[House Hearing, 110 Congress]
[From the U.S. Government Printing Office]
IMPLICATIONS OF CYBER VULNERABILITIES ON THE RESILIENCE AND SECURITY OF
THE ELECTRIC GRID
=======================================================================
HEARING
before the
SUBCOMMITTEE ON EMERGING
THREATS, CYBERSECURITY,
AND SCIENCE AND TECHNOLOGY
of the
COMMITTEE ON HOMELAND SECURITY
HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
SECOND SESSION
__________
MAY 21, 2008
__________
Serial No. 110-117
__________
Printed for the use of the Committee on Homeland Security
[GRAPHIC] [TIFF OMITTED] CONGRESS.#13
Available via the World Wide Web: http://www.gpoaccess.gov/congress/
index.html
__________
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COMMITTEE ON HOMELAND SECURITY
Bennie G. Thompson, Mississippi, Chairman
Loretta Sanchez, California Peter T. King, New York
Edward J. Markey, Massachusetts Lamar Smith, Texas
Norman D. Dicks, Washington Christopher Shays, Connecticut
Jane Harman, California Mark E. Souder, Indiana
Peter A. DeFazio, Oregon Tom Davis, Virginia
Nita M. Lowey, New York Daniel E. Lungren, California
Eleanor Holmes Norton, District of Mike Rogers, Alabama
Columbia David G. Reichert, Washington
Zoe Lofgren, California Michael T. McCaul, Texas
Sheila Jackson Lee, Texas Charles W. Dent, Pennsylvania
Donna M. Christensen, U.S. Virgin Ginny Brown-Waite, Florida
Islands Gus M. Bilirakis, Florida
Bob Etheridge, North Carolina David Davis, Tennessee
James R. Langevin, Rhode Island Paul C. Broun, Georgia
Henry Cuellar, Texas Candice S. Miller, Michigan
Christopher P. Carney, Pennsylvania
Yvette D. Clarke, New York
Al Green, Texas
Ed Perlmutter, Colorado
Bill Pascrell, Jr., New Jersey
Jessica Herrera-Flanigan, Staff Director & General Counsel
Rosaline Cohen, Chief Counsel
Michael Twinchek, Chief Clerk
Robert O'Connor, Minority Staff Director
______
SUBCOMMITTEE ON EMERGING THREATS, CYBERSECURITY, AND SCIENCE AND
TECHNOLOGY
James R. Langevin, Rhode Island, Chairman
Zoe Lofgren, California Michael T. McCaul, Texas
Donna M. Christensen, U.S. Virgin Daniel E. Lungren, California
Islands Ginny Brown-Waite, Florida
Bob Etheridge, North Carolina Paul C. Broun, Georgia
Al Green, Texas Peter T. King, New York (Ex
Bill Pascrell, Jr., New Jersey Officio)
Bennie G. Thompson, Mississippi (Ex
Officio)
Jacob Olcott, Director and Counsel
Dr. Chris Beck, Senior Advisor for Science and Technology
Carla Zamudio-Dolan, Clerk
Kevin Gronberg, Minority Professional Staff Member
______
(II)
C O N T E N T S
----------
Page
Statements
The Honorable James R. Langevin, a Representative in Congress
From the State of Rhode Island, and Chairman, Subcommittee on
Emerging Threats, Cybersecurity, and Science and Technology:
Oral Statement................................................. 1
Prepared Statement............................................. 3
The Honorable Ginny Brown-Waite, a Representative in Congress
From the State of Florida...................................... 4
Witnesses
The Honorable Joseph T. Kelliher, Chairman, Federal Energy
Regulatory Commission (FERC), Accompanied by Joseph McClelland,
Director, Office of Electric Reliability, FERC:
Oral Statement................................................. 6
Prepared Statement............................................. 7
Mr. Richard Sergel, President and Chief Executive Officer, North
American Electric Reliability Corporation (NERC):
Oral Statement................................................. 13
Prepared Statement............................................. 14
Mr. Greg Wilshusen, Director, Information Security Issues,
Government Accountability Office (GAO), Accompanied by Naba
Barkakati, Senior Level Technologist, GAO:
Oral Statement................................................. 25
Prepared Statement............................................. 26
Mr. William R. McCollum, Jr., Chief Operating Officer, Tennessee
Valley Authority (TVA), Accompanied by John Long, Chief
Administrative Officer, TVA:
Oral Statement................................................. 32
Prepared Statement............................................. 34
For the Record
Mr. Bill Pascrell, Jr., a Representative in Congress From the
State of New Jersey:
Exhibit A: ES-ISAC Advisory Follow-up Survey................... 45
Exhibit B: Letters............................................. 47
Appendix
Questions From Chairman James R. Langevin........................ 81
IMPLICATIONS OF CYBER VULNERABILITIES ON THE RESILIENCE AND SECURITY OF
THE ELECTRIC GRID
----------
Wednesday, May 21, 2008
U.S. House of Representatives,
Committee on Homeland Security,
Subcommittee on Emerging Threats, Cybersecurity, and
Science and Technology,
Washington, DC.
The subcommittee met, pursuant to notice, at 2:13 p.m., in
Room 311, Cannon House Office Building, Hon. James R. Langevin
[chairman of the subcommittee], presiding.
Present: Representatives Langevin, Lofgren, Etheridge,
Green, Pascrell, McCaul, and Brown-Waite.
Also present: Representative Jackson Lee.
Mr. Langevin. The subcommittee will come to order.
The subcommittee is meeting today to receive testimony on
Implications of Cyber Vulnerabilities on the Resiliency and
Security of the Electric Grid.
I will begin by recognizing myself for an open statement.
Good afternoon. I would like to thank our witnesses for
testifying today.
Over the last year, this subcommittee has spent a lot of
time and energy on improving Federal network security. Today's
issue, the security of our critical infrastructure networks, is
one that demands equal attention. The effective functioning of
our critical infrastructure, from dams and water systems to
factories and the electric grid, is highly dependent on control
systems, computer-based systems that are used to monitor and
control sensitive processes and physical functions.
Once largely proprietary closed systems, control systems
are becoming increasingly connected to open networks such as
corporate intranets and the Internet itself. This connectivity
places these infrastructures at increased risk of intentional
or unintentional control system failures which can have a
significant and potentially devastating impact on the economy,
public health and national security of the United States.
There can be no doubt that America's critical
infrastructure networks are under constant threat. Pervasive
vulnerabilities of hardware and software and the connectivity
of these machines to the Internet make our multi-layered lines
of defense, meaning anti-virus, firewall and intrusion
detection, relatively ineffective in addressing the problem.
To compound matters, many organizations prefer to focus on
the deployment of new technology without regard for the
security or integrity of their systems or information. This
often means that information security officers are
simultaneously facing increased responsibility and shrinking
budgets.
These are overwhelming challenges without clear solutions.
The Federal Government and the private sector must act with a
sense of urgency to address these issues; and yet, as I read
today's testimony, I still do not get the sense that we are
addressing cybersecurity with the seriousness that it deserves.
Today's hearing will focus on two primary issues.
First, we will receive an update from the Federal Energy
Regulatory Commission, FERC, and the North American Electric
Reliability Corporation, NERC, about electric industry efforts
to mitigate a cyber vulnerability known as Aurora. I think we
could search far and wide and not find a more disorganized,
ineffective response to an issue of national security of this
import. Everything about the way this vulnerability was
handled, from press leaks, to DHS's failure to provide more
technical details to support the results of its test, to NERC's
dismissive attitude to the industry's halfhearted approach
toward mitigation, leaves me with little confidence that we are
ready or willing to deal with the cybersecurity threat.
As time passes, I grow particularly concerned by NERC, the
self-regulating organization responsible for ensuring the
reliability of the bulk power system. Not only do they propose
cybersecurity standards that, according to the GAO and NIST,
are inadequate for protecting critical national infrastructure,
but throughout the committee's investigation they continued to
provide misleading statements about their oversight of industry
efforts to mitigate the Aurora vulnerability.
If NERC doesn't start getting serious about national
security, it may be time to find a new electric reliability
organization. NERC can begin demonstrating its commitment by
incorporating more of the NIST security controls in the next
iteration of its reliability standards.
Now I am thankful today that Chairman Kelliher and his
staff at FERC are taking cybersecurity seriously. In earlier
correspondence, Chairman Thompson and I voiced our concern that
the Commission not only lacked authority to regulate
potentially vulnerable cybersecurity assets, but they are not
covered in the NERC standards, but also the authority to issue
orders to owners and operators in the event of an imminent
exploitation of an asset on the grid.
The chairman and I fully support FERC's request for
additional legal authorities to adequately protect the bulk
power system, and we certainly look forward to working with you
and the appropriate committees in the future.
Our second issue of discussion today involves the GAO
investigation that this committee commissioned last year. We
asked GAO to provide insight into the cybersecurity controls of
the Nation's largest public power utility, the Tennessee Valley
Authority, TVA. The TVA's service area covers 80,000 square
miles in the southeastern United States, with a total
population before 8.7 million people.
Unfortunately, the GAO found that the TVA security posture
was seriously lacking. According to the report, TVA has not
implemented appropriate security practices to secure the
control systems and networks used to operate its critical
infrastructures. Until TVA addresses these weaknesses, it risks
a disruption of its operations as a result of a cyber incident
which could impact its customers.
Now I am pleased to hear that TVA has taken significant
steps toward implementing higher levels of security.
But these problems are not unique to TVA. I believe they
are typical of security practices across the industry; and
given what we have seen with the Aurora mitigation, I have
little confidence that the industry is taking appropriate
actions.
Now, in closing, I would like to challenge each of you here
and everyone in the industry to, among other things, prove to
our committee that you are serious about cybersecurity. Show us
you are willing to adopt better standards because it will make
the entire grid more secure. Leverage the critical
infrastructure community to push control system vendors to
build more secure products and commit the manpower and the
money to mitigating your vulnerabilities.
I can say this, that we will continue our oversight in this
area. It will be robust. In the next subcommittee hearing,
though, I certainly look forward to talking about all the
progress the industry has made in meeting our challenges.
[The statement of Chairman Langevin follows:]
Prepared Statement of Chairman James R. Langevin
May 21, 2008
Good afternoon. I'd like to thank our witnesses for testifying
today. Over the last year, this subcommittee has spent a lot of time
and energy on improving Federal network security. Today's issue--the
security of our critical infrastructure networks--is one that demands
equal attention.
The effective functioning of our critical infrastructure--from dams
and water systems, to factories and the electric grid--is highly
dependent on control systems, computer-based systems that are used to
monitor and control sensitive processes and physical functions. Once
largely proprietary, closed systems, control systems are becoming
increasingly connected to open networks, such as corporate intranets
and the Internet. This connectivity places these infrastructures at
increased risk of intentional or unintentional control system failures,
which can have a significant and potentially devastating impact on the
economy, public health, and national security of the United States.
There can be no doubt that America's critical infrastructure
networks are under constant threat. Pervasive vulnerabilities in
hardware and software, and the connectivity of these machines to the
Internet make our multilayered lines of defense--anti-virus, firewall,
and intrusion detection--relatively ineffective in addressing the
problem. To compound matters, many organizations prefer to focus on the
deployment of new technology without regard for the security or
integrity of their systems or information. This often means that
information security officers are simultaneously facing increased
responsibilities and shrinking budgets.
These are overwhelming challenges without clear solutions. The
Federal Government and the private sector must act with a sense of
urgency to address these issues, and yet, as I read today's testimony,
I still do not get the sense that we are addressing cybersecurity with
the seriousness it deserves.
Today's hearing will focus on two primary issues. First, we will
receive an update from the Federal Energy Regulatory Commission (FERC)
and the North American Electric Reliability Corporation (NERC) about
electric industry efforts to mitigate a cyber vulnerability known as
Aurora. I think we could search far and wide and not find a more
disorganized, ineffective response to an issue of national security.
Everything about the way this vulnerability was handled--from press
leaks, to DHS's failure to provide more technical details to support
the results of its test, to NERC's dismissive attitude, to the
industry's half-hearted approach toward mitigation--leaves me with
little confidence that we are ready or willing to deal with the
cybersecurity threat.
As time passes, I grow particularly concerned by NERC, the self-
regulating organization responsible for ensuring the reliability of the
bulk power system. Not only did they propose cybersecurity standards
that--according to the GAO and NIST--are inadequate for protecting
critical national infrastructure, but throughout the committee's
investigation they continued to provide misleading statements about
their oversight of industry efforts to mitigate the Aurora
vulnerability. If NERC doesn't start getting serious about national
security, it may be time to find a new electric reliability
organization. NERC can begin demonstrating its commitment by
incorporating more of the NIST security controls in the next iteration
of its reliability standards.
I am thankful that Chairman Kelliher and his staff at FERC are
taking cybersecurity seriously. In earlier correspondence, Chairman
Thompson and I voiced our concern that the Commission not only lacked
authority to regulate potentially vulnerable cybersecurity assets that
are not covered in the NERC standards, but also the authority to issue
orders to owners and operators in the event of an imminent exploitation
of an asset on the grid. The Chairman and I fully support FERC's
request for additional legal authorities to adequately protect the bulk
power system, and we look forward to working with you and the
appropriate committees in the future.
Our second issue of discussion today involves a GAO investigation
that this committee commissioned last year. We asked GAO to provide
insight into the cybersecurity controls of the Nation's largest public
power company, the Tennessee Valley Authority (TVA). The TVA's service
area covers 80,000 square miles in the southeastern United States, with
a total population of about 8.7 million people. Unfortunately, GAO
found that TVA's security posture was seriously lacking. According to
the report, TVA has not fully implemented appropriate security
practices to secure the control systems and networks used to operate
its critical infrastructures. Until TVA addresses these weaknesses, it
risks a disruption of its operations as a result of a cyber incident,
which could impact its customers.
I am pleased to hear that TVA has taken significant steps toward
implementing higher levels of security. But these problems are not
unique to TVA. I believe they are typical of security practices across
the industry. And, given what we've seen with the Aurora mitigation, I
have little confidence that the industry is taking the appropriate
actions.
In closing, I'd like to challenge each of you here, and everyone in
the industry. Prove to our committee that you are serious about
cybersecurity. Show us you're willing to adopt better standards because
it will make the entire grid more secure. Leverage the critical
infrastructure community to push control system vendors to build more
secure products. And commit the manpower and the money to mitigating
your vulnerabilities.
We will continue our oversight in this area. At the next
subcommittee hearing, I look forward to talking about all the progress
the industry has made in meeting our challenges.
Mr. Langevin. With that, the Chair now recognizes the
ranking member of the subcommittee, standing in for Mr. McCaul
from Texas. The gentlelady from Florida, Ms. Ginny Brown-Waite,
is recognized 5 minutes.
Ms. Brown-Waite. Thank you, Mr. Chairman.
I look forward to hearing from Chairman Kelliher today as
he provides us with an update on FERC's progress in
implementing critical infrastructure protection standards that
were issued earlier this year.
While I understand the new regulations are not perfect, I
believe that they are a positive step toward ensuring that the
electric grid remains available to provide reliable energy
despite emerging threats. Clearly, though, more can be done to
secure the assets critical to generating, transmitting and
delivering power, but I am pleased by efforts that are already
under way to increase the focus on security.
Regarding TVA's inadequate security posture a lack of
regulation does not seem to be the issue. There are already
Federal network security regulations in place, regulations that
it clearly appears that TVA just has not lived up to.
Regardless of whether harmful incidents arise from malicious
attacks or operator error, the effect would be the same,
serious damage to the critical infrastructure and limited
ability of TVA to provide power to its customers.
I understand that TVA actually has agreed with the majority
of GAO's recommendations and has a plan in place to mitigate
the vulnerabilities that GAO identified. Certainly this is good
news. But I urge the TVA management to make every possible
effort to secure their computer systems quickly and to fortify
their critical assets. The increasing interconnectivity of
computer systems and dire economic consequences of a successful
network-based attack warrant very careful oversight of computer
security efforts.
I look forward to hearing from the witnesses today, and I
thank you all very much for being here.
With that, I yield back.
Mr. Langevin. I thank the gentlelady.
Other members of the subcommittee at some point are
reminded of the committee rules that opening statements may be
submitted for the record.
I now welcome our distinguished panel of witnesses.
Our first witness, Mr. Joseph Kelliher, is the chairman of
the Federal Energy Regulatory Commission. Chairman Kelliher was
nominated by President George W. Bush and was sworn in on
November 20, 2003, for a first term and on December 21, 2007,
for his second term. He was designated chairman of the
Commission by President Bush effective July 9, 2005. Before
becoming a Commissioner, Mr. Kelliher was a senior policy
adviser to Secretary of Energy, Spencer Abraham. In that
capacity, he advised the Secretary in a wide range of energy
policy matters; and I thank you for being here, Mr. Chairman.
Our second witness, Mr. Richard Sergel, has been President
and Chief Executive Officer of the North American Electric
Reliability Corporation since September 12, 2005. Until 2004,
Mr. Sergel served as President and Chief Executive Officer for
the National Grid USA and was National Grid Group PLC Executive
Director for North America on the completion of the National
Grid New England electric system merger in March, 2000.
Our third witness is Mr. Greg Wilshusen, Director for
Information Security Issues at GAO, where he reads information
security related studies and audits the Federal Government. Mr.
Wilshusen has testified before the subcommittee on a number of
occasions, and we certainly welcome you back today.
Our fourth witness is Mr. William McCollum, the Chief
Operating Officer of the Tennessee Valley Authority. He has
held that position since April, 2007. He is responsible for the
management of TVA power's production, transmission, power
trading and resources management programs.
Welcome to you, Mr. McCollum.
Without objection, the witnesses' full statements will be
inserted into the record; and I now ask each witness to
summarize their statement for 5 minutes, beginning with
Chairman Kelliher.
STATEMENT OF THE HONORABLE JOSEPH T. KELLIHER, CHAIRMAN,
FEDERAL ENERGY REGULATORY COMMISSION (FERC), ACCOMPANIED BY
JOSEPH MC CLELLAND, DIRECTOR, OFFICE OF ELECTRIC RELIABILITY,
FERC
Mr. Kelliher. Thank you, Mr. Chairman; and I want to
commend you and the subcommittee for its interest in these
important issues.
I am accompanied today by Joseph McClelland, who is the
Director of the FERC Office of Electric Reliability, who
testified before the subcommittee last fall; and I appreciate
the opportunity to discuss the need to improve cybersecurity
and to protect the reliability of the power grid against cyber
attacks.
Congress made FERC responsible for overseeing reliability
of the power grid, guarding the grid against reliability
attacks, including cyber threats, by establishing and enforcing
mandatory reliability standards; and that duty was established
by the Energy Policy Act of 2005.
Since then, much progress has been made on grid
reliability. We have certified the Electric Reliability
Organization, established mandatory reliability standards. We
are working to improve those standards over time and are
establishing an enforcement regime. But today I would like to
focus my remarks on the cyber threat to the grid and the need
for effective defense.
In my letter to the subcommittee of November 7 of last
year, I stated my view that an effective defense of the power
grid from cyber attack has three necessary elements: No. 1,
timely and effective identification of cyber vulnerabilities;
No. 2, an ability to adopt mandatory reliability standards that
mitigate the vulnerability on a timely basis; and, No. 3, an
ability to maintain the confidentiality of information
regarding cyber vulnerability during the standards development
process, during Commission review, and during compliance
monitoring and development.
In my view, current law is inadequate to mount such a
defense and that FERC needs additional legal authority to
effectively guard the power grid from national security threats
such as cyber attacks.
With respect to the first element of an effective defense,
FERC is not a national security or an intelligence agency; and
we are not in the best position to identify cyber threats. U.S.
Government, though, does have the ability to identify cyber
threats in a timely and effective manner. FERC cooperates with
agencies that are in a better position to assess these
vulnerabilities.
With respect to the second element of an effective defense,
currently there is not an adequate means to establish mandatory
reliability standards in a timely manner. Currently, there are
two basic means to protect the grid against cyber threats: No.
1, the process in the Energy Policy Act, section 215 of the
Federal Power Act; or, No. 2, NERC advisories. In my view,
neither means is adequate. The 215 process produces reliability
standards that are mandatory but untimely, given the nature of
cyber threats, while NERC advisories are timely but voluntary.
With respect to the 215 process, FERC is using and will
continue to use the process established by section 215 to set
reliability standards including cyber standards. Just last
January, we approved eight critical infrastructure protection
standards, with 160 requirements designed to improve
cybersecurity; and I think those standards will improve
cybersecurity.
But the principal flaw of the 215 process is it simply
takes too long. It does not allow for protection of critical
information. Under the 215 process, it can take years to
develop new and modified reliability standards, including cyber
standards.
If you ask why is there a need for timely action in this
area, I think it is because the cyber threat is fundamentally
different from other reliability threats. The section 215 of
the Federal Power Act was to designed to address different
reliability challenges.
Most regional blackouts in the past have been caused in
part by poor vegetation management near power lines, trees. The
section 215 process was designed in response to western
blackouts in the summer of 1996 that involved tree contact. It
was not designed with a cyber threat in mind, and I think the
reliability threat posed by poor vegetation management and
trees is a fundamentally different threat than the cyber
threat. The cyber threat is a national security threat that may
be posed by foreign governments or organized groups, and the
process designed to guard against poor vegetation management is
not well-suited to meet national security threats.
The second means of protecting the power grid from cyber
threats, the alternative to the mandatory reliability standard
under 215, is the NERC advisory; and the principal virtue of
the advisory is dispatch. Its fundamental flaw is that
compliance is voluntary.
In the advisory issued last year in response to NERC, I
want to commend NERC for acting quickly in response to that
threat. As detailed in our testimony, FERC has been reviewing
the industry response to the advisory. Significant progress has
been made, but the results have been inconsistent. I think that
is, frankly, the predictable result of voluntary advisory, but
those inconsistencies can weaken the grid because the grid is
interconnected.
The third element is confidentiality. The third element of
an effective defense is confidentiality. The standards
development process established under 215 typically imposes few
or no restrictions on dissemination of information. In the case
of cyber vulnerability, public release of information related
to cybersecurity can be very harmful.
For those reasons, we have concluded that legislation is
necessary to address the cyber threat and be able to mount an
effective defense; and we look forward to working with the
committee and the committee of jurisdiction, the Energy and
Commerce Committee, to give FERC the authority it needs to be
able to effectively defend the power grid against cyber
threats.
With that, I just want to thank the subcommittee for its
interest.
[The statement of Mr. Kelliher follows:]
Prepared Statement of Joseph T. Kelliher
May 21, 2008
Mr. Chairman and Members of the subcommittee, thank you for the
opportunity to speak with you today about the cyber vulnerabilities of
the Nation's bulk power system. I appreciate the subcommittee's
attention to this critically important issue.
The Energy Policy Act of 2005 (EPAct 2005) made the Federal Energy
Regulatory Commission (FERC or Commission) responsible for overseeing
the reliability of the bulk power system. EPAct 2005 authorized the
Commission to approve and enforce mandatory reliability standards,
including cyber security standards, to protect and improve the
reliability of the Nation's bulk power system. Under the new statutory
framework, reliability standards are proposed by the Electric
Reliability Organization (ERO) (the North American Electric Reliability
Corporation or NERC) to the Commission for its review. The Commission
must either approve the proposed standards or remand them to NERC. The
Commission and NERC are well underway in implementing the new law,
including now having in place an initial set of mandatory cyber
security standards with varying effective dates. Much progress has been
made in the past 3 years. However, more work needs to be done, both
with respect to improving those cyber security standards and possibly
adding new ones. In addition, the Commission has made substantial
progress in examining whether industry has in place adequate mitigation
to address the cyber security vulnerability, known as Aurora, which was
raised at the subcommittee's last hearing on cyber security threats to
the transmission grid.
Protecting the interstate bulk power system against cyber security
threats is critical to the welfare of our Nation's citizens. It is
therefore appropriate to examine whether sufficient Federal authority
exists to take timely and effective action to protect against such
threats, particularly in emergency circumstances. In my view, FERC
currently does not have sufficient authority to adequately guard
against cyber security threats to reliability of the bulk power system.
background
In EPAct 2005, the Congress entrusted the Commission with a major
new responsibility to oversee mandatory, enforceable reliability
standards for the Nation's bulk power system (excluding Alaska and
Hawaii). This authority is in section 215 of the Federal Power Act.
Section 215 requires the Commission to select an ERO that is
responsible for proposing, for Commission review and approval,
reliability standards or modifications to existing reliability
standards to help protect and improve the reliability of the Nation's
bulk power system. The reliability standards apply to the users, owners
and operators of the bulk power system and become mandatory only after
Commission approval. The ERO also is authorized to impose, after notice
and opportunity for a hearing, penalties for violations of the
reliability standards, subject to Commission review and approval. The
ERO may delegate certain responsibilities to ``Regional Entities,''
subject to Commission approval.
The Commission may approve proposed reliability standards or
modifications to previously approved standards if it finds them ``just,
reasonable, not unduly discriminatory or preferential, and in the
public interest.'' If the Commission disapproves a proposed standard or
modification, section 215 requires the Commission to remand it to the
ERO for further consideration. The Commission, upon its own motion or
upon complaint, may direct the ERO to submit a proposed standard or
modification on a specific matter. The Commission also may initiate
enforcement on its own motion.
The Commission has implemented section 215 diligently. In
anticipation of reliability legislation being passed, it established a
reliability group at the agency even before the passage of EPAct 2005.
Within 180 days of enactment, the Commission adopted rules governing
the reliability program. In the summer of 2006, it approved NERC as the
ERO. In March 2007, the Commission approved the first set of national
mandatory and enforceable reliability standards. In April 2007, it
approved eight regional delegation agreements to provide for
development of new or modified standards and enforcement of approved
standards by Regional Entities. The Commission has since approved eight
additional reliability standards.
In exercising its new authority, the Commission has interacted
extensively with NERC and the industry. The Commission also has
coordinated with other Federal agencies, such as the Department of
Homeland Security, the Department of Energy, the Nuclear Regulatory
Commission, and the Department of Defense. Also, the Commission has
established regular communications with regulators from Canada and
Mexico regarding reliability, since the North American bulk power
system is an interconnected continental system subject to the laws of
three nations.
cyber security standards approved under section 215
Section 215 defines ``reliability standard[s]'' as including
requirements for the ``reliable operation'' of the bulk power system
including ``cybersecurity protection.'' Section 215 defines reliable
operation to mean operating the elements of the bulk power system
within certain limits so instability, uncontrolled separation, or
cascading failures will not occur ``as a result of a sudden
disturbance, including a cybersecurity incident.'' Section 215 also
defines a ``cybersecurity incident'' as a ``malicious act or suspicious
event that disrupts, or was an attempt to disrupt, the operation of
those programmable electronic devices and communication networks
including hardware, software and data that are essential to the
reliable operation of the bulk power system.''
