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Importance of the NERC PRC-005 Standard - Challenges and Audit Tips

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Importance of the NERC PRC-005 Standard - Challenges and Audit Tips

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A whitepaper from Certrec presenting many of the difficulties involved with the PRC-005 standard and tips to meet those challenges.

To learn how Certrec's regulatory experts can assist you through a NERC audit, visit: https://www.certrec.com

A whitepaper from Certrec presenting many of the difficulties involved with the PRC-005 standard and tips to meet those challenges.

To learn how Certrec's regulatory experts can assist you through a NERC audit, visit: https://www.certrec.com

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Importance of the NERC PRC-005 Standard - Challenges and Audit Tips

  1. 1. © Copyright 2022 Certrec All rights reserved. Page 1 of 11 The Importance of the NERC PRC-005 Standard: Challenges and Audit Tips November 11th , 2022
  2. 2. The Importance of the NERC PRC-005 Standard: Challenges and Audit Tips White Paper Page 2 of 11 © Copyright 2022 Certrec All rights reserved. Copyright © 2022 Certrec All rights reserved. This white paper or any portion thereof may not be reproduced or used in any manner whatsoever without the express written permission of the publisher, except in the case of brief quotations covered by the fair-use exception permitted by copyright law. www.certrec.com www.regsource.us www.certrecsaas.com
  3. 3. White Paper The Importance of the NERC PRC-005 Standard: Challenges and Audit Tips © Copyright 2022 Certrec All rights reserved. Page 3 of 11 Contents The Importance of the NERC PRC-005 Standard: Challenges and Audit Tips.............................................4 Introduction .......................................................................................................................................................4 Batteries and PRC-005 .....................................................................................................................................5 Challenges of the PRC-005 Standard...............................................................................................................5 Tips to Avoid Trouble During Audits .................................................................................................................7 Major Areas of Possible Deficiencies................................................................................................................7 Tips on how to Avoid Hefty Fines for Noncompliance with PRC-005...............................................................8 How can Certrec help?.......................................................................................................................................9 References and Resources ............................................................................................................................ 10
  4. 4. The Importance of the NERC PRC-005 Standard: Challenges and Audit Tips White Paper Page 4 of 11 © Copyright 2022 Certrec All rights reserved. The Importance of the NERC PRC-005 Standard: Challenges and Audit Tips Introduction The NERC standard, PRC-005, protects and maintains the reliability of the Bulk Electric System (BES) and any generation operator (GO or GOP), that has a NERC registry, is bound by PRC-005 to maintain their Protection System, Sudden Pressure Relaying, and Automatic Reclosing so as to keep them in working order. The North American Electric Reliability Corporation (NERC) comes under the Federal Energy Regulatory Commission (FERC). The objective of NERC is to safeguard the reliability of the Bulk Electric System within USA and Canada. The functional entities to which this standard applies are transmission owners, generator owners, and distribution providers. The hallmark objective of this standard is to deploy and document maintenance programs for a variety of protection systems. The NERC standard makes it possible to minimize or altogether cut out the impact on BES reliability and maintain the functional order of batteries. In the words of Certrec’s Evans Heacock, “PRC-005 is important to the Bulk Electric System from the standpoint that it is actually testing the battery systems, protective relays, control circuitry, and sudden pressure-type relays, which is necessary to ensure that if there is an issue with the generator’s systems, that it actually will disconnect those particular devices, when needed. You want to get that generator offline if there's a fault. You want to trip transformers to get them off the system so they don’t drag down the system. You don’t want a fault dragging down the system. That is, in essence why it is reliable. Those systems need to be reliable.”
