[Federal Register: May 2, 2006 (Volume 71, Number 84)]
[Notices]
[Page 25835]
[DOCID:fr02my06-63]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket Nos. EC06-111-000, et al.]

ESI Energy, LLC, et al.; Electric Rate and Corporate Filings

April 26, 2005.
    The following filings have been made with the Commission. The
filings are listed in ascending order within each docket
classification.

1. ESI Energy, LLC; Bison Wind GP, LLC; Heartland LP, LLC; Bison Wind
Holdings, LLC; Bison Wind, LLC; FPL Energy Burleigh County Wind, LLC;
FPL Wind Cowboy Wind, LLC

[Docket No. EC06-111-000]

    Take notice that on April 14, 2006 ESI Energy, LLC; Bison Wind GP,
LLC; Heartland LP, LLC; Bison Wind Holdings, LLC; Bison Wind, LLC; FPL
Energy Burleigh County Wind, LLC; and FPL Wind Cowboy Wind, LLC filed
an application for approval of a corporate organization and request for
expedited approval pursuant to section 203 of the Federal Power Act.
    Comment Date: 5 p.m. eastern time on May 5, 2006.

2. DeSoto County Generating Company, LLC; Progress Genco Ventures, LLC;
Southern Power Company

[Docket No. EC06-112-000]

    Take notice that on April 14, 2006 DeSoto County Generating
Company, LLC, Progress Genco Ventures, LLC, and Southern Power Company
filed an application for approval of a disposition of jurisdictional
facilities pursuant to section 203 of the Federal Power Act.
    Comment Date: 5 p.m. eastern time on May 5, 2006.

3. Entergy Services, Inc.

[Docket No. EL01-88-004]

    Take notice that on April 10, 2006 Entergy Services, Inc. as agent
and on behalf of the Entergy Operating Companies filed amendments to
its Entergy System Agreement in compliance with the Commission's June
1, 2005 and December 19, 2005 orders.
    Comment Date: 5 p.m. eastern time on May 31, 2006.

4. MidAmerican Energy Company

[Docket No. ER96-719-012]

    Take notice that on April 3, 2006 MidAmerican Energy Company filed
proposed changes to its FERC Electric Tariff, Original Volume No. 11
(Sales Tariff) for sales of capacity and energy within the MidAmerican
control area, to be effective August 7, 2005, to correspond with the
effective date that the Commission required for the Sales Tariff in its
March 17, 2006 order.
    Comment Date: 5 p.m. Eastern Time on May 8, 2006.

5. Cabrillo Power I LLC; Cabrillo Power II LLC; El Segundo Power, LLC;
Long Beach Generation, LLC

[Docket Nos. ER99-1115-009; ER99-1116-009; ER06-820-001; ER98-1127-009;
ER98-1796-008]

    Take notice that on April 17, 2006 Cabrillo Power I LLC, Cabrillo
Power II LLC, El Segundo, LLC and Long Beach Generation, LLC filed
amendments to their market-based rate tariffs to conform with the other
market-based rate tariffs held by subsidiaries of NRG Energy, Inc that
have been approved by the Commission in recent proceedings.
    Comment Date: 5 p.m. eastern time on May 8, 2006.

6. Governors of the States of Arizona, California; Colorado, Montana,
Nevada, New Mexico; Oregon, Utah, Washington and Wyoming

[Docket No. RR06-2-000]

    On April 20, 2006, the Governors of the States of Arizona,
California, Colorado, Montana, Nevada, New Mexico, Oregon, Utah,
Washington and Wyoming filed a petition, pursuant to section 215 of the
Federal Power Act, to create a Regulatory Advisory Body for the Western
Interconnection. The petitioners propose to organize the Western
Interconnection Regional Advisory Body pursuant to a Policy Resolution
of the Western Governors' Association.
    Comment Date: 5 p.m. eastern time on May 26, 2006.

Standard Paragraph

    Any person desiring to intervene or to protest this filing must
file in accordance with Rules 211 and 214 of the Commission's Rules of
Practice and Procedure (18 CFR 385.211, 385.214). Protests will be
considered by the Commission in determining the appropriate action to
be taken, but will not serve to make protestants parties to the
proceeding. Any person wishing to become a party must file a notice of
intervention or motion to intervene, as appropriate. Such notices,
motions, or protests must be filed on or before the comment date. On or
before the comment date, it is not necessary to serve motions to
intervene or protests on persons other than the Applicant.
    The Commission encourages electronic submission of protests and
interventions in lieu of paper using the ``eFiling'' link at http://www.ferc.gov.
 Persons unable to file electronically should submit an

original and 14 copies of the protest or intervention to the Federal
Energy Regulatory Commission, 888 First Street, NE., Washington, DC
20426.
    This filing is accessible on-line at http://www.ferc.gov, using the

``eLibrary'' link and is available for review in the Commission's
Public Reference Room in Washington, DC. There is an ``eSubscription''
link on the Web site that enables subscribers to receive e-mail
notification when a document is added to a subscribed docket(s). For
assistance with any FERC Online service, please e-mail
<EMAIL_ADDRESS>or call<PHONE_NUMBER> (toll free). For

TTY, call<PHONE_NUMBER>.

Magalie R. Salas,
 Secretary.
[FR Doc. E6-6582 Filed 5-1-06; 8:45 am]

BILLING CODE 6717-01-P


[Federal Register Volume 81, Number 35 (Tuesday, February 23, 2016)]
[Proposed Rules]
[Page 8867]
[FR Doc No: 2016-03733]

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SECURITIES AND EXCHANGE COMMISSION

17 CFR Part 240

[Release No. 34-77172; File No. S7-27-15]
RIN 3235-AL55

Transfer Agent Regulations; Extension of Comment Period

AGENCY: Securities and Exchange Commission.

ACTION: Advance notice of proposed rulemaking; Concept release; Request
for comment; extension of comment period.

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SUMMARY: The Securities and Exchange Commission (``Commission'') is
extending the comment period for the Advance Notice of Proposed
Rulemaking, Concept Release and Request for Comment with respect to
transfer agent regulations. The original comment period is scheduled to
end on February 29, 2016. The Commission is extending the time period
in which to provide the Commission with comments by 45 days, until
April 14, 2016. This action will allow interested persons additional
time to analyze the issues and prepare their comments.

DATES: Comments on the document published December 31, 2015 (80 FR
81948) must be in writing and received by April 14, 2016.

ADDRESSES: Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/concept.shtml);
     Send an email to<EMAIL_ADDRESS>Please include
File Number S7-27-15 on the subject line; or
     Use the Federal eRulemaking Portal (http://www.regulations.gov). Follow the instructions for submitting comments.

Paper Comments

     Send paper comments to: Brent J. Fields, Secretary,
Securities and Exchange Commission, 100 F Street NE., Washington, DC
20549-1090.

All submissions should refer to File Number S7-27-15. This file number
should be included on the subject line if email is used. To help us
process and review your comments more efficiently, please use only one
method. The Commission will post all comments on the Commission's
Internet Web site (http://www.sec.gov/rules/concept.shtml). Comments
are also available for Web site viewing and printing in the
Commission's Public Reference Room, 100 F Street NE., Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. All comments received will be posted without change; the
Commission does not edit personal identifying information from
submissions. You should submit only information that you wish to make
publicly available.

FOR FURTHER INFORMATION CONTACT: Moshe Rothman, Branch Chief, Thomas
Etter, Special Counsel, Catherine Whiting, Special Counsel, Mark
Saltzburg, Special Counsel, or Elizabeth de Boyrie, Counsel, Office of
Clearance and Settlement, Division of Trading and Markets, Securities
and Exchange Commission, 100 F Street NE., Washington, DC 20549-7010 at
(202) 551-5710.

SUPPLEMENTARY INFORMATION: The Commission has requested comment in its
Advance Notice of Proposed Rulemaking, Concept Release and Request for
Comment (``Release'') with respect to transfer agent regulations.\1\
The Release identifies and seeks comment in various areas, including
registration and reporting requirements, safeguarding of funds and
securities, standards for restrictive legends, and cybersecurity.
Additionally, the Release generally seeks comment on a broad range of
topics in the transfer agent space, including the processing of book
entry securities, recordkeeping for beneficial owners, administration
of issuer plans, and the role of transfer agents to mutual funds and
crowdfunding. The Release originally provided that comments must be
received by February 29, 2016. The Commission has received requests to
extend the comment period.\2\ The Commission believes that extending
the comment period would be appropriate in order to provide the public
additional time to consider and comment on the issues addressed in the
Release. Therefore, the Commission is extending the public comment
period for 45 days, until April 14, 2016.
---------------------------------------------------------------------------

    \1\ Securities Exchange Act Release No. 76743 (December 22,
2015), 80 FR 81948 (December 31, 2015).
    \2\ See letters from Todd May, President, Securities Transfer
Association, dated January 7, 2016; Martin McHale, President, U.S.
Equity Services, Computershare, dated January 15, 2016; Cristeena G.
Naser, Vice President and Senior Counsel, Center for Securities,
Trust & Investment of the American Bankers Association, dated
January 22, 2015; Alvin Santiago, President, Shareholder Services
Association, dated January 27, 2016; Thomas F. Price, Manager
Director, Securities Industry and Financial Markets Association,
dated February 2, 2016.

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    By the Commission.