In August 2006, NERC submitted eight new cyber security standards,
known as the Critical Infrastructure Protection (CIP) standards, to the
Commission for approval under section 215. NERC proposed an
implementation plan under which certain requirements would be
``auditably compliant'' beginning by mid-2009 and the others would be
so by the end of 2010.
On January 18, 2008, the Commission issued a Final Rule approving
the CIP Reliability Standards and concurrently directed NERC to develop
modifications addressing specific concerns.
The eight CIP standards contain over 160 requirements and sub-
requirements. Generally, the CIP standards will require the following
actions when fully implemented at the end of 2010:
Critical Cyber Asset Identification.--Requires the
identification of an entity's critical assets and critical
cyber assets using a risk-based assessment methodology.
Security Management Controls.--Requires an entity to develop
and implement security management controls to protect critical
cyber assets.
Personnel and Training.--Requires personnel with access to
critical cyber assets to go through identity verification,
criminal background checks and employee training.
Electronic Security Perimeters.--Requires the identification
and protection of electronic security perimeters and access
points. The security perimeters are to encompass the critical
cyber assets.
Physical Security of Critical Cyber Assets.--Requires the
creation and maintenance of a physical security plan that
ensures all cyber assets within an electronic security
perimeter are kept in an identified physical security
perimeter.
Systems Security Management.--Requires an entity to define
methods, processes, and procedures for securing the systems
identified as critical cyber assets, as well as the non-
critical cyber assets within the perimeter.
Incident Reporting and Response Planning.--Requires the
identification, classification and reporting of cyber security
incidents related to critical cyber assets.
Recovery Plans for Critical Cyber Assets.--Requires the
establishment of recovery plans for critical cyber assets using
established business continuity and disaster recovery
techniques and practices.
In the Final Rule, the Commission stated its concern with the
breadth of discretion left to utilities by the standards. For example,
the standards state that utilities ``should interpret and apply the
reliability standard[s] using reasonable business judgment.''
Similarly, the standards at times require certain steps ``where
technically feasible,'' but this is defined as not requiring the
utility ``to replace any equipment in order to achieve compliance.''
Also, the standards would allow a utility at times not to take certain
action if the utility documents its ``acceptance of risk.'' To address
this, the Final Rule directed NERC to, among other things:
Develop modifications to the CIP reliability standards to
remove the ``reasonable business judgment'' language.
Develop modifications to remove ``acceptance of risk''
exceptions from the CIP reliability standards.
Develop specific conditions that a responsible entity must
satisfy to invoke the ``technical feasibility'' exception. This
allows flexibility and customization of implementation of the
CIP reliability standards in a controlled manner that includes
external oversight and audit.
Provide additional guidance regarding the development of a
risk-based assessment methodology for the identification of
critical assets.
For certain other requirements in the CIP standards, the Commission
addressed its concern about discretion by requiring external oversight
of utility decisions, such as critical assets lists. This oversight
could be provided by industry entities with a ``wide-area view,'' such
as reliability coordinators or the Regional Entities, subject to the
review of the Commission.
current process to protect cyber security of bulk power system
In my view, section 215 is an adequate statutory foundation to
protect the bulk power system against most reliability threats.
However, the cyber security threat is different. It is a national
security threat that may be posed by foreign nations, or others intent
on undermining the United States through its electric grid. The nature
of the threat stands in stark contrast to other major reliability
vulnerabilities that have caused regional blackouts and reliability
failures in the past, such as vegetation management and relay
maintenance. Given the national security dimension to the cyber
security threat, there may be a need to act quickly to protect the bulk
power system, to act in a manner where action is mandatory rather than
voluntary, and to protect certain information from public disclosure.
Our legal authority is inadequate for such action.
Section 215 Process
As an initial matter, it is important to recognize how mandatory
reliability standards are established under section 215. Under section
215, reliability standards are developed by the ERO through an open and
public process. The Commission can direct NERC to develop a reliability
standard to address a particular reliability vulnerability, including
cyber security threats. However, the NERC process can take years to
develop standards for the Commission's review. In fact, the cyber
security standards approved by the agency last January took the
industry approximately 3 years to develop.
Section 215 relies on the ERO to develop and submit proposed
reliability standards. NERC's procedures for doing so allow extensive
opportunity for industry comment, are open, and are generally based on
the procedures of the American National Standards Institute (ANSI). The
NERC process is intended to develop consensus on both the need for the
standard and on the substance of the proposed standard. Although
inclusive, the process is not nimble.
Key steps in the NERC process include: nomination of a proposed
standard using a Standard Authorization Request (SAR); public posting
of the SAR for comment; review of the comments by industry volunteers;
drafting or redrafting of the standard by a team of industry
volunteers; public posting of the draft standard; field testing of the
draft standard, if appropriate; formal balloting of the draft standard,
with approval based on 75 percent of total votes and two-thirds of
weighted industry sector votes; re-balloting, if negative votes are
supported by specific comments; voting by NERC's board of trustees; and
an appeals mechanism to resolve any complaints about the standards
process. NERC-approved standards are then submitted to the Commission
for its review.
For the first set of reliability standards proposed by NERC and for
the CIP standards, the Commission began its process by issuing a staff
assessment of the proposed standards and allowing public comment on the
assessment. Based on its consideration of those comments, the
Commission then issued a Notice of Proposed Rulemaking identifying the
Commission's proposed actions and allowing additional opportunities for
public comment. After considering these additional comments, the
Commission issued a Final Rule approving the proposed standards and
requiring NERC to prospectively modify them using its standards
development process, thereby engaging industry.
Generally, the procedures used by NERC are appropriate for
developing and approving reliability standards. The process allows
extensive opportunities for industry and public comment. The public
nature of the reliability standards development process is a strength
of the process as it relates to most reliability standards. However, it
can be a weakness in the development of cyber security standards, given
the nature of the threat.
The procedures used under section 215 for the development and
approval of reliability standards do not provide an effective and
timely means of addressing urgent cyber security risks to the bulk
power system, particularly in emergency situations. Certain
circumstances, such as those involving national security, may require
immediate action. If a significant vulnerability in the bulk power
system is identified, procedures used so far for adoption of
reliability standards take too long to implement effective corrective
steps.
FERC rules governing review and establishment of reliability
standards allow the agency to direct the ERO to develop and propose
reliability standards under an expedited schedule. For example, FERC
could order the ERO to submit a reliability standard to address an
identified reliability vulnerability within 60 days. NERC's rules of
procedure include a provision for approval of urgent action standards
that can be completed within 60 days and which may be further expedited
by a written finding by the NERC board of trustees that an
extraordinary and immediate threat exists to bulk power system
reliability or National security.
However, even a reliability standard developed under the urgent
action provisions would likely be too slow in certain circumstances.
Faced with a cyber security or other national security threat to
reliability, FERC may need to act decisively in hours or days, rather
than months or years. That would not be feasible under the urgent
action process. In the meantime, the bulk power system would be left
vulnerable to a known cyber security threat. Moreover, existing
procedures, including the urgent action procedure, would widely
publicize the vulnerability and the possible solutions, thus increasing
the risk of hostile actions before the appropriate solutions are
implemented.
In addition, the proposed standard submitted to the Commission may
not be sufficient to address the vulnerability. As noted above, when a
proposed reliability standard is submitted to FERC for its review,
whether submitted under the urgent action provisions or the usual
process, the agency cannot modify such standard and must either approve
or remand it. Since the Commission may not modify a proposed
reliability standard under section 215, we would have the choice of
approving an inadequate standard and directing changes, which
reinitiates a process that can take years, or rejecting the standard
altogether. Under either approach, the bulk power system could remain
vulnerable for a prolonged period.
NERC Advisories
Currently, the alternative to a mandatory reliability standard is
for NERC to issue an advisory encouraging utilities and others to take
action to guard against cyber vulnerabilities. That approach provides
for quicker action, but any such advisory is voluntary, and should be
expected to produce inconsistent responses. That was our experience
with the response to an advisory issued last year by NERC regarding an
identified cyber security threat. Since the grid is interconnected,
those inconsistencies can retard cyber security measures. Reliance on
voluntary measures to assure cyber security is fundamentally
inconsistent with the conclusion Congress reached during enactment of
the Energy Policy Act, namely that voluntary standards cannot assure
reliability of the bulk power system.
In response to the risk of cyber attack identified last year as
Aurora, this subcommittee convened a hearing on October 17, 2007. Mr.
Joseph H. McClelland, the Director of the Commission's Office of
Electric Reliability, testified at that hearing. NERC reported that it
issued an advisory to generator owners, generator operators,
transmission owners, and transmission operators. According to NERC,
this advisory identified a number of short-term measures, mid-term
measures and long-term measures designed to mitigate the cyber
vulnerability. NERC asked the recipients to voluntarily implement the
measures. NERC also sent a data request to industry members to
determine compliance with the advisory. That data request was limited
in scope, however, asking only that industry members indicate if their
mitigation plans are ``complete,'' ``in progress,'' or ``not
performing.''
The Commission determined that the information sought by NERC in
the above data request was not sufficient for the Commission to
discharge its duties under section 215 because it did not provide
sufficient details about individual mitigation efforts for the
Commission to be certain that the threat had been addressed. For
example, it did not provide information such as what facilities were
the subject of the mitigation plans, what steps to mitigate the cyber
vulnerability were being taken, and when those steps were planned to be
taken--and, if certain actions were not being taken, why not.
Therefore, on October 23, 2007, the Commission provided notice to the
Office of Management and Budget (OMB) that it intended to immediately
issue a directive requiring all generator owners, generator operators,
transmission owners, and transmission operators that are registered by
NERC and located in the United States to provide to NERC certain
information related to actions they have taken or intend to take to
protect against the cyber vulnerability; this would allow the
Commission to review the mitigation plans at a central location to be
certain that the vulnerability had been addressed. The Commission
requested emergency processing of this proposed information collection.
After receiving clearance from OMB, the Commission issued a Notice of
Proposed Information Collection and Request for Comments (Notice).
Comments were due on January 14, 2008.
The Commission received seven sets of comments in response to the
Notice, including joint comments filed by four industry trade
associations: American Public Power Association, Edison Electric
Institute, National Rural Electric Cooperative Association, and the
Electric Power Supply Association. These trade associations represented
the majority of entities that would be required to respond to the
proposed information collection. A common concern among the commenters
was the need to ensure the confidentiality of sensitive information
that would be provided in response to the proposed information
collection. Commenters urged that the Commission implement additional
security measures to safeguard the collected information. Commission
staff met with trade association representatives to discuss these
concerns and how they might be addressed. Rather than experience
further delays by answering these objections to the proposed mandatory
information collection, it was determined that staff would first work
with industry groups to develop a plan to informally gather
information, on a voluntary basis, regarding the status of compliance
with NERC's Aurora advisory. In February, Commission staff began
performing interviews with a stratified sampling of electric utilities
concerning their compliance with the Aurora advisory. These interviews
are continuing as of this date.
Commission staff has conducted over 20 detailed interviews with a
variety of electric utilities geographically dispersed across the
contiguous 48 States, to assess the state of the industry's protection
against remote access cyber vulnerabilities, including the Aurora
vulnerability. The utilities were selected to encompass both large and
small companies, and a mixture of generating companies, transmission
companies, and mixed-asset companies. The sample of companies included
both investor-owned utilities and cooperative organizations. Interviews
with publicly owned utilities and municipal organizations are planned
in the near future. Each interview typically lasted 6 to 8 hours and
utilities voluntarily participated. The utilities were well prepared
with documents to explain their actions, and were very cooperative in
responding to staff questions.
Topics discussed included the use of passwords and other forms of
access controls, means of authenticating users, physical security of
cyber assets, means of communicating, vendor access, access revocation,
the use of firewalls and intrusion detection/prevention devices,
vulnerability assessments, the ways in which communications devices are
utilized, as well as the prevalence and functionality of digital
control devices. Staff found a wide range of equipment, configurations
and security features implemented by the utilities interviewed. While
staff intends to perform more interviews, there are several
observations that can be made based on the interviews to date.
All of the companies selected by the Commission fully cooperated in
the interviews. We learned that no company we interviewed ignored the
Aurora advisory, although we did find there was a broad range of
compliance based on individual interpretations of the threat and the
application of the recommended mitigation measures. In fact, all of the
utilities interviewed by the Commission requested additional
information to help understand the technical implications of the attack
and the specific strategies to mitigate the identified vulnerabilities.
Through these selected interviews, FERC staff has determined that
although progress has been made by every entity it interviewed, much
work remains to be done.
While NERC can issue an alert, as it did in response to the Aurora
vulnerability, compliance with these alerts is voluntary. Further, as
Commission staff has found with the Aurora alert, such alerts can cause
uncertainty about the specific strategies needed to mitigate the
identified vulnerabilities.
conclusion
The Congress made FERC responsible for overseeing the reliability
of the bulk power system, but it provided specific restrictions on the
procedures to be used to develop and put into effect mandatory
reliability standards. Section 215 is an adequate basis to protect the
bulk power system against most reliability threats, and for that reason
I do not believe there is a need to amend section 215. However, I
believe a different statutory mechanism is needed to protect the grid
against cyber security threats, given the nature of these threats. One
approach would allow the Commission to directly establish interim
reliability standards that are mandatory and enforceable upon a finding
by a national security or intelligence agency that there is a national
security threat to the bulk power system. This narrowly tailored
approach would ensure that reliability of the bulk power system can be
protected until the ERO reliability standards development process can
create a permanent reliability standard. It also would provide that the
authority be used rarely, in instances when other appropriate agencies
determine that a threat is real and the Commission determines existing
standards to be inadequate. It also may be necessary to authorize the
Commission to protect certain information from disclosure, if its
release could have significant adverse effect on the health and safety
of the public or the common defense or national security.
The full range of cyber security risks to the bulk power system are
not known, and new risks will continue to arise. I believe we should
not allow the Nation's bulk power system to be vulnerable to a known
national security threat while waiting months or years for a
reliability standard to be developed and submitted to the Commission
for review. At the same time, reliance on a voluntary alert issued by
NERC similarly does not provide adequate assurance that steps will be
taken in sufficient time to address a known vulnerability. Given the
national security dimension to the cyber security threat, there may be
a need to act quickly to protect the bulk power system, to act in a
manner where action is mandatory rather than voluntary, and to protect
certain information from public disclosure. Our legal authority is
inadequate for such action.
The Commission has taken, and will continue to take, action to
protect the bulk power system from cyber vulnerabilities. We continue
to work with national security agencies to understand the nature of the
threats facing the bulk power grid. We have established mandatory cyber
security standards under the section 215 process and have directed
improvements in approved standards over time. We also continue to
review the industry response to the NERC advisory on the Aurora threat,
and may review the response to any future such advisories. But I do not
want to leave you under the impression that these steps adequately
protect the bulk power system against cyber attacks.
Thank you again for the opportunity to testify today. I would be
happy to answer any questions you may have.
Mr. Langevin. Mr. Kelliher, thank you very much for your
testimony.
I now recognize Mr. Sergel to summarize his statement for 5
minutes.
STATEMENT OF RICHARD SERGEL, PRESIDENT AND CHIEF EXECUTIVE
OFFICER, NORTH AMERICAN ELECTRIC RELIABILITY CORPORATION (NERC)
Mr. Sergel. Good afternoon, Mr. Chairman and members of the
subcommittee. I am president and chief executive officer of the
North American Electric Reliability Corporation, better known
as NERC, and appreciate the opportunity to appear here today to
regain--to begin to regain your trust in NERC and to discuss
the progress being made to increase the cybersecurity of the
electric grid and to mitigate identified vulnerabilities; and I
am going to focus on the two things that we have done since the
last time we were here.
The first is--my testimony will address two major points.
First, the cybersecurity standards for the bulk power system,
mandatory and enforceable this July, represent a significant
improvement in cybersecurity for the electricity industry.
Second, NERC has enhanced the process for warning the electric
industry of cybersecurity threats and implementing mitigation
measures to address identified vulnerabilities.
Now cybersecurity of control systems is an increasing
priority for every sector of the U.S. economy. NERC and the
electricity sector have recognized and responded to this
challenge first through the voluntary standards but now through
mandatory critical infrastructure standards. The standards are
intended to ensure that the electric industry will devote the
necessary resources to securing control systems and related
cyber assets. The Commission approved those standards in
January 2008.
Now the standards development requires progressive and
continuous improvement. You have mentioned that in your
statement, and the improvement of those standards already is
under way through NERC's standards development process. In
improving the standards, FERC directed NERC to make certain
modifications. Those will be made.
FERC also directed us to monitor the development and
implementation of the NIST standards; and if provisions of the
NIST standards that would better protect the system are
identified, they will be addressed in the standards development
process. NERC originally planned to review the standards in
2009 but has advanced this review to address the changes
directed by the Commission.
Now while our protections for the grid are stronger with
the standards in place, those standards cannot eliminate the
threat of a cyber disruption. Vigilance is required. More is
required.
NERC serves as the Electricity Sector Information Sharing
and Analysis Center, ES-ISAC, which is responsible for promptly
analyzing and disseminating threat indications, analyses and
warnings to assist the electric industry; and, as the
subcommittee is aware, the ES-ISAC issued an advisory on June
21, 2007, in relation to the vulnerability identified in the
demonstration test. Now, since that advisory was issued,
important improvements have been made in the cybersecurity
alert system.
First, NERC now has in place a formal mechanism for issuing
alerts to the industry about important matters that come either
from NERC's own event analysis or, as was the case with the
Aurora demonstration test, from government agencies with
specific information about possible threats.
Second, NERC now has developed a contact list for all 1,800
owners, operators, and users of the bulk power system. It did
not have that at the time.
Third, coordination with the Commission on these important
communications is now a requirement of the rules of procedure.
None of those were in place. They are in place now. We
believe we have substantially addressed many of the concerns
expressed by the Chair and the committee, and we look forward
to addressing the others in the months ahead.
In closing, the mandatory and enforceable standards now in
place represent a important milestone to strengthen grid
reliability; and NERC has strengthened the existing alert
system to advise the industry when a cyber threat is
identified.
We look forward to answering your questions. Thank you very
much.
[The statement of Mr. Sergel follows:]
Prepared Statement of Richard Sergel
May 21, 2008
Mr. Chairman and Members of the subcommittee, the North American
Electric Reliability Corporation \1\ (``NERC'') is pleased to provide
this testimony on the progress being made to increase the cybersecurity
of the electric grid and to mitigate identified vulnerabilities.
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\1\ NERC is the corporate successor to the North American Electric
Reliability Council, also called ``NERC,'' formed to serve as the
electric reliability organization (``ERO'') authorized by Section 215
of the Federal Power Act (``FPA''), as added by Title XII, Subtitle A
of the Energy Policy Act of 2005, Pub. L. No. 109-58, 119 Stat. 594,
941 (2005).
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executive summary
Cyber security of control systems is an increasing priority for
every sector of the U.S. economy. On behalf of the electric power
sector, NERC has recognized and responded to this challenge, first
through a voluntary cybersecurity standard and now through mandatory
Critical Infrastructure Protection (``CIP'') Reliability Standards for
the bulk power grid. CIP Reliability Standards CIP-002-1 through CIP-
009-1 were approved by the Federal Energy Regulatory Commission
(``FERC'') in January 2008 and become mandatory and enforceable in
July. The CIP Reliability standards are intended to assure that the
electricity industry will devote the necessary resources to securing
control systems and identifying, responding to and reporting security
incidents related to critical cyber assets.
The CIP Reliability Standards represent a significant improvement
in cyber security for the electricity industry. The new standards will
increase the resiliency of control systems and improve the ability of
these critical assets to withstand cyber-based attacks. Cyber security
requirements will be applied to companies and assets where they have
never before been applied, including substations and generating plants.
The bulk power system will be more reliable with the CIP Reliability
Standards in place.
In approving the CIP Reliability Standards, FERC directed NERC to
make certain modifications to the standards, and also to monitor the
development and implementation of Recommended Security Controls for
Federal Information Systems under development by the National Institute
of Standards and Technology (``NIST''). The Commission-required
modifications to the CIP Reliability Standards are being addressed
through NERC's American National Standards Institute (``ANSI'')
accredited Reliability Standards development process. That process also
provides the mechanism for NERC to monitor developments in the NIST
process, and to determine whether any provisions of the NIST standards
would better protect bulk power system reliability than the CIP
Reliability Standards.
The CIP Reliability Standards will be reviewed, modified and
improved on an ongoing basis through the NERC Reliability Standards
development process. This will result in ever-increasing cyber security
for the bulk power system.
The CIP Reliability Standards, however, cannot eliminate the threat
of a cyber disruption of critical national infrastructure. Because NERC
has jurisdiction only to propose reliability standards for the bulk
power system, the CIP Reliability Standards cannot address other
critical assets--such as telecommunications systems, for example, or
electricity distribution systems. Moreover, the open process by which
Reliability Standards are developed, while demonstrably successful in
producing standards that have significantly enhanced the reliability of
the grid, may not be ideally suited to situations where, because of the
sensitive subject matter, confidentiality is required.
NERC reviews cybersecurity threats on an ongoing basis. Since 2003,
NERC, acting through its Critical Infrastructure Protection Committee
(``CIPC''), has compiled an annual list of the highest priority cyber
vulnerabilities and their associated mitigation measures.\2\
Additionally, NERC serves as the Electricity Sector Information Sharing
and Analysis Center (``ES-ISAC''),\3\ which is responsible for promptly
analyzing and disseminating threat indications, analyses and warnings
to assist the electricity industry.
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\2\ The most recent list is available on the NERC website at: ftp:/
/ftp.nerc.com/pub/sys/all_updl/cip/
2007_Top_10_Final_Approved_by_CIPC.pdf.
\3\ The ES-ISAC has been operated by NERC since it was formed in
2001. The ES-ISAC was created as a result of action by the U.S.
Department of Energy in response to Presidential Decision Directive 63
issued in 1998. The ES-ISAC works with the electricity industry to
identify and mitigate cyber vulnerabilities by providing information,
recommending mitigation measures, and following up to monitor
implementation of recommended measures.
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As the subcommittee is aware, the ES-ISAC issued an Advisory on
June 21, 2007, in relation to the vulnerability identified in the
Aurora demonstration test. Since that Advisory was issued, important
improvements have been made in the notification process. First, NERC
now has in place a formal mechanism for issuing alerts to the industry
about important matters that come either from NERC's own event analysis
efforts or, as was the case with the Aurora demonstration test, from
government agencies with specific information about possible threats.
Second, NERC has now developed a contact list for every owner, operator
and user of the bulk power system. This comprehensive list will assure
that future Advisories are directed to those officials responsible for
cybersecurity.
i. background
NERC's mission is to ensure that the bulk power system in North
America is reliable. To achieve this objective, NERC develops and
enforces reliability standards; monitors the bulk power system;
assesses and reports on the adequacy of electricity supplies and
transmission; evaluates owners, operators, and users for reliability
preparedness; and educates, trains and certifies industry personnel.
NERC is a self-regulatory organization that draws upon the collective
expertise of the electricity industry. FERC certified NERC as the
Electric Reliability Organization (``ERO'') in its order issued July
20, 2006.\4\
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\4\ Order Certifying North American Electric Reliability
Corporation as the Electric Reliability Organization and Ordering
Compliance Filing, 116 FERC 61,062 (2006).
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Because Reliability Standards are applicable to the entire,
interconnected North American bulk power system, NERC is subject to
oversight by governmental authorities in both Canada and the United
States. In the United States, with oversight from FERC, since June 18,
2007, NERC has had legal authority to enforce reliability standards
applicable to all owners, operators, and users of the bulk power
system.
ii. critical infrastructure protection reliability standards
On January 18, 2008, FERC issued Order No. 706, approving eight
mandatory Reliability Standards for Critical Infrastructure
Protection.\5\ NERC views the Commission's approval of the CIP
Reliability Standards as another major step forward in ensuring the
reliability of the electric grid.
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\5\ Mandatory Reliability Standards for Critical Infrastructure
Protection, Order No. 706, 122 FERC 61,040 (2008), reh'g denied,
Order No. 706-A, 123 FERC 61,174 (2008).
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The standards set forth specific requirements that are binding on
users, owners and operators of the bulk power system to safeguard
critical cyber assets (programmable electronic devices and
communication networks including hardware, software, and data). They
require identification and documentation of cyber risks and
vulnerabilities, establishment of controls to secure critical cyber
assets from physical and cyber sabotage, reporting of security
incidents, and establishment of plans for recovery in the event of an
emergency. The eight approved CIP Reliability Standards are:
CIP-002-1--Cyber Security--Critical Cyber Asset
Identification.--Requires a responsible entity to identify its
critical assets and critical cyber assets using a risk-based
assessment methodology.
CIP-003-1--Cyber Security--Security Management Controls.--
Requires a responsible entity to develop and implement security
management controls to protect identified critical cyber
assets.
CIP-004-1--Cyber Security--Personnel and Training.--Requires
verification of identity for personnel with access to critical
cyber assets, a criminal background check, and training.
CIP-005-1--Cyber Security--Electronic Security Perimeters.--
Requires the identification and protection of an electronic
security perimeter (which encompass the identified critical
cyber assets) and access points.
CIP-006-1--Cyber Security--Physical Security of Critical
Cyber Assets.--Requires a responsible entity to create and
maintain a physical security plan that ensures that all cyber
assets within an electronic security perimeter are kept in an
identified physical security perimeter.
CIP-007-1--Cyber Security--Systems Security Management.--
Requires a responsible entity to define methods, processes, and
procedures for securing the systems identified as critical
cyber assets, as well as the non-critical cyber assets within
an electronic security perimeter.
CIP-008-1--Cyber Security--Incident Reporting and Response
Planning.--Requires a responsible entity to identify, classify,
respond to, and report cyber security incidents related to
critical cyber assets.
CIP-009-1--Cyber Security--Recovery Plans for Critical Cyber
Assets.--Requires the establishment of recovery plans for
critical cyber assets using established business continuity and
disaster recovery techniques and practices.
The critical infrastructure protection standards approved through
Order No. 706 are a sound starting point for the electric industry to
address cybersecurity. Order No. 706 is not the end of the process,
however. Standards development requires progressive and continuous
improvement. Indeed, improvement of the CIP Reliability Standards
already is underway, both in response to directions given by FERC in
Order No. 706 and as part of NERC's Reliability Standards development
process, which requires that each Reliability Standard be reviewed at
least every 5 years.
