2013-11-08T15:15:15-06:00 2012-12-31 560574444 CHERRY BEKAERT LLP 1111 METROPOLITAN AVENUE SUITE 1000 CHARLOTTE NC 28204 990 2012-01-01 203311003 SERC RELIABILITY CORPORATION SERC 7049408231 2815 COLISEUM CENTRE DRIVE NO 500 CHARLOTTE NC 28217 R SCOTT HENRY 7043577372 2013-11-08 1 KELLIANNE F BENSON P01345659 7043771678 2012 2016-02-24 21:20:13Z R SCOTT HENRY 2815 COLISEUM CENTRE DR STE 500 CHARLOTTE NC 28217 15627836 0 X WWW.SERC1.ORG X 2005 AL TO PROMOTE AND IMPROVE THE RELIABILITY, ADEQUACY, AND CRITICAL INFRASTRUCTURE OF THE ELECTRICITY SUPPLY FOR THE SOUTHEASTERN UNITED STATES. 59 59 67 475 0 0 0 0 10671508 14845275 8105 7665 1216698 774896 11896311 15627836 0 0 0 0 8598948 10290422 0 0 0 2808628 2952808 11407576 13243230 488735 2384606 4326502 7663610 2051443 3003945 2275059 4659665 X THE MISSION OF SERC RELIABILITY CORPORATION IS TO COMPREHENSIVELY MONITOR AND ENFORCE COMPLIANCE WITH THE RELIABILITY STANDARDS AMONG ALL USERS, OWNERS AND OPERATORS OF THE BULK-POWER SYSTEM IN THE SERC REGION. THE COMPLIANCE MONITORING AND ENFORCEMENT PROGRAM WILL BE CONDUCTED WITH INTEGRITY, CONSISTENCY, CONFIDENTIALITY, FAIRNESS, INDEPENDENCE AND IMPARTIALITY. THE MEMBERS ARE OWNERS, OPERATORS, OR USERS OF THE BULK ELECTRIC SYSTEM OF THE SIXTEEN STATE REGION IN THE SOUTHEASTERN AND CENTRAL UNITED STATES. 0 0 SERC PROVIDES STATUTORY FUNCTIONS IN SUPPORT OF THE ELECTRIC RELIABILITY ORGANIZATION, IN ACCORDANCE WITH THE EXECUTED DELEGATION AGREEMENT BETWEEN SERC AND NERC. THESE FUNCTIONS ARE: ACTIVE PARTICIPATION IN THE DEVELOPMENT OF NORTH AMERICAN RELIABILITY STANDARDS FOR THE BULK-POWER SYSTEM, AND AS NEEDED DEVELOPMENT OF RELIABILITY STANDARDS APPLICABLE WITHIN THE SERC REGION; MONITORING AND ENFORCEMENT OF APPROVED RELIABILITY STANDARDS, INCLUDING THE REGISTRATION OF RESPONSIBLE ENTITIES, AND AS NEEDED CERTIFICATION OF SUCH ENTITIES; ASSESSMENT OF THE PRESENT AND FUTURE RELIABILITY, ADEQUACY, AND SECURITY OF THE BULK-POWER SYSTEM; PROMOTING SITUATION AWARENESS; CONDUCTING EVENT ANALYSIS TO IDENTIFY AND DISTRIBUTE LESSONS LEARNED TO IMPROVE RELIABILITY; PROMOTING EFFECTIVE TRAINING AND EDUCATION OF RELIABILITY PERSONNEL; AND ASSISTING IN THE CERTIFICATION OF OPERATING PERSONNEL AND PROMOTING THE PROTECTION OF CRITICAL INFRASTRUCTURE. SERC DOES NOT PROVIDE ANY NON-STATUTORY FUNCTIONS AT THIS TIME, ALTHOUGH SERC MAY IN THE FUTURE CONSIDER PROVIDING NON-STATUTORY FUNCTIONS FROM TIME TO TIME AS APPROPRIATE AND AS PERMITTED BY ITS BOARD AND APPLICABLE STATUTES AND REGULATIONS.IN RECOGNITION OF THE