Utilities and Regulators Contemplate The Potential Costs Of Enhanced Physical Security

Feb 24, 2014

Reading Time : 1 min

By: Shawn Whites (paralegal)

The security of the electric grid, both cyber- and physical, recently has received much public attention due to publicity surrounding a sniper attack on a California substation (see our blog post on grid security here). But FERC Commissioners John R. Norris and Philip D. Moeller advise against widespread panic and superfluous spending on security measures that could “inadvertently promote the prospect of additional copycat attacks” by publicly highlighting the grid’s areas of vulnerability. In their February 20, 2014 statements (available here and here), both Commissioners acknowledged that there is always room for improving security measures. Commissioner Norris suggested that utilities continue to focus on “modernizing” the grid with the further deployment of phasor measurement units, wide-area management systems, enhanced situational awareness to improve reliability and efficiency, and increased use of microgrids and smart grid technology to improve system resiliency. Norris also championed the planned initiatives between NERC and industry stakeholders as concrete, smart solutions to growing threats. Norris fears, however, that actions such as the erection of physical barriers—called for specifically by Sen. Charles E. Schumer (D-NY) (statement here)—are “20th century solution[s] for a 21st century problem.”

            Norris’s words of caution are well-timed. It has recently been reported that Dominion Virginia Power is planning to spend up to $500 million on the installation of anti-climb fences and other steel barriers around their most critical infrastructure. In addition, a recent order issued by the New York State Public Service Commission requires that Con Edison invest $1 billion over the next four years to protect its infrastructure from natural threats such as Hurricane Sandy, and human security threats such as the Metcalf incident. While Commissioner Norris conceded that some such measures may be warranted, he highlighted the risk of  “piling up billions in consumer costs in rate base” attempting to protect “400,000 miles of transmission lines and 55,000 substations” with walls and fences.  

Share This Insight

Previous Entries

Speaking Energy

April 15, 2025

On April 9, 2025, President Trump issued an executive order (EO)1 directing several federal agencies and subagencies that regulate energy, environmental, and conservation matters,2 including the Federal Energy Regulatory Commission (FERC) and the Department of Energy (DOE), to establish conditional sunset dates for “regulations governing energy production.” The stated objective of the EO is to require agencies to periodically reexamine their regulations to ensure that they continue to serve the public good. For FERC, the order covers regulations promulgated under the Federal Power Act (FPA), the Natural Gas Act (NGA) and the Powerplant and Industrial Fuel Use Act (FUA)3, as amended, while DOE must consider regulations promulgated under the Atomic Energy Act (AEA), the National Appliance Energy Conservation Act, the Energy Policy Act of 1992 (EPAct 1992), the Energy Policy Act of 2005 (EPAct 2005) and the Energy Independence and Security Act of 2007 (EISA), as amended (collectively the Covered Regulations).4 To the extent the DOE has been directed to promulgate regulations under various sections of the NGA, FPA and FUA, and FERC has been directed to promulgate regulations specific to the statutes attributed to the DOE in the EO, the EO is silent. The EO expressly does not apply to those “regulatory permitting regimes authorized by statute.”5

...

Read More

Speaking Energy

April 10, 2025

On April 8, 2025, President Trump issued an Executive Order (EO) directing the Department of Energy (DOE) to take steps to expand the use of its emergency authority under Federal Power Act (FPA) Section 202(c) to require the retention of generation resources deemed necessary to maintain resource adequacy within at risk-regions of the bulk power system regulated by the Federal Energy Regulatory Commission (FERC).1 The EO appears to envision a more active role for DOE in overseeing and supporting the resource adequacy of the grid that deviates from the historic use of Section 202(c) and touches on issues at the intersection of state and federal authority over resource planning.

...

Read More

Speaking Energy

March 10, 2025

On March 5, 2025, the United States Department of Energy (DOE) approved Golden Pass LNG Terminal LLC’s (GPLNG) request to extend a deadline to begin exporting liquefied natural gas (LNG) from its terminal facility currently under construction in Sabine Pass, Texas for 18 months, from September 30, 2025, to March 31, 2027 (the Order). The Order amends GPLNG’s two existing long-term orders authorizing the export of domestically produced LNG to countries with which the United States does and does not have free trade agreements (FTA).1  The Order does not amend the authorizations’ end date, which remains December 31, 2050. Under section 3 of the Natural Gas Act (NGA), the DOE may authorize exports to non-FTA countries following completion of a “public interest” review, whereas exports to FTA countries are deemed to be in the public interest and the DOE is directed to issue authorizations without modification or delay.

...

Read More

Speaking Energy

March 4, 2025

Join projects & energy transition partner Shariff Barakat at Infocast’s Solar & Wind, where he will moderate the “Tax Equity Market Dynamics” panel.

...

Read More

Speaking Energy

February 13, 2025

Oil & gas companies continue to identify and capitalize on opportunities related to the deployment of new energy technologies, with their approaches broadly maturing and coalescing around maximizing synergies, leveraging available subsidies and responding to regulatory drivers.

...

Read More

Speaking Energy

February 11, 2025

On January 30, 2025, the Federal Energy Regulatory Commission (FERC or the Commission) approved a Stipulation and Consent Agreement (Agreement) between the Office of Enforcement (OE) and Stronghold Digital Mining Inc. (Stronghold) resolving an investigation into whether Stronghold had violated the PJM Interconnection, L.L.C. (PJM) tariff and Commission regulations by limiting the quantity of energy made available to the market to serve a co-located Bitcoin mining operation.1 This order appears to be the first instance of a public enforcement action involving co-located load and generation and comes at a time when both FERC and market operators2 are scrutinizing the treatment of co-located load due to the rapid increase in demand associated with data center development.

...

Read More

Speaking Energy

February 5, 2025

2024 was about post-consolidation deal flow and a steady uptick in activity across the oil & gas market. This year, mergers & acquisitions (M&A) activity looks set to take on a different tone as major consolidation plays bed down.

...

Read More

Speaking Energy

January 30, 2025

The oil & gas industry is experiencing a capital resurgence, driven by stabilizing interest rates and renewed attention from institutional investors. Private equity is leading the charge with private credit filling the void in traditional energy finance and hybrid capital instruments gaining in popularity. Family offices are also playing a crucial role, providing long-term, flexible investments.

...

Read More

© 2025 Akin Gump Strauss Hauer & Feld LLP. All rights reserved. Attorney advertising. This document is distributed for informational use only; it does not constitute legal advice and should not be used as such. Prior results do not guarantee a similar outcome. Akin is the practicing name of Akin Gump LLP, a New York limited liability partnership authorized and regulated by the Solicitors Regulation Authority under number 267321. A list of the partners is available for inspection at Eighth Floor, Ten Bishops Square, London E1 6EG. For more information about Akin Gump LLP, Akin Gump Strauss Hauer & Feld LLP and other associated entities under which the Akin Gump network operates worldwide, please see our Legal Notices page.