Balancing Authority Operations

Foreword

Foreword

This professional reference is one of a series Energy Compliance, Inc. publishes for registered entities and the people who run their compliance programs.

I’ve spent more than thirty years on every side of the bulk electric system. I’ve operated control centers as a Reliability Coordinator, Transmission Operator, and Power System Operator. I’ve audited grid facilities and signed off on findings as a senior compliance auditor. I’ve worked enforcement matters from inside the regulator’s process. For the last several years I’ve advised registered entities directly through the firm I founded.

The entities that do reliability well share a common habit. They take the standards seriously without confusing them with reliability itself. They know that a NERC Reliability Standard is a floor, not a ceiling. They know that compliance is something an auditor evaluates, but reliability is something a system either delivers or doesn’t. They prepare for audits by building programs that survive real questions, not binders that look thick.

That’s the perspective these references try to share. Each one focuses on a single topic. A standard family, an operational function, a regulatory framework, or an emerging industry challenge. Each one walks through how the topic actually works.

These references are written for the compliance manager who wants to understand the system, not just memorize requirements. For the legal counsel who has to brief a board honestly. For the senior operator who’s been told that compliance and reliability are the same thing and suspects they aren’t. And for the new compliance hire who got handed a binder and told good luck.

These references aren’t marketing material disguised as content. They’re the result of three decades of doing this work and watching it succeed and fail. I’ve written them in the same voice I use in a control room or in front of a Regional Entity audit team. Direct, evidence-grounded, honest about what the standards do and do not require.

Energy Compliance exists because most of the consulting offered to registered entities today is structured for billable hours rather than for outcomes. Every engagement is led by one senior practitioner. We don’t bring five people to a meeting that needs one. We automate the work that should be automated. We apply senior judgment to the work that requires it. If that approach matches what you’re looking for in a compliance partner, the back of this reference has our contact information.

If not, the reference still belongs to you. Take what’s useful. Apply it well. And remember the only test that ultimately matters: when the system needs to perform, does it?

Rob Smith, Founder, Energy Compliance, Inc.

EC-WP-300 Balancing Authority Operations Explained

Chapter 1

Balancing Authorities Within the Bulk Electric System

relationships play out in real time. In addition, the paper discusses how BPA staff believe changing system conditions, such as a different mix of resources and a more dynamic system, will affect the BPA Balancing Authority’s work to preserve reliability.

The Balancing Authority (BA) Operations E-book will take you through the concepts of Balancing Authority operations in relation to NERC reliability standards and other relevant regulatory compliance. The goal of this ebook is to describe in some detail the functions of a Balancing Authority with respect to providing grid balance and frequency support and to demonstrate in an authoritative way why their operational activities are critical to the reliability of the bulk power system and the overall grid ecosystem.

Balancing Authorities (BA) are one of the foundational components of the bulk electric system. As the operational entity responsible for ensuring real time supply and demand equilibrium, their work is closely coordinated with transmission operations and wide area reliability organizations. From a reliability perspective, the work of a Balancing Authority is what assures that system frequency is maintained within established limits on a real time continuous basis.

Definition: Within the NERC functional model a Balancing Authority (BA) is a function related to ownership rather than a property owned by that ownership. A Balancing Authority Area (BAA) will have various types of generation resources, loads, and interchange points, but in NERC terms its fundamental responsibility is to keep load and interchange in balance by generation in real time on a second by second basis. The frequency of the system must remain stable (constant) and this balance between load, interchange, and generation must be maintained to provide that stability.

Bulk Electric System operated as a unified, synchronized machine across each interconnection. Transmission power flows were driven by physics rather than by contract; but frequency performance was a function of individual actions of Balancing Authorities (BA’s). Region BA’s ensured their own individual Area Reliability Coordinates, and supported the interconnection-wide frequency preservation target. The end result was reliability of the interconnection-wide system that was the product of how Balancing Authorities collectively performed their tasks.

The tasks performed by a Balancing Authority are time-sensitive. Because the difference between supply and demand shows up almost instantaneously as a change in frequency, small differences must be corrected before they can build up to a magnitude that is detrimental to reliable operation. This correction of small differences in supply

and demand is accomplished by a combination of automated and manual control actions, and it must be done within the established time period and within the allowed margin of deviation.

Relationship between Contextual Factors and Balancing Authority Functions For a BAlancing Authority, the contextual factors related with the power system function can be divided into two main

components: the first one is related to the equilibrium within its own area (referred as “internal balance” in the text), and the second is related to the interchange with adjacent areas (which is designated as “inter-area interaction” or “external balance” in the text). In other words, each BAlancing Authority is responsible for regulating and controlling the consumption of electrical power within its area of responsibility, at the same time that they interact, through interchange schedules and shared frequency response, with the areas of adjacent BAlancing Authorities. Consequently, it is necessary to permanently keep track of the internal conditions of the system as well as the general evolution of the power grid, a task that should be done in close relation with the Reliability Coordinators as well as with other BAlancing Authorities.

In some regions, BAs may have roles that interact with the market structure and resource response. However, the BA is operationally distinct from market activity. In any design, the reliability function at real time is always about ensuring grid balance and frequency stability. The reliability view is always about the outcomes and grid performance rather than any market or operational procedures.

The nature of a Balancing Authority in relation to the bulk electric system is that a Balancing Authority should be viewed as a dynamic reliability resource rather than an administrative one. Thus, activities performed by a Balancing Authority translate system actions inherent in system physics into controlled system behavior, and facilitate regulation of system frequency and stability under both normal and disturbed conditions. Balancing Authorities contribute to real-time reliability of the transmission system across an interconnection.

End-of-Chapter Summary

Balancing Authorities (BAs) are a key component of the reliability of the bulk electric system. They provide a real-time supply equal to the demand within their area and assist in maintaining frequency stability within an interconnection. Their activities and

responsibilities are based on functional need rather than control of specific resources and on a time frame different from other activities. The ultimate reliability benefit is a system-wide benefit, achieved by coordination among BAs within an interconnection.

