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99–931 PDF 2016

BLACKOUT! ARE WE PREPARED TO MANAGE 

THE AFTERMATH OF A CYBERATTACK OR 

OTHER FAILURE OF THE ELECTRICAL GRID? 

(114–39) 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS, AND 

EMERGENCY MANAGEMENT 

OF THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

SECOND SESSION 

APRIL 14, 2016 

Printed for the use of the 

Committee on Transportation and Infrastructure 

( 

Available online at: http://www.gpo.gov/fdsys/browse/ 

committee.action?chamber=house&committee=transportation 

(II) 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

BILL SHUSTER, Pennsylvania, Chairman 

DON YOUNG, Alaska 

JOHN J. DUNCAN, JR., Tennessee, 

Vice Chair 

JOHN L. MICA, Florida 

FRANK A. LOBIONDO, New Jersey 

SAM GRAVES, Missouri 

CANDICE S. MILLER, Michigan 

DUNCAN HUNTER, California 

ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas 

LOU BARLETTA, Pennsylvania 

BLAKE FARENTHOLD, Texas 

BOB GIBBS, Ohio 

RICHARD L. HANNA, New York 

DANIEL WEBSTER, Florida 

JEFF DENHAM, California 

REID J. RIBBLE, Wisconsin 

THOMAS MASSIE, Kentucky 

MARK MEADOWS, North Carolina 

SCOTT PERRY, Pennsylvania 

RODNEY DAVIS, Illinois 

MARK SANFORD, South Carolina 

ROB WOODALL, Georgia 

TODD ROKITA, Indiana 

JOHN KATKO, New York 

BRIAN BABIN, Texas 

CRESENT HARDY, Nevada 

RYAN A. COSTELLO, Pennsylvania 

GARRET GRAVES, Louisiana 

MIMI WALTERS, California 

BARBARA COMSTOCK, Virginia 

CARLOS CURBELO, Florida 

DAVID ROUZER, North Carolina 

LEE M. ZELDIN, New York 

MIKE BOST, Illinois 

PETER A. DEFAZIO, Oregon 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

CORRINE BROWN, Florida 

EDDIE BERNICE JOHNSON, Texas 

ELIJAH E. CUMMINGS, Maryland 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

STEVE COHEN, Tennessee 

ALBIO SIRES, New Jersey 

DONNA F. EDWARDS, Maryland 

JOHN GARAMENDI, California 

ANDRE ́ CARSON, Indiana 

JANICE HAHN, California 

RICHARD M. NOLAN, Minnesota 

ANN KIRKPATRICK, Arizona 

DINA TITUS, Nevada 

SEAN PATRICK MALONEY, New York 

ELIZABETH H. ESTY, Connecticut 

LOIS FRANKEL, Florida 

CHERI BUSTOS, Illinois 

JARED HUFFMAN, California 

JULIA BROWNLEY, California 

SUBCOMMITTEE ON ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS, AND EMERGENCY

MANAGEMENT

LOU BARLETTA, Pennsylvania, Chairman 

ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas 

THOMAS MASSIE, Kentucky 

MARK MEADOWS, North Carolina 

SCOTT PERRY, Pennsylvania 

RYAN A. COSTELLO, Pennsylvania 

BARBARA COMSTOCK, Virginia 

CARLOS CURBELO, Florida 

DAVID ROUZER, North Carolina 

BILL SHUSTER, Pennsylvania (Ex Officio) 

ANDRE ́ CARSON, Indiana 

ELEANOR HOLMES NORTON, District of 

Columbia 

ALBIO SIRES, New Jersey 

DONNA F. EDWARDS, Maryland 

DINA TITUS, Nevada 

PETER A. DEFAZIO, Oregon (Ex Officio) 

VACANCY 

(III) 

CONTENTS Page 

Summary of Subject Matter .................................................................................... iv 

TESTIMONY 

PANEL 1 

Hon. W. Craig Fugate, Administrator, Federal Emergency Management Agency ........................................................................................................................... 4

Patricia A. Hoffman, Assistant Secretary, Office of Electricity Delivery and 

Energy Reliability, Department of Energy ........................................................ 4 

Caitlin A. Durkovich, Assistant Secretary for Infrastructure Protection, National Protection and Programs Directorate, Department of Homeland Security ......................................................................................................................... 4

Richard Campbell, Specialist in Energy Policy, Congressional Research Service .......................................................................................................................... 4

PANEL 2 

Gerry W. Cauley, President and Chief Executive Officer, North American 

Electric Reliability Corporation .......................................................................... 28 

William H. Spence, Chairman, President and Chief Executive Officer, PPL 

Corporation ........................................................................................................... 28 

Bobbi J. Kilmer, President and Chief Executive Officer, Claverack Rural 

Electric Cooperative ............................................................................................. 28 

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS 

Hon. Andre ́ Carson of Indiana ................................................................................ 40 

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

Hon. W. Craig Fugate ............................................................................................. 43 

Patricia A. Hoffman ................................................................................................. 49 

Caitlin A. Durkovich ................................................................................................ 57 

Richard Campbell .................................................................................................... 65 

Gerry W. Cauley ...................................................................................................... 72 

William H. Spence ................................................................................................... 80 

Bobbi J. Kilmer ........................................................................................................ 90 

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(1) 

BLACKOUT! ARE WE PREPARED TO MANAGE 

THE AFTERMATH OF A CYBERATTACK OR 

OTHER FAILURE OF THE ELECTRICAL 

GRID? 

THURSDAY, APRIL 14, 2016 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON ECONOMIC DEVELOPMENT, 

PUBLIC BUILDINGS, AND EMERGENCY MANAGEMENT, 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, 

Washington, DC. 

The subcommittee met, pursuant to notice, at 10:05 a.m. in room 

2167, Rayburn House Office Building, Hon. Lou Barletta (Chairman of the subcommittee) presiding. 

Mr. BARLETTA. The committee will come to order. Today we are 

holding a hearing to explore a critical and timely topic. There have 

been numerous congressional hearings on cybersecurity and how to 

stop the bad guys. What has not been discussed in great detail is 

what the consequence will be from a massive cyberattack that 

brings down, for example, a large portion of the electrical grid for 

an extended period of time. 

The purpose of today’s hearing is to answer an important question: With respect to cyberthreats to the electrical power system, 

what consequences should the Federal Government tell States and 

local governments to prepare for? In other words, for how many 

people and for how long should States plan on being without 

power? 

The Federal Government does this now for almost every significant hazard that we face. Whether it is a category 5 hurricane hitting Miami or an 8.0 earthquake in Los Angeles, the Federal Government has realistic estimates or scenarios for States and cities 

to plan. The Federal Government does not have this basic planning 

scenario for a cyberthreat to the power system, and there is a huge 

disparity in what different groups think is a potential scenario for 

which States and local governments should prepare. 

And the difference would be significant for local governments. If 

the power is out for a few days, it can be an inconvenience, but if 

it is out for several weeks, or a month or more, the local government has to potentially plan for increased public safety, water 

treatment, sheltering, or evacuation, fuel delivery for generators, 

and many other contingencies. 

What should we plan for? Ted Koppel, in his book, says that we 

should plan on 6 to 18 months of uninterrupted blackouts. The industry seems to say a cyberattack could, at most, cause an interVerDate Aug 31 2005 11:11 Dec 19, 2016 Jkt 000000 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 P:\HEARINGS\114\ED\4-14-1~1\99931.TXT JEAN
2 

ruption in terms of days, not weeks. And today we are going to 

hear testimony from the Federal Emergency Management Agency, 

the Department of Energy, the Department of Homeland Security’s 

National Protection and Programs Directorate, the Congressional 

Research Service, the North American Electric Reliability Corporation, and representatives from the electrical industry. I hope to get 

an answer to this question for State and local governments who are 

on the ground and will be first charged with protection of people 

and property. 

Imagine what we would do without electricity for a day, a week, 

a month, a year. Virtually all critical infrastructure is dependent 

on the electrical grid, particularly the lifeline sectors: telecommunications, transportation, water, and financial services. And if the 

goal of the bad guys is to collapse the United States economic system, they are going to try to cut off the power. 

There have been reports of hacking attempts on electrical facilities by foreign and domestic parties. Our national security, public 

safety, economic competitiveness, and personal privacy is at risk. 

According to the Department of Homeland Security, the energy sector was the target of more than 40 percent of all reported 

cyberattacks. 

And even more disconcerting was the December 2015 cyberattack 

on Ukraine’s electric grid, which affected four dozen substations 

and left one-quarter of a million people without power. At the same 

time as the attack on the grid itself, call centers were hit with a 

telephony denial-of-service attack as customers were trying to report the outages. If anyone thought this was a glitch, think again. 

