FERC Responds to Senate Inquiry about Physical Grid Security

by Akin Gump Strauss Hauer & Feld LLP
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On February 11, 2014, Acting Chairman Cheryl A. LaFleur of the Federal Energy Regulatory Commission (FERC) responded (available here) to a letter from four members of the Senate, which asked if further regulatory measures were needed to protect the physical security of the bulk power system. Acting Chairman LaFleur explained that steps were being taken to coordinate with utilities and other government agencies to improve physical security. She agreed, however, that further regulation might be warranted, and asked for Congress to address related issues of confidential information and emergency response.

The letter (available here), signed by Senate Majority Leader Harry Reid (D-NV) and Senators Ron Wyden (D-OR), Dianne Feinstein (D-CA), and Al Franken (D-MN), was sent to Acting Chairman LaFleur and Gerry Cauley, the President and CEO of the North American Electric Reliability Corporation (NERC). It referenced the sniper attack on the Metcalf electrical substation in California on April 16, 2013. During the highly organized attack, 17 transformers were damaged and phone and internet cables nearby were cut.  Both the perpetrators and their motive remain unknown, but there are fears that the attack was a “dress rehearsal” for a larger attack on the bulk power system. The Senators noted that FERC and NERC have “clear and unmistakable” authority to develop mandatory reliability standards governing physical grid security under Section 215 of the Federal Power Act. The letter expressed concern that voluntary measures might not be sufficient to meet the risk of physical attacks such as that on the Metcalf Facility.

Acting Chairman LaFleur’s response describes the actions taken by FERC after the attack, including briefing utilities, state regulators, and industry organizations, identifying critical grid facilities in need of protection, and developing specific protective measures appropriate to vulnerable sites. FERC is also working with NERC, the Department of Homeland Security, the Department of Energy, and the Federal Bureau of Investigation to “reach out to utilities, sates, and law enforcement” on issues of physical security. Acting Chairman LaFleur believes the current response has been implemented “more quickly and more confidentially” than could be accomplished by regulation. Moreover, the protective measures taken have been uniquely designed to each location, which would be difficult to achieve with a fixed, mandatory set of rules.

However, the Acting Chairman agreed that additional regulation might be needed and asked for the assistance of Congress. Specifically, she suggested that Congress could help by providing an exemption to the Freedom of Information Act for sensitive security information and authorizing a federal agency (not necessarily FERC) to direct actions in the wake of an emergency caused by a physical or cyber attack on the power grid. Mr. Cauley has not yet responded to the Senators’ letter.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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