  5. 5. White Paper The Importance of the NERC PRC-005 Standard: Challenges and Audit Tips © Copyright 2022 Certrec All rights reserved. Page 5 of 11 “In the past, historically, a lot of major system events have started and have been traced back to either failures in relay systems, or protective relay systems not working the way that they expected them to work. It is important that our clients, the generator owners and transmission system owners, all maintain that equipment so that it performs as expected. It really does come down to the fact that we want to protect the integrity of the whole system.” – David McNeill “It is the individual generators responsibility to ensure that they are not the cause of a major disruption of our power for everyone.” – Steve Dixon Although PRC-005-3 is under development to resolve reclosing issues, the fact of the matter is that PRC-005- 2 still serves as the latest standard update. PRC-005 has had several revisions to implement maintenance programs for protection systems that impact the reliability of the BES, and with each passing revision, mandatory compliance has become more important for energy companies. Compliance is mandatory! It is important to understand that the batteries used for protection systems have to adhere to PRC-005-6 requirements. These maintenance requirements apply to DC supply protection systems that use VRLA (Valve- Regulated Lead-Acid) and VLA (Vented Lead-Acid) batteries. Batteries and PRC-005 Today, batteries ensure control over, and protection of the operational systems. When it comes to the substation, on the one hand, it would be fair to say that batteries are the inexpensive workhorse without which many systems could fail. On the other hand, the maintenance of batteries comes with endless parameters and complications. This is where NERC requirements come into play. These requirements mandate high standards of battery maintenance for a diverse range of equipment. The truth is that NERC battery maintenance requirements are highly complex, layered, and more stringent than for any other piece of equipment. In PRC-005, NERC specifies specific maintenance schedules and activities. Noncompliance with mandated requirements can lead to reduced performance and life of the batteries. You can look at NERC requirements through the lens of NETA and IEEE battery testing and maintenance guidelines. This, in turn, would allow you to get a clear sense of “how” to put in place a proper maintenance program. Challenges of the PRC-005 Standard PRC-005 is one of the few standards, maybe the only standard, that requires the generator owners and transmission owners to do a very detailed analysis of all the protection system equipment, and to identify those components that are key to protecting the Bulk Electric System. The very first challenge there, and the one we find is frequently the one that hangs people up, is the initial identification of those protection system components that are subject to the standard. Once you clear that hurdle, then you've got an even more challenging maintenance program that you've got to satisfy, and once you identify
  6. 6. The Importance of the NERC PRC-005 Standard: Challenges and Audit Tips White Paper Page 6 of 11 © Copyright 2022 Certrec All rights reserved. those components, then you've got to make sure that the employees of the plan, and the contractors that you hire, perform those maintenance requirements as they are specified in the standard. Prior to version two of the standard, the requirements were from a maintenance perspective, and left the development of the maintenance programs up to the owners, where they were allowed to develop them in ways that were not specified by NERC, but were more industry accepted practices. With version two of the standard, NERC felt the need to preserve the reliability of the entire system and, therefore, they decided to define more prescriptive standards as the bare minimum maintenance requirements, which need to be performed within the prescribed intervals. Another challenge is that certain classifications of equipment are more difficult to satisfy, or more susceptible to error, and the specific maintenance tasks within those classifications tend to be more problematic for our clients, either in terms of meeting the documentational requirements to demonstrate compliance with the maintenance task, or in maintaining the interval. Additionally, it is critical that clients understand the language within the standard. The standard provides guidance for the identification of protection system equipment that is used to identify and isolate faults on the Bulk Electric System. Since the issuance of the standard, NERC has also provided supplemental guidance that identifies equipment that may not specifically protect components that are part of the BES, but nevertheless affects the BES and its reliability, therefore, it is critical that you not only identify the components, as they are specified in the applicability section of the standard, but also look at that supplement and look at some of the protective relay equipment identified in that standard. This is critical to satisfying the requirements of being compliant with PRC-005. Up-to-date equipment lists and drawings are essential in making compliance a success. As the plant matures, and you upgrade your equipment, you have to revert back to the equipment list to ensure you have captured the protective functions of the new equipment, and that the drawings reflect the latest state of the facility so as to enable accurate identification of components. Not only is capturing the internal protective actions important, but you have to make sure you meet the PRC-005 deadlines for that. Not understanding what is on the list of requirements, or what needs to be on the list, will not suffice as an excuse for noncompliance. The requirements mentioned above make adherence to PRC-005 quite a big challenge, which requires meticulous attention to detail.