A. Implementation of the Approved CIP Reliability Standards
Order No. 706 approved the implementation plan for the CIP
Reliability Standards submitted by NERC, which phases in full
compliance with all of the requirements over a 3-year period (July
2008-December 2010). NERC proposed and FERC approved timelines for
achieving compliance that afford a reasonable period of time for grid
users, owners and operators to acquire and install the necessary
software and equipment and develop new programs and procedures to
achieve compliance. Enforcement begins in July for the most urgent
requirements, with the implementation of additional requirements
continuing through 2010.
NERC has allocated and will continue to devote the resources
necessary to administer and enforce the CIP Reliability Standards.
NERC's 2008 Business Plan and Budget, as approved by FERC,\6\ allocates
nearly $8 million (approximately 30 percent of NERC's overall budget)
for compliance enforcement and organization registration and
certification activities. To enable NERC to carry out its
responsibilities for developing and administering Reliability
Standards, NERC's total number of full time equivalent employees will
increase by approximately 20 percent above 2007 levels in 2008.
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\6\ North American Electric Reliability Corp., FERC 61,057
(2007). The major program elements of NERC's business plan and budget
are: (1) Reliability Standards; (2) compliance enforcement and
organization registration and certification; (3) reliability readiness
audits and improvement; (4) training, education and operator
certification; (5) reliability assessment and performance analysis; (6)
situational awareness and infrastructure security; and (7)
administrative services. P 12. In approving the NERC 2008 Budget and
Business Plan, the Commission considered the adequacy of staffing and
funding proposed by NERC in finding that the Budget is reasonable. P
22. NERC's funding comes primarily from end users based on net energy
for load.
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Additionally, FERC has approved the 2008 budgets for the regional
Reliability Entities, which share enforcement authority with NERC
pursuant to delegation agreements approved by FERC. The Regional
Entities are in the process of holding regional seminars on the CIP
Reliability Standards.
The Commission in Order No. 706 directed NERC to develop
modifications to the CIP Reliability Standards to address specific
matters through the Reliability Standards development process. The
Commission provided expressly that the development of modifications was
not to affect the implementation of the CIP Reliability Standards as
approved.\7\ NERC originally planned to review the CIP Reliability
Standards in 2009, but has advanced this review to address the changes
directed by FERC in Order No. 706.
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\7\ As the Commission explained in Order No. 706 at P 30:
``Consistent with section 215 of the FPA, our regulations, and Order
No. 693, any modification to a Reliability Standard, including a
modification that addresses a Commission directive, must be developed
and fully vetted through NERC's Reliability Standard development
process. Until the Commission approves NERC's proposed modification to
a Reliability Standard, the preexisting Reliability Standard will
remain in effect.''
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B. Modifications to Approved CIP Reliability Standards and Additional
Directives to NERC
The Commission in Order No. 706 directed NERC to modify the CIP
Reliability Standards to remove ``reasonable business judgment'' \8\
and ``acceptance of risk'' \9\ language. The Commission also directed
NERC to better define the circumstances under which exceptions to the
standards based on technical infeasibility would be allowed.\10\
Additional changes pertaining to each of the eight CIP Reliability
Standards were ordered by the Commission.
---------------------------------------------------------------------------
\8\ Order No. 706 at P 128. ``Reasonable business judgment'' would
have been used as a guide in determining what constituted compliance
with the CIP Reliability Standards.
\9\ Order No. 706 at P 150. The acceptance of risk language would
have permitted entities subject to the CIP Reliability Standards to
accept the risk of non-compliance.
\10\ Order No. 706 at P 178.
---------------------------------------------------------------------------
Of particular interest to the subcommittee, the Commission did not
direct NERC to incorporate provisions of NIST Special Publication (SP)
800-53 into the CIP Reliability Standards. Order No. 706, P 232. The
Commission did direct NERC to ``monitor the development and
implementation of the NIST standards to determine if they contain
provisions that will protect the Bulk-Power System better than the CIP
Reliability Standards.'' Order No. 706, P 233. Any provisions of the
NIST standards that are determined to better protect bulk power system
reliability are to be addressed in the NERC Reliability Standards
development process. Id.
FERC further directed NERC to consult with Federal entities
required to comply with both the NIST standards and the CIP Reliability
Standards on implementation and effectiveness issues. Id. This
consultation is underway. NERC personnel spoke at the recent Federal
Power Marketing Agencies Cyber Security Conference and are working on
this issue with representatives from the Bonneville Power
Administration and the Tennessee Valley Authority.
Another issue raised in the Subcommittee's comments on the NOPR
concerned interdependencies with other critical infrastructure. The
Commission addressed this issue in Order No. 706, concluding that
Section 215 of the Federal Power Act, which authorizes the
establishment of mandatory Reliability Standards, does not extend
beyond assets critical to the bulk power system:
Section 215 of the FPA authorizes the Commission to approve
Reliability Standards that ``provide for the reliable operation
of the bulk-power system,'' which the statute defines as the
facilities and control systems necessary for operation of an
interconnected electric energy transmission network and the
electric energy needed to maintain transmission system
reliability. In addition, section 215(a)(1) specifically
excludes from the definition of Bulk-Power System ``facilities
used in the local distribution of electric energy.'' Moreover,
given the complexities surrounding this issue and the
aggressive timeline that will be necessary merely to meet the
more modest task of developing and implementing cyber security
standards capable of protecting the reliability of the Bulk-
Power System, we will follow the approach that we described in
the CIP NOPR of approving CIP Reliability Standards designed to
safeguard the reliability of the Bulk-Power System.
Order No. 706 at P 340. The Commission identified a need for
coordination with stakeholders of other infrastructures and with other
government agencies in order to address interdependencies. NERC is
pursuing this through the Information Sharing and Analysis Center
(``ISAC'') Council, which is made up of representatives from critical
infrastructure sectors, including telecom, water, oil and natural gas,
emergency services, and maritime, in addition to the electricity
sector. The ISAC Council routinely shares information about
interdependencies. Also, NERC participates in the Partnership for
Critical Infrastructure Security (``PCIS'') and is actively working
through the PCIS Cross Sector Cyber Security Working Group to
facilitate information sharing about cyber vulnerabilities and
successful mitigation strategies.
C. CIP Reliability Standards Improvement Is Underway
On March 20, the NERC Standards Committee \11\ authorized the
posting for comments of a Standard Authorization Request (``SAR'')
proposing modifications to the CIP Reliability Standards to address the
directives from FERC in Order No. 706. The comment period closed on
April 19, and the Standards Committee appointed a SAR Drafting Team on
April 24 to review and respond to the 30 comments received on the first
draft of the SAR.\12\ There is active Federal agency input to this
process: NIST was among the entities submitting comments on the SAR,
and a representative of the Bureau of Reclamation serves on the SAR
Drafting Team.
---------------------------------------------------------------------------
\11\ The NERC Standards Committee reports to the NERC Board of
Trustees and is responsible for overseeing the development of
Reliability Standards.
\12\ Detailed information on the proposed modifications is
available on the NERC Web site at: http://www.nerc.com/%7Efilez/
standards/Project_2008-06_Cyber_Security.html.
---------------------------------------------------------------------------
The SAR, once approved by the Standards Committee, will become the
framework upon which the Standard Drafting Team develops the specific
revisions to the CIP Reliability Standards. The process of improving
the CIP Reliability Standards will likely be structured in multiple
phases to address priority items and measures such as removal of the
``reasonable business judgment'' language first, while recognizing that
other improvements will require more time. Application of the NIST
standards will be considered during the drafting of the revisions to
the CIP Reliability Standards.
Another of the key topics identified in Order No. 706 is for NERC
to develop guidance documents to help entities know what is expected to
comply with certain aspects of the CIP Reliability Standards. The
Standard Drafting Team will work closely with CIPC to develop these
guidelines or examples.
In summary, NERC's Reliability Standards development process
enables the progressive and continuous improvement of Reliability
Standards. Going forward, NERC will address the Commission's directives
and continually evaluate how these standards are executed in practice,
utilizing this experience as the basis for further improvements. NERC
also will monitor key industry and technology developments related to
the CIP Reliability Standards, in order to ensure that the bulk power
system in North America remains as reliable as possible.
iii. enhanced mechanisms to communicate emerging threats and
cybersecurity issues
As noted above, the CIP Reliability Standards in and of themselves
cannot eliminate the possibility of a cyber disruption of critical
national infrastructure. The limitation on NERC's jurisdiction to
propose reliability standards only for the bulk power system means that
the CIP Reliability Standards cannot address other critical assets--
such as telecommunications systems or electricity distribution systems.
Moreover, the Reliability Standards development process is by design a
public and transparent one. That public process--while demonstrably
successful in producing standards that have significantly enhanced the
reliability of the grid--may not be ideally suited to situations where
confidentiality is required (such as the response to the Aurora
demonstration test).
NERC recognizes the subcommittee's continuing interest in the
response to the Aurora demonstration test. Attachment 1 contains a
description of the actions taken by NERC, in its role as the ES-ISAC,
to notify the industry of the identified vulnerability, define
mitigation measures and assess the industry's implementation of those
measures. NERC believes the industry is cooperating in completing the
implementation of the recommended mitigation measures contained in the
Advisory regarding cybersecurity vulnerabilities issued on June 21,
2007 by the ES-ISAC.
NERC as the ES-ISAC continues to respond to inquiries regarding the
measures contained in the June 21 Advisory. Additionally, NERC meets
with government agencies as requested to discuss the Aurora
demonstration test. On April 25, NERC met with the Department of
Defense, the Department of Energy, FERC and other agencies to review
DOD installations and determine what additional actions should be taken
by DOD to address vulnerabilities resulting from the Aurora
demonstration test.
Lessons Learned: Among the key lessons learned from the Aurora
demonstration test was the need to improve the alert mechanism by which
the industry is made aware of significant vulnerabilities and
recommended mitigation measures. While ES-ISAC alerts are, by their
very nature, advisory only, with careful oversight of the
implementation of recommended measures, these alerts can be effective
in eliciting responses to identified cyber vulnerabilities that are not
addressed by the Reliability Standards.
Additionally, the Aurora demonstration test highlighted the
importance of having in place a comprehensive contact list for all
users, owners and operators of the bulk power system to facilitate
rapid communication of ES-ISAC advisories.
Notwithstanding the limitations on NERC's ability to deal with all
aspects of the cybersecurity issue, we are acting to address
effectively those aspects of the critical infrastructure cybersecurity
challenge that are within our control. If a cyber exploit of an
identified vulnerability is imminent, NERC as the ES-ISAC will take the
following actions:
Obtain approval from the Electricity Sector Coordinating
Council to escalate the Cyber Threat Alert Level to Red;
Post the escalated level on the ES-ISAC Web site;
Issue an industry advisory with recommended mitigation
measures/essential actions to respond to the identified
vulnerability;
Send e-mail notifications to the electric industry through
distribution lists designed for notification purposes
recommending that the industry promptly complete the immediate
mitigation measures identified in the ES-ISAC Advisory; and
Follow-up to monitor progress in implementing the immediate
mitigation measures and report to appropriate government
agencies.
Since the Aurora demonstration test, this notification system has
been significantly enhanced. First, NERC now has in place a formal
mechanism for issuing alerts to the industry about important matters
that come either from NERC's own event analysis efforts or, as was the
case with the Aurora demonstration test, from government agencies with
specific information about possible threats. The alert system is set
out in Rule 810 of NERC's Rules of Procedure \13\ and has three levels:
---------------------------------------------------------------------------
\13\ Rule 810, ``Information Exchange and Issuance of NERC
Advisories, Recommendations and Essential Actions.'' See ftp://
ftp.nerc.com/pub/sys/all_updl/rop/
NERC_Rules_of_Procedure_EFFECTIVE_20080321.pdf at pp. 69-70. NERC's
Rules of Procedure have been approved by FERC. See Rules Concerning
Certification of the Electric Reliability Organization; and Procedures
for the Establishment, Approval and Enforcement of Electric Reliability
Standards, Order No. 672, FERC Stats. & Regs. 31,204, at P 672; order
on reh'g, Order No. 672-A, FERC Stats. & Regs. 31,212 (2006); see
also North American Electric Reliability Council, et al., 122 FERC
61,245 (2008).
---------------------------------------------------------------------------
(1) ``Advisories'' are purely informational and are intended
to advise certain owners, operators and users of the bulk power
system of findings and lessons learned.
(2) ``Recommendations'' are specific actions that NERC is
recommending be considered on a particular topic by certain
owners, operators, and users of the bulk power system,
according to each entity's facts and circumstances.
(3) ``Essential Actions'' are specific actions that NERC has
determined are essential to be taken by certain owners,
operators, or users of the bulk power system to ensure the
reliability of the bulk power system. Essential Actions require
NERC board approval before issuance.
``Recommendations'' and ``Essential Actions'' have mandatory
reporting requirements on how each entity responds to the alert. This
reporting will allow NERC to determine whether further actions may be
necessary. FERC requires that NERC provide at least 5 business days'
notice to the Commission before an alert is issued, with provision for
shorter times in the event that faster action is necessary. The Rules
of Procedure further provide that a report will be filed with the
Commission (and other government agencies, as appropriate) no later
than 30 days after the date on which bulk power system owners, users
and operators are required to report to NERC on their actions taken in
response to the notification.
These alerts are not the same as reliability standards--they are
not enforceable with financial penalties and other sanctions. NERC
believes, however, that the alerts offer an effective and expeditious
means of communicating vital information to all owners, operators, and
users of the bulk power system who have a need to know. When the NERC
Board of Trustees determines that certain actions are essential for
owners, operators, and users to take to ensure the reliability of the
bulk power system, NERC believes those entities will do what is
necessary.
Second, NERC has now developed a contact list for every owner,
operator and user of the bulk power system. At present, there are over
1,800 entities on the list. The list was initially developed as NERC's
compliance registry, to identify the entities that are responsible for
complying with the mandatory reliability standards. This list is more
comprehensive than the ES-ISAC list used to distribute the June 21
Advisory.
NERC is presently using this expanded contact list for alerts,
including an alert that relates to cyber security. Each alert is
targeted to the types of entities to which it applies (e.g.,
Reliability Coordinators, Transmission Operators, Generation Owners)
and identifies the types of employees within the entity (e.g., system
planners, information technology workers) who need to be informed of
the alert. NERC is working with the Regional Reliability Entities and
industry trade associations to expand the contact list, so that we have
specific contacts for executive officers, cyber security, physical
security, and operations within each entity on the list.
iv. government's ability to share information with the private sector
As described above, NERC, working with the FERC, has enhanced the
formal cybersecurity alerts/communication processes. However, these
processes are only as good as the information being distributed. In its
roles as the ERO and the ES-ISAC, NERC operates as an information
bridge to the electric industry. NERC collects information from users,
owners, or operators of the bulk power system, commonly about events on
the power system, and shares that information throughout the industry
and with government agencies. In addition to this ``bottom up'' flow of
information, NERC also receives information from government agencies in
the United States and Canada, which is also shared with the industry.
The information regarding the Aurora demonstration test addressed in
the June 21 ES-ISAC Advisory is an example of this ``top down''
communication.
Effective communication with the private sector that will trigger
an immediate and comprehensive response to an identified vulnerability
requires an ability to articulate the seriousness of the threat. NERC
understands that the subcommittee has concerns regarding whether the
Department of Homeland Security, in the case of the Aurora
demonstration test, shared enough information with the private sector
to reveal the magnitude of the agency's concern. Where to draw the line
between releasing information that is necessary to inform private
action and information that actually expands the vulnerability is a
concern for both the public and private sectors.
The formality of the information sharing process now in place has
improved the flow of information between the government, NERC and the
industry. Under Rule 810.5 of NERC's Rules of Procedure, NERC advises
FERC and other applicable governmental authorities of its intent to
issue advisories, recommendations and essential actions 5 days prior to
their issuance. The benefits of this notification have already been
seen with several alerts. Moreover, NERC will report to FERC on the
actions taken by the relevant grid users, owners, and operators in
response to an alert and the success of those actions in correcting
vulnerabilities or deficiencies.
Another example of formalized information exchange is the
memorandum of agreement (``MOA'') between the U.S. Nuclear Regulatory
Commission (``NRC'') and NERC, which describes how the two
organizations will communicate and cooperate in sharing of information
on grid reliability in general and specifically on the analysis of
events that occur on the grid that have the potential to affect nuclear
power plants. First executed in 2004, the MOA was updated in 2007.
Under the coordination plan for communications and information sharing
during or immediately following emergencies, NERC as the ES-ISAC will
contact the NRC Headquarters Operations Officer when NERC becomes aware
of a significant grid disturbance or an unusual grid event that has
affected or may affect the reliability of offsite power to one or more
nuclear power plants. In turn, when the NRC learns through reports from
its licensees or other sources about grid events or conditions that
have affected or could potentially affect the reliability of offsite
power to one or more nuclear power plants, the NRC will contact NERC
through the ES-ISAC.
With this structure in place, Federal agencies, including the
Department of Energy and the Department of Homeland Security, should
have increased confidence in NERC's ability to notify the industry
expeditiously about vulnerabilities identified by the government and
the appropriate actions to be taken in response.
Beyond these formal processes, CIPC meetings offer one venue for
the technical discussion of vulnerabilities between government agencies
and the industry. Even within these established mechanisms, however,
challenges will still arise when (as in the case of the Aurora
demonstration test) the information is classified or there are tight
controls on the distribution of the information that needs to be
communicated to the industry.
conclusion
The mandatory and enforceable CIP Reliability Standards represent
an important milestone to help ensure grid reliability by improving the
resiliency of control system cyber assets and enhancing their ability
to withstand cyber-based attacks. The NERC Reliability Standards
Development Procedure provides a systematic approach to continuously
improving the standards and documenting the basis for those
improvements. In addition to providing the mechanism to respond to the
directions given by FERC in Order No. 706 to modify the 8 CIP
Reliability Standards, this process provides the opportunity to monitor
technical and other developments--including the further development of
the NIST guidance--and reflect those developments, where appropriate,
in the CIP Reliability Standards. NERC will continue to place a high
priority on assuring that robust CIP Reliability Standards are adhered
to by all responsible entities associated with the bulk power system.
Not all cybersecurity vulnerabilities, however, can be addressed
through the CIP Reliability Standards. While NERC's enforcement
authority is limited to the measures that are contained in the CIP
Reliability Standards, we are committed to analyzing the electric grid
to identify vulnerabilities, and working with government agencies and
industry through the ES-ISAC and otherwise to support the rapid
dissemination of information and mitigation measures for identified
vulnerabilities.
Attachment 1.--Assessment of the Implementation of the Mitigation
Measures Recommended in the June 21, 2007 ES-ISAC Advisory
introduction
The June 21, 2007 ES-ISAC Advisory regarding cybersecurity
vulnerabilities (ES-ISAC Advisory) was sent to generation owners,
generation operators, transmission owners, and transmission operators.
It was distributed broadly through the industry trade associations
(American Public Power Association; Canadian Electricity Association;
Edison Electric Institute (EEI); Electric Power Supply Association; and
the National Rural Electric Cooperative Association).
The ES-ISAC Advisory consisted of three parts. The first part
contained the recommended short- and mid-range (0-180 days) mitigation
measures.\1\ Part two was the longer term (greater than 180 days)
measures.\2\ Part three contained recommendations for immediate
measures.\3\ The ES-ISAC Advisory recommended the development of plans
to implement the immediate measures in the event that a vulnerability
is being exploited, but did not recommend that the immediate measures
be put into practice.
---------------------------------------------------------------------------
\1\ These measures are designated as numbers 1, 2.1, 2.1.1, 2.1.2,
2.1.3, 2.1.4, 3.1 and 3.2 in the ES-ISAC Advisory.
\2\ These measures are designated as numbers 4.1, 4.2, 4.2.1,
4.2.2, 4.2.3, 5, 6, 7 and 8 in the ES-ISAC Advisory.
\3\ These immediate measures are designated as numbers 1, 2, 3, 4,
and 5 in the ES-ISAC Advisory.
---------------------------------------------------------------------------
After the ES-ISAC Advisory was issued, numerous conference calls
were held with industry participants to explain the Advisory. Calls
were convened by trade associations, reliability regions, and
transmission owner and operator forums. ES-ISAC representatives also
responded to inquiries from a large number of companies. In general,
the industry response was constructive and demonstrated a commitment to
mitigating the vulnerability. In communications with the industry, the
ES-ISAC acknowledged its lack of authority to require completion of the
mitigation measures, and the fact that the Advisory was not part of the
NERC Reliability Standards mandatory compliance program. ES-ISAC
representatives also discussed the ``For Official Use Only''
classification on the Advisory, which was established by the
Departments of Homeland Security and Energy and the Nuclear Regulatory
Commission, and the need for maintenance of the confidentiality of
information.
The ES-ISAC conducted both an initial assessment of the
implementation of the recommended measures and a formal, written survey
to measure industry progress in completing the mitigation measures. The
initial assessment was conducted in September and early October 2007
and was performed by gathering information with sector entities in
phone conversations and at meetings. No formalized survey instrument
was used. In addition, a small number of entities submitted unsolicited
reports on their progress to the ES-ISAC.
Based on the information gathered in the discussions, the submitted
reports, and expert knowledge of the ownership and geography of the
bulk power system, the ES-ISAC concluded that approximately 75 percent
of the transmission grid had received mitigation measures or such
measures were in progress.
The October 19, 2007 survey was sent to a list of 65 contacts
representing major entities in the bulk power system developed by the
ES-ISAC with assistance from EEI. The written survey focused on the
implementation of the short- and mid-range measures only. The survey
did not measure progress on the long-term measures. A blank copy of the
survey and cover letter is attached.
One hundred thirty-three entities responded to the survey. The
respondents ranged from small municipally-owned utilities to very
large, multistate, investor-owned utilities. More responses were
received than surveys were distributed because in some cases,
recipients further distributed the survey to affected entities. As an
example, surveys were sent to reliability regions and the regions
passed the survey on to multiple entities in the region. Responses to
the survey were requested by November 2, 2007.
Survey respondents were assured the information submitted would be
kept confidential. The following paragraph was included in the survey
instrument:
Information supplied in this response will be kept confidential by
the ES-ISAC, and will not be shared in any attributable manner
with any other entity or government agency, unless the ES-ISAC
first provides notice of its intention to do so. Statistical
summary information will be calculated from the results, and
that information will be shared with select agencies in the
U.S. and Canadian governments to indicate an overall state of
completeness.
general summary of responses \4\
---------------------------------------------------------------------------
\4\ Detailed information on the survey responses was submitted by
letter dated December 5, 2007, from David A. Whiteley, Executive Vice
President of NERC, to Chairman Langevin.
---------------------------------------------------------------------------
The October 19 survey results indicated that 94 percent of the
short- and mid-range mitigation measures recommended in the ES-ISAC
Advisory, including the recommendation to establish a plan to implement
immediate measures when and if needed, were completed or were in
progress. This 94 percent consisted of 60 percent completed and 34
percent in progress. The remaining 6 percent were not being performed
for a variety of reasons (not applicable due to characteristics of
equipment; work being done by another entity; the measure could
comprise reliability rather than help reliability).
In addition, the information received from the nuclear sector
confirmed that the electricity sector worked diligently to complete
mitigation measures on the bulk power system near nuclear facilities.
The electricity sector took a prioritized approach to completing the
mitigation measures, working in the early stages with the nuclear
facilities and then continuing to work on other less critical
facilities on a prioritized basis. In general, electricity sector
entities weighed the risks associated with the vulnerability addressed
in the ES-ISAC Advisory against risks associated with other
vulnerabilities and worked to balance multiple demands for resources,
perform routine maintenance, repair damage caused by weather, build new
facilities for a growing economy, and replace obsolete facilities,
while mitigating vulnerabilities.
Several key observations regarding the survey responses:
The survey results were encouraging and positive and major
electricity sector entities representing over 75 percent of the
geography and ownership of the bulk power system were proactive
in this mitigation effort.
A significant portion (25 percent to 30 percent) of the
sectors' entities did not have the vulnerability due to how
they installed their protective systems.
Respondents were very concerned about the confidentiality of
information submitted.
The results demonstrated a responsible and appropriate
response to the ES-ISAC Advisory.
summary of survey responses by measure (see table 1 below)
A total of 105 responses were received on behalf of 133 entities.
In certain cases, a single response was provided on behalf of multiple
affiliated independent power producers. Of the 105 responses received,
32 entities indicated that none of the vulnerabilities or
recommendations contained in the ES-ISAC Advisory was applicable to
their facilities. This ``non-applicable'' response was very common for
the independent power producers and a number of the smaller entities
that responded their facilities did not have any remotely accessible
digital protective control devices (DPCD). The remaining 73 respondents
identified at least one of the recommendations in the ES-ISAC Advisory
that applied to their facilities, and reported on the implementation of
all of the measures that were deemed applicable.
The percentages shown in the grid below are calculated by adding
the number of responses that the measure is ``complete'' or ``in-
progress'' and dividing by the total number of responding entities that
have the vulnerability. Entities classified as ``not applicable'' on
Table 1 because they determined that their facilities did not have the
vulnerability the measure was meant to address are not included in
figuring the percentage. The narrative in the grid is based on the
specific survey results as shown in Table 1. Both the grid and the
table are keyed to the order in which the recommendations were included
in the ES-ISAC Advisory.
------------------------------------------------------------------------
Measure Response Analysis
------------------------------------------------------------------------
1 Plan Immediate Action................ Seventy of 71 respondents to
which these measures are
applicable indicated this
is complete or in progress.
This 98 percent (70/71)
rate represented a strong
effort by the sector to
develop the plans to
complete the five immediate
actions if required.
2.1 Enhance Security Remote Access..... This measure is a summary of
the four below it. The
compliance rate was 97
percent rate (62/64).
2.1.1 Security......................... This measure required
strengthening the
protections to reduce
unauthorized remote access.
The compliance rate was 98
percent (63/64).
2.1.2 Training......................... This measure is to provide
security training to
employees with access to
DPCD. While the overall
compliance rate was 98
percent (63/64), more of
the entities reported this
as ``in progress'' (35)
rather than ``completed''
(28).
2.1.3 Information Protection........... Respondents indicated 100
percent (64/64) took
measures to protect DPCD
access information,
although 28 of 64, almost
half, were still in
progress.
2.1.4 Seal Unused Ports................ This action was more
problematic for some
respondents due to the
virtual impossibility of
sealing unused ports in
some equipment. Fifty-seven
of 62 respondents to which
this measure applied were
completed or in progress,
while five believed sealing
unused ports is not
possible or is counter
productive.