IMPORTANCE OF THE COMPLIANCE ROLE OF REGIONAL ENTITIES, SERC HAS DEDICATED OVER HALF OF ITS STAFF RESOURCES TO COMPLIANCE MONITORING AND ENFORCEMENT. THE COMPLIANCE STAFF IS FURTHER DIVIDED INTO THREE GROUPS, ONE CONDUCTING COMPLIANCE AUDITS, THE SECOND PERFORMING COMPLIANCE ASSESSMENTS AND ENFORCEMENT, AND THE THIRD CONDUCTING A VARIETY OF PROGRAMMATIC COMPLIANCE ACTIVITIES ON TOPICS INCLUDING INVESTIGATIONS, CRITICAL INFRASTRUCTURE PROTECTION, AND REGISTRATION AND CERTIFICATION. SERC HAS DEVELOPED AND DEPLOYED A ROBUST SET OF ONLINE TOOLS FOR THE GATHERING, ANALYSIS, AND TRACKING OF COMPLIANCE INFORMATION.SERC HAS ORGANIZED THE REMAINING TECHNICAL STAFF INTO A RELIABILITY SERVICES GROUP AND A RELIABILITY ASSESSMENT GROUP TO ADDRESS THE OTHER STATUTORY FUNCTIONS LISTED ABOVE. THESE EXPERTS IN OPERATIONS, ENGINEERING, AND ANALYSIS ASSIST REGISTERED ENTITIES IN ASSESSING AND IMPROVING RELIABILITY. IT IS IN SUPPORT OF THESE AREAS THAT SERC ENGAGES THE MAJORITY OF INDUSTRY EXPERTS ON ITS TECHNICAL COMMITTEES. THE SECOND LARGEST PROGRAM IS RELIABILITY ASSESSMENTS AND PERFORMANCE ANALYSIS. SERC'S RELIABILITY ASSESSMENT AND PERFORMANCE ANALYSIS (RAPA) PROGRAM PROVIDES BULK ELECTRIC SYSTEM (BES) ANALYSIS, DATA GATHERING, AND ANALYSIS OF EVENTS IN ORDER TO IDENTIFY BULK ELECTRIC SYSTEM RELIABILITY RISKS IN THE SERC FOOTPRINT IN ACCORDANCE WITH THE DELEGATION AGREEMENT AND NERC'S RULES OF PROCEDURE. THE MISSION OF THIS PROGRAM IS TO PRODUCE MEASURABLE RELIABILITY IMPROVEMENT WITHIN THE SERC BES THROUGH THE IDENTIFICATION AND PRIORITIZATION OF SIGNIFICANT RISKS TO RELIABILITY, AND TO FACILITATE A CULTURE OF RELIABILITY EXCELLENCE. SERC CONDUCTS DATA GATHERING AND ANALYSIS TO PERFORM AN INDEPENDENT RELIABILITY ASSESSMENT OF THE BES WITHIN THE SERC REGION. THE PROGRAM UTILIZES INFORMATION FROM ITS INTERNAL DATA COLLECTION SOURCES ALONG WITH OTHER PROGRAMS, SUCH AS NERC TRANSMISSION AVAILABILITY DATA SYSTEM (TADS), GENERATING AVAILABILITY DATA SYSTEMS (GADS), AND DEMAND RESPONSE AVAILABILITY DATA SYSTEM (DADS) PROGRAMS. SERC CONDUCTS AND REPORTS THE RESULTS OF ITS INDEPENDENT ASSESSMENTS OF THE OVERALL RELIABILITY AND ADEQUACY OF THE SERC REGION IN SUPPORT OF THE NERC OBLIGATION TO PERFORM SIMILAR ANALYSIS OF THE INTERCONNECTED NORTH AMERICAN BULK POWER SYSTEMS. THE THIRD LARGEST PROGRAM IS SITUATION AWARENESS AND INFRASTRUCTURE SECURITY. SITUATION AWARENESS AND EVENTS ANALYSIS ACTIVITIES ARE PERFORMED WITH THE OBJECTIVE THAT CONDITIONS THAT IMPACT OR HAVE THE POTENTIAL TO IMPACT RELIABLE OPERATIONS