The electrical grid is not only under attack from cyberspace, the 

electric power sector is all too familiar with the devastation storms 

like Hurricane Sandy can leave behind, or physical attacks like the 

2013 incident at the Metcalf substation in California. Thankfully, 

in the cases of storms and physical attacks, the power sector has 

strong plans in place and redundant systems to restore power 

quickly and to avoid the loss of life and property. 

But I am concerned about a cyberattack. Are there similar plans 

in place for industry and for State and local government? Will 

those redundancies provide the same types of protections? 

Most recently, I have been discussing this topic with constituents 

in my district, asking what they will do in their communities if the 

power is out for a prolonged period of time. Honestly, most of them 

don’t know because we don’t know what to plan for. We have 

brought together the right people here to tell us today. 

We are also going to discuss what preparedness looks like, best 

practices, and how we can achieve a greater level of readiness, all 

the way down to the local mayors and township supervisors. I am 

encouraged to hear all the industry talk about an all-hazards approach and focusing on mitigating the greatest risks, but I think 

there are some unique characteristics of the cyberthreat that require specific planning guidelines. 

I know we cannot goldplate the system, but given the interdependency of electricity with our daily lives, it is crucial that we 

understand the risks and be prepared for the likely consequences 

possible from the failure of that system. 

3 

I look forward to this conversation today, starting with our witnesses, and I thank you all for being here. 

I now call on Ranking Member DeFazio for his comments. 

Mr. DEFAZIO. Thank you, Mr. Chairman. Mr. Chairman, you certainly laid out well the potential threats of a cyberattack against 

our critical electrical grid. We know there is constant probing, some 

of it being done by nation-states, not just terrorist groups, nationstates hostile to the U.S. And we need to be certain that we are 

as prepared, well prepared, as we can be. The Ukraine attack was 

perhaps a harbinger of things to come. 

The—I do believe, though, that the all-hazards approach can also 

cover the cyberattack area. The issue of probably most immediate 

concern to those of us who live in the Northwestern United States 

is the threat of Cascadia subduction zone quake in the magnitude 

of 9 or 9-plus, which will inevitably knock out our grid. So, you 

know, there are going to be exercises conducted, two exercises this 

year, with the cooperation of the Department of Homeland Security 

and all the local and State authorities in the region to simulate 

what would be possible in the face of that sort of a disaster. 

Many of the problems that could occur will be the same. You 

know, the loss of transformers is particularly of concern, and I am 

going to be probing that issue with some of the witnesses today. 

There is a question whether the Federal Government should be 

perhaps stockpiling these transformers, since now they are basically custom orders. They take 6 to 18 months. 

What if we lose a dozen large critical transformers because of an 

earthquake, tsunami, or a cyberattack? You know, it seems to me 

kind of a no-brainer that we should, either through Government 

sources or through cooperation with the industry, be creating a 

critical infrastructure component stockpile here in the United 

States to deal with any and all of these sorts of potential attacks. 

And a coordinated, physical attack and cyberattack could, of course, 

be the most devastating, outside of a massive earthquake/tsunami. 

And again, many of the same issues arise. 

And then one that doesn’t get talked about very much any more 

but we held a series of hearings on it years ago in the Committee 

on Natural Resources—then called the Committee on Interior and 

Insular Affairs—when we had jurisdiction over nuclear power is 

the potential for a bomb in place. That is, a nuclear plant. If you 

destroy the backup system—take over the plant, destroy the 

backup system and the incoming power, you can create a meltdown. And how good is the security at our nuclear plants these 

days? I know this hearing isn’t going to get to that topic, I am not 

certain it is even within our jurisdiction, but it is of concern to me, 

and I just wanted to raise that issue, too. 

So, like aviation, you know, electricity, the grid, the—and nuclear plants are of interest to terrorist groups and hostile nationstates, so we have got to be prepared. So I am pleased you are 

holding this hearing today. 

Mr. BARLETTA. Thank you. We will have two panels of witnesses 

today. And on our first panel we will have Administrator Fugate, 

the current Administrator of the Federal Emergency Management 

Agency, the Federal coordinator for consequence management; Assistant Secretary Hoffman from the Department of Energy’s Office 

4 

of Electricity Delivery and Energy Reliability—this is the office 

charged with coordinating the Federal efforts to facilitate the recovery from disruptions in the emergency and the energy supply; Assistant Secretary Durkovich, the Assistant Secretary for Infrastructure Protection from the Department of Homeland Security; and 

Mr. Richard Campbell, an expert at the Congressional Research 

Service in the electric power sector. 

On our second panel we will be joined by Mr. Gerry Cauley, the 

president and CEO of the North American Electric Reliability Corporation, the international regulatory authority whose mission is to 

assure the reliability of the bulk power system in North America; 

Mr. William Spence, CEO of the PPL Corporation, one of the largest investor-owned utility companies in the United States; and Ms. 

Bobbi Kilmer, president and CEO of the Claverack Rural Electric 

Cooperative, a nonprofit electric utility serving 2,250 square miles 

in northeastern Pennsylvania. 

I ask unanimous consent that the witnesses’ full statement be included in the record. 

[No response.] 

Mr. BARLETTA. Without objection, so ordered. Since your written 

testimony has been made a part of the record, the subcommittee 

would request that you limit your oral testimony to 5 minutes. 

Let’s start with our first panel. Administrator Fugate, you may 

proceed. 

TESTIMONY OF HON. W. CRAIG FUGATE, ADMINISTRATOR, 

FEDERAL EMERGENCY MANAGEMENT AGENCY; PATRICIA A. 

HOFFMAN, ASSISTANT SECRETARY, OFFICE OF ELECTRICITY DELIVERY AND ENERGY RELIABILITY, DEPARTMENT OF ENERGY; CAITLIN A. DURKOVICH, ASSISTANT SECRETARY FOR INFRASTRUCTURE PROTECTION, NATIONAL 

PROTECTION AND PROGRAMS DIRECTORATE, DEPARTMENT 

OF HOMELAND SECURITY; AND RICHARD CAMPBELL, SPECIALIST IN ENERGY POLICY, CONGRESSIONAL RESEARCH 

SERVICE 

Mr. FUGATE. Thank you, Mr. Chairman, Ranking Members, 

Members. I want to address your questions. What does a local official need? What do they need to plan for? And I think, based upon 

our experiences dealing with other hazards that have caused disruptions, planning needs to be measured in weeks, particularly if 

there is damage to infrastructure. And again, with cyber, we have 

seen restoration potentially very quickly if there is not physical 

damage. But if you do have damage to things like very large transformers or generator capacity, that will extend it. 

We do know that it is important that in an initial response, that 

you provide for safety and security. When lights are out, power is 

out—we have had major metropolitan areas go through this—you 

have a flurry of activity with people trapped in elevators, traffic 

control, and the fact that initial response may mean going out on 

patrol and looking for problems, rather than waiting for the traditional call to 911, which may or may not be impacted, as you have 

pointed out before, with denial-of-service attacks. 

Your next steps are pretty much, again, as the ranking member 

points out, all hazards. You have to then provide for the most imVerDate Aug 31 2005 11:11 Dec 19, 2016 Jkt 000000 PO 00000 Frm 00014 Fmt 6633 Sfmt 6633 P:\HEARINGS\114\ED\4-14-1~1\99931.TXT JEAN
5 

mediate needs. Hopefully, your critical infrastructure has power 

and emergency power, you have the fuel supply you need. We have 

found in many cases communities haven’t planned for that. Either 

they don’t have critical equipment on backup power or they don’t 

have adequate fuel supplies—usually only enough fuel to run their 

weekly or monthly test, but not to operate in a crisis. 

Generators are very expensive. And so, in many cases, there are 

other options, such as putting in transfer switches. The idea is 

what are the things that are required to keep the community up 

and running until power can be restored that are lifelines? Water 

systems, wastewater treatment, communications, your hospitals, 

and your 911 and other dispatch facilities. Generally, these have 

emergency power, but it has to be planned for real, not that it just 

works during the monthly test. 

And then, as you have pointed out, Mr. Chairman, the duration 

now starts driving additional issues. As we saw in New Jersey and 

New York, the longer you have power disruptions, the more you 

have cascading effects, from everything to not being able to get to 

retail stores, grocery stores, others, gasoline distribution. And 

again, as a community starts to try to recover and get back to normal, these all become challenges. 

So, the planning really is based upon safety, keeping your primary life support systems up, focusing on the restoration of the 

grid, and the reality that your residential areas will probably be 

last to get power because you are going to try to get your retail sectors and major core centers up first. 

The industry has shown a lot of resiliency capabilities of doing 

those things in physical destructions. And we think that the lessons we have learned there would apply, again, to cyber. But cyber 

has a lot of unknowns. And I will defer to my experts to my left 

on what those impacts are, the potential threats, and how likely 

these are. 

But you said how big is big. We actually looked at a natural phenomenon that is actually big, and that would be geomagnetic 

storms. Because of the way our grid is built, and the vulnerabilities 

to very large transformers, this administration has already developed a working plan of what we would do in the event of major 

geomagnetic storms, its impacts on satellites and terrestrial systems. 

