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116th Congress }                                            { Report
                        HOUSE OF REPRESENTATIVES
 1st Session   }                                            { 116-254

======================================================================

 
    ENHANCING GRID SECURITY THROUGH PUBLIC-PRIVATE PARTNERSHIPS ACT

                                _______
                                

October 28, 2019.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

 Mr. Pallone, from the Committee on Energy and Commerce, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 359]

    The Committee on Energy and Commerce, to whom was referred 
the bill (H.R. 359) to provide for certain programs and 
developments in the Department of Energy concerning the 
cybersecurity and vulnerabilities of, and physical threats to, 
the electric grid, and for other purposes, having considered 
the same, report favorably thereon without amendment and 
recommend that the bill do pass.

                                CONTENTS

                                                                   Page
  I. Purpose and Summary..............................................1
 II. Background and Need for the Legislation..........................2
III. Committee Hearings...............................................5
 IV. Committee Consideration..........................................5
  V. Committee Votes..................................................5
 VI. Oversight Findings...............................................5
VII. New Budget Authority, Entitlement Authority, and Tax Expenditures5
VIII.Federal Mandates Statement.......................................6

 IX. Statement of General Performance Goals and Objectives............6
  X. Duplication of Federal Programs..................................6
 XI. Committee Cost Estimate..........................................6
XII. Earmarks, Limited Tax Benefits, and Limited Tariff Benefits......6
XIII.Advisory Committee Statement.....................................6

XIV. Applicability to Legislative Branch..............................6
 XV. Section-by-Section Analysis of the Legislation...................7
XVI. Changes in Existing Law Made by the Bill, as Reported............8

                         I. PURPOSE AND SUMMARY

    Reps. Jerry McNerney (D-CA) and Robert E. Latta (R-OH) 
introduced H.R. 359, the ``Enhancing Grid Security through 
Public-Private Partnerships Act'', on January 9, 2019. This 
legislation would require the Department of Energy (DOE) 
Secretary to establish a program to facilitate and encourage 
public-private partnerships to promote and advance physical 
security and cybersecurity of electric utilities.
    The Secretary of Energy is directed to carry out a program 
to (1) develop, and provide for voluntary implementation of, 
maturity models, self-assessments, and auditing methods for 
assessing the physical security and cybersecurity of electric 
utilities; (2) provide training and technical assistance to 
electric utilities to address and mitigate cybersecurity supply 
chain management risks; and (3) increase opportunities for 
sharing best practices and data collection within the electric 
sector.
    The Secretary is also required to take into consideration 
different sizes of electric utilities and the regions they 
serve and to prioritize electric utilities with fewer available 
resources due to size or region. Any information an electric 
utility provides to the Federal Government through this program 
will be exempt from public disclosure under Federal, State, or 
tribal law.
    The bill also provides for a report to Congress addressing 
cybersecurity as it relates to the electric distribution 
system. H.R. 359 directs the Secretary to assess priorities, 
policies, procedures, and actions for enhancing the physical 
and cybersecurity of the electric distribution system, 
including the costs and benefits of implementing these 
priorities, policies, procedures, and actions.
    Finally, H.R. 359 directs DOE to update the Interruption 
Cost Estimate Calculator, a tool designed for and utilized by 
electric reliability planners at electric utilities, government 
organizations, or other entities that are interested in 
estimating interruption costs and benefits associated with 
infrastructure improvements.

                II. BACKGROUND AND NEED FOR LEGISLATION

    The United States energy infrastructure is comprised of a 
vast network of energy and electricity systems that deliver 
uninterrupted electricity from producers to consumers. These 
intricate and highly interdependent systems enable every aspect 
of our daily lives. Our Nation's economy, security, and the 
health and safety of its citizens depend upon the reliable and 
uninterrupted supply of fuels and electricity. Since the 
inception of the Department of Energy in 1977, the manner in 
which energy and power is generated, transmitted, and delivered 
continues to rapidly change and evolve. As advances in digital 
and information technologies continue to layer onto existing 
practices and energy infrastructures, new risks emerge, and 
vulnerabilities are exposed. Recent high-profile attempts by 
foreign actors to infiltrate our Nation's energy systems and 
infrastructure further highlight the need for legislation aimed 
at mitigating these significant and growing threats to the 
reliable supply of energy in the United States.