ARE RECOGNIZED AND UNDERSTOOD. THE SERC SITUATION AWARENESS AND INFRASTRUCTURE SECURITY PROGRAM ACCOMPLISHES THIS BY MONITORING SOURCES OF INFORMATION AND MAINTAINING COMMUNICATIONS WITH STAKEHOLDERS, NERC, AND OTHER ORGANIZATIONS. MITIGATING RELIABILITY IMPROVEMENT INITIATIVES ARE IDENTIFIED THROUGH THE PROCESS OF ANALYZING SIGNIFICANT BULK ELECTRIC SYSTEM (BES) EVENTS AND EXISTING TECHNICAL RELIABILITY GUIDANCE FOR RISKS AND VULNERABILITIES THAT COULD RECUR ELSEWHERE WITHIN THE BULK POWER SYSTEM (BPS). 0 0 0 0 0 0 0 0 0 1 0 0 0 0 1 1 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 20 0 1 67 1 0 0 0 0 0 0 0 0 X 59 59 0 0 0 0 1 1 1 1 1 0 0 0 1 1 1 1 1 1 1 0 NC X JENNIFER KELLY 7043577372 2815 COLISEUM CENTRE DRIVE STE 500 CHARLOTTE NC 28217 CAREN ANDERS - PROGRESS ENERGY CARO 0.30 X 0 0 0 JAY BARTLETT - PRAIRIE POWER INC 0.30 X 0 0 0 DAVID BEAM - NC ELEC MEMBERSHIP CO 0.30 X 0 0 0 GERALD BECKERLE - AMEREN SERVICES C 0.30 X 0 0 0 TERRY L BLACKWELL - SC PUBLIC SERVI 0.30 X 0 0 0 ROBIN BLANTON - PIEDMONT ELEC MEMBE 0.30 X 0 0 0 MAUREEN BORKOWSKI - AMEREN SERVICES 0.30 X 0 0 0 THOMAS BOWE - PJM INTERCONNECTION L 0.30 X 0 0 0 DENNIS BOYD - CUSTOMER 0.30 X 0 0 0 NATHAN L BROWN - SOUTH MISS ELEC P 0.30 X 0 0 0 CHRIS CALDWELL - GULF POWER CO 0.30 X 0 0 0 ROGER CLARK - ASSOCIATED ELECTRIC C 0.30 X 0 0 0 STEVE CRAIG - MISSISSIPPI POWER CO 0.30 X 0 0 0 DAVID CROCKETT - BIG RIVERS ELECTRI 0.30 X 0 0 0 MICHAEL DESSELLE - SOUTWEST POWER P 0.30 X 0 0 0 CJ ENGERSOLL - CONSTELLATION ENERGY 0.30 X 0 0 0 CLIFF EVANS - COGENTRIX ENERGY LLC 0.30 X 0 0 0 AMADOU FALL - ACES POWER MARKETING 0.30 X 0 0 0 JAY FARRINGTON - POWERSOUTH ENERGY 0.30 X 0 0 0 GREG FORD - GA SYSTEM OPERATIONS CO 0.30 X 0 0 0 EDWIN GOFF - PROGRESS ENERGY CAROLI 0.30 X 0 0 0 STUART GOZA - TENN VALLEY AUTHORITY 0.30 X 0 0 0 SCOT HATHAWAY - VA ELEC AND POWER C 0.30 X 0 0 0 ERIC HOBBIE - CITY OF SPRINGFIELD I 0.30 X 0 0 0 WILLIAM HUTCHINSON - SOUTHERN ILL P 0.30 X 0 0 0 DAN JEWELL - LOUISIANA GENERATING C 0.30 X 0 0 0 TAD JOHNSEN - CITY OF COLUMBIA MO 0.30 X 0 0 0 ROY JONES - NC MUNICIPAL POWER AGEN 0.30 X 0 0 0 BRETT KRUSE - CALPINE ENEGERY SERVI 0.30 X 0 0 0 KEN LACKEY - IPR-GDF SUEZ ENERGY 0.30 X 0 0 0 KENNETH LEGG - SOUTH MISS ELEC POWE 0.30 X 0 0 0 DOUG LEGO - MUNICIPAL ELEC AUTH OF 0.30 X 0 0 0 TIMOTHY LYONS - OWENSBORO KY MUN UT 0.30 X 0 0 0 JOSEPH MATRANGA - OCCIDENTAL CHEMIC 0.30 X 0 0 0 DAVID MCCUE - THE ENERGY AUTHORITY 0.30 X 0 0 0 W DOUGLAS MCLAUGHLIR - SOUTHERN CO 0.30 X 0 0 0 JAMES MESSERSMITH - OGLETHORPE POWE 0.30 