3.1 Control Center Authentication...... Fifty-five of 59 respondents
considered this
configuration that requires
an operator in the control
center to authenticate a
DPCD access. This measure
was not feasible in some
configurations nor
practical if the entity was
small and did not have a
control room.
3.2 Situation Awareness Process........ Forty-seven of 66
respondents reported that
they had not performed this
measure or that the measure
was not applicable. This
was an expected response
because performance of this
measure is the
responsibility of
Independent System
Operators, Regional
Transmission Organizations,
and reliability
coordinators, and thus not
the responsibility of many
of the recipients of the
October 19 survey.
1.1 to 1.5 Specific Immediate Measures. As discussed above, the
respondents indicated a
high degree of attention to
developing the plans
necessary to complete these
measures if necessary.
There was a higher degree
of variation in the
responses in this category
due to different DPCD and
equipment configurations.
------------------------------------------------------------------------
TABLE 1.--SURVEY RESPONSES SHOWING IMPLEMENTATION OF RECOMMENDATIONS FOR SHORT-TERM AND MID-TERM MEASURES AND
IMMEDIATE MEASURE PLANNING
----------------------------------------------------------------------------------------------------------------
In Not Not
Mitigation Measure Complete Progress Performed Applicable Total
----------------------------------------------------------------------------------------------------------------
1. Plan immediate actions................................... 55 15 1 2 73
2.1 Enhance security-remote access.......................... 38 24 2 9 73
2.1.1 Security.......................................... 38 25 1 10 74
2.1.2 Training.......................................... 28 35 1 5 69
2.1.3 Information protection............................ 36 28 0 5 69
2.1.4 Seal unused ports................................. 33 24 5 8 70
3.1 Control center authentication........................... 26 29 4 9 68
3.2 Situational awareness process........................... 7 12 12 35 66
----------------------------------------------------------------------------------------------------------------
1.1 Attachment A (only) Planning Access..................... 47 17 0 7 71
1.2 Disable remote change................................... 45 14 5 4 68
1.3 Disable auto reclose.................................... 41 11 2 14 68
1.4 Add time delay.......................................... 29 12 5 25 71
1.5 Disable remote close.................................... 38 10 7 15 70
----------------------------------------------------------------------------------------------------------------
Totals................................................ 461 256 45 148 .......
----------------------------------------------------------------------------------------------------------------
Mr. Langevin. I thank you for your testimony.
I will now recognize Mr. Wilshusen to summarize his
statement for 5 minutes.
Welcome, Mr. Wilshusen.
STATEMENT OF GREG WILSHUSEN, DIRECTOR, INFORMATION SECURITY
ISSUES, GOVERNMENT ACCOUNTABILITY OFFICE (GAO), ACCOMPANIED BY
NABA BARKAKATI, SENIOR LEVEL TECHNOLOGIST, GAO
Mr. Wilshusen. Thank you. Mr. Chairman and members of the
subcommittee, thank you for the opportunity to participate in
today's hearing to discuss control systems security.
I am accompanied today by Naba Barkakati, GAO's acting
technologist.
As you know, we have previously reported and testified
before this subcommittee that critical infrastructure control
systems face increasing risks due to cyber threats, system
vulnerabilities and the serious potential impact of attacks, as
demonstrated by several reported incidents. If control systems
are not adequately secured, their vulnerabilities could be
exploited and our critical infrastructures could be disrupted
or disabled, possibly resulting in loss of life, physical
damage or economic losses.
Mr. Chairman, at your request, GAO examined the information
security controls for the control systems and networks used to
operate TVA's critical infrastructure. In reports being issued
today on the results of our examination, we determined that TVA
had not fully implemented appropriate security controls to
properly protect its networks and control systems.
On TVA's corporate network, for example, many of the work
stations and servers that we examined lacked key security
patches or were insecurely configured. In addition, certain
network protocols and devices provided limited protections; and
TVA's ability to monitor its network using its intrusion
detection system was limited. On certain control systems and
networks, passwords or other equivalent documented controls
were not effectively implemented, user activity was not logged,
software patches were not current, and viruses protection
software was not consistently implemented.
The interconnectivity between the corporate network and
control systems networks at certain facilities provided
opportunities for weaknesses on one network to potentially
affect systems on other networks. Physical security weaknesses
also introduced risk to control systems at certain facilities.
For example, live network jacks connected to TVA's internal
network were publicly accessible.
An underlying reason for these weaknesses is that TVA had
not fully implemented its information security program.
Although TVA had implemented program activities related to
contingency planning and incident response, it had not
consistently conducted key activities related to, among other
things, developing an inventory of systems, assessing risks,
completing appropriate training for individuals with
significant security responsibilities, testing and monitoring
the effectiveness of security controls and identifying and
tracking remedial actions to mitigate known uncontrolled
weaknesses. As a result, systems and networks that operate
TVA's critical infrastructures were at increased risk of
unauthorized modification or disruption by both internal and
external threats.
Accordingly, opportunities exist for TVA to enhance the
security of its control systems networks. In reports being
issued today, we are making a total of 92 recommendations to
strengthen security controls and implement an effective
information security program that can provide TVA with a solid
foundation for ensuring sufficient protection of its control
systems. TVA has concurred with most of our recommendations.
In summary, TVA's power generation and transmission
critical infrastructures are important to the economy of the
southeastern United States and the safety, security and welfare
of millions of people. However, multiple weaknesses in both the
agency's corporate network and control systems networks place
these infrastructures at increased risk. If TVA does not take
sufficient steps to secure its control systems and fully
implement its security program, it risks not being able to
prevent or respond properly to a disruption caused by either
malicious or unintended cyber incident.
Mr. Chairman, this concludes our statement. We would be
happy to answer questions at this time.
[The statement of Mr. Wilshusen follows:]
Prepared Statement of Gregory C. Wilshusen
May 21, 2008
information security: tva needs to enhance security of critical
infrastructure control systems and networks
gao highlights: highlights of gao-08-775t, a testimony before the
subcommittee on emerging threats, cybersecurity, and science and
technology, committee on homeland security, house of representatives
Why GAO Did This Study
The control systems that regulate the Nation's critical
infrastructures face risks of cyber threats, system vulnerabilities,
and potential attacks. Securing these systems is therefore vital to
ensuring national security, economic well-being, and public health and
safety. While most critical infrastructures are privately owned, the
Tennessee Valley Authority (TVA), a Federal corporation and the
Nation's largest public power company, provides power and other
services to a large swath of the American Southeast.
GAO was asked to testify on its public report being released today
on the security controls in place over TVA's critical infrastructure
control systems. In doing this work, GAO examined the security
practices in place at TVA facilities; analyzed the agency's information
security policies, plans, and procedures in light of Federal law and
guidance; and interviewed agency officials responsible for overseeing
TVA's control systems and their security.
What GAO Recommends
In public and limited distribution reports being issued today, GAO
is recommending that TVA take steps to improve implementation of the
agency's information security program and to correct specific security
weaknesses identified at TVA facilities.
In comments on drafts of GAO's reports, TVA provided information on
steps it is taking to implement these recommendations.
What GAO Found
TVA had not fully implemented appropriate security practices to
secure the control systems used to operate its critical infrastructures
at facilities GAO reviewed. Multiple weaknesses within the TVA
corporate network left it vulnerable to potential compromise of the
confidentiality, integrity, and availability of network devices and the
information transmitted by the network. For example, almost all of the
workstations and servers that GAO examined on the corporate network
lacked key security patches or had inadequate security settings.
Furthermore, TVA did not adequately secure its control system networks
and devices on these networks, leaving the control systems vulnerable
to disruption by unauthorized individuals. Network interconnections
provided opportunities for weaknesses on one network to potentially
affect systems on other networks. For example, weaknesses in the
separation of network segments could allow an individual who gained
access to a computing device connected to a less secure portion of the
network to compromise systems in a more secure portion of the network,
such as the control systems. In addition, physical security at multiple
locations that GAO reviewed did not sufficiently protect the control
systems. For example, live network jacks connected to TVA's internal
network at certain facilities GAO reviewed had not been adequately
secured from unauthorized access. As a result, TVA's control systems
were at increased risk of unauthorized modification or disruption by
both internal and external threats.
An underlying reason for these weaknesses was that TVA had not
consistently implemented significant elements of its information
security program. For example, the agency lacked a complete and
accurate inventory of its control systems and had not categorized all
of its control systems according to risk, limiting assurance that these
systems are adequately protected. In addition, TVA's patch management
process lacked a mechanism to effectively prioritize vulnerabilities.
As a result, patches that were identified as critical, meaning they
should be applied immediately to vulnerable systems, were not applied
in a timely manner.
Numerous opportunities exist for TVA to improve the security of its
control systems. For example, TVA can strengthen logical access
controls, improve physical security, and fully implement its
information security program. If TVA does not take sufficient steps to
secure its control systems and fully implement an information security
program, it risks not being able to respond properly to a major
disruption that is the result of an intended or unintended cyber
incident.
Mr. Chairman and Members of the subcommittee, thank you for the
opportunity to participate in today's hearing to discuss control
systems security. We have previously reported and testified before this
subcommittee that critical infrastructure control systems face
increasing risks due to cyber threats, system vulnerabilities, and the
serious potential impact of attacks as demonstrated by reported
incidents.\1\ If control systems are not adequately secured, their
vulnerabilities could be exploited, and our critical infrastructures
could be disrupted or disabled, possibly resulting in loss of life,
physical damage, or economic losses.
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\1\ GAO, Critical Infrastructure Protection: Federal Efforts to
Secure Control Systems Are Under Way, but Challenges Remain, GAO-07-
1036 (Washington, D.C.: September 2007) and GAO, Critical
Infrastructure Protection: Multiple Efforts to Secure Control Systems
Are Under Way, but Challenges Remain. GAO-08-119T (Washington, D.C.:
October 2007).
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The majority of our Nation's critical infrastructures are owned by
the private sector; however, the Federal Government owns and operates
critical infrastructure facilities including ones used for energy,
water treatment and distribution, and transportation. One such entity,
the Tennessee Valley Authority (TVA)--a Federal corporation and the
Nation's largest public power company--generates electricity using its
52 fossil, hydro, and nuclear facilities, all of which use control
systems. As a wholly owned government corporation, TVA is to comply
with the Federal Information Security Management Act of 2002 \2\
(FISMA) by developing a risk-based information security program and
implementing appropriate information security controls for its computer
systems.
---------------------------------------------------------------------------
\2\ FISMA was enacted as title III, E-Government Act of 2002, Pub.
L. No. 107-347 (Dec.17, 2002).
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In our testimony today, we will summarize the results of our review
of the security controls over TVA's critical infrastructure control
systems. We are issuing two reports today, one publicly available and
one with limited distribution, which provide additional details on the
results of our review.\3\ Our objective was to determine whether TVA
has effectively implemented appropriate information security practices
for its control systems. In preparing for this testimony, we relied on
our work supporting these reports, which discuss the details of our
scope and methodology. The information in this testimony is
specifically based on our public report, which has been reviewed for
sensitivity by TVA.
---------------------------------------------------------------------------
\3\ GAO, Information Security: TVA Needs to Address Weaknesses in
Control Systems and Networks, GAO-08-459SU and GAO-08-526 (Washington,
D.C.: May 2008).
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Our testimony is based on the work done for our reports from March
2007 to May 2008. The work on which this testimony is based was
conducted in accordance with generally accepted government auditing
standards, which require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that
the evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.
results in brief
TVA had not fully implemented appropriate security practices to
secure the control systems used to operate its critical infrastructures
at facilities we reviewed. Specifically, network interconnections
provided opportunities for weaknesses on one network to potentially
affect systems on other networks. For example, weaknesses in the
separation of network segments could allow an individual who gained
access to a computing device connected to a less secure portion of the
network to compromise systems in a more secure portion of the network,
such as the control systems. In addition, physical security at multiple
locations that we reviewed did not sufficiently protect the control
systems. As a result, TVA's control systems were at increased risk of
unauthorized modification or disruption by both internal and external
threats.
An underlying reason for these weaknesses was that TVA had not
consistently implemented significant elements of its information
security program. For example, the agency lacked a complete and
accurate inventory of its control systems and it had not categorized
all of its control systems according to risk, limiting assurance that
these systems were adequately protected. In addition, TVA's patch
management process lacked a mechanism to effectively prioritize
vulnerabilities. Until TVA fully and consistently implements its
information security program, it risks a disruption of its operations,
which could impact both TVA and its customers.
In the reports being issued today,\4\ we are making 19
recommendations to the Chief Executive Officer of TVA to improve the
implementation of its agencywide information security program and 73
recommendations to correct specific information security weaknesses.
---------------------------------------------------------------------------
\4\ GAO-08-526 and GAO-08-459SU.
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In its comments on our reports, TVA concurred with all of our
recommendations regarding its information security program and the
majority of our recommendations regarding specific information security
weaknesses and provided information on steps the agency was taking to
implement our GAO recommendations.
background
Information security is a critical consideration for any
organization that depends on information systems and computer networks
to carry out its mission or business. Of particular importance is the
security of information and systems supporting critical
infrastructures--physical or virtual systems and assets so vital to the
Nation that their incapacitation or destruction would have a
debilitating impact on national and economic security and on public
health and safety. Although the majority of our Nation's critical
infrastructures are owned by the private sector, the Federal Government
owns and operates key facilities that use control systems, including
oil, gas, water, electricity, and nuclear facilities. In the electric
power industry, control systems can be used to manage and control the
generation, transmission, and distribution of electric power. For
example, control systems can open and close circuit breakers and set
thresholds for preventive shutdowns.
Critical infrastructure control systems face increasing risks due
to cyber threats, system vulnerabilities, and the potential impact of
attacks as demonstrated by reported incidents.\5\ Control systems are
more vulnerable to cyber threats and unintended incidents now than in
the past for several reasons, including their increasing
standardization and connectivity to other systems and the Internet. For
example, in August 2006, two circulation pumps at Unit 3 of the Browns
Ferry, Alabama, nuclear power plant operated by TVA failed, forcing the
unit to be shut down manually. The failure of the pumps was traced to
an unintended incident involving excessive traffic on the control
system's network.
---------------------------------------------------------------------------
\5\ See GAO, Critical Infrastructure Protection: Multiple Efforts
to Secure Control Systems Are Under Way, but Challenges Remain, GAO-07-
1036 (Washington, D.C.: Sept. 10, 2007).
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To address this increasing threat to control systems governing
critical infrastructures, both Federal and private organizations have
begun efforts to develop requirements, guidance, and best practices for
securing those systems. For example, FISMA outlines a comprehensive
risk-based approach to securing Federal information systems, which
include control systems. Federal organizations, including the National
Institute of Standards and Technology (NIST), the Federal Energy
Regulatory Commission (FERC), and the Nuclear Regulatory Commission
(NRC), have used a risk-based approach to develop guidance and
standards to secure control systems. NIST guidance has been developed
that currently applies to Federal agencies; however, much of the
guidance and standards developed by FERC and NRC has not yet been
finalized. Once implemented, FERC and NRC standards will apply to both
public and private organizations that operate covered critical
infrastructures.
TVA Provides Power to the Southeastern United States
The TVA is a Federal corporation and the Nation's largest public
power company. TVA's power service area includes almost all of
Tennessee and parts of Mississippi, Kentucky, Alabama, Georgia, North
Carolina, and Virginia. It operates 11 coal-fired fossil plants, 8
combustion turbine plants, 3 nuclear plants, and a hydroelectric system
that includes 29 hydroelectric dams and one pumped storage facility.\6\
TVA also owns and operates one of the largest transmission systems in
North America.
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\6\ A pumped-storage plant uses two reservoirs, with one located at
a much higher elevation than the other. During periods of low demand
for electricity, such as nights and weekends, energy is stored by
reversing the turbines and pumping water from the lower to the upper
reservoir. The stored water can later be released to turn the turbines
and generate electricity as it flows back into the lower reservoir.
---------------------------------------------------------------------------
Control systems are essential to TVA's operation because it uses
them to both generate and deliver power. To generate power, control
systems are used within power plants to open and close valves, control
equipment, monitor sensors, and ensure the safe and efficient operation
of a generating unit. Many control systems networks connect with other
agency networks to transmit system status information. To deliver
power, TVA monitors the status of its own and surrounding transmission
facilities from two operations centers.
tva had not fully implemented appropriate controls to protect control
systems from unauthorized access
TVA had not fully implemented appropriate security practices to
secure the networks on which its control systems rely. Specifically,
the interconnected corporate and control systems networks at certain
facilities that we reviewed did not have sufficient information
security safeguards in place to adequately protect control systems. In
addition, TVA did not always implement controls adequate to restrict
physical access to control system areas and to protect these systems--
and their operators--from fire damage or other hazards. As a result
TVA, control systems were at increased risk of unauthorized
modification or disruption by both internal and external threats.
Weaknesses in TVA's Corporate Network Controls Placed Network Devices
at Risk
Multiple weaknesses within the TVA corporate network left it
vulnerable to potential compromise of the confidentiality, integrity,
and availability of network devices and the information transmitted by
the network. For example:
Almost all of the workstations and servers that we examined
on the corporate network lacked key security patches or had
inadequate security settings.
TVA had not effectively configured host firewall controls on
laptop computers we reviewed, and one remote access system that
we reviewed had not been securely configured.
Network services had been configured across lower- and
higher-security network segments, which could allow a malicious
user to gain access to sensitive systems or modify or disrupt
network traffic.
TVA's ability to use its intrusion detection system \7\ to
effectively monitor its network was limited.
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\7\ An intrusion detection system detects inappropriate, incorrect,
or anomalous activity that is aimed at disrupting the confidentiality,
availability, or integrity of a protected network and its computer
systems.
---------------------------------------------------------------------------
Weaknesses in TVA Control Systems Networks Jeopardized the Security of
its Control Systems
The access controls implemented by TVA did not adequately secure
its control systems networks and devices, leaving the control systems
vulnerable to disruption by unauthorized individuals. For example:
TVA had implemented firewalls to segment control systems
networks from the corporate network. However, the configuration
of certain firewalls limited their effectiveness.
The agency did not have effective passwords or other
equivalent documented controls to restrict access to the
control systems we reviewed. According to agency officials,
passwords were not always technologically possible to
implement, but in the cases we reviewed there were no
documented compensating controls.
TVA had not installed current versions of patches for key
applications on computers on control systems networks. In
addition, the agencywide policy for patch management did not
apply to individual plant-level control systems.
Although TVA had implemented antivirus software on its
transmission control systems network, it had not consistently
implemented antivirus software on other control systems we
reviewed.
Physical Security Did Not Sufficiently Protect Sensitive Control
Systems
TVA had not consistently implemented physical security controls at
several facilities that we reviewed. For example:
Live network jacks connected to TVA's internal network at
certain facilities we reviewed had not been adequately secured
from unauthorized access.
At one facility, sufficient emergency lighting was not
available, a server room had no smoke detectors, and a control
room contained a kitchen (a potential fire and water hazard).
The agency had not always ensured that access to sensitive
computing and industrial control systems resources had been
granted to only those who needed it to perform their jobs. At
one facility, about 75 percent of facility badgeholders had
access to a plant computer room, although the vast majority of
these individuals did not need access. Officials stated that
all of those with access had been through the required
background investigation and training process. Nevertheless, an
underlying principle for secure computer systems and data is
that users should be granted only those access rights and
permissions needed to perform their official duties.
information security management program was not consistently
implemented across tva's critical infrastructure
An underlying reason for TVA's information security control
weaknesses was that it had not consistently implemented significant
elements of its information security program, such as: documenting a
complete inventory of systems; assessing risk of all systems
identified; developing, documenting, and implementing information
security policies and procedures; and documenting plans for security of
control systems as well as for remedial actions to mitigate known
vulnerabilities. As a result of not fully developing and implementing
these elements of its information security program, TVA had limited
assurance that its control systems were adequately protected from
disruption or compromise from intentional attack or unintentional
incident.
TVA's Inventory of Systems Did Not Include Many Control Systems
TVA's inventory of systems did not include all of its control
systems as required by agency policy. In its fiscal year 2007 FISMA
submission, TVA included the transmission and the hydro automation
control systems in its inventory. However, the plant control systems at
its nuclear and fossil facilities had not been included in the
inventory. At the conclusion of our review, agency officials stated
they planned to develop a more complete and accurate system inventory
by September 2008.
TVA Had Not Assessed Risks to Its Control Systems
TVA had not completed categorizing risk levels or assessing the
risks to its control systems. FISMA mandates that agencies assess the
risk and magnitude of harm that could result from the unauthorized
access, use, disclosure disruption, modification, or destruction of
their information and information systems. However, while the agency
had categorized the transmission and hydro automation control systems
as high-impact systems,\8\ its nuclear division and fossil business
unit, which includes its coal and combustion turbine facilities, had
not assigned risk levels to its control systems. TVA had also not
completed risk assessments for the control systems at its
hydroelectric, nuclear, coal, and combustion turbine facilities.
According to TVA officials, the agency plans to complete the
hydroelectric and nuclear control systems risk assessments by June 2008
and they plan to complete the security categorization of remaining
control systems throughout TVA by September 2008, except for fossil
systems, for which no date has been set.
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\8\ Federal Information Processing Standard 199 provides criteria
for categorizing risk to systems as high, moderate, or low.
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Inconsistent Application of TVA's Policies and Procedures Contributed
to Program Weaknesses
Several shortfalls in the development, documentation, and
implementation of TVA's information security policies contributed to
many of the inadequacies in TVA's security practices. For example:
TVA had not consistently applied agencywide information
security policies to its control systems, and TVA business unit
security policies were not always consistent with agencywide
information security policies.
Cyber security responsibilities for interfaces between TVA's
transmission control system and its hydroelectric and fossil
generation units had not been documented.
Physical security standards for control system sites had not
been finalized or were in draft form.
Patch Management Weaknesses Left TVA's Control Systems Vulnerable
Weaknesses in TVA's patch management process hampered the efforts
of TVA personnel to identify, prioritize, and install critical software
security patches to TVA systems in a timely manner. For a 15-month
period, TVA documented its analysis of 351 reported vulnerabilities,
while NIST's National Vulnerability Data base \9\ reported about 2,000
vulnerabilities rated as high or medium risk for the types of systems
in operation at TVA for the same time period. In addition, upon release
of a patch by the software vendor, the agency had difficulty in
determining the patch's applicability to the software applications in
use at the agency because it did not have a mechanism in place to
provide timely access to software version and configuration information
for the applications. Furthermore, TVA's written guidance on patch
management provided only limited guidance on how to prioritize
vulnerabilities. The guidance did not refer to the criticality of IT
resources or specify situations in which it was acceptable to upgrade
or downgrade a vulnerability's priority from that given by its vendors
or third-party patch tracking services. For example, agency staff had
reduced the priority of three vulnerabilities identified as critical or
important by the vendor or a patch tracking service and did not provide
sufficient documentation of the basis for this decision. As a result,
patches that were identified as critical were not applied in a timely
manner; in some cases, a patch was applied more than 6 months past TVA
deadlines for installation.
---------------------------------------------------------------------------
\9\ The National Vulnerability Data base is the U.S. government
repository of standards based vulnerability management data. This data
enables automation of vulnerability management, security measurement,
and compliance.
---------------------------------------------------------------------------
TVA Had Not Developed System Security and Remedial Action Plans for All
Control Systems
TVA had not developed system security or remedial action plans for
all control systems as required under Federal law and guidance.
Security plans document the system environment and the security
controls selected by the agency to adequately protect the system.
Remedial action plans document and track activities to implement
missing controls such as missing system security plans and other
corrective actions necessary to mitigate vulnerabilities in the system.
Although TVA had developed system security and remedial action plans
for its transmission control system, it had not done so for control
systems at the hydroelectric, nuclear, or fossil facilities. According
to agency officials, TVA plans to develop a system security plan for
its hydroelectric automation and nuclear control systems by June 2008,
but no timeframe has been set to complete development of a security
plan for control systems at fossil facilities. Until the agency
documents security plans and implements a remediation process for all
control systems, it will not have assurance that the proper controls
will be applied to secure control systems or that known vulnerabilities
will be properly mitigated.
opportunities exist to improve security of tva's control systems
Numerous opportunities exist for TVA to improve the security of its
control systems. Specifically, strengthening logical access controls
over agency networks can better protect the confidentiality, integrity,
and availability of control systems from compromise by unauthorized
individuals. In addition, fortifying physical access controls at its
facilities can limit entry to TVA restricted areas to only authorized
personnel, and enhancing environmental safeguards can mitigate losses
due to fire or other hazards. Further, establishing an effective
information security program can provide TVA with a solid foundation
for ensuring the adequate protection of its control systems.
Because of the interconnectivity between TVA's corporate network
and certain control systems networks, we recommend that TVA implement
effective patch management practices, securely configure its remote
access system, and appropriately segregate specific network services.
We also recommend that the agency take steps to improve the security of
its control systems networks, such as implementing strong passwords or
equivalent authentication mechanisms, implementing antivirus software,
restricting firewall configuration settings, and implementing
equivalent compensating controls when such steps cannot be taken.
To prevent unauthorized physical access to restricted areas
surrounding TVA's control systems, we recommend that the agency take
steps to toughen barriers at points of entry to these facilities. In
addition, to protect TVA's control systems operators and equipment from
fire damage or other hazards, we also recommend that the agency improve
environmental controls by enhancing fire suppression capabilities and
physically separating cooking areas from system equipment areas.
Finally, to improve the ability of TVA's information security
program to effectively secure its control systems, we are recommending
that the agency improve its configuration management process and
enhance its patch management policy. We also recommend that TVA
complete a comprehensive system inventory that identifies all control
systems, perform risk assessments and security risk categorization of
these systems, and document system security and remedial action plans
for these systems. Further, we recommend improvements to agency
information security policies.
In commenting on drafts of our reports, TVA concurred with all of
our recommendations regarding its information security program and the
majority of our recommendations regarding specific information security
weaknesses. The agency agreed on the importance of protecting critical
infrastructures and stated that it has taken several actions to
strengthen information security for control systems, such as
centralizing responsibility for cyber security within the agency. It
also provided information on steps the agency was taking to implement
certain GAO recommendations.
In summary, TVA's power generation and transmission critical
infrastructures are important to the economy of the southeastern United
States and the safety, security, and welfare of millions of people.
Control systems are essential to the operation of these
infrastructures; however, multiple information security weaknesses
exist in both the agency's corporate network and individual control
systems networks and devices. An underlying cause for these weaknesses
is that the agency had not consistently implemented its information
security program throughout the agency. If TVA does not take sufficient
steps to secure its control systems and implement an information
security program, it risks not being able to respond properly to a
major disruption that is the result of an intended or unintended cyber
incident.
