TRANSMISSION:

Disputes dog efforts to protect grid from 'high-impact, low-probability' threats

The threat to the nation's transmission grid from extreme geomagnetic currents -- either from solar eruptions or terrorist attack -- has been on federal agendas since at least 2004, when a congressionally appointed expert panel warned of potentially catastrophic consequences to the nation's electric power supply from these hazards.

The response to these "high-impact, low-probability" threats has been slowed, however, on a range of fronts. Disputes have cropped up over where regulatory authority should be centered, dividing federal officials and the power industry and leading House and Senate lawmakers down separate paths.

The electric power industry is challenging an analysis of the electromagnetic pulse (EMP) threat that was an instrumental part of the 2004 report by the congressional EMP Commission. The commission focused on surges affecting the power grid from a high-altitude nuclear detonation. The same analysis, by prominent researcher John Kappenman and the California-based firm Metatech, also underpins warnings of widespread grid damage from geomagnetic currents triggered by a massive, once-in-a-century solar flare.

The Federal Energy Regulatory Commission cites the Metatech study, issued by the Energy Department's Oak Ridge National Laboratory, as a basis for its appeals to Congress for more authority over grid defenses.

The North American Electric Reliability Corp., the power industry's nonprofit grid monitor that reports to FERC, says the Metatech work cannot be independently confirmed. It has launched a new study, putting itself apparently at cross-purposes with FERC.

Metatech's analysis is based on "closed" software whose modeling assumptions cannot be verified, said Mark Lauby, NERC's reliability manager. "There is an assumption that when current gets to a certain level [grid] transformers fail catastrophically and need to be replaced. The problem is, the code is proprietary, and you can't look inside." The threat must be better understood and the proper safeguards designed to avoid unintended problems for the grid, industry leaders say.

Some advocates for EMP defenses say this is an argument about dollars, not threat models. FERC says the costs of stronger grid protection are trivial compared to the damage from a devastating solar flare. A 1989 solar storm shut down Quebec's grid for nine hours. The "solar max" eruption matching the biggest recorded solar flare could be many times worse, FERC says.

"The cost of damage from the most extreme solar event has been estimated at $1 to $2 trillion with a recovery time of four to ten years, while the average yearly cost of installing equipment to mitigate an EMP event is estimated at less than 20 cents per year for the average residential customer," FERC says.

Kappenman said the costs to transmission companies and utility customers could total $1 billion. "That's certainly a lot of money, but it's a round-off error in the grand scheme of revenues for the electric power industry annually. It's certainly small compared to the potential harm that could occur to society if these events are allow to unfold," he said in an interview.

"As with all risk management decisions, [electricity providers] will need to balance expected outcomes against costs, recognizing that all costs are ultimately borne by the customer," a NERC policy statement says.

Meanwhile, House and Senate committees have moved in different directions on the issue. A grid security bill that passed the Senate Energy and Natural Resources Committee in July proposes to study the EMP threat. It focuses primarily on the threat of cyber attacks.

Last year, the House passed a more far-reaching Grid Act with rare bipartisan support. Once notified by the president of an imminent threat to the grid, FERC under the bill could order utilities to take emergency defensive measures. The bill also would allow FERC to order utilities to invest in grid defenses -- including possibly several hundred multimillion-dollar grid transformers -- if NERC's ordinary standards-setting process was not delivering results that satisfied FERC.

The Senate committee's approach appears aligned with NERC's position. The House bill matches FERC's goals. The Obama administration wants to concentrate on the cyber issue.

Senate and House aides say there is currently no clear path for getting a grid bill through the Senate, where several committees seek jurisdiction over cyber threats, nor for reconciling the House and Senate versions.

There may also be political and ideological differences over the EMP response.

The impetus for action began with concerns by some leading conservatives over the threat of EMP from a terrorist-launched missile. The EMP campaign has stirred opposition from some liberals who see a conservative interest in reviving a Reagan-era missile defense debate, some EMP action advocates say.

"Within the administration and among some of my Democratic friends, there is a willingness to close their eyes to anything that is nuclear generated," said Rep. Trent Franks (R-N.M.), a leading member of the congressional EMP caucus. He said the nuclear scenario is "broader and more dangerous if it occurs" than the solar storm. "I am concerned that terrorists the world over are beginning to dial in to the grid's vulnerability."

Lauby of NERC said the terrorist scenario -- foreseen as the launch of a crude nuclear weapon on a version of SCUD missile from a ship off the U.S. coast -- is the government's responsibility, not industry's.

The dispute begins

Just a year ago, FERC, NERC and the Energy Department appeared to be on the same page. NERC and DOE were sponsors of a workshop on the EMP threat in November 2009. The workshop's report, "High-Impact, Low-Frequency Event Risk to the North American Bulk Power System," was issued in June 2010 by NERC and DOE.

