VALLEY FORGE, Pa. — PJM’s Independent Market Monitor said Wednesday that recently approved maintenance adders to the synchronized reserve calculation allow resources to withhold from the reserve market and increase offers above competitive levels.
To remedy this, the IMM’s Catherine Tyler told the MIC to set the synchronized reserve operations and maintenance cost included in Manual 15 to zero. Market sellers could still submit alternate O&M cost calculations to PJM and the Monitor for review using an exception procedure outline in Section 1.8 of the manual.
Stakeholders on the Energy Price Formation Senior Task Force agreed last year that O&M costs for synchronized reserve offers should be removed from PJM’s market rules. That docket is still pending before FERC (EL19-58).
Tyler said that a specific provision in Manual 15 allows steam unit synchronized reserves to include O&M costs attributable to a heat rate increase in their offers. The incremental energy offer curve and the no-load costs outlined in Schedule 2 of the Operating Agreement and the manual already account for this, Tyler said.
Sharon Midgley, Exelon’s director of wholesale market development, questioned why stakeholders would make this change while FERC has yet to rule on the energy price formation filing.
“The intent is to value resources more appropriately than how they are valued today,” she said. “This really decreases the value of reserves. … It’s doing the exact opposite of what the package’s intent was. Really focusing on one tiny component to us doesn’t seem right at this point in the process.”
“This is overstating costs for reserves, and it’s inappropriate and incorrect,” Tyler said. “Any other market design changes around reserves that would affect the price are completely separate from this.”
Stakeholders will vote on the potential manual change at the February MIC meeting.
Order 841 Update
Andrew Levitt, of PJM’s Applied Innovation Department, said work continues on the RTO’s brief to FERC due March 11 regarding its proposed 10-hour minimum runtime rule for energy storage resources offering into the capacity market.
FERC accepted most of PJM’s storage rules in October, but set the RTO’s 10-hour proposal for a paper hearing to determine whether it was just and reasonable. PJM requested a 90-day extension for its brief on Nov. 26.
In the filing, PJM said it needed extra time to engage with stakeholders after noting the sheer volume of protests over the proposed rule.
“Such dialogue will allow PJM to explore potential alternative approaches, as well as to ensure that all sides better understand each other’s respective positions,” the RTO wrote.
VALLEY FORGE, Pa. — PJM’s Planning Committee last week endorsed revisions to Manual 14F that would remove the competitive exemption for Form 715 local planning criteria transmission projects.
The directives came in two orders prompted by the D.C. Circuit Court of Appeals’ August 2018 remand that found FERC erred when it assigned all the costs for two Form 715 transmission projects proposed by Dominion Energy to the Dominion zone.
Critical Infrastructure Oversight
The Critical Infrastructure Stakeholder Oversight Task Force will hold its first meeting Jan. 27, PJM’s Christina Stotesbury said.
The PC approved the task force’s issue charge last month after several delays. The group will consider whether the RTO must develop governing document language to deal with transmission system enhancements designed to reduce the number of critical assets identified under NERC’s critical infrastructure protection standard CIP-014. (See “Critical Infrastructure Mitigation,” PJM PC/TEAC Briefs: Dec. 12, 2019.)
Stotesbury said the task force will recommend governing document changes within six months.
Order 845 Update
PJM’s Susan McGill said staff have until Feb. 17 to address several outstanding issues on its compliance with FERC Order 845: identification and definition of contingent facilities; provisional and surplus interconnection service; and incorporation of advanced technologies. The commission on Dec. 19 accepted six of the 10 changes the RTO proposed in its first compliance filing on the order, which is intended to increase the transparency and speed of the generator interconnection process (ER19-1958).
McGill said PJM will bring manual changes for the accepted revisions to the PC for a first read in February.
Capacity Import Study
PJM’s capacity import study completed last month shows the RTO can handle the 3,500 MW of capacity benefit margin (CBM) emergency assistance assumed available in the 2019 Reserve Requirement Study.
The anticipated allocation of CBM differs from 2019 because of increased generation dispatch in the Niagara area of NYISO that reduced import capability in the North supply zone from 412 MW to 120 MW. Withdrawn deactivation requests of several large units in PJM also increased import capability from the West 1 zone from 1,104 MW to 1,402 MW.
Entergy Mississippi has scored a major victory in an 11-year-old rate battle brought by the state’s former attorney general, who claimed the utility overcharged its customers.
Mississippi Chancery Court Judge Dewayne Thomas last month issued a ruling dismissing the case, deciding the court lacked the jurisdiction and expertise to hear the matter (25CH1:08-cv-02086).
