FERC Standards of Conduct

1. FERC Standards of Conduct

2. Welcome • This training course was developed by WeComply, a leading provider of ethics and compliance training since 1999. The course is also available online from any Internet-connected computer. • WeComply offers 60+ courses on a wide range of business ethics and compliance topics. Each course helps employees spot key compliance issues and respond appropriately. • This course is designed and licensed for classroom use in parallel with WeComply's online course on the same topic. This course may not be hosted on a learning management system or distributed to employees individually by electronic or other means without WeComply's prior authorization. • For more information about this course or others, whether for classroom use or online access, please e-mail info@wecomply.com or call 1-866-WeComply.

3. Introduction • Thank you for participating in our FERC Standards of Conduct training course. Whether you perform transmission functions or marketing functions for our organization, this course will help you to understand these Standards and how they apply to your job duties. • At the end of the course material, you'll take a quiz that presents hypothetical situations for you to analyze. Respond correctly to move through the quiz and earn a Certificate of Completion. • Please keep in mind that this material is provided for informational purposes only and is not intended as legal advice. If you have questions or need legal advice about how any of this material applies to your job responsibilities, please direct them to your supervisor or the Legal Department. 1 of 19

4. Overview • FERC Standards of Conduct are intended to ensure that transmission providers do not give their affiliates a competitive advantage — • Through preferential treatment • By providing access to information denied to non-affiliates • Standards impose the following rules and requirements: • Non-Discrimination Requirements • Independent Functioning Rule • No Conduit Rule • Transparency Rule 2 of 19

5. Overview (Cont’d) • FERC Standards of Conduct are intended to ensure that transmission providers do not give their affiliates a competitive advantage — • Through preferential treatment • By providing access to information denied to non-affiliates • Standards impose the following rules and requirements: • Non-Discrimination Requirements • Independent Functioning Rule • No Conduit Rule • Transparency Rule 3 of 19

6. Non-Discrimination Requirements • In any sale or purchase of transmission service, we must — • Not give undue preference to any customer with regard to rates, terms or conditions • Strictly enforce all non-discretionary tariff provisions • Apply discretionary tariff provisions fairly and impartially • Apply any discounts equitably • Process all similar requests for service similarly 4 of 19

7. Transmission-Function Information • Standards restrict our handling of non-public transmission-function information • Transmission-function information includes information regarding — • Transmission flows or equipment status • Scheduled or unscheduled transmission outages • Available transmission capacity • Curtailment or maintenance activity • Information about or from third-party transmission customers • Any transmission-function information that is not included on our website is non-public 5 of 19

8. FERC Is Fair But Not Feckless • Congress Greatly Enhances FERC’s Ability to Levy Huge Fines • Congress gave the Federal Energy Regulatory Commission (FERC) a shot in the arm recently by (1) expanding its authority to levy fines and (2) increasing the maximum penalty to $1 million per day per violation. Congress also increased the maximum imprisonment time when FERC refers a case to the U.S. Department of Justice for criminal prosecution. In the wake of these changes, FERC issued new penalty guidelines that it says will "ensure fairness, consistency and transparency in all FERC civil penalty decisions." 6 of 19

9. Independent Functioning Rule • Requires transmission-function employees (TFEs) to work independently of marketing-function employees (MFEs) • We enable independent functioning through — • Separate physical facilities, business records and computer databases • Restricted access to facilities and resources • Independent-functioning guidelines: • If an MFE, never attempt to gain access to transmission facilities, systems or transmission-function information • If a TFE, never attempt to gain access to marketing facilities, records or computer systems • If you receive restricted information in error, do not use it and report it immediately • If you divulge any restricted information in error, report it immediately 7 of 19

10. Independent Functioning Rule (Cont’d) • Requires transmission-function employees (TFEs) to work independently of marketing-function employees (MFEs) • We enable independent functioning through — • Separate physical facilities, business records and computer databases • Restricted access to facilities and resources • Independent-functioning guidelines: • If an MFE, never attempt to gain access to transmission facilities, systems or transmission-function information • If a TFE, never attempt to gain access to marketing facilities, records or computer systems • If you receive restricted information in error, do not use it and report it immediately • If you divulge any restricted information in error, report it immediately 8 of 19

11. Independent Functioning Rule (Cont’d) • Requires transmission-function employees (TFEs) to work independently of marketing-function employees (MFEs) • We enable independent functioning through — • Separate physical facilities, business records and computer databases • Restricted access to facilities and resources • Independent-functioning guidelines: • If an MFE, never attempt to gain access to transmission facilities, systems or transmission-function information • If a TFE, never attempt to gain access to marketing facilities, records or computer systems • If you receive restricted information in error, do not use it and report it immediately • If you divulge any restricted information in error, report it immediately 9 of 19

