[Federal Register Volume 85, Number 26 (Friday, February 7, 2020)]
[Rules and Regulations]
[Pages 7197-7204]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-01595]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 40

[Docket No. RM18-20-000; ORDER NO. 866]


Critical Infrastructure Protection Reliability Standard CIP-012-
1--Cyber Security--Communications Between Control Centers

AGENCY: Federal Energy Regulatory Commission.

ACTION: Final action.

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SUMMARY: The Federal Energy Regulatory Commission (Commission) approves 
Reliability Standard CIP-012-1 (Cyber Security--Communications between 
Control Centers). The North American Electric Reliability Corporation 
(NERC), the Commission-certified Electric Reliability Organization, 
submitted Reliability Standard CIP-012-1 for Commission approval in 
response to a Commission directive. In addition, the Commission directs 
NERC to develop modifications to the CIP Reliability Standards to 
require protections regarding the availability of communication links 
and data communicated between bulk electric system Control Centers.

DATES: This final action is effective April 7, 2020.

FOR FURTHER INFORMATION CONTACT: Vincent Le (Technical Information), 
Office of Electric Reliability, Federal Energy Regulatory Commission, 
888 First Street NE, Washington, DC 20426, (202) 502-6204, 
vincent.le@ferc.gov.
    Kevin Ryan (Legal Information), Office of the General Counsel, 
Federal Energy Regulatory Commission, 888 First Street NE, Washington, 
DC 20426, (202) 502-6840, kevin.ryan@ferc.gov.

SUPPLEMENTARY INFORMATION: 
    1. Pursuant to section 215(d)(2) of the Federal Power Act (FPA),\1\ 
the Commission approves Reliability Standard CIP-012-1 (Cyber 
Security--Communications between Control Centers). The North American 
Electric Reliability Corporation (NERC), the Commission-certified 
Electric Reliability Organization (ERO), submitted Reliability Standard 
CIP-012-1 for Commission approval in response to a Commission directive 
in Order No. 822.\2\ In Order No. 822, the Commission directed NERC, 
pursuant to section 215(d)(5) of the FPA, to develop modifications to 
the Reliability Standards to require responsible entities to implement 
controls to protect, at a minimum, communications links and sensitive 
bulk electric system data communicated between bulk electric system 
Control Centers ``in a manner that is appropriately tailored to address 
the risks posed to the bulk electric system by the assets being 
protected (i.e., high, medium, or low impact).'' \3\
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    \1\ 16 U.S.C. 824o(d)(2).
    \2\ Revised Critical Infrastructure Protection Reliability 
Standards, 81 FR 4177 (Jan. 26, 2016), Order No. 822, 154 FERC ] 
61,037, at P 53, order denying reh'g, Order No. 822-A, 156 FERC ] 
61,052 (2016).
    \3\ 16 U.S.C. 824o(d)(5); Order No. 822, 154 FERC ] 61,037 at P 
53.
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    2. Consistent with the directive in Order No. 822, Reliability 
Standard CIP-012-1 improves upon the currently-effective Critical 
Infrastructure Protection (CIP) Reliability Standards to mitigate cyber 
security risks associated with communications between bulk electric 
system Control Centers. Specifically, Reliability Standard CIP-012-1 
supports situational awareness and reliable bulk electric system 
operations by requiring responsible entities to protect the 
confidentiality and integrity of Real-time Assessment \4\ and Real-time 
monitoring data transmitted between bulk electric system Control 
Centers. Accordingly, the Commission approves Reliability Standard CIP-
012-1 because it is largely responsive to the Commission's directive in 
Order No. 822 and improves the cyber security posture of responsible 
entities. We also approve the associated violation risk factors and 
violation severity levels, implementation plan, and effective date.
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    \4\ The NERC Glossary defines Real-time Assessment as, ``An 
evaluation of system conditions using Real-time data to assess 
existing (pre-Contingency) and potential (post-Contingency) 
operating conditions. The assessment shall reflect applicable inputs 
including, but not limited to: load, generation output levels, known 
Protection System and Special Protection System status or 
degradation, Transmission outages, generator outages, Interchange, 
Facility Ratings, and identified phase angle and equipment 
limitations. (Real-time Assessment may be provided through internal 
systems or through third-party services.)'' NERC Glossary of Terms 
Used in NERC Reliability Standards (July 3, 2018).
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    3. In addition, pursuant to section 215(d)(5) of the FPA, the 
Commission directs NERC to develop modifications to the CIP Reliability 
Standards to require protections regarding the availability of 
communication links and data communicated between bulk electric system 
Control Centers. As discussed in the notice of proposed rulemaking 
(NOPR), Reliability Standard CIP-012-1 does not require protections 
regarding the availability of communication links and data communicated 
between bulk electric system Control Centers, as directed in Order No. 
822.\5\ In the NOPR, the Commission indicated that it did not agree 
with NERC's assertion that currently-effective Reliability Standards 
address availability, and we are not persuaded by NOPR comments raising 
the same argument. Instead, pursuant to section 215(d)(5) of the FPA, 
we determine that the absence of a requirement that specifically 
pertains to the availability of communication links and data 
communicated between bulk electric system Control Centers represents a 
reliability gap in the CIP Reliability Standards that should be 
addressed by NERC.
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    \5\ See Critical Infrastructure Protection Reliability Standard 
CIP-012-1--Cyber Security--Communication between Control Centers, 
Notice of Proposed Rulemaking, 84 FR 17105 (April 24, 2019), 167 
FERC ] 61,055, at P 54 (2019) (NOPR).
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    4. The Commission, in the NOPR, also proposed to direct NERC to 
identify clearly the types of data that must be protected under 
Reliability Standard CIP-012-1. The NOPR expressed concern that 
Reliability Standard CIP-012-1 does not adequately identify the types 
of data covered by its requirements, due to, among other things, the 
fact that the term ``Real-time monitoring'' is not defined in the 
Reliability Standard or the NERC Glossary. After considering the NOPR 
comments, however, we determine not to direct the proposed modification 
based on the explanation of the types of data that must be protected 
set forth in the NOPR comments.