Former Mississippi Attorney General Jim Hood filed the lawsuit in 2008, alleging that hundreds of thousands of Entergy customers paid too much because the company ran its own inefficient, older generation instead of purchasing less expensive wholesale power. Hood argued that Entergy owed up to $2 billion in damages from 1998 to 2013 as a result of its self-dealing.
Entergy Mississippi CEO Haley Fisackerly countered that the utility acted in the best interest of its customers. The company has argued that it did purchase power from third parties but also needed to run its own generation for the sake of reliability.
“Entergy Mississippi has some of the lowest rates in the country. We’re proud of our reputation for integrity in our business practices, which decades of clean audits prove,” Fisackerly said Thursday in a statement.
Entergy’s Grand Gulf Nuclear Station cooling tower | Entergy Mississippi
He also expressed satisfaction that the court agreed it wasn’t equipped to make a decision on utility rates.
“We have consistently maintained that a courtroom is not the proper forum to address issues about utility rates paid by customers and are grateful the Chancery Court carefully considered the issue and ruled in our favor,” Fisackerly said. He also pointed out that the company is subject to oversight from FERC and the Mississippi Public Service Commission. Those two agencies are “tasked with ensuring we treat our customers fairly,” Fisackerly said. Entergy has long argued that the complaint should be heard before FERC or the PSC if it were to proceed at all.
Current Attorney General Lynn Fitch, who took office a day after the ruling, has until Jan. 29 to appeal the court’s decision. Fitch did not respond to a request for comment.
The lawsuit’s lengthy history ended where it began — in county court, though the case mostly played out in the U.S. District Court for the Southern District of Mississippi. A four-day trial in April ensued before the district court remanded the case to the Chancery Court for lack of subject matter jurisdiction.
In his decision, Thomas cited FERC’s exclusive jurisdiction in filed rates and the Entergy System Agreement (ESA), which steered the Entergy operating companies from 1982 until 2013. Interpretation of the ESA has long been a source of disagreement in FERC proceedings. (See La. PSC Complaints Denied in Entergy System Disputes.)
“Because resolving the dispute in this matter involves the consideration and interpretation of the ESA, a FERC-approved tariff, this court must conclude that the matter falls within FERC’s exclusive jurisdiction,” Thomas wrote.
Hood early in 2019 called Entergy a “poor corporate citizen.” His out-of-state counsel also brought a similar $1 billion suit against Entergy Texas, which was also dismissed in 2015 on the basis of federal regulatory pre-emption by a Texas appeals court. Hood, a Democrat, was defeated in November’s gubernatorial election.
SPP last week produced more than 18 GW of wind energy for the first time, less than four months after breaking the 17-GW barrier.
The latest record came at 6:08 p.m. Wednesday, when wind production hit 18,259 MW. That exceeded the previous wind peak of 17,861 MW set on Dec. 11. SPP first cracked 17 GW on Sept. 30, when wind production peaked at 17,107 MW.
Jan. 20 Wind Mark | SPP
ERCOT holds the grid operator record with a 19,672-MW wind peak, set last January.
New York Gov. Andrew Cuomo signaled last week that his state will this year continue to step up efforts to decarbonize its economy with an eye to spreading the benefits.
Cuomo delivers the State of the State address. | NYDPS
“We must accelerate our transition to renewable energy, because the clock is ticking,” Cuomo said in his State of the State address Wednesday in Albany.
The Climate Leadership and Community Protection Act (A8429) signed into law last July calls for 70% of New York’s electricity to come from renewable energy resources by 2030, and for electricity to be 100% carbon-free by 2040. It also nearly quadrupled New York’s offshore wind energy target to 9 GW by 2035.
The law’s clean energy mandates also include doubling distributed solar generation to 6 GW by 2025, deploying 3 GW of energy storage by 2030 and raising energy efficiency savings to 185 trillion BTU by 2025.
Cuomo earlier in the week announced that the New York State Energy Research and Development Authority (NYSERDA) will solicit at least 1 GW of offshore wind energy this year and that a new $20 million Offshore Wind Training Institute at state college campuses on Long Island would begin training 2,500 workers next year.
The state last July awarded offshore wind contracts to Equinor’s 816-MW Empire Wind project and to the 880-MW Sunrise Wind, a joint venture of Ørsted and Eversource Energy. It also plans to commit $200 million to public investments in port infrastructure improvements to serve the new offshore wind industry.
“The creation of the Offshore Wind Training Institute is a critical step in developing the next generation of workers here in New York, who will serve as the backbone for the state’s offshore wind industry and clean energy future for decades to come,” Boone Davis, CEO of Atlantic Offshore Terminals, a developer of offshore wind supply facilities, said in a statement.
