U.S. Senator Richard Burr: slow down smart grid technology deployment
If it were up to United States Senator Richard Burr (R-North Carolina), smart grid technology deployment would slow to a crawl.
And he made it clear yet again that he's not too happy with the Federal Energy Regulatory Commission (FERC), either.
Speaking during a question period at the end of a U.S. Senate Committee on Energy and Natural Resources full committee hearing to receive testimony on a joint staff discussion draft pertaining to cyber security of the bulk power system and electric infrastructure, Sen. Burr's final comment before leaving the hearing chambers was abrupt but clear.
Addressing Joseph McClelland, FERC's office of energy projects director, who had just revisited the reason FERC supports the discussion draft's proposed authorization to develop standards to address cyber security vulnerabilities not only for utility generation and transmission, but also distribution (which is currently under states' individual jurisdiction, rather than federal), Sen. Burr said:
"I appreciate that comment, and this would be a personal observation: With what we don't know today, I'm more encouraged to slow down the implementation of smart grid technology until we learn the things that we need to learn with a great deal of confidence."
Burr's observation was an unexpected departure from the hearing's discussion about cyber security standards development and control onto an unmapped path through the brambles. His previous line of questioning had taken a more familiar route. (Remember, Senator Burr was one of the five U.S. senators in transmission "pass-through" states who introduced legislation back in February to derail a proposed rule from the FERC that the senators have said would give the agency the option of spreading transmission line costs to customers outside the areas that directly benefit from new services.)
Here is an excerpt from his questioning, which also addressed Gerry Cauley, president and CEO of the North American Electric Reliability Corporation (NERC).
Sen. Burr: Under the joint draft, FERC would be authorized to develop standards to address cyber security vulnerabilities for utility generation, transmission and distribution. Who currently has jurisdiction over the distribution system?
McClelland: The states do.
Sen. Burr: And under this, would that then supercede the existing authority?
McClelland: I think the way the legislation is written, the commission would have the ability to write cyber security or non-cyber standards for distribution.
Sen. Burr: Let me ask an open question. Why should we give FERC, who is the economic regulator of markets, jurisdiction over distribution?
McClelland: Section 215 of the Federal Power Act gave FERC jurisdiction over both cyber security and reliability standards ...
Sen. Burr: I realize we did, and understand that today. We were very early into sort of the threat generation that we're in now, and personally, if I had it to do over again, I'd love to see the focus of this on how we remove authority that we gave to FERC, because I believe as a country right now, we've got the authority in too many different places to be responsible for a threat stream that, by the time these agencies are notified, quite frankly, it may be too late for the immediacy of the threat...
Sen. Burr: Industry is making the advances that they need to in order to respond to get back up and running. The NERC, if we need to look somewhere, I guess our question should be what additional authority do you [NERC] need to do what you're currently doing, versus to bring anybody new into the process of mapping out a pathway forward for the infrastructure and its integrity. Mr. Cauley, I'm giving you the opportunity. What do you need?
Cauley: If that's a question, Senator Burr, I did point out in my testimony that the one gap I sense right now is, if there is an imminent threat or vulnerability and we need industry to take action, then we do not have the ability to make enforceable directives to industry. That has to be done very carefully. I'm not an operator, Mr. McClelland is not an operator. We don't want to order the industry to take an action that has risky consequences.
Sen. Burr: And if you were to take an action, or if we were to give you the authority over distribution and you made determination under the guidance of cyber vulnerability, who pays for it?
Cauley: The ratepayers.
Sen. Burr: The ratepayers. Let me just suggest to you, regardless of how we move forward, let's consider the fact that the ratepayers are going to pay for this. We don't have the luxury of doing everything that one might think we should do to protect ourselves. I would only say this as a member of the committee -- you can't do enough things to protect us 100 percent from the threats that are out there. So let's recognize the fact that there's got to be some consideration on cost, and a big consideration on who pays for it.
It was at that point in the questioning that McClelland revisited the transmission issue, and prompted Burr's observation that, if it were up to him, smart grid technology implementation would be slowed down, perhaps indefinitely.
To Sen. Burr's point: How does one define, with assurance, that we've learned the things we need to learn with a great deal of confidence, in order to implement smart grid technologies? Personally, I'd say we're there. Burr, obviously, feels we aren't. And there lies the rub.
Utility operators, where do you think the responsibility for distribution standards lies? Should it remain with the states? Should it move to FERC? We've been down this particular discussion road before, a mere two years ago, in the same Senate committee hearing chambers, with many of the same players in attendance.
David Owens, an executive vice president for business operations at the Edison Electric Institute, offered last Thursday's committee hearing participants a potential solution that provided a little bit of something for both, as well as the utilities themselves. His ideas will be featured in next Tuesday's column.
