GAO report on electric grid geomagnetic disturbances

A report released by the U.S. Government Accountability Office found that U.S. and Canadian electricity suppliers have taken steps to prepare for potential electromagnetic disruptions to the electric grid such as from solar storms or high-altitude nuclear detonations -- but that more research is needed on both geomagnetic disturbances and high-altitude electromagnetic pulses.

Under some circumstances, a severe solar storm or high-altitude nuclear blast could damage the U.S. electric grid and potentially cause extensive outages. Federal energy regulators have used both regulatory and more informal collaborative approaches to address the threat to the electric grid posed by electromagnetic pulses and geomagnetic disturbances. Regulatory approaches to electromagnetic disturbance readiness include mandatory reliability standards adopted by electric reliability organization NERC, which require some electricity suppliers to assess their vulnerability to extreme solar storms, and developing procedures for responding to grid security emergencies.

In this context, the Government Accountability Office was asked to review electricity industry actions to prepare for and mitigate electromagnetic risks. Its 95-page report, Critical Infrastructure Protection: Electricity Suppliers Have Taken Actions to Address Electromagnetic Risks, and Additional Research is Ongoing, examines topics including the degree to which U.S. and Canadian electricity generation and transmission owners and operators have identified information about the effects on the grid caused by geomagnetic disturbances and high-altitude electromagnetic pulses (HEMP), steps some suppliers have taken to protect against GMD and HEMP, and opportunities for U.S. suppliers to recover costs for protecting against GMD and HEMP.

According to the report, there is "general agreement that more research is needed on both GMD and HEMP." Risks identified include potential voltage instability leading to collapse of the bulk power system and blackouts, as well as possible damage to key system components. But more information is needed, according to the report -- especially on HEMP effects, given that previous studies have focused on impacts to military equipment as opposed to the commercial electric grid.

The cost of addressing reliability concerns can be significant. The GAO report describes some suppliers' reports "that costs they have incurred to protect against GMD and HEMP have been relatively small so far and they expect to recover those costs through customer rates." But the report warns that suppliers could face future increased costs, as a second regulatory standard phases in through 2022. For example, the report cites one supplier serving about 4.5 million retail customers as estimating "the cost of hardening a planned control center against HEMP to be at least $10 million." GAO calculated that fully passing this cost on to customers in a single year would add $2 to the average customer ’s electric bill for that year.

While regulated U.S. suppliers may be able to recover GMD protection costs through rates, the report notes that recovery is less certain for protection against HEMP because less is known about HEMP risks. The report also presages challenges for any kind of reliability-driven cost recovery for independent owners of power plants, who must recover reliability improvement costs through their sales of electricity without assurances about market prices.

Substation security and the Garkane shooting

As the U.S. strengthens protections for its electricity grid, much of the discussion focuses on cybersecurity -- but physical security is also important, as shown by an attack on a Utah utility's substation.  On September 25, an unknown gunman fired at least 3 shots into a distribution system substation, damaging a transformer and causing power outages.  The incident may place renewed pressure on utilities to secure their infrastructure against vandalism and terrorism.

As reported by the Deseret News, the damage occurred at a substation owned by Garkane Energy Cooperative.  An assailant reportedly shot the main transformer's oil-cooled radiator system, causing the transformer to overheat and fail.  About 13,000 customers lost power across most of Kane and Garfield counties.  A spokesman for the cooperative said damage to the transformer could reach $1 million; repairs could take 6 to 12 months.  The utility has offered an unusually high reward -- $50,000 -- for information leading to the arrest of the shooter.

This is not the first time someone has used firearms to damage utility infrastructure.  Some incidents, such as the 2012 shotgunning of 167 insulating discs on Vermont's transmission system, may be considered vandalism.  Others, like the 2013 sniper shooting of a PG&E substation in San Jose, California, are considered terrorism.  That attack led the Federal Energy Regulatory Commission to implement new physical security protections for utility infrastructure known as CIP-014, through its Order No. 802.

The Garkane incident remains under investigation.  More broadly, it may strengthen calls for further hardening of the utility system against physical attack.  Meanwhile, efforts continue to strengthen cybersecurity protections for the grid.

