April 10, 2014
WASHINGTON — U.S. Senator Mary L. Landrieu, D-La., Chair of the Senate Committee on Energy and Natural Resources, today held a hearing to review what is being done by both the federal government and the private sector to ensure the security and reliability of our nation’s electric grids. The hearing entitled, “Keeping the Lights On: Are We Doing Enough to Ensure the Reliability and Security of the Electric Grid?,” focused on addressing the threat of both physical and cyber-attacks to substations, as well as the strain on the power supply experienced during this winter’s polar vortex.
“Affordability and reliability of electricity is so commonplace in America today that most people spend little time even thinking about it except, of course, when power goes out and when the lights go off—whether for a few minutes, a few days or a few weeks. It can be inconvenient, it can be maddening, and it can be also life threatening,” Senator Landrieu said. “A power outage of even a few minutes can be a terrible inconvenience, it can be a costly occurrence, or it could be a real threat to public health, particularly when temperatures are very high or very low, or in the aftermath of storms, disasters, hurricanes, floods, tornadoes, mudslides, fires.”
Download a photo of Sen. Landrieu during today’s hearing:
The hearing’s first panel focused on new and emerging cyber threats, as well as long-standing physical threats to the electricity grid.
The Energy Policy Act of 2005 included a first-of-its-kind provision to establish reliability standards, including ones to address cyber threats to the nation’s electric grid. In fact, the electricity sector is still the only part of our national critical infrastructure that is subject to binding cyber threat standards.
The hearing also examined the attack last year on the Metcalf substation in California’s Silicon Valley, which was the most serious attack ever on the U.S. electricity system.
“Fortunately, Metcalf did not result in a blackout in Silicon Valley. The horrors of which could only be imagined,” Sen. Landrieu said. “But the incident, as it has been reported, came very close to causing the shutdown of a large portion of the Western Grid. I commend the electricity industry and its federal and state partners involved for the significant improvements they have made to reduce the risks of a physical attack on since that took place.”
Last month the Federal Energy Regulatory Commission (FERC) voted to direct the North American Electric Reliability Corporation (NERC) to direct some additional standards and gave it 90 days to do so.
“Grid reliability is the responsibility of the electricity industry as well as state and federal agency partners. Each of us has a role to play. In my view, it is essential that information regarding an attack, or threat of an attack, be transmitted to others that need that information in a timely, secure and actionable fashion,” Sen. Landrieu said. “I believe that we must take very seriously these issues and develop appropriate responses to these threats. But the response must fit the size and the nature of the threat. One size does not fit all. In Louisiana, we have two large utilities, Entergy and CLECO, as well as a number of relatively small rural coops and of course municipal utilities. It just doesn’t make sense for small coops with minimal critical infrastructure to be subject to the same requirements as larger suppliers.”
Testifying before the Committee on the hearing’s first panel were The Honorable Cheryl LaFleur, Chairman of the Federal Energy Regulatory Commission, Mr. Gerry Cauley, President and CEO of the North American Electric Reliability Corporation, Ms. Sue Kelly, President and CEO of the American Public Power Association, and The Honorable Colette Honorable, President of the National Association of Regulatory Utility Commissioners and Chairman of the Arkansas Public Service Commission.
“Our nation relies on the electric grid to meet many vital needs: to power our economy, to bolster our national defense, and to support our quality of life. At FERC, we take seriously our obligation to the American people to protect the reliability and security of the electric grid and to enhance its resilience,” Chairman LaFleur testified. “Indeed, I believe that reliability is job one, a fundamental responsibility for FERC and the electric industry. From my past experience working directly for electricity and natural gas customers, I know firsthand how hard even a short outage can be on families, businesses, and communities. And a major interruption in service could have devastating effects on our nation’s citizens and economy, whether it is caused by severe weather, a cybersecurity incident, or a physical attack.”
“The electric grid is one of the Nation's most critical infrastructures. The North American BPS is one of the largest, most complex, and most robust systems ever created. Several, if not all, of the other critical infrastructure sectors are dependent on electric power,” Mr. Cauley testified. “As CEO of the organization charged with ensuring the reliability and security of the North American grid, I am deeply concerned about the changing risk landscape from conventional risks, such as extreme weather and equipment failures, to new and emerging risks in the security arena.”