[[Page 7198]]

I. Background

A. Section 215 and Mandatory Reliability Standards

    5. Section 215 of the FPA requires a Commission-certified ERO to 
develop mandatory and enforceable Reliability Standards, subject to 
Commission review and approval. Reliability Standards may be enforced 
by the ERO, subject to Commission oversight, or by the Commission 
independently.\6\ Pursuant to section 215 of the FPA, the Commission 
established a process to select and certify an ERO,\7\ and subsequently 
certified NERC.\8\
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    \6\ 16 U.S.C. 824o(e).
    \7\ Rules Concerning Certification of the Electric Reliability 
Organization; and Procedures for the Establishment, Approval, and 
Enforcement of Electric Reliability Standards, 71 FR 19814 (April 
18, 2006), Order No. 672, 114 FERC ] 61,104, order on reh'g, Order 
No. 672-A, 114 FERC ] 61,328 (2006).
    \8\ North American Electric Reliability Corp., 116 FERC ] 
61,062, order on reh'g and compliance, 117 FERC ] 61,126 (2006), 
aff'd sub nom. Alcoa, Inc. v. FERC, 564 F.3d 1342 (D.C. Cir. 2009).
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B. Order No. 822

    6. In Order No. 822, the Commission approved seven modified CIP 
Reliability Standards and directed NERC to develop additional 
modifications to the CIP Reliability Standards.\9\ Specifically, the 
Commission directed that NERC, among other things, develop 
modifications to the CIP Reliability Standards to require that 
responsible entities implement controls to protect, at a minimum, 
communications links and sensitive bulk electric system data 
communicated between bulk electric system Control Centers ``in a manner 
that is appropriately tailored to address the risks posed to the bulk 
electric system by the assets being protected (i.e., high, medium, or 
low impact).'' \10\ The Commission observed that NERC, as well as other 
commenters in that proceeding, ``recognize that inter-Control Center 
communications play a critical role in maintaining bulk electric system 
reliability by . . . helping to maintain situational awareness and 
support reliable operations through timely and accurate communication 
between Control Centers.'' \11\
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    \9\ Order No. 822, 154 FERC ] 61,037 at PP 1, 3.
    \10\ Id. P 53.
    \11\ Id. P 54.
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    7. The Commission explained that Control Centers associated with 
responsible entities, including reliability coordinators, balancing 
authorities, and transmission operators, must be capable of receiving 
and storing a variety of bulk electric system data from their 
interconnected entities in order to adequately perform their 
reliability functions. The Commission, therefore, determined that 
``additional measures to protect both the integrity and availability of 
sensitive bulk electric system data are warranted.'' \12\
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    \12\ Id.
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    The Commission cautioned, however, that ``not all communication 
network components and data pose the same risk to bulk electric system 
reliability and may not require the same level of protection.'' \13\ 
Therefore, the Commission determined that NERC should develop controls 
that reflect the risk being addressed in a reasonable manner.
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    \13\ Id. P 56.
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C. NERC Petition and Reliability Standard CIP-012-1

    8. On September 18, 2018, NERC submitted for Commission approval 
proposed Reliability Standard CIP-012-1 and the associated violation 
risk factors and violation severity levels, implementation plan, and 
effective date.\14\ NERC states that the purpose of Reliability 
Standard CIP-012-1 is to help maintain situational awareness and 
reliable bulk electric system operations by protecting the 
confidentiality and integrity of Real-time Assessment and Real-time 
monitoring data transmitted between Control Centers.
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    \14\ Reliability Standard CIP-012-1 is not attached to this 
final action. The Reliability Standard is available on the 
Commission's eLibrary document retrieval system in Docket No. RM18-
20-000 and on the NERC website, www.nerc.com.
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    9. NERC states that Reliability Standard CIP-012-1 ``requires 
Responsible Entities to develop and implement a plan to address the 
risks posed by unauthorized disclosure (confidentiality) and 
unauthorized modification (integrity) of Real-time Assessment and Real-
time monitoring data while being transmitted between applicable Control 
Centers.'' \15\ According to NERC, the required plan must include the 
following: (1) Identification of security protections; (2) 
identification of where the protections are applied; and (3) 
identification of the responsibilities of each entity in case a Control 
Center is owned or operated by different responsible entities.\16\
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    \15\ NERC Petition at 10.
    \16\ Id. at 3.
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    10. As noted above, the types of data within the scope of 
Reliability Standard CIP-012-1 consist of Real-time Assessment and 
Real-time monitoring data exchanged between Control Centers. NERC 
states that it is critical that this information is accurate since 
responsible entities operate and monitor the bulk electric system based 
on this Real-time information. NERC explains that Reliability Standard 
CIP-012-1 ``excludes other data typically transferred between Control 
Centers, such as Operational Planning Analysis data, that is not used 
by the Reliability Coordinator, Balancing Authority, and Transmission 
Operator in Real-time.'' \17\
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    \17\ Id. at 12.
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    11. NERC also indicates that data at rest and oral communications 
fall outside the scope of Reliability Standard CIP-012-1. Regarding 
data at rest, NERC states that the standard drafting team determined 
that since data at rest resides within BES Cyber Systems,\18\ it is 
already protected by the controls mandated by Reliability Standards 
CIP-003-6 through CIP-011-2. According to NERC, oral communications are 
out of scope of Reliability Standard CIP-012-1 ``because operators have 
the ability to terminate the call and initiate a new one via trusted 
means if they suspect a problem with, or compromise of, the 
communication channel.'' \19\ NERC notes that Reliability Standard COM-
001-3 requires reliability coordinators, balancing authorities, and 
transmission operators to have alternative interpersonal communication 
capability, which could be used if there is a suspected compromise of 
oral communication on one channel.
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    \18\ BES Cyber System is defined as ``[o]ne or more BES Cyber 
Assets logically grouped by a responsible entity to perform one or 
more reliability tasks for a functional entity.'' NERC Glossary. The 
acronym BES refers to the bulk electric system.
    \19\ NERC Petition at 14.
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D. Notice of Proposed Rulemaking