Chapter 2

Real-Time Balancing and Frequency Control

Real-time balancing is the central operational function of a Balancing Authority and is the means by which system frequency is maintained. Within a Balancing Authority Area, the sum of the real-time generation from all sources, less the realtime scheduled interchange, should equal the sum of the real time loads. Any persistent difference between the sum of the real-time generation and loads within a BAA will result in frequency deviation. Balancing Authority real-time balancing and frequency control are inextricably linked. Frequency is a measure of the current balance of the entire system at any given time and does not necessarily reflect conditions in a particular region. An individual Balancing Authority’s control actions and corrective actions in the event of an imbalance affect frequency. A rapid change in load or generation in a Balancing Authority occurs in conjunction with frequency response shared across the entire interconnection to realign the frequency with a balanced system value. The corrective actions that ensure the balance authority restores its own share of the load and/or generation to balance are unique characteristics of reliable interconnection operation. The control of realtime balance between supply and demand is a complex task requiring both automatic and manual action. The balance is provided by Automatic Generation Control (AGC) which acts to remove frequency deviations and interchange errors. At the same time, operating personnel continuously monitor system conditions and take necessary control actions. From a reliability point of view, the primary concern is not the method of control, but rather the speed with which the imbalances are removed. Rate of response is a major reliability factor. Frequency deviations occur rapidly and the longer it takes to correct them, the larger the deviation and the longer the period of deviation. Balancing Authority control operations are designed to use short control intervals and substantial real-time measurement to assure that frequency deviations and resulting large power imbalances are corrected in a time consistent with system stability and reliability. The time constraint for this balancing function is considerably different from that for many other functions in the bulk electric system. Interchange schedules add another dimension to the challenge of real-time balancing. Each Balancing Authority must take into account the

scheduled power flows between areas within its boundaries as well as the variability of its own generation and load. Deviations from scheduled interchange should be accounted for when determining an imbalance and making corrections for the same type of change as any variation in load or generation within the B.A. High reliability requires that schedules, their monitoring and the necessary correction for

deviations from scheduled interchange with adjacent BAs are all in place. Random occurrences such as power plant trips and sudden changes in load are a frequent test of real-time balancing functions. Restoring balance after such an occurrence requires coordination with Reliability Coordinators (RC’s) and Transmission Operators to assure that the corrective actions taken by the Balancing Authorities (BAs) do not violate transmission constraints or threaten system stability. The balancing function is a key part of a larger reliability activity. Real-time balancing is not an optimization exercise, but a stability function. The reliability objective of frequency bias control is to keep frequency deviation within certain limits and to prevent the system from drifting to unsafe conditions. Balancing Authorities perform the important stabilizing function of matching, as closely as practicable at all times, generation, load, and interchange to provide a stable basis for the reliable operation of the bulk power system under a wide range of conditions.

End-of-Chapter Summary

The core function of the Balancing Authority (BA) is to maintain real time equilibrium or balance between supply and demand and between generation and load in order to keep the grid frequency within acceptable limits. The real time equilibrium between supply and demand is maintained through equilibrium corrections. Balancing Authority achieves the required equilibrium through monitoring, automatic control and response to dynamic loads which can occur over a wide range, from small local shifts in demand or supply to larger scale involuntary power shif in the Interconnection.

Chapter 3

Area Control, Interchange, and Operational Boundaries

Balancing Authority (BA) operations involve a set of operational boundaries, which define local BA control responsibilities while at the same time coordinate the interarea activities among BA’s to restore balance on an interconnected grid. These operational boundaries promote reliable grid operation, by providing both local flexibility to manage unforeseen changes as well as system wide stability during interconnected mode of operation. Area control is that part of the duties of a Balancing Authority which pertains to supplying the necessary increases or decreases in real power demand and generation within the BA area in accordance with the schedule of interchange between BA’s and the frequency bias recommendations. The operation of area control is a continuous affair and is founded on the principle that each BA is responsible for the balance of its own area. This aspect of balance is an integral part of the means for assuring fair and effective frequency regulation of the grid. Interchange schedules specify the intended power flows between Balancing Authorities. These schedules are a basis for BAL activities. Scheduled interchange constitutes the boundary between internal generation and load balancing and exchange activities. Any deviations from scheduled interchange levels must be offset in real time in order to establish balance. Reliability-wise it is important to closely monitor scheduling and interchange activity to pre vent accidental or unintentional interchange shifts. Although operational boundaries divide one Balancing Authority Area from another, they do not act as barriers to the transmission of energy, because power flows according to physical laws, and frequency responses are shared across the interconnection. The delineation of control areas, however, serves to apportion to each Balancing Authority Area the responsibility for restoring balance to its segment of the interconnection – thus preventing possible cascading effects of imbalance and thereby preserving overall system coordination. Boundary coordination is needed during abnormal or distress conditions. Large deviations from balance within a BA may cause difficulties with respect to maintaining frequency and transferring power to neighboring BA’s. If an imbalance within a BA appears to be

having major effects on more than its own BA, then this interrelationship must be made known to neighboring BA’s and Reliability Coordinators. The interaction of Balancing Authority boundaries and transmission constraints introduce another level of complexity. Corrective balancing actions must be evaluated against the limitations and operating conditions of the transmission system. Actions taken to balance generation and load within a BA may cause violations of transmission system limits in other

locations, further requiring coordination with Transmission Operators and Reliability Coordinators. From a reliability perspective, area control and interchange boundaries identify the structural relationships among Balancing Authorities that enable a decentralized yet coordinated approach to frequency control. Reliability-wise, they serve to apportion specific balancing responsibilities and to utilize the overall coordination of the Eastern Interconnection to preserve system reliability. Understanding Balancing Authority relationships as defined by area control and interchange boundaries provides insight into how BAs collectively contribute to reliable bulk electric system operation.