  7. 7. White Paper The Importance of the NERC PRC-005 Standard: Challenges and Audit Tips © Copyright 2022 Certrec All rights reserved. Page 7 of 11 Tips to Avoid Trouble During Audits The auditors always say, “If it’s not written down, it didn’t really happen.” Trust but verify! Hiring contractors to perform maintenance and handle the documentation, based on the decided scope of work, can often result in inconsistencies if the generator owners file the documentation without verifying it. Do not blindly file documentation without verifying and completing it, right after the maintenance activity. The reports may also have actionable items. Take ownership. In our experience, we have found that our clients get into trouble when they don’t document all their activities. They may be performing all the correct activities, but at audit time, they have to scramble around and find the documentation. It is really important to ensure everything is written down and is organized so your audits go smoothly. PRC-005 states that when you identify an unresolved maintenance issue, you have an obligation to document the activities that you’re performing to follow up on that deficiency. Failure to recognize that there is a deficiency can result in delays in fixing it, and if the time to recognize and resolve the deficiency goes beyond the maintenance interval, then it becomes what PRC-005 classifies as an unresolved maintenance issue. That triggers additional requirements to document your activities to correct that deficiency. This can lead to trouble. Transparency is key in maintaining a good working relationship with your auditor. NERC has provisions for self- reporting, failures, and deficiencies in your reporting program. It is a structured process for ensuring you get your reporting program back on track. This is a lot less painful than trying to cover up deficiencies or create records that do not reflect the actual maintenance activities that were performed. You never want to be in that situation. The urge to falsify documents at audit time can lead to more trouble, if caught, than to admit you don’t have the documents. This is a sure shot way of ruining your relationship with the auditor. Major Areas of Possible Deficiencies In our experience, batteries are always an Achilles heel. Unless a generator or an entity has taken the time to develop a rigorous battery testing program, it can become one of the major areas where deficiencies are found. Some of the major reasons for this happening are as follows: Batteries are one of the components of the plant that not a lot of thought is given to. Often, only visual inspections are done, after months, so long as they are working. A lack of understanding with respect to what is intended by the PRC-005 standard within the battery testing program. Many violations are related to the DC supply systems and their batteries. A recurring issue within the history of PRC-005 is related to instrument transformers; CT and PT testing.
  8. 8. The Importance of the NERC PRC-005 Standard: Challenges and Audit Tips White Paper Page 8 of 11 © Copyright 2022 Certrec All rights reserved. The primary reason for this is that, for years, industry standards and best practices were used, and they were employed even within version one of the PRC-005 standard. With PRC-005-2, however, NERC wanted a specific maintenance requirement to be performed. For example, in version two, NERC wanted the verification of the integrity of the cables that carried those current and voltage signals back to the relays. They required that the CT and PT signals needed to be verified and that those signals were actually reaching the relays that they were intended to reach. Many testing contractors and generator owners were caught off guard as they were not aware that the previous testing methods, they had been following, did not satisfy this new requirement, so they did not change their methods. The 12-year interval of the test for batteries is very long, so complete adaptation to the standards and new methods will keep taking place for some time. We, therefore, encourage our clients to send us their scope documents when they are getting ready for an outage or when they are going to be doing maintenance to satisfy the requirements of PRC-005. This enables us to advise them in advance if something needs to be improved in the document so as to improve the communication between the client and their contractor. Tips on how to Avoid Hefty Fines for Noncompliance with PRC-005 The following tips will come in handy at audit time: First-time fines are normally on the lower side, but NERC tends to impose heavier fines for repeat violations. By default, NERC looks to give credit to good performers who try to do the right thing. If an entity has a strong maintenance program where due diligence is shown in trying to achieve compliance with PRC- 005, they will give you the benefit of the doubt and will use that credit to mitigate any enforcement and civil penalties that they calculate. You must build a good reputation, as this knowledge is in the public domain, and can have ramifications beyond just fines. Shareholders and the wholescale power community will also judge you on this reputation.