    12. On April 18, 2019, the Commission issued a NOPR proposing to 
approve Reliability Standard CIP-012-1 as just, reasonable, not unduly 
discriminatory or preferential, and in the public interest.\20\ The 
NOPR stated that Reliability Standard CIP-012-1 is largely responsive 
to the Commission's directive in Order No. 822 and improves the cyber 
security posture of the bulk electric system by requiring responsible 
entities to protect the confidentiality and integrity of Real-time 
Assessment and Real-time monitoring data transmitted between bulk 
electric system Control Centers, which supports situational awareness 
and reliable bulk electric system operations.
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    \20\ NOPR, 167 FERC ] 61,055 at P 1.
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    13. While proposing to approve Reliability Standard CIP-012-1, the 
Commission also proposed to direct NERC to develop modifications to the 
CIP Reliability Standards to address potential reliability gaps. First, 
the NOPR stated that Reliability Standard CIP-012-1 does not require 
protections regarding the availability of

[[Page 7199]]

communication links and data communicated between bulk electric system 
Control Centers as directed in Order No. 822. The NOPR explained that 
the Commission was not persuaded by NERC's explanation that certain 
currently-effective Reliability Standards address the issue of 
availability. Second, the NOPR raised a concern that Reliability 
Standard CIP-012-1 does not adequately identify the types of data 
covered by its requirements, due to, among other things, the fact that 
Real-time monitoring is not defined in the proposed Reliability 
Standard or the NERC Glossary.\21\
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    \21\ Id. P 16.
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    14. In response to the NOPR, eight entities submitted comments. A 
list of commenters appears in Appendix A. The discussion below 
addresses the proposals in the NOPR as well as the NOPR comments.

II. Discussion

    15. Pursuant to section 215(d)(2) of the FPA, the Commission 
approves Reliability Standard CIP-012-1 as just, reasonable, not unduly 
discriminatory or preferential, and in the public interest. Reliability 
Standard CIP-012-1 largely addresses the Commission's directive in 
Order No. 822 because it will enhance existing protections for bulk 
electric system reliability by augmenting the currently-effective CIP 
Reliability Standards to mitigate cyber security risks associated with 
communications between bulk electric system Control Centers. 
Reliability Standard CIP-012-1 achieves this by requiring responsible 
entities to protect the confidentiality and integrity of Real-time 
Assessment and Real-time monitoring data transmitted between bulk 
electric system Control Centers, thereby supporting situational 
awareness and reliable bulk electric system operations.
    16. While the Commission approves Reliability Standard CIP-012-1, 
we also determine that the reliability risks identified in Order No. 
822 will not be fully addressed with the implementation of the 
Reliability Standard. As discussed below, a significant cyber security 
risk associated with the protection of communications links and 
sensitive bulk electric system data communicated between bulk electric 
system Control Centers remains because Reliability Standard CIP-012-1 
does not address the availability of communication links and data 
communicated between bulk electric system Control Centers. To address 
this gap, the Commission directs NERC, pursuant to section 215(d)(5) of 
the FPA, to develop modifications to the CIP Reliability Standards to 
require protections regarding the availability of communication links 
and data communicated between bulk electric system Control Centers.
    17. Below, we discuss the following issues: (A) Availability of 
bulk electric system communication links and data; and (B) scope of 
bulk electric system data that must be protected.

A. Availability of Bulk Electric System Communication Links and Data

1. NOPR
    18. The NOPR stated that Reliability Standard CIP-012-1 does not 
address the availability component of the Commission's directive in 
Order No. 822. The NOPR identified this as a gap because ensuring 
timely and reliable access to and use of data is essential to the 
reliable operation of the bulk electric system. The NOPR indicated that 
the existing Reliability Standards cited in NERC's petition do not 
require responsible entities to protect the availability of sensitive 
bulk electric system data in a manner consistent with Order No. 
822.\22\ In particular, the NOPR stated that the cited Reliability 
Standards either do not apply to communications between individual 
Control Centers or, while their effect may be to support availability, 
the Reliability Standards do not create an obligation to protect 
availability.\23\
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    \22\ Id. P 24.
    \23\ Id.
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2. Comments
    19. NERC, Trade Associations, Tri-State and IRC do not support a 
directive that addresses the availability of communication links and 
data communicated between bulk electric system Control Centers. 
Reclamation, Appelbaum, and Liu express support for the directive, 
while Bonneville offers qualified support.
    20. Comments opposing the proposed directive largely reiterate the 
petition's assertion that currently-effective Reliability Standards 
adequately protect the availability of communication links and data 
communicated between bulk electric system Control Centers. For example, 
NERC contends that ``[w]hile IRO-002-5 and TOP-001-4 cover 
infrastructure within Control Centers, not between Control Centers, the 
requirements help protect the availability of data to be exchanged 
between Control Centers . . . [because] the data exchange 
infrastructure in scope of these requirements facilitates sending and 
receiving data between Control Centers.'' \24\ NERC explains that if 
``an applicable entity lost capability of some of this data exchange 
infrastructure, the applicable entity could continue to send and 
receive data between Control Centers because of the redundant data 
exchange infrastructure within its Control Center.\25\ In addition, 
NERC states that Reliability Standards IRO-010-2 and TOP-003-3 require 
applicable entities to use a mutually agreeable security protocol 
between Control Centers. NERC explains that this supports availability 
by helping to ensure that conflicting protocols do not impede receipt 
of data between Control Centers.
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    \24\ NERC Comments at 5.
    \25\ Id.; see also Trade Associations Comments at 6-8, Tri-state 
Comments at 3.
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    21. NERC also contends that Reliability Standard EOP-008-2 helps 
support the availability of communication links between Control Centers 
by requiring reliability coordinators to have backup Control Center 
facilities, or backup Control Center functionality for balancing 
authorities and transmission operators, in addition to their primary 
Control Centers. NERC explains that ``[t]hese backup facilities supply 
redundancy of some communication links and data exchange infrastructure 
and capabilities at the backup Control Center.'' \26\ NERC further 
explains that entities with geographically diverse primary and backup 
Control Centers may have communication links that are physically 
separate from one another. NERC concludes that although ``geographic 
diversity alone will not always provide redundancy of communication 
links, having backup Control Centers with different paths to 
communicate with other Control Centers helps support availability of 
communication links.'' \27\
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    \26\ NERC Comments at 7; see also Trade Associations Comments at 
9-10.
    \27\ NERC Comments at 7.
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    22. In addition, comments opposing the directive maintain that it 
is premature to require protections for the availability of the 
communication links and data at issue. NERC states that it recognizes 
that ``there may be additional controls that could help address'' risks 
to the availability of data and communication links and commits to 
``study the risks to availability of data and communication links 
between Control Centers and the current controls that support 
availability.'' \28\ Trade Associations, similarly, ``encourage[s] the 
Commission to consider directing NERC to study the issue [of 
telecommunications security] to identify