End-of-Chapter Summary

The operations of a Balancing Authority (BA) depend on defined Area Control and Interchange Boundaries for the enforcement of real-time balancing responsibility and coordination of interconnection performance. The boundaries act as a localization factor in correcting imbalances without isolating any area from the system-wide effects. The control and interchange functions, within an electric power system, play a very important role in maintaining reliable frequency and system stability.

Chapter 4

Coordination With Transmission Operators and Reliability Coordinators

Balancing Authority activities are closely related to activities of Transmission Operators and Reliability Coordinators due to the interconnectedness of real-time reliability activities. While the focus of Balancing Authority activities is ensuring sufficient generation to meet load and maintaining optimal frequency, their actions impact transmission conditions and wide area reliability. Efficient coordination between these activities is required to maintain reliable bulk electric system operation. The interface between Balancing Authorities and Transmission Operators is concerned with the relationship between imbalance correction actions and transmission constraints. The redispatch of generation, load changes and changes in interchange order and amount made to restore balance to a system may affect transmission constraints including thermal, voltage and stability constraints. It is essential that each Balancing Authority understands the constraints of the transmission system and coordinates the actions to restore balance in order to mitigate the potential development of transmission reliability problems. Reliability Coordinators (RCs) look across the whole region bringing together information from the various Balancing Authorities and Transmission Operators. They are responsible for seeing problems or reliability risks that do not exist within a single control area and for directing activities necessary to deal with those problems. The work of the RCs is supported by the Balancing Authorities collecting, providing, and analyzing data as it is needed and by responding to RC inquiries and implementing Regional reliability-related directives which may be necessary to coordinate balancing actions across the region. Coordination of operations is particularly important during abnormal conditions or under disturbance. Large changes such as generation outages, transmission line faults or major load changes all require quick co-ordination across functional boundaries. The responsibility for Balance of System (BOS) stability or Real Time Operations rests with the Balancing Authorities to balance the need to restore frequency and voltage stability as quickly as possible after such disturbances while at the same time protecting the transmission network and ensuring that wide area stability is not compromised thereby preventing unwanted or unintended repercussions on other parts of the system. The protocols and shared awareness associated with communication are important factors in coordination. Balancing Authorities, Transmission Operators and Reliability Coordinators coordinate by exchanging information over established communication links concerning the state of the power system, planned actions, anticipated or actual events that could disrupt reliability of the power system supply. The reliability of this communication may be as important as the actual operation and control performed. The Coordination

Framework does not diminish the individual responsibilities of the Functions. Instead, the Framework describes how the Functions can act towards the common reliability goal. As set out in section 5.6.4.1a, BALs remain responsible for balance control within their BAL Area, TOs remain responsible for local transmission relay functions and Reliability Coordinators (RCs) remain responsible for wide-area reliability control. What the Coordination Framework does achieve is to ensure that the responsibilities are coordinated with one another. Balancing Authority (BA) operations in a grid are about more than just controlling resources – they are also a part of a larger operational environment and need to be viewed in this context. The ability to control and balance resources also depends on interchanging information with other reliability functions in the grid. This coordination of various functions is an important aspect of reliable operation in interconnected bulk power systems.

End-of-Chapter Summary

Balancing Authority operations are linked with detailed coordination with all Transmission Operators and Reliability Coordinators to ensure that Balancing Authority Area real-time balancing actions support reliability of the overall power system. Generationload corrective actions are coordinated with all transmission constraints and wide-area stability requirements. Coordination of operations across functional boundaries requires on-going communication of real-time information and shared situational awareness of the bulk power system.

Chapter 5

Disturbance Response and Frequency Events

Balancing Authority operations are put to their most rigorous test during disturbances which interfere with the Balance between supply and demand. Such events might occur as a result of a generator failure, sudden demand swings or separation of parts of the power system. Disturbance response is a key aspect of reliability that is demonstrated in the operations of a Balancing Authority. Initial system response to a disturbance is dictated by the physical characteristics of the interconnection. Frequency begins to shift as the system experiences imbalance and inertial and primary frequency responses from connected resources serve to stabilize and limit the rate of change of this frequency shift. However, ultimate responsibility for restoring balance to its own territory, and hence in maintaining frequency within tolerance, rests with the Balancing Authority in which the original disturbance has occurred. These are the principles that underlie interconnected reliability. For Frequency Balancing Authorities, it is critical to be able to quickly detect the occurrence of a disturbance and understand the nature of the event including its magnitude and its impact on the power system. Situational awareness during frequency events requires real-time information on frequency, real and reactive power outputs from generators, levels of interchange, and load behavior. This knowledge is critical to enabling the BA to provide the necessary operating instructions to responding resources to prevent large frequency deviations from occurring or to reduce the duration and magnitude of any deviation that does occur. During a disturbance the corrective actions are based on reliability considerations rather than on optimization criteria. The main objective is to stop a frequency drop or increase and to restore the frequency to normal. The corrective actions are based on changing the generation output and/or the interchange and/or arrangements with other systems in order to bring the system response in line. From a reliability point of view the time and magnitude of the corrective actions are more important than the actual control action taken. Remedial Action Orders for Disturbance Response - Interactions with Reliability Coordinators and Transmission Operators The interaction between disturbance response and Reliability Coordinators and Transmission Operators is also an important factor. Large disturbances and widespread disruptions can cause cascading instability that can spread rapidly across the grid affecting many Balance Areas and systems beyond the initial point of origin. In such cases utilities must closely monitor and report developments to Reliability Coordinators and the resulting remedies and directives must be carefully coordinated with other parts of the system to ensure that frequency control efforts to mitigate the initial disturbance are not in conflict with transmission constraint limitations and do not add to

overall grid instability. These are events where the system’s inherent frequency problems become exposed - i.e. the system may be unable to recover as quickly as desired or it has little balancing reserve to correct frequency deviations. BPA is not responsible for permanently correcting these problems in real time; the speed of BPA’s response provides some measure of system stability. From a reliability standpoint, the ability of the system to withstand and to recover from disturbances includes both the operational actions required to recover from such an event and also the reflection that such actions have of the general state of the power system. A smooth and effective disturbance response is critical to overall system reliability as it contributes to grid stability and overall reliability of the interconnected system. Balancing Authorities are the “conductors” of the grid, orchestrreating the coordinated and synchronized response to provide a stable operating environment for frequency regulation throughout the interconnection.