We are working currently now on the lessons from the previous 

power outages on the annex to add to the National Response 

Framework to look at the power outages because of a lot of the 

unique capabilities the Federal Government brings, but also this 

has got to be a true working relationship with the utilities. We cannot do this separate. It is a partnership. It has got to involve all 

levels, because the primary place we regulate power is at the 

States, through the, you know, utility regulatory operations the— 

State managed. 

That framework this summer will be going to our senior leadership in the agencies to begin that process of concurrence and updating it, but it serves as a framework if something was to happen 

now, based upon our lessons from Sandy, and going all the way 

back to previous hurricanes and other disruptions. 

6 

But the challenge is, I think, for people to look at planning not 

for what they do every day, but what would happen if power was 

out for not just hours but days or weeks. Do they really understand 

what their capabilities are, and the things they need to do to ensure that their critical lifelines have enough power? 

And trust me, sir, I have been through enough hurricanes to find 

out too many facilities only had enough emergency power to pass 

whatever requirements were there, but under full load in a crisis 

they failed. They didn’t operate them under loads, they didn’t 

maintain enough fuel in the systems for that. They did not have 

contracts for firm deliveries when the crisis occurred. So you really 

need to get people to focus on this, that if you are going to provide 

emergency power it has got to be for real, and it has got to be able 

to operate for long periods of time. 

And you need to really plan for this from the standpoint of a 

phased approach, because oftentimes when this starts we don’t 

know how long it is going to be out. So we have immediate response steps, but you also need to start asking the question if 

power isn’t on in 72 hours, what are the next things we have to 

focus on? If we are out for a week, what are the next things we 

have to focus on? 

But I think the story from industry is also good. We have learned 

a lot about how to get systems back up. We have learned how to 

bypass fail systems. And, in many cases, the automation has replaced the man in the middle. And sometimes we have to put people back in and run less efficient systems, but we can get power 

back. 

So I think there is both a good news story, but there is still a 

lot that we don’t know. So against that we are not going to be able 

to write a plan for everything that can happen. We need to write 

plans based upon consequences. And again, as we have a better understanding of the duration of impacts, that will help us shape that 

guidance to State and local officials for dealing with extensive 

power outages, pretty much irregardless of the cause of it, but really looking at it over the time phase of what would be happening 

and what the next steps are. 

But again, a lot of the lessons have been learned from natural 

hazards. The question in cyber is how widespread and how many 

jurisdictions simultaneously will be impacted. That is probably the 

one difference that a physical specific such as a hurricane or earthquake—we know the geographical area, which cyber—it won’t be 

defined by political or physical boundaries, it would be systemwide. 

And that is another area that we ask questions about. 

But not much dissimilar to the threat from geomagnetic storms. 

That is a hemispheric risk, and that is probably—when you—outside of a A&P detonation in space, it is probably the largest potential impact to the utilities, and again, a lot of work has been done 

to minimize those impacts. 

So, Mr. Chairman, I stand ready for questions, but I wanted to 

try to answer your questions in my opening statements. 

Mr. BARLETTA. Thank you for your testimony. Before we move on 

I want to recognize the ranking member of the subcommittee, Mr. 

Carson, for his opening statement. 

7 

Mr. CARSON. Well, Chairman Barletta, thank—we had a hearing 

with the CIA [Central Intelligence Agency] Director and I didn’t 

have access to my phone. And then, when I finally escaped I saw 

the messages. But my apologies. But I want to thank you guys. 

Chairman, I think—for the sake of time, I think we should still 

continue, because I was the one who was late, so thank you. 

Mr. BARLETTA. Thank you. We will now move on to Assistant 

Secretary Hoffman. You may proceed. 

Ms. HOFFMAN. Chairman Barletta, Ranking Member Carson, 

members of the subcommittee, thank you very much for focusing 

attention on the importance of being prepared for an outage, and 

for the opportunity to discuss the Department of Energy’s role in 

helping ensure resilient, reliable, and flexible electricity systems in 

an increasingly challenging environment. 

Our economy, national security, even the health and safety of 

citizens depend on reliable delivery of electricity. The mission of 

the Office of Electricity Delivery and Energy Reliability is to 

strengthen, transform, and improve our energy infrastructure to 

ensure access to reliable, secure, and clean sources of energy. We 

are committed to working with our public and private sector partners to protect the Nation’s critical energy infrastructure, including 

the electric power grid, from disruptions, whether it be caused by 

natural or manmade events, including severe weather, physical attacks, and cyberattacks. 

A crucial factor in meeting these challenges is to be proactive, 

and cultivate what I call an ecosystem of resilience, a network of 

owners and operators, regulators, vendors, Federal partners, and 

consumers acting together to strengthen our ability to prepare, respond, and recover. Our organization works on indepth strategies, 

products, and tools to inform and educate State and local officials 

in their energy emergency preparedness activity. This is done 

through forums, trainings, and tabletop exercises that include Federal, State, and local energy officials. 

In the area of cybersecurity, as part of the administration’s effort 

to improve electricity subsector cybersecurity capabilities, the Department of Energy and industry partners have developed the Electricity Subsector Cybersecurity Capability Maturity Model. This is 

an evaluation tool that helps organizations prioritize and develop 

cybersecurity capabilities. 

In April, DOE [Department of Energy] will lead Clear Path IV 

in Portland, Oregon, and Washington, DC. Clear Path is an interagency exercise focused on testing and evaluating the energy sector 

roles and responsibilities and response plans utilized for a Cascadia 

subduction zone 9.0 earthquake and tsunami. When a response is 

required and needed, the Department of Energy serves as lead 

agency for this response under the National Response Framework 

and under FEMA’s [Federal Emergency Management Agency’s] 

leadership. 

The Department of Energy works with industry and Federal 

partners to assess the impacts of disaster on local and regional energy infrastructure, coordinate delivery of assets, monitor and report on restoration efforts, and provide regular situational awareness to key decisionmakers in the States, the White House, and our 

interagency partners. 

8 

DOE also provides strategic leadership by requesting and facilitating the development of an energy Information Sharing and 

Analysis Center, as well as the development of an Electricity Subsector Coordinating Council. This council is a group of leaders from 

across the electric sector that meet regularly with Government to 

coordinate and share information. When power goes out, the local 

utility is the first responder. Should any threat or emergency exceed the capability of any local or private-sector resources, the Federal Government and the electric sector, through the council, will 

engage in coordinating a response to this type of a crisis. 

Congress enacted several important new security measures in 

the FAST Act [Fixing America’s Surface Transportation Act]. This 

act affirms DOE’s responsibility in cybersecurity coordination, oil 

and gas information sharing, and the development of a transformer 

reserve plan. In addition, the FAST Act provides the Secretary of 

Energy with a new authority: Upon declaration of a grid security 

emergency by the President, the Secretary can issue orders to protect and restore critical electric infrastructure, or defense critical 

electric infrastructure. This authority allows DOE to respond as 

needed to cyberthreats or physical threats to the grid. The Department is actively engaging in the process and procedure for implementing this new authority. 

The keys to strengthening resilience are not only understanding 

threat insight and response, but it is also through innovation. Advanced technology and innovation in cybersecurity storage 

microgrids will also help the industry get ahead of these risks. 

In conclusion, the threats will continue to evolve. DOE is working diligently to stay ahead of the curve. To accomplish this we 

must invest in resilience, encourage innovation, and use the best 

practices to help raise the sector’s cyber and physical security maturity, as well as strengthen local incident response and recovery 

capabilities. 

Thank you for your time. And this concludes my remarks. I look 

forward to any questions you have. 

Mr. BARLETTA. Thank you for your testimony, Assistant Secretary Hoffman. 

Assistant Secretary Durkovich, you may proceed. 

Ms. DURKOVICH. Good morning, Chairman Barletta, Ranking 

Member Carson, and members of the subcommittee. My name is 

Caitlin Durkovich, and I am the Assistant Secretary for Infrastructure Protection within the National Protection and Programs Directorate at the Department of Homeland Security. Thank you for the 

opportunity to discuss how NPPD, which leads the national effort 

to secure and enhance the resilience of our Nation’s infrastructure, 

fulfils its responsibility to support the Federal Government’s preparedness for, response to, and recovery from all-hazard events, including the physical impacts of cyber incidents. 

I want to begin by acknowledging that protecting the electric grid 

is a top priority of this administration and of the Department of 

Homeland Security. It is also worth underscoring, as you will hear 

from our industry partners later, that the grid, by its very design, 

is resilient. It is a complex network of electric infrastructure assets 

that has built-in redundancies and can adapt to rapidly changing 

demand, load, climate, and a host of other factors. 