Think Big
NYSERDA this year also plans to award development funds to 21 large-scale solar, wind and energy storage projects across upstate New York, totaling more than 1,000 MW of renewable capacity and 40 MW of energy storage capacity.
“People say you have to choose between a strong economy and a healthy planet, but nothing could be farther from the truth,” Cuomo said. “The economy of tomorrow is the green economy.
“This year, let’s go big with an ambitious expansion of electric vehicles and attract the growing industry. It’s a win-win for our environment and our economy,” he said.
Most participants join in the Pledge of Allegiance before Gov. Andrew Cuomo delivers the State of the State address in Albany on Jan. 8. | NYDPS
Cuomo announced he had chosen Binghamton University professor Stanley Whittingham, winner of the 2019 Nobel Prize in chemistry for his work with lithium-ion batteries, to lead a task force to provide the state with “the most aggressive road map to the e-vehicle future.”
Spectrum News quoted Whittingham on Friday: “The easiest vehicles to convert from internal combustion to electric are fleet vehicles, whether the state can take initiative to start converting hundreds of vehicles to electric, convert all the buses to electric.”
Cuomo said the New York Power Authority (NYPA) should plan and build a statewide functional network of charging stations.
The agencies will work with private industry to ensure that one or more fast-charging locations are available in each of the state’s 10 Regional Economic Development Council regions by the end of 2022, that every travel plaza on the New York State Thruway has charging stations by the end of 2024 and that a total of at least 800 new chargers are installed statewide over the next five years.
Cuomo designed this poster for his State of the State address, and hired Brooklyn artist Rusty Zimmerman to render it professionally. | NYDPS
“Let’s use our collective government purchasing power and make sure that 25% of public transit bus fleets are electrified by 2025 and 100% by 2035,” Cuomo said. “Let’s make $100 million in Green Bank financing available to locate or expand EV manufacturers and suppliers in the state.”
The Green Bank of New York is a state-sponsored investment fund that helps leverage private financing for clean energy industry companies.
NYSERDA and NYPA will provide additional incentives to build more renewable projects and build them faster, focusing on opportunities upstate, and they will build new transmission lines to get the power to consumers who need it downstate, the governor said.
New York also will work this year to reduce fossil fuel consumption in buildings, with NYSERDA launching a $30 million retrofit program to demonstrate solutions for high-profile commercial and multifamily buildings.
NYSERDA will ask property owners, developers, equipment manufacturers and energy efficiency providers to propose ways to cut energy consumption and greenhouse gas emissions from buildings.
RENSSELAER, N.Y. — NYISO on Wednesday unveiled a plan to devote about one day a month in 2020 for stakeholders to discuss reliability and market issues related to the challenge of integrating a slew of clean energy resources into the grid over the next few years, a transition driven primarily by state policy.
“Until the markets reflect the cost of the environmental attributes that we’re trying to maximize, it is difficult to get renewable energy from upstate to the load centers downstate,” Mike DeSocio, the ISO’s director of market design, told the Installed Capacity/Market Issues Working Group (ICAP-MIWG).
NYISO last month published a 122-page “Grid in Transition” report, which will serve as the starting point for stakeholder discussion.
New York’s clean energy goals are reshaping the grid. | NYISO
Organized wholesale electricity markets have brought improved resource efficiency, “but there is more work to be done to deliver additional clean energy into New York City,” DeSocio said.
“New York’s electricity industry is transforming from a grid that is powered by traditional central-station, controllable fossil fuel generation to non-emitting, weather-dependent intermittent resources and distributed generation,” the report said.
Last year’s Climate Leadership and Community Protection Act (A8429) mandates the state to get 70% of electricity from renewable energy resources by 2030, develop 9 GW of offshore wind energy by 2035 and reach 100% carbon-free electricity by 2040.
The state’s clean energy goals also include doubling distributed solar generation to 6 GW by 2025, deploying 3 GW of energy storage by 2030,and upping its energy efficiency savings to 185 trillion BTU by 2025.
Reliability vs. Resilience
DeSocio said that reliability and resilience were much the same thing, with reliability the desired outcome, and resilience the means of achieving it.
Couch White attorney Kevin Lang, representing New York City, disagreed, saying that the two terms mean different things.
“In the city’s view, when it comes to resilience, the concern is the weakest link in the line or system,” Lang said. “At present, no reliability metric measures this factor.”
With respect to the grid transition discussion, Lang commented that the market provides signals for generation but not for transmission, adding that it is not clear that transmission is wholly a market responsibility.
Lang agreed with DeSocio’s response that the markets may not be the sole source of signals regarding the need for new transmission.
The grid paper did a good job of emphasizing the market, “but the afternoon will come when you need reserves, but also need energy prices not to be in scarcity pricing,” said Mark Reeder, representing the Alliance for Clean Energy New York (ACE NY).