Mr. Chairman, this concludes our statement. We would be happy to
answer questions at this time.
Mr. Langevin. Thank you, Mr. Wilshusen.
The Chair now recognizes Mr. McCollum to summarize your
statement for 5 minutes. Welcome.
STATEMENT OF WILLIAM R. McCOLLUM, JR., CHIEF OPERATING OFFICER,
TENNESSEE VALLEY AUTHORITY (TVA), ACCOMPANIED BY JOHN LONG,
CHIEF ADMINISTRATIVE OFFICER, TVA
Mr. McCollum. Good afternoon, Chairman Langevin, Ranking
Member Ms. Brown-Waite and members of the subcommittee.
I am Bill McCollum, Chief Operating Officer of the
Tennessee Valley Authority. I am accompanied today by TVA's
Chief Administrative Officer, John Long.
I appreciate this opportunity to appear before you to
discuss the Government Accountability Office report on the
security of the computer networks and control system used in
TVA's operations.
As TVA's Chief Operating Officer, I am responsible for the
safe and reliable operation of the TVA power system which
generates and distributes electricity for a region of the
southeast which covers the State of Tennessee and adjacent
parts of six neighboring States. All of our operations are
financed by revenues from the sale of electricity. TVA does not
receive any annual congressional appropriations.
I am also pleased to note that earlier this week we
observed the 75th anniversary of the TVA. As we have for 75
years, we remain focused on carrying out our three-part mission
in energy, economic development and environmental stewardship.
Each part of this mission has contributed significantly to the
progress of our 80,000-square-mile service region.
In performing our mission, the safety of our employees and
the public is paramount in all of our operations, including
specialized security requirements to protect the computerized
control systems involved in the generation and transmission of
electricity.
On behalf of TVA, we appreciate the substantial time and
resources that the GAO allotted to examining and evaluating our
computer security. As you know, the report made public today
listed 19 recommendations for improving the security of our
computer systems. We concur with all of these recommendations,
and we have either completed or are aggressively moving to
implement remedial actions for all 19.
It is important to note that TVA was already in the process
of addressing 17 of the 19 recommendation areas when GAO's
field work began at TVA last October. We also initiated several
actions to address other aspects of our security while the
field team was conducting its evaluation. These actions were
the result of ongoing assessments by TVA staff and the
independent TVA office of the Inspector General, which had
initiated planning for an audit of our information technology
security by Science Applications International Corporation.
GAO's work has been very helpful in affirming and focusing the
need for these and other measures that we are taking.
Some of the security issues identified by the GAO report
involved instances that have been addressed by the
centralization of our cybersecurity policy, its administration
and its oversight activities into a corporate-level
organization. The centralization of this responsibility was
completed in February, which now gives TVA a uniform security
set of procedures to be followed by all its organizations and
covers all control systems.
In conjunction with our implementation of additional
measures to strengthen our defense-in-depth security posture,
we commissioned a third-party consultant to perform penetration
testing of our infrastructure to identify any immediate
weaknesses. Testing involved both informed and uninformed
circumstances in which the third party made attempts to
penetrate our networks. We are pleased to note that the
consultant's team was unable to gain access to any of the
targeted process control networks in either type of test. While
the test failed to penetrate our control network security, the
process identified several opportunities to further insulate
and protect our security systems. We are now implementing those
additional measures.
In closing, the TVA fully understands that it has a solemn
responsibility to ensure the safety and security of the systems
that are vital to our Nation's critical infrastructure, our
region and the Nation's economy and the health and safety of
the public. One of my responsibilities is ensuring that we
embrace safety as a value in all aspects of our operations to
protect the health and well-being of our work force and the
public. We are moving as quickly as possible to complete
remedial measures for all 19 of the GAO's recommendations,
along with other steps that have been identified to elevate
every level of our security and computer network security.
As a Federal entity, we are cognizant of our special
responsibility to provide leadership in this important aspect
of our electric system operations. We assure the subcommittee
and the public at large that TVA is committed to ensuring that
the infrastructure entrusted to our responsibility meets or
exceeds the best accepted practices in government and in the
electric utility industry.
Thank you for this opportunity to provide our perspectives
and experiences as you continue this subcommittee's important
work in assessing the adequacy of security measures within the
Nation's critical electric power infrastructure.
[The statement of Mr. McCollum follows:]
Prepared Statement of William R. McCollum, Jr.
May 21, 2008
Good afternoon Chairman Langevin, Ranking Member McCaul, and
Members of the subcommittee. I am Bill McCollum, Chief Operating
Officer of the Tennessee Valley Authority (TVA). I am accompanied today
by TVA's Chief Administrative Officer, John Long.
I appreciate this opportunity to appear before you to discuss the
Government Accountability Office (GAO) report on the security of the
computer networks and control systems used in TVA's operations.
As TVA's Chief Operating Officer, I am responsible for the safe and
reliable operation of the TVA power system, which generates and
distributes electricity for a region of the Southeast which covers
Tennessee and adjacent parts of six neighboring States. All of our
operations--the generation and distribution of electricity and our
stewardship of the Nation's fifth largest river system and economic
development work--are financed by revenue from the sale of electricity.
TVA does not receive any annual congressional appropriations.
I am pleased to note that earlier this week we observed the 75th
Anniversary of TVA in Muscle Shoals, Alabama. As we have for 75 years,
we remain focused carrying out our historic three-part mission in
energy, economic development and environmental stewardship. Each part
of our mission has contributed significantly to the progress of our
80,000-square-mile service region, which is centered on the watershed
of the Tennessee River.
In performing our mission, the safety of our employees and the
public is paramount in all of our operations, including the specialized
security requirements to protect the computerized control systems
involved in the generation and transmission of electricity.
On behalf of TVA, we appreciate the substantial time and resources
that the GAO allotted to examining and evaluating our computer
security. As you know, the report made public today by the GAO listed
19 recommendations for improving the security of our computer systems.
We concur with all of those recommendations, and we have either
completed or are aggressively moving to implement remedial actions for
all 19.
It is important to note that TVA was already in the process of
addressing 17 of the 19 recommendation areas when GAO's field work
began at TVA last October. We also initiated several actions to address
other aspects of our security while the field team was conducting its
evaluation. These actions were the result of on-going assessments by
TVA staff and the independent TVA Office of Inspector General, which
had initiated planning for an audit of our Information Technology
Security by Science Applications International Corporation. GAO's work
has been very helpful in affirming and focusing the need for these and
other measures that we are taking.
Some of the security issues identified by the GAO report involved
instances that have been addressed by the centralization of our cyber
security policy, its administration and its oversight activities into a
corporate-level organization. The centralization of this responsibility
was completed in February, which now gives TVA uniform security
procedures to be followed by all of its organizations and covers all
control systems.
In conjunction with our implementation of additional measures to
strengthen our defense-in-depth security posture, we commissioned a
third-party consultant to perform penetration testing of our
infrastructure to identify any immediate weaknesses. The testing
involved both ``informed'' and ``uninformed'' circumstances in which
this third party made attempts to penetrate our networks. We are
pleased to note that the consultant's team was unable to gain access to
any of the targeted Process Control Networks in either type of test.
While the tests failed to penetrate our control network security, the
process identified several opportunities to further insulate and
protect the security of our systems. We are now implementing those
additional measures.
In closing, TVA fully understands that it has a solemn
responsibility to ensure the safety and security of systems that are
vital to the Nation's critical infrastructure, our region and Nation's
economy, and the health and safety of the public. As the Chief
Operating Officer, one of my responsibilities is ensuring that we
embrace safety as a value in all aspects of our operations to protect
the health and well-being of our work force and the public. We are
moving as quickly as possible to complete remedial measures for all 19
of GAO's recommendations, along with other steps we have identified, to
elevate every level of our computer and network security.
As a Federal entity, we are cognizant of our special responsibility
to provide leadership in this important aspect of electric system
operations. We assure the subcommittee and the public at-large that TVA
is committed to assuring that the infrastructure entrusted to our
responsibility meets or exceeds the best accepted practices in
government and in the electric utility industry.
Thank you for this opportunity to provide our perspectives and
experiences as you continue the subcommittee's important work in
assessing the adequacy of security measures within the Nation's
critical electric power infrastructure.
Mr. Langevin. Thank you, Mr. McCollum.
I want to thank the witnesses for their testimony.
I remind each member that he or she will have 5 minutes to
question the panel, and I now recognize myself for questions.
Last October, this committee was told that 75 percent of
the transmission grid has either taken appropriate actions or
is in the process of implementing those actions for Aurora. In
NERC's testimony today, they suggest 94 percent of the short
midrange mitigation measures have been completed or in
progress. Yet, on the other hand, Chairman Kelliher is telling
us in testimony that there is a broad range--there is a broad
range of compliance based only on individual interpretations of
the threat and the application of the recommended mitigation
measures.
My question for the panel is, who is right? What are we--
what do these varying assessments tell us about the industry's
readiness or ability to comply with the reliability standards?
Mr. Kelliher. I think both answers might be true and that
we are actually asking different questions. So we are coming to
somewhat different answers. We are conducting a subjective
review of some of the utility plans in response to the
advisory, whereas NERC is really asking a different question.
So I think, actually, both can be true at the same time.
Mr. Sergel. Chairman, there are three different sources for
that information. The first would have been done immediately
after our advisory last year. It involved going out and doing
interviews and gathering information with respect to the
status. We did that at that time because we did not have in
place a data base to get the entirety of the users and owners
and operators, and I know that was some source of confusion.
For that we apologize. The responsibility, to be clear, is ours
and ours entirely; and we will do better the next time.
The second data that you refer to, the 94 percent, is from
a written survey that we sent out. It is the data that came
back from it. But I will tell you that we recognized and the
Commission recognized and took action that that type of survey
was limited, and we provided it to you with that knowledge.
I think the third that has been done and is ongoing is
being done by the Commission. It is both the most recent, it is
the most comprehensive, and it is the one that is the best
information at this point in time.
Mr. Langevin. I am surely troubled by the last time that
NERC appeared before us; and, you know, at best, the answers
that were given were confusing. At worst, it was highly
misleading. I am glad to hear that you have worked to clarify
some of that today, but I hope never to hear that kind of
testimony or lead us to be misled ever in the future.
I mentioned in my opening statement that I have real doubts
about NERC's ability to regulate these new reliability
standards. From where I sit, I would say that NERC seems either
not to take their authority as the electric reliability office
seriously--for instance, NERC was responsible for following up
with industry to see how they implemented the Aurora
mitigation, but, according to FERC, the NERC survey was much
too limited in scope to make a real determination about how far
the industry had come in mitigating the Aurora vulnerability.
It is hard to understand why the regulatory body responsible
for the security and the safety of the bulk power system would
take such a laissez faire approach to this critical issue.
Chairman Kelliher, based on your findings, do you think
that NERC will, in fact, be able to carry out its duty as the
ERO and how are you working with them to fix the shortcomings?
Mr. Sergel, given this first halfhearted effort to oversee
the industry, how does your organization plan on fulfilling its
enforcement authority role and what specific lessons have you
learned and what structures are in place to address my
concerns?
Chairman Kelliher, please.
Mr. Kelliher. I think NERC is doing a job under a law that
is very imperfect, particularly with regard to this kind of
threat. As I already said, there are two means to address to
defend the grid against cyber attacks. The only quick means is
an advisory. It is purely voluntary. I think a voluntary by its
nature is always going to produce inconsistent results.
That is what led Congress to legislate on reliability 2\1/
2\ years ago. The industry historically has relied on voluntary
compliance with unenforceable standards. Congress ultimately
concluded--correctly, in my judgment--that that was
fundamentally flawed, that you needed to have mandatory
standards.
Now, we can develop mandatory standards on cybersecurity,
but it takes time. It can take years. That is the dilemma that
we have right now. We have a threat just by whose nature
requires quick action and mandatory action, mandatory
compliance with that action. We actually have to choose one or
the other right now. We can choose quick action, where
compliance is purely voluntary, or we can go down the path of
mandatory standards that can take years.
I think NERC realized there was a need for quick action in
response to Aurora and took the only course that it had
available, an advisory. The results haven't been consistent,
but I actually think that is predictable and perhaps
unavoidable.
Mr. Sergel. Mr. Chairman, again, the responsibility for
being clear is entirely ours, and our failure to do that is
noted, and we intend to do better going forward.
With respect to lessons learned, talk about two things. The
first is that we have put in a formal system of advising the
industry. That system has been approved by the Commission. It
comes in levels. We have--the first level is simply an
advisory. Then we have a second level, which is a
recommendation; and the third is an essential action. Each of
those we notify the Commission in advance and coordinate with
them before we issue it. We would coordinate with any other
appropriate government agency if it was on a topic relative to
them.
We now have in place the list of 1,800 users, owners and
operators to communicate with. They understand the system. They
have been notified in advance. They understand what an advisory
is and a recommendation. We didn't have that before. So we are
in a much better position going forward to communicate better
and be more effective within the limited authority that we
have. It is limited.
Then, with respect to enforcement of these standards, we
now have a standard. We will enforce it. We have been very
active in the last few months. We have put out a guidance on
what it means, the fact that it is effective beginning in July
for those for whom the voluntary standards were in place, and
they understood those. We will enforce the standard up to the
parameters included in the law.
Mr. Langevin. In our last hearing, we discussed the
standards problem. NIST standards which apply to Federal
entities are much more robust than the NERC standards which
apply to private entities. Unfortunately, publicly and
privately owned infrastructure on the grid are so
interconnected weak security controls in one utility can pose a
harm to another utility that shares a connection.
My question is, Mr. McCollum, you are required to implement
NIST, yet you are connected to folks who implement NERC; and
are you concerned that a weakness on a NERC-compliant
infrastructure can affect your network?
Mr. McCollum. We are moving aggressively to be in
compliance and remain in compliance or exceed the requirements
of all of those standards in terms of the security of our
critical infrastructure and networks. This is going to be an
increasing challenge going forward. As you noted in your
opening testimony, the deployment of technology has resulted in
increased interconnectivity; and we are moving aggressively to
stay ahead of this issue and skate to where the puck is going
to be in the future in terms of implementing sufficient
controls.
I believe that through a defense-in-depth posture and
compliance with all of these controls and protocols which meet
or exceed these standards, we will provide adequate protection
for all of the critical infrastructure.
Mr. Langevin. Finally, Mr. Sergel, could you please tell us
what steps are being taken to transition the NERC reliability
standards toward NIST and why should the scope of CIP-002 be
changed to include all equipment that is electronically
connected?
Mr. Sergel. Let me deal with the second part of that first,
which is that standard two requires that the users, owners and
operators identify the critical assets that they have on the
system and then those become the ones that are then accountable
to the remaining standards.
The identification of critical assets is a requirement, and
I want to begin with that. It is often you hear that, well,
that means someone can just not identify any and they are in
compliance. Doesn't meet my test of what it means to identify
your critical assets. So the identification of critical assets
is one in which we expect the list to be inclusive of all those
that are, in fact, critical.
So going to the question of, well, why then didn't we just
start with all assets, I think the answer to that is there are
so many in the industry at this point in time, the challenge is
so great, that we believe that the priority is to start with
those that are critical, identify those, and move forward. We
will continuously evaluate the standard and continuously
evaluate whether more is required; and if it is, we will do
that. But it is a matter of prioritization.
Mr. Langevin. But specifically to NIST, do you see that as
the--do you recognize that, as most of us do, as being the gold
standard of standards and are you--tell me about your
transition efforts.
Mr. Sergel. Well, we have a process in place--it has been
done already--to review and propose new standards that will
incorporate any of the NIST requirements that are appropriate
to real-time power system operating systems.
We have been directed to do that by the Commission, and we
will do that. We have begun that work. We, in fact, have
accelerated it by a year. So what you are looking for is now
part of our work plan, but, beyond that, it has been directed
to us that we it be done by the Commission.
Mr. Langevin. Thank you, and as far as I am concerned the
sooner the better.
With that, at this time I would yield to the ranking
member, but he has asked me to yield to the gentlelady from
Florida, first, Ms. Ginny Brown-Waite, which I will do at this
time, to pose some questions.
Ms. Brown-Waite. Thank you very much, Mr. Chairman.
Actually, I am following up on the questions of the
chairman.
There was an article in today's Washington Post. Now
everyone up here knows and we regularly tell our constituents
don't believe everything you read in the paper, but let me just
kind of summarize something that should be of concern.
It says, security experts, however, contend that existing
NERC standards contain loopholes and don't adequately protect
critical power systems. For example, telecommunication
equipment is excluded, even though there are documented cases
of computer worms shutting off service from control systems to
substations.
It goes on to say, you have got a whole bunch of utilities
who claim they have no critical cyber assets, which means they
don't have to do anything else to secure their current cyber
system.
The person also went on to say, we have some very big
electric utilities who claim they just have 10 cyber assets,
when most companies have more critical relays like that in a
single substation.
Mr. Sergel, if you could respond to that, and perhaps Mr.
Kelliher.
Mr. Sergel. That is a specific statement on the issue I
just mentioned before, and it is an interpretation of the
standard which requires that they identify their critical
assets, and it implies that someone can merely say I don't have
any and now they don't have to comply with the standards, all
of the other standards.
As of July 1, for the most important parts of that industry
and all those that have been subject to the voluntary standards
in the past, they will have a requirement to have identified
the critical assets. I can assure you if they have critical
assets and put down zero that we will begin to evaluate whether
they are in compliance with that standard, and their audit
would identify that.
So I believe that there is not a weakness in these
standards with respect to the notion that the identification of
critical assets simply leaves it to them to decide they don't
have any. I just disagree with that.
The second issue is that we at NERC by statute are limited
to the bulk power system. Now to the extent that those
telecommunications providers are part of the protection
mechanisms that they are relying on to meet the standards, then
we have some reach for those. But I can't understand why
someone would say you have not gone far enough. There are
telecommunications issues you should direct.
Those are beyond the scope of the law that we have. We are
restricted to the users, owners and operators of the bulk power
system. We do not have any jurisdiction to require a
telecommunications company to make a change, for example, or to
set a standard for them.
Ms. Brown-Waite. Mr. Kelliher, do you think that
telecommunications should be included?
Mr. Kelliher. The SCADA systems are so interrelated that it
is hard to draw a line if you were to--FERC only has the
authority that the Congress gave us. We have the authority to
oversee reliability of the bulk power system. That is a defined
term, and it typically does not extend into the telecom
industry.
I do, though, with respect to the issue about critical
facilities, I think the industry is doing a faithful job
implementing and respecting reliability standards. I don't see
widespread noncompliance in that kind of approach. But we don't
necessarily accept the representation of a company. If the
company were to come in and say we have zero critical
facilities, we don't have to accept that representation.
Ms. Brown-Waite. I have one more question for Mr. Sergel;
and that is, could you share with the committee some examples
of when an expedited process has been used in an urgent
situation?
Mr. Sergel. Probably the best example is the original
establishment of the cyber standards. Now this is before my
time as the CEO, so it is difficult for me to answer that. But
the cyber ones were put in under a process of moving, of
expediting the schedule.
We have three levels of speed at which we operate. The
first is the normal speed, and typically in that category we
are operating in an environment in which all of the information
is well-known, and it is a significant process of bringing
together the technical talent to evaluate the standards so
there is no horizons of time. We can expedite it, which means
it is important enough that we ought to do it more quickly; and
there are rules, procedure that do that. Then we can also
establish it in an emergency period of time. So we can speed up
the time that we can create a standard.
But what we can't do is we can't speed it up and not have
it be a public process; and that is why the chairman is here
asking for additional authority, I believe, more fundamentally
than the time. Because we can act quickly, but we can't act
quickly and confidentially. Everything we do has to be posted
in an opportunity for notice and evaluation and comment. We can
ask people to do that very quickly, right, but we can't do that
quickly and confidentially simultaneously, and therefore I see
that as a significant reason why they are asking for additional
authority.
Ms. Brown-Waite. Thank you very much; and, with that, I
yield back the balance of my time.
Mr. Langevin. I thank the gentlelady for her very
insightful questions. I think that it raises a lot of questions
in my mind and poses some challenges, given the fact of how
interrelated SCADA--it really is and how do we, in fact, tie in
the regulation of telecom in this area. It is going to pose a
challenge for us.
With that, the Chair now recognizes the gentleman from
Texas, Mr. Green, for 5 minutes.
Mr. Green. Thank you, Mr. Chairman.
Mr. Wilshusen, is that correct?
Mr. Wilshusen. Yes.
Mr. Green. You mentioned a total, I believe, of 92
recommendations that were made to TVA, is that correct?
Mr. Wilshusen. That's correct.
Mr. Green. And the representative from TVA, I think you
responded to 19 of the 92.
Mr. Wilshusen. Yes. The difference is because we are
issuing two reports to them, one that is publicly available,
and that report has 19 recommendations in it. We are also
issuing a limited official-use-only report which contains more
details and specifics about the individual findings that we
identified, and in that report we are making 73
recommendations.
Mr. Green. My assumption is that you believe that all 92 of
them should be addressed.
Mr. Wilshusen. Yes, sir.
Mr. Green. Okay, so let me go over to Mr. McCollum. Is that
correct, sir?
Mr. McCollum. That's correct.
Mr. Green. Mr. McCollum, if there is something about this
that you can't say publicly, I understand, but you addressed
only 19 of the 92?
Mr. McCollum. In my opening statement, I referred to the 19
recommendations in the public report. However, we have
responded to and are addressing or have already addressed all
of the recommendations in both of those reports that were just
referred to.
Mr. Green. Could you kindly define ``addressed'', please?
``Addressed'' could simply mean that you looked at it and you
decided that it was something that you will get around to, or
it could mean that you completely corrected the situation.
There are 73 recommendations concerning specific information
security weaknesses that should be corrected. So how do you
address them?
Mr. McCollum. We have an action plan in place. A number of
those recommendation actions have already been closed on those
to complete the actions necessary to remediate those
recommendations. We have others in progress that will be
complete shortly. By the end of this fiscal year and calendar
year, we will have completed a majority of the actions.
Some of the recommendations address items in the standards
that relate to longer-term assessments and documentation and
other actions that will take a little longer. But we have an
action plan in place to address and remediate all of those
recommendations on a priority basis, as noted in some of the
earlier testimony in responses to questions. It is important
that we address those most important----
Mr. Green. If I may, let me go back to Mr. Wilshusen.
Sir, have you had an opportunity to see the proposed action
plan?
Mr. Wilshusen. Not the specific action plans. We have
received responses from TVA that they made in response to our
report, which is included in our reports. But as a matter of
GAO policies and, of course, the government auditing standards
we will go back later to verify the corrective actions that TVA
has taken or will take on these actions on our recommendations.
Mr. Green. Are these actions that should be taken with the
next 10 years?
Mr. Wilshusen. I would hope so. I think many of them should
be taken immediately. As Mr. McCollum indicated some already
have been taken and they have been completed actions on some of
them already.
Mr. Green. Should they all be finished within the next 10
years?
Mr. Wilshusen. I would think so, yes.
Mr. Green. Should they be finished within the next 5 years?
Within the next 3 years?
Mr. Wilshusen. Probably so, the recommendations we are
making.
Mr. Green. Will you, in continuing your audit, provide
information as to how the action plan is progressing? Is that
information that we can receive?
Mr. Wilshusen. We can certainly work with your staff to
provide that information, yes.
Mr. Green. Those things that should be done immediately, I
assume will make them priority No. 1. I assume that they are
priority No. 1 for a reason. Are you finding that any of these
priority No. 1 items are not being addressed what we will call
timely?
Mr. Wilshusen. At this point, we have not gone back to
verify the actions taken by TVA on our recommendations. So I
can't comment as to whether or not the actions have been
completed. All we have at this point are assertions by TVA that
they have taken action or plan to take actions.
Mr. Green. I have about 8 seconds. How long do you think it
will take you to verify what has been indicated has been done
currently?
Mr. Wilshusen. It would not take us too long if we were to
go out and conduct our tests.
Mr. Green. It is not too long, 2 weeks; or is it 2 months?
Mr. Wilshusen. It could be 2 weeks to do the work, but we
would not necessarily be able to go out in 2 weeks to do that,
given our other workload and activities and commitments that we
have.
Mr. Green. Thank you.
I yield back, Mr. Chairman.
Mr. Langevin. I thank the gentleman.
The chairman now recognizes the ranking member, the
gentleman from Texas, Mr. McCaul, for 5 minutes.
Mr. McCaul. I thank the chairman.
This is really kind of a follow-up hearing to the hearing
that we had after the story of Aurora broke on national
television on CNN. We had had closed briefings on that, and it
raised kind of a specter of what could happen if we had a cyber
attack on our power grids. It revealed a major vulnerability in
this Nation to our security, the idea that the power grid could
be shut down by the use of intrusions through computer
networks. Of course, everything is tied to computer networks.
This raises a broader specter.
I think the Commission that Chairman Langevin and I formed
to study this issue hopefully will provide good recommendations
for the next administration.
But I have just a couple of questions. One is, in your
dealings--and this is directed to Mr. Kelliher and Mr. Sergel.
In your dealings with the private sector, how serious do you
think they are really taking this threat, which so many of us
in Congress believe is a serious threat to the not only
economic viability but security of this Nation?
Mr. Kelliher. I think they are taking it very seriously.
Mr. McCaul. Mr. Sergel.
Mr. Sergel. I believe they are taking it very seriously as
well.
I do believe that understanding the complexity of the
threat, you described one part of it, which is that somebody
could attack the grid itself. I think many of us are
increasingly concerned that the attack would come from the grid
to a private facility, to a critical facility, which is an
entirely different issue. I think for that reason, as we
wrestle with the complexity of it, we often find that folks
say, well, I have taken care of it, and then learn that they
haven't. It is not they aren't working at it hard and taking it
seriously, but, rather, it is because, as we dig deeper, we
find more. It doesn't make our concern go away. It makes our
concern go up.
Mr. McCaul. I appreciate that response.
Mr. Sergel, do you believe that you have enough authority
to adequately address this issue in the private sector?
Mr. Sergel. So, at NERC, we are a not-for-profit. We are
designated by the Federal Energy Regulatory Commission as the
ERO, subject to our application and subject to their continuing
jurisdiction. As such, we are limited to the bulk power system.
We do not have authority over distribution, so there is a
limitation there. We do not have authority over
telecommunications. There is a limitation there. The structure
of the law and because we are not a government agency suggests
that we do everything publicly. We post for comment, and we
evaluate it and then take action. So all of those are
limitations on what we can do.