12. Independent Functioning Rule (Cont’d) • Requires transmission-function employees (TFEs) to work independently of marketing-function employees (MFEs) • We enable independent functioning through — • Separate physical facilities, business records and computer databases • Restricted access to facilities and resources • Independent-functioning guidelines: • If an MFE, never attempt to gain access to transmission facilities, systems or transmission-function information • If a TFE, never attempt to gain access to marketing facilities, records or computer systems • If you receive restricted information in error, do not use it and report it immediately • If you divulge any restricted information in error, report it immediately 10 of 19

13. Pop Quiz! • Sally, a project manager, wanted to have a meeting of TFEs and invited Jason, a marketing consultant, and Pearl, a sales contractor, to attend. Does either of these invitations violate the Independent Functioning Rule? • No, neither of them. • Yes, the invitation to Pearl. • Yes, both of them. 11 of 19

14. No Conduit Rule • No Conduit Rule prohibits — • Disclosing non-public transmission-function information to MFEs • Using anyone as a conduit to do so • Prevent inappropriate disclosures by — • Using strong passwords for electronic files and documents • Never sharing your personal user ID or password • Keeping your work area secure • Using caution and good judgment when discussing any aspect of our business • Report any improper disclosures you become aware of to your supervisor immediately 12 of 19

15. No Conduit Rule (Cont’d) • No Conduit Rule prohibits — • Disclosing non-public transmission-function information to MFEs • Using anyone as a conduit to do so • Prevent inappropriate disclosures by — • Using strong passwords for electronic files and documents • Never sharing your personal user ID or password • Keeping your work area secure • Using caution and good judgment when discussing any aspect of our business • Report any improper disclosures you become aware of to your supervisor immediately 13 of 19

16. No Conduit Rule (Cont’d) • No Conduit Rule prohibits — • Disclosing non-public transmission-function information to MFEs • Using anyone as a conduit to do so • Prevent inappropriate disclosures by — • Using strong passwords for electronic files and documents • Never sharing your personal user ID or password • Keeping your work area secure • Using caution and good judgment when discussing any aspect of our business • Report any improper disclosures you become aware of to your supervisor immediately 14 of 19

17. No Conduit Rule (Cont’d) • No Conduit Rule prohibits — • Disclosing non-public transmission-function information to MFEs • Using anyone as a conduit to do so • Prevent inappropriate disclosures by — • Using strong passwords for electronic files and documents • Never sharing your personal user ID or password • Keeping your work area secure • Using caution and good judgment when discussing any aspect of our business • Report any improper disclosures you become aware of to your supervisor immediately 15 of 19

18. FAQs • Exceptions to the Independent Functioning and No Conduit Rules • There are limited exceptions to the Independent Functioning and No Conduit Rules. We may share non-public transmission-function information with an MFE if it is — • In response to that MFE's own request for transmission service; • About another customer, and we obtain and post to our website (a) that customer's written consent and (b) a confirmation that the consenting customer did not agree to the disclosure in exchange for preferential treatment; • Necessary either to (a) perform generation dispatch or (b) maintain or restore operation of the transmission system or generating units; or • Furnished to comply with FERC reliability standards. • Whenever we share information with an MFE under (3) or (4) above, we must make a contemporaneous record of any information we exchange — except in an emergency, in which case we must make a record of information shared as soon as practicable after the fact. 16 of 19

19. Transparency Rule • Requires that we post any non-public transmission-function information — • Disclosed in violation of the No Conduit Rule, or • Supplied in an emergency • You must report prohibited disclosures you learn of to your supervisor immediately • Also requires us to post — • Names and addresses of affiliates that employ or retain MFEs • Job titles and descriptions of all TFEs • A list of any facilities shared by TFEs and MFEs • Our written procedures related to the Standards 17 of 19

20. In Conclusion... • Standards obligate us to — • Treat all customers equitably • Maintain separate marketing and transmission functions • Prevent inappropriate disclosures of non-public transmission-function information • Align your conduct with the Standards by — • Avoiding preferential dealings among transmission customers • Respecting separation of transmission and marketing functions • Protecting the security of the information you handle • Report any conduct that violates these obligations to your supervisor or the Legal Department immediately 18 of 19

21. Final Quiz 19 of 19

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23. Course-Delivery Options • WeComply offers training courses in multiple delivery formats to reach all employees -- not just those with computers: 1-866-WeComply • Online – available 24/7 from any computer • Mobile – tablets and smartphones • Offline optionswhen Internet access is unavailable: • PowerPointwith presenter notes for classroom training • PDF booklets with tear-off certifications • CD-ROM/intranetwith tracking via e-mail • Phone-based training and certification

24. Online Training Benefits • While classroom training has certain advantages, it can be challenging to implement in large and/or geographically dispersed companies. Consider these advantages of online training: • Better Attendance • Higher Completion Rates • Less Impact on Productivity • Perfect for New Hires • Convenient for Remote Locations • Available in 42 Foreign Languages • Easy Access to Courses • Periodic Refreshers Blended Benefits Get the best of both worlds by providing classroom training where feasible and online training elsewhere – all centrally tracked and organized for easy monitoring and reporting.