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• Shared rights and responsibilities for transmission planning and operations, transmission service – Payments in kind – Loose coordination agreements – No third-party transmission access • Costs of service allocated broadly – Federal and state rate regulation • North American Electric Reliability Council (NERC) sets voluntary operating policies – Membership comprised of eight regional reliability councils – Regional councils set broad range of requirements to implement operating policies gcpud 2

• Following 1979-81 severe economic dislocations, broad-based initiatives to bring market discipline to business sectors • Intense debates produced Energy Policy Act of 1992 – Authorizes FERC to set rules for third-party access to high-voltage transmission to make sales for resale – Order 888 that eventually lead to Order 2003 standards for generation interconnection.

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• “…over the ERO,…any regional entities, and all users, owners, and operators of the bulk power system,…” and any entities included in the ERO rules.

• “…for purposes of approving standards …and enforcing compliance.” • “Bulk power system” – “…facilities and control systems necessary for operating an interconnected electric energy transmission network, and electric energy from generation…needed to maintain reliability,…” excluding local distribution facilities.

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• Natural evolution to seek clarification of roles, rights, and responsibilities for physical system planning and operations • 1998 – Call begins for federal legislation requiring creation of organization to set and enforce mandatory standards • 2005 – Energy Policy Act of 2005 (EPAct) creates Section 215 of the Federal Power Act • Expands FERC regulatory authority to reliability •

Defines Electric Reliability Organization (ERO)

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Energy Policy Act of 2005 • Assigns ownership of the issue of bulk power system reliability to FERC in the US • Applies to all users, owners, and operators of the bulk power system • Create an Electric Reliability Organization – NERC named ERO in July 2006 – Creates reliability standards – Sets reliability standards for bulk power system – Monitors & enforces compliance with standards gcpud 6

NERC REGIONS

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RO Reliability Coordinator TO -Transmission Owner GO - Generation Owner LSE - Load Serving Entity BA - Balancing Authority TSP -Transmission Service Provider TO -Transmission Operator GO - Generation Operator RRO - Regional Reliability Organization gcpud 8

NPCC SERC RC BA Implementation Schedule Table 1 Begin Work TO ERCOT TOP RFC TSP Implementation Schedule Table 2 Substantially Compliant FRCC GO GOP Implementation Schedule Table 3 Compliant WECC LSE RRO NERC Implementation Schedule Table 4 Auditably Compliant Control Centers CIP002 - Critical Cyber Asset Identification Transmission Substations Generation System Restoration (Blackstart) Automatic Load Shed (300 MW) Special Protection Systems MRO Other SPP CIP003 CIP004 CIP005 CIP006 CIP007 CIP008 CIP009 9

Scope of CIP 002-009 • Applies to these bulk power system entities: – IOUs – Coops – Federal – Municipals – State agencies – Others • Within the entities – Operations – Substations – IT – Generating Plants gcpud 10

– CIP002: Critical Cyber Asset Identification – CIP003: Security Management Controls – CIP004: Personnel and Training – CIP005: Electronic Security Perimeter(s) – CIP006: Physical Security – CIP007: Systems Security Management – CIP008: Incident Reporting and Response Planning – CIP009: Recovery Plans for Critical Cyber Assets gcpud 11

BULK ELECTRIC SYSTEM

As defined by the Regional Reliability Organization, the electrical generation resources, transmission lines, interconnections with neighboring systems, and associated equipment, generally operated at voltages of 100 kV or higher. Radial transmission facilities serving only load with one transmission source are generally not included.

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Bulk Electric Assets CIP 002 Critical Cyber Asset Identification 1

Filtering

Identifying Critical Assets Critical Electric Assets

Output

list of CCAs gcpud 13

Risk Basis

If the asset were to be compromised or removed from service, what would be the impact, either direct or indirect to transmission grid reliability or operatability.’ gcpud 14

Methodology

A four (4) step process.

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Task 1: Assemble team of SMEs (Subject Mater Experts) to list electric assets by both physical and calculated means using power flow models and system simulations.

•

Task 2: Eliminate non critical assets and list in ‘Null List’; remaining are Critical Electrical Assets.

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Task 3: Select Cyber Assets supporting Critical Electric Assets.

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Task 4: Determine Critical Cyber Assets.

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CIP 002 Critical Cyber Asset Identification 2 Critical Electric Assets Cyber Assets

Filtering

Essential to operation of critical asset

and

meets CIP002-R3 gcpud CRITICAL CYBER ASSETS 16

Cyber Asset Definiation Critical cyber assets are assets that meet at least one of the following requirements: – the cyber asset uses a routable protocol to communicate outside the electronic security perimeter; or, – the cyber asset uses a routable protocol within a control center; or, – the cyber asset is dial-up accessible.

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RAM - T

RAM-DSM was the first RAM developed at Sandia for critical infrastructures. Bonneville Power Administration commissioned Sandia National Laboratories to develop the Risk Assessment Methodology for Transmissions (RAM TSM) based on RAM-DSM.

RAM-TSM is a way to analyze the current security risks and systematically characterize and assess the security requirements of the nation's electrical transmission system facilities to deter, prevent, and mitigate malevolent attacks. The methodology and training has been made available to owners, operators, managers, and others responsible for transmitting electrical power.

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What to do next?

• • Attend one of the NERC regional workshops on cyber security standards

ftp://www.nerc.com/pub/sys/all_updl/cip/CSS_Workshop_A nnouncement.pdf

• Get involved in NERC standards process – Registered Ballot Body – Standards drafting teams – Comment of proposed standards • Get involved in your regions standards process • Find out about compliance assurance within your organization – Some companies building formal internal compliance programs gcpud 19

NERC WORKSHOP • How to make an Asset Inventory • Set up Change Management • Physical and Electronic Access Control and Monitoring • Governance • Incident Response • Documentation, Classification & Control • Network Management • Personnel Risk Assessment • Physical Security • Recovery Operations • Systems Management • Testing procedures • Employee Training • Performing Vulnerability Assessments • Prepare for a Compliance Audit.

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NERC CIP Workshops • 1-1/2 days • Help entity identify steps needed to determine if it has critical assets and critical cyber assets under CIP standards.

• To be held in 9 remaining cities through January 2007 • For information and registration go to: ftp://www.nerc.com/pub/sys/all_updl/cip/CSS_Workshop_Announcement.pdf

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Acknowledgements

Marty Sidor – NERC Director of Education Mark Kuras – NERC – Standards Education Team Dave Dworzak – Edison Electric Institute

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