What I can assure you is that we have a great challenge in
this area, but we will continue to do everything we can within
the jurisdiction that we do have, and that includes within the
standards. We will push as far as we can to get as much done on
the telecommunications side within the standard, and we will
push as hard as we can to get as much of the bulk power system
covered and protected.
Mr. McCaul. Thank you.
My understanding is you have jurisdiction over the bulk
power system, as you said.
With respect to telecom and oil and gas and banking and all
of the other sectors in the private sector, that would be
within the jurisdiction of the Department of Homeland Security?
Mr. Kelliher. And other agencies, yes.
Mr. McCaul. And other agencies.
What is your relationship with DHS? Do you have a good
working relationship with them?
Mr. Kelliher. Yes, it is a very cooperative relationship,
in part because we realize we are not in the best position to
assess the nature of a cyber threat, particularly if it is a
threat posed by a foreign country or an organized group. That
is really the province of the national security or intelligence
agency. So we think they are the ones best suited to identify
the threat, and we might be the best suited to actually act
upon that threat.
Mr. McCaul. So they are in the best position to deal with
the nature of this type of threat.
Is the coordination positive and productive?
Mr. Kelliher. Yes, it has been very positive and
productive. I am tempted to say ``seamless,'' but there are
probably always some seams between government agencies.
Mr. McCaul. Mr. Sergel, do you have a response?
Mr. Sergel. We also have a very positive relationship with
both the Department of Homeland Services and the Department of
Energy.
Mr. McCaul. Okay.
I yield back. Thank you.
Mr. Langevin. I thank the ranking member.
I wanted to clarify something. You know, we are talking
about not the entire telecommunications industry; we are
talking about telecommunications equipment on the bulk power
system. I think that that is an important distinction to be
made, and there has got to be a mechanism to allow for some
oversight or regulation in that area with respect to FERC and
NERC, and we are going to explore those avenues with you. If it
requires involvement of other committees and jurisdictions, we
will involve them as well.
With that, Ms. Jackson Lee, a member of the full committee,
has asked to participate in the hearing. I ask unanimous
consent that she be allowed to participate.
Hearing none, Ms. Jackson Lee will be recognized for
questions after the members of the subcommittee are recognized.
We welcome you here to the participation, and we appreciate
the work that you are doing on your subcommittee with respect
to infrastructure protection.
With that, the Chair now recognizes the gentleman from New
Jersey for 5 minutes, Mr. Pascrell.
Mr. Pascrell. Thank you, Mr. Chairman.
Mr. Chairman, this is an issue of compliance. We had the
same pushback from the chemical industry when we were deciding
in a bipartisan fashion how we can protect the chemical
industry and, hence, protect our families because that is what
it comes down to, homeland security. Knowing what the mission
of this committee--this subcommittee--is, its having been
formed from two previous committees, our mission is pretty
clear, Mr. Chairman, as far as I am concerned. We are not the
enemy, this committee. The enemy are those who wish to attack
America and to put our families in jeopardy.
So, Mr. Sergel, I have some questions to ask of you. I have
to clarify something for the record. We are trying to figure
out who has mitigated the Aurora vulnerability. We have gone
through all of the nomenclature--CIP, NERC, FERC, BPS, ERO. I
am frustrated because your organization has provided this
committee with so many conflicting and inaccurate statements
that I have to question how seriously NERC takes its
responsibility as the electric liability organization.
I was here on October 17 last year when your colleague
David Whiteley testified before the subcommittee. The Chairman
asked Mr. Whiteley to describe the survey that your
organization claimed to have sent to the owners and the
operators of the grid. Mr. Whiteley stated for the record that
approximately 75 percent of the transmission grid either took
or was in the process of implementing mitigation. When asked if
these were anecdotal numbers, Mr. Whiteley told us that these
were hard numbers. After the hearing, we asked you to provide
us a copy of the survey.
Mr. Chairman, this is exhibit A, electric sector
transmission owner-operators, generation owner-operators.
This is what you submitted on October 19, 2007.
I want to enter this into the record with your permission,
Mr. Chairman.
Mr. Langevin. Without objection.
[The information referred to follows:]
Mr. Pascrell. That is what we got back. So I have a copy of
this survey, and it is dated October 19. It was 2 days, I
think, after the hearing. So you misled this committee back in
October by claiming that you sent a survey out and received
hard numbers back. That did not happen.
Unfortunately, this was not the last time, Mr. Chairman,
that this committee was misled.
When we got a copy of the survey back, we asked the staff
how you could have hard numbers at the hearing when you had not
sent the survey out yet. I think that is a pretty reasonable
question. The story changed. We were told that NERC received
detailed information about the industry's efforts during a
meeting in St. Louis back in September. Having been misled
once, the committee requested information from all of the
participants at that meeting. This is exhibit B.
Exhibit B, which I have in my hand, Mr. Chairman, has
almost 20 response letters from the attendees at that meeting.
Each one of them was asked to provide a narrative of the
conversation they had with NERC, the North American Energy
Reliability Corporation, the organization which has the job of
endorsing the regulations. None of them claim to have discussed
these mitigation efforts with you. None of them.
Mr. Chairman, I ask unanimous consent to enter these
letters into the record as well as exhibit B.
Mr. Langevin. Without objection.
[The information referred to follows:]
Mr. Pascrell. So let us get to the bottom of this.
I want you, the CEO of NERC, to clarify for all of us what
you have been doing since June 21 of last year when the initial
advisory went out. As you explain to us what happened, please
tell us in answers to these two following questions:
Why did your company provide false and misleading
information to this committee?
Second, if you did not send a survey out until 2 days after
the hearing and you did not talk to the folks at the St. Louis
meeting, which you claimed, where did you get the numbers that
you cited in October?
Mr. Sergel. As I indicated to the subcommittee, first, the
responsibility for being clear is entirely ours, and we have
failed to do that. That is clear. Going forward, we will do
better. Let me take you back----
Mr. Pascrell. Excuse me. This is not a question of doing
better. This is not a question of doing better. This is a
question of telling the truth as to the best of your knowledge
like any human being on the face of this Earth. We are all
fallible. Only God is perfect. But you and your company two
times told us fibs. Why?
Mr. Sergel. In June, we sent out the initial advisory.
Between that time and the committee hearing, we conducted a
series of oral interviews. I will have to get to the bottom of
whether they took place in St. Louis or in other locations, but
I do believe that those interviews took place, but I will have
to go back and look at that.
Mr. Pascrell. Mr. Sergel, you are the electrical
reliability organization for this country; is that not correct?
Mr. Sergel. Yes, sir.
Mr. Pascrell. In listening to your answer, how is this
committee supposed to believe that you are taking the job
seriously? FERC had to do a new survey because they thought
yours was inadequate. Do you think NERC is really ready to
carry out such duties?
We are talking about, Mr. Chairman, life and death. We are
not talking about misplaced adverbs here. We are talking about
serious business as we were talking about serious business when
we looked at the chemical industry.
We want to be friends. We want to be partners with the
electrical companies, with the utilities. We want to be
partners, but you are not going to sit there and waste my time
and tell me that we are doing the job that we were directed to
do. At the same time, you have no real answer for these two
documents that you sent us. What do you think we are, a bunch
of jerks?
Now, let me tell you. I am from Paterson, New Jersey. It is
not the most perfect place in the world, but the one thing we
do not tolerate on the streets is people telling fibs. If I ask
you a question and you do not know what the answer is, fine.
That is fair. It is very fair.
Mr. Chairman, considering what we already know about these
misleading statements, I think we should look into the
processes for holding the--let me get it straight, Mr.
Chairman--the North American Energy Reliability Corporation.
``Slowly I turn.'' Do you remember that one? ``Slowly I turn.''
I would like to look into the process for holding this
organization in contempt of this committee. I am serious about
this, Mr. Chairman. I was just as serious when we went after
truth in the chemical industry, and we should be just as
serious today because the American people deserve no less.
Would you agree with me or disagree with me?
Mr. Langevin. Well, I certainly agree with the gentleman. I
share his anger and frustration over not getting accurate
information. I will certainly look into the gentleman's request
and recommendation about contempt.
As I have made clear, I do not ever want to hear that kind
of testimony, that unclear or misleading testimony, before this
subcommittee or the full committee ever, ever again. When
someone does not know an answer, the proper response is, ``We
will take that for the record,'' or ``I am unsure,'' but not to
just, it seems, make up information or to present unclear
information as fact.
I heard the gentleman, Mr. Sergel, in his testimony today
say that they will do better in the future. They have
acknowledged the mistake. Again, it does not change the fact
that there was unclear information that was presented as fact
to this committee. I will certainly look into the gentleman's
request.
With that, the Chair now recognizes the gentleman from
North Carolina, Mr. Etheridge, for 5 minutes.
Mr. Etheridge. Thank you, Mr. Chairman. Thank you for
holding this hearing today.
Let me ask a question. All of us remember in 2003 when the
blackout covered much of northeastern United States. We have
been fortunate we have not had that in recent years, but that
blackout was from causes that are still not totally clear but
which seem to come to rest on the failure of three transmission
lines in Cleveland. We have pretty much come to that
realization.
My question is, with utility uses and prices likely to hit
record peaks this year, we really cannot afford disruptions
that could create additional burdens on business, and all of us
know what happens if we lose power with all of the major
computer systems that we have. The interconnected nature of our
electric grid means that a single point of failure can cause a
cascading event that can be devastating, and that certainly
shows us what could happen.
So my question is, how likely is it that a single cyber
attack on a controlled system could cause a massive disruption
of our electrical grid?
Let me go ahead and get a couple more questions in the loop
so we will have it all out there.
Second, how would you compare the cyber risks to the
electrical sector to other risks?
Finally, are public utilities--this has been touched on a
little bit earlier. Are public utilities and private companies
taking this threat as seriously as they should before people
start paying attention to it? People always pay attention to it
when they have a problem. Then once the problem is over with,
they figure it is solved, and they move on to something else.
It is in whatever order you want to take those three. How
likely is it to cause a massive disruption? No. 2, compare the
risks to the electrical sector to other risks. Then public-
private utilities in working together.
Mr. Kelliher. There is some risk that you could be faced
with a large regional blackout like we saw in August 2003.
August 2003 really was, at least by one count, one of eight
large regional blackouts. It was the one that affected the most
number of people, but there were blackouts in the summer of
2002 and in the summer of 1996, and they really stretched back
to the 1960's. So that is always a risk.
Now, the cyber risk, I am not sure we could qualitatively
say the consequence of a cyber attack would be greater than
other reliability risks, but the nature of it is very
different. It is a national security risk, a national security
threat. So the origin of threat is fundamentally different from
the other reliability threats. That is why we think at FERC we
need to have a different statutory tool, a different way to
guard against that specific risk. We do think current law is
adequate to address other reliability threats and that it
should not be amended. Section 215 of the Federal Power Act, I
do not think, should be amended.
Mr. Etheridge. Let me interrupt you for a moment, please,
since you have raised that issue.
What additional authority does FERC need in order to ensure
that the utilities and private companies do, in fact, take it
seriously and deal with it? That is what this committee is
really all about.
Mr. Kelliher. On your third point, I do think utilities are
and utilities and others are taking reliability standards
seriously. They are making great efforts to comply, and they
are positively trying to comply. We do have enforcement
authorities. FERC has penalty authority that Congress gave us
just 2\1/2\ years ago, and that allows us to impose penalties
of up to $1 million a day, and that applies to reliability
violations as well as others. So I think utilities are taking
it seriously currently, but we do think we need legislative
authority that, I think, would operate, roughly, in the
following way:
If a national security or intelligence agency identifies a
threat, only then could FERC act to establish on its own an
interim reliability standard to guard against that national
security threat such as a cyber threat. That interim standard
would stay in place until the threat disappears or until a
permanent standard is developed under the 215 process. I view
that as a limited grant because I do not think it would be used
very often, and I think it recognizes that 215 is adequate to
deal with other reliability threats.
Mr. Etheridge. Mr. Sergel and Mr. McCollum, how do you
think the industry should react to FERC's having this
additional authority?
Mr. Sergel. I think there is a gap in what we can do. We
are limited to doing things in public. We are not confidential.
We are limited to the bulk power system. We cannot act quickly
enough in those kinds of circumstances, so there is clearly a
gap. I see the Commission as kind of our authorizing agency,
and therefore, they would be the appropriate ones, at least
with respect to NERC, to have that authority despite the fact
that we have a very good relationship with Homeland Security
and with the Department of Energy. We have a tighter
relationship with the FERC. I think there is a last part of
this, which is public policy, which is not kind of a NERC
responsibility to comment on.
Mr. Etheridge. So I take that as supportive.
Mr. Sergel. On the two things that we are responsible for,
on those two.
Quickly, to your other question on kind of measuring this
risk to the others in the system, they are just fundamentally
different. You know, we spend a lot of time on trees and on
maintenance and on training and on all the kinds of things that
are essential to a reliable bulk power system. It is not the
same as someone attacking you, and as a consequence, it is just
fundamentally different, fundamentally different.
Mr. McCollum. TVA is committed to the security of our
networks and control systems, and we have moved aggressively to
increase the security and to make those controls even more
robust, and we certainly will continue to move ahead to
strengthen our defense in depth on our networks to meet or to
exceed the requirements of any standards or authority that
Congress chooses to put in place.
Mr. Etheridge. So that is an affirmative?
Mr. McCollum. Yes.
Mr. Etheridge. Okay. Thank you.
Thank you, Mr. Chairman. I yield back.
Mr. Langevin. I thank the gentleman.
The Chair now recognizes the gentlelady from Texas, Ms.
Jackson Lee, for 5 minutes.
Ms. Jackson Lee. Mr. Chairman, thank you so very much for
the courtesies of this committee and to the ranking member, Mr.
McCaul, my colleague from Texas.
I think it is important that our respective committees--the
Transportation Security and Critical Infrastructure--continue
to cross-pollinate on these very crucial issues, and I thank
you for your leadership.
I think it is important to note whether or not the
witnesses respectively feel that they are on an ongoing hot
seat. We are very much aware that intelligence, classified and
nonclassified, suggest that terrorists will not act the same,
that they will not be redundant, that they will not be
repetitive. To a certain extent, they will look for new and
creative ways.
We are well aware of the complete shock and collapse of our
intelligence communications that generated the horrific tragedy
of
9/11. As one of the early members of the Select Committee on
Homeland Security, I am reminded of the constant chatter about
what we did not do and how we did not follow up with the
linkage of our intelligence to know the potential of these 19
terrorists who did this dastardly act.
So we find ourselves here in 2008 with a new, enormous and
growing loophole that has been evidenced by the GAO, which
found that the Tennessee Valley Authority had significant
problems with cybersecurity, with the Aurora loophole. The idea
of this hearing--I hope and view as very important--is to not
put your finger in the dam for what could be a horrific and
devastating act equaling and surpassing the tragic earthquake
that just occurred in China and the horrible cyclone in Burma.
This is about life and death. This is about Americans' dying. I
know that there is a thought that this may be about the idea of
lights going out, but it may also be about the ability to, in
essence, shut down a system that would impact the very lifeline
of this country.
So I am disturbed as well as a nonmember of this committee
to hear of the misrepresentation of materials, and it causes me
to think, Mr. Chairman, as we did in chemical security--and I
think we worked together on that legislation. There were
components of both of our committees as we moved on the
chemical security legislation out of the Transportation
Security committee and out of this committee. That legislation
is imperative. I know that there are initiatives that we have
spoken about, but let me raise this question as I raise it for
all of the witnesses.
To the Tennessee Valley Authority: Can you tell me why--and
forgive me if you have answered it, and I would love a brief
answer--you are called the Nation's largest power company, and
we are quite proud of the technology of the Tennessee Valley
Authority. In fact, we are probably, on the floor of the House,
discussing this question of hydropower. Can you tell me why it
seems that you have not fully implemented security measures
that would operate against a catastrophic event for your
entity?
For the other witnesses, speak to the point of legislation
with punitive measures--criminal and fines--as an incentive in
what is, I think, a very challenging question.
Mr. McCollum, I believe, for the Tennessee Valley
Authority, where are you in the implementation of these
security measures?
Mr. McCollum. We have been taking and are taking aggressive
action to maintain the security of our networks and
infrastructure and to improve those on an ongoing basis. We, in
fact, had many actions underway in areas associated with the
recommendations of the GAO report prior to the GAO's audit, and
we are continuing to move ahead and to take actions on those
areas. So we are committed to strengthening on an ongoing basis
in a continuous improvement fashion and in a prioritized
fashion all of the defense in-depth approach and infrastructure
to guard against cybersecurity threats.
Ms. Jackson Lee. Mr. McCollum, do you think you are going
fast enough?
Mr. McCollum. Yes, I do. I believe that we have taken much
action on this issue, and we continue to move ahead.
As Chairman Kelliher noted in his testimony, in order to
aggressively move against these threats, we have to understand
the threats, understand the issues involved and the mitigation
strategies and move quickly to implement those, and that is
what I believe we are doing. The GAO report is beneficial to us
in terms of clarifying some of the issues around compliance and
mitigation strategies, and that is very helpful to us.
Ms. Jackson Lee. Let me thank you because I have the three
witnesses, and I must move quickly, but I do not think, from my
perspective, we are moving fast enough and you are moving fast
enough.
I know that the representative from the GAO probably does
not want to comment--and if you do, please do, but let me just
say, do you see the landscape of utilities moving fast enough,
from your perspective?
Mr. Wilshusen. Overall, I cannot really comment on that
because the scope of our work dealt with just TVA.
Ms. Jackson Lee. Do you see them moving fast enough?
Mr. Wilshusen. We have received the responses to our
recommendations and the actions that we recommend they do. We
have not yet verified their assertions. What we have at this
point are assertions.
Ms. Jackson Lee. And you will provide us a report on that.
Was the response timely?
Mr. Wilshusen. Yes.
Ms. Jackson Lee. Thank you.
Mr. Sergel, in light of the unfortunate misstatements that
have occurred from the reliability corporation, do we need--
well, I am not going to ask whether you need it.
Wouldn't it be helpful to have incentives that were fairly
strong, that were fairly harsh about compliance?
Mr. Sergel. We have standards that we have put in place,
and we will enforce them up to the $1 million a day per
violation, so we will do that.
I think what is clear to me--and it was clear before, but
it is even more so after today--is that, as to the particular
nature of our organization, setting standards in an industry
public way is not adequate to deal with the issues that have
been presented by this committee.
Ms. Jackson Lee. Maybe your enforcement is not adequate as
well.
Mr. Sergel. Our enforcement of what we have will be as it
is limited by the law. Today, it is limited by the law.
Ms. Jackson Lee. Maybe the law needs to be expanded.
I will conclude, Mr. Chairman, by asking the FERC chairman,
and will thank him for his presence here.
Give me a little bit more detail on how you work closely
with the Department of Homeland Security. Are you all in
periodic dialog? Is there oversight that is done in a combined
method? What is your assessment of the grid from your
regulatory perspective?
Would you see the value, if you will--and I guess I am
asking a regulator because you are civil, if you will--for
criminal penalties for those who violate and/or for those who
are not adhering to the urgency of this matter?
Mr. Kelliher. We coordinate with the national security
agencies, including Homeland Security, the Department of
Defense, the Department of Energy, and others, really, more in
the area that is the focus of the hearing today--in the area of
cybersecurity--than on other reliability issues.
I just want to reassure you that we can impose penalties
for violations of cyber standards as well as other reliability
standards. We can impose civil penalties up to $1 million per
day per violation. I do not think maximum penalties will be the
norm for all reliability violations. I think we would tend to
reserve them for the most serious violations. We also want to
know not just whether a violation occurred but why it occurred.
We are really in the first stages.
Reliability standards became enforceable on June 18 of last
year. So we have had less than 1 year of experience with
mandatory reliability standards. I think we are developing
enforcement programs at the regional level. We have a process
that is slow, but it is designed to be slow, frankly, by
Congress in the 215 process. That is what we think does not
work so well with this cyber threat, and there is the
possibility of criminal penalties as well for violations of the
Federal Power Act.
Ms. Jackson Lee. Mr. Chairman, I will yield back with a
commitment to review with you these standards that you have
brought to our attention. I, frankly, believe that there is the
framework of reliability, and then there is the framework of
piercing the system by those who would desire to do us harm.
That, I guess, is the question I raise, which is whether or not
the system is secure enough to rebuff that and whether or not
we need to expand the concept of reliability to the concept of
rebuffing and intrusion through cybersecurity and otherwise and
whether or not the penalties, whether by the Federal Power Act,
are criminal.
I am not trying to lasso you in, but I am trying to
emphasize the urgency and the importance of such as to whether
or not they are sufficient, as to whether or not the industry
is listening, as to whether or not the industry is moving fast
enough, and as to whether or not the industry realizes that
their challenge is alongside of reliability. It is life and
death for Americans who are impacted by your industry.
With that, Mr. Chairman, I yield back. Thank you, and thank
you to the ranking member for your courtesies.
Mr. Langevin. I thank the gentlelady for her questions and
for her input.
Clearly, this is an area where, I believe, stronger
authorities, more comprehensive authorities are needed. I
certainly look forward to working with you and with the members
of this subcommittee and with the members of the full committee
to see how we strengthen those authorities. It is not just
enough to have some standards in place; they have to be the
right standards. If they are not broad enough or if they are
not strong enough--and that is what I believe is the case
here--then they do not go far enough. That is why I have
stronger confidence in this, in these standards, and the sooner
we can move in that direction in adopting those standards, the
better off we will be.
These are the kinds of things that keep me up at night, our
electric grid, which we all rely on for our way of life, for
our national security. Our families depend on the reliability
of the electric grid. When we identify a vulnerability such as
has been identified in this data threat and particularly in the
Aurora threat, it is something that we need to move
aggressively to close. This is, again, one of those things of
many that this subcommittee deals with that keeps me up at
night, and I am not going to be satisfied until we have
aggressively moved to close the vulnerability and that our
electric grid is 100 percent secure.
With that, the vote has been called. I want to thank the
members for their questions. I want to thank the witnesses for
their testimony.
Members of the subcommittee may have additional questions
that they would ask of the witnesses, and we would ask that you
respond expeditiously in writing.
Hearing no further business, the subcommittee stands
adjourned.
[Whereupon, at 3:40 p.m., the subcommittee was adjourned.]
A P P E N D I X
----------
Questions From Chairman James R. Langevin for Honorable Joseph T.
Kelliher, Chairman, Federal Energy Regulatory Commission (FERC)
Question 1. One of our witnesses from the October panel, Joe Weiss,
recently commented in the press that ``some generation managers
considered NERC Reliability Standard compliance a `game' to remove
assets from the standards definition without addressing the reliability
threat.'' For instance, according to Weiss, one manager of a coal-fired
power plant was specifically charged by his upper management to ensure
that his plant was not considered a critical cyber asset. Another plant
manager whose plant had black start capability was subject to CIP-002;
however, the company considered it more cost-effective to simply remove
its black start capability. They determined that the cost of NERC
Reliability Standard compliance, and possible fines, was too much for
their facilities. Is there concern on your part that this is becoming a
compliance game? What are you preparing to do to address this problem?
Answer. In Order No. 706, issued in January 2008, the Commission
directed two actions to ensure proper identification of critical
assets. First, we believe that a lack of uniformity in the performance
of risk-based assessments of critical assets could make it difficult to
compare companies and to check for adequate critical asset lists.
Therefore, the Commission directed NERC to develop guidance on the
development of a risk-based assessment methodology to identify critical
assets. NERC has that effort underway and is expected to post a draft
for comments in the fourth quarter of 2008. Second, we directed NERC to
revise the reliability standards to require an oversight mechanism for
an entity with a wide-area perspective to examine the critical asset
lists in order to ensure critical assets were listed. Upon identifying
a missing critical asset, the oversight entity could require that the
missing asset be added to the list and protected according to the CIP
reliability standards. This review procedure will be developed through
NERC's reliability standards development process and is expected to be
filed for the Commission's review in the second quarter of 2011. Also,
the Commission intends to spot check critical asset lists and their
determinations by actively participating in some compliance audits of
the CIP reliability standards. This is the most direct way for the
Commission to not only examine the specific details for the company
under consideration, but also to assess the effectiveness of the
critical asset identification requirement.
Question 2. Are you familiar with the Aurora mitigation technology
that is manufactured by Cooper Industries? Do you know how many
companies have purchased this technology? In conversations with
industry owners and operators, have you gathered an understanding of
how many people have purchased this technology?
Answer. The Commission is aware of the Cooper technology. Based
upon discussions with industry members, Commission staff believes that
the technology is not being widely used by industry. Their use is
limited by industry's need to test the reliability and operation of the
devices, as well as by supply issues.
Question 3. Under the Cyber Initiative, all Federal agencies will
use a service provided by the US-CERT known as EINSTEIN to monitor
their connections to the Internet. EINSTEIN is an automated process for
collecting, correlating, analyzing, and sharing computer security
information across the Federal civilian government. As a Federal
entity, the TVA already deploys several EINSTEIN boxes on its networks
to monitor traffic. TVA also reports computer incidents to the US-CERT.
In the future, do you envision a role for the Federal Government to
provide a similar monitoring service for the private sector? To what
extent has FERC had these conversations with NERC, DHS, or other
intelligence agencies?
Answer. To date, FERC has not been involved with the EINSTEIN
project and has not had discussions with NERC, DHS, other intelligence
agencies, or TVA about the subject. I note, however, that during the
course of the Commission's rulemaking regarding proposed Critical
Infrastructure Protection reliability standards and during our attempts
to assess industry's mitigation steps regarding the Aurora
vulnerability, industry has expressed very strong concerns about
sharing sensitive security-related information with Federal entities,
since the latter have limited legal authority to ensure that
information is disclosed only to those who have a need to know the
information.
Question 4. Please elaborate on your request for new authority.
Would this require legislation? What intelligence agencies would be
involved? What is the next step for requesting or establishing this
authority?
Answer. I believe new legislation is needed to protect the grid
against cyber security threats, given the nature of these threats. I
anticipate that the Commission would coordinate with other Federal
agencies, as appropriate, such as the Department of Energy, the
Department of Defense, the Department of Homeland Security, the Central
Intelligence Agency, the National Security Agency, or the Federal
Bureau of Investigation. We have been engaging in discussions with
affected entities to get input as we consider how to craft legislation
appropriately. We have received constructive input from these
discussions and are incorporating that input into draft legislative
text.
Question 5. In your opinion, do America's intelligence agencies
have adequate situational awareness throughout the public and private
sector to provide FERC with the appropriate intelligence that would
allow FERC to immediately issue temporary mandatory reliability
standards to prevent or mitigate a cyber attack launched against the
Nation's bulk power system? If not, what could be done to better
improve this situational awareness?