    Dated: February 18, 2016.
Brent J. Fields,
Secretary.
[FR Doc. 2016-03733 Filed 2-22-16; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 77, Number 56 (Thursday, March 22, 2012)]
[Notices]
[Pages 16828-16829]
[FR Doc No: 2012-6880]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Don Pedro Hydroelectric Project Project No. 2299-075]

Turlock Irrigation District, & Modesto Irrigation District;
Notice of Dispute Resolution Process Schedule, Panel, Technical
Conference, and Modified Filing Times for Panel Recommendations and
Dispute Determination

    On January 11, 2012, the National Oceanic and Atmospheric
Administration's National Marine Fisheries Service (NMFS) and the
California Water Resources Control Board (Water Board) (collectively,
the Agencies), filed a Notice of Study Dispute to initiate the Federal
Energy Regulatory Commission's (Commission) formal study dispute
resolution process, pursuant to 18 CFR 5.14, in the relicensing
proceeding for the Don Pedro Hydroelectric Project No. 2299-075.\1\
Turlock Irrigation District and the Modesto Irrigation District
(collectively, the Districts), are co-licensees for the Don Pedro
Hydroelectric Project.
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    \1\ The U.S. Fish and Wildlife Service (FWS) also requested
dispute resolution on two studies requested by the California
Department of Fish and Game (Cal Fish and Game) and one study
requested by NMFS. Additionally, NMFS requested dispute resolution
on one of the Cal Fish and Game studies. In a March 9, 2012, letter
the Director of the Office of Energy Projects determined that the
Cal Fish and Game's studies would not be referred to dispute
resolution because a disputing agency can only dispute a study
request that it has made itself. The dispute regarding the study
requested by NMFS and endorsed by FWS will go forward as a NMFS
study dispute.
---------------------------------------------------------------------------

    In its Notice of Study Dispute, NMFS disputes the December 22, 2011
Study Plan Determination's treatment of eight of its June 10, 2011
study requests. NMFS identified study requests 1-4 and 7-9 as being in
dispute. Specifically, the disputed study requests are: Request 1--
Effects of the Project and Related LaGrange Complex Facilities on
Anadromous Fish; Request 2--Effects of the Project and Related
Facilities Evaluated Through an Operations Model; Request 3--Effects of
the Project

and Related Activities on Fish Passage for Anadromous Fish; Request 4--
Effects of the Project and Related Facilities Hydrology for Anadromous
Fish: Magnitude, Timing, Duration, and Rate of Change; Request 7--
Evaluation of the Upper Tuolumne Habitats for Anadromous Fish; Request
8--Salmon and Steelhead Full Life-Cycle Population Models; and Request
9--Effects of the Project and Related Facilities on Ecosystem/Marine-
Derived Nutrients for Anadromous Fish.
    The Water Board's Notice of Study Dispute seeks to have the
Districts' Study W&AR-2--Project Operations/Water Balance Model
modified to address constraints in timing and magnitude of flows
related to water rights.
    On February 10, 2012, Commission staff designated Mr. Stephen
Bowler to serve as the Commission staff Dispute Resolution Panel
(Panel) chair. On March 2, 2012, NMFS designated Mr. David White as the
Agency Dispute Resolution Panel member.\2\ From an established list of
potential third party panelists, Mr. Bowler and Mr. White selected Mr.
Richard Craven and requested that he serve on the Panel. Mr. Craven
agreed to serve and the Panel convened on March 10, 2012. Mr. Craven's
statement certifying that he has no conflict of interest, which also
summarizes his qualifications, has been filed into the record. None of
the three panelists have been involved previously in the Don Pedro
Hydroelectric Project relicensing proceeding.
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    \2\ Mr. White's designation followed two previous designations
of NMFS staff members who were determined to have prior involvement
in the Don Pedro proceeding and were deemed ineligible to serve on
the Panel. Mr. White's designation came one business day ahead of
the deadline established by the Commission of March 5, 2012. Because
of the delay in establishing an eligible agency panel member, March
5, 2012 will serve as the date of initiation of the dispute
resolution process rather than the dispute notice date of January
11, 2011. Mr. White was designated to represent the Water Board as
well as NMFS.
---------------------------------------------------------------------------

    By letter filed March 15, 2012, the Panel requested that the
Director of the Office of Energy Projects (Director) modify the
timeframe for submission of the Panel's recommendations from 50 to 60
days from the start of the dispute resolution process, specifically
from April 24, 2012 to May 4, 2012. The Panel also recommended the
modification of the deadline for the Director's determination on the
study dispute from 70 to 80 days from the start of the dispute
resolution process, specifically from May 14, 2012 to May 24, 2012. By
this notice, the Director modifies the schedule as recommended and
requested by the Panel under his authority provided in 18 CFR
5.29(f)(2) of the Commission's regulations. The resulting process plan
for dispute resolution is as follows:

----------------------------------------------------------------------------------------------------------------
          Responsible party                 Pre-filing milestone           Date             FERC regulation
----------------------------------------------------------------------------------------------------------------
Agencies.............................  Designation of Agency                3/2/2012  5.14(d)(2).
                                        Panelist (Actual).
Agencies.............................  Designation of Agency                3/5/2012  5.14(d)(2).
                                        Panelist (Deadline) (Start
                                        of Dispute Resolution
                                        Process).
Dispute Panel........................  Third Dispute Panel Member           3/5/2012  5.14(d)(3).
                                        Selected.
Dispute Panel........................  Dispute Resolution Panel            3/12/2012  5.14(d).
                                        Convened.
FERC.................................  Notice of Dispute Resolution        3/16/2012  Guidance.
                                        Panel Technical Conference.
Districts............................  Applicant Comments on Study         3/28/2012  5.14(i).
                                        Disputes Due.
Dispute Panel........................  Dispute Resolution Panel            4/17/2012  5.14(j).
                                        Technical Conference.
Dispute Panel........................  Dispute Resolution Panel             5/4/2012  5.14(k).
                                        Findings Issued.
FERC.................................  Director's Study Dispute            5/24/2012  5.14(l).
                                        Determination.
----------------------------------------------------------------------------------------------------------------

    The Panel will hold an all-day technical conference on the disputed
studies on April 17, 2012. The conference will be held in Sacramento,
CA. Further details will be supplied in a future notice. The purpose of
the technical conference is for the disputing agencies, the applicant,
and the Commission to provide the Panel with additional information
necessary to evaluate the disputed studies. All local, state, and
federal agencies, Indian tribes, and other interested parties are
invited to attend the meeting as observers. The Panel may also request
information or clarification on written submissions as necessary to
understand the matters in dispute. The Panel will limit all input that
it receives to the specific studies or information in dispute and will
focus on the applicability of such studies or information to the study
criteria stipulated in 18 CFR 5.9(b). If the number of participants
wishing to speak creates time constraints, the Panel may, at its
discretion, limit the speaking time for each participant.
    For more information, please contact Stephen Bowler, the Dispute
Resolution Panel Chair, at<EMAIL_ADDRESS>or<PHONE_NUMBER>.

    Dated: March 16, 2012.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2012-6880 Filed 3-21-12; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register Volume 85, Number 154 (Monday, August 10, 2020)]
[Rules and Regulations]
[Pages 48107-48108]
[FR Doc No: 2020-12916]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR 165

[Docket No. USCG-2018-0533]

Navigation and Navigable Waters, and Shipping; Technical,
Organizational, and Conforming Amendments for U.S. Coast Guard Field
Districts 5, 8, 9, 11, 13, 14, and 17

AGENCY: Coast Guard, DHS.

ACTION: Correcting amendments.

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SUMMARY: On February 13, 2020, the Coast Guard published a final rule
on Navigation and Navigable Waters, and Shipping; Technical,
Organizational, and Conforming Amendments for U.S. Coast Guard Field
Districts 5, 8, 9, 11, 13, 14, and 17. Effective March 16, 2020, that
rule removed a security zone regulation when only the section heading
for that regulation needed to be amended. This document corrects that
error.

DATES: Effective August 10, 2020.

FOR FURTHER INFORMATION CONTACT: Dominique Christianson, Coast Guard,
telephone<PHONE_NUMBER> or fax<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Correction

    On February 13, 2020 the Coast Guard published a rule in the
Federal Register (85 FR 8169), effective on March 16, 2020. Subsequent
review of the rule revealed that it removed a security zone regulation,
33 CFR 165.809, when the only change needed was to amend the section
heading for that regulation. Page 85 FR 8170 of the rule referred to a
2005 proposed rule (70 FR 9363) as support for removing the security
zones in Sec.  165.809, but that NPRM only proposed to ``remove the
Port of Port Lavaca-Point Comfort security zone.'' And the final rule
(70 FR 39176, 39178, July 7, 2005) that followed the NPRM revised Sec.
165.809(a) so that it maintained the Corpus Christi Inner Harbor
security zone. That 2005 rule also used the following section heading:
Sec.  165.809 Security Zone; Port of Corpus Christi Inner Harbor,
Corpus Christi, TX.
    All the 2020 rule should have done was to remove the reference to
the Port of Port Lavaca-Point Comfort in the section heading. This
document corrects the error of removing the Port of Corpus Christi
Inner Harbor, Corpus Christi Safety Zone regulation by reinstating
Sec.  165.809 with the correct section heading.
    We find good cause under 5 U.S.C. 553(d) to make this correction
effective on its date of publication. Delaying its effective date would
increase risk of vessel collisions as the security zone is needed to
protect a portion of the waterway that has a high volume of commercial
vessel traffic and military outload vessel traffic.

List of Subjects in 33 CFR Part 165

    Harbors, Marine safety, Navigation (water), Reporting and
recordkeeping requirements, Security measures, Waterways.

    Accordingly, 33 CFR part 165 is corrected by making the following
correcting amendments:

PART 165--REGULATED NAVIGATION AREAS AND LIMITED ACCESS AREAS

0
1. The authority citation for part 165 continues to read as follows:

    Authority:  46 U.S.C. 70034, 70051; 33 CFR 1.05-1, 6.04-1, 6.04-
6, and 160.5; Department of Homeland Security Delegation No. 0170.1.

