FERC Chairman's Reliability Report: A Year in Review
By Patrick Miller
In 2023, FERC Chairman Willie L. Phillips' report highlighted advancements in U.S. power grid reliability, focusing on enhanced cybersecurity measures, physical grid security improvements, and resilience against extreme weather. Key initiatives included the implementation of new cybersecurity standards, incentive-based cybersecurity investments, and transmission reforms to accommodate evolving energy resources. These efforts underscore FERC's commitment to maintaining a resilient and secure electric grid.
As we approach the end of 2023, it's good to reflect on the significant strides made in securing and enhancing the reliability of our nation's power systems. The Chairman's Reliability Report, by FERC Chairman Willie L. Phillips, underscores a year filled with decisive actions and regulatory advancements. This review delves into the pivotal areas addressed throughout the year, emphasizing cyber security, physical attacks, extreme weather preparedness, and the changing resource mix.
Protecting the Grid from Cyber Threats
A landmark achievement this year was the Final Rule on Internal Network Security Monitoring (INSM) for High and Medium Impact Bulk Electric System Cyber Systems, issued on January 19, 2023. This directive is a response to the increasing sophistication of cyber threats, mandating the development of new or modified Reliability Standards. Its primary aim is to enhance internal network security monitoring across various levels of cyber systems, reflecting a proactive approach to cybersecurity.
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Furthermore, the Commission approved Reliability Standard CIP-003-9 in March 2023. The changes to this standard focus on enhancing cyber security for low impact Bulk Electric System (BES) Cyber Systems, particularly addressing supply chain risk management. It introduces new requirements for cyber security policies, including vendor electronic remote access security controls. The standard also requires methods for determining and disabling vendor remote access and detecting malicious communications. The implementation plan allows a 36-month period post-approval for effective transition and the retirement of the preceding standard CIP-003-8.
See our additional blog posts on this topic:
New cybersecurity controls for vendor access to low impact NERC CIP assets
New Low Impact NERC CIP-003-9 Regulations: Vendor Supply Chain Security
Incentivizing Cybersecurity Investments
Another notable development was the introduction of incentive-based rate treatments for utilities making voluntary cybersecurity investments. Order No. 893, issued in April 2023, is a strategic move to encourage utilities to invest in advanced cybersecurity technology. This approach not only bolsters grid security but also aligns financial incentives with the urgent need for cybersecurity enhancements.
Addressing Physical Attacks on the Grid
Physical security remains a paramount concern, as highlighted by NERC's evaluation of the Physical Security Reliability Standard. The Joint Technical Conference in August 2023 brought together key stakeholders to discuss solutions beyond the existing standards, underscoring the necessity for continuous improvement in physical grid security.
Preparing for Extreme Weather
The FERC-NERC Joint Inquiry into Winter Storm Elliott and subsequent reports provide key insights into grid resilience during extreme weather events. The findings reveal significant challenges, such as unplanned generating unit losses and the need for better preparation against natural gas infrastructure issues. The Commission's approval of extreme weather final rules, including Transmission System Planning Performance Requirements, marks a significant step toward enhancing grid reliability in the face of increasingly volatile weather patterns.
Ensuring Reliability amid Changing Resource Mix
As the energy landscape evolves, ensuring the reliability of inverter-based resources (IBRs) becomes increasingly important. FERC's approval of NERC's IBR Registration Work Plan and the subsequent IBR Final Rule are pivotal in integrating new clean energy technologies without compromising grid reliability. This development reflects a balanced approach to embracing clean energy while maintaining grid stability.
Transmission Reform for Reliability
Lastly, the adoption of Order No. 2023, focusing on Improvements to Generator Interconnection Procedures and Agreements, signifies a major reform in the transmission sector. These changes, including the first-ready, first-served cluster study process and faster queue processing, are instrumental in accommodating new technologies and enhancing the overall efficiency of grid operations.
Conclusion
The year 2023 has been a testament to FERC's commitment to fortifying the nation's electric grid against diverse challenges. From cyber and physical threats to extreme weather and the integration of new technologies, the regulatory measures undertaken this year lay a robust foundation for a resilient and secure electric grid. As we look forward to 2024, these initiatives will undoubtedly continue to shape the landscape of grid reliability and security, as well as FERC’s agenda.
