OVERNIGHT ENERGY: Fault lines on power grid cybersecurity

By Zack Colman and Ben Geman - 07/16/12 06:03 PM ET

State of Play: Senate lawmakers will learn Tuesday what regulators are doing to protect the electric grid from computer attacks at a time when cybersecurity legislation remains in political limbo on Capitol Hill.

The Senate Energy and Natural Resources Committee will convene a morning hearing on the matter that includes testimony from a top Federal Energy Regulatory Commission (FERC) official and other experts.

Beefing up power grid security has proven tricky, and Tuesday’s hearing could bring fresh battles in an ongoing turf war between regulators.

FERC regulates interstate utilities, but has no authority to propose cybersecurity standards.

Responsibility for electric grid cybersecurity standards lies with the North American Electric Reliability Corporation (NERC), but it can only enforce standards for transmission lines and other elements related to the transmission grid, such as electrical substations.

The organization’s utility members, however, must approve the regulations.

That leaves about 97 percent of the nation’s electric lines without a national regulator. State public utility commissions regulate those distribution utilities and set cybersecurity standards for them to follow.

The hodgepodge regulatory structure has often pitted FERC against NERC.

Joseph McClelland, FERC director of office of electric reliability, believes NERC is acting too slowly to defend the electric system from cyber attacks. He will testify at Tuesday’s hearing.

Gerry Cauley, president and CEO of NERC, has pushed forward with stronger cybersecurity standard proposals in recent months, which most of NERC’s members have resisted. He will also testify.

The hearing arrives as the path ahead on federal legislation remains highly uncertain. Republicans want to keep even voluntary benchmarks for those networks out of any cybersecurity bill, fearing those metrics will serve as a stalking horse for enforceable rules.

But many Democrats and some GOP lawmakers think the networks are too important for both public safety and the economy to ignore them in cybersecurity legislation.

The House passed cybersecurity legislation, H.R. 3253, in April.

A Senate bill, S. 2105, has yet to be called for a vote, while Sens. Jon Kyl (R-Ariz.) and Sheldon Whitehouse (D-R.I.) are working to piece together a separate compromise proposal.   

The main hang-ups in the Senate include the role of the Department of Homeland Security, whether to include critical infrastructure networks and concerns about civil liberties.

Something we’re watching ...

The U.S. Court of Appeals for the District of Columbia Circuit will rule as soon as Tuesday on challenges to the Environmental Protection Agency’s Cross-State Air Pollution Rule, which demands cuts to smog-forming and particulate pollution from power plants that affects eastern states.

NEWS BITES:

Fracking: The Obama doctrine

President Obama used an Ohio campaign stop Monday to offer plenty of cheers for natural-gas development through “fracking” but warned, “we haven’t established clear guidelines for how to do it safely.”

Obama, campaigning in a swing state where fracking could become widespread, had this to say when touting his support for expanded drilling:

Now, you always hear these arguments that somehow there’s this huge contradiction between the environment and economic development, or the environment and energy production. And the fact of the matter is that there are a lot of folks right now that are engaging in hydraulic fracking who are doing it safely. The problem is, is that we haven’t established clear guidelines for how to do it safely, and informed the public so that neighbors know what’s going on, and your family, you can make sure that any industry that’s operating in your area, that they’re being responsible.

The White House has convened a multi-agency task force to oversee oil-and-gas development enabled through fracking. The Interior Department is crafting rules to govern chemical disclosure and other aspects of fracking on public lands, while EPA recently completed new air pollution rules.

Obama on Monday vowed to work with industry on creating “best practices” and invest in research to ensure fracking safety, and also said “irresponsible” companies would be held “to account.” Here’s more from his remarks in Cincinnati:

And that’s how we should develop this incredible resource — which, by the way, if we do it properly, could end up changing the economics and politics globally of energy in a way that's actually very good for us, because we'll be less dependent on what happens in the Middle East and our economy will be less subject to the kinds of spikes that we saw earlier in the spring in terms of gas prices.

Federal officials to talk alt-fuels, vehicles

Several senior Obama administration officials will appear before a House Energy and Commerce Committee panel Tuesday afternoon for a hearing on alternative fuels and vehicles. More info, including the testimony, is here.

Transportation and green energy in focus

The American Council on Renewable Energy will hold a “Transportation and Renewable Energy Forum” Tuesday with speakers including Federal Highway Administrator Victor Mendez. More here.

IN CASE YOU MISSED IT:

Check out these stories that ran on E2-Wire Monday and over the weekend ...

- Republicans keep 'activist' EPA in crosshairs
- Wind power advocates fear Romney will slow industry
- GOP leaders slam door on carbon taxes
- Republicans plan vote to ease rules on illegal timber
- Apple: Withdrawing green certification a 'mistake'
- Fed agency: June was fourth-hottest on record worldwide
- Interior spokesman joins Obama campaign
- White House holds 'pep talk' on biofuels