End-of-Chapter Summary

The primary reason for the existence of a Balancing Authority is to correct any disturbances which may cause an imbalance between generation and load and affect frequency. These corrections are necessary to support frequency stability and ensure adequate interconnection capacity. The Disturbance Response is primarily a function of the shared initial frequency response of the system, and the local balance restoring functions of a Balancing Authority.

Chapter 6

Operational Risk Management and Margin Awareness

Operational risk for the Balancing Authority is a dynamic risk that must be managed at all times in order to ensure that generation and load are maintained in balance as the system conditions change over time. The static risk assessment of a particular imbalance condition is a basis for the determination of BAA but the Balancing Activity to correct an imbalance condition must be carried out under dynamic conditions where loads change and resources and interchange levels are subject to change over time. From a reliability perspective, the risk associated with the BA function is a dynamic risk that depends on the margin available in the BA area at all times and on the BA’s ability to respond properly in the event of an imbalance. The operational margin in the Balancing Authority context is a measure of excess capacity of controllable resources to meet the present and forecasted future balancing requirements. It is defined by the regulating capability, ramping capacity and reserves available for corrective actions to remove imbalances. It is important to have adequate margin to meet the normal swings in power and to absorb unusual disturbances without having to resort to emergency actions or interchanges. Balancing Authorities must make provision for both anticipated and unforeseen sources of imbalance. The BAO discusses both routine and unforeseen sources of imbalance in FERC Defined Reliability Projects, such as:

• Errors in load and resource forecasts; • Transient load swings and other load volatility; • Variable

energy resources; • Generator contingencies. The BAO identifies peak load periods and periods of low resource capability, and recommends that higher risk mitigation practices be utilized during those periods. Temporal awareness of margin is also critical. BA’s must consider current capacity and how that may change over the short term. Ramping and fuel constraints can erode margin over minutes and hours. It is important for BA’s to be able to determine when their margin is declining and respond accordingly in accordance with Reliability Standards that address operating conditions and interactions with other resources. Interchange management has two main roles within operational risk management; scheduled interchange is a contingency reserve and a cost effective means of managing generation and transmission resources while deviations from the schedule constitute an imbalance that must be corrected. Balancing Authorities should have procedures in place to detect and quantify interchange activity so that they can identify when operational risk is increased as a result of interchange deviations, especially under stressed system conditions. Reliability Coordinators (RCs) and neighboring Balancing Authorities (BA) are often involved in the coordination process in order to manage operational risk. When margins are low or imbalances cannot be cleared, the utility begins to communicate and

coordinate with other utilities in order to keep a potential problem isolated and to prevent a problem in one area from becoming a reliability problem for other areas. This process enhances situational awareness and acts as a tool to help manage interconnection reliability. It is not necessary to intervene on an on-going basis. Maintenance, in the sense of restraint, control, vigilance and preparedness may suffice to ensure that no difficulties arise. The role of a Balance and Ordering Capacity Balancing Authority includes ensuring that the level of promptness in removing imbalances is properly fitted to the needs of reliability. Actions taken to restore balance in order to relieve constraints on system capacity at one point and time should not create new constraints at another. Margin awareness and operational risk management are reliability considerations that are central to successful Balancing Authority operations. They serve to mitigate uncertainty in power systems, preserve stability under a broad range of operating conditions and support reliable frequency performance.

End-of-Chapter Summary

BAL operates in a mode of continuous operational risk management based on knowledge of the current balancing margin and system situation, with sufficient controllable capacity to enable timely correction of imbalances and to secure response to disturbances. Through surveillance, mutual co-ordination and controlled measures, BAL secures reliable frequency control.

Chapter 7

Human Performance and Decision-Making in Balancing Operations

Balancing Authority operations present a variety of dynamic challenges to human performance. Real world operation is dynamic, involving large system changes on short notice with a great deal of uncertainty. Balance operation and frequency control in real time using automation and human judgment as reliability resources. Reliability interests depend heavily on how effectively human operating judgment can supplement the automation under normal and disturbed conditions. Balancing Authority Control Center Operators Operating personnel in the BA control center must always be aware of system balance, frequency trends, interchange performance, and current utilization levels. They must always be prepared to address possible system imbalances that may not currently be evident in an otherwise stable system, and they must do so quickly and effectively. Key human performance contributions to balancing operational reliability include the ability to detect trends or problems such as a degraded frequency response and a deteriorating regulating margin. In the Balancing Authority context, decisions must be made in a very time constrained environment. Systems are often stabilized within seconds or minutes of an imbalance or frequency deviation occurring. decisions are typically made under considerable uncertainty and with changing system conditions and minimal opportunity for deliberation. The reliability oriented approach is more focused on stability and maintaining adequate margins rather than on optimizing or achieving precision in decisions. Workload management is a critical performance influencing factor. Balancing Authority (BA) operations can see dramatic shifts from periods of low activity to periods of very high activity following a disturbance or system stress. During these periods, operators must manage and respond to a large amount of information in a timely manner. This requires the operator to juggle a variety of tasks while interacting with other organizations, all while still fulfilling their balancing responsibilities. Control room design, staff configuration and procedures for escalating staff all play a critical role in supporting operator performance during these periods of dramatic change. Another factor that can

