Critical Utility Infrastructures: the U.S. Experience
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CriticalCritical UtilityUtility Infrastructures:Infrastructures: TheThe U.S.U.S. ExperienceExperience Robert M. Clayton III Commissioner, Missouri Public Service Commission Chairman, NARUC Committee on International Relations EU-US Energy Regulators Roundtable December 5-6, 2007 Athens, Greece OverviewOverview I. WhatWhat isis “Critical“Critical Infrastructure?”Infrastructure?” II. ExamplesExamples ofof CriticalCritical InfrastructureInfrastructure andand disasterdisaster preparationpreparation fromfrom thethe UnitedUnited StatesStates III. CriticalCritical InfrastructureInfrastructure inin thethe 2121st CenturyCentury 2 I.I. WhatWhat IsIs CriticalCritical Infrastructure?Infrastructure? A. ElectricityElectricity B. NaturalNatural GasGas C. TelecommunicationsTelecommunications D. EconomicEconomic FunctionFunction E. PoliticalPolitical GoalsGoals 3 A.A. WhatWhat IsIs Critical?Critical? ElectricityElectricity When there is an outage, the productivity losses to commercial and industrial customers can be tremendous, ranging from thousands to millions of dollars for a single event. The cost to manufacturing facilities can be even higher. More and more commercial and industrial customers are purchasing or renting generators to provide backup power in case their electric service is interrupted. Today, even voltage dips that last less than 100 milliseconds can have the same effect on industrial process as an outage that lasts several minutes or more. ⇒ High Quality electricity deliverydelivery is a critical need, and the infrastructure needed to delivdeliverer highhigh qualityquality electricityelectricity is critical. 4 B.B. WhatWhat isis Critical?Critical? NaturalNatural GasGas Space Heating: The vast majority of US citizens depend on natural gas for space heating. Industrial Process: Many industrial processes depend on natural gas a fuel for steam and in some cases for products. Electricity Production: Natural gas provides both intermediate and peaking sources of electricity for the US power grid. ⇒ NaturalNatural GasGas isis aa criticalcritical inputinput andand thethe pipelinespipelines andand locallocal deliverydelivery systemssystems areare criticalcritical infrastructure.infrastructure. 5 C.C. WhatWhat IsIs Critical?Critical? TelecommunicationsTelecommunications Communications are essential for our economy Businesses cannot function without data/information accessed through telecommunications Security systems depend on telecommunications to provide quick response when security is breached. Utilities are interconnected and rely on each other; analysis is incomplete without reference to all public services. TelecommunicationsTelecommunications andand thethe associatedassociated investmentsinvestments areare aa criticalcritical componentcomponent ofof thethe USUS infrastructure.infrastructure. 6 D.D. EconomicEconomic conditionsconditions oror advancesadvances inin technologytechnology cancan changechange whatwhat meetsmeets thethe definitiondefinition ofof criticalcritical infrastructureinfrastructure CommunicationsCommunications networksnetworks areare criticallycritically importantimportant toto thethe functionfunction andand monitoringmonitoring ofof utilityutility servicesservices EconomicEconomic ConditionsConditions maymay mandatemandate aa certaincertain levellevel ofof reliabilityreliability notnot expectedexpected before,before, therefore,therefore, identifyingidentifying newnew criticalcritical infrastructureinfrastructure 7 E.E. DefinitionDefinition ofof “Critical“Critical Infrastructure”Infrastructure” cancan evolveevolve dependingdepending onon politicalpolitical trendstrends andand policypolicy decisions.decisions. SomeSome nationsnations havehave takentaken thethe reductionreduction ofof energyenergy dependencedependence onon importsimports asas aa goal.goal. Redundancy,Redundancy, alternativealternative suppliessupplies oror generalgeneral increasesincreases inin securitysecurity SomeSome nationsnations havehave takentaken thethe reductionreduction ofof environmentalenvironmental pollutionpollution asas aa goal.goal. RenewableRenewable PortfolioPortfolio StandardsStandards 8 II.II. RecentRecent USUS ExperienceExperience withwith CriticalCritical Infrastructure:Infrastructure: DisasterDisaster planningplanning andand recoveryrecovery A. ProtectionProtection andand QuickQuick RecoveryRecovery fromfrom disastersdisasters (man(man--made,made, naturalnatural && accidental)accidental) B. StateState Regulator’sRegulator’s RoleRole C. InterdependenciesInterdependencies andand limitationslimitations 9 NewNew Orleans,Orleans, SeptemberSeptember 20052005 10 11 HurricanesHurricanes KatrinaKatrina andand RitaRita 12 WhatWhat areare thethe