Increasing Energy Reliability & Resiliency NGA Policy Institute for Governors' Energy Advisors Denver Colorado, September 11, 2013

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1 + Increasing Energy Reliability & Resiliency NGA Policy Institute for Governors' Energy Advisors Denver Colorado, September 11, 2013 Jeffrey R. Pillon, Director, Energy Assurance Programs National Association of State Energy Officials

2 + So what does resiliency mean? For a community, loss of resilience, R, can be measured as the expected loss in quality (probability of failure) over the time to recovery, t1 t0. Source: Multidisciplinary Center for Earthquake Engineering Research framework for defining resilience (Bruneau and Reinhorn, 2007; Bruneau et al., 2003)

3 + Resilience Results from a Sustained 3 Commitment to: Robustness The ability to operate or stay standing in the face of disaster Resourcefulness Skillfully managing a disaster once it unfolds Rapid Recovery The capacity to get things back to normal as quickly as possible after a disaster Learning Lessons Having the means to absorb the new lessons that can be drawn from a catastrophe Presidential Policy Directive 21 defines resilience as the ability to prepare for and adapt to changing conditions and withstand and recover rapidly from disruptions. Resilience includes the ability to withstand and recover from deliberate attacks, accidents, or naturally occurring threats or incidents. Source: Flynn, S. (2008) America the Resilient: Defying Terrorism and Mitigating Natural Disasters. Foreign Affairs, 87 (2), 2-8 and Presidential Policy Directive 21 (PPD-21) February 12, 2013

4 + Why Invest in Reliability and Resilience? To reduce human and economic consequences 4 Weather-related power outages are estimated to have cost the U.S. economy an inflation-adjusted annual average of $18 billion to $33 billion. Annual costs fluctuate significantly and are greatest in the years of major storms such as Hurricane Ike in 2008, a year in which cost estimates range from $40 billion to $75 billion, and Superstorm Sandy in 2012, a year in which cost estimates range from $27 billion to $52 billion. Since 1980, the United States has sustained 144 weather disasters whose damage cost reached or exceeded $1 billion and seven of the ten costliest storms in U.S. history occurred between 2004 and The Economic Benefits of Increasing Electric Grid Resilience to Weather Outages, The White House Council of Economic Advisers and the U.S. Department of Energy, August 12,

5 + In 2012, the U.S. had eleven weather disasters costing over a billion-dollars 5 This was the second-most for any year on record, behind only Source: National Oceanic and Atmospheric Administration

6 + National Infrastructure Protection Plan The Plan issued June 2006, updated in 2009 and a succor plan is due in October Under PPD-21 a successor to the 2009 plan is being written and is schedule to be delivered to the President in October 2013 The new plan will define the nature, scope, roles and responsibilities for the public and private sectors to pursue the vision, goals and objectives of the plan PPD- 21 specifically refers to Critical Infrastructure Security & Resilience PPD-21 also identifies energy and communications systems as uniquely critical due to cross sector impacts Risks = threats, vulnerabilities, and consequences from all hazards Focuses on assets, systems, networks, and functions Further works to strengthens information sharing

7 + State Energy Assurance Planning Responding to energy emergencies & reducing risk to critical energy infrastructure DOE provided Grants (issued in 2009 and 2010) to 48 States, 2 Territories, 43 Cities to: Develop new or refine State Energy Assurance Plans Create State-level expertise on Smart Grid systems, cyber security, interdependencies, and communications Develop processes for tracking energy supply disruptions Prepare Workforce development plans and training Conduct energy emergency exercises Revise State policies, procedures and practices 7 Benefits for States and Cities: Enhance the speed and effectiveness of the energy emergency response Improved coordination across State agencies, among States and regions Expanded situational awareness Improved recovery and restoration capabilities For more information go to naseo.org/energyassurance

8 + Private Sector Investments in Energy Infrastructure 8 Marathon Refinery, Detroit MI Expanded Capacity $2.2 billion Enbridge Pipeline Replacement Project $1.3 billion in Indiana and Michigan

9 + Benefits of the Smart Grid Net Present Worth (2010) $ Billions 9 Over and above the investment to meet electric load growth the estimated net investment needed to realize the envisioned power delivery system of the future over the next 20 years is between $338 and $476 billion with the benefits ranging from $1.2 to $2 trillion a benefit-tocost ratio range of 2.8 to 6.0 Productivity $1 Reliability $445 Safety $13 Environment $55 Security $152 Capacity $56 Cost $57 Quality $65 Quality of Life $74 Estimating the Costs and Benefits of the Smart Grid -- A Preliminary Estimate of the Investment Requirements and the Resultant Benefits of a Fully Functioning Smart Grid, EPRI 2011 Technical Report

10 + State Policies and Programs that Support 10 Investments in Resiliency Some examples include: Adopting renewable portfolio standards that diversify and distribute power generation Expanding alternative fuel vehicles uses and refueling locations Encouraging use of Combined Heat and Power Supporting Smart Grid demonstration projects Approving cost recovery by Public Utility Commission of prudent security and resiliency investments by electric and gas utilities Providing incentives for installing or prewiring retail gas station for emergency generators Promoting cyber security in the public and private sectors Planning for energy emergencies to improve the speed and effectiveness of the response and sustaining capabilities

11 Oregon's Earthquake Risk Study for Critical Energy Infrastructure Hub Risk, Vulnerability and Resiliency Assessments

12 NYS2100 Commission Preliminary Report on Improving the Strength and Resilience of New York State s Infrastructure January Risk, Vulnerability and Resiliency Assessments

13 + Critical Infrastructure: Cyber Security Colorado Plan Cyber Attacks Section 13 Missouri Plan Appendix S Cybersecurity Wisconsin Plan Section 7 Cyber Security Texas Plan Cybersecurity Threats, Vulnerabilities and Consequences, following diagrams from the Texas plan

14 + Energy Emergency Reponses Maintaining the capability to respond to all hazards to minimize the human and economic consequences 14 Make sure you and your staff are prepared and trained to meet the needs of policy makers Know the following: State s energy profile and interdependencies locations and demographics of your energy infrastructures key government and industry contacts legal authorities which support the response Understand how you can effectively respond by -- increasing supply, reducing demand, and setting priorities Maintain a good working relationship with the private and public sector Be prepared to work with the media Keep your energy assurance plan up to date

15 + Closing Thoughts The rate of staff turnover due to retirements, reassignments, reorganizations, and departures from state service means ongoing training and exercises are needed A specific deliverable of the Energy Assurance Grant was a Workforces Development Plan which should have addressed preparedness and sustainment of capabilities built over the last 4 years Pennsylvania has addressed this in Appendix G which discussed the need for a trained workforce and defines and identifies resources and training in the following categories: Initial Advanced Support Continuing Education Periodic State and Multi-State Level Exercises Regular update to the Plan

16 + Thank you! Jeff Pillon, Director, Energy Assurance Program * Phone

Cyber Security & State Energy Assurance Plans

Cyber Security & State Energy Assurance Plans Michigan Cyber Summit 2011 Friday, October 7, 2011 Jeffrey R. Pillon, Director of Energy Assurance National Association of State Energy Officials What is Energy