impact reliability is the interaction between operators and automatic control systems. AGC and other balancing resources provide a quick response to disturbances in a power system but an understanding by operators of the way these systems operate, their capabilities and limitations, assumptions and the basis upon which actions are taken is required. Operator knowledge of the interaction between resources and systems is important so as to maximize the effectiveness of automation in supporting reliability

objectives and to detect potential problems in the event that manual intervention becomes necessary. Team coordination within a control room significantly affects the accuracy of decisions made. Balancing activities are almost never performed by a single person, though most control rooms for Balancing Authorities are organized with an operator, supervisor and relay room staff (communications, etc). For team decision-making reliability, roles must be well defined, shared mental models intact, and internal communications performed proficiently, a special challenge during complicated and prolonged events. Human performance is an important consideration in BAA activities, because operating a Balancing Authority is not strictly a technical activity. It involves the interaction of system knowledge, situational awareness, and decision-making in real time. High performance in control centers is directly associated with reliable frequency control and stable system performance.

End-of-Chapter Summary

Human performance is a critical element in all aspects of BAlancing Authority (BA) activities, from gathering and assessing information to making and executing timely and appropriate actions. Frequency, voltage and load conditions that are evolving rapidly must be assessed, understanding of trends and potential problems are made and timely control actions are initiated using the judgment of BA operators complemented and directed by the operating modes of control and monitoring systems. It is also important to have support from the control center and coordinating efforts from the BA operating team to sustain high levels of frequency balance reliability.

Chapter 8

Abnormal Conditions and Emergency Balancing Operations

Abnormal conditions can occur at any time and can require a number of planning and operational adjustments to ensure optimal performance of the Balanced Volume. Some of these abnormal conditions could include events which violate standard assumptions regarding system operation such as after large disturbances have occurred, severe weather occurs, or limitations in system fuel resources occur. In addition, equipment failures and/or other events which affect several generation units in the same manner, such as failures in gas transmission pipelines affecting several gas-fired plants, would also be examples of abnormal conditions. Emergency balancing events which occur on occasion in BA areas over time provide the key operational test of frequency bias and automaticSP participation in real-time BA functions during times when planned reserve margins in the BA may be exhausted or operating reserves otherwise severely eroded. During abnormal conditions, the balancing goal is changed from correcting small frequency deviations to preserving the integrity of the power system. Large changes in frequency maybe more noticeable and the options to counteract such changes are limited due to equipment and transmission line restrictions. Under these conditions, the Balance of System conditions for all Balancing Authorities are viewed as more marginal with a greater awareness of any further disturbances. In the emergency balancing mode, a BA must attempt to balance its system in a manner which is acceptable to all relevant considerations. Decisions are made that try to balance as many factors as possible, for example: the need to balance the voltage and/or the real and reactive power in a transmission line; the requirement to meet the reserve needs; the limitations in neighboring BA’s systems. In this mode the BA has to take into account the reliability conditions determined under normal and emergency conditions and has to coordinate its actions with the Reliability Coordinators and with Transmission Operators. Some balance problems are even harder to resolve due to the load behavior under abnormal conditions. For example, severe weather or high system stress can disrupt the normal load patterns, lead to less predictable

loads and even unexpected and rapid changes in load. The relatively accurate and well-tuned automation system that was designed for average system conditions is then not optimized to the unusual load conditions. Reliability-wise, the role of the operator is significant to determine when such an unusual operating condition calls for a change in operating posture. In addition to providing local flexibility for balancing within a power system, Balancing Authorities can also serve a role in emergency

response through coordination and communication of system conditions. If BA members are able to provide advance notice of their available resources, their current ability to balance their generation and load, and of any potential issues they are experiencing, the Reliability Coordinator will have an improved understanding of the overall state of the power system. This improved visibility of system conditions helps prevent localized imbalance issues from escalating into a reliability event impacting a larger area. In severe conditions the emergency balancing operation may coincide with firm load shedding or other emergency actions ordered through other reliability processes. As noted above, the emergency balancing function is not part of the routine balancing activity, but Balancing Authorities may be involved in implementing or assisting in the implementation of these orders, should they be applicable. The emergency actions in question are part of the structured escalation process of the reliability functions for maintaining interconnection reliability. Unplanned conditions highlight the need for readiness and adherence to normal procedures in a Bally Authority. Emergency balancing is not a last minute, post occurreaction activity, but a routine reliability activity performed under normal reliability conditions in an unstable or emergency condition. Matching balancing and reliability activity response to the condition of the power system, while at the same time maintaining appropriate coordination and situation awareness is a key reliability capability.

End-of-Chapter Summary

Abnormal conditions and emergencies require more effort from a Balancing Authority to supply power and provide more reserves and greater uncertainty. Emergency balancing is more concerned with preserving system stability and frequency than with correcting small hour-to-hour imbalances. And emergency operating procedures require careful consideration of priorities, coordination and application of the reliability concepts in a more disciplined manner.

