United States: Electricity Sector Cybersecurity Risks Included In New Cybersecurity Executive Order

Norma Krayem is a Senior Policy Advisor in & Knight's Washington D.C. office

Directive focuses specifically on Cybersecurity Risks to the Electric Utility Industry and the "Most Critical of Critical Infrastructure"

On May 11, 2017, President Trump signed a long anticipated Cybersecurity Executive Order (EO), Strengthening the Cybersecurity of Federal Networks and Critical Infrastructure." It represents President Trump's first major cyber policy effort, aimed at addressing systemic cyber risks to the critical infrastructure and the Federal Government. Homeland Security Advisor Tom Bossert, during the press briefing announcing the signing of the EO stated: "I think the trend is going in the wrong direction in cyberspace, and it's time to stop that trend and reverse it on behalf of the American people. We've seen increasing attacks from allies, adversaries, primarily nation states but non-state actors, and sitting by and doing nothing is no longer an option."

The EO builds on and tracks concerns expressed by the White House, Congress as well as the U.S. Departments of Homeland Security (DHS) and Energy (DOE) over escalating cyber-attacks on utilities that could have operational impacts on delivery of service and resulting impacts on the rest of the economy. There are five immediate distinct policy and operational impacts on electric utilities, with potential regulatory and legal implications down the road as it is implemented. There will be a tremendous amount of work to achieve the deadlines listed throughout and it is critical for utilities to fully participate in the process.

I. Critical Infrastructure at Greatest Risk

Section 2 focuses on the sixteen designated Critical Infrastructure (CI) sectors of which the energy sector is one of the most important. The EO utilizes the underlying requirements of the February 2013 Executive Order 13636: "Improving Critical Infrastructure Cybersecurity" and Presidential Policy Directive (PPD 41), by focusing on the "most critical of critical sectors" also known as Section 9 companies. These are companies, and assets within companies, which have been designated by the Executive Branch as being at the greatest risk not only from a cyber-attack but one where an attack on the company, as defined by EO 13636, "could reasonably result in catastrophic regional or national effects on public health or safety, economic security, or national security."

The EO focuses on the national and homeland security implications of such an attack and directs DHS, in coordination with the U.S. Department of Defense (DOD), the Attorney General, the Director of National Intelligence (DNI), the FBI Director and the heads of appropriate sector-specific agencies to: "Identify authorities and capabilities that agencies could employ to support the cyber efforts" of the Section 9 companies and to engage these companies to see how these "authorities and capabilities" could help support the companies risk management efforts. A report is due to the President within 180 days with recommendations to "for better supporting the cybersecurity risk management efforts" of these companies.1 Certainly from there, we could see potential regulatory changes, other requirements and changes in expected preparedness.

II. Federal Evaluation of Electricity Sector Capabilities and Readiness

The EO singles out specific risks to the electricity sector and its ability to manage a sustained cyber-attack. The "Assessment of Electricity Disruption Incident Response Capabilities," section directs "the Secretaries of DOE and DHS, in consultation with DNI, State, local, tribal, and territorial governments, and with others as appropriate," to analyze:

  1. The potential scope and duration of a prolonged power outage associated with a significant cyber incident, (as defined in PPD 41) against the electric subsector;
  2. The readiness of the United States to manage the consequences of such an incident;
  3. Any gaps or shortcomings in assets or capabilities required to mitigate the consequences of such an incident.

There are continued and growing concerns over increased nation state attacks against the grid and how the attacks could have a ripple effect on the broader economy and other sectors. The EO requires a report to the President in 90 days to assess these risks, with the presumption that the Executive Branch will have to decide how to take some measure of corrective actions to address the risks that may have been identified.

III. Assessment of Risk Management Practices in Publicly Traded Companies

For those publicly traded utilities, EO cites potential concerns around the cyber risk management practices and requires DOC and DHS to review "the sufficiency of existing Federal policies and practices to promote appropriate market transparency of cybersecurity risk management practices by critical infrastructure entities" and report to the President within 90 days.2

IV. Resilience Against Botnets and Other Automated, Distributed Threats

The growth of the "Internet of Things" and the distributed threats from botnets brings shared risk across all critical infrastructure ecosystems. This is an area that is of concern to utilities as well and will be important to focus on. The process will be led by Commerce and DHS with a mandatory report due within 240 days.

V. Cybersecurity Workforce Development

The lack of qualified cybersecurity professionals is a challenge for all utilities and the EO focuses on the need and challenges that the public and private have in this area and could result in a more structured way to find, recruit and retain cyber professionals.

Footnotes

1. It is important to note that companies who may not be currently designated as a Section 9 entity are subject to that designation at any time. The designation is not "appealable" and once designated by the Federal government, it is more likely companies and additional assets would be added to the list, more unlikely for a company to come off the list.

2. As companies are aware, the Securities and Exchange Commission (SEC) made it clear several years ago that cyber is a "foreseeable risk" and is part of traditional disclosures of risk.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.