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Kate Rowland
Editor-in-chief, Intelligent Utility magazine
krowland@energycentral.com
Twitter: @katerowland2
Comments
cyber security and the professional community
Thanks for your comment. You will definitely appreciate what EEI's David Owens had to say at the hearing. I'll be covering that next Tuesday.
Kate
Dumb Grid or Smart Grid, we need security now
The biggest benefit we gained in smart grid field study deployments was the recognition of security issues in both legacy power grid networks and even the first stage smart grid deployments. According to a recent survey by Q1 Labs and the Ponemon Institute, 76 percent of energy companies admit to recent security breaches. Interesting enough the only way to address these current network security issues is by adding secure interactive network intelligence to the power grid (the Smart Grid).
Stopping smart grid deployments due to security concerns is exactly the opposite of what we need to do. I have been in the IP network business for years and work with some brilliant engineers that can quickly and economically address these smart grid security issues. Rather than invest in smart meters that can be hacked we need to start investing in organizations like mine that can address these power grid security issues right now.
security
The question as to who we want to regulate depends on how we look at the solution to national grid parity - or not. The way it stands now when dealing with licensing an energy project we have to answer to both state and federal - in spite of the MOU signed that both state and federal would work together to stream line the environmental, societal and regulatory requirements of obtaining a license. It still isn't working due in part to the bureaucratic middle ground of both state and federal agencies. Stonewalling a project seems to be an enjoyed past time of all service agencies. Why should we expect more compliance on security requirements? If it is determined that states should be the regulators; it will almost be guaranteed that each state will determine what is best for themselves, not the grid per-say. If it is the feds who have control getting anything done will be next to impossible. If it is determined that a commission comprised of stakeholders and government should be formed to over see regulation that is formed by all entities then we might have a solution that works but getting to that point will take longer than emigration reform. What ever happens and what ever form grid security takes, the less government the better, however we don't need an expensive entity that's top heavy like school boards. Certainly something to think about.
re: security
I agree that licensing an energy project, whether it be a transmission line or a generation project, is often a nightmare of requirements, paperwork, and duplicate work for different departments. I remember covering the early work of a cross-border merchant transmission line, and learning about the enormity of licensing and approvals in both Canada and the United States.
In playing devil's advocate here, without stating my own opinion, I'm hoping that, as a community and as an industry, we can come to some level of agreement as to the best way forward with regard to cyber security. Next week, I'll focus on the presentation made by EEI's David Owens, which I felt was both sound and workable.
Kate Rowland
Houston, We Have a Problem
This dialogue should be a wake up call to our industry. It sends a chill down my spine.
Kate's column raises critical issues of leadership, strategy and organization and points us in the right direction, but the challenge to all of us is our industry's fragmented state and the lack of policy direction or appropriate oversight mechanisms to deal with an increasingly dynamic situation. This dialogue makes plain to me that what has worked in the past will not take us to where we need to go now in overhauling the grid and designing and implementing a new one.
Two federal agencies in charge of electricity and telecom, which are coming together with the smart grid: market operations/long-distance transmission and now, cyber security and reliability standards (FERC) and telecommunications and broadband (FCC). Another national organization in charge of grid reliability (NERC). Fifty state regulatory commissions in charge of distribution utility regulation ... and two houses of Congress and fifty state legislatures and governor's offices. Wow!
As we move into this historic change phase for our vital electric grid, which by the way is thoroughly interconnected already, and will be even more so as smart grid initiatives take hold, we need a cohesive strategy and clear legislative/regulatory guidance, but I'm not holding my breath. Having a multi-headed hydra of government oversight of a single interconnected industry is a recipe for indecision and confusion.
I understand why the Senator wants to hit the Pause button - cyber security risks are very real - but we don't have the luxury of postponing our problems and kicking them down the road. The Smart Grid is moving forward with or without the US, and we are already moving at a relative snail's pace as it is. I am afraid that we will get lapped by the field if we don't resolve these issues and press forward with reform. Rather than slowing down, we need to speed up and move this agenda item up the ladder towards resolution.
John Cooper, President, Ecomergence
re: Houston...
John,
Thanks for your comment. I agree with you that the myriad levels of federal and state oversight (necessary, but at what level?) at the moment may well grind things to a halt, without adding even more.
It stunned me, frankly, to hear such a personal comment from the senator inserted into the Q&A period of this hearing. Perhaps it shouldn't surprise me, but I keep wanting government to keep the pace set by our thought leaders in the technology world of smart grid. As you so eloquently put it, we don't have the luxury of postponing our problems and kicking them down the road.
Kate Rowland