The Department of Energy's Authorities for Cybersecurity, Energy 
        Security, and Emergency Response

    When the Department of Energy was organized in 1977, energy 
security concerns revolved around oil supply shortages. As a 
result, energy security emergency functions in the Department 
of Energy Organization Act focused on distributing and 
allocating fuels in an emergency. Over time, these functions in 
DOE's organic statute remained largely unchanged, but DOE's 
responsibilities and authorities have evolved substantially 
beyond what was envisioned 40 years ago. Energy delivery 
systems have become increasingly interconnected and digitized, 
while society has become more dependent on energy in all its 
forms--expanding the opportunities for cybersecurity threats 
and other hazards that may require emergency response.
    Today, the DOE mission to advance the national, economic, 
and energy security of the United States requires it to act as 
the lead agency for the protection of electric power, oil, and 
natural gas infrastructure. DOE has authority and 
responsibilities for the physical security and cybersecurity of 
energy delivery systems from laws that Congress has passed and 
Presidential directives. Congress has provided DOE with a wide 
range of emergency response and cybersecurity authorities 
affecting multiple segments of the energy sector, beginning 
with the Department of Energy Organization Act, and most 
recently with the Fixing America's Surface Transportation Act 
(FAST Act).
    The FAST Act, which was signed into law in 2015, designated 
DOE as the Sector-Specific Agency (SSA) for the energy sector 
and provided the Department with several new energy security 
authorities to respond to physical and cyberattacks to energy 
systems. Section 61003 of the FAST Act amended section 215 of 
the Federal Power Act (FPA) and created a new section 215A 
entitled, ``Critical Electric Infrastructure Security.'' This 
new section 215A of the FPA provided definitions for the terms 
``bulk power system'', ``critical electric infrastructure'', 
``critical electric infrastructure information'', and ``grid 
security emergency''\1\ among other terms. Section 215 of the 
FPA states that when the President issues or provides to the 
Secretary of Energy a written directive or determination 
identifying a grid security emergency, the Secretary may, with 
or without notice, hearing, or report, issue orders for 
emergency measures to protect or restore the reliability of 
critical electric infrastructure or of defense critical 
electric infrastructure during an emergency.\2\ Section 215A 
also includes protections for the sharing of critical electric 
information.
---------------------------------------------------------------------------
    \1\See Section 215A of the Federal Power Act, the term ``Grid 
Security Emergency'' means the occurrence or imminent danger of (A)(i) 
a malicious act using electronic communication or an electromagnetic 
pulse, or a geomagnetic storm event, that could disrupt the operation 
of those electronic devices or communications networks, including 
hardware, software, and data, that are essential to the reliability of 
critical electric infrastructure or of defense critical electric 
infrastructure; and (ii) disruption of the operation of such devices or 
networks, with significant adverse effects on the reliability of 
critical electric infrastructure or of defense critical electric 
infrastructure, as a result of such act or event; or (B)(i) a direct 
physical attack on critical electric infrastructure or on defense 
critical electric infrastructure; and (ii) significant adverse effects 
on the reliability of critical electric infrastructure or of defense 
critical electric infrastructure as a result of such physical attack.
    \2\Federal Power Act Sec. 215A, 16 U.S.C. Sec. Sec. 824o-1.
---------------------------------------------------------------------------
    DOE's cybersecurity roles and responsibilities are also 
guided by the Federal Government's operational framework, as 
provided by the Presidential Policy Directive 41 (PPD-41) 
issued in 2016 addressing ``United States Cyber Incident 
Coordination.'' A primary purpose of PPD-41 is to improve 
coordination across the Federal Government by clarifying roles 
and responsibilities. Under the PPD-41 framework, DOE serves as 
the lead agency for the energy sector, coordinating closely 
with other agencies and the private sector to facilitate the 
response, recovery, and restoration of damaged energy 
infrastructure.
    On February 14, 2018, the Secretary of Energy established a 
new Office of Cybersecurity, Energy Security, and Emergency 
Response (CESER) at DOE. The CESER office is currently led by 
Assistant Secretary Karen S. Evans, whose work focuses on 
energy infrastructure security, supporting the expanded 
national security responsibilities assigned to DOE and 
reporting to the Under Secretary of Energy.\3\
---------------------------------------------------------------------------
    \3\See Press Release, U.S. Department of Energy, ``Karen Evans 
Sworn in as DOE Assistant Secretary for Cybersecurity, Energy Security, 
and Emergency Response.'' (Sep. 4, 2018), https://www.energy.gov/
articles/karen-evans-sworn-doe-assistant-secretary-cybersecurity-
energy-security-and-emergency.
---------------------------------------------------------------------------

