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Special Report

Industry hopes its centralized assets aren't in the crosshairs.
Fortnightly Magazine - November 1 2001

in regular communication with the National Infrastructure Protection Center (NIPC), a department created in 1997 by President Clinton and located at the Federal Bureau of Investigation (FBI) headquarters in Washington. The center monitors threats and attacks against critical industrial infrastructure in the United States, including energy, telecommunications, and banking and finance.

In its response, the Federal Energy Regulatory Commission (FERC) issued a statement alerting energy companies that it would allow them to recover costs associated with beefing up security at their facilities.

"The commission is aware that electric, gas, and oil companies may need to adopt and/or update procedures and install facilities that further safeguard electric power grids and natural gas pipeline systems," FERC said in a statement. The commission said it's committed to expediting the processing on a priority basis any application that would "specifically recover such costs from wholesale customers." FERC said companies also can propose a separate rate recovery mechanism, such as a surcharge over currently existing rates or some other cost recovery method.

The FBI Connection

Vancko says her organization has been in almost daily contact with the FBI to ensure proper security measures are being followed. "We've had direct contact with the federal government and our security coordinators," she said.

Each of the 21 NERC regions employs its own security officer who is responsible for ensuring proper measures are being taken by member energy companies. Some regions have a large nuclear reactor presence while security coordinators in other regions such as the Pacific Northwest must watch over hydroelectric assets. Each region has different factors on which security is based, Vancko says.

In June, three months before the attacks in New York and Washington, NERC issued a study on protecting electricity industry infrastructure. The council offered a quote at the beginning of the study from a book entitled with a refrain that rings similar to comments of pundits who compared the Sept. 11 actions to the Japanese raid of Dec. 7, 1941. "Whether at Pearl Harbor or at the Berlin Wall, surprise is everything involved in a government's (or in an alliance's) failure to anticipate effectively," the quote reads.

In the study, "An Approach to Action for the Electricity Sector," NERC noted that recent requests for security funding often had been met with the rhetorical management question: "Nothing has ever happened, so why spend money on security?" NERC responded that much has happened, including computer intrusions, sabotage, vandalism, and plots to disable towers and substations, although not on the scale of what occurred to Con Edison's infrastructure on Sept. 11.

Nuclear Plant Self-policing Found Suspect

The nuclear industry's move toward self-regulation of security at its power plants hit a major pothole in the wake of the attacks on the World Trade Center and Pentagon.

The Nuclear Energy Institute (NEI), the lobbying arm for the nuclear power industry, has worked with the Nuclear Regulatory Commission (NRC) to implement the safeguards performance assessment (SPA) program, a process that involves nuclear plant operators conducting "full-scale, force-on-force exercises" on their own with less direct NRC involvement. Currently, the NRC uses its own