August 19, 2003
Since “pre-conferencing” on energy has started, we figured “Pre-Conference Updates” might be helpful. This first one deals with provisions in the recently passed energy bill that would upgrade the national power grid and protect against future blackouts. The conference-bound energy legislation that the Senate passed last year and again last month contains a special title (Title XVIII) on energy infrastructure protection that that is relevant to last week’s power outage. Specifically, Section 1803: SEC. 1803. CRITICAL ENERGY INFRASTRUCTURE PROGRAMS. (a) PROGRAMS -- In addition to the authorities otherwise provided by law (including Section 1261), the Secretary is authorized to establish programs of financial, technical, or administrative assistance to -- (1) enhance the security of critical energy infrastructure in the United States; (2) develop and disseminate, in cooperation with industry, best practices for critical energy infrastructure assurance; and (3) protect against, mitigate the effect of, and improve the ability to recover from disruptive incidents affecting critical energy infrastructure. (b) REQUIREMENTS -- A program established under this section shall -- (1) be undertaken in consultation with the advisory committee established under section 1804; (2) have available to it the scientific and technical resources of the Department, including resources at a National Laboratory; and (3) be consistent with any overall Federal plan for national infrastructure security developed by the President or his designee. Note the reference to "disruptive incidents affecting critical energy infrastructure" in subsection (a)(3). This section is backed up by a special section on R&D to promote critical energy infrastructure protection, Section 1261: SEC. 1261. CRITICAL ENERGY INFRASTRUCTURE PROTECTION RESEARCH AND DEVELOPMENT. (a) IN GENERAL -- The Secretary shall carry out a research, development, demonstration and technology deployment program, in partnership with industry, on critical energy infrastructure protection, consistent with the roles and missions outlined for the Secretary in Presidential Decision Directive 63, entitled `Critical Infrastructure Protection.' The program shall have the following goals: (1) Increase the understanding of physical and information system disruptions to the energy infrastructure that could result in cascading or widespread regional outages; (2) Develop energy infrastructure assurance “best practices” through vulnerability and risk assessments; and (3) Protect against, mitigate the effect of, and improve the ability to recover from disruptive incidents within the energy infrastructure. (b) PROGRAM SCOPE -- The program under subsection (a) shall include research, development, deployment, technology demonstration for -- (1) analysis of energy infrastructure interdependencies to quantify the impacts of system vulnerabilities in relation to each other; (2) probabilistic risk assessment of the energy infrastructure to account for unconventional and terrorist threats; (3) incident tracking and trend analysis tools to assess the severity of threats and reported incidents to the energy infrastructure; and (4) integrated multisensor, warning and mitigation technologies to detect, integrate, and localize events affecting the energy infrastructure including real time control to permit the reconfiguration of energy delivery systems. (c) REGIONAL COORDINATION -- The program under this section shall cooperate with Departmental activities to promote regional coordination under Section 102 of this Act, to ensure that the technologies and assessments developed by the program are transferred in a timely manner to State and local authorities, and to the energy industries. (d) COORDINATION WITH INDUSTRY RESEARCH ORGANIZATIONS -- The Secretary may enter into grants, contracts, and cooperative agreements with industry research organizations to facilitate industry participation in research under this section and to fulfill applicable cost-sharing requirements. (e) AUTHORIZATION OF APPROPRIATIONS -- There is authorized to be appropriated to the Secretary to carry out this section -- (1) $25,000,000 for fiscal year 2003; (2) $26,000,000 for fiscal year 2004; (3) $27,000,000 for fiscal year 2005; and (4) $28,000,000 for fiscal year 2006. (f) CRITICAL ENERGY INFRASTRUCTURE FACILITY DEFINED -- For purposes of this section, the term “critical energy infrastructure facility” means a physical or cyber-based system or service for the generation, transmission or distribution of electrical energy, or the production, refining, transportation, or storage of petroleum, natural gas, or petroleum product, the incapacity or destruction of which would have a debilitating impact on the defense or economic security of the United States. The term shall not include a facility that is licensed by the Nuclear Regulatory Commission under section 103 or 104b of the Atomic Energy Act of 1954 (42 U.S.C. 2133 and 2134(b). Section 1261(b)(4) of the Senate-passed bill specifically calls for technologies that, if implemented, could have prevented the cascading outages that left more than 50 million people in the dark last week. In contrast, the GOP energy bill that the Energy Committee reported on a largely partisan vote, and which the full Senate pulled the plug on in favor of last year's bill, did not contain either of these provisions. The version of S.14 originally placed on the Senate calendar had two sections on electricity transmission (Sections 926 & 927), but these mostly related to establishing a new DOE Office of Electric Transmission and Distribution that would help to upgrade the grid to function in a deregulated competitive market. Worse, the electricity title in the scuttled Republican Senate energy bill contained a provision (in Section 1121) that would have impeded the ability of the FERC to respond to multi-state energy crises and problems between the date of enactment and July 1, 2005 (i.e., by forbidding the issuance of any “rule of general applicability,” which is how an agency addresses generic problems affecting more than one party). While it is too soon to know if last week’s outages will spur formal review and action by FERC, if this provision had been enacted into law, such a review and action would not even be on the table as an option. During Senate consideration of the energy bill, Sen. Bingaman offered an amendment (S. Am. 1413) that would have fixed this problem, but the amendment was killed on a mostly party-line vote of 53-44.