Physical Security and Cybersecurity of the Electric Grid

    With respect to its responsibilities for security of the 
electric power system, DOE works closely with electric sector 
owners and operators to detect and mitigate risks to critical 
electric infrastructure. DOE collaborates with the electric 
sector to develop technologies, tools, exercises, and other 
resources to assist the energy sector in evaluating and 
improving their security preparedness.\4\
---------------------------------------------------------------------------
    \4\Department of Energy. Energy Sector Cybersecurity Preparedness.
---------------------------------------------------------------------------
    Along with DOE, the Federal Energy Regulatory Commission 
(FERC) has authority over the reliability of the electric grid. 
Congress, through the Energy Policy Act of 2005,\5\ provided 
FERC with the authority to approve mandatory cybersecurity 
standards proposed by the Electric Reliability Organization 
(ERO). The North American Electric Reliability Corporation 
(NERC) currently serves as the ERO. NERC proposes reliability 
standards for planning and operating the North American bulk 
power system. These critical infrastructure protection (CIP) 
reliability standards\6\ address physical security and 
cybersecurity of critical electric infrastructure.
---------------------------------------------------------------------------
    \5\P.L. 109-58.
    \6\See North American Electric Reliability Corporation for further 
information.
---------------------------------------------------------------------------
    Cooperation between the Federal Government and electricity 
sector extends beyond mandatory and enforceable standards. The 
Electricity Subsector Coordinating Council (ESCC)\7\ serves as 
the principal liaison between the Federal Government and the 
electric power sector in coordinating efforts to prepare for 
national-level incidents or threats to critical infrastructure. 
The Cybersecurity Risk Information Sharing Program (CRISP) is a 
public-private partnership, funded by DOE and industry. CRISP 
is managed by the Electricity Information Sharing and Analysis 
Center (E-ISAC)\8\ and facilitates the timely bi-directional 
sharing of unclassified and classified threat information with 
energy sector partners.\9\
---------------------------------------------------------------------------
    \7\See Electric Subsector Coordinating Council for further 
information.
    \8\See Electricity Information Sharing and Analysis Center for 
further information.
    \9\Department of Energy. Cybersecurity for Critical Energy 
Infrastructure.
---------------------------------------------------------------------------

Need for Legislation

    The Committee finds that section 2 of H.R. 359 would 
facilitate and strengthen public-private partnerships to 
promote and advance the physical security and cybersecurity of 
electric utilities that have fewer resources due to size or 
region.
    The Committee finds section 3 of H.R. 359 would help 
mitigate against threats and vulnerabilities to electricity 
distribution systems by assessing priorities, policies, 
procedures, and actions for enhancing the physical and 
cybersecurity of electric distribution systems.
    The Committee finds section 4 of H.R. 359 would help 
improve electric infrastructure resilience by updating a 
program that assists grid planners at utilities, government 
organizations and other entities with estimating interruption 
costs and benefits associated with infrastructure improvements.