FERC adopts grid physical security reliability standard

As expected, federal regulators have approved a new physical security standard for the high-voltage electricity grid.

On November 20, the Federal Energy Regulatory Commission approved Reliability Standard CIP-014-1 (Physical Security).  The standard, proposed by Commission-certified Electric Reliability Organization North American Electric Reliability Corporation (NERC), is designed to enhance physical security measures for the most critical parts of the nation's "bulk-power system," the high-voltage backbone of the nation's electric grid.

In the wake of a 2013 California incident in which a major substation was damaged by gunfire, in March 2014 the FERC directed NERC to prepare a draft standard to protect the physical security of the grid.  In response, NERC proposed a standard requiring owners and operators of transmission facilities toidentify and protect critical transmission stations, substations, and control centers whose damage through physical attack could result in spreading outages or other reliability problems.

On November 20, 2014, the FERC issued its Order No. 802 approving the physical grid reliability standards.  In a press release, the Commission described Order No. 802 as enhancing the physical security for the most-critical Bulk-Power System facilities and reducing the overall vulnerability of the grid to attacks.

As described by the FERC in Order No. 802, Reliability Standard CIP-014-1 has six requirements:

• Requirement R1 requires applicable transmission owners to perform risk assessments on a periodic basis to identify their transmission stations and substations that, if rendered inoperable or damaged, could result in widespread instability, uncontrolled separation , or cascading within an Interconnection. Requirement R1 also requires transmission owners to identify the primary control center that operationally controls each of the identified transmission stations or substations.
• Requirement R2 requires that each applicable transmission owner have an unaffiliated third party with appropriate experience verify the risk assessment performed under Requirement R1. Requirement R2 states that the transmission owner must either modify its identification of facilities consistent with the verifier’s recomme ndation or document the technical basis for not doing so. In addition, Requirement R2 requires each transmission o wner to implement procedures for protecting sensitive or confidential info rmation made available to third - party verifier s or developed under the Reliability Standard from public disclosure.
• Requirement R3 requires the transmission owner to notify a transmission operator that operationally controls a primary control center identified under Requirement R1 of such identification to ensure that the transmission operator has notice of the identification so that it may timely fulfill its obligations under Requirements R4 and R5 to protect the primary control center.
• Requirement R4 requires each applicable transmission owner and transmission operator to conduct an evaluation of the potential threats and vulnera bilities of a physical attack on each of its respective transmission stations, transmission substations, and primary control centers identified as critical in Requirement R1.
• Requirement R5 requires each transmission owner and transmission operator to develop and implement documented physical security plans that cover each of their respective transmission stations, transmission substations, and primary control centers identified as critical in Requirement R1.
• Requirement R6 requires that each transmission owner and transmission operator subject to Requirements R4 and R5 have an unaffiliated third party with appropriate experience review its Requirement R4 evaluation and Requirement R5 security plan. Requirement R6 states that the transmission owner or transmission operator must either modify its evaluation and security plan consistent with the recommendation, if any, of the reviewer or document its reasons for not doing so. Requirement R6 also requires each transmission owner to implement procedures for protecting sensitive or confidential information made available to third-party reviewers or developed under the Reliability Standard from public disclosure

While the Commission adopted the standard, it directed NERC to submit an informational filing within 2 years that addresses whether the physical security reliability standard should be applicable to additional control centers.  It also gave NERC 6 months to propose modifications to clarify the use of the phrase "widespread" instability in Requirement R1.

The FERC's rule will become effective 60 days after its publication in the Federal Register.

FERC directs standards requiring utility hardening against physical threat

In the wake of last year's sniper assault on a California electrical substation, federal regulators have initiated a process to require utilities to demonstrate that they have hardened their power plants, transmission lines, and other infrastructure against physical attacks.  Last week the Federal Energy Regulatory Commission ordered the North American Electric Reliability Corporation, or NERC, to develop reliability standards requiring utilities to address risks due to physical security threats and vulnerabilities.  If NERC adopts reliability standards to protect against physical threats, will the standards improve electric reliability -- and if so, at what cost?

