Smart Grid Legal News - High Voltage Insight on Smart Grid Issues

Last year, the Commonwealth of Kentucky released its final report of the Smart Grid Kentucky Roadmap Initiative. The report is a hefty 370 pages and provides an in-depth analysis of the current and future state of the smart grid in Kentucky. With so much focus on smart meters, it is always nice to point out there is more to the smart grid. The report begins by stating the characteristics of the smart grid:

1. Active Participation by Consumers
2. Accepts All Power Generation and Storage
3. Enables New Products and Services
4. Improved Power Quality
5. Efficient Operation and Use of Assets
6. Self-Healing
7. Defends Against Attack and Natural Disaster

Many surveys were done. The responding Kentucky electric utilities were given a listing and description of smart grid functionalities, each followed by a listing of technologies that enable such functions. The report summarizes their responses regarding the use of installed technology to achieve smart grid functionality. Here is a peek at the responses regarding enabling technologies for grid awareness:

SCADA: 10 deployed, 1 deploying
Breaker monitoring system: 6 deployed
Wide-area monitoring system: 4 deployed
Phasor measurement unit: 3 deployed
Geographic information system: 12 deployed
Digital event recording device: 7 deployed
Transmission line sag monitoring: 0 deployed 

And for increased national and information security:

Techniques related to cyber security: 10 deployed
Techniques related to data privacy: 10 deployed

Utilities and regulators may find the included surveys and presentations helpful. Kentucky is poised to develop its smart grid future.

DOE recently released a study that analyzes the economy-wide impact of the American Recovery and Reinvestment Act of 2009 (Recovery Act or ARRA) funding for Smart Grid project deployment administered by DOE's Office of Electricity Delivery and Energy Reliability (DOE OE). The investments analyzed cover expenditures from August 2009 to March 2012 and encompass nearly three billion dollars in publicly documented expenditures. The Smart Grid support from DOE included the Smart Grid Investment Grants (SGIG) and the Smart Grid Demonstration Program (SGDP). Key findings are positive:

• ARRA funding and matching support from utilities and the private sector in the SGIG and SGDP programs generated a significant impact on the U.S. economy. As of March 2012, the total invested value of $2.96 billion to support Smart Grid projects generated at least $6.8 billion in total economic output.
• Smart Grid deployment positively impacted employment and labor income throughout the economy. Overall, about 47,000 full time equivalent jobs were supported by investments. Among Smart Grid vendors – an ecosystem of manufacturers, information technology and technical services providers – about 12,000 direct jobs were supported, with the remaining jobs being in those companies’ respective supply chains and induced by the money spent throughout the broader economy.
• Investment in core Smart Grid industries supports high-paying jobs. Industrial sectors that benefit directly include computer systems design, technical and scientific services and consulting, and electrical/wireless equipment and component manufacturing. Industrial sectors which experience indirect and induced benefits include real estate, wholesale trade, financial services, restaurants and health care. Smart Grid ARRA investments also supported employment in personal service sectors, such as health care, financial services, real estate and food/restaurants through indirect and induced impacts.
• The Smart Grid Gross Domestic Product (GDP) multiplier is higher than many forms of government investment. For every $1 million of direct spending, which includes both government ARRA funds and private sector matching, the GDP increased by $2.5 to $2.6 million, depending on the scenario being evaluated, which compares favorably against other potential government investments in general spending or other types of infrastructure.

Additional details to support these findings are provided in the study.

In the past, customer education typically meant nothing more than a bill insert and perhaps an additional public notice. Then came the smart grid and suddenly more is required… much more. Ameren Illinois conducted a quantitative study to measure its customers’ baseline awareness about AMI. Key findings revealed:

• 63% of customers have heard the term “smart grid.”
  Among the 63% hearing the term:
  • 40% don’t know much about what it means
  • 34% have a favorable impression
  • 29% are neutral
  • 16% have an unfavorable impression
  • 21% don’t know
• 45% of customers have heard the term “smart meter.”
  Among the 45% hearing the term:
  • 25% of those who have heard the term don’t know much about what it means
  • 35% have a favorable impression
  • 28% are neutral
  • 23% have an unfavorable impression
  • 14% don’t know
• 46% of all customers feel that smart meters would be “mostly an advantage,”
• 40% seeing the meters as “having no impact,” and
• 8% as “mostly a disadvantage.”