0
2. Add Sec.  165.809 to read as follows:

Sec.  165.809   Security Zone; Port of Corpus Christi Inner Harbor,
Corpus Christi, TX.

    (a) Location. The following area is designated as a security zone:
All waters of the Corpus Christi Inner Harbor from the Inner Harbor
Bridge (U.S. Hwy 181) to, and including the Viola Turning Basin.
    (b) Regulations. (1) No recreational vessels, passenger vessels, or
commercial fishing vessels may enter the security zone unless
specifically authorized by the Captain of the Port Corpus Christi or a
designated representative.
    (2) Recreational vessels, passenger vessels and commercial fishing
vessels requiring entry into the security zone must contact the Captain
of the Port Corpus Christi or a designated representative. The Captain
of the Port may be contacted via VHF Channel 16 or via telephone at
(361) 888-3162 to seek permission to transit the area. If permission is
granted, all persons and vessels must comply with the instructions of
the Captain of the Port, Corpus Christi or a designated representative.
    (3) Designated representatives include U.S. Coast Guard
commissioned, warrant, and petty officers.
    (c) Authority. In addition to 46 U.S.C. 70034, the authority for
this section includes 46 U.S.C. 70116.

    Dated: June 11, 2020.
J.E. McLeod,
Acting Chief, Office of Regulations and Administrative Law.
[FR Doc. 2020-12916 Filed 8-7-20; 8:45 am]
BILLING CODE 9110-04-P


[Federal Register Volume 83, Number 17 (Thursday, January 25, 2018)]
[Proposed Rules]
[Pages 3433-3442]
[FR Doc No: 2018-01247]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 40

[Docket No. RM17-13-000]

Supply Chain Risk Management Reliability Standards

AGENCY: Federal Energy Regulatory Commission, Department of Energy.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Federal Energy Regulatory Commission (Commission) proposes
to approve supply chain risk management Reliability Standards CIP-013-1
(Cyber Security--Supply Chain Risk Management), CIP-005-6 (Cyber
Security--Electronic Security Perimeter(s)) and CIP-010-3 (Cyber
Security--Configuration Change Management and Vulnerability

Assessments). The North American Electric Reliability Corporation
(NERC), the Commission-certified Electric Reliability Organization,
submitted the proposed Reliability Standards for Commission approval in
response to a Commission directive. In addition, the Commission
proposes that NERC develop and submit certain modifications to the
supply chain risk management Reliability Standards.

DATES: Comments are due March 26, 2018.

ADDRESSES: Comments, identified by docket number, may be filed in the
following ways:
     Electronic Filing through http://www.ferc.gov. Documents
created electronically using word processing software should be filed
in native applications or print-to-PDF format and not in a scanned
format.
     Mail/Hand Delivery: Those unable to file electronically
may mail or hand-deliver comments to: Federal Energy Regulatory
Commission, Secretary of the Commission, 888 First Street NE,
Washington, DC 20426.
    Instructions: For detailed instructions on submitting comments and
additional information on the rulemaking process, see the Comment
Procedures Section of this document.

FOR FURTHER INFORMATION CONTACT:
Simon Slobodnik (Technical Information), Office of Electric
Reliability, Federal Energy Regulatory Commission, 888 First Street NE,
Washington, DC 20426,<PHONE_NUMBER>, [email protected].
Kevin Ryan (Legal Information), Office of the General Counsel, Federal
Energy Regulatory Commission, 888 First Street NE, Washington, DC
20426,<PHONE_NUMBER>, [email protected].

SUPPLEMENTARY INFORMATION:
    1. Pursuant to section 215(d)(2) of the Federal Power Act (FPA),\1\
the Commission proposes to approve supply chain risk management
Reliability Standards CIP-013-1 (Cyber Security--Supply Chain Risk
Management), CIP-005-6 (Cyber Security--Electronic Security
Perimeter(s)) and CIP-010-3 (Cyber Security--Configuration Change
Management and Vulnerability Assessments). The North American Electric
Reliability Corporation (NERC), the Commission-certified Electric
Reliability Organization (ERO), submitted the proposed Reliability
Standards for Commission approval in response to a Commission directive
in Order No. 829.\2\ The proposed Reliability Standards are intended to
augment the currently-effective CIP Reliability Standards to mitigate
cybersecurity risks associated with the supply chain for BES Cyber
Systems.\3\
---------------------------------------------------------------------------

    \1\ 16 U.S.C. 824o(d)(2).
    \2\ Revised Critical Infrastructure Protection Reliability
Standards, Order No. 829, 156 FERC ] 61,050, at P 43 (2016).
    \3\ BES Cyber System is defined as ``[o]ne or more BES Cyber
Assets logically grouped by a responsible entity to perform one or
more reliability tasks for a functional entity.'' Glossary of Terms
Used in NERC Reliability Standards (NERC Glossary), http://www.nerc.com/files/glossary_of_terms.pdf. The acronym BES refers to
the bulk electric system.
---------------------------------------------------------------------------

    2. As the Commission previously recognized, the global supply chain
provides the opportunity for significant benefits to customers,
including low cost, interoperability, rapid innovation, a variety of
product features and choice.\4\ However, the global supply chain also
enables opportunities for adversaries to directly or indirectly affect
the management or operations of companies that may result in risks to
end users. Supply chain risks may include the insertion of
counterfeits, unauthorized production, tampering, theft, or insertion
of malicious software, as well as poor manufacturing and development
practices. We propose to determine that the supply chain risk
management Reliability Standards submitted by NERC constitute
substantial progress in addressing the supply chain cyber security
risks identified by the Commission.
---------------------------------------------------------------------------

    \4\ Revised Critical Infrastructure Protection Reliability
Standards, Notice of Proposed Rulemaking, 80 FR 43354 (July, 22,
2015), 152 FERC ] 61,054, at PP 61-62 (2015).
---------------------------------------------------------------------------

    3. The Commission also proposes to approve the proposed Reliability
Standards' associated violation risk factors and violation severity
levels. With respect to the proposed Reliability Standards'
implementation plan and effective date, the Commission proposes to
reduce the implementation period from the first day of the first
calendar quarter that is 18 months following the effective date of a
Commission order approving the proposed Reliability Standards, as
proposed by NERC, to the first day of the first calendar quarter that
is 12 months following the effective date of a Commission order.
    4. While the Commission proposes to determine that the proposed
Reliability Standards address most aspects of the Commission's
directive in Order No. 829, there remains a significant cyber security
risk associated with the supply chain for BES Cyber Systems because the
proposed Reliability Standards exclude Electronic Access Control and
Monitoring Systems (EACMS),\5\ Physical Access Control Systems
(PACS),\6\ and Protected Cyber Assets (PCAs),\7\ with the exception of
the modifications in proposed Reliability Standard CIP-005-6, which
apply to PCAs. To address this gap, pursuant to section 215(d)(5) of
the FPA,\8\ the Commission proposes to direct NERC to develop
modifications to the CIP Reliability Standards to include EACMS
associated with medium and high impact BES Cyber Systems within the
scope of the supply chain risk management Reliability Standards.\9\ In
addition, the Commission proposes to direct NERC to evaluate the cyber
security supply chain risks presented by PACS and PCAs in the study of
cyber security supply chain risks requested by the NERC Board of
Trustees (BOT) in its resolutions of August 10, 2017.\10\ The
Commission further proposes to direct NERC to file the BOT-requested
study's interim and final reports with the Commission upon their
completion.
---------------------------------------------------------------------------

    \5\ EACMS are defined as ``Cyber Assets that perform electronic
access control or electronic access monitoring of the Electronic
Security Perimeter(s) or BES Cyber Systems. This includes
Intermediate Systems.'' NERC Glossary. Reliability Standard CIP-002-
5.1a (Cyber Security--BES Cyber System Categorization) states that
examples of EACMS include ``Electronic Access Points, Intermediate
Systems, authentication servers (e.g., RADIUS servers, Active
Directory servers, Certificate Authorities), security event
monitoring systems, and intrusion detection systems.'' Reliability
Standard CIP-002-5.1a (Cyber Security--BES Cyber System
Categorization) Section A.6 at 6.
    \6\ PACS are defined as ``Cyber Assets that control, alert, or
log access to the Physical Security Perimeter(s), exclusive of
locally mounted hardware or devices at the Physical Security
Perimeter such as motion sensors, electronic lock control
mechanisms, and badge readers.'' NERC Glossary. Reliability Standard
CIP-002-5.1a states that examples include ``authentication servers,
card systems, and badge control systems.'' Id.
    \7\ PCAs are defined as ``[o]ne or more Cyber Assets connected
using a routable protocol within or on an Electronic Security
Perimeter that is not part of the highest impact BES Cyber System
within the same Electronic Security Perimeter. The impact rating of
Protected Cyber Assets is equal to the highest rated BES Cyber
System in the same [Electronic Security Perimeter].'' NERC Glossary.
Reliability Standard CIP-002-5.1a states that examples include, to
the extent they are within the Electronic Security Perimeter, ``file
servers, ftp servers, time servers, LAN switches, networked
printers, digital fault recorders, and emission monitoring
systems.'' Id.
    \8\ 16 U.S.C. 824o(d)(5).
    \9\ Reliability Standard CIP-002-5.1a (Cyber Security System
Categorization) provides a ``tiered'' approach to cybersecurity
requirements, based on classifications of high, medium and low
impact BES Cyber Systems.
    \10\ Proposed Additional Resolutions for Agenda Item 9.a: Cyber
Security--Supply Chain Risk Management--CIP-005-6, CIP-010-3, and
CIP-013-1 (August 10, 2017), http://www.nerc.com/gov/bot/Agenda%20highlights%20and%20Mintues%202013/Proposed%20Resolutions%20re%20Supply%20Chain%20Follow-Up%20v2.pdf.