[[Page 7200]]

specific availability vulnerabilities and potential mitigation 
methods.'' \29\
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    \28\ Id. at 8-9.
    \29\ Trade Associations Comments at 12.
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    23. IRC, while not supporting the proposed directive, 
``acknowledges that [the Commission] could require additional actions 
by responsible entities to promote the availability of [bulk electric 
system] communication links to the extent possible through contracts 
with telecommunications providers.'' \30\ IRC recommends a best efforts 
approach similar to how supply chain risks are addressed under 
Reliability Standard CIP-013-1. Specifically, IRC suggests that ``NERC 
could adopt a standard that would require responsible entities, when 
negotiating these service contacts, to take reasonable steps or use 
best efforts to maximize the availability of communication links.'' 
\31\
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    \30\ IRC Comments at 3 (emphasis in original).
    \31\ Id.
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    24. Reclamation, in support of the Commission proposal, states that 
the availability of communication networks should encompass links 
between Control Centers owned by the same entity as well as Control 
Centers owned by different entities. Reclamation maintains that the 
requirements for electronic communications be parallel to the following 
requirements for oral communication contained in Reliability Standard 
COM-001-3: (1) Have electronic communication capability; (2) designate 
alternative electronic communication capability in the event of a 
failure of the primary communication capability; (3) test the alternate 
method of electronic communication; (4) notify the entity on the other 
end of the communication path if a failure is detected; and (5) 
establish mutually agreeable action to restore the electronic 
communication capability.
    25. As an initial matter, Bonneville recommends delaying approval 
of Reliability Standard CIP-012-1 until NERC conducts a pilot project 
to study the most effective way to encrypt data while ensuring the data 
is available to responsible entities. However, if the Commission 
approves the Reliability Standard, Bonneville ``agrees with the 
Commission's proposal to address the availability of communication 
links and data communicated between Control Centers.'' \32\ Bonneville 
explains that maintaining the availability of the communication links 
includes addressing both redundancy and recovery. Therefore, Bonneville 
recommends that, if Reliability Standard CIP-012-1 is approved, ``the 
Commission order NERC to adopt modifications requiring Responsible 
Entities to have incident recovery plans/continuity of operation plans 
addressing planning for recovery time, capability, and capacity.'' \33\ 
Similarly, Appelbaum supports the proposed directive and contends that 
``a requirement for a continuing operations plan for loss of critical 
data resulting for the loss of Control Center functionality should be 
directed.'' \34\
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    \32\ Bonneville Comments at 5.
    \33\ Id. at 6.
    \34\ Appelbaum Comments at 7.
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3. Commission Determination
    26. We determine that modifications to the CIP Reliability 
Standards to address the availability of communication links and data 
communicated between bulk electric system control centers will enhance 
bulk electric system reliability. As the Commission stated in Order No. 
822, bulk electric system Control Centers ``must be capable of 
receiving and storing a variety of sensitive bulk electric system data 
from interconnected entities.'' \35\ We are not persuaded by the 
contention in the petition and comments that currently-effective 
Reliability Standards adequately address the directive in Order No. 822 
regarding availability. Instead, we determine that the Reliability 
Standards cited by NERC either do not apply to communications between 
Control Centers or do not create an obligation to protect the 
availability of data between Control Centers. Accordingly, the directed 
modifications to the CIP Reliability Standards are not duplicative of 
existing Reliability Standards.
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    \35\ Order No. 822, 154 FERC ] 61,037 at P 54.
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    27. As the Commission explained in the NOPR, the existing 
Reliability Standards cited by NERC are not responsive to the 
availability directive in Order No. 822.\36\ Reliability Standards IRO-
002-5 and TOP-001-4 require responsible entities to have redundant and 
diversely routed data exchange infrastructure within the Control Center 
environment, but they do not address communications between individual 
Control Centers, which was the subject of the Commission's directive in 
Order No. 822.\37\ While it is true that the infrastructure associated 
with communications within Control Centers may be useful to data 
exchange between Control Centers, nothing in the cited Reliability 
Standards creates an obligation to maintain data availability between 
Control Centers. Similarly, Reliability Standards IRO-010-2 and TOP-
003-3 require responsible entities to have mutually agreeable security 
protocols for exchange of Real-time data, which may have the effect of 
contributing to greater availability; however, these requirements do 
not create an obligation, as directed in Order No. 822, to protect the 
availability of those communication capabilities and associated data by 
applying appropriate security controls.
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    \36\ NOPR, 167 FERC ] 61,055 at P 24.
    \37\ NOPR, 167 FERC ] 61,055 at P 24; NERC Comments at 5 (``IRO-
002-5 and TOP-011-4 cover infrastructure within Control Centers, not 
between Control Centers'').
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    28. As the NOPR explained, creating an obligation to protect 
availability, while affording flexibility in terms of what data is 
protected and how, is distinct from relying on currently-effective 
Reliability Standards whose effect may be to support availability.\38\ 
The comments do not offer a new or persuasive reason to alter this 
view. For example, the Trade Associations repeat the line of reasoning 
in the NERC petition by ``encourag[ing] the Commission to focus 
holistically on the broad requirements contained with [the] IRO and TOP 
standards, which focus on the performance requirements necessary to 
support Real-time monitoring and Real-time Assessments.'' \39\ In this 
circumstance, we disagree with that approach because, as the Commission 
observed in Order No. 822, ``NERC and other commenters recognize that 
inter-Control Center communications play a critical role in maintaining 
bulk electric system reliability by, among other things, helping to 
maintain situational awareness and reliable bulk electric system 
operations through timely and accurate communication between Control 
Center.'' \40\ Thus, the holistic view urged by Trade Associations does 
not address the gap recognized by the Commission in Order No. 822.
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    \38\ NOPR, 167 FERC ] 61,055 at P 24; NERC Comments at 6-7 
(stating that alarms, recovery plans, and the ability to disable 
data encryption also support data availability).
    \39\ Trade Associations Comments at 8.
    \40\ Order No. 822, 154 FERC ] 61,037 at P 54.
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    29. The contention in NERC's comments that Reliability Standard 
EOP-008-2 could also help maintain the availability of communication 
links between bulk electric system Control Centers, rests on the same 
reasoning that the ancillary benefits of an existing Reliability 
Standard addresses the reliability gap identified by the Commission and 
concomitant availability directive in Order No. 822. While we agree 
that a requirement to maintain a backup Control Center arguably 
provides a level of redundancy for a responsible entity's overall 
operations, it does not require redundant and diversely routed