Stacks from a power plant subject to NERC standards rise above a cove in Salem, Massachusetts.

NERC, a not-for-profit entity whose mission is to ensure the reliability of the bulk power system in North America, has been designated as the United States' electric reliability organization.  To carry out this mission, NERC develops and enforces reliability standards for owners and operators of critical electrical infrastructure.  NERC's existing standards span 1,778 pages, and cover issues ranging from personnel training and emergency preparedness to protection against hacking and cyberterrorism. 

Following the April 16, 2013, destruction by intense gunfire of a PG&E Corp. substation in San Jose, California, much attention has fallen on the protection of the U.S. electrical grid against physical threats.  At the federal regulatory level, this attention led the FERC to issue an order on March 7, 2014, directing NERC to adopt additional standards for physical security.  That order prescribes the creation of new standards requiring owners and operators of the so-called Bulk-Power System to take at least three steps to protect physical security:

• First, owners and operators must perform a risk assessment of their system to identify their "critical facilities".  Critical facilities are defined as those that, if rendered inoperable or damaged, could have a critical impact on the operation of the interconnection through instability, uncontrolled separation, or cascading failures of the Bulk-Power System.


• Second, owners and operators of critical facilities must evaluate potential threats and vulnerabilities to those facilities.


• Third, owners and operators must develop and implement a security plan to address potential threats and vulnerabilities.

The order directing physical protections standards has prompted at least two sets of questions in the utility industry.  First, will these standards lead to improved reliability?  While the efficacy of the standards will likely only be proven in retrospect, if at all, fears brought to life by the California attack and others have convinced a majority of the Commission that the standards are necessary.

Other questions have arisen about the cost of implementing the standards.  While some defenses against physical threats may be adopted relatively inexpensively -- for example, opaque fencing around critical facilities -- others may prove expensive.  When the possible scope and extent of critical facilities are taken into account, some estimates of the potential cost -- including that of concurring FERC Commissioner John Norris -- rise into the billions.

Under the Commission's order, NERC has until June 5, 2014, to prepare and submit its proposed new reliability standards.

Vermont transmission line vandalism

Vermont's electric transmission authority has reported vandalism to a section of high-voltage line connecting Hydro-Quebec's grid to southern New England markets.  According to the Caledonian Record, 167 insulating discs were shot out from a transmission line in the town of Concord, Vermont.

Vermont Electric Power Company (VELCO) manages Vermont's electric transmission system, which includes, 738 miles of transmission lines, 13,000 acres of rights-of-way, 55 substations, switching stations and terminal facilities, interconnection facilities with Hydro-Quebec, as well as fiber optic communication networks that both control the electric system and provide the backbone for high-speed data internet access. VELCO was formed by the state's utilities in 1956 as the nation's first statewide, "transmission only" public utility.

Vandals reportedly used a shotgun to shoot the glass insulating discs which are spaced along the transmission lines and are designed to keep the lines safe from shorting out.  In all, 167 out of over 400 insulating discs were destroyed.  As a result, VELCO depowered the line until the discs could be replaced, which took from last Friday until last Sunday.  The repair itself cost about $250,000, but the biggest cost arose when regional grid operator ISO New England was forced to turn to the spot market to replace the electricity normally imported over the line from Quebec while the line was down.  The cost of that replacement power was reportedly over $1 million per day.

The incident is now the subject of a federal investigation.  Laws enacted after the widespread eastern blackout in 2003 and the September 11 terrorist attacks have increased the penalties for disrupting electric transmission and other infrastructure.  The insulating disc shooting may be treated as a "terrorist act" under federal law.

Transmission lines provide value to society, but are typically expensive and are often located in remote areas.  Hunting often occurs along or near transmission lines; just this year, VELCO won the National Wild Turkey Federation's Energy for Wildlife award for the company’s ongoing commitment to develop and improve wildlife habitat along its rights-of-way.  The extent of the damage to the insulating discs makes the shooting appear to be intentional, and thus more than a "hunting accident".  How will the incident affect transmission line owners' policies about public access to areas near lines?  How can transmission lines be better protected against vandalism?