Regulatory Updates
On September 14, 2020, FERC, NERC, and NERC Regional Entities staff (collectively, “joint staff”) published a Cyber Planning for Response and Recovery Study (CYPRES) Report that discusses utility approaches to protecting their networks against cyber security incidents by way of their incident response and recovery plans. Subject matter experts from the joint staff relied upon the National Institute of Standards and Technology (NIST) Special Publication 800-61 Rev.2, Computer Security Incident Handling Guide Recommendations, as a reference tool for how to respond to incidents effectively.
After a series of site visits and interviews of employees at electric utilities of various sizes and bulk electric system responsibilities, along with varying cyber infrastructure designs, the joint staff made some key observations. While the CYPRES Report confirms there is no “one size fits all” approach to preparing and responding to cyber incidents, it does illuminate common areas where entities can effectively focus their response efforts.
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The Federal Energy Regulatory Commission (“FERC”) announced the issuance of a Final Rule, Order No. 2222, which it describes as “historic” in enabling distributed energy resource (“DER”) aggregators to compete in all regional organized wholesale electric markets. In doing so, FERC makes express reference to the recent appellate ruling on energy storage participation, Order 841, and the court’s view of an expansive federal role over activity that may interact with wholesale electric markets.
As FERC Staff observes, “DERs tend to be too small to meet the minimum size requirements to participate in the RTO/ISO markets on a stand-alone basis, and may be unable to meet certain qualification and performance requirements because of the operational constraints they may have as small resources.”
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On August 13, 2020, the ERO Enterprise extended guidance originally issued in May through December 31, 2020. This guidance and extension were issued in response to the ongoing coronavirus pandemic. In particular, this extension allows the continuation of regulatory relief by continuing the Self-Logging Program. The extension also includes the deferment of on-site activities, including on-site audits, through the end of 2020.
The guidance was originally issued to address the handling of potential noncompliance related to the coronavirus pandemic. The guidance recognized the importance of focusing on the health and safety of personnel while also continuing the reliability and security of the bulk power system. This temporary expansion has been extended to December 31, 2020 and is intended to last only during the public health emergency.
The ERO Enterprise Guidance: Potential Noncompliance Related to Coronavirus Impacts can be accessed here.
For further information regarding the guidance and extension, please contact This email address is being protected from spambots. You need JavaScript enabled to view it., This email address is being protected from spambots. You need JavaScript enabled to view it. and This email address is being protected from spambots. You need JavaScript enabled to view it..
On July 31, 2020, the Federal Energy Regulatory Commission (“FERC”) and the North American Electric Reliability Corporation (“NERC”) released a joint white paper on preventing security risks posed by a Network Interface Controller (“NIC”). It is intended to help the electric sector identify vendors of components on their networks in order to mitigate any potential risks to the bulk power system. The white paper is in response to several hearings and reviews since 2012 which examined a security threat posed by Chinese telecommunication companies – specifically, Huawei or ZTE. As the market share of Chinese telecommunication companies has increased, their electronic components have entered the bulk power system, creating a potential cybersecurity concern. The joint white paper provides several noninvasive techniques a cybersecurity professional can use to identify potentially malicious components.
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On July 16, 2020, the Federal Energy Regulatory Commission (“FERC”) issued an Order dismissing New England Ratepayers Association’s (“NERA”) petition for declaratory order concerning net energy metering (Docket No. EL20-42-000). NERA had asked FERC to declare that it has jurisdiction over energy sales from rooftop solar facilities and other distributed generation located on the customer side of the retail meter where the output of the generators is not used to serve demand behind the customer’s meter. NERA had argued that such excess sales are wholesale sales in interstate commerce, which should be priced at the utility’s avoided cost of energy if the sale is made pursuant to Public Utility Regulatory Policies Act of 1978 (“PURPA”) or a just and reasonable wholesale rate if the sale is made pursuant to the Federal Power Act (“FPA”).
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On July 16, 2020, the Federal Energy Regulatory Commission (“FERC” or “the Commission”) issued Order No. 872, a Final Rule implementing Sections 201 and 210 of the Public Utility Regulatory Policies Act (“PURPA”). The Final Rule changes a number of practices which have been in place since the initial passage of the Act in 1978. FERC implemented these changes in response to what the Commission called an unprecedented change in the dynamics of the natural gas market, the improved outlook for alternatives to natural gas and oil-fired generation resources, and the introduction of Qualified Facilities (“QFs”) as competing sources of electricity to incumbent electric utilities. The Final Rule implements several key changes to PURPA.
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On June 30, 2020, the United States Court of Appeals for the District of Columbia Circuit issued an en banc opinion regarding the use of tolling orders issued by the Federal Energy Regulatory Commission (“FERC”) for requests for rehearing of its actions taken pursuant to the National Gas Act (“NGA”). The opinion eliminates the current practice by FERC of issuing a tolling order in response to a request for rehearing and will affect the rights of parties before FERC to seek judicial review of FERC actions.
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On June 11, 2020, the California Public Utilities Commission (“CPUC”) adopted a final Decision regarding a central procurement framework for the CPUC-jurisdictional Load-Serving Entities’ (“LSEs”) multi-year local Resource Adequacy (“RA”) requirements. This Decision impacts the procurement authority of many California LSEs and will affect the costs of meeting RA requirements.
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