[[Page 7201]]

communication paths between either the primary and backup Control 
Centers or third-party Control Centers.
    30. In addition, we do not agree that it is premature to require 
protections for the availability of the communication links and data 
communicated between bulk electric system Control Centers. While NERC 
and Trade Associations advocate further study of the risks associated 
with availability, we conclude that the risks associated with losing 
the availability of either data or communication links between bulk 
electric system Control Centers is supported by the existing record and 
warrants a directive to modify the CIP Reliability Standards.\41\
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    \41\ See Appelbaum Comments at 7, Bonneville Comments at 5, IRC 
Comments at 3, Dr. Liu Comments at 1, Reclamation Comments at 1.
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    31. We address several related issues raised in the comments. 
Commenters raise a concern that directing NERC to address requirements 
for certain aspects of availability, in particular redundancy and 
diverse routing, could have significant impacts on responsible entities 
using third-party telecommunications providers. Specifically, Trade 
Associations notes that responsible entities ``may not have sufficient 
control over the design of these networks to ensure that such 
requirements are met.'' \42\ Without control over these networks, 
commenters suggest that the only options for addressing availability 
would be to construct costly private networks or implement less secure 
internet-based connections.\43\
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    \42\ Trade Associations Comments at 12.
    \43\ See, e.g., id., Tri-State Comments at 2.
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    32. We are not persuaded by these arguments. Rather, as IRC 
correctly notes in its discussion of the challenges raised in securing 
third-party telecommunications networks, while the Commission lacks 
jurisdiction over telecommunication service providers that may own and 
operate the communication links between bulk electric system Control 
Centers, the Commission has the authority to require responsible 
entities to take actions to promote the availability of communication 
links through service contracts with network providers.\44\ For 
example, entities could enter into service contracts with 
telecommunication service providers that include an agreed-upon quality 
of service commitment to maintain the availability of the data exchange 
capability to minimize the availability risk. Such arrangements would 
mirror the approach in Reliability Standard CIP-013-1 (Cyber Security--
Supply Chain Risk Management), which also involved non-jurisdictional 
entities.\45\ NERC should likewise consider allowing responsible 
entities to contract with telecommunication service providers to 
minimize the risk of loss of availability of communication links and 
data communicated between bulk electric system Control Centers in cases 
where communications between Control Centers are managed by a third 
party.
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    \44\ IRC Comments at 3.
    \45\ The currently-approved supply chain risk management 
Reliability Standard exempts communication networks and data links 
between discrete Electronic Security Perimeters. See NERC 
Reliability Standard CIP-013-1, Applicability Section 4.2.3.2.
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    33. We agree with Reclamation's comment that protections for the 
availability of communication links and data communicated between bulk 
electric system Control Centers should encompass both entity-owned and 
third-party owned Control Centers. The intent of the Commission's 
directive is for NERC to address the risks associated with the 
availability of communication links and data communicated between all 
bulk electric system Control Centers, which will require coordination 
between neighboring responsible entities.
    34. We reject Bonneville's recommendation that the Commission delay 
approval of Reliability Standard CIP-012-1 to allow for a pilot project 
on encryption. The record in this proceeding does not support a delay, 
and Bonneville's request conflicts with the implementation plan 
proposed by NERC.\46\ Moreover, the standard drafting team addressed 
the Commission's finding on this issue in Order No. 822. In Order No. 
822, the Commission stated ``that any lag in communication speed 
resulting from implementation of protections should only be measurable 
on the order of milliseconds and, therefore, will not adversely impact 
Control Center communications . . . [but that] technical issues should 
be considered by the standard drafting team . . . e.g., by making 
certain aspects of the revised CIP Standards eligible for Technical 
Feasibility Exceptions.'' \47\ In response, NERC stated that the 
standard drafting team ``developed an objective-based rather than 
prescriptive requirement . . . [that] will allow Responsible Entities 
flexibility in mitigating the risks posed . . . in a manner suited to 
each of their respective operational environments.'' \48\ Accordingly, 
we determine not to delay approval of Reliability Standard CIP-012-1.
---------------------------------------------------------------------------

    \46\ See NERC Petition at Exhibit B.
    \47\ Order No. 822, 154 FERC ] 61,037 at P 62.
    \48\ NERC Petition, Exhibit D (Consideration of Issues and 
Directives) at 7.
---------------------------------------------------------------------------

    35. We agree with Bonneville and Appelbaum that maintaining the 
availability of communication networks and data should include 
provisions for incident recovery and continuity of operations in a 
responsible entity's compliance plan. We recognize that the redundancy 
of communication links cannot always be guaranteed; responsible 
entities should therefore plan for both recovery of compromised 
communication links and use of backup communication capability should 
it be needed for redundancy (i.e., satellite or other alternate backup 
communications).
    36. Accordingly, pursuant to section 215(d)(5) of the FPA, we 
direct that NERC develop modifications to the CIP Reliability Standards 
to require protections regarding the availability of communication 
links and data communicated between bulk electric system Control 
Centers, as discussed above.