                        III. COMMITTEE HEARINGS

    For the purposes of section 103(i) of H. Res. 6 of the 
116th Congress--(1) the following hearing was used to develop 
or consider H.R. 359: The Subcommittee on Energy held a hearing 
on July 12, 2019, entitled ``Keeping The Lights On: Addressing 
Cyber Threats To The Grid.'' The Subcommittee received 
testimony from the following witnesses:
     Karen S. Evans, Assistant Secretary, Office of 
Cybersecurity, Energy Security, and Emergency Response, U.S. 
Department of Energy;
     J. Andrew Dodge, Sr., Director, Office of 
Reliability, Federal Energy Regulatory Commission; and
     Jim Robb, President and Chief Executive Officer, 
North American Electric Reliability Corporation.

                      IV. COMMITTEE CONSIDERATION

    H.R. 359 was introduced in the House of Representatives and 
referred to the Committee on Energy and Commerce on January 9, 
2019. Subsequently, the bill was referred to the Subcommittee 
on Energy on January 25, 2019. On May 16, 2019, the 
Subcommittee on Energy met in open markup session, pursuant to 
notice, to consider H.R. 359 and agreed to a motion by Mr. 
Rush, Chairman of the Subcommittee, to forward the bill H.R. 
359 favorably to the full Committee, without amendment, by a 
voice vote.
    On July 17, 2019, the full Committee on Energy and Commerce 
met in open markup session, pursuant to notice, to consider 
H.R. 359. No amendments were offered at full Committee. 
Subsequently, the Committee agreed to a motion by Mr. Pallone, 
Chairman, to order the bill H.R. 359 reported favorably to the 
House, without amendment, by a voice vote, a quorum being 
present.

                           V. COMMITTEE VOTES

    Clause 3(b) of rule XIII requires the Committee to list the 
recorded votes on the motion to report legislation and 
amendments thereto. There were no recorded votes taken in 
connection with ordering H.R. 359 reported.

                         VI. OVERSIGHT FINDINGS

    Pursuant to clause 3(c)(1) of rule XIII and clause 2(b)(1) 
of rule X of the Rules of the House of Representatives, the 
oversight findings and recommendations of the Committee are 
reflected in the descriptive portion of the report.

 VII. NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX EXPENDITURES

    Pursuant to 3(c)(2) of rule XIII of the Rules of the House 
of Representatives, the Committee adopts as its own the 
estimate of new budget authority, entitlement authority, or tax 
expenditures or revenues contained in the cost estimate 
prepared by the Director of the Congressional Budget Office 
pursuant to section 402 of the Congressional Budget Act of 
1974.
    The Committee has requested but not received from the 
Director of the Congressional Budget Office a statement as to 
whether this bill contains any new budget authority, spending 
authority, credit authority, or an increase or decrease in 
revenues or tax expenditures.

                    VIII. FEDERAL MANDATES STATEMENT

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

       IX. STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

    Pursuant to clause 3(c)(4) of rule XIII, the general 
performance goal or objective of this legislation is to provide 
programs and developments in the Department of Energy 
concerning the cybersecurity and vulnerabilities of, and 
physical threats to, the electric grid, and for other purposes.

                   X. DUPLICATION OF FEDERAL PROGRAMS

    Pursuant to clause 3(c)(5) of rule XIII, no provision of 
H.R. 359 is known to be duplicative of another Federal program, 
including any program that was included in a report to Congress 
pursuant to section 21 of Public Law 111-139 or the most recent 
Catalog of Federal Domestic Assistance.

                      XI. COMMITTEE COST ESTIMATE

    Pursuant to clause 3(d)(1) of rule XIII, the Committee 
adopts as its own the cost estimate prepared by the Director of 
the Congressional Budget Office pursuant to section 402 of the 
Congressional Budget Act of 1974.

    XII. EARMARKS, LIMITED TAX BENEFITS, AND LIMITED TARIFF BENEFITS

    Pursuant to clause 9(e), 9(f), and 9(g) of rule XXI, the 
Committee finds that H.R. 359 contains no earmarks, limited tax 
benefits, or limited tariff benefits.

                   XIII. ADVISORY COMMITTEE STATEMENT

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                XIV. APPLICABILITY TO LEGISLATIVE BRANCH

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

           XV. SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short title

    This section provides that the Act may be cited as the 
``Enhancing Grid Security through Public-Private Partnerships 
Act''.