Chapter 9

Oversight, Compliance Context, and Reliability Accountability

Operational activities performed by a Balancing Authority are governed by a governance framework that is operational rather than prescriptive. The Reliability Oversight activity assesses whether a Balancing Authority maintains the necessary infrastructure, authority and discipline to ensure that it has the ability to manage generation and load balance and frequency deviations under a large variety of operating scenarios. This is not a test of operational procedures but rather a reflection of the judgement and degree of discretion required to balance supply and demand in real time. Balancing Authorities operate under NERC reliability standards that establish expectations for controlling frequency, coordinating real time data, maintaining situational awareness and preparing for emergency situations. These standards set performance criteria and functional responsibilities for Balancing Authorities and include elements of discretion in how those responsibilities are carried out. From a reliability perspective, this balance provides operating authorities with the flexibility to manage the changing conditions of the grid in a manner that is consistent with current operating conditions, rather than following a pre-determined course of action that may not be relevant at a given time. The concept of accountability for outcome based operation in BA roles is dynamic and taking into account of circumstances. The implementation of accountability processes should aim to determine based on the hindsight whether the actions taken under normal and abnormal conditions were appropriate to the operational reliability circumstances, bearing in mind the knowledge available at that time. The system is not 100 % perfect and full preventions of unwanted occurrences cannot be assured. RRM (Reliability Risk Management) involves dealing with inevitable amount of uncertainty and the concept of BA accountability is primarily based on being prepared, aware and well-coordinated rather than being perfect. Documentation and information retention is a significant factor in the oversight context. Balance of system (BOS) failures require Balance of System Components – Balancing Authorities to keep records of the state of the system, at the time of action and reasoning behind the action taken. This is for after-action analysis and for potential learning opportunities. Reliability wise, the purpose of the documentation is for improvement rather than for retrospective prescriptive instruction. Review and analysis after any event occurring on the grid must be accounted for in reliability accountability. Frequency events, near misses, or operational problems are valuable learning tools to gain insight into how a system really operates and to determine how high and low balancing performance levels need to be set in order to maintain reliability. Participation in event analysis through BAOCES (Balancing Authority and Operating Committee Events Sharing) or other

mechanisms that identify root causes, system reaction and lessons learned is important to reinforcing reliability accountability without undermining operational independence through over supervision or micromanaging. This responsibility integrates coordination with Reliability Coordinators and other entities. Balancing Authorities are responsible for both their own internal performance and for their participation in the grid wide situational awareness and coordinated response activities, and their reliability performance metrics include appropriate communication and response metrics for RCU Region Wide Directives. In the context of oversight and compliance, understanding the relationship of Balancing Authorities to oversight and compliance as the accountable reliability entity, as opposed to as a rules based operator, can help in understanding the BA role in providing timely grid responses and maintaining system situational awareness while operating within a reliability framework consistent with current reliability standards and oversight mandates.

End-of-Chapter Summary

The Balancing Authority operations fall under the umbrella of preparedness, situational awareness and operational response rather than rules. The Reliability standards describe the expected functions while allowing for operational flexibility. Accountability is focused on whether the balancing actions that were taken were reasonable given the circumstances of the BPA region at the time.

Chapter 10

System Resilience and the Evolving Balancing Authority Role

The fundamental contribution of Balancing Authority resources to the overall system resilience is described in detail. The ability of the bulk electric system to respond to and recover from threats is shaped by the way the system behaves under normal conditions while absorbing irregularities. The traditional BA function has been about maintaining real time balance of supply and demand, but numerous other system factors have turned BAs into key players in the broader context of the resilience of the system. From a reliability perspective BAs are moving from a straightforward balancing role to the medium term adaptation of system behavior to changing load profiles and other contingencies. Cumulative Balancing Stress One of the resilience dimensions addresses the cumulative effect of long term balancing stress. High levels of variability in load or energy output, loss of control reserves, and/or large numbers of emergency scenarios all represent instances of high levels of balancing stress that must be continuously met by a system’s balancing capabilities. Operating near the limits of capacity for extended periods can erode away the ability of a system to recover from an extreme event when it finally occurs. Balancing Authorities serve to increase the resilience of the grid by bringing stress conditions that occur over a long period of time to the awareness of utilities and allows them to make adjustments to the system in preparation so that the remaining amount of flexibility is preserved. Many BA challenges are changing in a shifting resource mix. With the increasing use of different types of resources, there are changes to the BA resilience context. Different types of resources respond differently, which changes the way imbalance situations develop and are restored. BA’s balancing strategies and procedures need to change to accommodate the new rate of ramp, different response times and availability under stressed system conditions. The BA’s ability to manage by countering potential destabilizing effects and to stabilize and recover from a disturbance, should not be diminished by these changes. The purpose of this paper is to demonstrate through extreme events the role of Balancing Authorities (BA) in providing resiliency for power systems.

Weather-related and other load extreme events along with fuel supply disruptions, synchronized outages etc., can severely stress the BA’s ability to provide needed balancing services and their resultant frequency responses. It will be demonstrated through extreme events how the BAs establish the character of the systems recovery from extreme events (i.e. stable, slowly deteriorating or suffering an abrupt reliability event) while at the same time illustrating the BAs’ role in managing and determining

the severity of their capacity resources and their need to coordinate with other entities to mitigate the impact of severe extreme events on the performance of the power grid. Resilience is also concerned with the recovery phase after a significant event. During the recovery of the power system, a Balancing Authority can aid the process by bringing generation and load into synchronization as the system configuration changes and resources are restored. Careful phasing will be required to restore frequency stability, and coordination with Transmission Operators and Reliability Coordinators will likely be necessary. An effective Balancing Authority will help to ensure an efficient and stable recovery of the power system. Long-term Balancing Authority activity gives some insight into future R&R challenges related to grid-wide resilience. The Balancing Authority will contend with difficulties in achieving balance and minimizing involuntary frequency responses should imbalances rise in future periods. They will also contend with limited ability to provide adequate voluntary frequency responses. These problems have their roots in broader resilience issues in the power system. Solving them may be completely outside of the BAlancing Authority role but understanding their impact on overall system resilience will be key. Balancing Authorities make significant contributions to both the real-time reliability of the power system and its long term stability and planning through two complementary modes of operation. Initially, BA’s respond to major disturbances to provide stability and restore power delivery. On a continuous basis they also operate on a changing grid and provide important information regarding the flexibility of the power system. These complementary functions further emphasize the critical role of BA’s in power system operations.

End-of-Chapter Summary

Balancing Authority operations are responsible for assuring the reliability of the grid by managing long term balancing efforts and dealing with real-time changes in supply and demand to restore frequency stability following major disturbances. The performance of BA operations impacts the way disturbances occurring in the grid are absorbed

and the speed of restoration to normal operations. They provide a unique and potentially forward looking perspective related to new challenges to grid resilience, since BAs experience real-time effects of variations occurring on the system.

