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US agencies push harder for reliability at distribution level

June 28, 2020
Discussions between US level officials involved in smart grid efforts, regulators and distribution utilities are beginning to bear fruit, a group of panelists said yesterday in response to a question from Smart Grid Today at the National Town Meeting on Demand Response and Smart Grid in Washington, DC.  After taking a long wait-and-see approach as smart grid projects matured, agencies like FERC, NIST and DOE amped up their engagement with distribution utilities with more information about those deployments coming in and increasing pressure to strengthen reliability at the distribution level, the officials said.

The development is an important one considering the tricky legal and regulatory boundaries posed by the US power system.  With an estimated 97% of the nation's power lines unregulated by NERC or federal regulatory bodies and with a growing number of high-profile outages, pressure from Capitol Hill and elsewhere has built to push state regulators and the distribution utilities they oversee to get more aggressive about cybersecurity and other reliability concerns.  Still, FERC and NERC lack authority to force any action; instead, they rely on dialogue and education to push desired action.

With more information coming in from the 99 SGIG-funded projects, about half of which are deployed, DOE now can offer bird's eye view lessons and advice to state regulators and utilities, Eric Lightner, director of DOE's Federal Smart Grid Task Force, said.  Aggregating all those information points and lessons has let the task force create a “model strategy” that will help utilities and regulators answer the question of “How do I go about educating my consumers in proactive way to avoid the splashback some others have experienced?” he said.

The absence of cybersecurity-literate staff members at state regulatory commissions is one of the biggest constraints to getting satisfactory reliability and cybersecurity checks and policies implemented, many experts have said.  Worse yet, those experts said, is the fact that state commissions might make the mistake of resorting to relatively ineffective NERC critical infrastructure protection (CIP) standards as the basis for statewide security and reliability rules.  The CIP standards, at best, provide a compliance baseline, but are by no means meant to be a wholesale regulatory regime, groups such as NARUC and federal agencies such as DOE have said.   [EDITOR'S NOTE:  The evolution of NERC CIP standards is explored in great detail in Smart Grid Today's exclusive, just-published report “The Ins & Outs of CYBER inSECURITY.”]
QUOTABLE:  The NERC reliability standards cover
the bulk power system.  And so the bulk power system
is in the states.  It very much includes parts of
distribution utilities, but oftentimes doesn't include
that last mile to that feeder.  And I think that's the
question: How do we encourage greater reliability of
distribution utilities given the trade-offs that are made
in balancing investment versus keeping rates down.
Nick Sinai, senior advisor for the White House
Office of Science and Technology Policy, in an
interview yesterday with Smart Grid Today
The topic Sinai addressed is a sensitive issue around which regulators and federal agencies have tiptoed.
FERC cannot demand anything of state regulators when it comes to how they handle their distribution utilities, but since February it has engaged in constant conversation with those regulators, Mary Beth Tighe, senior technical and policy advisor to FERC Chairman Jon Wellinghoff, said.

Talks at NIST, which backs the Smart Grid Interoperability Panel (SGIP), evolved to include distribution reliability, David Wollman, deputy director of NIST's smart grid and cyber-physical program office, said.  As smart grid technology proliferates, utilities and regulators will need to determine how all that interconnection translates to distribution reliability, he said.
Too much focus on size?

That touches on a point FERC has often made about NERC CIP standards, in that the nature and function of an input should color its critical status more than the sheer size of that element.  NERC CIP 5 would define critical cyber assets by their breadth of control rather than by size.  Such changes would go a long way to satisfy Order 706, FERC said in April when it approved the fourth version of the CIP standards.

It is unclear whether that proposal can pass muster with the utilities NERC regulates – which must approve all CIP standards.  NERC also does not believe Order 706 called for basing critical cyber assets on connectivity rather than the operational functions of each asset, which is how NERC currently evaluates such equipment.  FERC feels that connectivity is paramount in cybersecurity defense because of potential multiple-asset attacks (SGT, Apr-30).

FERC commissioners also hesitated last week to fully approve NERC's recent revised definition of bulk electric system, with one of the chief concerns being setting reliability thresholds based purely on size.  That fails to account for the growing interconnectedness of the grid, which calls for activities and devices to rely on smaller and more complex elements within the grid system, some commissioners said (SGT, Jun-25).

Recent hearings on Capitol Hill regarding electric reliability shed light on the territorial disputes between regulators.  Incentivizing smart grid technology adoption could potentially reduce weather- and cybersecurity-related outages, some senators on the Energy and Natural Resources Committee agreed during an April hearing on power reliability.  But witnesses at that hearing stonewalled the senators who asked whether NERC, FERC or the federal government should impose distribution-level reliability standards.  Short of concrete methods to encourage such undertakings, more dialogue between all parties was the recommended remedy (SGT, Apr-27).

A “whole host” of less formal interactions between federal, state and utility entities occur all the time, Sinai said.  As some legislators call for stricter safeguards to ensure reliability, the regulators' constant struggle between providing low-cost services and ensuring reliability makes some ideas unlikely.

“The distribution grid is built to be rebuilt.  It would be far more costly to bury all the distribution lines across the country, so there are cost-benefit trade-offs,” Sinai said.  “The way the distribution systems are typically architected is to be rebuilt in times of natural disaster.  That's a standard kind of operating practice to balance the impact on end-user rates.”

© 2012 Modern Markets Intelligence Inc..  IMPORTANT: This article was reproduced from the June 28, 2020 issue of Smart Grid Today with the limited permission of the owner.  To view the full story on Smart Grid Today’s website, please visit


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