9 

In short, the electric grid has been engineered with one principle 

in mind: reliability. Thousands of companies work together with 

the Government to run the most reliable grid in the world. And 

while over 85 percent of the Nation’s electricity infrastructure is in 

private hands, the Federal Government recognizes we must work 

in partnership with industry to protect our grid because of its importance to national security, economic prosperity, and community 

resilience. 

I have the privilege of working with industries that span the 16 

critical infrastructure sectors, and can say with confidence that the 

electric industry takes a multilayered approach to risk management, and is committed to continuous adaptation, based on lessons 

learned from real-world events and exercises, and an understanding of the dynamic risk environment. Industry and Government acknowledge, however, we cannot stop every threat and natural hazard, and that we must be prepared to respond to a range 

of events and their consequences. 

The Federal Government’s voluntary partnership with the electric sector, which is defined under the National Infrastructure Protection Plan, reached new levels in 2012 following two important 

events. The first was a report published by the Presidential advisory committee, the National Infrastructure Advisory Council, in 

2011 on the resilience of the electric and nuclear sectors, and called 

for the most senior executives from industry and Government to 

convene on a regular basis to craft a risk management agenda that 

was reflective of the increasingly chaotic threat environment. 

Nearly a year later our country awoke to the scenes of an earthquake, tsunami, and subsequent failure at the Fukushima Nuclear 

Power Plant in Japan that put new emphasis on the need for the 

public and private sector and the United States to come together 

to plan for a catastrophic national incident. 

For nearly 4 years now, 30 CEOs representing the breadth of the 

electric power industry have comprised the Electricity Subsector 

Coordinating Council, and meet regularly with their counterparts 

at DHS [Department of Homeland Security], DOE, and other members of the interagency to address the growing number of sophisticated factors that put our grid at risk. This risk management approach is focused on ensuring that the consequences of the most 

catastrophic events are minimized, and that the value of our relationship is strengthened by identifying joint priorities enabled by 

robust information sharing, continuous planning, and regular testing and exercise of these plans. 

Projects conducted through this partnership include action-oriented information sharing around physical and cyber events, including black energy: a 2013–2014 security outreach campaign 

around threats to substations recommended security best practices 

and the importance of reporting suspicious activity; an Electricity 

Subsector Coordinating Council playbook, which is a crisis management framework to enable senior executives from industry and 

Government to coordinate effectively on response and recovery 

issues; as well as work by DHS and DOE with the Electricity Subsector Coordinating Council on efforts to institutionalize coordination with other lifeline functions. 

10 

In addition to our ESCC [Electricity Subsector Coordinating 

Council] work, DHS works directly with owners and operators to 

help enhance their security and resilience posture, understand dependencies and interdependencies, and exercise with their State, 

local, tribal, and territorial partners for a range of possible scenarios. This engagement would not be possible without a cadre of 

security specialists around the country who engage with asset owners on a regular basis to help them understand the risk posed by 

cyber and physical threats, perform assessments, share information, and ensure they are connected to the broader homeland security community to include State and local officials. 

NPPD also works with partners across the Government in the 

event of a needed response to a major disaster or attack resulting 

in a failure of the electric grid. NPPD supports FEMA during response operation, and helps provide an understanding of the infrastructure of concern in an impacted area, and decision support in 

prioritizing restoration and recovery, as well as ensuring the resilience of our communications infrastructure. 

During a cyber or communication incident, NPPD’s National 

Cybersecurity and Communications Integration Center is able to 

coordinate with State, local, and private-sector partners, including 

law enforcement and intelligence communities, so that the full capabilities of the Federal Government can be brought to bear in a 

coordinated manner. 

The Industrial Control Systems Cyber Emergency Response 

Team is the response component of the NCCIC [National 

Cybersecurity and Communications Integration Center] and provides on-site support to private-sector industrial control system 

owners and operators. 

In conclusion, Government and industry have engaged in an unprecedented effort to assess and mitigate the risks from 

cyberattacks, physical sabotage, and natural disasters, all of which 

can result in disruptions to the electric grid. In a major step toward 

this unified approach, the Department proposed to transition 

NPPD to an operational component, the Cyber and Infrastructure 

Protection Agency. This transition would elevate cyber operations 

and provide more comprehensive, coordinated risk management 

support to our stakeholders that reflect the growing convergence of 

cyber and physical threats. 

Chairman Barletta, Ranking Member Carson, and members of 

the subcommittee, thank you again for the opportunity to appear 

before you today and to discuss NPPD’s efforts in managing the 

physical consequences of cyberthreats. 

I look forward to your questions. 

Mr. BARLETTA. Thank you for your testimony, Ms. Durkovich. 

Mr. Campbell, you may proceed. 

Mr. CAMPBELL. Good morning, Chairman, Ranking Member, and 

members of the subcommittee. My name is Richard Campbell. I am 

a specialist in energy policy for the Congressional Research Service, 

CRS. On behalf of CRS I would like to thank the committee for inviting me here to testify today. 

My testimony will provide background on the possible consequences of a failure of the electric grid, the roles with respect to 

parties, and some of the objective challenges in the recovery efforts. 

11 

I should note that CRS does not advocate policy or take a position 

on specific legislation. 

Electric power generation is vital to the commerce and daily 

functioning of the United States. While the electric grid has operated historically with a high level of reliability, various parts of the 

electric power system are vulnerable to failure due to natural, operational, or manmade events. Natural events include severe weather 

and even solar storms. Operational events can result from failures 

of grid components or systems. And manmade events would include 

actual attacks on the grid. The extent to which these events could 

damage the grid would depend upon the severity of the incident. 

Much of the infrastructure which serves the U.S. power grid is 

aging. As the grid is modernized, new technologies utilizing twoway communications and other digital capabilities are being incorporated with Internet connectivity. While these advances can improve the efficiency and performance of the grid—— 

Mr. BARLETTA. Mr. Campbell, excuse me. Can you pull the microphone just a little closer? Thank you. 

Mr. CAMPBELL. While these advances can improve the efficiency 

and performance of the grid, they may also increase its vulnerability to cyberattacks launched from the Internet. 

In 2014 the National Security Agency reported that it had seen 

intrusions into industrial control systems with the apparent technical capability to take down the controls to operate U.S. power 

grids, water systems, and other critical infrastructure. Although 

there has not been a cybersecurity event resulting in a power outage in the United States, the potential still exists for such attacks 

to cause a wide-scale, long-lasting outage. 

The first blackouts attributed to a cyberattack happened in 

Ukraine in December 2015. The attack targeted industrial control 

and operating systems in multiple regional utilities. Other critical 

infrastructure was also targeted, apparently in an attempt to impair recovery efforts. A report released by the National Research 

Council in 2012 concluded that well-informed terrorists could black 

out a large region of the country for weeks or even months. It said 

that if such an attack occurred during times of extreme weather, 

hundreds or thousands of deaths could occur from heat stress or 

extended exposure to the cold. A systematic attack of this sort 

could cost the U.S. economy hundreds of billions of dollars. 

Recovery from a well-planned cyber and physical attack on the 

grid could be complicated by the cost and vulnerability of critical 

components. For example, the strategic destruction of a number of 

critical, high-voltage transformers could use up the limited inventory of spare units, and it may take months or even years to build 

new units. 

The electric utility industry generally prepares for outages from 

weather-related events, and views the potential for a major 

cybersecurity attack or similar event as a low-probability risk. If an 

event is severe enough to be a federally declared disaster, then 

FEMA, the Federal Energy Management Agency, can provide financial assistance to eligible utilities for the recovery effort. 

And in 2015 Congress gave the Department of Energy new authority to order electric utilities and the North American Electric 

12 

Reliability Corporation, NERC, to implement emergency security 

measures in the Fixing America’s Surface Transportation Act. 

However, given the potential for damage to the Nation’s economy 

from a major attack on the grid, some might suggest that the 

greater focus on recovery is needed, and should become as much a 

part of the grid security strategy as the efforts to secure the grid. 

A focus on recovery should consider the mutual dependence and 

implications to other critical infrastructure of an electric grid failure, and how quickly such impacts could proliferate, if not planned 

for in advance. 

Congress may also want to consider how the grid of the future 

will address cyber and physical security concerns. Incorporating 

elements to increase system resiliency as it develops will aid in reducing the vulnerability of the system. 

Finally, NERC has stated that after a major grid disruption, restarting generation and energizing transmission and distribution 

systems will be a first priority. Restoring service to communications systems, fuel, water supply and treatment and hospital customers will be a secondary priority. Congress may want to consider 

how planning for the subsequent restoration of services would proceed to ensure that all civilian communities are kept informed, and 

they are treated as equitably as possible in disaster recovery efforts. 

This concludes my brief remarks. I look forward to your questions. 

Mr. BARLETTA. Thank you for your testimony, Mr. Campbell. I 

will now begin the first round of questions, limited to 5 minutes for 

each Member. If there are additional questions following the first 

round, we will have additional rounds of questions as needed. And 

I will start with Administrator Fugate. 

