A number of officials from public power utilities across the U.S., as well as an official from the American Public Power Association, weighed in on various electric reliability issues at a recent technical conference at the Federal Energy Regulatory Commission’s headquarters in Washington, D.C on July 31.
The officials, including Jack Cashin, director of policy analysis and reliability standards at the American Public Power Association, filed statements (Docket No. AD18-11-000) with FERC that were used for conference questions. Cashin’s statement outlined the Association’s support for a reliability standards efficiency review that is being conducted by the North American Electric Reliability Corporation.
The first panel of the day included Cashin and officials from various other sectors of the power industry. Panelists were asked to address several questions related to the Electric Reliability Organization (ERO) Enterprise, including NERC and the regional entities.
FERC certified NERC as the ERO for North America in July 2006, pursuant to the Energy Policy Act of 2005. As the ERO, NERC is responsible for developing and enforcing mandatory electric reliability standards under FERC's oversight.
At the technical conference, FERC Commissioner Neil Chatterjee noted that “a number of you were happy with the progress of the standards efficiency review. We’ve had some other ad hoc efforts to review the standards.”
Chatterjee asked the panelists whether “we need a more regular review process or after this review, will we have eliminated most of the low-hanging fruit for efficiencies?”
NERC standards efficiency review effort involves evaluating NERC reliability standards “using a risk-based approach to identify potential efficiencies through retirement or modification of reliability standard requirements.”
The Association is “very supportive of the standards efficiency review,” Cashin said in response to Chatterjee’s question. “We think it’s a great process.” Cashin said that the standards efficiency review “shows the dynamic of industry and working together.”
He said the other piece of the body of standards is the critical infrastructure protection (CIP) standards. “We’d like to see that review go on as well,” the Association official said.
In his statement comments filed for the conference, Cashin said that to date, the CIP standards have been excluded from the standards efficiency review.
The Association “believes the CIP standard requirements require a full risk-based review to achieve greater efficiency,” Cashin said in his filed comments. While the Association “understands that NERC agrees such a review should be performed, the timing remains uncertain. APPA would encourage NERC to launch a review of the CIP standards sooner rather than later so as to retain the momentum gained in the first phase of the standards efficiency review.”
During a Q&A with FERC Commissioner Richard Glick, Cashin highlighted a recent Association/National Rural Electric Cooperative Association white paper, which describes best practices in managing cyber supply chain risk for small registered entities.
The white paper was developed at the request of NERC’s Board of Trustees in the context of approving a set of cyber security supply chain reliability Standards.
The Association and NRECA are also both extending and expanding their efforts with the Department of Energy to customize cyber security programs to fit the needs of small and medium-sized member companies. Similar to addressing supply chain risk, these broader programs focus on flexible risk management best practices, rather than mandates.
Public power officials participated in other panels
Other panels at the FERC conference addressed how reliability and resilience are related, explored power system planning and operations challenges and opportunities as a result of changes in the generating resource mix, and opportunities to collaboratively address existing and emerging cyber threats and vulnerabilities.
Several public power officials participated in these panels – Carol Chinn, chief information and compliance officer at Florida Municipal Power Agency, on behalf of the Transmission Access Policy Study Group, Roy Jones, CEO of Electricities of North Carolina, on behalf of the Large Public Power Council, and Paul Crist, vice-president, technology services and CTO, at Lincoln Electric System.
Chinn, who participated in the reliability and resilience panel, noted in her written statement that there is some overlap between the two. While she urged FERC not to expand reliability standards to address resilience, Chinn said this doesn’t mean that NERC has no role with respect to resilience.
She said in her statement that “there are ample opportunities outside the development and enforcement of reliability standards for NERC to work collaboratively with states and other jurisdictions to enhance resilience. And there is much NERC can achieve in this regard by working with registered entities and other stakeholders outside the scope of the domain of reliability standards.”
Jones participated on the panel that tackled power system planning and operations challenges and opportunities as a result of changes in the resource mix.
He said that with respect to key attributes in the context of essential reliability services, “as we think about the portfolio of generation that was built” in the 1970s and 1980s, those services were “just kind of givens and we really didn’t think about them and I think now as we see that the portfolio is changing, we are starting to recognize the value of some of those services.”
Jones said that ramping is an issue that requires paying close attention to, noting the “duck curve” in California. The duck curve refers to the mid-day spike in power generation from solar power that drops off as the sun sets and needs to be replaced by peaking plants in the evening.
“I’m going to tell you, the duck has flown across the country – now it’s in North Carolina,” Jones said. “We’re not in a market, but we’re dealing with it.”
Jones said that “as we continue to move forward, let’s make sure we recognize, first off, we do have a ramping problem” and, second, “let’s make sure we’re looking at it holistically and making sure that we’re not picking winners and losers.”
Lincoln Electric System’s Crist participated in the panel that looked existing and emerging cyber threats and vulnerabilities.
In his statement submitted for the conference, Crist said the current NERC CIP standards are challenging for utilities when emerging cyber threats are discovered and ultimately put the utility in a situation of having to choose between being compliant and being secure.
Crist said an example of this occurred when there was a concern about certain software being malicious and this same software was being used in industrial control systems to meet the malware protection requirements of the CIP standards. “Utilities had to choose between removing the software and not meeting the CIP requirements, or keeping the software in place to be compliant and trying to mitigate the risk of the software through other means,” he said in his statement.