Customers indicated that improving reliability, bill accuracy and customer service and providing them with more control of home energy usage as the top smart meter benefits. The study will help guide the development of Ameren’s stakeholder and customer education plan. You can learn more about Ameren’s plan and ComEd’s plan by reading their Annual AMI Reports filed with the Illinois Commerce Commission on April 1, 2013. Ameren and ComEd also filed jobs creation reports as a result of the Energy Infrastructure Modernization Act.

For purposes of the Request for Information (“RFI”) the National Institute of Standards and Technology (“NIST”) defines “critical infrastructure” as:

systems and assets, whether physical or virtual, so vital to the United States that the incapacity or destruction of such systems and assets would have a debilitating impact on security, national economic security, national public health or safety, or any combination of those matters.

Threats to critical infrastructures typically fall into two categories: (1) physical threats - physical threats to tangible property and (2) cyber threats - threats of electronic/computer-based attacks on the communications components that control critical infrastructures. Many of these critical infrastructures are owned and operated by the private sector. Therefore, it is essential that the government and private sector work together to develop a strategy for protecting them and assuring their continued operation. 

The National Institute of Standards and Technology is conducting a comprehensive review to develop a framework to reduce cyber risks to critical infrastructure (“Framework”). The Framework will consist of standards, methodologies, procedures and processes that align policy, business and technological approaches to address cyber risks. The RFI requests information to help identify, refine and guide the many interrelated considerations, challenges and efforts needed to develop the Framework. Responding to the NIST RFI is one of many action items the private sector can take. Several companies have already filed their comments. Some of the questions asked in the RFI include:

• What are the current regulatory and regulatory reporting requirements in the United States (e.g. local, state, national, and other) for organizations relating to cybersecurity?
• What organizational critical assets are dependent upon other critical physical and information infrastructures, including telecommunications, energy, financial services, water and transportation sectors?
• What do organizations see as the greatest challenges in improving cybersecurity practices across critical infrastructure?
• Describe your organization's policies and procedures governing risk generally and cybersecurity risk specifically. How does senior management communicate and oversee these policies and procedures?
• How do organizations define and assess risk generally and cybersecurity risk specifically?

Written comments, due by April 8, 2013, may be submitted by mail to Diane Honeycutt, National Institute of Standards and Technology, 100 Bureau Drive, Stop 8930, Gaithersburg, MD 20899. Submissions may be in any of the following formats: HTML, ASCII, Word, RTF, or PDF. Online submissions in electronic form may be sent to cyberframework@nist.gov. Please submit comments only and include your name, company name (if any), and cite “Developing a Framework to Improve Critical Infrastructure Cybersecurity” in all correspondence. All comments received by the deadline will be posted at http://csrc.nist.gov/ without change or redaction, so commenters should not include information they do not wish to be posted (e.g., personal or confidential business information).

The smart grid creates the need for greater cybersecurity and is also part of the solution. The smart grid represents the modernization of electricity infrastructure often through added technology, allowing the grid to gather and store data and to create a “dialogue” between all components of the grid, and also allowing for automatic command and response within the function of the grid. A fully evolved smart grid will provide many improvements to situational awareness, prevention, management and restoration that, in spite of the new vulnerabilities it introduces, fundamentally makes the electric system more secure and reliable. On the other hand, the smart grid enhances the need for cybersecurity because it adds a layer of computer systems and software to existing utility infrastructure. It may increase the portals through which a cyber threat could enter the system.

Last month, the National Association of Regulatory Utility Commissioners (“NARUC”) released an updated version of its cybersecurity primer Cybersecurity for State Regulators 2.0. Meant for state regulators, the Primer will be helpful to utilities as it provides a “heads up” to the questions you will be asked. It includes an introductory explanation of the issues, identifies the jurisdictional landscape and highlights some of the characteristics of good cybersecurity that policymakers should consider. Understanding that cybersecurity is a quickly evolving area, the Primer also encourages regulators to engage in strategic discussions about cybersecurity to enable and support a thoughtful, risk-based approach to prudent investments by infrastructure operators. It includes sample questions for regulators to customize and ask their regulated entities and provides other resources. Here are some of the thought-provoking questions:

• Does your cybersecurity plan include alternative methods for meeting critical functional responsibilities in the absence of IT or communication technology?
• Has your organization conducted a cyber risk or vulnerability assessment of its information systems, control systems and other networked systems?
• Does your organization perform vulnerability assessment activities as part of the acquisition cycle for products in each of the following areas: cybersecurity, SCADA, smart grid, internet connectivity and Web site hosting?
• Has the company managed cybersecurity in the replacement and upgrade cycle of its networked equipment? Does this include smart meters?