Could you please walk the committee through a timeline of consequences that we could expect to experience in the event of a 

large-scale and a prolonged power outage which is the result of a 

combined cyber and physical attack? 

Let’s assume over 10 million people are out of power in the 

Northeast and it lasts for over a month. 

Mr. FUGATE. The first thing—— 

Mr. BARLETTA. I am not talking about how to turn the power 

back on. But what consequences will State and local governments 

and residents have to deal with because the power is out? And this 

is my concern. I am going to put my mayor’s hat back on. And, you 

know, I have been listening to a lot of how prepared we are, what 

we can—what is typical, what is unlikely, and what we are going 

to do. But I am not convinced that we have connected the dots all 

the way down to the local government. 

I haven’t talked to a mayor or a township supervisor yet. When 

I ask them the question, ‘‘In the event of an unusual and an unlikely event that power is out in a cyberattack, how long are you 

prepared to provide services?’’ nobody can give me that answer. 

You know, I know it is an unlikely event. So was the chance of two 

planes running into the twin towers in New York, very unlikely. 

So, that is what I am hoping to get at today is, for example, in 

the first few days—because these are the people—I was a mayor. 

When something like this happens there is going to be panic, and 

13 

people are going to want to know how long can we expect—and I 

don’t know if anybody has yet given me a clear answer. 

In the event of both a physical attack and cyberattack, the worstcase scenario—very unlikely, very unusual, but still, as a mayor 

and a supervisor, I want to be prepared for that worst-case circumstance. So, for example, in the first few days there will be thousands of people stuck in elevators. After 3 or 4 days, hospitals and 

other critical infrastructure will need fuel for generators. After a 

week, clean water and waste disposal may be—may have serious 

problems. And at some point people may start to self-evacuate in 

large numbers. 

Please walk us through that timeline of increasing consequences, 

as the duration of this scenario increases. 

Mr. FUGATE. Mr. Chairman, first challenge, having actually had 

this happen during accidents where human error causes power outages, we don’t know at first how long it is going to be out. And oftentimes you only know that you are having power outages; you 

are not aware of what is happening outside. Situation awareness 

will be key, because your initial response will not be any different. 

We have had numerous communities go through power outages 

very substantial that resulted in having to do mass rescues and elevator operations, deal with the traffic control issues, hitting at 

commuter times with commuter rail being knocked off with electricity. We have seen those. I think most communities that are 

doing effective planning, those are things that they will be doing 

almost from the beginning. What is critical—and this goes back to 

what my partners to the left will be focused on—is this a shortterm duration or is it longer. 

We faced this in Florida, actually, when I was still in the State. 

We had power knocked out that was not occurring in any set pattern. It was occurring all over the State simultaneously. We didn’t 

know what was going on. By the time we had situational awareness, the next question was, ‘‘Will this go into the night hours?’’ Because if so, the Governor will call out the National Guard to provide additional law enforcement support. 

And so, again, you start focusing on those immediate things of 

life safety. Also safety in your communities, because when you lose 

power and you start seeing those disruptions, you have to provide 

a much more visible form of policing and give people a sense of 

safety in their communities. That is going to require more manpower, more people on the streets. You start looking at my generators are now running, what systems will need refueling next? Is it 

going to be the next 72 hours? 

And this is something I think is important. I learned this the 

hard way. A lot of communities do not plan for refueling in a crisis. 

And there are certain contractual things you have to have to make 

sure you get deliveries, and those deliveries to suppliers may not 

be local. Again, if you are talking 10 million people, we were shipping fuel as far away as Philadelphia back into New Jersey and 

New York to provide gas. We found all kinds of regulatory challenges. 

But again, you start going, ‘‘OK, my first step is pretty much my 

emergency response. My next step is the next 72 hours. Which of 

my critical facilities will start running out of fuel or are having 

14 

generator problems?’’ This is—by this time we would hopefully 

have assessed this is a much larger event than local. We start looking at mobilizing resources from the outside, generators, fuel, other 

things to keep those on. 

It is key to keep the water systems and wastewater running. 

Electricity has got a lot of problems, but water and wastewater are 

almost impossible to make up the differences in dense populations. 

There is not really a good way to manage that if those systems go 

offline for extensive periods of time. And so you continue to escalate. 

Once you get to past my 72 hours—and I am starting to talk my 

first week—now you start really looking at what does the retail 

sector supply chain look like. Florida learned this hard lesson, that 

many of our gas stations, grocery stores, and even pharmacies now 

have emergency power, they have transfer switches because, as we 

were dealing with power outages measured in weeks, literally, from 

hurricanes—and some of our duration of outages actually went to 

almost a month—we found that retail was doing a lot of things that 

we had to start supporting because they were bringing in generators, they were getting themselves back open. 

But we weren’t doing it as a partnership, we actually found ourselves competing with them. So you really want to plan this. And 

I think most communities, that initial response, if they have got 

good plans, they have done this, or they are prepared to do it. It 

is once you get past 72 hours that I think that they really need to 

start thinking through their plans. Where are they going to get 

fuel? What kind of things do they have to keep up? And then where 

will be the next points? 

As we saw with New Jersey and New York, initially it was the 

rescues and the trapped people and stuff like that. A lot of people 

evacuated. But then it became the fuel, it became pharmacies, grocery stores. And so you started seeing cascading effects. And again, 

those are the things I think that, once you are past 72 hours, you 

need to start planning out, OK, I am out for 1 week, I am out for 

2 weeks, I am out for 3 weeks. How much of my core am I bringing 

up? 

Again, the utilities aren’t waiting. They are not going to be nothing happening for a month. But you are not going to get power 

back to everybody, and you are not going to get power back particularly to a lot of your residential areas. So can you get enough life 

support back up and running where people that still don’t have 

power can get the essentials? It won’t be easy, it will be difficult. 

But the thing here now is to continue to trade off. Where can I 

make activities to buy more time to keep my population stable? 

Evacuations, maybe self-evacuating. Where people have that option, they will. But you won’t see large numbers, because it is unlikely in widespread outages there is going to be places to go to. 

So again, it becomes this time of stabilization, continue to look 

at the down-range impacts, what we are able to bring up, where 

we prioritize that. But the reality is that almost all these scenarios, 

including the cyber as well as the physical, residential areas are 

probably going to be the last ones to get that power. So can you 

get enough life support and infrastructure going to keep the major 

supply lines up? And you are not going to have everything. You are 

15 

not going to have what the normal consumption rates are. You may 

have to do what Governor Christie did and go with rationing of 

gasoline to start normalizing what is available versus demand signals. 

But this means you have to plan out not just the power went out, 

but now what are the impacts of that as you go through—and then, 

hopefully, this is what our partners are working on, is to give you 

better information about how much time are we talking about before key systems come up. When will we get the final power turned 

back on? Because in the absence of information, I think that generates its own problems. If we know that it is going to be out for 

3 weeks, we can plan. People are more resilient than we give them 

credit for. But the lack of information, that in itself becomes a challenge. 

So I ran over my time, Mr. Chairman, but I was trying to—— 

Mr. BARLETTA. That is OK, because it is important, because that 

is what I am trying to get at, is are these conversations—and who 

is responsible for these conversations with people at the local level, 

because this is an unknown. If there is a storm coming, a hurricane, an ice storm, a—we are prepared for that. We can expect— 

we know what is coming. An earthquake, not so. You don’t know 

it is coming, but still we have experience with that. But a widespread cyberattack with a physical attack attached to it is unknown. And who is having that conversation with people at the 

local level that—we don’t know. It could be out a week, it could be 

out longer than a week. You need to be prepared. 

And are those conversations actually happening? I don’t—I am 

not convinced that they are. And that is where the life will be lost. 

And I think we need to begin to find out how do we connect the 

dots. Who is responsible for having those conversations down at the 

lowest level of the people who will be first charged with trying to 

protect lives. 

I am going to turn to Ranking Member Carson for his questions. 

Mr. CARSON. Thank you very much, Chairman Barletta. Madam 

Hoffman, your testimony notes that the Department’s research and 

development activities with respect to developing spare transformer 

components, what is the cost to manufacturers when we are making these alternative components? And has a domestic manufacturer been identified so that we can ensure that there is no disruption to its prior usage? 

Ms. HOFFMAN. So thank you very much for the question. Transformers are a very critical component to the electric sector as was 

stated in the testimonies and some of the conversations earlier. 

With respect to transformers, the price of a transformer ranges 

anywhere between $5 million and $10 million. And so these are significant components. So what is our research program, or what are 

the activities looking for, dealing with the transformer issues? It is, 

first of all, looking at the spare components that—and the spare 

transformers that industry has, and then industry is looking at 

having spare capacity on their system. 

We are also looking at how do we develop the next generation 

transformer, which might be a transformer that you have the ability to produce more quickly, and also have more standardization 

16 

and flexibility. So that includes, in our research component, the development of power electronics and hybrid transformers. 