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I. Background

A. Section 215 and Mandatory Reliability Standards

    5. Section 215 of the FPA requires a Commission-certified ERO to
develop mandatory and enforceable Reliability Standards, subject to
Commission review and approval. Reliability Standards may be enforced
by the ERO, subject to Commission oversight, or by the Commission
independently.\11\ Pursuant to section 215 of the FPA, the Commission
established a process to select and certify an ERO,\12\ and
subsequently certified NERC.\13\
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    \11\ 16 U.S.C. 824o(e).
    \12\ Rules Concerning Certification of the Electric Reliability
Organization; and Procedures for the Establishment, Approval, and
Enforcement of Electric Reliability Standards, Order No. 672, FERC
Stats. & Regs. ] 31,204, order on reh'g, Order No. 672-A, FERC
Stats. & Regs. ] 31,212 (2006).
    \13\ North American Electric Reliability Corp., 116 FERC ]
61,062, order on reh'g and compliance, 117 FERC ] 61,126 (2006),
aff'd sub nom. Alcoa, Inc. v. FERC, 564 F.3d 1342 (D.C. Cir. 2009).
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B. Order No. 829

    6. In Order No. 829, the Commission directed NERC to develop a new
or modified Reliability Standard that addresses supply chain risk
management for industrial control system hardware, software and
computing and networking services associated with bulk electric system
operations.\14\ Specifically, the Commission directed NERC to develop a
forward-looking, objective-based Reliability Standard that would
require responsible entities to develop and implement a plan with
supply chain management security controls focused on four security
objectives: (1) Software integrity and authenticity; (2) vendor remote
access; (3) information system planning; and (4) vendor risk management
and procurement controls.\15\
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    \14\ Order No. 829, 156 FERC ] 61,050 at P 43.
    \15\ Id. P 45.
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    7. The Commission explained that the first objective, verification
of software integrity and authenticity, is intended to reduce the
likelihood that an attacker could exploit legitimate vendor patch
management processes to deliver compromised software updates or patches
to a BES Cyber System.\16\
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    \16\ Id. P 49.
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    8. With respect to the second objective, vendor remote access, the
Commission stated that the objective is intended to address the threat
that vendor credentials could be stolen and used to access a BES Cyber
System without the responsible entity's knowledge, as well as the
threat that a compromise at a trusted vendor could traverse over an
unmonitored connection into a responsible entity's BES Cyber
System.\17\
---------------------------------------------------------------------------

    \17\ Id. P 52.
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    9. For the third objective, information system planning, Order No.
829 indicated that the objective is intended to address the risk that
responsible entities could unintentionally plan to procure and install
unsecure equipment or software within their information systems, or
could unintentionally fail to anticipate security issues that may arise
due to their network architecture or during technology and vendor
transitions.\18\
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    \18\ Id. P 57.
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    10. Vendor risk management and procurement controls, the fourth
objective, the Commission explained, are intended to address the risk
that responsible entities could enter into contracts with vendors that
pose significant risks to the responsible entities' information
systems, as well as the risk that products procured by a responsible
entity fail to meet minimum security criteria. This objective also
addresses the risk that a compromised vendor would not provide adequate
notice and related incident response to responsible entities with whom
that vendor is connected.\19\
---------------------------------------------------------------------------

    \19\ Id. P 60.
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    11. Order No. 829 stated that while responsible entities should be
required to develop and implement a plan, the Commission did not
require NERC to impose any specific controls or ``one-size-fits-all''
requirements.\20\ In addition, the Commission stated that NERC's
response to the Order No. 829 directive should respect the Commission's
jurisdiction under FPA section 215 by only addressing the obligations
of responsible entities and not by directly imposing any obligations on
non-jurisdictional suppliers, vendors or other entities that provide
products or services to responsible entities.\21\
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    \20\ Id. P 13.
    \21\ Id. P 21.
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C. NERC Petition and Proposed Reliability Standards

    12. On September 26, 2017, NERC submitted for Commission approval
proposed Reliability Standards CIP-013-1, CIP-005-6, and CIP-010-3 and
their associated violation risk factors and violation severity levels,
implementation plans, and effective dates.\22\ NERC states that the
purpose of the proposed Reliability Standards is to enhance the
cybersecurity posture of the electric industry by requiring responsible
entities to take additional actions to address cybersecurity risks
associated with the supply chain for BES Cyber Systems. NERC explains
that the proposed Reliability Standards are designed to augment the
existing controls required in the currently-effective CIP Reliability
Standards that help mitigate supply chain risks, providing increased
attention on minimizing the attack surfaces of information and
communications technology products and services procured to support
reliable bulk electric system operations, consistent with Order No.
829. Each proposed Reliability Standard is summarized below.
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    \22\ Proposed Reliability Standards CIP-013-1, CIP-005-6 and
CIP-010-3 are not attached to this notice of proposed rulemaking
(NOPR). The proposed Reliability Standards are available on the
Commission's eLibrary document retrieval system in Docket No. RM17-
13-000 and on the NERC website, www.nerc.com.
---------------------------------------------------------------------------

    13. NERC states that the proposed Reliability Standards apply only
to medium and high impact BES Cyber Systems. NERC explains that the
goal of the CIP Reliability Standards is to ``focus[ ] industry
resources on protecting those BES Cyber Systems with heightened risks
to the [bulk electric system] . . . [and] that the requirements
applicable to low impact BES Cyber Systems, given their lower risk
profile, should not be overly burdensome to divert resources from the
protection of medium and high impact BES Cyber Systems.'' \23\ NERC
further maintains that the standard drafting team chose to apply the
proposed Reliability Standards only to medium and high impact BES Cyber
Systems because the proposed Reliability Standards are ``consistent
with the type of existing CIP cybersecurity requirements applicable to
high and medium impact BES Cyber Systems as opposed to those applicable
to low impact BES Cyber Systems.'' \24\
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    \23\ NERC Petition at 16-17.
    \24\ Id. at 18.
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    14. NERC states that the standard drafting team also excluded
EACMS, PACS, and PCAs from the scope of the proposed Reliability
Standards, with the exception of the modifications in proposed
Reliability Standard CIP-005-6, which apply to PCAs. NERC explains that
although certain requirements in the existing CIP Reliability Standards
apply to EACMS, PACS, and PCAs due to their association with BES Cyber
Systems (either by function or location), the standard drafting team
determined that the proposed supply chain risk management Reliability
Standards should focus on high and medium impact BES Cyber Systems
only. NERC states that this determination was based on the conclusion
that applying the

proposed Reliability Standards to EACMS, PACS, and PCAs ``would divert
resources from protecting medium and high BES Cyber Systems.'' \25\
---------------------------------------------------------------------------

    \25\ Id. at 20.
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    15. NERC maintains that with respect to low impact BES Cyber
Systems and EACMS, PACS, and PCAs, while not mandatory, NERC expects
that these assets will likely be subject to responsible entity supply
chain risk management plans required by proposed Reliability Standard
CIP-013-1. Specifically, NERC asserts that ``Responsible Entities may
implement a single process for procuring products and services
associated with their operational environments.'' \26\ NERC contends
that ``by requiring that entities implement supply chain cybersecurity
risk management plans for high and medium impact BES Cyber Systems,
those plans would likely also cover their low impact BES Cyber
Systems.'' \27\ NERC also claims that responsible entities ``may also
use the same vendors for procuring PACS, EACMS, and PCAs as they do for
their high and medium impact BES Cyber Systems such that the same
security considerations may be addressed for those Cyber Assets.'' \28\
---------------------------------------------------------------------------

    \26\ Id.
    \27\ Id. at 19.
    \28\ Id. at 20.
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Proposed Reliability Standard CIP-013-1
    16. NERC states that the focus of proposed Reliability Standard
CIP-013-1 is on the steps that responsible entities take ``to consider
and address cybersecurity risks from vendor products and services
during BES Cyber System planning and procurement.'' \29\ NERC explains
that proposed Reliability Standard CIP-013-1 does not require any
specific controls or mandate ``one-size-fits-all'' requirements due to
the differences in needs and characteristics of responsible entities
and the diversity of bulk electric system environments, technologies,
and risks. NERC states that the goal of the proposed Reliability
Standard is ``to help ensure that responsible entities establish
organizationally-defined processes that integrate a cybersecurity risk
management framework into the system development lifecycle.'' \30\ NERC
explains that, among other things, proposed Reliability Standard CIP-
013-1 addresses the risk associated with information system planning,
as well as vendor risk management and procurement controls, the third
and fourth objectives outlined in Order No. 829.
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    \29\ Id. at 22.
    \30\ Id. at 23.
---------------------------------------------------------------------------

    17. NERC states that, consistent with the Commission's FPA section
215 jurisdiction and Order No. 829, the proposed Reliability Standard
applies only to responsible entities and does not directly impose
obligations on suppliers, vendors, or other entities that provide
products or services to responsible entities. NERC explains that the
focus of the proposed Reliability Standard is on the steps responsible
entities take to account for security issues during the planning and
procurement phase of high and medium impact BES Cyber Systems. NERC
also explains that any resulting obligation that a supplier, vendor, or
other entity accepts in providing products or services to the
responsible entity is a contractual matter between the responsible
entity and third parties, which is outside the scope of the proposed
Reliability Standard.
    18. NERC explains that the term ``vendor'' is used broadly to refer
to any person, company or other organization with whom the responsible
entity, or an affiliate, contracts with to supply BES Cyber Systems and
related services to the responsible entity. NERC states that the use of
the term ``vendor,'' however, ``was not intended to bring registered
entities that provide reliability services to other registered entities
as part of their functional obligations under NERC's Reliability
Standards (e.g., a Balancing Authority providing balancing services for
registered entities in its Balancing Authority Area) within the scope
of the proposed Reliability Standards.'' \31\
---------------------------------------------------------------------------

