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Electric Reliability Update - August 28, 2014

August 28, 2014


D.C. Circuit Bars FERC from Fining Federal Entities for Reliability Violations - August 22 - The D.C. Circuit issued its opinion in Southwestern Power Administration v. FERC, and held that FERC and NERC's authority to levy penalties under Section 215 of the Federal Power Act did not extend to federal entities such as SWAPA.  Specifically, the decision indicated that federal sovereign immunity (the ability to sue or penalize the government) could only be waived by unambiguous statutory language, which was not present in section 215.  Should the ruling stand, FERC and NERC would still be able to promulgate and enforce reliability requirements for federal entities, but would not be able to seek monetary penalties from such entities for noncompliance.

FERC Grants Rehearing in Geomagnetic Disturbance Standards Proceeding - August 20 -FERC granted a limited rehearing of the its June 19 order approving new Reliability Standards to address Geomagnetic Disturbances in order to allow more time for considering the issues raised in petitioners’ rehearing requests. FERC states that it will address the substance of rehearing requests in a future order.  

FERC Submits Corrections to MOD NOPR
- Aug. 14 - FERC published in the Federal Register an errata notice to correct certain paragraphs of the MOD NOPR, which was previously published in the Federal Register on June 26, 2014.  The errata modifies information in the original NOPR relating to the paperwork burden and updating the OMB Control Number.  Comments remain due August 25, 2014.

FERC Extends Deadline for Comments on ERO 5-Year Performance Assessment - August 19 - Upon request, FERC extended the deadline for comments on NERC's Five-Year ERO Performance Assessment Report until August 29, 2014.


NERC Submits Proposed Reliability Standards for Facility Connection Requirements - August 22 -NERC submitted for FERC approval revised Facility Design, Connections, and Maintenance (“FAC”) Reliability Standards (FAC-001-2 and FAC-002-2).  According NERC’s proposal, Reliability Standard FAC-001-2 “requir[es] Transmission Owners and applicable Generator Owners to document Facility interconnection requirements,” while Standard FAC-002-2 intends to assess the “impact of interconnecting new or materially modified Facilities on the Bulk Electric System.” 

NERC Submits 2015 Business Plan and Budget for Approval - Aug. 22 - NERC submitted to FERC its 2015 Business Plan and Budget.  In its proposal, NERC is proposing an 18.2% increase over its 2014 Budget.  Nearly 16% of the 18% increase is due to added costs associated with participating in the Cyber Risk Information Sharing Program (CRISP), which is a cybersecurity information sharing tool built by the Pacific Northwest National Laboratory that seeks to enhance the ability of utilities to protect critical infrastructure.  Comments are due September 12th.

NERC Submits Errata Filing to Interchange Scheduling and Coordination Reliability Standards -August 22 - NERC submitted to FERC a petition for approval of errata related to four reliability standards.  Among other changes, NERC’s errata filing clarifies an inconsistency between the implementation plan and the effective date language for the listed Reliability Standards in its original February 27 petition for approval.

NERC Board Approves Role for ES-ISAC in DOE Cybersecurity Initiative and Adopts Four Standards - August 14 - At its quarterly meeting, the NERC Board of Trustees  authorized a resolution to expand the Electricity Sector Information Sharing and Analysis Center (ES-ISAC) duties to include management of the Department of Energy's Cyber Risk Information Sharing Program (CRISP).  The Board of Trustees also adopted four new standards, which will now go to FERC for approval: FAC-001-2 - Facility Interconnection Requirements; FAC-002-2 - Facility Interconnection Studies; NUC-001-3 - Nuclear Plant Interface Coordination; and PRC-004-3 - Protection System Misoperation Identification and Correction.

NERC Submits Budget Compliance Filing
 - August 14 - NERC submitted a compliance filing required under a settlement agreement with FERC's Office of Enforcement relating to FERC's 2012 performance audit of NERC.  The compliance filing contains an unaudited budget-to-actual variance report of NERC expenditures for the second quarter of 2014. 

Cybersecurity and Grid Security

NRC Hacked Three Times in Three Years – August 18- A report by the Inspector General of the Nuclear Regulatory Commission (NRC) indicates that the NRC was hacked three times in the past three years, including through phishing and spearphishing attacks, and malware distributed through an employee's compromised email account.

Department of Homeland Security Identifies Cybersecurity Vulnerability in Substation Software - July 31 - The Industrial Control Systems Cyber Emergency Response Team (ICS-CERT), which is division of the Department of Homeland Security, identified a cybersecurity vulnerability in software commonly used in electric substations.  Specifically, the ICS-CERT notice indicates that the issue involves a buffer overflow vulnerability in the SUBNET Solutions Inc (SUBNET), SubSTATION Server 2, Telegyr 8979 Master application.  A fix for this vulnerability is now available from SUBNET.

Regional Developments

FRCC and MRO Final 2015 Budgets Posted - August 21 - The Florida Reliability Coordinating Council and the Midwest Reliability Organization budgets for 2015 have been filed with NERC.  MRO requested a $10.33 million budget (an increase of $583,000 over 2014) while FRCC requests $7.16 million (an increase of $367,000 over 2014).  Each organization's budget includes goals and key deliverables for 2015.

Other Developments

DOE Releases Study on Electric Transmission Congestion - August 19 - The Department of Energy released a draft of its National Electric Transmission Congestion Study for public comment.  The report evaluates congestion concerns in light of changes such as EPA regulations and new transmission development and identifies areas of congestion throughout the country, but does not recommend particular changes to alleviate congestion.  A new report is required by statute every three years.  Comments are due to DOE by October 20, 2014.

The Van Ness Feldman Electric Reliability Update is published by Andrew ArtMalcolm McLellan and Gabe Tabak, with assistance from Chris ZentzIlan Gutherz, and Van Smith

Van Ness Feldman counsels, advises and trains a wide range of clients on reliability matters.  Please email usor call us at 202.298.1817 or 206.829.1814 for additional information.

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