Our 2017 budget request has a very strong program looking at transformers, which is about $10 million, in which we are going to 

look at developing the next generation transformers, as well as 

doing testing of transformers to make sure we understand any 

vulnerabilities that may exist. 

Mr. CARSON. Thank you. Administrator Fugate, in the event of 

a widespread outage, what are FEMA’s plans for communicating 

with citizens on response and recovery efforts when there is essentially zero electricity? 

Mr. FUGATE. Not much different than what we have faced in 

other significant outages. We have a variety of tools. 

First of all, within the emergency alert system, the radio stations, TV stations, many of the—that have emergency power, TV 

stations partner with radio stations. We can get signals. And in addition, if we lose a—and this will be something that we will be 

looking at in Oregon during the Cascadia—it is not uncommon that 

you are going to lose radio and TV stations in the area of impact. 

But we work with the FCC [Federal Communications Commission] for the nonimpacted stations to increase power to get signal 

back in. That is why we continue to encourage people, have that 

battery-operated radio. That is why we encourage the idea of FM 

chips in cell phones, because we can get signals in from the outside, but people need to receive it to get the information. 

But part of this is going to be where the information is coming 

from. We are going to be working through the Governor’s office because Governors and their teams are going to be the best information at the local level. Our job, really, on the Federal side is to provide the backup and tools required. And we are prepared to work 

with the FCC and broadcasters to get signal from the outside. In 

addition, we have gone as far—and we did this in the Sandy response—bring in satellite communications and set up WiFi in some 

of the areas that have lost some of the cellular communications. 

But we have another backup, and, self-disclosure, I am an amateur radio operator. But I think sometimes the more we look at the 

complexity of our risk, we forget that we have some very resilient 

systems that aren’t part of Government, but they oftentimes are 

the last thing running when everything else has failed. So we look 

from everything from our systems and satellite technology, working 

with nonimpacted stations how to broadcast in, amateur radios are 

all part of that. 

But it is important that people take the steps to be able to get 

the information when we can get the signal in, and that is why it 

may seem very passe in an area of streaming everything that a 

battery-powered radio may be that lifeline of communication link 

to get information, because we have seen, even in large-scale—like 

Katrina—stations outside the area get broadcast in, but you had to 

have a way to receive the information. 

Mr. CARSON. And lastly, Madam Durkovich, have our most critical transformers and substations within the bulk power system 

been identified so that we have a clear comprehension of system 

dependencies? And even cascading impacts from a widespread 

power outage, regardless of the cost? 

17 

Ms. DURKOVICH. Thank you very much for that question, Ranking Member Carson. 

We work very closely with the utility owners, with our partners 

at DOE, as well as NERC and FERC [Federal Energy Regulatory 

Commission], to understand the most critical aspects of the electric 

grid. We have a number of programs that we leverage to help assess the vulnerabilities of these particular assets, and to work with 

owners and operators to help enhance the security and resilience 

to provide recommendations. But equally important, as you will 

hear later from Gerry Cauley, who is the president and CEO of 

NERC, we have a series of standards that are intended to guide 

the security of some of these most critical assets. 

Increasingly within my office we are working to better understand the dependencies and interdependencies on some of these 

critical energy assets to be able to visualize what an outage is— 

the impacts it is going to have to other key lifeline sectors, and to 

be able to provide that information as leaders to include Administrator Fugate and those of the utilities working to get power restored. Thank you. 

Mr. CARSON. Thank you, ma’am. 

Chairman, I yield back. 

Mr. BARLETTA. Thank you. The Chair recognizes Mr. Meadows 

for 5 minutes. 

Mr. MEADOWS. Thank you, Mr. Chairman, for this important 

topic. I think this is one of the interesting aspects that I get asked 

about more than anything else. 

Let me tell you why I am a little bit troubled here today is that 

I hear a lot of rhetoric that acts like we have our act together from 

a Federal standpoint, when really the vast majority of the job that 

gets done is really with the stakeholders, with those public utilities 

that, for years, have been prepared for mass outages, but perhaps 

the scope of the threat, the cyberthreat—and when we are talking 

about mass outages, you know, we can talk about Hurricane 

Sandy, we can talk about, you know, other storms. They are used 

to that. 

I am just telling you, they have got—I used to work for an electric utility many years ago. I was around—I have got enough gray 

hair, I was around when the DOE was actually formed. And so 

when we look at this, to suggest that the Federal Government is 

here to help, I want to make sure that you are helping. 

And the chairman talked about the real communication that is 

being done. The real communication that is being done is really 

being done by the public utilities at the local level. If any is getting 

done. You know, it is crickets when it comes to the other Federal 

agencies as it relates to this. Now, I say that as a criticism, only 

because we have to figure out that we are sick before we start to 

figure out the diagnosis and how to fix it. 

So let me ask Assistant Secretary Hoffman for your help on one 

particular area. In your testimony you were talking about national 

security and how you can reprioritize and make sure that those national security interests are supplied by public utilities or governmental agencies. 

Here is my concern. Many of our national security interests actually have their own generating and own distribution capacity. And 

18 

yet I find them woefully underprepared for cyberattacks. You 

know, some of them are primary metered at the point of entrance, 

so you may have a public utility providing the generating capacity. 

They do the distribution. So as we look at this, what kind of turf 

war do we get in between DOD [Department of Defense] and DOE 

with regards to being ready for a cyberattack that would have national security implications? 

Ms. HOFFMAN. Thank you, Congressman, for that question. When 

we deal with any sort of event, we are going to act as a whole of 

Government. So, whether it is a cyber event—— 

Mr. MEADOWS. But who is in charge? Here is the problem, is— 

and I have dealt with a number of agencies. So we get FEMA that 

comes in, and we get local emergency management responses. And 

what you have is you have different people saying different things. 

So with regards to national security, who is in charge of the 

power grid? Is it DOE or is it DOD? 

Ms. HOFFMAN. The owners and operators are ultimately in 

charge of the power grid. The support to the power grid is going 

to come both from DOE with respect to working with the owners 

and operators to restore power and DOD has a responsibility with 

respect to national security and protection. So, from a physical security perspective, we may look at law enforcement to help the utilities protect substations. It depends on the event, but the response 

will be coordinated. 

Mr. MEADOWS. All right. So you have a plan, a coordinated plan 

that I could look at today on how that would happen. 

Ms. HOFFMAN. So for—— 

Mr. MEADOWS. That you can give to this committee in terms of 

the—because here is what happens, is most of the time an event 

happens and then you go out and you figure out the problems. You 

know, Mr. Fugate was talking about the fact that we learn lessons 

from each event that we have. 

But the problem is, with a cyber event as we are looking at in 

the Ukraine, you know, here we have an outage to over 200,000 

people, where it was cut off. But the real problem was—is they 

were in the system for almost 6 months and we didn’t know about 

it. 

So I guess the question is how many times are we getting attacked? And are they in our systems without our knowledge? 

Ms. HOFFMAN. Well, you bring up a good point, Congressman, 

thank you. But the issue is every event and every incident, as Administrator Fugate brought up, is going to be different, and we are 

going to have to think about the capabilities. When somebody can 

take someone’s access credentials, we have to think about that and 

look at that as an industry. So we are taking the lessons 

learned—— 

Mr. MEADOWS. But that is more of a physical threat. I want to 

go back to the cyber aspect, because what we are doing is—and I 

heard Ms. Durkovich talk about this—is that we are looking at risk 

management. And really, what we need to start to focus on is a 

real comprehensive plan on how we are going to partner with the 

private sector or public utilities on doing this, because what happens is we get a little check box and we say, ‘‘well, we have gone 

and we have talked to XYZ and we have asked them to make sure 

19 

that they are vigilant about cybersecurity,’’ which most of them 

are. 

But yet, what happens is we don’t have a comprehensive plan at 

a Federal level to look at how we can support them in the event 

of a national attack that would come in the way of cyber. So I am 

not talking about storms, and I am not talking about stealing a credential. I am talking about the real attacks that we get hit with 

every single day. 

Do we know—have we done a risk assessment where we have intelligence? And have we shared that with the public utilities? Because a lot of times we have this national security concern that we 

don’t want to share that with an outside, you know, group because 

of national security concerns. 

Ms. HOFFMAN. So thank you. You bring up very good points in 

your discussion. 

First of all, we follow the National Response Framework. As Administrator Fugate talked about, regardless of whether it is a physical or cyber or weather-related event, we are going to act as a 

whole of Government in responding to that. 

With respect to your question on intelligence, we are sharing information with the private sector. DHS and DOE regularly host 

classified briefings with the private sector to share actionable information. And that is the information that the utilities are able to 

take back and really do response force. 

With respect to specific events such as the Ukraine incident, ICS 

[industrial control system] alert has provided very specific actionable information. DOE, working with the Electricity Information 

Sharing and Analysis Center, has provided actionable information 

to the industry to learn from these events and prepare. And that 

is what is important. Each event is going to be different. We have 

to take those events and learn from them. 