“Unlike cybersecurity threats, which are constantly evolving, many of the threats to physical infrastructure have been identified for years, if not decades, and are more readily understood than potential cyber threats,” Ms. Kelly testified. “Electric utilities, including public power utilities, take these threats seriously, and deploy measures to mitigate such threats. At the same time, the sheer size and in some cases, remoteness, of the infrastructure requires that utilities prioritize facilities that, if damaged, would have the most severe impacts on the ability of utilities to ‘keep the lights on.’ This risk-based approach enables the industry to prioritize the most important assets, and also allows it to change that prioritization over time. The bulk electric system continually evolves because assets that impact the system change over time.”
“Today’s hearing on Grid Security is timely, and not simply because of the recent press reports on the potential physical threats to our electricity infrastructure. The seriousness of the Metcalf incident is not being discounted; the details of that event are alarming and serve as a lesson about the damage dedicated bad actors can do to our infrastructure,” Chairman Honorable testified. “But physical threats are one of the several vulnerabilities facing our utility infrastructure every day. These vulnerabilities can take the shape of a sophisticated Metcalf-style attack or a massive storm such as Hurricane Sandy, which devastated utility infrastructure in the Mid-Atlantic and blacked out parts of New York and New Jersey for weeks.”
The hearing’s second panel focused on whether or not there is sufficient generation and unfettered transmission to keep the lights on when electricity demand peaks throughout the country. In particular, the panel examined the strain placed on the system during this winter’s polar vortex.
Testifying on the committee’s second panel were The Honorable Philip D. Moeller, Commissioner of the Federal Energy Regulatory Commission, Mr. Michael J. Kormos, Executive Vice President-Operations for PJM Interconnection, Mr. Nicholas Akins, Chairman, President, and CEO of American Electric Power, Mr. Thad Hill, President and Chief Operating Officer of Calpine, Ms. Cheryl Roberto, Associate Vice President of Clean Energy for the Environmental Defense Fund, and Mr. Jim Hunter, Utilities Director for the International Brotherhood of Electrical Workers.
“Every day, men and women sit in windowless control rooms making decisions on how to operate the power grid. They ensure that the right power plants are running at the right time, and they carefully balance power generated with power consumed. On a minute-to-minute basis, they ensure that the lights, heaters and air conditioners stay on, and that manufacturing and other business activity continues,” Commissioner Moeller testified. “This winter had more than a few days when electricity supplies were at their limits, yet the operators kept the system running without interruption. Every one of us today owe each of them appreciation for their hard work. And going forward, we owe them the resources that they need to keep the lights on in the future.”
“This was the most difficult winter challenge the grid has faced since the winter of 1994. Summer heat stresses transmission lines while winter cold is particularly hard on generators,” Mr. Kormos testified. “It was not simply cold in the PJM region – it was deeply cold over a very long period across our entire footprint. On many days, demand was 20,000 to 40,000 megawatts above normal January peaks.”
“The weather events experienced this winter provided an early warning about serious issues with electric supply and reliability. PJM was not alone. Many of the Regional Transmission Organizations and Balancing Authorities needed to call on Emergency Procedures to ensure reliable operations. This country did not just dodge a bullet – we dodged a cannon ball,” Mr. Akins testified. “We need to take action now to ensure adequate power plant capacity, fuel diversity and grid investment after the retirement of significant amounts of base load generation in mid-2015 and beyond. Because the base load generation that will retire in 14 months will not be fully replaced, this reliability concern is imminent and is a concern we need to proactively address.”
“My key message here today is that the competitive electric sector – in particular PJM, which covers much of the mid-Atlantic and the Midwest, and which I believe is most of the focus of this panel – is in solid shape to transition over the next several years from one supported by older, less efficient and more costly coal plants to one supported by newer, more efficient, less expensive and cleaner natural gas plants,” Mr. Hill testified. “There is significant new investment occurring in the mid-Atlantic power and gas markets – including our own brand new gas fired power plant under construction in Dover, Delaware. These investments are being made due to the game-changing discovery of shale natural gas, the existence of a competitive market with a set of rules, and a commitment by the stakeholders to seeing the market function. Although this market is not perfect, changes to address some of the issues are underway, and grid reliability is secure.”