Reliability coordinators in the West
Meanwhile, another topic discussed during the first panel was the formation of reliability coordinators in the western U.S.
In his opening remarks, Jim Robb, president and CEO of NERC, said that his “personal view of risk priorities for us align with the agenda” for the conference. Robb assumed his role at NERC on April 9.
Among other things, he said that the restructuring of the Western Interconnection and the fragmentation of the reliability coordinator “is a very important issue for us all to pay attention to.”
Robb said he was very gratified with “the collaboration that we have with WECC [Western Electricity Coordinating Council] and a number of the large entities in the West to make sure that that transition happens in as seamless manner as possible.” Prior to his current role at NERC, Robb served as the CEO of WECC, a NERC Regional Entity.
Flurry of activity tied to reliability coordinators in the West
There has been a flurry of activity this year related to reliability coordinators in the West.
The California Independent System Operator announced in January that it would withdraw from receiving services from Peak Reliability by Sept. 1, 2019 and form its own RC to serve the ISO and other entities in the Western Interconnection.
In late July, the Balancing Authority of Northern California announced that it intends to get reliability coordinator services from CAISO. CAISO said that BANC’s announcement is the first public commitment of an entity seeking to receive reliability services from the ISO.
Meanwhile, Peak Reliability, the reliability coordinator for most of the Western Interconnection, on July 18 said that it will cease operation at the end of 2019. The announcement came after a year of effort by Peak Reliability to provide a viable, long-term reliability coordinator option for the West, it said in a stakeholder bulletin posted on its website.
And the Southwest Power Pool on June 5 said that it plans to offer reliability coordination services in the western U.S., specifically the Western Interconnection, starting in late 2019.
“As we make this transition from Peak to an unknown number of reliability coordinators that seems to be more than one, what do we have to keep our eye on, what should we be doing?” asked FERC Commissioner Cheryl LaFleur asked.
Robb said that the key thing to remember about the Western Interconnection is it “really works as one integrated machine.”
He said that it is “very clear to me and was clear to me in my role at WECC, that having a unified reliability coordinator overseeing that system was very beneficial. One of the issues we deal with in the West is that a problem in the Northwest can manifest itself in New Mexico very, very quickly.”
Robb said that the “most important thing as we shift to a multi-reliability coordinator system in the West, that the seams agreements and the operating protocols between them really recreate that entire wide area view for the entire interconnection because an issue in the Northwest – like I said – will manifest itself elsewhere and if there’s not good visibility communications that won’t occur.”
He added, “some of that is addressed in the standards around information sharing between reliability coordinators. Some of it will be embedded in commercial agreements between the various RCs [reliability coordinators]. So I think that’s the most important thing to keep in mind.”
Robb noted that NERC “has a very formal role that we’ll be playing in terms of certifying the emergent RCs once they declare.” He said that NERC has had a formal request from CAISO “to go through that process. I don’t think we’ve had the formal request yet from SPP, but we anticipate one from them.”
The seams issues “are going to be top of mind,” said Eric Schmitt, vice president of operations at CAISO. “There’s uncertainty around the exact footprint as we move forward,” he said.
“We expect, really in the next few weeks, to have much more clarity about scope of service and I think more recently, we’re focused on transition because we think that’s absolutely critical,” Schmitt said.
Meanwhile, Commissioner Glick noted that Peak recently announced that it will cease operations at the end of next year “and that doesn’t give everyone a lot of time,” and a lot of entities “still haven’t chosen their dance partners yet.”
Glick asked Robb what NERC and WECC “are going to be doing to help expedite the process.”
The senior leadership “of the TOPs [transmission operators] are well aware of this issue and very concerned, very committed to having a good reliability coordination function in the West. I think that’s a fair statement,” Robb said.
“We sent a letter jointly between NERC and WECC asking all of them to identify the reliability coordinator they intend to go with by the end of the first week of September,” he noted. “Now, we don’t necessarily have the authority to compel them to do that but have asked them to do that and I believe we’ll get a pretty good response to that.”
State of reliability standards today
During the conference, LaFleur also focused on the state of reliability standards. “Do we have in place a good set of baseline standards with some improvement as we do reviews?” Also, given the length of time it takes to formalize something in a standard, “when do we decide that something is a sufficient challenge that it gets to that stage because clearly we haven’t thought of everything already.”
NERC’s Robb said, “I think there’s a little bit of you’ll know it when you see it embedded in here.” He said that “we shouldn’t have aspirations for more standards or less standards or more requirements, fewer requirements. We should have the right set of requirements and the right set of standards.”
In the case of the standards efficiency review, “part of what makes that a powerful process right now is we have lots of experience with the standards. We know which ones are important, which ones are really driving changes in utility behavior,” Robb went on to say. “So it’s appropriate to step back and look at those.”
He said that at some level the CIPS standards are “very fresh. I think we need more experience with them before we know whether we need to go through an efficiency review and start dropping out requirements.”
At the same time, Robb said that it is very clear that the “CIP world and the threats that we’re trying to defend against are evolving much more rapidly than we can evolve standards.” The standards “really are meant to establish a foundational baseline of performance and not meant to defend against everything.”
He went on to say that the work that NERC does around assessments is “very good at identifying issues that are coming down the pike and if we have our lenses far enough down the road then that gives us plenty of time to address an issue through a standard if we believe that’s required.”