    \31\ Id. at 21.
---------------------------------------------------------------------------

    19. NERC maintains that, consistent with Order No. 829, responsible
entities need not apply their supply chain risk management plans to the
acquisition of vendor products or services under contracts executed
prior to the effective date of Reliability Standard CIP-013-1, nor
would such contracts need to be renegotiated or abrogated to comply
with the proposed Reliability Standard. In addition, NERC indicates
that, consistent with the development of a forward looking Reliability
Standard, if entities are in the middle of procurement activities for
an applicable product or service at the time of the effective date of
proposed Reliability Standard CIP-013-1, NERC would not expect entities
to begin those activities anew to implement their supply chain
cybersecurity risk management plan to comply with proposed Reliability
Standard CIP-013-1.
    20. NERC explains that, under Requirement R1 of this Reliability
Standard, responsible entities would be required to have one or more
processes to address, as applicable, the following baseline set of
security concepts in their procurement activities for high and medium
impact BES Cyber Systems: (1) Vendor security event notification
processes (Part 1.2.1); (2) coordinated incident response activities
(Part 1.2.2); (3) vendor personnel termination notification for
employees with access to remote and onsite systems (Part 1.2.3); (4)
product/services vulnerability disclosures (Part 1.2.4); (5)
verification of software integrity and authenticity (Part 1.2.5); and
(6) coordination of vendor remote access controls (Part 1.2.6). NERC
states that the intent of Part 1.2 of Requirement R1 is not to require
that every contract with a vendor include provisions for each of the
listed items, but to ensure that these security items are an integrated
part of procurement activities, such as a request for proposal or in
the contract negotiation process.
    21. NERC states that Requirement R2 mandates that each responsible
entity implement its supply chain cybersecurity risk management plan.
NERC explains that the actual terms and conditions of a procurement
contract and vendor performance under a contract are outside the scope
of proposed Reliability Standard CIP-013-1. NERC states that the focus
of proposed Reliability Standard CIP-013-1 is ``on the processes
Responsible Entities implement to consider and address cyber security
risks from vendor products or services during BES Cyber System planning
and procurement, not on the outcome of those processes. . . .'' \32\
NERC maintains that responsible entities must make a business decision
on whether and how to proceed with an acquisition after weighing the
risks associated with a vendor or product and making a good faith
effort to include security controls in any agreement with a vendor, as
required by proposed Reliability Standard CIP-013-1. In addition, NERC
states that vendor performance is outside the scope of the proposed
Reliability Standards and, while NERC expects responsible entities to
enforce the provisions of their contracts, ``a Responsible Entity
should not be held responsible under the proposed Reliability Standard
for actions (or inactions) of the vendor.'' \33\
---------------------------------------------------------------------------

    \32\ Id. at 27.
    \33\ Id. at 28.
---------------------------------------------------------------------------

    22. With regard to assessing compliance with proposed Reliability

Standard CIP-013-1, NERC states that NERC and Regional Entities would
focus on whether responsible entities: (1) Developed processes
reasonably designed to (i) identify and assess risks associated with
vendor products and services in accordance with Part 1.1 and (ii)
ensure that the security items listed in Part 1.2 are an integrated
part of procurement activities; and (2) implemented those processes in
good faith. NERC explains that NERC and Regional Entities will evaluate
the steps a responsible entity took to assess risks posed by a vendor
and associated products or services and, based on that risk assessment,
the steps the entity took to mitigate those risks, including the
negotiation of security provisions in its agreements with the vendor.
    23. Finally, NERC explains that Requirement R3 requires a
responsible entity to review and obtain the CIP Senior Manager's
approval of its supply chain risk management plan at least once every
15 calendar months in order to ensure that the plan remains up-to-date.
Proposed Modifications in Reliability Standard CIP-005-6
    24. Proposed Reliability Standard CIP-005-6 includes two new parts,
Parts 2.4 and 2.5, to address vendor remote access, which is the second
objective discussed in Order No. 829. NERC explains that the new parts
work in tandem with proposed Reliability Standard CIP-013-1,
Requirement R1.2.6, which requires responsible entities to address
Interactive Remote Access and system-to-system remote access when
procuring industrial control system hardware, software, and computing
and networking services associated with bulk electric system
operations. NERC states that proposed Reliability Standard CIP-005-6,
Requirement R2.4 requires one or more methods for determining active
vendor remote access sessions, including Interactive Remote Access and
system[hyphen]to[hyphen]system remote access. NERC explains that the
security objective of Requirement R2.4 is to provide awareness of all
active vendor remote access sessions, both Interactive Remote Access
and system[hyphen]to[hyphen]system remote access, that are taking place
on a responsible entity's system.
    25. NERC maintains that proposed Reliability Standard CIP-005-6,
Requirement R2.5 requires one or more methods to disable active vendor
remote access, including Interactive Remote Access and
system[hyphen]to[hyphen]system remote access. NERC explains that the
security objective of Requirement R2.5 is to provide the ability to
disable active remote access sessions in the event of a system breach.
In addition, NERC explains that Requirement R2 was modified to only
reference Interactive Remote Access where appropriate. Specifically,
Requirements R2.1, R2.2, and R2.3 apply to Interactive Remote access
only, while Requirements R2.4 and R2.5 apply both to Interactive Remote
Access and system-to-system remote access.
Proposed Modifications in Reliability Standard CIP-010-3
    26. Proposed Reliability Standard CIP-010-3 includes a new part,
Part 1.6, to address software integrity and authenticity, the first
objective addressed in Order No. 829, by requiring the identification
of the publisher and confirming the integrity of all software and
patches. NERC explains that proposed Reliability Standard CIP-010-3,
Requirement R1.6 requires responsible entities to verify software
integrity and authenticity in the operational phase, if the software
source provides a method to do so. Specifically, NERC states that
proposed Reliability Standard CIP-010-3, Requirement R1.6 requires that
responsible entities must verify the identity of the software source
and the integrity of the software obtained by the software sources
prior to installing software that changes established baseline
configurations, when methods are available to do so. NERC asserts that
the security objective of proposed Requirement R1.6 is to ensure that
the software being installed in the BES Cyber System was not modified
without the awareness of the software supplier and is not counterfeit.
NERC contends that these steps help reduce the likelihood that an
attacker could exploit legitimate vendor patch management processes to
deliver compromised software updates or patches to a BES Cyber System.
BOT Resolutions
    27. In the petition, NERC states that in conjunction with the
adoption of the proposed Reliability Standards, on August 10, 2017 the
BOT adopted resolutions regarding supply chain risk management. In
particular, the BOT requested that NERC management, in collaboration
with appropriate NERC technical committees, industry representatives,
and appropriate experts, including representatives of industry vendors,
further study the nature and complexity of cyber security supply chain
risks, including risks associated with low impact assets not currently
subject to the proposed supply chain risk management Reliability
Standards. The BOT further requested NERC to develop recommendations
for follow-up actions that will best address any issues identified.
Finally, the BOT requested that NERC management provide an interim
progress report no later than 12 months after the adoption of these
resolutions and a final report no later than 18 months after the
adoption of the resolutions. In its petition, NERC states that ``over
the next 18 months, NERC, working with various stakeholders, will
continue to assess whether supply chain risks related to low impact BES
Cyber Systems, PACS, EACMS and PCA necessitate further consideration
for inclusion in a mandatory Reliability Standard.'' \34\
---------------------------------------------------------------------------

    \34\ Id. at 20-21.
---------------------------------------------------------------------------

Implementation Plan
    28. NERC's proposed implementation plan provides that the proposed
Reliability Standards become effective on the first day of the first
calendar quarter that is 18 months after the effective date of a
Commission order approving them. NERC states that the proposed
implementation period is designed to afford responsible entities
sufficient time to develop and implement their supply chain
cybersecurity risk management plans required under proposed Reliability
Standard CIP-013-1 and implement the new controls required in proposed
Reliability Standards CIP-005-6 and CIP-010-3.

II. Discussion

    29. Pursuant to section 215(d)(2) of the FPA, the Commission
proposes to approve supply chain risk management Reliability Standards
CIP-013-1, CIP-005-6 and CIP-010-3 as just, reasonable, not unduly
discriminatory or preferential, and in the public interest. The
proposed Reliability Standards will enhance existing protections for
bulk electric system reliability by addressing the four objectives set
forth in Order No. 829: (1) Software integrity and authenticity; (2)
vendor remote access; (3) information system planning; and (4) vendor
risk management and procurement controls.
    30. The proposed Reliability Standards address the four objectives
discussed in Order No. 829. Proposed Reliability Standard CIP-013-1
addresses information system planning and vendor risk management and
procurement controls by requiring that responsible entities develop and
implement one or more documented supply chain cyber security risk
management plan(s) for high and medium impact BES Cyber Systems.