  9. 9. White Paper The Importance of the NERC PRC-005 Standard: Challenges and Audit Tips © Copyright 2022 Certrec All rights reserved. Page 9 of 11 How can Certrec help? Certrec is the leading provider of NERC regulatory compliance programs and SaaS apps for the energy industry. 90% of the nuclear plants trust us today. Our complete NERC compliance program costs a fraction of a full-time equivalent. We have a team of 50+ members who delivered zero fines in 350+ client audits. Additional Resources: For procuring CORE (Certrec On-demand Regulatory Expertise) consultancy hours, visit https://www.certrecsaas.com/certrec-core/. To gauge your CIP threat level, visit and try: Certrec’s NERC CIP Health Check. To download our useful audit tips document, visit: https://www.certrec.com/tips/.
  10. 10. The Importance of the NERC PRC-005 Standard: Challenges and Audit Tips White Paper Page 10 of 11 © Copyright 2022 Certrec All rights reserved. References and Resources i. https://www.nerc.com/pa/Stand/Reliability%20Standards/PRC-005-6.pdf ii. https://www.youtube.com/watch?v=Keq8xVKHLjs&t=606s (Certrec’s companion video) iii. http://www.ferc.gov/EventCalendar/Files/20120203152741-RM10-5-000.pdf iv. https://www.nerc.com/pa/Stand/Pages/Project2009-10_Interpretation_PRC-005-1_CMPWG.aspx v. https://www.nerc.com/pa/Stand/Pages/Project2009-17_Interpretation_PRC-004_PRC-005_Y- W_TriStateGT.aspx vi. https://www.whitecase.com/publications/alert/nerc-case-notes-reliability-standard-prc-005-1 vii. https://www.youtube.com/watch?v=bFHI-ZldkDM viii. https://new.siemens.com/us/en/products/energy/product-support/t-d-guardian-articles/maintenance- planning-in-compliance-with-new-nerc-reliability-standard-prc-005-6.html ix. https://www.whitecase.com/publications/alert/nerc-case-notes-reliability-standard-prc-005-1 x. https://electricenergyonline.com/energy/magazine/1079/article/Battery-Testing-and-Maintenance-Per- NERC-PRC-005-Guidelines.htm xi. https://www.youtube.com/watch?v=hbcgM-tcsx0 xii. https://www.nerc.com/pa/Stand/Reliability%20Standards/PRC-005-6.pdf xiii. https://www.aeso.ca/rules-standards-and-tariff/alberta-reliability-standards/prc-005-protection-system- automatic-reclosing-and-sudden-pressure-relaying-maintenance/ xiv. https://cms-cdn.selinc.com/assets/Literature/Product%20Literature/Flyers/Automate%20PRC- 005_PF00547.pdf?v=20220127-234928 xv. https://www.youtube.com/watch?v=bFHI-ZldkDM xvi. https://www.spp.org/documents/37818/prc-005video.pdf
  11. 11. White Paper The Importance of the NERC PRC-005 Standard: Challenges and Audit Tips © Copyright 2022 Certrec All rights reserved. Page 11 of 11 About Certrec: Certrec is a leading provider of regulatory compliance solutions for the energy industry. Our SaaS and consulting services have helped hundreds of power- generating facilities manage their regulatory compliance and reduce their risks across nuclear, fossil, solar, wind, and other power plants. Certrec has helped more than 120 generating facilities establish and maintain NERC compliance, and we manage the entire NERC compliance program for 60+ registered sites in the US and Canada that trust us to decrease their regulatory and reputational risk. Certrec is ISO/IEC 27001:2013 certified and has successfully completed a SOC 2 Type 2 examination, resulting in independent verification of the standards of security, availability, reliability, and trusted services that we provide. This content is the proprietary information of Certrec. Certrec, the Certrec logo, and Certrec product names and logos are trademarks or registered trademarks of Certrec in the U.S. and other countries. The Certrec products described in this document are distributed under a license agreement restricting the use, copying, distribution, decompilation, or reverse engineering of the products. The Certrec products and services described in this document may only be used in accordance with their terms of use and corresponding license agreements. No part of this document may be reproduced in any form by any means without prior written authorization from Certrec. Certrec may amend, improve, or make changes to Certrec products or this document at any time without notice. THIS DOCUMENT IS PROVIDED "AS IS" AND ALL EXPRESS OR IMPLIED CONDITIONS, REPRESENTATIONS, AND WARRANTIES, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT, ARE DISCLAIMED, EXCEPT TO THE EXTENT THAT SUCH DISCLAIMERS ARE HELD TO BE LEGALLY INVALID. CERTREC SHALL NOT BE LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES IN CONNECTION WITH THE FURNISHING, PERFORMANCE, OR USE OF THIS DOCUMENT. THE INFORMATION CONTAINED IN THIS DOCUMENT IS SUBJECT TO CHANGE WITHOUT NOTICE. Contact Us 6500 West Freeway, Suite 400, Fort Worth, TX 76116 817-738-7661 www.certrec.com Have you tried RegSource® yet? Try the industry’s leading source of regulatory compliance information! Click Free Trial to start your free trial, or visit www.RegSource.us/#pricing to compare the various plans.

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