“If you squeeze the high prices into a narrow band of hours, I wonder whether the ISO has thought about scarcity pricing,” Reeder said. “I worry about the exercise of market power.”
New York state economy-wide GHG emissions history and future reduction goals | NYISO
DeSocio replied that the ISO has thought about the topic, which it refers to as shortage pricing.
“The shortage pricing construct can be the right kind of signal for resources able to respond very quickly, from off to on in a very short period of time,” DeSocio said.
On carbon pricing, DeSocio said the ISO has done its job and that it’s up to the state to now act on the issue.
“We hope for a carbon pricing signal within the next six months, whether carbon pricing is a good idea or to stop talking about it,” he said. “We are not abandoning carbon pricing, but at the same time, we’re not talking about it much because it’s in the state’s hands to indicate where to go.”
The MIWG took over last January from the Integrated Public Policy Task Force (IPPTF), a joint effort between the ISO and the state’s Public Service Commission that spent a year-and-a-half developing the carbon pricing proposal released in December 2018.
The state must put a price on carbon in its electricity market if it hopes to meet the aggressive timelines of the decarbonization goals set out in the new law, the co-author of NYISO’s carbon pricing study, Analysis Group’s Sue Tierney, said in October. (See Carbon Pricing Vital to NY Goals, Study Author says.)
In addition, NYISO has registered support for carbon pricing in New York from many organizations, the latest of which is the New York League of Conservation Voters, which included support for carbon pricing in its 2020 Legislative Agenda.
“Putting a price on carbon is the only way New York can even come close to meeting its emissions goals,” Mark Younger of Hudson Energy Economics said Wednesday.
Howard Fromer, director of market policy for PSEG Power New York, said the state government acted to meet an environmental challenge, and that “markets have been successful at addressing environmental concerns, the most dramatic evidence being the reductions in nitrogen oxides and sulfur oxides over the past couple decades.”
Discussion Process
Energy market design specialist Ashley Ferrer presented a rough outline of the process for the grid transition discussions this winter and spring.
Associate capacity market design specialist Emily Conway laid out the timeline through May, with ICAP/MIWG meetings on grid transition reliability and market issues scheduled for Feb. 4, March 6 and 26, and May 11.
NYISO has scheduled stakeholder meetings from January to June 2020 to discuss topics related to the transformation of the grid. | NYISO
The outline referred stakeholders to potential questions in a project planning and market product file from last September, which included the following under reliability and market considerations:
What are appropriate market structures for assuring reliability in the 2030 and 2040 cases?
How to set reliability requirements and measure reliability with a system made of renewables and storage of different durations?
How to accommodate potentially reduced [uninstalled capacity] contribution arising from correlated renewable outages?
What role should real-time retail pricing play to assure customer load reductions when correlated outage events occur?
Where should the cost of loss of load be considered?
NYISO will kick off the discussion of each specific topic, followed by stakeholder presentations. Stakeholders need to submit materials for ISO review six business days before the meeting. Materials will be posted three business days prior to the working group meeting, consistent with current procedures.
Faced with a Feb. 9 deadline to rule on J.P. Morgan’s proposed $4.3 billion purchase of El Paso Electric, the Texas Public Utility Commission said last week it will take the matter up for consideration during its next two open meetings (49849).
Should the PUC not meet the deadline, set in motion in August when EPE and J.P. Morgan’s Infrastructure Investments Fund (IIF) and Sun Jupiter Holdings holding company filed a merger application with the commission, it would then have to file an extension.
The PUC is required to rule on acquisitions, mergers and other transactions within 180 days. It will meet twice in open session before the deadline — on Jan. 16 and 31.
“I don’t particularly want to [extend the proceeding],” PUC Chair DeAnn Walker said at the conclusion of a Jan. 7 hearing on the transaction.
PUC Chair DeAnn Walker leads the commission’s discussion of the El Paso Electric purchase.
To that end, Walker asked staff to spend more time with the documents and ensure “everything is tied down” and that the applicants are prepared to answer the commission’s questions during the next open meeting.
“One thing that’s certain is the commission has a very robust process to vet these types of transactions,” said attorney Lino Mendiola, representing IIF. “I can testify this process has been robust, with copious amounts of testimony and numerous discussions, emails and everything else.”
That process has a resulted in a stipulated settlement agreement between the applicants and PUC staff, the Office of Public Utility Counsel, the city of El Paso, and various consumer and labor groups. (See Parties to EPE Acquisition Reach Settlement Agreement.)
The Rate 41 Group, a coalition of school districts and other public entities, withdrew an earlier motion for continuance on Jan. 3 and indicated it wouldn’t oppose the settlement after having made “significant” progress on its issues.