Chapter 11

Synthesis of Balancing Authority Reliability Functions

The functions of a Balancing Authority combine several reliability activities into a continuous, on-line real time process aimed at maintaining stability of the bulk electric system. In normal and disturbed states, including severe disruptions, Balancing Authorities act as a bridge linking system stability-related physical phenomena and the synchronized operational activity of power generation and transmission resources. In other words, their performance is a continuous process and not one of specific action at particular times. The main focus is on real-time coordination of generation, load, and interchange, while ensuring appropriate response to changing operating conditions. One of the key synthesis themes of the central effort on Synchrophasor-based reliability metrics is related to frequency as a systemwide reliability indicator, and the balancing task related to frequency control, which is instantaneous quantity indicating balance of the grid at every instant, is purely local in nature. It is a Balancing Authority’s responsibility to keep its power supply in synchronism with system frequency, while at the same time meeting local demand at all times and responding quickly to major deviations in power demand in a manner commensurate with the level of power involved. This Balsing authority level local responsiblity for synchronizing supply and demand, augmented by the fact that power systems have inherently linked dynamic responses to unexpected events has stood the test of times and has continued to enable reliable grid operations, even for highly-interconnected power systems. Margin awareness is a common theme throughout B.A. operations. Balance Managers spend a great deal of time looking at generation margin, the marginal or “ramping” capacity of individual units, and total system reserve margin in relation to anticipated peaks, disturbances, etc. in order to determine when to intervene, or at the very least when to consult and/or alert other Balance Managers to a developing situation potentially warranting escalation. In BA operations reliability is maintained on a reactive basis rather than on a continuous basis, because rather than having to exert ongoing control to meet changing conditions, reliability is maintained by carefully

monitoring capacity, available spare capacity, margins between supplies and demands and having the necessary spare capacity to satisfy periodic imbalance needs and being prepared to bring units on and off line as required to restore balance. This module describes how coordination across functional boundaries is essential to BS in order to emphasize the system-wide aspects of BA operations. Balancing is closely coordinated with the relevant Transmission Operators, Reliability Coordinators, and other BAs.

This coordination depends on information sharing, situational awareness, and the BA’s recognition of authority relationships, in order to ensure that BA actions are consistent with the overall reliability goals, while minimizing adverse system impacts. Ultimately the outcome of the balance between human and automation performance is a function of the total system. As has been stated earlier, automation provides the advantage of speed and accuracy, while the human element brings perception, decision and the ability to adjust to dynamic conditions. The Balancing Authority experience points to a successful Balance of Power at all times as a function of proper combination of technology and human skill. RTO governance, abnormal conditions and resilience all contribute to the integrated role of a BA. Balancing Authorities operate with reduced margin and reduced visibility in periods of normal high load margin and low volatility, but they are often the determining factor of whether frequency excursions from nominal can be controlled or must run up. Their performance in these situations is a direct measure of how well the reliability initiatives mandated by the RTO have succeeded under real world operating conditions. When viewed in its entirety, the operations of a Balancing Authority reflect a key reliability principle – stability is maintained through dynamic regulation of imbalances on a continuous basis, rather than being maintained by enforcing inflexible margins or through random bias corrections. Balancing Authorities are where reliability standards are translated into performance with the interconnected system being maintained stable under a broad range of operating conditions.

End-of-Chapter Summary

The Balancing Authority functions perform the frequency control, margin management, control area coordination and operational personnel’s judgment in their efforts to provide real-time reliability performance on a continuous basis. Work in the Balancing Authority is essentially a dynamic function aimed at maintaining the state of balance in terms of generation, load and interchange on a sustained basis rather than performing individual actions at discrete points in time. Through the coordinated operation of BA activities, the reliability and stability of the overall behavior of the bulk power system is ensured.

Chapter 12

Concluding Observations on Balancing Authority Operations

Balancing Authority operations are a key element of bulk electric system reliability providing the real time control function that synchronizes generation, load and interchange to maintain system frequency stability. Throughout this document, the BA concept has been viewed not as a regulatory construct or market enabler, but as a reliability entity whose operations and performance shape second by second, minute by minute and hour by hour system behavior. Summary BA operations are about managing imbalance under uncertainty, with perfect balance not being required. Reliability is about properly managing the deviations, reserving enough operating margins and timely responding to disturbances rather than about maintaining BA under specific conditions at all times. This Balancing Authority Management Method reflects the true physical aspects of operating interconnected systems. The interconnected nature of frequency control reinforces the collective responsibility inherent in the concept of Balancing Authority (BA) responsibility. Although frequency response is provided across the interconnection, each BA is locally responsible to bring its frequency within balance. The resulting system structure achieves coordinated stability while retaining decentralized control; it functions as a single large machine with diverse local control components. We have identified another important situational attribute that relates to the operational environment in which the BALCO performs its reliability function. As described above, the increasing changes in resource capabilities, in loads, and in the volatility of the power system have significantly increased the degree of difficulty in performing real time balance of supply and demand. These changes, however, do not affect the underlying reliability function that continues to be the core of BAOs’ activities. Rather they serve to highlight the need for dynamic situational awareness, adequate margin assessment and functional interface between the operational functions of a BALCO. BALCOs must dynamically adjust to these changing operating conditions all the while preserving the basic tenets of power system reliability. Human performance is still a critical element in the balance of reliability. The speed and accuracy of automated systems provides a high degree of consistency in management of grid resources. However, it is the judgment of the humans that interprets, prioritizes and responds appropriately to unique and unusual conditions. BAA operations therefore blend technology and human expertise. In addition to normal operating conditions BAWR also identified several unusual operating conditions that demonstrate reliability significance to BAs. These include operating conditions related to unusual events, accidents and unusual or extreme weather conditions that are associated with BA activities and rely heavily on the proper

performance of the associated resources. Balancing functions associated with these conditions impact whether major deviations in frequency at the extreme of synchronized operations are held down and recovered from or whether they are permitted to drift. They demonstrate BA’s capability of operating in uncertain circumstances while coping with limited system margins. From a broader reliability perspective, the work of a Balancing Authority is clear evidence that system reliability is a dynamic function that requires a continuous focus to achieve in an only occasionally intermittent manner. The tasks of frequency stability, margin management, and load response are normal to the operation of the power system and must be performed at all times while the system is energized. The work of a Balancing Authority therefore is a manifestation of the concept of dynamic system reliability, and is a real time function in that respect. The changes occurring in the bulk electric system do not change the function of Balancing Authorities. The basic purpose of a Balancing Authority remains the same. A Balancing Authority provides sufficient reserve to maintain balance and stable frequency, and coordinates the actions of generation and major consumption within its control area to ensure reliable power delivery to the ultimate consumers.

