Power Industry Gets Security Standard

Move over HIPAA, SOX, and PCI. There's a new security compliance standard in town.

After nearly three years of consideration, the North American Electric Reliability Council (NERC) has finalized its Critical Infrastructure Protection (CIP) specifications, which require all major utilities on the continent to meet a set of security standards or face financial penalties. The first compliance deadlines are set for the second quarter of 2009.

The new requirements, officially known as CIP 002-009, were completed in May and quietly enacted last month. They will apply to any company, large or small, that is part of the continent's bulk electric power grid. Distributors will not be held to the new standard, but suppliers and contractors to the major utilities may have to comply with some aspects.

More rigorous regulations have been in demand for some time, particularly in light of terrorist attacks around the globe. In 2005, The Washington Post interviewed Patrick Wood III, the chairman of the Federal Energy Regulatory Commission, after officials at the Energy Department's Idaho National Laboratory showed him a skilled hacker could cause serious problems. "I wished I'd had a diaper on," Wood told the newspaper.

This will be the first time that American power companies have been subject to mandatory security standards with penalties, according to Lynn Costantini, CIO at NERC and a chief contributor to the specifications. A previous guideline, called Cyber Security Standard 1200, was self-regulated and only applied to the largest power generators.

"Those guidelines were very basic, really more on the order of best practices," says Costantini. "We've significantly expanded the scope of the requirements." Under CIP, NERC will conduct an audit of each utility every three years, and an independent contractor will audit NERC's audits, she says.

The CIP standards do not specify products, but they do require that utilities deploy certain categories of security technology, such as antivirus software, patch management tools, and intrusion detection systems. Power companies will be required to conduct a vulnerability assessment at least once a year.

The first standard of the suite, CIP-002, requires power companies to conduct a risk assessment of their security environments and identify all of the systems and devices that need to be protected. CIP-003 requires the utilities to build a security governance program, documenting ownership of assets, authority to make changes, and policies for maintaining security. CIP-004 defines security training requirements.

While CIP-006 defines requirements for physical and building security, IT people will probably spend most of their time working on CIP-005, which defines electronic perimeter defenses, and CIP-007, which outlines requirements for protecting servers and implementing tools such as patch management and IDS. The standards don't specify the functionality of those devices, but they do require power companies to prove those systems are in place and operational.

CIP-008 and CIP-009 outline requirements for reporting, responding, and recovering in the event of a security incident.

NERC has not yet set its guidelines for auditing, so it's not clear how stringent those audits will be, Costantini says. The financial penalties also have not yet been defined, but there will be four levels of violation. "A Level 1 violation would be considered less serious, and the penalty would be smaller," she says. "A Level 4 violation would be considered very serious." The group hasn't decided whether to levy graduated penalties based on the size of the utility.

"The goal of the whole project is to keep the power on," Costantini says. "We think this will help. We have some utilities that are very ready now, and others that still have a long way to go. But they've all known about the coming requirements for some time, and from what I've seen, they're all committed to making the deadlines."

— Tim Wilson, Site Editor, Dark Reading