Answer. I believe that the intelligence agencies are best suited to
assess adversaries, their capabilities, and their intents. The
Commission has the knowledge and experience necessary to issue orders
addressing needed reliability measures or actions. To the extent
feasible, the Commission plans to consult with the relevant entities in
order to gain their input regarding the design and implementation of
any measures or actions needed to prevent or mitigate a cyber attack
launched against the Nation's bulk power system.
Question 6. An article in the National Journal dated May 31, 2008
suggests that the Chinese government may have been responsible for the
2003 New York City blackout and the 2008 Florida Power and Light
blackout. Please provide a detailed narrative explaining your position
on this article. Please also explain whether such an attack could
potentially be carried out. Please explain the cause of the 2008
Florida Power and Light blackout.
Answer. The Commission took part in the investigation and
subsequent report on the 2003 blackout. In summary, the Security
Working Group analysis provided no evidence that a malicious cyber
attack was a direct or indirect cause of the August 14, 2003, power
outage.\1\ The Commission has no reason to think otherwise today. As
for the 2008 Florida blackout, on March 19, 2008, the Commission
initiated a non-public, formal investigation into whether any mandatory
Federal reliability standards were violated during the Florida
blackout. Because the investigation is ongoing and the information
gained during the investigation is still non-public, I cannot discuss
any causes of the Florida blackout at this time.
---------------------------------------------------------------------------
\1\ U.S.-Canada Power System Outage Task Force, Final Report on the
August 14, 2003 Blackout in the United States and Canada: Causes and
Recommendations, April 2004, page 132.
---------------------------------------------------------------------------
Question 7. A common criticism of the NERC standards is that there
is not an adequate definition of critical cyber assets for CIP-002,
and, as a result, many companies are struggling to determine exactly
what is/is not covered under the reliability standards. To what extent
has FERC engaged industry in this discussion? What is your guidance to
the industry?
Answer. NERC's Glossary of Terms Used in Reliability Standards
defines critical cyber assets as cyber assets ``essential to the
reliable operation'' of critical assets. Cyber assets are defined as
``[p]rogrammable electronic devices and communication networks
including hardware, software, and data.'' As a result of these
definitions, the identification of critical cyber assets involves a
two-step process. First, the critical assets must be identified. Then,
the associated critical cyber assets must also be identified. Most of
the discussions between industry and the Commission on this process
have focused on identifying critical assets. See the response to
question one above. Regarding the second step, most of the discussions
on that aspect of the process have been about the ``data'' component.
That discussion culminated in the Commission's direction in Order No.
706 that NERC consider the designation of various types of data as a
critical asset or a critical cyber asset. We also directed NERC to
develop guidance on the steps that would be required to apply the CIP
reliability standards to such data and to consider whether this also
covers the computer systems that produce the data. The Commission also
expects that best practices used to identify critical cyber assets will
be identified during the process of auditing responsible entities for
compliance with CIP-002. At that point, the Commission will consider
whether additional guidance is called for, or whether the reliability
standard needs to be modified.
Question 8. Does FERC have the authority to require companies
operating on the bulk power system to undergo ``red team'' efforts
involving remote or onsite attackers? Does FERC have any, operational
authority to run ``red team'' exercises against these companies?
Answer. The CIP reliability standards require responsible entities
to conduct vulnerability tests, but not actual ``red team'' efforts. In
theory, a reliability standard could require a ``red team'' exercise,
but there would be associated reliability risks with conducting such
exercises. The Commission does not have authority to run such ``red
team'' exercises against industry companies.
Question 9. The Nuclear Regulatory Commission documents all unusual
cyber-related events, in contrast to non-nuclear electric facilities
that do not make these events public. Does FERC intend to create a
catalogue of events on grid facilities to allow for the monitoring of
this kind of activity? If not, why not?
Answer. The Commission has no plans at this time to create a public
catalog of cyber security incidents. The CIP reliability standards do
require responsible entities to report cyber security incidents to the
electricity sector information sharing and analysis center (operated by
the North American Electric Reliability Corporation), but that
information is not all public. At this point, the Commission is more
focused on having incidents reported rather than making them public. In
fact, the Commission's Order No. 672 indicated a preference for keeping
proceedings involving a cybersecurity incident nonpublic because it is
possible that bulk-power system security and reliability would be
further jeopardized by the public dissemination of information
involving incidents that compromise the cybersecurity of a specific
user, owner or operator of the bulk-power system. If such information
is made public, careful attention will be necessary to be sure
sensitive information that could jeopardize the reliability of the
bulk-power system is not disclosed.
Questions From Chairman James R. Langevin to Richard Sergel, President
and CEO, North American Electric Reliability Corporation
June 23, 2008
Question 1. For the record, please provide a detailed timeline that
explains the steps that you took to distribute the industry survey
regarding the Aurora mitigation. Please note the discrepancies that
were discussed during the hearing, and provide explanations for those
discrepancies.
Answer. The responsibility to provide consistent, coordinated,
clear and effective communication lies entirely with NERC. We apologize
for the confusing, unclear, and misleading communications with the
subcommittee. A detailed timeline that describes the steps taken by
NERC to distribute the October 19, 2007 written survey to the industry
regarding the implementation of the mitigation measures contained in
the June 21, 2007 ES-ISAC Advisory is attached (Attachment 1).
The discrepancies discussed during the May 21 hearing appear to us
to fall into two categories: (1) the timing and means by which NERC
assessed the industry's compliance with the June 21 Advisory, and (2)
the representation to the subcommittee of NERC's assessments of
compliance with the Advisory. These are discussed below, beginning with
the October 17 hearing.
A. The October 17, 2007 testimony of David Whiteley regarding NERC's
assessment of the industry's implementation of the mitigation
measures identified in the Advisory.
At the October 17 hearing, Chairman Langevin told Mr. Whiteley that
staff of the Department of Homeland Security had described to committee
staff ``a survey that NERC sent out in August 2007 to determine how
many owners and operators were implementing the mitigation efforts''
identified in the June 21 Advisory. Mr. Langevin then asked Mr.
Whiteley to ``describe the survey and tell us its findings.''
Mr. Whiteley failed to inform Mr. Langevin that the Chairman's
understanding was incorrect and that NERC had NOT sent out a formal
written survey of the industry's compliance with the Advisory in August
2007. As depicted on the timeline, NERC had prepared a formal survey
that was approved by NERC senior management. NERC received FERC's
assent to distribute that survey in August. However, the survey had not
been sent out at the time of the hearing. By not advising the
subcommittee that no written survey had been sent out, Mr. Whiteley's
testimony was inaccurate and misleading.
Mr. Whiteley responded as though the survey had been distributed,
stating that it was a follow-up to the ``guidance that was issued
earlier in the spring,'' and that ``we've determined that
approximately, at this point, 75 percent of the transmission grid has
either taken appropriate actions or is in the process of implementing
those actions.'' This discussion of ``75 percent of the transmission
grid'' appears to have been misunderstood by the subcommittee. Mr.
Whiteley's use of the 75 percent number referred to the portion of the
transmission grid owned by companies that had been contacted by NERC
staff and for which Mr. Whiteley believed that mitigation measures had
been implemented, based on information provided to Mr. Whiteley by
NERC's Manager, Situation Awareness and Infrastructure Security (NERC
SAIS Manager). Mr. Whiteley did not intend by use of this number, as
the subcommittee may reasonably have assumed, to state that 75 percent
of all transmission users, owners or operators had implemented
mitigation measures.
In response to a further question from Chairman Langevin at the
October 17 hearing, Mr. Whiteley stated that NERC had ``hard data''
showing the extent of the industry's compliance with the June 21
Advisory.\1\ The basis for Mr. Whiteley's response to Chairman
Langevin's inquiry was an e-mail sent to NERC management on October 10
by the NERC SAIS Manager that reported on the status of implementation
of the short- and mid-term mitigation measures recommended in the
Advisory. That e-mail stated that the ``data'' gathered from voluntary
submissions and from discussions with NERC Critical Infrastructure
Protection Committee (CIPC) contacts at ``the large transmission owners
and operators'' ``covers at least 75 percent of the BPS in the U.S.''
---------------------------------------------------------------------------
\1\ ``Mr. Langevin: . . . 75 percent you say is in compliance, . .
. this is not just anecdotal? You are talking about this as hard
answers to the issue of having implemented all the mitigation
strategies?'' ``Mr. Whiteley: This is a follow-up with most of the
large utilities in the country and many of the intermediate-size
utilities as well. And it is hard evidence or hard data that we've
asked, and they've explained what's been done. So we have direct
information.''
---------------------------------------------------------------------------
Because the only information NERC had at the time of the October 17
hearing was the information the NERC SAIS Manager obtained in a few
voluntary written submissions and his informal discussions with company
representatives, it was inaccurate to characterize the information as
``hard'' or ``direct.'' A complete answer would have described what had
been done, i.e., to tell the subcommittee that NERC staff conducted
discussions with industry representatives that collectively own or
operate 75 percent of the total transmission grid. The response also
should have said that NERC had not verified the reports received in
these discussions regarding the status of mitigation measures.
B. Responses to follow-up inquiries from the committee.
In responding to follow-up questions for the record of the October
17 hearing on November 20, NERC submitted a copy of the formal written
survey sent out on October 19 to assess the status of compliance with
the mitigation measures recommended in the Advisory. On December 5,
NERC provided a narrative overview of the implementation of the
mitigation measures recommended in the June 21 Advisory, along with the
survey responses themselves (with the identity of the specific
respondents concealed), in response to a further request of the
subcommittee.\2\
---------------------------------------------------------------------------
\2\ This further request was made on November 16 in a letter from
Chairman Langevin to Mr. Sergel. The narrative overview document was
entitled ``Assessment of the Implementation of the Mitigation Measures
recommended in the June 21, 2007 ES-ISAC Advisory.''
---------------------------------------------------------------------------
The narrative overview provided on December 5 stated that:
The ES-ISAC conducted both an initial assessment of the
implementation of the recommended measures and a formal,
written survey to measure industry progress in completing the
mitigation measures. The initial assessment was conducted in
September and early October and was performed by gathering
information with sector entities in phone conversations and at
meetings. No formalized survey instrument was used. In
addition, a small number of entities submitted unsolicited
reports on their progress to the ES-ISAC.
Based on the information gathered in the discussions, the submitted
reports, and expert knowledge of the ownership and geography of
the bulk power system, the ES-ISAC concluded that approximately
75 percent of the transmission grid had received mitigation
measures or such measures were in progress.
Following this submission to the subcommittee, the subcommittee
counsel contacted NERC on December 6 to schedule a face-to-face meeting
and request further detail regarding the September/October ``initial
assessment'' of the industry compliance with the mitigation measures in
the June 21 Advisory. On December 20, NERC representatives met with
subcommittee staff and provided a letter in response to the staff's
request for ``a list of phone conversations and meetings that these
individuals had with sector entities. Please include dates and any
information/notes prepared.''
The December 20 letter, submitted by NERC's SAIS Manager, stated
that ``[a]fter issuance of the Advisory on June 21, 2007, I
communicated regularly with industry representatives to explain and
discuss the Advisory. Beginning in September and October, my
communication efforts shifted from explanation of the Advisory to
determination of how well the Advisory was being implemented. A
reconstructed list of the discussions, to the best of my recollection,
is listed below.'' Contacts made at the September 27-28 CIPC meeting in
St. Louis were listed in this letter, as well as phone calls with other
individuals conducted in September and October. The letter also
provided copies of the three voluntary written submissions that NERC
received. In addition to this written response, NERC representatives
and subcommittee staff discussed the nature of the information
gathering process prior to the distribution of the written survey on
October 19.
Committee Chairman Thompson and subcommittee Chairman Langevin sent
letters on January 8, 2008 to attendees at the September 27-28 CIPC
meeting identified in the December 20 letter. The letter from Messrs.
Thompson and Langevin said:
``The committee recently requested and received documentation from
the North American Electric Reliability Corporation (NERC) to
help determine the extent of the sector's efforts to implement
the security recommendations contained in the June 21, 2007
NERC Advisory. According to these documents, NERC staff met
with you individually at the NERC Critical Infrastructure
Protection Committee meeting, held from September 27-28 in St.
Louis, Missouri, to discuss your company's implementation
efforts.
``During this meeting with NERC staff, you answered questions
regarding the clarity of the recommendations contained in the
NERC Advisory, the extent of your company's efforts to mitigate
the Aurora vulnerability, and existence of your company's
cybersecurity training program for employees. Please provide
the committee with a detailed narrative explaining this
discussion with NERC.''
The January 8 letter reveals the subcommittee's view that the
discussions at the CIPC meeting in St. Louis were more formal than they
were. As NERC's December 5 submission indicated, no formal survey was
conducted. Although NERC's December 5 narrative overview indicated that
information was gathered from sector entities ``in phone conversations
and at meetings,'' NERC understands from subcommittee counsel that the
subcommittee's January 8 inquiry was sent only to the CIPC meeting
attendees.
The responses provided to the subcommittee's January 8 letter do
not support Mr. Whiteley's reference to ``hard data'' showing
compliance by 75 percent of the transmission grid in his response to
Chairman Langevin at the October hearing. However, several of the
responses sent to the subcommittee do describe company interactions
with NERC staff at the CIPC meeting and discussions of company
compliance with the recommended mitigation measures:
One company stated the Aurora advisory was discussed during
the general CIPC meeting in September, not in an individual
meeting. It stated that at the initiation of NERC there was
discussion by many attendees in the open forum about the
response of their companies to the NERC advisory; details of
the response to the advisory were not provided at the meeting
due to the sensitive nature of the information on mitigation of
the vulnerability.
Another company submitted detailed affidavits, which
reported, among other things, that the company representative
recalled talking to NERC staff about the Aurora vulnerability
and the company's efforts to address it. The company
representative also told NERC that the company had taken action
to eliminate the Aurora vulnerability.
Another company stated it told NERC it had addressed the
vulnerability.
A few companies reported that there was some (limited)
discussion of the Aurora vulnerability at the CIPC meeting.
Taken together, the responses the subcommittee received to its
January 8 letter would not lead to a conclusion that there was ``hard
data'' for David Whiteley to rely on at the October 17 hearing.
C. Other missed opportunities to correct the record and clarify the
status of the implementation of the mitigation measures
contained in the Advisory.
October 15.--NERC received a request from subcommittee staff
for information about the August 2007 survey. NERC failed to
advise the staff that a survey was NOT sent in August 2007.
November 20.--NERC submitted responses to the subcommittee's
follow-up questions from the October 17 hearing. The first
question asked, ``What were the results of the August 2007 NERC
survey sent to owners and operators regarding the status of the
sector's implementation of the Aurora mitigation efforts,'' and
also requested a copy of the survey and a narrative of the
results. The NERC response enclosed a copy of the October 19
survey and a narrative of the results, as requested, but failed
to advise the subcommittee that a formal written survey was NOT
sent out in August. By letter dated December 12, 2007 and
delivered on December 14, NERC clarified its responses for the
record of the October 17 hearing and stated definitively that
no survey was sent in August 2007.
December 5.--NERC's response to Chairman Langevin's November
16 letter requesting a copy of the survey and its results
failed to clarify that the reference to 75 percent of the grid
having mitigation measures completed or in progress was a
reference to the percentage of the physical transmission grid,
by ownership, not to the percentage of users, owners or
operators that had completed mitigation measures.
In summary, NERC did not rigorously survey the implementation of
the mitigation measures it had recommended and did not accurately
communicate with the subcommittee about what NERC had done. As I
testified on May 21, 2008, NERC now has a structure in place--with a
formal FERC-approved, three-level system of alerts; a comprehensive
list of owners, operators and users of the bulk power system; and
mandatory reporting regarding implementation of recommendations and
essential actions--to assure that a rigorous and timely analysis of the
implementation of recommended measures in future Advisories will be
conducted.
Question 2. Publicly and privately owned infrastructures on the
grid are so interconnected, weak security controls in one utility can
pose harm to another utility that shares a connection. Yet publicly and
privately owned infrastructures are subject to different security
standards. According to a NIST-sponsored review published in March
2007, an organization conforming to the baseline set of security
controls in PS 800-53 will also comply with the management, operational
and technical security requirements of the NERC Reliability Standards,
though the converse may not be true. For instance, the NERC Reliability
Standards allow for the exclusions of telecommunications and
distribution equipment from the ``critical assets'' list. Under the SP
800-53 requirements, however, there is no similar exclusion. This
committee--along with NIST and GAO--has suggested that the NERC
standards should be more aligned with the NIST 800-53 standards that
apply to federally owned infrastructure. What steps are being taken to
transition the NERC Reliability Standards toward NIST? Why shouldn't
the scope of CIP-002 be changed to include ``all equipment that is
electronically connected''?
Answer. In Order 706, FERC directed NERC to consult with Federal
agencies on the effectiveness of NIST standards and implementation
issues, and using the standards development process, address any
provisions that would better protect the bulk power system.
In response to this direction, a Standard Authorization Request
(SAR) was initiated and posted for a 30-day public comment period from
March 20 to April 19, 2008. A SAR drafting team comprised of well
regarded subject matter experts from a broad range of industry segments
was assembled to review and respond to the comments received during
that initial SAR posting. This team includes a representative from a
Federal agency that must comply with both NERC and NIST standards.
Presently, the drafting team is considering all comments on the
SAR, including those submitted by NIST. The drafting team must prepare
written responses to all comments. The end work product will be a SAR
that specifies the work scope for the Standard Drafting Team that will
ultimately develop the revisions to the standards.
NERC management has formally invited NIST to continue its
participation in the standards drafting effort as a formal team member.
NIST has agreed.
Regarding the scope of CIP-002, it does not include ``all equipment
that is electronically connected'' for jurisdictional as well as
reliability reasons.
Section 215 of the Federal Power Act limits the ERO's
jurisdiction to bulk power system users, owners, and operators.
By definition, the bulk power system excludes distribution
assets. Similarly, telecommunications common carriers are not
users, owners or operators of the bulk power system.
Section 215 of the Federal Power Act also defines a
reliability standard as a requirement that provides for the
reliable operation of the bulk power system. The process
required in CIP-002 determines which assets of the bulk power
system provide for its reliable operations. Those assets are
identified through an analysis of the impact that the loss of
an asset poses to reliable operation of the bulk power system.
Those assets found to provide for the reliable operation of the
bulk power system are critical assets.
The CIP-002--CIP-009 standards drafting team intentionally
focused requirements on cyber assets that were: (1) Essential
to the reliable operation of critical assets; (2) whose impact
to reliable operation of the bulk power system, if compromised,
could be significant; and, (3) had a great number of attack
vectors. Cyber assets meeting these criteria are critical cyber
assets.
An electronic perimeter, as required in CIP-005, shields critical
cyber assets from potential adverse impacts from external
sources such as non-critical cyber assets.
NERC's CIP standards represent the first set of reliability
standards requiring a uniform level of cyber security for all users,
owners, and operators of the bulk power system. These standards
intentionally focus the efforts of those users, owners, and operators
on assets most critical to the reliable operation of the bulk power
system. The CIP standards expanded the scope of assets beyond those
addressed in Urgent Action 1200. The process of focusing resources on
those assets with the greatest impact on reliable operations, and
protecting them as required in the remaining standards (specifically
including the provision of electronic security perimeters), mitigates
the need for protection of every other asset that is connected to them.
Subsequent cyber security standards may include other assets within the
scope of the ERO's jurisdiction.
Question 3. In April 2000, Vitek Boden, an employee at an
Australian firm that installed SCADA radio-controlled sewage equipment,
packed his car with stolen radio equipment attached to a computer. He
drove around issuing radio commands to the sewage equipment that
resulted in sewage spills. This is the first widely known example of
someone maliciously breaking into a control system. Please explain how
a company demonstrating auditable compliance with the NERC CIP
standards prevents this incident from occurring, when they are not
required to follow any mandatory reliability standards for
telecommunications equipment.
Answer. If the referenced event had occurred on the North American
bulk power system, it would represent a breach of the ``electronic
security perimeter,'' which is required by present NERC Cyber Security
standard CIP-005-1. In this particular instance, communications from an
invalid source were allowed to be transmitted to, received by, and
acted upon by the control equipment for the sewage system. As required
by the NERC standards, the system control equipment would be contained
within an electronic security perimeter. Any communications across that
perimeter (wireless or not) would have to pass through the protections
of the electronic security perimeter prior to being sent to the system
control equipment.
The electronic security perimeter is implemented using the concept
of ``mutual distrust'', as described in the requirements of CIP-005,
which includes requirements to implement a ``deny by default'' stance,
and requires ``specific access permissions be specified''. It also
requires ``only ports and services required for operations and
monitoring'' be allowed to cross the perimeter. In the Boden example,
had CIP-005 been implemented, the perimeter controls would have been
implemented to disallow control actions from being delivered from
addresses not associated with the control center, and would therefore
be flagged as suspicious, requiring investigation and reporting of said
suspicious activities following the requirements of NERC Standard CIP-
008-1.
In this particular case, if the entity in the Boden example
followed the change management procedures required by CIP-003-1, the
equipment disposal procedures required by CIP-007-1, and the access
control review and revocation requirements required by CIP-003-1, CIP-
004-1, CIP-005-1, CIP-006-1, and CIP-007-1, the stolen equipment used
by Mr. Boden would have been removed from the valid access list, and
the illicit communications would have been disallowed at the perimeter.
Question 4. You stated during the hearing that NERC ``will push as
far as we can to get as much done on the telecommunications side within
the standard.'' However, as it currently stands, the NERC reliability
standard excludes telecommunications and non-routable protocols and
does not explicitly address wireless systems in the definition of
``critical cyber assets.'' What steps is NERC taking to ensure that
telecommunications equipment is covered in the next revision of the
standard?
Answer. Section 215 of the Federal Power Act limits the scope of
FERC's and the ERO's jurisdiction to only the bulk power system. FERC
and NERC standards cannot enforce requirements upon telecommunications
providers and their equipment.
However, a Standard Authorization Request (SAR) drafting team is
currently considering alternative approaches to address how data and
information are received through wired and wireless telecommunications
equipment owned or operated by owners, operators and users of the bulk
power system. Specifically, it is discussing the merits of protecting
the data being transmitted, rather than protecting the transmission
media. This change in philosophy from the initial set of standards will
extend the protections to wireless data transmission, will lessen the
need for requirements for protecting the transmission media itself, and
allow the standards to be enforced regardless of whether the
telecommunications system is owned by the jurisdictional entity or a
telecommunications provider.
The draft SAR was posted for a 30-day public comment period from
March 20 to April 19, 2008. The SAR drafting team met on May 5-6, 2008
to consider comments and refine the SAR. Further refinement took place
during a conference call and WebEx on May 30, 2008. Continued
refinement is scheduled to take place on a July 2, 2008 conference call
and WebEx. The end work product will be a SAR that specifies the work
scope for the Standard Drafting Team that will ultimately develop the
revisions to the standards.
Question 5. Are you familiar with the Aurora mitigation technology
that is manufactured by Cooper Industries? Do you know how many
companies have purchased this technology?
Answer. Yes, NERC is aware of this technology. The U.S. Department
of Homeland Security informed NERC of the development of the device.
NERC subsequently invited Richard Hein of Cooper Industries to
participate in a panel discussion during the December 13, 2007 Critical
Infrastructure Protection Committee meeting in Orlando, Florida, where
he presented information about the rotating equipment isolation device
(REID). NERC has supplied Cooper Industries' Web site information to
Ameren Corporation who had asked for assistance to learn more about the
device.
According to Cooper Industries, only the Department of Defense, to
date, has purchased REID devices. The number of devices sold was not
disclosed to NERC staff.
Question 6. Under the Cyber Initiative, all Federal agencies
(including, for instance, the TVA) will use a service provided by the
US-CERT known as EINSTEIN to monitor their connections to the Internet.
EINSTEIN is an automated process for collecting, correlating,
analyzing, and sharing computer security information across the Federal
civilian government. As a Federal entity, the TVA already deploys
several EINSTEIN boxes on its networks to monitor traffic.
TVA also reports computer incidents to the US-CERT. In the future,
do you envision a role for the Federal Government to provide a similar
monitoring service for the private sector? To what extent has NERC had
conversations with either DHS or FERC about this issue? To what extent
have you discussed this possibility privately with your members?
Answer. Neither the Department of Homeland Security, of which US-
CERT is a part, nor FERC has briefed NERC management or ES-ISAC staff
about a service named EINSTEIN. NERC has not consulted subject matter
experts within industry on the subject of EINSTEIN or the potential
benefits this government-run monitoring service could provide for the
electricity sector.
NERC is aware that in 2004 DHS sponsored a project involving
several ISO/RTOs to evaluate intrusion detection system (IDS) tools and
analytical capabilities. The 1-year pilot, called the Cyber Log
Analysis Project, was conducted by EWA-Canada and Dartmouth College.
The results suggested that aggregation of IDS log data could be useful
in improving the incident and warning (I&W) capability in the
electricity sector and recommended that DHS continue developing more
sophisticated and automated shared information analysis techniques and
develop open source software for this purpose.
NERC's Reliability Standard CIP-005 requires monitoring of network
traffic across the electronic security perimeter to provide early
warning of possible unauthorized access attempts. As such, NERC would
be open to exploring with FERC and DHS the benefits of implementing an
EINSTEIN-like project within the electricity sector.
Question 7. To what extent has NERC involved either NIST or the ISA
in the standards-setting process? Will you be inviting individuals from
both entities to participate in the new CIP-706 Standard Drafting Team
(SDT)?
Answer. ISA became involved with the standards development
effort in 2005 through review and comment on draft three of
CIP-002--CIP-009.
The co-chair of ISA SP99 is a named, formal member of the drafting
team charged with scoping the future development of the CIP
standards pursuant to FERC Order 706. NERC management has
formally invited the co-chair to continue ISA SP99's
involvement in the CIP standards drafting process. He has
agreed to participate.
NIST's participation in NERC's standards-setting process
began this year. NIST has contributed comments to the current
scoping effort, which must be considered and responded to in
accordance with the NERC process. Those comments are attached
(Attachment 2).
NERC management has formally requested NIST's continued involvement
in the CIP standards drafting process. NIST has agreed to
participate.
Federal agencies required to follow both NIST guidance and
NERC Standards have been involved in the Cyber Security
standards setting process since 2003.
An employee of Western Area Power Administration was a
named, formal member of the CIP-002--CIP-009 standards
drafting team.
Bonneville Power Administration, Tennessee Valley
Authority, United States Bureau of Reclamation, and the
Western Area Power Administration have participated in the
review and comment process for CIP-002--CIP-009. The United
States Army Corps of Engineers provided comments, as well.