“We are pleased to be a part of a very comprehensive settlement that addressed virtually every concern someone could raise,” Mendiola said.
Last Opponent
The lone holdout to the settlement is retired veterinarian Richard Bonart, who once served on El Paso’s Public Service Board. Bonart raised concerns over the stipulated agreement’s revision of the applicants’ commitment to a $100 million economic development fund, saying the loss of the words “sustainability” and “community” provided an “inferior product.” He argued that the new language would place the poorer communities around El Paso at a disadvantage.
“Those people should reap the benefits from this fund,” he said. “What you’re creating with this fund is a black box, a leap of faith. ‘Just let us do it, and we’ll take care of everything.’ I don’t think the way this is set up will guarantee … good performance.”
Bonart was given the opportunity to question the hearing’s only two witnesses: Darryl Tietjen, director of the PUC’s Rate Regulation Division, and EPE CFO Nathan Hirschi.
Richard Bonart (right) questions the PUC’s Darryl Tietjen.
Tietjen reiterated earlier testimony supporting the stipulated agreement, saying the agreement “reflects an appropriate and reasonable balancing of the interests of EPE, its customers and other participants in the Texas electricity market.”
“Any changes to the stipulation could undermine its purpose, result in the withdrawal from the stipulation by signatories negatively affected by the changes, and create additional litigation and costs,” Tietjen said, reading his testimony aloud. He said he felt “absolutely confident” that El Paso ratepayers would not bear the burden funding the economic commitments, pointing to his role in annually gathering utility earnings reports.
Hirschi told Bonart that the fund, to be allocated 80-20 between El Paso and the state of New Mexico, was an “effective way to distribute the resources.”
IIF has also reached an agreement with government agencies, organizations and a lone intervenor in New Mexico. The state’s Public Regulation Commission, which also must approve EPE’s purchase, has scheduled a hearing on Jan. 16.
The Nominating Subcommittee for NERC’s new Reliability and Security Technical Committee (RSTC) is considering the final group of nominees for the 34-person entity’s first slate of members following the elections of sector representatives.
Nominations to fill 10 at-large seats closed Friday, RSTC Chairman Greg Ford told the Member Representatives Committee’s (MRC) pre-meeting informational conference call last week. The Nominating Subcommittee — composed of Ford, RSTC Vice Chair David Zwergel, Board of Trustees Vice Chair Janice Case, CEO Jim Robb and MRC Vice Chair Jennifer Sterling — will announce their choices at the next meeting of the board Feb. 6 in Manhattan Beach, Calif.
The at-large members will join representatives chosen from sectors 1-10 and 12. Each sector was allocated two seats last year when NERC approved the creation of the new committee, which will replace the Planning, Operating and Critical Infrastructure Protection committees. Because all but four sectors put forward more than two names, they held elections to narrow the field. (See Elections Underway for New NERC Panel.)
Elected were:
Sector 1 (Investor-Owned Utility): Greg Stone of Duke Energy (2020-2023) and Kayla Messamore of Evergy (2020-2022)
Sector 2 (State/Municipal Utility): Brian Irish of Salt River Project (2020-2023) and Art Iler of American Municipal Power (2020-2022)
Sector 3 (cooperative utilities): Marc Child of Great River Energy (2020-2023) and Ben Engelby of Arizona G&T Cooperatives (2020-2022)
Sector 4 (Federal/Provincial Utility): Robert Reinmuller of Hydro One (2020-2023) and Edison Elizeh of Bonneville Power (2020-2022)
Sector 5 (Transmission-Dependent Utility): John Stephens of City Utilities of Springfield (2020-2023) and Carl Turner of Florida Municipal Power Agency (2020-2022)
Sector 6 (Merchant Electricity Generator): Allen Schriver of NextEra Energy (2020-2023) and Sheranee Nedd of Public Service Enterprise Group (2020-2022)
Sector 7 (Electricity Marketer): Kyle VanderHelm of Tenaska (2020-2023) and Jodirah Green of ACES Power (2020-2022)
Sector 8 (Large End-Use Electricity Customer): John P. Hughes of Electricity Consumers Resource Council (2020-2023) and Venona Greaff of Occidental Chemical (2020-2022)
Sector 9 (Small End-Use Electricity Customer): Darryl Lawrence of the Pennsylvania Office of Consumer Advocate (2020-2023) and David Mulcahy of Modern Energy (2020-2022)
Sector 10 (ISOs/RTO): Wesley Yeomans of NYISO (2020-2023) and Christine Hasha of ERCOT (2020-2022)
Sector 12 (State Government): Christine Ericson of the Illinois Commerce Commission (2020-2023) and Cezar Panait of the Minnesota Public Utilities Commission (2020-2022)
The Nominating Subcommittee will consider several factors in choosing at-large members, primarily interconnection diversity, Canadian representation, entity sector and size, and areas of expertise, with the goal of ensuring a well-rounded overall membership.
| NERC
“We’ve got a matrix that has got all of the attributes of those that were elected, and what we plan to do is look at the different areas such as operations planning or both physical and cybersecurity, where would we like to have a little more expertise,” Ford said.