B. Scope of Bulk Electric System Data That Must Be Protected

1. NOPR
    37. The NOPR observed that Reliability Standard CIP-012-1 requires 
the protection of Real-time Assessment and Real-time monitoring data. 
The Commission explained that that while Real-time Assessment is 
defined in the NERC Glossary, Real-time monitoring data is not defined. 
Accordingly, the NOPR expressed concern that Reliability Standard CIP-
012-1 does not clearly indicate the types of data to be protected. To 
address this, the Commission proposed to direct that NERC develop 
modifications to the CIP Reliability Standards to clearly identify the 
types of data that must be protected, including whether a NERC Glossary 
definition of Real-time monitoring would assist with implementation and 
compliance.
2. Comments
    38. Appelbaum and Reclamation support the development of one or 
more definitions. Specifically, Reclamation recommends that the 
Commission direct NERC to develop definitions for the terms: (1) Real-
time monitoring data; (2) Real-time data; (3) BES Data; (4) Operational 
Data; (5) System Planning Data; (6) availability and (7) Real-time 
monitoring. Appelbaum supports requiring a definition of Real-time 
monitoring given its importance to triggering alarms that system 
operators respond to and because it is an input to automatic dispatch.

[[Page 7202]]

    39. NERC and other commenters maintain that a directive is 
unnecessary because the terms Real-time Assessment and Real-time 
monitoring are clear. NERC states that the ``language used in proposed 
Reliability Standard CIP-012-1, `Real-time Assessment and Real-time 
monitoring data,' is sufficient to identify the data as described in 
TOP-003-3 and IRO-010-2.'' \49\ Specifically, NERC explains that since 
the IRO and TOP Reliability Standards are the only currently-effective 
Reliability Standards that use the phrase Real-time monitoring and the 
term Real-time Assessment, ``[c]ompliance with these standards defines 
the data that is used in Real-time monitoring and Real-time 
Assessments.'' \50\ NERC concludes that by ``using this language that 
is only referenced in the IRO and TOP Reliability Standards families, 
proposed CIP-012-1 brings the data identified pursuant to TOP-003-3 and 
IRO-010-2 into scope.'' \51\
---------------------------------------------------------------------------

    \49\ NERC Comments at 10.
    \50\ Id.
    \51\ Id.
---------------------------------------------------------------------------

    40. Trade Associations and IRC concur with NERC that the scope of 
data subject to the requirements of proposed Reliability Standard CIP-
012-1 is adequately clear. According to Trade Associations, responsible 
Entities and NERC understand that the types of data covered in CIP-012-
1 is the data specified for Real-time Assessment and Real-time 
monitoring under TOP-003 and IRO-010. Similarly, IRC notes that ``all 
responsible entities must already know the universe of data needed for 
Real-time Assessment and Real-time monitoring activities in order to 
comply with NERC Reliability Standards TOP-003-3 and IRO-010-2.'' \52\ 
Regarding the concern raised in the NOPR that the term Real-time 
monitoring is not defined, IRC states that it ``sees no reason that the 
term should be presumed to mean something different from what it means 
in other places where it is used in the NERC Reliability Standards.'' 
\53\
---------------------------------------------------------------------------

    \52\ IRC Comments at 4.
    \53\ Id.
---------------------------------------------------------------------------

    41. While Bonneville does not take a position on the NOPR proposal, 
it notes a concern over ``creating a compliance requirement to identify 
how different types of information are protected.'' \54\ Bonneville 
states that, generally, the use of the same data exchange 
infrastructure will result in all data using that infrastructure 
receiving the same protection regardless of data type. Therefore, 
Bonneville avers that, if the Commission directs NERC to define the 
scope of data to be protected, then ``a Responsible Entity should have 
the option to show that all data types are protected at the highest 
level using the same security protocols, without having to identify and 
show how specific types of data are protected.'' \55\
---------------------------------------------------------------------------

    \54\ Reclamation Comments at 6.
    \55\ Id.
---------------------------------------------------------------------------

3. Commission Determination
    42. In view of the comments, we determine not to adopt the NOPR 
proposal to direct modifications to define the scope of data covered by 
Reliability Standard CIP-012-1. NERC, Trade Associations and IRC agree 
that Reliability Standard CIP-012-1 requires the protection of Real-
time Assessment and Real-time monitoring data identified under 
Reliability Standards TOP-003-3 and IRO-010-2. This point is also 
confirmed in the Technical Rationale document for Reliability Standard 
CIP-012-1.\56\ We are persuaded that responsible entities must know the 
types of data needed for Real-time Assessment and Real-time monitoring 
activities in order to comply with Reliability Standards TOP-003-3 and 
IRO-010-2.
---------------------------------------------------------------------------

    \56\ NERC Petition, Exhibit F (Technical Rationale) at 1-2.
---------------------------------------------------------------------------

    43. With this understanding, we are satisfied that the data 
protected under Reliability Standard CIP-012-1 is the same data 
identified under Reliability Standards TOP-003-3 and IRO-010-2. We 
determine that this clarification addresses the concern in the NOPR 
that not defining the types of data that must be protected under 
Reliability Standard CIP-012-1 could result in uneven compliance and 
enforcement. In addition, we agree with Bonneville that responsible 
entities may show that all data types are protected at the highest 
level using the same security protocols, without having to identify and 
show how specific types of data are protected, so long as the security 
protocols are reasonable.