The required plans must address, as applicable, a baseline set of six
security concepts: Vendor security event notification; coordinated
incident response; vendor personnel termination notification; product/
services vulnerability disclosures; verification of software integrity
and authenticity; and coordination of vendor remote access controls.
Proposed Reliability Standard CIP-005-6 addresses vendor remote access
by creating two new requirements: for determining active vendor remote
access sessions and for having one or more methods to disable active
vendor remote access sessions. Proposed Reliability Standard CIP-010-3
addresses software authenticity and integrity by creating a new
requirement that responsible entities verify the identity of the
software source and the integrity of the software obtained from the
software source prior to installing software that changes established
baseline configurations, when methods are available to do so. Taken
together, the proposed Reliability Standards constitute substantial
progress in addressing the supply chain cyber security risks identified
in Order No. 829.
    31. While the Commission proposes to approve the proposed
Reliability Standards, certain cyber security risks associated with the
supply chain for BES Cyber Systems may not be adequately addressed by
the NERC proposal. In particular, as discussed below, the Commission is
concerned with the exclusion of EACMS, PACS, and PCAs from the scope of
the proposed Reliability Standards.\35\ To address this risk, pursuant
to section 215(d)(5) of the FPA, the Commission proposes that NERC
develop modifications to the CIP Reliability Standards to include EACMS
within the scope of the supply chain risk management Reliability
Standards. In addition, the Commission proposes to direct NERC to
evaluate the cyber security supply chain risks presented by PACS and
PCAs in the cyber security supply chain risks study requested by the
BOT. The Commission further proposes to direct NERC to file the BOT-
requested study's interim and final reports with the Commission upon
their completion.
---------------------------------------------------------------------------

    \35\ As we noted previously, the only exceptions are the
modifications in proposed Reliability Standard CIP-005-6, which
apply to PCAs.
---------------------------------------------------------------------------

    32. Below, we discuss the following issues: (A) Inclusion of EACMS
in the supply chain risk management Reliability Standards; (B)
inclusion of PACS and PCAs in the BOT-requested study on cyber security
supply chain risks and filing of the study's interim and final reports
with the Commission; and (C) NERC's proposed implementation plan.

A. Inclusion of EACMS in CIP Reliability Standards

    33. The proposed Reliability Standards only apply to medium and
high impact BES Cyber Systems; they do not apply to low impact BES
Cyber Systems or Cyber Assets associated with medium and high impact
BES Cyber Systems (i.e., EACMS, PACS, and PCAs). The BOT-requested
study on cyber security supply chain risks will examine the risks posed
by low impact BES Cyber Systems and, as discussed in the following
section, we believe it is appropriate to await the outcome of that
study's final report before considering whether low impact BES Cyber
Systems should be addressed in the supply chain risk management
Reliability Standards.
    34. With respect to Cyber Assets associated with medium and high
impact BES Cyber Systems, and EACMS in particular, we propose further
action than what is requested in the BOT resolutions.\36\ As explained
in current Reliability Standard CIP-002-5.1a, BES Cyber Systems have
associated Cyber Assets, which, if compromised, pose a threat to the
BES Cyber System by virtue of: (1) Their location within the Electronic
Security Perimeter (i.e., PCAs), or (2) the security control function
they perform (i.e., EACMS and PACS).\37\ EACMS support BES Cyber
Systems and are part of the network and security architecture that
allow BES Cyber Systems to work as intended by performing electronic
access control or electronic access monitoring of the Electronic
Security Perimeter (ESP) or BES Cyber Systems.
---------------------------------------------------------------------------

    \36\ We address PACS and PCAs in the following section.
    \37\ Reliability Standard CIP-002-5.1a (Cyber Security--BES
Cyber System Categorization), Background at 6.
---------------------------------------------------------------------------

    35. Since EACMS support and enable BES Cyber System operation,
misoperation and unavailability of EACMS that support a given BES Cyber
System could also contribute to misoperation of a BES Cyber System or
render it unavailable, which could adversely affect bulk electric
system reliability. EACMS control electronic access, including
interactive remote access, into the ESP that protects high and medium
impact BES Cyber Systems. One function of electronic access control is
to prevent malware or malicious actors from gaining access to the BES
Cyber Systems and PCAs within the ESP. Once an EACMS is compromised,
the attacker may gain control of the BES Cyber System or PCA. An
attacker does not need physical access to the facility housing a BES
Cyber System in order to gain access to a BES Cyber System or PCA via
an EACMS compromise. By contrast, compromise of PACS, which could
potentially grant an attacker physical access to a BES Cyber System,
requires physical access. Further, PCAs typically become vulnerable to
remote compromise once EACMS have been compromised. Therefore, EACMS
represent the most likely route an attacker would take to access a BES
Cyber System or PCA within an ESP.
    36. Currently-effective Reliability Standard CIP-010-2 applies to
EACMS and the modifications proposed in Reliability Standard CIP-010-3
maintain the current coverage of EACMS, except for new Part 1.6 of
Requirement R1, which addresses software integrity and authenticity.
Moreover, NERC's petition acknowledges that requirements in the
existing CIP Reliability Standards ``require Responsible Entities to
apply certain protections to PACS, EACMS, and PCAs, given their
association with BES Cyber Systems either by function or location.''
\38\ This statement suggests a recognition by NERC that EACMS, PACS,
and PCAs warrant certain protections. We agree with NERC's statement,
but we believe that the most important focus is on EACMS for the
reasons described above.
---------------------------------------------------------------------------

    \38\ NERC Petition at 19.
---------------------------------------------------------------------------

    37. In addition, while EACMS is a term unique to NERC-developed
Reliability Standards, it is widely recognized that the types of access
and monitoring functions that are included within NERC's definition of
EACMS, such as firewalls, are integral to protecting industrial control
systems. For example, the Department of Homeland Security's Industrial
Control Systems Cyber Emergency Response Team (ICS-CERT) identifies
firewalls as ``the first line of defense within an ICS network
environment'' that ``keep the intruder out while allowing the
authorized passage of data necessary to run the organization.'' \39\
ICS-CERT further explains that firewalls ``act as

sentinels, or gatekeepers, between zones . . . [and] [w]hen properly
configured, they will only let essential traffic cross security
boundaries[,] . . . [i]f they are not properly configured, they could
easily pass unauthorized or malicious users or content.'' Accordingly,
if EACMS are compromised, that could adversely affect the reliable
operation of associated BES Cyber Systems.
---------------------------------------------------------------------------

    \39\ ICS-CERT, Recommended Practice: Improving Industrial
Control System Cybersecurity with Defense-in-Depth Strategies, at 23
(September 2016), https://ics-cert.us-cert.gov/sites/default/files/recommended_practices/NCCIC_ICS-CERT_Defense_in_Depth_2016_S508C.pdf. See also NIST, Guide to
Industrial Control Systems (ICS) Security, NIST Special Publication
800-82, Revision 2, at Section 5 (ICS Security Architecture) (May
2015) (discussing importance of technologies and strategies,
including firewalls, to secure industrial control systems), http://nvlpubs.nist.gov/nistpubs/SpecialPublications/NIST.SP.800-82r2.pdf.
---------------------------------------------------------------------------

    38. NERC explains that the standard drafting team chose to limit
the scope of the proposed Reliability Standards to medium and high
impact BES Cyber Systems, but not their associated Cyber Assets (e.g.,
EACMS), in order not to ``divert resources from protecting medium and
high BES Cyber Systems.'' \40\ As noted above, EACMS include
``authentication servers (e.g., RADIUS servers, Active Directory
servers, Certificate Authorities), security event monitoring systems,
and intrusion detection systems'' that are integral to the security of
the medium and high impact BES Cyber Systems to which they are
associated.\41\ While NERC states that it will continue to assess
whether supply chain risks related to low impact BES Cyber Systems,
PACS, EACMS, and PCAs necessitate further consideration for inclusion
in a mandatory Reliability Standard, in view of the discussion above,
we propose to determine that a sufficient basis currently exists to
include EACMS associated with medium and high impact BES Cyber Systems
in the supply chain risk management Reliability Standards.
---------------------------------------------------------------------------

    \40\ Id. at 20.
    \41\ Reliability Standard CIP-002-5.1a (Cyber Security--BES
Cyber System Categorization), Section A.6 at 6.
---------------------------------------------------------------------------

    39. Accordingly, pursuant to section 215(d)(5) of the FPA, the
Commission proposes to direct NERC to develop modifications to the CIP
Reliability Standards to include EACMS associated with medium and high
impact BES Cyber Systems within the scope of the supply chain risk
management Reliability Standards. The Commission seeks comment on this
proposal.

B. BOT-Requested Cyber Security Supply Chain Risks Study

    40. As discussed above, we believe it is appropriate to await the
findings from the BOT-requested study on cyber security supply chain
risks before considering whether low impact BES Cyber Systems should be
addressed in the supply chain risk management Reliability Standards.
    41. We note that while the BOT resolutions explicitly stated that
the BOT-requested study should examine the risks posed by low impact
BES Cyber Systems, the BOT resolutions did not identify PACS and PCAs
as subjects of the study. However, NERC's petition suggests that NERC
will be evaluating PACS and PCAs as part of the BOT-requested
study.\42\
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    \42\ NERC Petition at 21 (``over the next 18 months, NERC,
working with various stakeholders, will continue to assess whether
supply chain risks related to low impact BES Cyber Systems, PACS,
EACMS, and PCA necessitate further consideration for inclusion in a
mandatory Reliability Standard'').
---------------------------------------------------------------------------

    42. While many of the concerns expressed in the previous section
with respect to the risks posed by EACMS also apply to varying degrees
to PACS and PCAs, we propose to direct NERC, consistent with the
representation made in NERC's petition, to include PACS and PCAs in the
BOT-requested study and to await the findings of the study's final
report before considering further action. We distinguish among EACMS
and the other Cyber Assets because, for example, a compromise of a
PACS, which would potentially grant an attacker physical access to a
BES Cyber System or PCA, is less likely since physical access is also
required. Therefore, while we believe that EACMS require immediate
action, because they represent the most likely route an attacker would
take to access a BES Cyber System or PCA within an ESP, possible action
on other Cyber Assets can await completion of the BOT-requested study's
final report.
    43. In addition to proposing to direct NERC to include PACS and
PCAs in the BOT-requested study, we propose to direct that NERC file
the study's interim and final reports with the Commission upon their
completion. The Commission seeks comment on these proposals.