The RSTC will hold its first meeting March 4 to elect the executive committee. Its initial regular meeting in June will coincide with the final meetings of the retiring committees.
All representatives are set to take their seats at the RSTC’s first regular meeting in June. Half of the initial members will serve two-year terms expiring in 2022, while the rest will serve three-year terms ending in 2023. After the inaugural terms, future members will serve for two years, expiring in alternating years.
[Editor’s Note: This article has been updated to correct the names of the nominating committee members and the location of the February Board of Trustees meeting.]
Although fears of an imminent U.S. military conflict with Iran eased last week, cybersecurity experts cautioned that the country remains an increasing cyber threat with ambitions for attacks on U.S. infrastructure.
Concerns about a cyber offensive from Iranian state actors have grown since the country pledged to retaliate for the Jan. 2 U.S. drone attack that killed Maj. Gen. Qassem Soleimani, leader of the Quds Forces of the Islamic Revolutionary Guards Corps. After responding Jan. 7 with a missile attack on two bases housing U.S. soldiers in Iraq, Iranian leaders said they “do not seek escalation or war.”
But that doesn’t mean Iran won’t continue to pursue cyber warfare, which experts say it sees as a “force multiplier” against the U.S.’ more powerful military. Western intelligence agencies have identified Iran, along with North Korea, Russia and China, as the countries with the most sophisticated cyber offensive capabilities.
The U.S. indicted seven Iranians with links to the Revolutionary Guard Corps for attacks on almost four dozen U.S. financial services firms over about 18 months beginning in late 2011. | FBI
News of the Soleimani attack prompted Christopher Krebs, director of the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency (CISA), to reissue the agency’s June 2019 alert that noted “a recent rise in malicious cyber activity directed at United States industries and government agencies by Iranian regime actors and proxies.”
“Time to brush up on Iranian TTPs [tactics, techniques and procedures] and pay close attention to your critical systems, particularly ICS [industrial control systems],” he tweeted. “Make sure you’re also watching third-party accesses!”
“Iran maintains a robust cyber program and can execute cyberattacks against the United States,” DHS said in a terrorism threat bulletin Jan. 4. “Iran is capable, at a minimum, of carrying out attacks with temporary disruptive effects against critical infrastructure.”
CISA followed with a warning Jan. 6 urging businesses to “assess and strengthen your basic cyber and physical defenses.”
Some 85% of cybersecurity experts polled by The Washington Post said the U.S. should expect serious cyberattacks from Iran in the next few months.
“It is almost a foregone conclusion that we will now see retaliatory cyberattacks on U.S. assets by Iran,” Richard Henderson, head of global threat intelligence for security firm Lastline, told SecurityWeek. “Iran has shown a demonstrated ability and propensity to go after heavy industry. Any organization with substantial ICS infrastructure should be on high alert now for potential attacks. Heavy industry, oil and gas, electrical generation and the attached grid infrastructure, as well as other critical infrastructure, are all caught in the crosshairs as of this moment.”
“I can’t say one way or another if Iran was contemplating a cyberattack before the U.S. strike,” Michael Daniel, CEO of the Cyber Threat Alliance and former cybersecurity coordinator under President Barack Obama, told Yahoo Finance. “What I can say is that the U.S. and other Western countries should also be prepared for the Iranians to use their cyber capabilities as part of a retaliation effort.”
After the 2015 nuclear deal it signed with the U.S. and others, Iran mainly limited its cyber efforts to the Middle East, said John Hultquist, director of intelligence analysis for security firm FireEye. In May 2018, President Trump said the U.S. would no longer honor the deal and imposed sanctions on the Iranian regime. “In light of [the Soleimani assassination], resolve to target the U.S. private sector could supplant previous restraint,” Hultquist told SecurityWeek.
DHS said it had seen “no specific, credible threats” to the U.S. since the general’s killing. But the nature of cyber warfare means it could be weeks or months before threats materialize, experts said.
Wiper Attacks
Iran has been linked to several destructive online attacks in recent years, mostly in the Middle East. Its most well known operation was the Shamoon virus, which infiltrated Saudi Arabia’s national oil company Saudi Aramco in 2012 and overwrote the hard drives of more than 35,000 computers. Restoring the affected systems took more than a week.