III. Information Collection Statement

    44. The FERC-725B information collection requirements contained in 
this final action are subject to review by the Office of Management and 
Budget (OMB) under section 3507(d) of the Paperwork Reduction Act of 
1995.\57\ OMB's regulations require approval of certain information 
collection requirements imposed by agency rules.\58\ Upon approval of a 
collection of information, OMB will assign an OMB control number and 
expiration date. Respondents subject to the filing requirements of this 
action will not be penalized for failing to respond to the collection 
of information unless the collection of information displays a valid 
OMB control number.
---------------------------------------------------------------------------

    \57\ 44 U.S.C. 3507(d).
    \58\ 5 CFR part 1320.
---------------------------------------------------------------------------

    45. The Commission received no comments on the validity of the 
burden and cost estimates in the NOPR. The Commission is updating the 
burden estimates and labor costs contained in the NOPR. The Commission 
in this final action corrected an error from the NOPR in the row 
``Identification of Security Protection Application (if not owned by 
same Responsible Entity) (Requirement R1.3)'' where the total number of 
hours was understated by 100,000, and all calculations based upon this 
error.
    46. The Commission is submitting these reporting and recordkeeping 
requirements to OMB for its review and approval under section 3507(d) 
of the PRA. Comments are solicited on the Commission's need for this 
information, whether the information will have practical utility, the 
accuracy of the provided burden estimate, ways to enhance the quality, 
utility, and clarity of the information to be collected, and any 
suggested methods for minimizing the respondent's burden, including the 
use of automated information techniques.
    47. The Commission bases its paperwork burden estimates on the 
changes in paperwork burden presented by Reliability Standard CIP-012-
1.
    48. The NERC Compliance Registry, as of December 2019, identifies 
approximately 1,482 unique U.S. entities that are subject to mandatory 
compliance with Reliability Standards. Of this total, we estimate that 
719 entities will face an increased paperwork burden under proposed 
Reliability Standard CIP-012-1. Based on these assumptions, we estimate 
the following reporting burden:

[[Page 7203]]



                                       FERC-725B, Modifications Due to the Final Action in Docket No. RM18-20-000
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      Number of
                                      Number of     responses \59\   Total number   Average burden hours & cost per   Total annual burden hours & total
                                     respondents    per respondent   of responses            response \60\                       annual cost
                                              (1)              (2)   (1) x (2) = (  (4)............................  (3) x (4) = 5
                                                                                3)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Implementation of Documented                  719                1             719  128 hrs.; $11,776..............  92,032 hrs.; $8,466,944.
 Plan(s) (Requirement R1) \61\.
Document Identification of                    719                1             719  40 hrs.; $3,680................  28,560 hrs.; $2,645,920.
 Security Protection (Requirement
 R1.1) \61\.
Identification of Security                    719                1             719  20 hrs.; $1,840................  14,280 hrs.; $1,322,960.
 Protection Application (if owned
 by same Responsible Entity)
 (Requirement R1.2) \61\.
Identification of Security                    719                1             719  160 hrs.; $14,720..............  14,240 hrs.; $10,583,680.
 Protection Application (if not
 owned by same Responsible
 Entity) (Requirement R1.3) \61\.
Maintaining Compliance (ongoing,              719                1             719  83 hrs.; $7,636................  59,677 hrs.; $5,490,284.
 starting in Year 2).
                                  ----------------------------------------------------------------------------------------------------------------------
    Total (one-time, in Year 1)..  ..............  ...............           2,876  ...............................  250,212 hrs.; $23,019,504.
                                  ----------------------------------------------------------------------------------------------------------------------
        Total (ongoing, starting   ..............  ...............             719  ...............................  59,677 hrs.; $5,490,284.
         in Year 2).
--------------------------------------------------------------------------------------------------------------------------------------------------------

    49. The one-time burden (in Year 1) for the FERC-725B information 
collection will be averaged over three years:
---------------------------------------------------------------------------

    \59\ We consider the filing of an application to be a 
``response.''
    \60\ The hourly cost for wages plus benefits is based on the 
average of the occupational categories for 2018 found on the Bureau 
of Labor Statistics website (http://www.bls.gov/oes/current/naics2_22.htm):
    Information Security Analysts (Occupation Code: 15-1122): 
$61.494
    Computer and Mathematical (Occupation Code: 15-0000): $63.54
    Legal (Occupation Code: 23-0000): $142.86
    Computer and Information Systems Managers (Occupation Code: 11-
3021): $98.81.
    These various occupational categories' wage figures are averaged 
as follows: $61.494/hour + $63.54/hour + $142.86/hour + $98.81/hour) 
/ 4 = $91.70/hour. The resulting wage figure is rounded to $92.00/
hour for use in calculating wage figures in the final action in 
Docket No. RM18-20-000.
    \61\ This includes the record retention costs for the one-time 
and the on-going reporting documents.

 250,212 hours / 3 = 83,404 hours/year over Years 1-3
 The number of one-time responses for the FERC-725B information 
collection is also averaged over Years 1-3: 2,876 responses / 3 = 959 
responses/year

    50. The average annual number (for Years 1-3) of responses and 
burden for one-time and ongoing burden will total:

 1,678 responses [959 responses (one-time) + 719 responses 
(ongoing)]
 143,081 burden hours [83,404 hours (one-time) + 59,677 hours 
(ongoing)] hours (ongoing)]

    51. Title: Mandatory Reliability Standards for Critical 
Infrastructure Protection [CIP] Reliability Standards.
    Action: Revisions to FERC-725B information collection.
    OMB Control No.: 1902-0248.
    Respondents: Businesses or other for-profit institutions; not-for-
profit institutions.
    Frequency of Responses: One-time and Ongoing.
    Necessity of the Information: This final action approves the 
requested modifications to Reliability Standards pertaining to critical 
infrastructure protection. As discussed above, the Commission approves 
NERC's proposed Reliability Standard CIP-012-1 pursuant to section 
215(d)(2) of the FPA because they improve upon the currently-effective 
suite of cyber security Reliability Standards.
    Internal Review: The Commission has reviewed the proposed 
Reliability Standard and made a determination that its action is 
necessary to implement section 215 of the FPA.
    52. Interested persons may obtain information on the reporting 
requirements by contacting the following: Federal Energy Regulatory 
Commission, 888 First Street NE, Washington, DC 20426 [Attention: Ellen 
Brown, Office of the Executive Director, email: DataClearance@ferc.gov, 
phone: (202) 502-8663, fax: (202) 273-0873].
    53. Please send comments concerning the collection of information 
and the associated burden estimate to the Commission, and to the Office 
of Management and Budget, Office of Information and Regulatory Affairs, 
725 17th Street NW, Washington, DC 20503, Washington, DC 20503 
[Attention: Desk Officer for the Federal Energy Regulatory Commission]. 
For security reasons, comments to OMB should be submitted by email to: 
oira_submission@omb.eop.gov. Comments submitted to OMB should include 
FERC-725B (OMB Control No. 1902-0248).