X 0 0 0 SILVIA PARADA MITCHELL - FLORIDA PO 0.30 X 0 0 0 SCOTT MOORE - ALABAMA POWER CO 0.30 X 0 0 0 GREGG PAKELA - DTE ENERGY TRADING I 0.30 X 0 0 0 NELSON PEELER - DUKE ENERGY CAROLIN 0.30 X 0 0 0 BILL PHILLIPS - MIDWEST INDEPENDENT 0.30 X 0 0 0 NEIL PHINNEY - GA SYSTEM OPERATIONS 0.30 X 0 0 0 TIMOTHY PONSETI - TENN VALLEY AUTHO 0.30 X 0 0 0 MIKE PULLEN - ELECTRIC ENERGY INC 0.30 X 0 0 0 RICHARD RILEY - ENTERGY 0.30 X 0 0 0 MARK RINGHAUSEN - OLD DOMINION ELEC 0.30 X 0 0 0 LARRY RODRIGUEZ - ENTEGRA POWER GRO 0.30 X 0 0 0 DAN ROETHEMEYER - DYNEGY INC 0.30 X 0 0 0 BOB SCHAFFELD - SOUTHERN CO SERVICE 0.30 X 0 0 0 KEVIN SMITH - TENASKA POWER SERVICE 0.30 X 0 0 0 EDWIN STATON - LGE AND KU SERVICES 0.30 X 0 0 0 DAVID TREGO - FAYETTEVILLE PUBLIC W 0.30 X 0 0 0 CHARLES A WHITE - SC ELEC GAS CO 0.30 X 0 0 0 DENVER YORK - EAST KENTUCKY POWER C 0.30 X 0 0 0 MIKE SMITH - GEORGIA TRANSMISSION C 0.30 X X 0 0 0 RAY PHILLIPS - ALABAMA MUN ELEC AUT 0.30 X X 0 0 0 MARION LUCAS - ALCOA POWER GENERATI 0.30 X X 0 0 0 R SCOTT HENRY 40.00 X 391571 0 41216 JOHN TWITCHELL 40.00 X 243076 0 26955 MARISA SIFONTES 40.00 X 228287 0 25466 JENNIFER KELLY - SERC RELIABILITY C 40.00 X 150488 0 16923 CARTER EDGE - SERC RELIABILITY CORP 40.00 X 200312 0 23106 KENNETH B KEELS 40.00 X 202567 0 23329 JOE SPENCER 40.00 X 167058 0 18397 JAMES R HARRELL 40.00 X 169233 0 20811 PATRICK HUNTLEY 40.00 X 165043 0 19853 1917635 0 216056 33 0 1 0 WALSER TECHNOLOGY 108 SOUTH MAIN STREET SALISBURY NC 28144 IT CONSULTING 140115 1 MEMBER ASSESSMENT 900099 14845275 14845275 14845275 7665 7665 PENALTY SANCTIONS 900099 434500 434500 WORKSHOP REVENUE 900099 226574 226574 MISCELLANEOUS INCOME 900099 113822 113822 774896 15627836 15620171 0 7665 1123980 6879524 1060293 665615 561010 70777 41939 422014 402242 404835 581263 383704 129449 26173 CONTRACTS 482242 8170 13243230 2373668 5634198 1474137 1558710 47962 18487 123301 127403 698870 374058 307434 324812 4326502 7663610 1575116 2447339 476327 556606 2051443 3003945 X 0 0 0 0 2275059 4659665 2275059 4659665 4326502 7663610 2384606 0 X X 0 1 X 1 0 53099 34033 19066 645771 340025 305746 324812 X 15627836 0 15627836 0 15627836 13243230 0 13243230 0 13243230 DESCRIPTION OF UNCERTAIN TAX POSITIONS UNDER FIN 48: PART X, LINE 2: MANAGEMENT HAS EVALUATED THE EFFECT OF THE FINANCIAL ACCOUNTING STANDARDS BOARD ("FASB") GUIDANCE ON ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES. THE GUIDANCE CLARIFIES THE ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES RECOGNIZED IN AN ENTITY'S