Such “wiper” attacks could cause major problems for utilities. However, security experts say creating widespread havoc in the North American grid by this method would take considerable effort, which has not been observed so far.
Wiper attacks require “weeks if not months of preparation and intrusion work,” Nathan Brubaker, a senior manager at FireEye, told ERO Insider. “More sophisticated targeted destructive cyberattacks would require the same intrusion activity … as well as extensive preoperational planning and significant amounts of expertise to understand a target’s industrial process and how to interact with it in order to cause a desired outcome.”
DHS’ June 2019 alert said Iranian actors and proxies were using tactics like spear phishing (emails appearing to come from a trusted sender that are intended to trick individuals into revealing confidential information), password spraying (a brute force attack in which hackers test a small number of commonly used passwords on a large number of accounts) and credential stuffing (using stolen information related to one system to try to get into other systems).
“What might start as an account compromise, where you think you might just lose data, can quickly become a situation where you’ve lost your whole network,” DHS said, urging the use of multifactor authentication.
Facebook, Twitter and Google suspended dozens of accounts in mid-2018 for taking part in Iranian government phishing campaigns.
Pre-2015 Attacks
In addition to the 2012 Saudi Aramco attack, Iran has been blamed for the 2014 assault that took out computers, phones and email at Las Vegas Sands’ headquarters after CEO Sheldon Adelson suggested a nuclear attack on the country.
Iran also was accused of the distributed denial of services attacks that hit almost four dozen U.S. financial services firms over about 18 months beginning in late 2011. In 2016, federal officials announced they had indicted seven Iranians with links to the Revolutionary Guard Corps for the attacks, which blocked hundreds of thousands of customers from online access to their bank accounts.
In 2013, an Iranian national allegedly gained access to the supervisory control and data acquisition system for the Bowman Avenue Dam in Rye, N.Y., allowing him to monitor water levels, temperature and the status of the sluice gate. But Brubaker said this event, while significant, should not be exaggerated.
In 2013, an Iranian national allegedly gained access to the SCADA system for the Bowman Avenue Dam in New York, allowing him to monitor water levels, temperature and the status of the sluice gate.
“There is a huge difference between remotely accessing a SCADA system and having enough knowledge about and access to the target’s control systems and processes to cause a specific desired outcome,” such as an explosion, Brubaker said.
For example, an intruder who wishes to cause significant damage to a nuclear facility needs a sophisticated understanding of the physics behind its operation in order to predict the results of any remotely entered command. Moreover, the attacker must be able to circumvent the plant’s independent safety systems that may intervene to return the system to normal. Neither of these is within the realm of capabilities that Iran’s cyber forces have demonstrated to date.
Security firm IronNet issued a briefing this month that identified several hacker groups believed associated with Iran.
It included a group known as Tortoiseshell, which in addition to targeting IT service providers in Saudi Arabia, has run a separate campaign targeting U.S. military veterans with a fake website purporting to help them find jobs. “This attack is believed to be a supply chain attack, enacted to enable access to the IT service providers’ customers, but it is unclear which specific customers were targeted,” IronNet said.
The group APT34, also known as the OilRig group, is believed responsible for a July 2019 campaign that used fake LinkedIn profiles purporting to belong to college faculty members. The effort was intended to build trust with targets in order to deliver malware through file attachments.
The same group was believed to have run several domain name server (DNS) hijacking campaigns in early 2019, prompting an emergency directive from CISA requiring U.S. government agencies to verify their DNS records and ensure their DNS management accounts were secured.
Last October, Microsoft reported that Iranian hackers were involved in an information operation that attempted to compromise email accounts of U.S. government officials, journalists covering political campaigns and accounts associated with a presidential campaign, later identified by The New York Times as that of Trump.
Security Apparatus Tested
Marc Child, chair of NERC’s Critical Infrastructure Protection Committee and information security program manager for Great River Energy, said the heightened concerns over Iran provided an opportunity to see how security measures play out in real-world scenarios.
“It has been interesting to watch the response from our intelligence-sharing partners. The Electricity Subsector Coordinating Council and the E-ISAC [Electricity Information Sharing and Analysis Center] really stepped up quickly to provide utilities with the information we need,” he told ERO Insider. “It feels like we’ve taken the lessons learned from GridEx and put them to immediate practice.”
Tri-State Generation and Transmission Association said Thursday that it will shut down 1,111 MW of coal-fired generation and an associated coal mine, bending to environmental pressures and market economics.
The Colorado-based cooperative announced the retirement of its last New Mexico coal plant by the end of this year and its remaining Colorado coal units and coal mine by 2030.