IV. Environmental Analysis

    54. The Commission is required to prepare an Environmental 
Assessment or an Environmental Impact Statement for any action that may 
have a significant adverse effect on the human environment.\62\ The 
Commission has categorically excluded certain actions from this 
requirement as not having a significant effect on the human 
environment. Included in the exclusion are rules that are clarifying, 
corrective, or procedural or that do not substantially change the 
effect of the regulations being amended.\63\ The actions herein fall 
within this categorical exclusion in the Commission's regulations.
---------------------------------------------------------------------------

    \62\ Regulations Implementing the National Environmental Policy 
Act of 1969, 52 FR 47897 (Dec. 17, 1987), Order No. 486, FERC Stats. 
& Regs. ] 30,783 (1987).
    \63\ 18 CFR 380.4(a)(2)(ii).
---------------------------------------------------------------------------

V. Regulatory Flexibility Act Analysis

    55. The Regulatory Flexibility Act of 1980 (RFA) generally requires 
a description and analysis of proposed and final actions that will have 
significant economic impact on a substantial number of small 
entities.\64\ The Small Business Administration's (SBA) Office of Size 
Standards develops the numerical definition of a small business.\65\ 
The SBA revised its size standard for electric utilities (effective 
January 22, 2014) to a standard based on the number of employees, 
including affiliates (from the prior standard based on megawatt hour 
sales).\66\
---------------------------------------------------------------------------

    \64\ 5 U.S.C. 601-12.
    \65\ 13 CFR 121.101.
    \66\ 13 CFR 121.201, Subsection 221.
---------------------------------------------------------------------------

    56. Reliability Standard CIP-012-1 is expected to impose an 
additional burden on 719 entities \67\ (reliability

[[Page 7204]]

coordinators [RC], generator operators [GOP], generator owners [GO], 
transmission operators [TOP], balancing authorities [BA], and 
transmission owners [TO]).
---------------------------------------------------------------------------

    \67\ Public utilities may fall under one of several different 
categories, each with a size threshold based on the company's number 
of employees, including affiliates, the parent company, and 
subsidiaries. These entities may be included in the SBA categories 
for: Hydroelectric Power Generation, Fossil Fuel Electric Power 
Generation, Nuclear Electric Power Generation, Solar Electric Power 
Generation, Wind Electric Power Generation Geothermal Electric Power 
Generation, Biomass Electric Power Generation, Other Electric Power 
Generation, Biomass Electric Power Generation, or Electric Bulk 
Power Transmission and Control. These categories have thresholds for 
small entities varying from 250-750 employees. For the analysis in 
this final action, we are using a conservative threshold of 750 
employees.
---------------------------------------------------------------------------

    57. Of the 719 affected entities discussed above, we estimate that 
approximately 82% percent of the affected entities are small entities. 
We estimate that each of the 590 small entities to whom the 
modifications to Reliability Standard CIP-012-1 apply will incur one-
time, non-paperwork cost in Year 1 of approximately $17,051, plus 
paperwork cost in Year 1 of $32,016, giving a total cost in Year 1 of 
$49,067. In Year 2 and Year 3, each entity will incur only the ongoing 
annual paperwork cost of $7,594. We do not consider the estimated costs 
for these 590 small entities to be a significant economic impact.
    58. Accordingly, we certify that Reliability Standard CIP-012-1 
will not have a significant economic impact on a substantial number of 
small entities.

VI. Effective Date and Congressional Notification

    59. This final action is effective April 7, 2020. The Commission 
has determined, with the concurrence of the Administrator of the Office 
of Information and Regulatory Affairs of OMB, that this action is not a 
``major rule'' as defined in section 351 of the Small Business 
Regulatory Enforcement Fairness Act of 1996. This final action is being 
submitted to the Senate, House, and Government Accountability Office.

VII. Document Availability

    60. In addition to publishing the full text of this document in the 
Federal Register, the Commission provides all interested persons an 
opportunity to view and/or print the contents of this document via the 
internet through the Commission's Home Page (http://www.ferc.gov) and 
in the Commission's Public Reference Room during normal business hours 
(8:30 a.m. to 5:00 p.m. Eastern time) at 888 First Street NE, Room 2A, 
Washington, DC 20426.
    61. From the Commission's Home Page on the internet, this 
information is available on eLibrary. The full text of this document is 
available on eLibrary in PDF and Microsoft Word format for viewing, 
printing, and/or downloading. To access this document in eLibrary, type 
the docket number of this document, excluding the last three digits, in 
the docket number field.
    62. User assistance is available for eLibrary and the Commission's 
website during normal business hours from the Commission's Online 
Support at (202) 502-6652 (toll free at 1-866-208-3676) or email at 
ferconlinesupport@ferc.gov, or the Public Reference Room at (202) 502-
8371, TTY (202) 502-8659. Email the Public Reference Room at 
public.referenceroom@ferc.gov.

    By the Commission.

    Issued: January 23, 2020.
Nathaniel J. Davis, Sr.,
Deputy Secretary.

    Note: The following Appendix will not appear in the Code of 
Federal Regulations.

Appendix A

Commenters

------------------------------------------------------------------------
              Abbreviation                          Commenter
------------------------------------------------------------------------
Appelbaum..............................  Jonathan Appelbaum.
Bonneville.............................  Bonneville Power
                                          Administration.
IRC....................................  ISO/RTO Council.
Dr. Liu................................  Dr. Chen-Ching Liu.
NERC...................................  North American Electric
                                          Reliability Corporation.
Reclamation............................  Bureau of Reclamation.
Trade Associations.....................  American Public Power
                                          Association, Edison Electric
                                          Institute, National Rural
                                          Electric Cooperative
                                          Association.
Tri-State..............................  Tri-State Generation and
                                          Transmission Association, Inc.
------------------------------------------------------------------------

[FR Doc. 2020-01595 Filed 2-6-20; 8:45 am]
BILLING CODE 6717-01-P


