Electricity Markets, Grid Security and Resilience

The nation’s electricity grid delivers electricity that is essential for modern life. However, the electric utility industry faces significant challenges, including aging infrastructure, changes in the sources of power generation, and increased cybersecurity and other risks.

The Department of Energy (DOE) and the Federal Energy Regulatory Commission (FERC) have key responsibilities related to the electric utility industry. For example, DOE seeks to ensure that the nation’s energy delivery system is secure, resilient, and reliable. DOE is also responsible for things like collaborating with the owners and operators of critical infrastructure, identifying vulnerabilities, and helping to mitigate incidents. FERC regulates wholesale electricity markets and is responsible for reviewing and approving mandatory electric reliability standards. In addition, the federal government owns significant electricity generating capacity and transmission assets, which federal entities like the Tennessee Valley Authority (TVA) and the Power Marketing Administrations (PMA) play a significant role in managing.

These and other federal agencies play various roles in addressing challenges facing the electric utility industry.

For example:

• The federal government has a significant role in addressing cybersecurity risks facing the electricity grid, even though most of the grid is owned and operated by private industry. DOE has developed plans to implement a strategy for addressing grid cybersecurity risks, and FERC has approved mandatory grid cybersecurity standards. However, both DOE and FERC could improve their efforts in these areas. For instance, DOE should ensure the plans it develops to implement the federal cybersecurity strategy more fully address risks to the grid’s distribution systems.
• Climate change is expected to affect every aspect of the electricity grid. DOE should coordinate its efforts to enhance the electricity grid’s resilience to climate change, and FERC should assess climate risks to the grid and identify options to address these risks. In addition, the PMAs and TVA face climate-related risks to their operations and have taken some steps to manage them, but additional steps are needed.
• Federal agencies coordinate to support local electric utilities in addressing risks to the grid and restoring power after a disaster. For example, as the industry works to address supply chain challenges for critical grid components—including transformers—DOE has identified options for addressing such challenges but DOE should develop plans that specify how to implement these options. In addition, agencies took unprecedented roles in restoring power in Puerto Rico following Hurricanes Irma and Maria. However, DOE should address lessons learned from previous disasters to prioritize recovery efforts. In addition, DOE is developing planning tools, such as metrics for grid resilience, but could better guide these efforts and better inform utilities about available resources.

Hurricane Maria Damaged Power Lines in Puerto Rico in November 2017

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