FINANCIAL STATEMENTS BY PRESCRIBING A RECOGNITION THRESHOLD AND MEASUREMENT ATTRIBUTE FOR THE FINANCIAL STATEMENT RECOGNITION AND MEASUREMENT OF A TAX POSITION TAKEN OR EXPECTED TO BE TAKEN IN A TAX RETURN. THE CORPORATION'S POLICY IS TO RECORD A LIABILITY FOR ANY TAX POSITION TAKEN THAT IS BENEFICIAL TO THE CORPORATION, INCLUDING ANY RELATED INTEREST AND PENALTIES, WHEN IT IS MORE LIKELY THAN NOT THE POSITION TAKEN BY MANAGEMENT WITH RESPECT TO A TRANSACTION OR CLASS OF TRANSACTIONS WILL BE OVERTURNED BY A TAXING AUTHORITY UPON EXAMINATION. MANAGEMENT BELIEVES THERE ARE NO SUCH POSITIONS AT DECEMBER 31, 2012 OR 2011 AND, ACCORDINGLY, NO LIABILITY HAS BEEN ACCRUED. X X X X 0 1 0 R SCOTT HENRY 279251 0 112320 0 0 0 34425 0 6791 0 432787 0 0 0 JOHN TWITCHELL 189502 0 53574 0 0 0 21471 0 5484 0 270031 0 0 0 MARISA SIFONTES 182090 0 46197 0 0 0 21364 0 4102 0 253753 0 0 0 JENNIFER KELLY - SERC RELIABILITY C 118077 0 32411 0 0 0 14400 0 2523 0 167411 0 0 0 CARTER EDGE - SERC RELIABILITY CORP 158068 0 42244 0 0 0 18861 0 4245 0 223418 0 0 0 KENNETH B KEELS 166308 0 36259 0 0 0 18486 0 4843 0 225896 0 0 0 JOE SPENCER 145474 0 21584 0 0 0 15211 0 3186 0 185455 0 0 0 JAMES R HARRELL 143615 0 25618 0 0 0 14501 0 6310 0 190044 0 0 0 PATRICK HUNTLEY 145080 0 19963 0 0 0 15044 0 4809 0 184896 0 0 0 PART I, LINE 4B THE ORGANIZATION ESTABLISHED A SECTION 457 DEFERRED COMPENSATION PLAN FOR CERTAIN EMPLOYEES. IN 2012, THE ORGANIZATION CONTRIBUTED $21,876 FOR SCOTT HENRY, THE PRESIDENT OF THE ORGANIZATION. SUPPLEMENTAL INFORMATION PART III BONUS DETERMINATION: BASED ON PERFORMANCE THROUGH THE PRECEDING YEAR, LEVEL OF RESPONSIBILITIES, AND OVERALL CONTRIBUTIONS TO THE ORGANIZATION, EACH EMPLOYEE MAY BE ELIGIBLE FOR A YEAR-END INCENTIVE PAYMENT. THE PRESIDENT PROPOSES APPROPRIATE RANGES FOR INCENTIVE PAY, BASED ON OVERALL CORPORATE PERFORMANCE, DEPARTMENT PERFORMANCE, AND INDIVIDUAL PERFORMANCE DURING THE PRECEDING YEAR, EACH AT DIFFERENT WEIGHTS DEPENDING ON LEVEL OF RESPONSIBILITY. THE SEVERAL RANGES VARY FROM ZERO TO A CERTAIN PERCENTAGE OF BASE PAY. THE INCENTIVE PAY RANGES ARE SUBJECT TO APPROVAL OF THE INDEPENDENT BOARD-APPOINTED HUMAN RESOURCE AND COMPENSATION COMMITTEE AND TOTAL INCENTIVE COMPENSATION IS SUBJECT TO BUDGET LIMITATIONS. WITHIN THE APPROVED RANGES, THE APPROVING OFFICER OF THE CORPORATION, WITH INPUTS FROM EACH EMPLOYEE'S SUPERVISOR, WILL DETERMINE THE ACTUAL INCENTIVE PAY FOR EACH EMPLOYEE. INCENTIVE PAY IS INTENDED TO REWARD PERFORMANCE THAT IS BENEFICIAL TO THE ORGANIZATION AND IS