It concluded, "Recent analysis by Metatech and Storm Analysis Consultants suggests ... that the potential extremes of the geomagnetic threat environment may be much greater than previously anticipated." The workshop's EMP task force was chaired by Kappenman, a principal with Storm Analysis Consultants, and Metatech President William Radasky, and they were instrumental in writing that section of the 2010 report, industry officials say.

FERC endorsed the report's conclusion in an executive summary, noting Metatech's model estimates that more than 300 large grid transformers "would be at-risk for failure or permanent damage from the event. With a loss of this many transformers, the power system would not remain intact, leading to probable power system collapse in the Northeast, Mid-Atlantic and Pacific Northwest, affecting a population in excess of 130 million."

Since spare transformers used for high voltage are not plentiful and take months to obtain from overseas, a devastating solar storm could leave cities in the top half of the United States uninhabitable, without power for months, FERC said.

But once the 2010 report was issued, NERC and industry officials apparently felt they could raise contrary arguments.

"The Metatech study came out quite confidently with one conclusion. We think this needs to be vetted with more technical analysis and also with testing on actual transformers," said Rich Lordan, Electric Power Research Institute (EPRI) technical director for power delivery.

NERC highlights an analysis by the ABB Group, a leading grid equipment manufacturer, which concluded that even high levels of solar geomagnetic-induced currents (GIC) would not generate enough heat to damage large transformers because of the currents' short duration.

"The failure of only one old shell-form transformer of a very old winding design is confirmed to have been a consequence of GIC. All other failures, reported in the published literature to have been caused by GIC, were not caused by GIC," the ABB report said. The greatest threat from GIC would be a disruption of grid stability leading to a potential blackout of limited duration, ABB said.

"The preliminary assessment from a lot of the system engineers is that the system would go down before the transformers had permanent damage," Lordan said. "It would be more like the Northeast Blackout" of 2003 but possibly smaller. "We would bring the system back up."

"EPRI is developing a model for NERC and the industry that will be in the public domain," Lordan added. "Researchers will be able to download the model and argue about its veracity." Utilities can run the model to see how their transformers respond. Metatech "may in fact be correct," Lordan said. "But something of this importance needs to be debated."

FERC spokeswoman Mary O'Driscoll responded that "FERC issued the Oak Ridge [Metatech] report, put it out for peer review and received no negative comments that would overturn it.

"On that basis, FERC still supports the work. We understand what NERC is doing, and we encourage NERC to go ahead and do a separate analysis that independently checks this work. We're monitoring NERC's work very closely," she said.

Battle for authority

Peter Pry, who served on the EMP Commission staff, noted that "two commissions and three major studies have looked at these issues."

"This has been studied to death. It is settled," said Pry, who runs a website campaigning for grid defenses.

Pry and others following the debate say the EMP issue has been pulled into a struggle between NERC and FERC over the regulator's requests to Congress for unambiguous authority to deal with fast-evolving threats to the grid.

"Given the national security dimensions to this threat, there may be a need to act quickly to act in a manner where action is mandatory rather than voluntary and to protect certain information from public disclosure," said Joseph McClelland, director of FERC's Office of Energy Projects, testifying in May before the Senate Energy and Natural Resources Committee. "The commission's legal authority is inadequate for such action."

NERC President Gerry Cauley, who took his position after the November EMP workshop, has pushed back against FERC's bid for more authority over grid defenses.

A stronger government hand is justified in dealing with imminent cyber attacks on the grid, but policies to protect the grid against EMP threats should be developed through the current industry consensus process and then submitted to FERC for approval, he said.

Kappenman said he agreed that the EMP threat should be thoroughly studied but that the complaint that his and Metatech's analysis is not verifiable is off-base. "Essentially what NERC has decided to do is not allow commercial firms like mine to be a provider of this sort of simulation software. ... The fact that I and others would like to be compensated for providing the code isn't reason to think it is invalid."

Kappenman said he also hears concerns that his studies are influenced by the opportunities to sell hardware solutions to protect the grid: "We should talk about that elephant in the room, I guess." He said he has been involved in researching protection against EMP threats since the early 1990s, at EPRI's request.

"I have never attempted to patent that technology. ... It has been in public domain for 20 years. I have no control over it," he said. While he is involved in commercial solutions to the EMP threat, if utilities begin to buy the safeguards, bigger firms will step into the picture "and will no doubt do a better job than I ever could in competing for the marketplace," he added.

"There are some honest technical discussions that need to occur here. There is a big gap we need to figure out how to close. We need to make sure we get this question right," Kappenman said.

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