End-of-Chapter Summary

Balancing Authority operations are a key component of bulk power system reliability. Their operations provide real time control of generation and load balance and frequency stability. The control they provide is designed to achieve disciplined responses to imbalance, margin management and synchronized responses to uncertain conditions. Balancing Authorities put reliability principles into practice on a continuous basis while managing to changing conditions in the Bulk Power System.

Glossary

Glossary

Balancing Authority (BA) An entity that provides advanced planning by coordinating resource plans, and real-time operating services that keep load, interchange and generation in balance within the BA Area and support Interconnection frequency.

Balancing Authority Area - That area including generation, transmission lines and loads which is bounded by metering points.

Bulk Electric System (BES) - As defined by NERC, the facilities and control systems that constitute the transmission grid itself, as well as the energy supplied from generation sources to maintain reliability.

Frequency - The rate at which Alternating Current (AC) cycles occurs on a system measured in Hertz (Hz).

Interchange - Energy transfers that cross Balancing Authority boundaries.

Load - The amount of electric power delivered or required at any specified point or points on the system.

Reliability is the ability of the Bulk Electric System (BES) to supply the needed electric energy and electric service reliability levels to end-use customers, both instantaneously and over time, while withstanding random outages and forced outages such as those resulting from individual component failures or other circumstances that may reduce BES capacity.

Reliability Coordinator (RC) - The entity with final authority responsible for reliable operation of the Bulk Electric System who has a wide-area view and responsibility within its Reliability Coordinator Area.

Transmission Operator (TOP) - The entity responsible for the reliability of its local transmission system and that operates or directs the operations of the transmission facilities.

Voltage - The force that causes electric current to flow. Measured in volts.

These definitions are taken from selected terms in the NERC Glossary of Terms. This list is provided for convenience and does not have the force of the official NERC Glossary of Terms.

About the Author

About the Author

Rob Smith is a senior electric industry professional with over thirty years of experience across every major function of the North American Bulk Electric System. His work spans reliability coordination, transmission operations, regulatory compliance, and cybersecurity reliability.

Rob has worked directly in real-time grid operations as a Reliability Coordinator, Transmission Operator, and Power System Operator within RTO/ISO and utility control center environments. He has also held senior regulatory and oversight roles, including senior compliance auditor and subject matter expert for NERC Reliability Standards. In those roles he audited grid facilities for compliance with applicable standards, evaluated the adequacy of mitigation actions, supported the development of violation notifications and settlements as part of FERC-directed enforcement actions, and participated in risk based oversight of utility mitigation activities.

Rob founded Energy Compliance, Inc. to bring senior, regulator-side compliance authority to registered entities directly, without the layered staffing, billable-hour overhead, and generalist advice typical of larger consulting firms. Every Energy Compliance engagement is led by Rob personally.

About Energy Compliance, Inc.

About Energy Compliance, Inc.

Energy Compliance, Inc. is an independent consulting and advisory firm focused exclusively on electric reliability, cybersecurity reliability, and regulatory compliance for organizations connected to the North American Bulk Electric System.

Our work supports registered entities, including Generator Owners and Operators, Transmission Owners and Operators, Reliability Coordinators, Balancing Authorities, and Distribution Providers. We work across NERC Reliability Standards, FERC orders, RTO/ISO market participation rules, Regional Entity oversight, and state regulatory frameworks.

We do this work differently than larger consulting firms. Engagements are led by a single senior practitioner with regulator-side experience. We don’t staff for billable hours. We staff for outcomes. Our deliverables are written to be operationally executable and audit-defensible, not to manufacture activity. Where automation can replace manual work, we build the automation. Where senior judgment is required, the senior is in the room.

Energy Compliance is not affiliated with, sponsored by, or endorsed by the North American Electric Reliability Corporation, the Federal Energy Regulatory Commission, or any Regional Entity.

Services Provided

Our services are written to be clearly defensible. Operationally executable in real time. Audit-defensible at compliance review. Every deliverable is structured for the auditor’s question, not the consultant’s binder.

Energy Compliance services include, but are not limited to:

• NERC reliability and compliance advisory support
• Reliability governance and program assessments
• Registration and applicability analysis
• Operational and engineering reliability alignment
• Compliance program design and improvement
• Audit and enforcement support (non-advocacy)
• Mitigation planning and Self-Report development
• Training and executive briefings on reliability frameworks
• Regulator-perspective program reviews

Each engagement is scoped to the entity’s role, function, and bulk system impact.

ENERGY COMPLIANCE PROFESSIONAL REFERENCE

Rigorous Compliance. Defensible Programs. Energy Compliance, Inc. partners with registered entities on the institutional and technical questions that define strong reliability and cybersecurity programs, from classification through audit through enforcement response.

N ERC CO MP LIANC E S ENIO R ADV ISO RY Program support, interpretation, and audit Direct engagement on complex reliability preparation. questions.

I ND USTRY ENGAGEMENT AUD IT D EFENSE Standards development and working-group Notice of Penalty response and settlement participation. posture.

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