NERC wimps out, passes toothless grid security regulations



Quick Take:  The Wall Street Journal reports that the North American Electric Reliability Corp. (NERC) has approved the draft regulations to protect the grid against physical attacks, despite criticism they lack teeth.


I'm on the side of utilities, don't get me wrong. But unless they get ahead of these looming security issues, they will be hurt in the long run. It may seem smart to fight against regulations that will take time and money to address. But it won't seem so smart when your grid goes down for three months due to terrorism. Far better to pass stiff standards that every utility is required to use. And that every regulator will be forced to allow into the rate base. - Jesse Berst


The Federal Energy Regulatory Commission (FERC) ordered NERC to craft new security standards after a California substation was damaged by rifle fire. NERC has responded with draft standards. On the plus side, the proposed rules gained 82% approval. On the downside, most of the votes were from the very utilities who would be subject to these new regulations.


Proponents of much stiffer security safeguards wanted things like blast barriers to protect transformers and other critical equipment. NERC's proposed rules, however, allow utilities to determine on their own whether or not their substations are critical. And then to decide on their own what measures they should take to protect the facilities, if any.


The proposal is virtually silent on what kind of threats to protect against and what kind of measures utilities have at their disposal.


FERC will conduct its own analysis of the proposal beginning in June.


Jesse Berst is the founder and Chief Analyst of SGN and Chairman of the Smart Cities Council, an industry coalition.


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