FERC lacks the juice to enforce smart grid security, study finds

A framework of standards is emerging for securing an intelligent energy grid, but it is not yet complete and federal overseers lack the authority to require industry compliance, according to a study by the Government Accountability Office.

The standards for a smart grid are being assembled by the National Institute of Standards and Technology under the Energy Independence and Security Act of 2007. EISA also directed the Federal Energy Regulatory Commission, the primary federal regulator of the electricity system, to adopt standards for smart grid security and interoperability.

“While EISA gives FERC authority to adopt smart grid standards, it does not provide FERC with specific enforcement authority,” GAO noted in its report on electricity grid modernization. “As a result, any standards identified and developed through the NIST-led process are voluntary unless regulators use other authorities to indirectly compel utilities and manufacturers to follow them.”

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Regulation of the electric power industry and system is divided among various regulators at the federal, state and local levels, and FERC currently has no plan for monitoring industry compliance with voluntary standards.

GAO recommended that FERC better coordinate with other regulatory and industry groups in its efforts to monitor and evaluate voluntary compliance with approved standards and inform Congress about gaps in its authority.

The smart grid program has been identified as an element of the Obama administration’s economic recovery program because it promises to create jobs, contribute to energy independence and curb greenhouse gas emissions.

The grid would use intelligent networking and automation to better control the flow and delivery of electricity to consumers, enabling a two-way flow of electricity and information between power plants and appliances, and points in between. That could enable the more efficient generation, transmission and use of energy across a national grid.

“Despite these anticipated benefits, cybersecurity and industry experts have expressed concern that if smart grid systems are not implemented securely, they will be vulnerable to attacks that could result in widespread loss of electrical services essential to maintaining our national economy and security,” the GAO report states.

Potential vulnerabilities include:

• Increasing the number of entry points and paths that can be exploited by potential attackers and creating wider access for attackers.
• Introduction of new, unknown vulnerabilities.
• Increasing the amount of customer information being collected and transmitted and thereby providing monetary incentives for adversaries.

Money for developing and fielding new electric grid technology has been granted under the American Recovery and Reinvestment Act, and the industry now needs standards for interoperability and security to avoid those vulnerabilities.

The electricity grid has historically relied on proprietary technology, but with smart grid upgrades, utilities are seeking systems that are interoperable and easily integrated with technologies from different vendors. However, there are no widely accepted standards for their security.

EISA directed NIST to coordinate development of a framework of IT standards. NIST is identifying existing standards for interoperability and cybersecurity that can be applied to the smart grid and identifying gaps where new standards need to be developed.

NIST published an initial framework for interoperability and security in January 2010 in Special Publication 1108, “NIST Framework and Roadmap for Smart Grid Interoperability Standards, Release 1.0.” That was followed in August by the first version of security guidelines, the three-volume Interagency Report 7628, “Guidelines for Smart Grid Cyber Security.” GAO said the guidelines include important elements, such as a high-level strategy for developing an approach to securing smart grid systems and identifying appropriate security requirements.

FERC is reviewing initial guidelines for adoption as voluntary standards, including five existing cybersecurity standards identified by NIST as ready for adoption.

“However, FERC has not developed a coordinated approach with other regulators to monitor the extent to which industry follows these voluntary standards, because, according to officials, it has not yet determined whether or how to perform such a task,” the GAO report states. “Without a documented approach to coordinate with state and other regulators on this issue, FERC will not be well positioned to promptly begin monitoring the results of any standards it adopts or quickly respond if gaps arise.”

Furthermore, the guidelines are not complete, and GAO recommended that NIST develop a formal plan and schedule with milestones for filling gaps. According to GAO, there has been no assessment of the risk of combined cyber/physical attacks. Other security elements yet to be addressed include:

• Research and development for specific technologies, such as synchrophasor systems that provide detailed data on the conditions of electricity transmission and distribution.
• Cryptography issues and solutions.
• Additional smart grid system design issues, such as managing supply chain vulnerabilities.

The report also identified six key challenges to securing the Smart Grid.

• The current regulatory environment makes it difficult to ensure the cybersecurity of smart grid systems.
• Consumers are not adequately informed about the benefits, costs and risks associated with a smart grid.
• Utilities are focusing on regulatory compliance instead of comprehensive security.
• Security features are not being built into smart grid systems.
• The electricity industry does not have an effective mechanism for sharing information on cybersecurity.
• The electricity industry does not have metrics for evaluating cybersecurity.