Threats?Threats? AllAll HazardsHazards ApproachApproach Sabotage/TerrorismSabotage/Terrorism CivilCivil DisturbanceDisturbance FloodingFlooding NaturalNatural DisastersDisasters InfrastructureInfrastructure FailuresFailures PublicPublic HealthHealth EmergenciesEmergencies 13 UtilityUtility SystemsSystems && ResponseResponse toto Disasters:Disasters: StateState Regulator’sRegulator’s RoleRole • Address interconnections and interdependencies of various utilities and systems • Pre-disaster planning • Identification of critical infrastructure • Requirement to have protections in place for infrastructure • Redundancy • Security • Focus on Reliability and resiliency • Address infrastructure expansions and upgrades • Continuity of Operations 14 Interdependencies?Interdependencies? TheThe functionalfunctional reliancereliance ofof anan essentialessential serviceservice (e.g.,(e.g., networkednetworked utilityutility service)service) onon anotheranother network/systemnetwork/system DDisruption/outageisruption/outage inin oneone area/sectorarea/sector hashas implicationsimplications beyondbeyond thatthat area/sector,area/sector, andand vicevice versversaa What interdependencies exist among your utility systems? How can a domino effect be avoided? 15 RTO Regions 16 … and you might be in more than one What regions do you belong to? How do you communicate: exercises, conference calls, and/or websites? 17 State Role: Review and Approval of Cost Recovery WhoWho pays?pays? HowHow dodo wewe pay?pay? HowHow dodo CommissionsCommissions processprocess CICI informationinformation inin raterate cases?cases? WhatWhat levellevel ofof informationinformation detaildetail isis sufficientsufficient toto determinedetermine aa prudentprudent expenditure?expenditure? HowHow cancan sharedshared informationinformation bebe protected?protected? 18 RegulatoryRegulatory ModelsModels MayMay ChallengeChallenge InfrastructureInfrastructure ProtectionProtection Procedural openness Rulemaking processes Ex parte restrictions Regulatory incentives Regulatory lag Policy consistency Transparency, participation, and accountability may challenge some aspects of critical infrastructure protection needs Each State will need to approach critical infrastructure protection uniquely 19 Other Organizations to Know in Critical Infrastructure Emergencies Governors’ State & Local State Energy Offices Police; National Offices Guard Public Utility Emergency Other States Commissions Managers Utilities & Interdependent Local Systems Federal Lead Government Agencies (DOE, Contacts EPA, DHS) 20 III. Critical Infrastructure in the 21st Century A.A. EPACTEPACT 2005:2005: NationalNational interestinterest ElectricElectric TransmissionTransmission CorridorsCorridors B.B. DOE’sDOE’s ModernModern GridGrid InitiativeInitiative C.C. WindWind IntegrationIntegration intointo USUS GenerationGeneration SupplySupply 21 NationalNational InterestInterest ElectricElectric TransmissionTransmission Corridors:Corridors: FederalFederal RuleRule EPACT 2005 gives FERC the authority to require transmission to be built when it finds that significant transmission constraint or congestion problems exist. Secretary of Energy Samuel W. Bodman said. “The goal is simple – to keep reliable supplies of electric energy flowing to all Americans. By designating these National Corridors, we are encouraging stakeholders in these regions to identify solutions and take prompt action." 22 DOE’sDOE’s RecentRecent FindingsFindings U.S. Department of Energy (DOE) announced (October 2, 2007) the Department’s designation of two National Interest Electric Transmission CorridorsCorridors the Mid-Atlantic Area National Interest Electric Transmission Corridor, andand thethe SouthwestSouthwest AreaArea National Interest Electric Transmission Corridor. These corridors include areas in two of the Nation’s most populous regions with growing electricity congestion problems. The Department based its designations on data and analysis showing that persistent transmission congestion exists in these two areas. 23 B.B. DOE’sDOE’s ModernModern GridGrid InitiativeInitiative America’s global competitiveness and quality of life depend on plentiful, reliable electric power. Every industry is becoming more electric-dependent A blackout cost Sun Microsystems up to $1 M per minute. A recent rolling blackout caused and estimated $75 M in losses in Silicon Valley alone. During a 1 hour loss of power at the Chicago Board of Trade during the summer of 2000, trades worth $20 trillion could not be executed. Today, nearly 10% of electricity is delivered to digital devices that require high quality, digitaldigital gradegrade power.power. 24 FiveFive DrivingDriving TechnologiesTechnologies • IntegratedIntegrated CommunicationsCommunications • SensingSensing andand MeasurementMeasurement