Internal Controls: If April showers bring May flowers, what does June bring?
By Courtney Fasca, Senior Technical Auditor, Operations & Planning Compliance Monitoring
In this recurring column, we dive into the world of internal controls – covering risks, common root causes, and mitigation efforts as well as conversation starters to help you on your controls journey. Controls are to help create and maintain a sustainable plan that keeps entities compliant and ahead of evolving risks. Our goal is to help highlight opportunities for control conversations and improvement and offer our insight and aid in your internal controls journey toward a more reliable electric grid.
As we get ready to welcome the summer (and the hot weather that comes with the season), we hope you’ve taken our advice from April’s article and performed some spring cleaning of your controls. You may remember we talked about extreme weather response controls – checking maintenance of our models, updating Facilities, ensuring there is a qualified back-up subject matter expert (SME) identified. We also talked about asking ourselves “how do we ensure…” and with the summer season rapidly approaching, we’re about to really test our controls.
“April showers bring May flowers” is a popular saying, and if you’re into jokes, many tag on the additional phrase, “then what does June bring?” While the answer is usually a joke, this time, really ask yourself: what does June bring? In our industry, outage season has ended, temperatures start to rise, and we turn to our meteorologists forecasting summer storms. June brings the beginning of summer, the time when most of our grid hits the peak for the year, when we need to be reliable for the health and safety of our customers with these high-temperature, high-humidity days.
How do we ensure that we are ready for this? We trust our internal controls!
Internal controls come in three types – preventive, detective, and corrective. We want to prevent a situation that may lead to less reliability, we want to detect when something happens, and we want to correct any reliability issues before they cascade into larger issues.
What can this look like?
With storm season and high temperatures brewing, we are taking our usual preventive measures: training our storm crews, checking our parts inventory, noting any work that we can try to get done before storms hit – or reprioritize to fix after the summer season has ended. But after a major storm, a lot can happen. Sometimes, we just don’t have the in-kind replacement parts we need and have to wait to order them.
- How do we ensure that these unexpected, emergency replacements with different ratings are noted and detected in our Facility Ratings database? In our EMS?
- If it’s a storm crew not familiar with the specific site and processes, how will these changes be later caught and corrected?
- If we end up changing the most limiting element, how do we ensure that the right people know about this change, however temporary it may be?
The objective in this example is to ensure that we have accurate Facility Ratings – capturing emergency field repairs and ensuring proper communication and tracking of these changes. Fixing the issues and restoring power is the top priority, but derated equipment that isn’t tracked can have big reliability impacts.
For example, let’s say we end up replacing a 1,200 amp disconnect with a 600 amp disconnect – and it turns out that this new disconnect is now the most limiting element of that Facility. An internal control scheme where we hold a periodic meeting between construction crews, field engineers, and personnel performing walkdowns after storms can help catch these changes that may have been overlooked. We can trust this control to help detect changes and take corrective actions to ensure the changes are captured.
After the summer, take stock of not just your substations and inventory, but your internal controls. Did they work as intended? Did they result in any detective or corrective actions? Or were your corrections reliant on good catches from SMEs (meaning your controls need some modification)? Remember, while we cleaned up our controls over the spring, we still need to monitor them for effectiveness as we put them to the test.
So, if April showers bring May flowers, what does June bring? An opportunity to test and monitor our internal controls!
Facility Ratings is a hot topic right now, but there are other summertime risks we can use internal controls to mitigate as well. Consider joining us at the ReliabilityFirst June Tech Talk on June 10! RF will be sharing the latest Summer Reliability Assessment for the footprint, projecting resource adequacy for the summer. RF will also share some key Critical Infrastructure Protection themes and lessons learned from an enforcement perspective, highlighting more areas and opportunities for internal controls concentration to drive continued progress of grid reliability.
Finally, consider attending our Fall Reliability & Security Summit where we will hear industry, academia, and ReliabilityFirst experts cover navigating the challenges of a changing generation mix. This is an in-person event in Indianapolis this year, with an evening reception on Sept. 16, presentations on Sept. 17, and additional morning presentations on Sept 18.
Try your hand at an Internal Controls-themed fallen phrase puzzle!