Mr. MEADOWS. I have run out of time. I will yield back, Mr. 

Chairman. Thank you for your patience. 

Mr. BARLETTA. Thank you. The Chair recognizes Mr. DeFazio for 

5 minutes. 

Mr. DEFAZIO. Thank you, Mr. Chairman. I regret I had to step 

out to go to a hearing upstairs. We should—the committee should 

look at not scheduling hearings in different subcommittees at the 

same time. 

Administrator Fugate, I think you made a number of excellent 

points. And when you talked about being a ham radio operator, obviously that is a potential backup. But I was recently in Japan and 

one of their greatest regrets is that they didn’t have enough deep 

ocean sensors, and they underestimated the size of the tsunami. 

And they did manage to get out a warning with that original estimate before the electrical grid went down in those areas, and they 

had no further capability of broadcasting and warning people. And 

therefore, many people sheltered in places that actually were below 

the crest of the tsunami and died. 

So they have now moved to a cell phone-based system, and required resilient cell towers to be built. Are we looking at anything 

like that here, in the U.S.? 

Mr. FUGATE. Yes, sir. Part of the charge you gave us and the 

FCC was to develop wireless emergency alerts, which, working 

20 

with the carriers, we actually implemented faster than we thought. 

So right now, every cell phone being manufactured today is required to be able to transmit a wireless emergency alert, part of 

the emergency alert system. Tsunami warnings are built into 

those. 

So, if there is a triggering event, the originator for that will be 

the National Weather Service tsunami warning centers. In the case 

of Oregon it is going to be the Alaska Warning Center. It would 

go out. It is geocoded to the areas of impact, so those counties and 

communities at risk would get those notifications over your cell 

phones. You cannot—you don’t have to opt in, you don’t have to 

sign up. The only thing you can do with a cell phone is turn it off 

and not get the alerts. So, unless you have done that, a tsunami 

warning would be issued, it would be transmitted upon that point 

and go out. 

I think you do point out, though, one of the challenges, which is 

why we work very closely at the local levels. It is hard to get the 

magnitude of the tsunami, so the evacuation zones pretty much 

have to be what is the maximum risk, we got to move now. A 

phased approach, we generally don’t have time, particularly with 

Cascadia. It is too close to the coast. And that is why we tell people, ‘‘even before you get the warning, if you feel shaking you got 

to move to higher ground,’’ because even with a warning you only 

have minutes to move. 

But the cell phone system now, as soon as the Weather Service 

issues the warning, it will get transmitted to those areas. We have 

actually seen this occur already. But it has answered this question 

of what will wake people up in the middle of the night. And your 

cell phone buzzing and humming and making strange noises was 

the whole purpose of the wireless emergency alert system. 

Mr. DEFAZIO. And when—phones manufactured after what date 

were required to have that, do you know? 

Mr. FUGATE. It started—I believe it is—I would have to look at 

the exact date, but it has been about the last—2010, 2011. 

Mr. DEFAZIO. OK. 

Mr. FUGATE. That all new handsets—Apple, the iOS, was the 

last of the handsets to incorporate this in. And so pretty much all 

the new handsets now have this. And, as we see the replacement 

cycle of cell phones, we have actually now—third, fourth, fifth replacement cycles. So we are getting good penetration now with 

those systems. 

Mr. DEFAZIO. That is great. Yes, I have actually been on an airplane here where we were held on the ground because of thunderstorms, and everybody’s cell phone started buzzing as they had, 

like, a tornado alert or something. I can’t remember what it was. 

Mr. FUGATE. Yes, sir. 

Mr. DEFAZIO. So that is great progress. To the Honorable Ms. 

Hoffman, just on the issue I raised earlier, you know, the transformer issue, it does seem really critical and they are very expensive, they are cumbersome, hard to move. But, I mean, where are 

you at in evaluating the potential or possibility of having some, you 

know, backup or replacement transformers in a strategic reserve? 

Is it—you are analyzing that, or where are you at in that process? 

21 

Ms. HOFFMAN. Thank you very much, Congressman, for the question. The transformer reserve plan that was required as part of the 

FAST Act is in progress. We have contracted with Oak Ridge National Laboratory to do an assessment with respect to transformers, the transportation issues, any sort of where they would be 

placed, the volumes and size. As you are well aware, the transformers in the United States are quite unique, and we have to also 

look at a parallel process for how do we look at standardization, 

look at next generation transformer for additional manufacturing. 

We are also in the process of assessing transformer manufacturing in the U.S. DOE has had several reports out with respect 

to transformer manufacturing. There are several manufacturing 

entities in the U.S., including EFACEC, Georgia Transformer, 

ABB, Waukesha, Prolec GE and Hyundai. Those are the transformer manufacturers in the U.S. Is that enough for the capacity 

we need? I would say we need more capacity with respect to transformers. So it is important that we continue to look at a transformer sharing program. 

So we are in progress and on target to meeting that deliverable 

for the committee. 

Mr. DEFAZIO. So what was the timeline that was established for 

the—— 

Ms. HOFFMAN. The timeline that was established in the FAST 

Act was 1 year from enactment. So it would be due in December. 

Mr. DEFAZIO. OK, great. Are you aware whether or not the regional power administration, the Bonneville Power Administration, 

is, you know—I mean are you working with them? Because they 

obviously have most of the—are interlinked in some places with 

private, but for the most part provide for the, you know power 

transmission and—high-voltage power transmission. And half of 

that—well, part of it is DC. So we actually have two different sets 

of transformers. 

Ms. HOFFMAN. So thank you very much for highlighting that. 

Yes, we are working with the power marketing administrations, 

which includes WAPA and Bonneville. They are a core asset to the 

Department of Energy, as well as a core asset to the electric infrastructure writ large. So they are a very important part of the conversation. 

As required by the FAST Act, we will do consultation with industry and with experts in this area. 

Mr. DEFAZIO. OK, thank you. 

Thank you, Mr. Chairman. 

Mr. BARLETTA. The Chair recognizes Mr. Perry for 5 minutes. 

Mr. PERRY. Thank you, Mr. Chairman. 

Secretary Hoffman, the FAST Act you were just discussing includes what you were just discussing, some additional roles and authorities. Can you talk a little further about the importance of the 

transformer reserve and what your thoughts on that are, particularly? 

Ms. HOFFMAN. Thank you very much for the question. The transformers in the United States are a very critical component of the 

system. The FAST Act recognizes the criticality of these transformers, as well as the need to assess where are we at with respect 

22 

to any sort of need to develop a plan for transformer spare capacity. 

So what this means is really evaluating the spare capacity in the 

United States and the ability to transport transformers. So where 

should a transformer stockpile, if necessary, be located because of 

the different sizes and dimensions of the transformers. 

So part of the plan of what we are looking at with Oak Ridge 

National Laboratory, our other national laboratories and industry—is assessing the number of transformers, the size of transformers, meaning the different voltage classes, and then where 

those transformers could potentially be needed to be located because of transportation issues. 

The industry has had discussions with the Class A railroads and 

looking at the transportation of transformers. You may not be 

aware, but a lot of substations are in very remote locations. So 

really, the criticality and some of the time is not only manufacturing the transformers, but it is actually the transportation of 

those transformers to a location. 

Mr. PERRY. Will you be considering the timeline for manufacture 

of transformers, as well, in that study, and when is the—when can 

we expect the results? 

Ms. HOFFMAN. Yes, the—we have started looking and have had 

several reports out with respect to transformer manufacturing. And 

those are on DOE’s Web site. But the results of that will be included in the report in December. 

Mr. PERRY. Do you discuss cost or reimbursement at all in your 

report? 

Ms. HOFFMAN. So part of the request is to look at policy implications and the cost and financing of that. We are going to work 

within the Department of Energy with our energy policy and systems analysis group and assess what are some of the financial implications to setting up and developing a transformer reserve. 

Mr. PERRY. All right, thank you. In my opinion, the EPA [Environmental Protection Agency] continues to over-regulate the energy 

industry. And with that, I don’t think they have the ability to determine or examine the requirements. 

Mr. Fugate, do you—I mean I am sure you are aware, based on 

what I have here, as of December of 2015 we are retiring—due to 

EPA policy, retiring or converting 81,423 megawatts, or 499 units, 

based on regulation. Has FEMA done an examination of how the 

EPA regulations affect the grid and the capacity? Are you interested in doing that? Do you know what the capacity is, and do you 

know the ramification of the loss of the 499 units and the 81,000- 

plus megawatts? 

Mr. FUGATE. To be honest, Congressman, we really depend upon 

our partners and DHS that do that. We are not the subject matter 

experts. We determine for our infrastructure protection what that 

means and what those impacts are. 