Section 2. Program to promote and advance physical security and 
        cybersecurity of electric utilities

            (a) Establishment
    The Secretary of Energy, in consultation with State 
regulatory authorities, industry stakeholders, and other 
Federal agencies the Secretary determines appropriate, shall 
carry out a program to (1) develop, and provide for voluntary 
implementation of, maturity models, self-assessments, and 
auditing methods for assessing the physical security and 
cybersecurity of electric utilities; (2) provide training and 
technical assistance to electric utilities to address and 
mitigate cybersecurity supply chain management risks; (3) 
increase opportunities for sharing best practices and data 
collection within the electric sector; (4) assist with 
cybersecurity training for electric utilities; (5) advance the 
cybersecurity of third-party vendors that work in partnerships 
with electric utilities; and (6) provide technical assistance 
for electric utilities subject to the program.
            (b) Scope
    Section 2(b) states that in carrying out the program under 
section 2(a), the Secretary of Energy shall (1) take into 
consideration different sizes of electric utilities and the 
regions that such electric utilities serve; (2) prioritize 
electric utilities with fewer available resources due to size 
or region; and (3) to the extent practicable, utilize and 
leverage existing Department of Energy programs.
            (c) Protection of information
    Section 2(c) states that information provided to, or 
collected by, the Federal Government pursuant to this section, 
(1) shall be exempt from disclosure under section 552(b)(3) of 
title 5, United States Code; and (2) shall not be made 
available by any Federal, State, political subdivision, or 
tribal law requiring disclosure of information or records.

Section 3. Report on cybersecurity and distribution systems

            (a) In general
    Section 3(a) directs the Secretary of Energy, in 
consultation with State regulatory authorities, industry 
stakeholders, and other Federal agencies the Secretary 
determines appropriate, shall submit to Congress a report that 
assesses (1) priorities, policies, procedures, and actions for 
enhancing the physical security and cybersecurity of 
electricity distribution systems to address threats to, and 
vulnerabilities of, such electricity distribution systems. 
Section 3(a)(2) further clarifies that this report will assess 
implementation of such priorities, policies, procedures, and 
actions, including an estimate of potential costs and benefits 
of such implementation, including any public-private cost-
sharing opportunities.
            (b) Protection of information
    Section 3(b) states that information provided to, or 
collected by, the Federal Government pursuant to this section, 
(1) shall be exempt from disclosure under section 552(b)(3) of 
title 5, United States Code; and (2) shall not be made 
available by any Federal, State, political subdivision, or 
tribal law requiring disclosure of information or records.

Section 4. Electricity interruption information

            (a) Interruption Cost Estimate Calculator
    Section 4(a) directs that the Secretary of Energy, in 
consultation with the Federal Energy Regulatory Commission, 
State regulatory authorities, industry stakeholders, and other 
Federal agencies the Secretary determines appropriate, shall 
update the Interruption Cost Estimate Calculator, as often as 
appropriate and feasible, but not less than once every 2 years.
            (b) Indices
    Section 4(b) instructs that the Secretary of Energy, in 
consultation with the Federal Energy Regulatory Commission, 
State regulatory authorities, industry stakeholders, and other 
Federal agencies the Secretary determines appropriate, shall, 
as often as appropriate and feasible, update the following: (1) 
The System Average Interruption Duration Index; (2) The System 
Average Interruption Frequency Index; and (3) The Customer 
Average Interruption Index.
            (c) Survey
    Section 4(c) directs that the Administrator of the Energy 
Information Administration shall collect information on 
electricity interruption costs, if available, from a 
representative sample of owners of electric grid assets through 
biennial survey.

Section 5. Definitions

    For this legislation the term ``electric utility'' has the 
meaning given such term in section 3 of the Federal Power Act 
(16 U.S.C. 796). The term ``State regulatory authority'' has 
the meaning given such term in section 3 of the Federal Power 
Act (16 U.S.C. 796).

       XVI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

    This legislation does not amend any existing Federal 
statute.