CEO Duane Highley said during a media conference call that carbon-reduction legislation in Colorado and New Mexico, the “economics of operating a [coal-fired] power plant in a competitive market,” and the addition of low-cost renewables led to a push from Tri-State’s membership to develop a future plan for the organization.
“The very, very low cost of renewables coming online are coming in well below the variable cost of fossil fuel plants,” Highley said. “We’re member-owned and -governed. Our members asked us to come up with a plan that is both financially and environmentally viable.”
Tri-State, with 43 member electric cooperatives and public power districts in four states, announced the development of its Responsible Energy Plan in July in an “aggressive” transition to a cleaner energy portfolio and to ensure compliance with state environmental regulations.
That was Step 1. The next step was Thursday’s announcement that it would retire New Mexico’s Escalante Generating Station at the end of this year and Colorado’s three-unit Craig Generating Station by 2030.
The 253-MW Escalante plant began operations in 1984. Tri-State previously retired its share of coal-fired Unit 3 of San Juan Generation Station in New Mexico in 2017.
The 1,285-MW Craig plant’s three units went into service between 1979 and 1984. Tri-State is the majority owner of the 410-MW Unit 2 and full owner of the 448-MW Unit 3. The cooperative said it is working with Unit 2’s other owners, which include Xcel Energy, PacifiCorp, Platte River Power Authority and Salt River Project, to determine the details of its retirement.
A previously announced 2025 closure date for the 427-MW Unit 1 will remain unchanged.
Tri-State will also close by 2030 its Colowyo Mine, which solely feeds Craig. The plant is also the only buyer of coal from Trapper Mine, which is owned by Tri-State and other utilities. Highley said it will be up to the plant’s other owners to decide its fate once Craig closes.
“I anticipate [Trapper] having difficulty remaining open when the [plant] is gone,” Highley said. “[The ownership] will have to decide what to do.”
The cooperative still has 783 MW of minority ownership stakes in the Laramie River and Springville coal-fired plants in Wyoming and Arizona, respectively. Asked whether Tri-State could simply withdraw from those contracts, Highley, who joined the cooperative less than a year ago, said he was not familiar with the details of any commitments.
Tri-State’s announcement drew a shout-out from Colorado Gov. Jared Polis during his State of the State address Thursday and praise from environmental organizations.
Polis, who has pushed legislation designed to make Colorado carbon-free by 2040, used Tri-State as an example of the private sector seeing a “profitable future in renewables.” (New Mexico last year passed legislation requiring 100% carbon-free electricity by 2045.)
“We’re also excited to work with Tri-State to allow its 17 member co-ops across the state to generate more renewable energy locally,” Polis said. “We want communities to have the option of reaping the benefits of more clean, low-cost local energy generation. … It is a bold step to protect the future of the planet we all must inhabit.”
The Rocky Mountain Institute’s Nick Steel noted that a 2018 RMI analysis of Tri-State’s coal fleet had determined the cooperative’s members would save $600 million through 2030 by retiring its coal-fired plants and investing in a replacement portfolio of clean energy resources.
The association’s “announcement represents a critical step toward achieving those savings for Tri-State’s members,” Steel said in a statement. “Importantly, due to falling prices for renewable resources in the Western United States since 2018, the cost savings that Tri-State can capture as a result of these announced coal plant retirements will likely be even higher than we estimated in 2018.”
Western Resource Advocates’ Erin Overturf, deputy director of the nonprofit environmental group’s Clean Energy Program, agreed.
“Closing these coal-fired power plants is an important step that will help Tri-State reduce its emissions of carbon dioxide and other harmful air pollutants, while also lowering electricity costs for its members,” she said. “Continued operation of coal plants is increasingly more expensive than shifting to cleaner resources like wind and solar.”
Both Polis and Highley referenced their working together on “proactive legislation” and ensuring employees affected by the closures are taken care of.
“That’s the key for us: maintaining stable rates and reliable power for our members,” Highley said. “To provide certainty for our members and employees and communities, wholesale electric rates have to be stable. We’re confident we can manage these closures while maintaining stable rates.”
Highley put off discussing the Responsible Energy Plan and replacement power until next week, preferring, he said, to stay focused on Tri-State employees and its communities over the next few days. He said the coal closures will mark a “significant downsizing of the company and a significant loss of jobs,” touching almost half the employees.
Tri-State has 600 employees directly involved in coal production and another 100 “probably” impacted, Highley said.
Highley did say the Responsible plan will result in a “significant” investment in renewables and rural electrification initiatives.
Tri-State has issued six requests for proposals for renewable energy resources, resulting in power contracts for 656 MW of utility-scale wind and solar resources. The cooperative says nearly a third of the electricity used by its consumers comes from renewable resources.