C. Implementation Plan

    44. The 18-month implementation period proposed by NERC does not
appear to be justified based on the anticipated effort required to
develop and implement a supply chain risk management plan.\43\ While
NERC maintains that the proposed implementation period is ``designed to
afford responsible entities sufficient time to develop and implement
their supply chain cybersecurity risk management plans required under
proposed Reliability Standard CIP-013-1 and implement the new controls
required in proposed Reliability Standards CIP-005-6 and CIP-010-3,''
\44\ the security objectives of the proposed Reliability Standards are
process-based and do not prescribe technology that might justify an
extended implementation period. Instead, we propose that the proposed
Reliability Standards become effective the first day of the first
calendar quarter that is 12 months following the effective date of a
Commission order approving the Reliability Standards. Our proposed
implementation period is reasonable, given the nature of the
requirements in the proposed Reliability Standards, and provides
enhanced security for the bulk electric system in a timelier manner. We
seek comment on this proposal.
---------------------------------------------------------------------------

    \43\ The 18-month implementation plan proposed by NERC may be
longer given NERC's request that the effective date of the proposed
Reliability Standards falls on the first day of the first calendar
quarter that is 18 months after the effective date of a Commission
order approving the proposed Reliability Standards.
    \44\ NERC Petition at 35.
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III. Information Collection Statement

    45. The FERC-725B information collection requirements contained in
this notice of proposed rulemaking are subject to review by the Office
of Management and Budget (OMB) under section 3507(d) of the Paperwork
Reduction Act of 1995.\45\ OMB's regulations require approval of
certain information collection requirements imposed by agency
rules.\46\ Upon approval of a collection of information, OMB will
assign an OMB control number and expiration date. Respondents subject
to the filing requirements of this rule will not be penalized for
failing to respond to these collections of information unless the
collections of information display a valid OMB control number. The
Commission solicits comments on the Commission's need for this
information, whether the information will have practical utility, the
accuracy of the burden estimates, ways to enhance the quality, utility,
and clarity of the information to be collected or retained, and any
suggested methods for minimizing respondents' burden, including the use
of automated information techniques.
---------------------------------------------------------------------------

    \45\ 44 U.S.C. 3507(d).
    \46\ 5 CFR 1320.11.
---------------------------------------------------------------------------

    46. The Commission bases its paperwork burden estimates on the
changes in paperwork burden presented by the newly proposed CIP
Reliability Standard CIP-013-1 and the proposed revisions to CIP
Reliability Standard CIP-005-6 and CIP-010-3 as compared to the current
Commission-approved Reliability Standards CIP-005-5 and CIP-010-2,
respectively. As discussed above, the notice of proposed rulemaking
addresses several areas of the CIP Reliability Standards through
proposed Reliability Standard CIP-013-1, Requirements R1, R2, and R3.
Under Requirement R1, responsible entities

would be required to have one or more processes to address the
following baseline set of security concepts, as applicable, in their
procurement activities for high and medium impact BES Cyber Systems:
(1) Vendor security event notification processes (Part 1.2.1); (2)
coordinated incident response activities (Part 1.2.2); (3) vendor
personnel termination notification for employees with access to remote
and onsite systems (Part 1.2.3); (4) product/services vulnerability
disclosures (Part 1.2.4); (5) verification of software integrity and
authenticity (Part 1.2.5); and (6) coordination of vendor remote access
controls (Part 1.2.6). Requirement R2 mandates that each responsible
entity implement its supply chain cybersecurity risk management plan.
Requirement R3 requires a responsible entity to review and obtain the
CIP Senior Manager's approval of its supply chain risk management plan
at least once every 15 calendar months in order to ensure that the plan
remains up-to-date.
    47. Separately, proposed Reliability Standard CIP-005-6,
Requirement R2.4 requires one or more methods for determining active
vendor remote access sessions, including Interactive Remote Access and
system[hyphen]to[hyphen]system remote access. Proposed Reliability
Standard CIP-005-6, Requirement R2.5 requires one or more methods to
disable active vendor remote access, including Interactive Remote
Access and system[hyphen]to[hyphen]system remote access. Proposed
Reliability Standard CIP-010-3, Requirement R1.6 requires responsible
entities to verify software integrity and authenticity in the
operational phase, if the software source provides a method to do so.
    48. The NERC Compliance Registry, as of December 2017, identifies
approximately 1,250 unique U.S. entities that are subject to mandatory
compliance with Reliability Standards. Of this total, we estimate that
288 entities will face an increased paperwork burden under proposed
Reliability Standards CIP-013-1, CIP-005-6, and CIP-010-3. Based on
these assumptions, we estimate the following reporting burden:

                                                                    RM17-13-000 NOPR
                             [Mandatory Reliability Standards for Critical Infrastructure Protection Reliability Standards]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        Annual number                                              Total annual burden       Cost per
                                          Number of     of responses    Total number    Average burden and cost   hours and total annual    respondent
                                         respondents   per respondent   of responses        per response 47                cost                 ($)
                                                  (1)             (2)     (1) * (2) =  (4).....................  (3) * (4) = (5)........       (5) / (1)
                                                                                (3)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Create supply chain risk management               288               1             288  546 hrs.; $44,772.......  157,248 hrs.;                    44,772
 plan (one-time) 48 (CIP-013-1 R1).                                                                               $12,894,336.
Updates and reviews of supply chain               288               1             288  30 hrs.; $2,460.........  8,640 hrs.; $708,480...           2,460
 risk management plan (ongoing) 49
 (CIP-013-1 R2).
Develop Procedures to update remote               288               1             288  50 hrs.; $4,100.........  14,400 hrs.; $1,180,800           4,100
 access requirements (one time) (CIP-
 005-6 R1-R4).
Develop procedures for software                   288               1             288  50 hrs.; $4,100.........  14,400 hrs.; $1,180,800           4,100
 integrity and authenticity
 requirements (one time) (CIP-010-3
 R1-R4).
                                      ------------------------------------------------------------------------------------------------------------------
    Total (one-time).................  ..............  ..............             864  ........................  186,048 hrs.;            ..............
                                                                                $15,255,936.
    Total (ongoing)..................  ..............  ..............             288  ........................  8,640 hrs.; $708,340...  ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The one-time burden of 186,048 hours will be averaged over three
years (186,048 hours / 3 = 62,016 hours/year over three years).
---------------------------------------------------------------------------

    \47\ The loaded hourly wage figure (includes benefits) is based
on the average of the occupational categories for 2016 found on the
Bureau of Labor Statistics website (http://www.bls.gov/oes/current/naics2_22.htm):
    Legal (Occupation Code: 23-0000): $143.68.
    Information Security Analysts (Occupation Code 15-1122): $66.34.
    Computer and Information Systems Managers (Occupation Code: 11-
3021): $100.68.
    Management (Occupation Code: 11-0000): $81.52.
    Electrical Engineer (Occupation Code: 17-2071): $68.12.
    Management Analyst( Code: 43-0000): $63.49.
    These various occupational categories are weighted as follows:
[($81.52)(.10) + $66.34(.315) + $68.12(.02) + $143.68(.15) +
$100.68(.10) + $63.49(.315)] = $82.03. The figure is rounded to
$82.00 for use in calculating wage figures in this NOPR.
    \48\ One-time burdens apply in Year One only.
    \49\ Ongoing burdens apply in Year 2 and beyond.
---------------------------------------------------------------------------

    The ongoing burden of 8,640 hours applies to only Years 2 and
beyond.
    The number of responses is also average over three years (864
responses (one-time) + (288 responses (Year 2) + 288 responses (Year
3)) / 3 = 480 responses.
    The responses and burden for Years 1-3 will total respectively as
follows:
Year 1: 480 responses; 62,016 hours
Year 2: 480 responses; 62,016 hours + 8,640 hours = 70,656 hours
Year 3: 480 responses; 62,016 hours + 8,640 hours = 70,656 hours
    49. The following shows the annual cost burden for each year, based
on the burden hours in the table above:

 Year 1: $15,255,936
 Years 2 and beyond: $708,480
 The paperwork burden estimate includes costs associated with
the initial development of a policy to address requirements relating
to: (1) Developing the supply chain risk management plan; (2) updating
the procedures related to remote access requirements (3) developing the
procedures related to software integrity and authenticity. Further, the
estimate reflects the assumption that costs incurred in year 1 will
pertain to plan and procedure development, while costs in years 2 and 3
will reflect the burden associated with maintaining the SCRM plan and
modifying it as necessary on a 15 month basis.

    50. Title: Mandatory Reliability Standards, Revised Critical
Infrastructure Protection Reliability Standards.
    Action: Proposed Collection FERC-725B.
    OMB Control No.: 1902-0248.
    Respondents: Businesses or other for-profit institutions; not-for-
profit institutions.
    Frequency of Responses: On Occasion.
    Necessity of the Information: This notice of proposed rulemaking
proposes to approve the requested modifications to Reliability
Standards pertaining to critical infrastructure protection. As
discussed above, the Commission proposes to approve NERC's proposed CIP
Reliability Standards CIP-013-1, CIP-005-6, and CIP-010-3 pursuant to
section 215(d)(2) of the FPA because they improve upon the currently-
effective suite of cyber security CIP Reliability Standards.
    Internal Review: The Commission has reviewed the proposed
Reliability Standards and made a determination that its action is
necessary to implement section 215 of the FPA.
    51. Interested persons may obtain information on the reporting
requirements by contacting the following: Federal Energy Regulatory
Commission, 888 First Street NE, Washington, DC 20426 [Attention: Ellen
Brown, Office of the Executive Director, e-mail:
[email protected], phone:<PHONE_NUMBER>, fax:<PHONE_NUMBER>].
    52. For submitting comments concerning the collection(s) of
information and the associated burden estimate(s), please send your
comments to the Commission, and to the Office of Management and Budget,
Office of Information and Regulatory Affairs, Washington, DC 20503
[Attention: Desk Officer for the Federal Energy Regulatory Commission,
phone:<PHONE_NUMBER>, fax:<PHONE_NUMBER>]. For security reasons,
comments to OMB should be submitted by e-mail to:
[email protected]. Comments submitted to OMB should include
Docket Number RM17-13-000.

