Electric powerlinesToday we highlight the Quadrennial Energy Review’s (“QER”) focus on grid security recommendations in the context of the newly adopted Fixing America’s Surface Transportation Act (“FAST Act”) and the Federal Power Act (“FPA”).  It discusses FERC role in grid security and suggests that FERC utilize its regional entities to assist in security planning.

Make sure to read Part I: Transmission, Distribution and Storage, Part II: Renewable Generation, and Part III: Demand Response and Energy Efficiency, which provide a review of the QER recommendations in each of these areas.

The FAST Act: Implementation

Enacted in December 2015, the FAST Act gives the Secretary of Energy broad and nearly unilateral authority over critical electric infrastructure to protect system reliability in emergency situations. In this context, QER 1.2 advocates for increased data collection and development of data surveillance to inform decisions on emergency actions and imminent dangers. It calls for enhanced “coordination between energy-sector information sharing and analysis centers and the intelligence communities to synthesize threat analysis and disseminate it to industry in a timely and useful manner.”

The QER 1.2 recommends that the DOE exercise its FAST Act authority to assess current cybersecurity protections for U.S. natural gas pipelines and pipeline infrastructure to determine whether additional security measures are needed to protect the electricity system. It recommends developing and implementing such security measures if found necessary. QER 1.2 recommends that the DOE coordinate with FERC when assessing U.S. pipeline cybersecurity and building on the Transportation Security Administration’s (“TSA”) existing work.

The Federal Power Act: Proposed Amendments

The review recommends that Congress amend Federal Power Act (FPA) to clarify the DOE’s authority to develop preparation and response capabilities to enable DOE to issue grid-security emergency orders aimed at protecting critical electric infrastructure. It also recommends that Congress amend the FPA to provide FERC’s with additional authority –even to promulgate reliability standards directly — for cyber security, if expeditious action is needed. QER 1.2 states that this FPA amendment is necessary to allow the Federal government to “act directly if necessary to address national security issues.” QER 1.2 bases the need for direct Federal action on “fast-developing new threats to the grid.” It emphasizes support for the current NERC-FERC regulatory structure and characterizes FERC’s expanded authority as “narrow.”

FERC’s Role

QER 1.2 adopts an integrated, nation-wide approach to security planning and standards to “ensure that there are no unnecessary vulnerabilities associated with state-to-state or utility-to-utility variations in protections[.]” QER 1.2 envisions a significant role for FERC in this effort. It recommends that FERC adopt a rule for standards that require integrated security planning on a regional basis. Such a rule would gives FERC latitude to allow the regional organizations to conduct this security planning and it encourages FERC to consider whether the costs of implementing such regional security measures are appropriate for regional cost allocation.

Support for Grid Modernization Integration

The review recognizes that advanced grid modernization technologies must continue to demonstrate their technical readiness and economic viability in order to gain the confidence of investors and utilities.  It calls for the DOE to create a cost-sharing program for certain utilities to make this demonstration.  The cost-sharing program applies to the following advanced technologies: voltage control and optimization systems; dynamic protection schemes to manage reverse power flows, communications, sensors, storage, switching and smart-inverter networks; and advanced distribution management systems, including automated substations.

QER 1.2 recognizes that state public utility commissions and small utilities will need additional expertise and administrative support in order to effectively deploy grid modernization technologies and systems.  It proposes to Federal support for states and small utilities in their efforts to administer the “increasing complexities in the electric system.”  It proposes to increase Federal support for state efforts to quantify and incorporate energy efficiency, demand response, and distributed storage into resource planning.