NOT GUARANTEED AS AN ENTITLEMENT TO ANY EMPLOYEE. FORM 990, PART VI, SECTION A, LINE 6 SERC RELIABILITY CORPORATION IS AN ORGANIZATION WITH MEMBERS WHO DESIGNATE THE REPRESENTATIVE TO THE GOVERNING BODY, WHICH ITSELF OR THROUGH THE EXECUTIVE COMMITTEE MAKES SIGNIFICANT DECISIONS FOR THE ORGANIZATION. FORM 990, PART VI, SECTION A, LINE 7A EACH BOARD MEMBER HAS A WEIGHTED VOTE IN ELECTING MEMBERS OF THE GOVERNING BODY. FORM 990, PART VI, SECTION A, LINE 7B THE GOVERNING BODY IS MADE UP OF OUR MEMBERS. ONCE THE BOARD APPROVES, IT DOES NOT NEED ADDITIONAL APPROVAL BY THE MEMBERS. FORM 990, PART VI, SECTION B, LINE 11 SERC'S FORM 990 IS PREPARED BY ITS INDEPENDENT AUDITORS. IT IS THEN REVIEWED BY THE PRESIDENT, THE DIRECTOR OF FINANCE AND THE BOARD OFFICERS BEFORE THE RETURN IS FILED WITH THE IRS. ADDITIONALLY, A REDACTED COPY OF THE 990 IS PROVIDED TO ALL BOARD MEMBERS PRIOR TO FILING WITH THE IRS. FORM 990, PART VI, SECTION B, LINE 12C SERC HAS A WRITTEN CONFLICT OF INTEREST POLICY, IN WHICH ALL EMPLOYEES AND BOARD MEMBERS ARE REQUIRED TO REVIEW AND COMPLETE A WRITTEN QUESTIONNAIRE ON CONFLICTS ON AN ANNUAL BASIS. ALL SERC STAFF CONFLICTS ARE CONSOLIDATED ON A "SERC STAFF RECUSAL REQUIREMENTS" DOCUMENT. EACH SERC REPRESENTATIVE MUST RECUSE HIMSELF OR HERSELF FROM PARTICIPATION IN ANY PARTICULAR MATTER INVOLVING THE SUBJECT OF A CONFLICT. FORM 990, PART VI, SECTION B, LINE 15 THE OFFICERS OF THE INDEPENDENT BOARD MEET IN EXECUTIVE SESSION TO DETERMINE THE SALARY AND INCENTIVE PAY FOR THE EXECUTIVES OF THE ORGANIZATION. THE BOARD OFFICERS RELY UPON INDUSTRY DATA AND COMPENSATION STUDIES PERFORMED TO DETERMINE THE REASONABLENESS OF THE EXECUTIVES' COMPENSATION PACKAGES. COMPENSATION STUDIES ARE PERFORMED AT A MINIMUM EVERY OTHER YEAR AND INCLUDE SOURCES SUCH AS IEEE, ADP SALARY COMPARISONS, AND REGIONAL REPORTS RECIEVED FOR THE ORGANIZATION'S PARTICIPATION IN REGIONAL COMPENSATION SURVEYS. THE DELIBERATION AND DECISION IS CONTEMPORANEOUSLY SUBSTANTIATED IN MEETING MINUTES. THE BOARD-APPOINTED HUMAN RESOURCE AND COMPENSATION COMMITTEE REVIEWS AND ENDORSES THE PRESIDENT'S RECOMMENDATIONS REGARDING THE COMPENSATION OF OTHER HIGHEST PAID EMPLOYEES. THE COMMITTEE RELIES UPON INDUSTRY DATA AND COMPENSATION STUDIES PERFORMED TO DETERMINE REASONABLENESS OF THE COMPENSATION OF HIGHEST PAID EMPLOYEES. FORM 990, PART VI, SECTION C, LINE 19 ALL GOVERNING DOCUMENTS AND AUDITED FINANCIAL STATEMENTS ARE AVAILABLE TO THE PUBLIC UPON REQUEST. AUDIT COMMITTEE: THE PROCESS HAS NOT CHANGED SINCE THE PRIOR YEAR.