IV. Environmental Analysis

    53. The Commission is required to prepare an Environmental
Assessment or an Environmental Impact Statement for any action that may
have a significant adverse effect on the human environment.\50\ The
Commission has categorically excluded certain actions from this
requirement as not having a significant effect on the human
environment. Included in the exclusion are rules that are clarifying,
corrective, or procedural or that do not substantially change the
effect of the regulations being amended.\51\ The actions proposed
herein fall within this categorical exclusion in the Commission's
regulations.
---------------------------------------------------------------------------

    \50\ Regulations Implementing the National Environmental Policy
Act of 1969, Order No. 486, FERC Stats. & Regs. ] 30,783 (1987).
    \51\ 18 CFR 380.4(a)(2)(ii).
---------------------------------------------------------------------------

V. Regulatory Flexibility Act Analysis

    54. The Regulatory Flexibility Act of 1980 (RFA) generally requires
a description and analysis of proposed rules that will have significant
economic impact on a substantial number of small entities.\52\ The
Small Business Administration's (SBA) Office of Size Standards develops
the numerical definition of a small business.\53\ The SBA revised its
size standard for electric utilities (effective January 22, 2014) to a
standard based on the number of employees, including affiliates (from
the prior standard based on megawatt hour sales).\54\
---------------------------------------------------------------------------

    \52\ 5 U.S.C. 601-12.
    \53\ 13 CFR 121.101.
    \54\ 13 CFR 121.201, Subsection 221.
---------------------------------------------------------------------------

    55. Proposed Reliability Standards CIP-013-1, CIP-005-6, CIP-010-3
are expected to impose an additional burden on 288 entities \55\
(reliability coordinators, generator operators, generator owners,
interchange coordinators or authorities, transmission operators,
balancing authorities, and transmission owners).
---------------------------------------------------------------------------

    \55\ Public utilities may fall under one of several different
categories, each with a size threshold based on the company's number
of employees, including affiliates, the parent company, and
subsidiaries. For the analysis in this NOPR, we are using a 500
employee threshold due to each affected entity falling within the
role of Electric Bulk Power Transmission and Control (NAISC Code:
221121).
---------------------------------------------------------------------------

    56. Of the 288 affected entities discussed above, we estimate that
approximately 248 or 86.2 percent of the affected entities are small
entities. We estimate that each of the 248 small entities to whom the
proposed modifications to Reliability Standards CIP-013-1, CIP-005-6,
CIP-010-3 apply will incur one-time costs of approximately $52,972 per
entity to implement the proposed Reliability Standards, as well as the
ongoing paperwork burden reflected in the Information Collection
Statement (approximately $2,460 per year per entity). We do not
consider the estimated costs for these 248 small entities to be a
significant economic impact. Accordingly, we certify that proposed
Reliability Standards CIP-013-1, CIP-005-6, and CIP-010-3 will not have
a significant economic impact on a substantial number of small
entities.

VI. Comment Procedures

    57. The Commission invites interested persons to submit comments on
the matters and issues proposed in this notice to be adopted, including
any related matters or alternative proposals that commenters may wish
to discuss. Comments are due March 26, 2018. Comments must refer to
Docket No. RM17-13-000, and must include the commenter's name, the
organization they represent, if applicable, and address.
    58. The Commission encourages comments to be filed electronically
via the eFiling link on the Commission's web site at http://www.ferc.gov. The Commission accepts most standard word processing
formats. Documents created electronically using word processing
software should be filed in native applications or print-to-PDF format
and not in a scanned format. Commenters filing electronically do not
need to make a paper filing.
    59. Commenters that are not able to file comments electronically
must send an original of their comments to: Federal Energy Regulatory
Commission, Secretary of the Commission, 888 First Street NE,
Washington, DC 20426.
    60. All comments will be placed in the Commission's public files
and may be viewed, printed, or downloaded remotely as described in the
Document Availability section below. Commenters on this proposal are
not required to serve copies of their comments on other commenters.

VII. Document Availability

    61. In addition to publishing the full text of this document in the
Federal Register, the Commission provides all interested persons an
opportunity to view and/or print the contents of this document via the
internet through the Commission's Home Page (http://www.ferc.gov) and
in the Commission's Public Reference Room during normal business hours
(8:30 a.m. to 5:00 p.m. Eastern time) at 888 First Street NE, Room 2A,
Washington, DC 20426.
    62. From the Commission's Home Page on the internet, this
information is available on eLibrary. The full text of this document is
available on eLibrary in PDF and Microsoft Word format for viewing,
printing, and/or downloading. To access this document in eLibrary, type
the docket number of this document, excluding the last three digits, in
the docket number field.
    63. User assistance is available for eLibrary and the Commission's
website during normal business hours from the

Commission's Online Support at<PHONE_NUMBER> (toll free at 1-866-208-
3676) or e-mail at [email protected], or the Public Reference
Room at<PHONE_NUMBER>, TTY<PHONE_NUMBER>. E-mail the Public Reference
Room at [email protected].

    By direction of the Commission. Commissioner LaFleur is
concurring with a separate statement attached.

    Issued: January 18, 2018.
Nathaniel J. Davis, Sr.,
Deputy Secretary.

Attachment

LaFLEUR, Commissioner concurring:

    In today's order, the Commission proposes to approve the supply
chain risk management standards filed by the North American Electric
Reliability Corporation (NERC), and direct certain modifications to
those standards. I write separately to explain my vote in support of
today's order, given my dissent on the Commission order that
directed the development of these standards.\1\
---------------------------------------------------------------------------

    \1\ Revised Critical Infrastructure Protection Reliability
Standards, Order No. 829, 156 FERC ] 61,050 (2016) (LaFleur, Comm'r,
dissenting).
---------------------------------------------------------------------------

    As I stated in my dissent, I shared the Commission's concern
about supply chain threats and supported continued Commission
attention to those threats. Indeed, I remain concerned that the
supply chain is a significant cyber vulnerability for the bulk power
system. However, I believed that the Commission was proceeding too
quickly to require a supply chain standard, without having
sufficiently worked with NERC, industry, and other stakeholders on
how to design an effective, auditable, and enforceable standard. In
my view, the directive that resulted was insufficiently developed
and created a risk that needed protections against supply threats
would be delayed, due in large part to the nature of the NERC
standards process.
    Given the limited guidance and timeline provided by the
Commission in Order No. 829, the proposed standards are,
unsurprisingly, quite general, focusing primarily ``on the processes
Responsible Entities implement to consider and address cyber
security risks from vendor products or services during BES Cyber
System planning and procurement, not on the outcome of those
processes . . .'' \2\ The proposed standards would provide
significant flexibility to registered entities to determine how best
to comply with their requirements. In my view, that flexibility
presents both potential risks and benefits. It could allow
effective, adaptable approaches to flourish, or allow compliance
plans that meet the letter of the standards but do not effectively
address supply chain threats. I hope that we will see more of the
former, but I believe the Commission, NERC, and the Regional
Entities should closely monitor implementation if the standards are
ultimately approved.
---------------------------------------------------------------------------

    \2\ NERC Petition at 27.
---------------------------------------------------------------------------

    In voting for today's order, I recognize that the choice before
the Commission today is not the same as it was in July 2016. I
acknowledge that a significant amount of time and effort have been
committed to the development of these standards in response to a
duly voted Commission order. Most importantly, I agree that they are
an improvement over the status quo. I do not believe that remanding
these standards or the larger supply chain issue to the NERC
standards process would be a prudent step at this point. Rather, I
believe the better course of action at this time is to move forward
with these standards and, assuming the Commission ultimately
proceeds to Final Rule, improve them over time as needed.
    In that regard, I believe the Commission is appropriately
proposing to direct a modification to the proposed standards to
address an identified reliability gap regarding Electronic Access
Control and Monitoring Systems. I also support the proposal to
require NERC to include Physical Access Controls and Protected Cyber
Assets within its ongoing assessment of the supply chain risks posed
by low-impact Bulk Electric System Cyber Systems, which will help
the Commission and NERC determine whether further revisions to the
standards are needed.
    More so than with most standards, I believe that whether these
standards are effective will only reveal itself over time as we gain
additional experience with them. I am therefore particularly
interested in feedback from commenters on how the Commission, NERC,
and industry should assess these standards, including any reporting
obligations that might be appropriate.\3\ In addition, given the
very general process-oriented nature of the standard, I also support
the proposal to shorten the implementation date for the new
standards. If ultimately adopted, the revised deadline will allow
industry, NERC, and the Commission to put the standards in place
sooner while continuing to evaluate how best to protect the bulk
power system against supply chain threats.
---------------------------------------------------------------------------

    \3\ I note that NERC has also developed draft implementation
guidance that provides additional detail regarding possible
compliance approaches. As NERC and the Regional Entities gain
additional experience with assessing compliance under these
standards, updating this implementation guidance could be an
effective approach for quickly disseminating best practices and
lessons learned.
---------------------------------------------------------------------------

    For these reasons, I respectfully concur.

Cheryl A. LaFleur,

Commissioner.

[FR Doc. 2018-01247 Filed 1-24-18; 8:45 am]
BILLING CODE 6717-01-P