From the Board Chair and President and CEO

Dear Members and Stakeholders:

This week’s annual member and board meetings offered a valuable opportunity to reflect on the challenges and achievements of 2024, assess ongoing work, and set priorities for the future. We are proud to report that staff met or exceeded all target corporate goals set for the year, including collaborative efforts related to completion of the congressionally mandated Interregional Transfer Capability Study, which was discussed in greater detail during the open board meeting. What we accomplished this year demonstrates a commitment to the important work we do; credit for which is owed to MRO staff, board members, industry stakeholders, and colleagues across the ERO Enterprise.

The board’s Organizational Group Oversight Committee (OGOC) kicked off this week’s events with its annual risk meeting—a closed session focused on assessing regional risks and exploring how MRO’s three advisory councils (Compliance Monitoring and Enforcement Program, Reliability, and Security) can contribute to risk mitigation efforts across the region. Invited participants included MRO’s leadership team, board members, and the chair and vice chair from each advisory council. MRO staff provided a preview of the 2025 Regional Risk Assessment (scheduled for release in early 2025) to guide the discussions. Based on input gathered during the meeting, the advisory councils will develop their annual work plans.

Discussions about risk continued the following day during the board’s closed session. Physical and cyber security were key topics along with risks and opportunities presented by advancements in artificial intelligence. Also in closed session, the board heard reports on the status of strategic metrics, the proposed 2025-2028 Strategic Plan, and a reimagined biannual Compliance Monitoring and Enforcement Program update, which now includes information on the registration and certification of registered entities. Director training on fiduciary duties and conflicts of interest was also held.

NERC President and Chief Executive Officer Jim Robb joined the meeting remotely to discuss the challenges we must address to advance the ERO Enterprise vision and mission. He shared four crucial focus areas in the ERO Enterprise Long-Term Strategy: Energy, Security, Engagement, and Agility and Sustainability. Robb provided greater detail on the activities included in each focus area, emphasizing that the forces shaping our industry are more complex and voluminous now than ever before. He concluded by stressing that ERO Enterprise leadership is committed to collective success by working together as one synchronous machine — effectively, efficiently, and collaboratively.

Robb was joined by NERC Board Vice-Chair and Chair-Elect Suzanne Keenan, who provided her perspectives on the joint ERO Enterprise board leadership meeting that took place in October. She commented on the level of collaboration and communication during that impactful gathering where the leaders of NERC and the six Regional Entities discussed how to sustain success in a highly complex and evolving energy landscape. Keenan acknowledged that NERC and the Regional Entities have earned the reputation of being trusted experts and are well positioned to be the voice of truth for reliability and security issues affecting the North American grid.

Keeping with the strategic theme, MRO’s Vice President and Engineer for Strategy, Innovation, and Finance, Lam Chung, presented the proposed 2025-2028 MRO Strategic Plan for board approval. He highlighted that the key initiatives outlined in MRO’s strategy directly support the ERO Enterprise focus areas, fostering a unified approach to enhancing grid reliability, security, and resilience. Chung explained that the plan was developed through a collaborative process that involved gathering input from a wide range of stakeholders, including industry participants and the board. He noted the strategy continues to prioritize people, processes, and partnerships, and will enable MRO to address critical issues, seize opportunities for investment, and make informed decisions regarding resource allocation and budgeting as we work to advance our shared vision and mission.

Director of Reliability Analysis, Bryan Clark, reviewed the results of the Interregional Transfer Capability Study — part two and three of which were published by NERC earlier this week. The study was mandated by the U.S. Congress in June of 2023 as part of the Fiscal Responsibility Act with a deadline for the ERO Enterprise to complete the work and file with the Federal Energy Regulatory Commission by December 2, 2024. Study deliverables focused on what transmission capacity is needed today, as well as what is needed in the future to support reliability of the North American bulk power system. There were three study phases: 1) current transfer capability analysis, 2) identification of prudent additions, and 3) how best to meet and maintain transfer capability. The results of the study found that while current transfer capability is sufficient, ten of the thirty transmission planning regions in the U.S will need prudent additions over a forward-looking ten-year horizon. There will be an opportunity for public comment on the full study results after it is filed with the Commission in December. The study will also be expanded to include information from Canadian utilities, collection of which is underway and being coordinated through NERC and the cross-border Regional Entities.

During the open board meeting, we bid farewell to directors Tom Finco (American Transmission Company) and Michael Desselle (Southwest Power Pool, or SPP), who represented the Transmission System Operator Sector. Desselle, who has served on the board for six years, announced his retirement from his role as vice president and chief compliance and administrative officer at SPP after more than 20 years with the company. With 40 years of industry experience, his contributions have been invaluable to both MRO and the board. The dedication and thoughtful leadership of both Desselle and Finco will be deeply missed. In recognition of their service, the board passed a resolution and presented each with an award.

The board welcomed three new members who will be seated in January 2025. Terri Pyle (Oklahoma Gas and Electric) fills an open regional director seat, and Mike Riley (Southwest Power Pool) and Brenda Houtz (ITC) both fill open Transmission System Operator sector seats.

As part of MRO’s volunteer recognition program, the board recognized the following long-time organizational group members for their collective 65 years of service on MRO organizational groups

Last, but certainly not least, the board honored the winner of this year’s HERO Award, Dick Pursley, Director of Operations and Transmission Services with Great River Energy. Pursley has served on multiple organizational groups, with contributions dating back to 2010. He has participated in, and helped to lead, several regional risk mitigation efforts, most notably related to cold weather preparedness. Pursley has also supported MRO’s efforts to raise awareness of reliability risks by authoring news articles, planning and participating in webinars and conferences, fostering information sharing among regional constituents, and serving on reliability assessment review teams. His exemplary leadership reflects a strong commitment to Highly Effective Reliability Organizations and the region.

Committee Reports

The Finance and Audit Committee provided year-to-date financials and reports on the status of MRO’s 2023 Form 990, the independent 2024 financial audit, and corporate risk management program efforts.

The Governance and Personnel Committee reviewed recent HR and talent management activities, including benefit enrollment and the year-end performance review process. The committee also discussed revisions to the board committee charters and policies and highlighted the results of the 2024 board election.

The Organizational Group Oversight Committee reviewed organizational group accomplishments in 2024 and provided a list of new organizational group members approved for 2025. The committee also summarized the discussions from the annual risk meeting held earlier this week.

Board Actions

Actions taken by the board during the meetings include:

You can read more about the discussions and actions taken at the fourth quarter board meetings in the full meeting minutes, which will be available soon on MRO’s website.

We conclude this letter with an overwhelming sense of gratitude, respect and hope. Gratitude for the relationships and connections that have been cultivated throughout the year, respect for the incredible group of professionals that enable our ongoing progress, and hope for the future. As we think about the future, two quotes come to mind:

“In the middle of difficulty lies opportunity.” (Albert Einstein)

“The best way to predict the future is to create it.” (Peter Drucker).

We will approach the future with our shared purpose of a highly reliable and secure North American bulk power system top of mind, understanding that we each have a role to play in connecting strategy to action. We also look forward to rolling up our sleeves and getting the work done!

In whatever way you celebrate the holiday season, on behalf of everyone here at MRO, we wish you the very best.

Thank you for your participation. Our future is bright!

Sincerely,

Dr. Dana Board, Board Chair, and Sara Patrick, President and CEO