FERC considers Physical Security Reliability Standard

Federal energy regulators are considering a new national standard for protecting the physical security of the U.S. electric grid.  Given the importance of electric reliability and concern over terrorist attacks and sabotage, electric reliability organization NERC has proposed a Physical Security Reliability Standard known as CIP-014-1.  If adopted by the Federal Energy Regulatory Commission (FERC), the standard would become enforceable against transmission owners and operators.

Under U.S. law, the FERC has jurisdiction over the network of wires and transformers that make up the nation's bulk transmission system.  The Energy Policy Act of 2005 expanded the Commission's authority to impose mandatory reliability standards on the bulk transmission system.  Working with the nation's chief electric reliability organization (North American Electric Reliability Corporation, or NERC), the Commission has adopted a series of reliability standards covering matters including communications among utilities, cybersecurity, and interconnections.

On July 17, 2014, the FERC issued a notice of proposed rulemaking proposing to approve NERC’s proposed Physical Security Reliability Standard (CIP-014-1).  NERC has described this standard as designed to enhance physical security measures for the most critical Bulk-Power System facilities and thereby to lessen the overall vulnerability of the Bulk-Power System to physical attacks.  The standard requires owners and operators of transmission facilities to identify and protect critical transmission stations, substations, and control centers whose damage through physical attack could result in spreading outages or other reliability problems.

The proposed physical security reliability standard also includes provisions protecting sensitive or confidential information from public disclosure, calling for third party verification and periodic reevaluation of critical facility identification, threats assessment, and security plans.

The FERC solicited public comment on the proposed physical security reliability standard through September 8, 2014.  Over 30 parties filed comments, with additional reply comments filed by September 22.

With the proposed Physical Security Reliability Standard now pending before the FERC, we may soon see its adoption.  The FERC has scheduled the matter for its November 20 deliberations.  Assuming CIP-014-1 is adopted, owners and operators of regulated facilities will need to comply with the new standard, and to plan for further tightening up of the physical security of the electric grid in the coming years.