An employee of the U.S. Bureau of Reclamation is a named,
formal member of the drafting team charged with scoping the
future development of the CIP standards pursuant to FERC
Order 706. NERC management has formally requested the
Bureau's continued participation in the CIP standards
drafting process.
ATTACHMENT 1.--TIMELINE OF STEPS TAKEN BY NERC (AS THE ES-ISAC) TO
DISTRIBUTE THE INDUSTRY SURVEY OF THE AURORA MITIGATION
------------------------------------------------------------------------
2007
------------------------------------------------------------------------
June 7......................... FERC issues order on NERC compliance
filing that states, ``the Commission
believes that NERC should issue an
operations and equipment alert
requiring specific actions only under
NERC's remedial power.''
June 21........................ NERC acting as the ES-ISAC issues
advisory regarding the Aurora
Demonstration Test following
discussions with Department of Energy
and Department of Homeland Security.
At the direction of DOE and DHS, the
advisory is designated ``For Official
Use Only''. The Advisory states the ES-
ISAC would be distributing a follow-up
survey to measure the progress made in
the electricity sector in implementing
the recommended mitigation measures.
July 9......................... NERC files request for clarification or
rehearing of FERC's June 7 order
stating that NERC should issue an
operations and equipment alert
requiring specific actions only under
NERC's remedial power.
July 30........................ NERC General Counsel (GC) prepares
draft cover letter for survey.
August 1....................... Discussions between NERC staff and FERC
staff regarding the survey.
NERC agrees to coordinate with FERC
before sending out the survey.
August 3....................... NERC GC sends a copy of a draft follow-
up survey and cover letter to FERC (to
the Director, Office of Electric
Reliability (Director), and to the
then-General Counsel) via e-mail. NERC
proposes that the ES-ISAC would
distribute the survey and the cover
letter, to be signed by the NERC
President and CEO. The draft survey
proposes a response date of August 24;
NERC informs FERC of its desire to
send the survey out ``by the middle of
next week'' [week of August 6].
The e-mail implemented NERC's
commitment made August 1 to coordinate
with FERC before sending out the
follow-up survey. NERC solicited
FERC's suggestions on the draft letter
and the survey. NERC also asked FERC
staff ``if you have had further
thoughts about whether the ES-ISAC
should send this letter.''
Sometime after August 3 and The Director of the FERC Office of
before August 15. Electric Reliability and the NERC CEO
discussed the draft ES-ISAC cover
letter and survey.
August 16...................... NERC's GC sends an e-mail to FERC's GC
following up on the Director-CEO
discussion.
August 21...................... NERC's GC and FERC's GC discuss FERC
staff concerns with the proposed cover
letter and survey.
August 21...................... E-mail from NERC GC to FERC GC
acknowledges the Director's concerns
regarding ``the penultimate paragraph
on the instruction sheet to the
survey'' dealing with the
circumstances under which the ES-ISAC
would make information available about
the status of the mitigation efforts
to government agencies.
August 21...................... NERC GC and FERC GC further discuss the
survey/cover letter, and NERC GC
recommends a modification to the
confidentiality language in the survey
instructions. According to an e-mail
from the NERC GC to the CEO, the FERC
GC said that the ``edit solved the
immediate problem and we can get the
letter out.'' NERC's GC said that he
would work with NERC's Manager,
Situation Awareness and Infrastructure
Security (SAIS Manager) on getting the
survey out.
August 21...................... NERC's GC transmits the change in
language worked out with the FERC GC
to the NERC SAIS Manager via e-mail.
The NERC GC advises the NERC SAIS
Manager that the FERC GC ``said that
with the change, we can send out the
letter.'' The NERC GC also advises
that the proposed August 24 due date
for the survey responses would need to
be extended by a reasonable amount to
account for the delay in distribution
of the survey.
August 21...................... CEO comments on wording of the
instructions to the survey in an e-
mail to the NERC SAIS Manager, and
approves the letter.
August 21...................... The NERC GC advises the NERC SAIS
Manager that ``I'm leaving this with
you, unless you have further
questions, or something else comes
up.''
September...................... NERC SAIS Manager has informal, off the
record telephone conversations with
representatives of major bulk power
system entities regarding the
implementation of the Advisory. No
notes of the discussions were taken.
September 20................... FERC issues order granting NERC's
request for clarification that NERC
has the authority to issue industry
alerts in a broader set of
circumstances than just violations of
reliability standards. FERC requires
NERC to change the term ``Required
Actions'' to something else and
imposes requirements that NERC must
give notice to the Commission prior to
issuing alerts and must report back to
the Commission on the status of
implementing the recommendations of
the alerts.
September 27-28................ CIPC meeting in St. Louis. One agenda
item during the meeting was a
discussion of the June 21 advisory:
October 8...................... NERC SAIS Manager has an informal, off
the record discussion of the
implementation of the Advisory on a
call with ERCOT. No notes of the
discussion were taken.
October........................ NERC SAIS Manager has informal, off the
record telephone conversations with
representatives of major bulk power
system entities regarding the
implementation of the Advisory. No
notes of the discussions were taken.
October 10..................... NERC SAIS Manager sends an e-mail to
NERC's CEO, NERC's General Counsel,
NERC's Executive Vice President, and
NERC's Chief Information Officer
setting forth the status of the
mitigation measures contained in the
Advisory. The e-mail reported:
``Mitigation Status
Measure
----------------------------------------
Short Term--0 to 60
days:
1. Plan for taking 100%
immediate, drastic
action.
2.1.1 Security for 100%
remote access.
2.1.2 Personnel 85%
Security.
2.1.3 Sensitive 90%
Information.
2.1.4 Seal Off open 99%
ports.
Mid Term--60 to 180
days:
3.1 Authentication. 65%
3.2 Situation 30%
Awareness.
Long Term--180 days
plus:
4.1 Remote Monitor.
4.2 Vendors........
4.2.1 Separate
Functionality.
4.2.2 Seal Breaker
Close Function.
4.2.3 Secure
Firmware and
Software.
5. Superfast
Protective Device.
6. Shadow Device...
7. Government
Intelligence
Agencies.
8. CIP 002-009''
The NERC SAIS Manager further advises
in the e-mail that this information
``has been gathered from voluntary
submission by 10 entities (all major
players) and from discussions with
CIPC contacts at the large
transmission owners and operators. The
data is current as of last week. The
data covers at least 75 percent of the
BPS in the U.S.''
The NERC SAIS Manager's e-mail also
states that no written survey had yet
been sent out to assess the
implementation of the measures in the
Advisory:
``I have not sent out the formal survey
for the following reasons:
1. I do not have a good list to send
this kind of survey to.
2. NERC received a great deal of
criticism for how the initial advisory
was distributed to and who it was not
distributed to. Many key entities did
not receive it until several weeks
afterward.
3. I have been working with the
[Regional Reliability Entities] and
the trade associations to compile a
list but it has not been successful.
At the last CIPC meeting in late
September, a consensus was reached to
use the NERC Compliance Registry and I
have been pursuing that option.''
October 17..................... Subcommittee Hearing.
October 19..................... NERC, acting as the ES-ISAC, sends the
Follow-up Survey to ``Electric Sector
Transmission Owner/Operators and
Generation Owner/Operators,'' asking
for a response by November 2. The
survey was sent to ``major entities in
the bulk power system.''
The cover letter accompanying the
survey recommends that a ``coordinated
effort be made at each entity to
compile a single response rather than
multiple responses from the same
entity.'' The letter stated further
that ``The ES-ISAC is working with the
regional reliability organizations,
EEI, and the [Canadian Electricity
Association] to deliver the survey
instrument to the right people in the
right entities.''
October 23..................... FERC requests approval from the Office
of Management and Budget to send its
own survey requesting detailed
information on the status of
implementation of the Aurora
mitigation measures by owners,
operators, and users of the bulk power
system.
NOTE: NERC did not learn of this
request by FERC until December 5.
November 2..................... Deadline for responses to the October
19 survey. A total of 133 entities
respond to the survey.
November 8..................... NERC circulates questions for the
record submitted to David Whiteley as
follow-up to the October 17 hearing.
NERC GC designates responsibility for
the draft responses among NERC staff.
November 9..................... Chairman Kelliher replies to an October
17 letter from the subcommittee. The
letter notes that FERC had directed
NERC to report to FERC on the level of
compliance with future Advisories
within 30 days. The letter discusses
FERC's views of NERC's October 19
survey: ``[a]lthough we support NERC
taking the actions it believes are
necessary as ES-ISAC, we do not
believe NERC's survey provides
sufficient information for the
Commission to determine whether
further action is appropriate. For
example, it does not provide
information on what facilities are the
subject of the mitigation plans, what
steps to mitigate the cyber
vulnerability are being taken, when
those steps are planned to be taken,
and, if certain actions are not being
taken, why not. Nor is it clear to the
Commission that NERC has received a
complete set of responses to its data
request.'' FERC therefore planned to
conduct its own survey that would
``supplement NERC's action and provide
more detailed information on which to
assess the status of mitigation
efforts.''
NOTE: NERC did not become aware of this
letter until December 5.
November 15.................... NERC staff sends an e-mail reporting on
a call on November 14 from
subcommittee counsel requesting a face-
to-face meeting and ``a copy of all
the docs we sent re: esisac cyber recs
and surveys.''
November 16.................... Chairman Langevin sends a letter to
NERC CEO requesting the results from
the ES-ISAC Advisory follow-up survey,
with the response due by November 28.
NOTE: The letter did not come to light
until the CEO returned to the office
on November 28. NERC subsequently
received an extension of the deadline
to submit the materials until December
5.
November 20.................... NERC submits responses to questions for
the record to the subcommittee.
December 5..................... NERC GC prepares draft cover letter for
a second survey of the status of
industry efforts to implement the
Aurora mitigation measures, in
preparation for coordination with FERC
staff.
December 5..................... While edits were still being made on
the NERC response to Mr. Langevin's
November 16 letter, NERC staff obtains
a copy of the letter dated November 9
from FERC Chairman Kelliher to the
subcommittee in response to the
October 17 letter [see November 9
entry above].
December 5..................... Based on information in Chairman
Kelliher's November 9 letter, NERC
General Counsel obtains a copy of
FERC's request to OMB seeking approval
to send survey to owners, operators,
and users of the bulk power system
requesting detailed information on the
status of implementation of the Aurora
mitigation measures. After discussions
between NERC GC and FERC staff
regarding the status of FERC's request
to OMB, NERC's plans to send a second
follow-up survey in December are put
on hold, and references in the NERC
response to the November 16 letter to
the second survey are deleted.
December 5..................... NERC submits the final response to
November 16 letter to the House
Subcommittee, signed by David
Whiteley:
``Following the issuance of the
Advisory, many of the larger
transmission owners and operators were
contacted by an ES-ISAC representative
to help the ES-ISAC make an assessment
of the response to the June 21
Advisory and measure the progress in
completing mitigation. Additional
entities made unsolicited information
submissions to the ES-ISAC. Through
this process, the ES-ISAC determined
that approximately 75 percent of the
transmission grid had mitigation
measures completed or in progress.
This was the basis for my testimony at
the October 17 subcommittee hearing.
``A follow-up written survey to
formally measure the progress in
implementing the recommended
mitigation measures was distributed to
major entities in the bulk power
system on October 19 and responses
were requested by November 2. The
following information regarding the
October 19 survey is enclosed: (1) an
overview of the implementation
assessment process, which summarizes
the survey responses; (2) a blank copy
of the survey; (3) the forms supplied
by the respondents; and (4) an
alphabetical listing of the
respondents. To preserve the security
and confidentiality of this
information, which is a commitment
made to the respondents by the ES-
ISAC, all entity identification was
removed from these forms and a
separate listing of the respondents
was created. The information submitted
confirms the conclusion reached by the
ES-ISAC that 75 percent of the
transmission grid has implemented the
recommended mitigation.''
December 6..................... Subcommittee staff sends an e-mail to
NERC staff requesting times for a face-
to-face meeting and asking NERC to
bring to the meeting: ``1. The name
and position of the individual/s who
conducted the `initial assessment' on
behalf of NERC in September/October;
2. A list of phone conversations and
meetings that these individuals had
with sector entities. Please include
dates and any information/notes
prepared; 3. The unsolicited reports
issued to the ES-ISAC during this
time, including the names of the
sector entities who submitted the
unsolicited reports.''
December 14.................... Letter dated December 12, 2007 sent to
the subcommittee by NERC Executive
Vice President clarifying the question
of when NERC's survey was sent
(October 2007 not in August 2007) and
apologizing for any misimpression that
the November 20 response may have
given regarding the timing of the
written survey.
December 20.................... At a meeting with NERC representatives,
subcommittee staff is given a letter
from the NERC SAIS Manager formally
responding to the 3 questions set out
in subcommittee staff's December 6 e-
mail. In response to question 2 (list
of phone conversations and meetings
that these individuals had with sector
entities, including dates and
information/notes prepared), the
letter stated:
``After issuance of the Advisory on
June 21, 2007, I communicated
regularly with industry
representatives to explain and discuss
the Advisory. Beginning in September
and October, my communication efforts
shifted from explanation of the
Advisory to determination of how well
the Advisory was being implemented. A
reconstructed list of the discussions,
to the best of my recollection, is
listed below.'' The list identified
contacts made at the September 27, 28
CIPC meeting as well as phone calls
with other individuals conducted in
September and October.
December-January 2008.......... NERC learns from FERC staff that FERC
has changed its plan to send the
formal written survey regarding the
status of Aurora mitigation measures
to all owners and operators; instead,
FERC teams are conducting interviews
in the field with selected utilities
to learn the status of their efforts
to mitigate the Aurora
vulnerabilities.
------------------------------------------------------------------------
Attachment 2.--NIST Comments on Standards Development for Future
Version SAR (06/11/2008)
NIST agrees with the proposed changes in FERC Order 706 and
proposes several additional items for consideration listed in the
comments section of Question 5 of this comment form.
general comments summary
NIST believes that if the changes specified in FERC Order 706 and
the recommendations below are implemented, NERC will have made a
positive step toward making the CIPs commensurate with the NIST SP 800-
53, Rev 2 moderate baseline. However, there are still differences in
coverage and in the level of specificity of the security requirements
that need to be addressed. NIST would also like to point out that many
of the Federal agencies that own/operate industrial control systems in
the bulk electric sector are classifying their systems as High impact
systems that implement the High baseline requirements in SP 800-53.
NIST is willing and has the resources to work on the NERC standards
team in developing the next revision to the standard.
approach
Critical Assets vs. Information System.--NIST understands that in
the electric sector, protecting critical assets has been the
predominant paradigm, but recommends for future revisions of the
standards that an information systems approach rather than critical
asset approach be considered.
Our rationale for this suggestion is as follows: While it is
important to identify critical assets using a risk-based assessment
methodology, NIST suggests that NERC consider applicability of the CIPs
at an information system level rather than at the critical asset level.
An information system view provides a more natural context for the
application of information technology security across an industrial
control system composed of multiple components, where some subset of
the components is supported by information technology.
Under the current scope of the CIPs, all of the CIP security
requirements would be applied to every critical cyber asset. In some
cases, application of all of the CIP security requirements to a
critical cyber asset may not make sense or may be excessive due to the
nature of the asset. When an information system view is adopted, the
CIP security requirements would be applied at the information system
level, resulting in the allocation of CIP requirements to specific
components. All components of the information system are not required
to support every information system security requirement? Just those
that are identified as a result of the requirement allocations; thus
resulting in significant cost savings.
Using the information system view, there is no need to distinguish
between cyber assets and critical cyber assets as all cyber assets
within the information system are protected. Comments on Specific
Requirements CIP 002 R3.1 NIST strongly recommends that a clear
unambiguous definition of ``routable protocol'' be developed and, based
on that definition, all routable protocols currently within the scope
of the CIPs should be identified. All data encapsulated within a
routable protocol should also be within the scope of the CIPs. CIP 002
R3.2 NIST recommends that ``control center'' should be replaced by
``electronic security perimeter.''
Nuclear Facility Exemption.--In reference to section 4.2.1 of each
CIP, NIST observes that the electric side of nuclear power plants can
have an impact on the bulk electric sector. NIST suggests that the
continuity of power aspects of nuclear facilities should be included in
the scope of these standards. Therefore NIST recommends that the
exemption statement: ``Facilities regulated by the U.S. Nuclear
Regulatory Commission or the Canadian Nuclear Safety Commission be
changed to--Specific systems that are regulated by the U.S. Nuclear
Regulatory Commission or the Canadian Nuclear Safety Commission (e.g.,
safety systems).''
Wireless.--NIST observes that the CIPs do not sufficiently address
the security of wireless technologies, which include, but are not
limited to, microwave, satellite, packet radio (UHF/VHF), 802.11x, and
Bluetooth. There appears to be an assumption in the CIPs that
communication occurs solely over media. Consequently, NIST recommends
that a clear, unambiguous definition of wireless technology be
developed and security requirements for wireless technologies be
included in the CIPs.
Media Protection.--NIST recommends that the CIPs media protection
requirements be expanded to cover all types of media. Because of the
miniaturization and increased portability of digital media, protection
of this media by a physical security perimeter is no longer adequate.
Information system media includes both digital media (e.g., diskettes,
magnetic tapes, external/removable hard drives, flash/thumb drives,
compact disks, digital video disks) and non-digital media (e.g., paper,
microfilm). Information system media are also components of portable
and mobile computing and communications devices (e.g., notebook
computers, personal digital assistants, cellular telephones). The
organization should have policy and procedures to protect and control
information system media during transport outside the physical
perimeter and restrict the activities associated with transport of such
media to authorized personnel. For example, many organizations today
prohibit removing laptop computers with unencrypted hard drives from
the physical protection perimeter, and enforce this policy with
unannounced inspection at the exits. Information system media is also a
component of telephone systems that have the capability to store
information (e.g., voice-mail systems). Since telephone systems do not
have, in most cases, the identification, authentication, and access
control mechanisms typically employed in other information systems,
policy should address the types of information stored on telephone
voice-mail systems that are accessible outside of physically protected
areas.
Questions From Chairman James R. Langevin to Mr. Greg Wilshusen,
Director, Information Security Issues, Government Accountability Office
(GAO)
Question 1. Please verify that, since the hearing, you have had the
opportunity to review TVA's proposed action plan.
Answer. We have not yet received TVA's formal action plan for
review. In its written comments to our draft reports, TVA informed us
of several actions that it plans to take to address our recommendations
to strengthen the security of its control systems but we have not
performed audit work to verify that these actions are under way or
effective. Agencies are permitted 60 days from the date of an audit
report's issuance to submit their action plan to us.
Question 2. Explain the process you will undertake to verify that
the corrective actions are underway.
Answer. As part of our audit responsibilities under generally
accepted government auditing standards, after conducting and reporting
the results of an audit, we follow up with the audited entity to
determine the extent to which it has implemented our recommendations.
In doing so, we request that the agency provide a copy of the agency's
statement of action to serve as preliminary information on the status
of open recommendations and we discuss the status of the
recommendations with cognizant agency officials; we obtain copies of
agency documents supporting the recommendations' implementation or
information from the agency's Office of the Inspector General; and we
perform sufficient audit work to verify that the recommended actions
are being taken and, to the extent possible, that the desired results
are being achieved.
We track the status of agency efforts to implement our
recommendations in a publicly available database, which is updated
routinely and made available to all Members of Congress, their staffs,
and audited agencies. A recommendation is closed when it has been
implemented, when actions have been taken that essentially meet the
recommendation's intent, or when circumstances have changed and the
recommendation is no longer valid.
Questions From Chairman James R. Langevin to Mr. William R. McCollum,
Jr., Chief Operating Officer, Tennessee Valley Authority (TVA)
Question 1. Publicly and privately owned infrastructures on the
grid are so interconnected, weak security controls in one utility can
pose harm to another utility that shares a connection. Yet publicly and
privately owned infrastructures are subject to different security
standards. According to a NIST-sponsored review published in March
2007, an organization conforming to the baseline set of security
controls in SP 800-53 will also comply with the management, operational
and technical security requirements of the NERC Reliability Standards,
though the converse may not be true. For instance, the NERC Reliability
Standards allow for the exclusions of telecommunications and
distribution equipment from the ``critical assets'' list. Under the SP
800-53 requirements, however, there is no similar exclusion. This
committee--along with NIST and GAO--has suggested that the NERC
standards should be more aligned with the NIST 800-53 standards that
apply to federally owned infrastructure. Are you concerned that a
weakness on a privately owned infrastructure would affect your network?
Answer. TVA understands the importance of protecting its systems
and takes that responsibility seriously. Good security practice
requires that the higher security zone consider connections to other
security zones as potentially hostile.
Accordingly, we treat all external connections as potentially
hostile in order to appropriately protect our systems.
TVA does not believe that a security weakness at other electric
utilities could impact the security or integrity of TVA's control
systems. Computer network connections to control systems require
multiple layers of security, as addressed by both NIST and NERC
standards. The security controls in these layers must be, and in TVA's
case are, sufficiently strong to compensate for any weaknesses in the
other network.
Question 2. As control systems are becoming more connected, the
more vulnerabilities are exposed. For instance, several months ago, a
penetration-testing consultant named Ira Winkler gave a presentation at
a conference describing an attack that he performed on a power company.
Winkler was hired by the company to test the security of its network
and the power grid it oversees. He set up an attack that paired social
engineering with corrupting browsers on a power company's desktops. By
the end of a full day of the attack, they had taken over several
machines, giving the team the ability to hack into the control network
overseeing power production and distribution. According to GAO, the
interconnections between your control system networks and the corporate
network mean that security weaknesses on the corporate network could
affect control systems networks. As a result, TVA's control systems
were at an increased risk of unauthorized access or disruption via
access from the corporate network. Why shouldn't all control systems be
isolated from the business network? How is TVA addressing this issue?
Answer. TVA agrees that control systems should be isolated from the
business network. To the largest possible extent, this isolation should
be a physical separation. In cases where there is a strong business or
regulatory basis for interconnection with other networks, segmentation
must be implemented through network architectural schemes that include
layered security controls and effective intrusion detection systems.
TVA has implemented and will continue to strengthen a defense in
depth strategy. This plan includes isolation and/or levels of
segmentation that meet or exceed NIST, NERC, and other applicable
standards.
Question 3. What specific efforts are underway to address the GAO
report? Please provide the committee with a timeline for completing the
recommendations.
Answer. TVA will continue to remediate the GAO recommendations
according to our scheduled commitments in our response to the GAO
report. Effective February 2008, cyber security is positioned at the
enterprise level and is responsible for all management, administration,
and control of cyber security at TVA including control systems. The GAO
report made 19 recommendations that focused on our need to improve and
extend our existing security program for process control systems. TVA
was already addressing 17 of the 19 recommendations prior to the GAO
audit. The other two were completed in April. The LOUO GAO report
identified 73 additional recommendations. Fifty percent of those
recommendations will be complete by September 30, 2008. Seventy-five
percent will be complete by December 31, 2008. Most of the remaining
recommendations will be complete by September 30, 2009.
Question 4. Has the TVA performed all mitigations recommended by
the ES-ISAC advisory for the Aurora vulnerability? Have you met with
FERC staff to discuss these mitigations?
Answer. TVA has implemented all the mitigations from the ES-ISAC
advisory that were determined to be necessary, based on a June 2007
assessment. Given that it has been a full year since TVA responded to
the ES-ISAC advisory, we have conducted a fresh, zero-based assessment
and have validated that currently digital relays on TVA's generation
units either have no wiring installed for reclosing or have no remote
communications connections. In accordance with the ES-ISAC advisory,
TVA completed an emergency plan in August 2007. TVA's Nuclear Power
Group (NPG) completed the required assessments consistent with these
requirements on August 20, 2007.
TVA and FERC representatives spoke via conference call prior to the
hearing to discuss the mitigations. At the conclusion of the call, both
agencies agreed that a good next step is to meet in person. TVA is
working with FERC to schedule this meeting.
Question 5. There is at least one company that manufactures a
device that specifically mitigates the Aurora vulnerability. Has the
TVA purchased this protective device?
Answer. No, TVA has not purchased this protective device, which is
designed for those systems in which relays are capable of reclosing
breakers, thereby damaging generation units. Since TVA relays dedicated
to generation units have remote communication disconnected or are
configured in a way that cannot reclose breakers, TVA has no need for
this particular device.
TVA believes the best general solution is that digital relays, like
the one used in the Aurora experiment, must be protected by strong
cyber security controls if they must be connected to a computer
network.
Question 6. Has DHS provided you with more EINSTEIN boxes since
your previous discussions with the committee? How many boxes are you
deploying in total?
Answer. TVA has four primary external connections and has installed
or will be installing a device at each connection in support of the
EINSTEIN initiative. DHS has provided TVA with the four EINSTEIN boxes
with the exception of a card for one of these boxes. The installation
of three of the four boxes is complete and the final installation will
be scheduled based on the arrival of the necessary card.
Question 7. The committee is concerned not only with the security
of the electric sector, but also the nuclear sector. Brown's Ferry
nuclear plant is operated by the TVA. In August 2006, two circulation
pumps at Unit 3 failed, forcing the unit to be shut down manually. The
failure of the pumps was traced to an unintended incident involving
excessive traffic on the control system's network. In 2007, the
committee wrote to the NRC requesting an investigation into the source
of this data storm; unfortunately, to this day, the NRC has been unable
to conclusively determine the cause. Why don't we know what happened at
Brown's Ferry? What has TVA done to determine what happened?
Answer. Consistent with our Nuclear Power Group (NPG) procedures, a
root cause analysis using the Kepner-Tregoe methodology was performed
by a multi-disciplinary team at the Browns Ferry following the
incident.
The root cause analysis determined that excessive network traffic
on the Unit 2 and 3 Integrated Computer System network caused the pumps
to fail. TVA had network intrusion devices monitoring the connection
between the business network and the internet at the time of the
incident. Examination of logs from those devices for the August 2006
event showed no indication of outside influence. As stated in the NRC's
letter to Chairman of the Committee on Homeland Security dated July 20,
2007, ``The licensee [TVA] determined that the cause of the event was a
malfunction of the recirculation pump variable frequency drive (VFD)
microprocessor-based controller. The controller failure was attributed
to excessive traffic on the internal network. Since the control network
is physically and electrically independent of networks that interface
outside the plant, the NRC is confident that the failure was not the
result of a cyber attack.''
TVA will continue to strengthen the security of our control
systems. In performing our mission, the safety of our employees and the
public is paramount in all of our operations.