Having come from the State of Florida, I will tell you that, as we 

have seen these types of changes, we have seen dependency move 

from coal fire to natural gas to peaker units. So we had to start 

planning for what happens there. I actually was in probably a 

unique experience of having a natural gas pipeline sever due to 

lightning strike. Knocked out all the natural gas to the southern 

23 

and middle parts of the State. And we suddenly realized that we 

had a tremendous dependency on natural gas peaker units, and we 

were fortunate that we had mild weather. Otherwise, we would 

have had generator capacity shortfalls that would not be made up. 

So we—— 

Mr. PERRY. So if I could just—— 

Mr. FUGATE [continuing]. Partners for the information—— 

Mr. PERRY. I got a limited amount of time here. So if FEMA is 

not doing it particularly, who are you getting the—which partner 

are you getting that information from? Who is assessing the effect 

of the regulation, the loss of capacity and the timing of that loss? 

Who is doing that, of your partners? 

Mr. FUGATE. I would depend upon my partners to the left. We 

look at energy as a function of Government, because, as you point 

out, there are numerous parts of the regulatory and response structure. So we concentrate onto function—— 

Mr. PERRY. So, with all due respect, may I ask your partner to 

the left? Do you have that information? Are you tracking that? 

Ms. HOFFMAN. So thank you very much for the question. The Department does look at reliability implications with respect to any 

sort of change in generation mix in the United States. 

With respect to the Clean Power Plan, it is really going to be as 

the States develop their implementation plans the assessment will 

occur with the regional reliability entities and the independent system operators, where they will coordinate and understand the reliability impacts. 

Mr. PERRY. So you don’t know what it is upfront, or you don’t 

assess it as it occurs? You don’t know that, you know, so many 

plants and so much capacity is leaving in Ohio or Pennsylvania or 

Alabama, you don’t know that in advance and make an assessment 

of the potential risk that is involved? 

Ms. HOFFMAN. So—thank you. From a widespread reliability 

point of view, DOE believes that the Clean Power Plan and the regulations will not have any widespread reliability impacts. But the 

specific—— 

Mr. PERRY. Well, hold on a second. Hold on. With the chairman’s 

indulgence—you believe that, but do you believe that because you 

have empirical data to support that belief, or you believe that because somebody is telling you that, or you believe that because you 

don’t have any reason to disbelieve it? 

Ms. HOFFMAN. Right now the utilities will work very hard to ensure reliability of the system. And our past experience is, as any 

sort of any reliability concerns come up, there is strong coordination within the industry to address any sort of reliability impacts. 

So—— 

Mr. PERRY. So does that mean, if you thought that there was 

going to be a reliability impact based on the regulation and the capacity reduction that you would essentially exonerate or waive the 

requirements for a period of time to make sure that the capacity 

remains? Do you have a policy to do that, or is there a thought to 

that? Or what is your plan, if you come up against something that 

doesn’t comport with what you think it needs to be, from a capacity 

standpoint? 

24 

Ms. HOFFMAN. Within the Clean Power Plan the States, as they 

develop their Clean Power Plan, their State plans, they will be coordinating with the reliability entities, the ISOs [independent system operators] and the RTOs [regional transmission organizations], 

looking at any potential reliability implications, and—— 

Mr. PERRY. But how does that work since, for instance, I live in 

the PJM, which is a multistate organization? It is not State by 

State, it is multistates that all feed into the same grid. So how does 

one State’s plan affect another, and how—who coordinates reliability or capacity issues in that regard? 

Ms. HOFFMAN. So the States are required, as part of the Clean 

Power Plan, to coordinate with PJM, and PJM has and will continue to do reliability analysis for that region. 

Mr. PERRY. Thank you, Mr. Chairman. I appreciate your indulgence. 

Mr. BARLETTA. Thank you. The Chair recognizes Mr. Sires. 

Mr. SIRES. Thank you, Chairman and Ranking Member, for holding this hearing. It is very important. 

I represent the Eighth District of New Jersey, which has Hoboken and some other areas—Jersey City—which got hit very hard 

by Sandy. And if I learned anything about our infrastructure, it is 

how unprepared we were for a storm or anything else. And there 

is plenty of blame to go around. Everybody always points to the 

Federal Government, but in reality the States could do a lot of 

things and the locals could do a lot of things and the power companies could do a lot of things. 

I always think of the example—and I gave this once before to the 

chairman as an example—there was a generator in the flood zone. 

And the power company was protecting it with a chain link fence. 

So when it flooded, obviously, the chain link fence did not hold the 

water back. So what I am trying to get at is these are the kind of 

simple things that we can do to protect, you know, this particular 

transformer. 

The other thing was in terms of the gas station. You were talking 

about—I mean we have plenty of gas, quite frankly, but they 

couldn’t pump it. So a simple thing like a small generator to just 

move the pump and move the gas from the—you know, from the 

containers to the people, I mean, would it suffice? So when I say 

to you that everybody has shares of blame in this, I just hope that 

we have come from Sandy far enough to learn some of these mistakes and we are correcting them. 

So, Honorable Fugate, would you please tell me that we have 

come a long way from where we were? 

Mr. FUGATE. We have come a long ways, we haven’t gone far 

enough. And I think, Congressman, you point out what I see is the 

real challenge, and which cyber highlights. The tendency is to plan 

for what we are used to dealing with, not for what could happen. 

And so, again, as you point out, we put a fence around a generator in a flood zone. Well, the reason you have a generator is the 

power goes out, one of the likely causes for power outages would 

be a coastal storm. But you hadn’t had one in a long time, so you 

were more concerned about somebody breaking in and damaging 

the transformer. And that is the trap we fall into. 

25 

And I think this is what the chairman is raising. Cyber is new. 

A lot of things we are going to do won’t be new in response to the 

consequences, but if we don’t know what we are planning against, 

we may run the risk of only planning for what we have been used 

to having, maybe short-term power outages, maybe disruptions 

that are strictly local, and not plan for what could happen and plan 

against it. 

And unfortunately, as you point out, we try to promote these lessons, but it seems to, again, be one of our challenges. How do you 

get people to change? Let’s talk about gas stations. That is a private entity. Putting in a generator is a cost. Most people say, ‘‘well, 

you could just ship a generator there.’’ Doesn’t work that well, because most of those utilities were underground and it was hard to 

get a generator hooked up to it. 

So in some States that have dealt with this they have put in incentives that gas stations would be required through regulation to 

put in a transfer switch. It was a good compromise. That way, if 

they did lose power for long periods of time, we could get generators in there, hook it up, and pump gas. 

But this is where we got to be very careful. It is easy to say, ‘‘this 

is the fix’’ until you ask who is paying for it. And I think this is 

the tradeoff of what would make sense, either through incentives, 

tax credits, regulatory oversight, to get these changes, because I 

can’t ask a business to lose money if their other partners or competitors aren’t doing the same thing. 

And at the same time, you know, the response was, ‘‘you got to 

put a generator in every gas station.’’ That is also not necessarily 

a great idea, either. But putting in a transfer switch was a good 

compromise. 

So again, I think, as we learn these lessons we go back to this 

trap of we plan for what we have experienced in the past, and that 

does not always scale up for the future impacts. We have got the 

lessons learned, we are putting the information out there. But the 

receptiveness of that audience is oftentimes based upon do they 

perceive this threat as applying to them. 

And, as you know for your community, we talk about hurricanes 

and hurricane evacuations, and most people said, ‘‘we don’t have 

hurricanes, we have northeasters.’’ So it is getting people planning. 

In many cases we know what these impacts are, but it is really the 

challenge of getting people to plan for what can happen, not what 

they are prepared to do based upon only their past experiences. 

As the chairman points out, we have not had a lot of experience 

with cyber. So part of this, again, is getting—what are we planning 

against, and then what will we do differently. And if that requires 

resources, where are those resources coming from? 

Mr. SIRES. I also think that we have to be prepared post-Sandy 

or post—because one of the issues—we still have problems in New 

Jersey where people are still out of their homes years later. And 

to me that is really unacceptable, 2 or 3 years later, that we have 

these issues where people with the insurance or with the valuation 

of the property—I mean somehow we have to be prepared for some 

of these things because it impacts real people. 

26 

Mr. FUGATE. It does. And our experience is, coming out of Hurricane Katrina, 5 years after that we still had over 5,000 families living in travel trailers because we didn’t have the right answers. 

So, rebuilding after disaster is, again, very time consuming. 

There’s a lot of hurdles to go through. And I agree, it is ideal to 

get people back in their homes as quickly as possible. But that requires a lot of things that go beyond even some of my programs. 

It is really, as you point out, State and locals and—— 

Mr. SIRES. I am not just putting the blame on you, I am also putting the blame on, you know, the locals and the State, that we 

should be prepared for any of these storms or whatever we have. 

Thank you, Mr. Chairman. 

Mr. BARLETTA. Thank you. The Chair recognizes Mr. Massie. 

Mr. MASSIE. Thank you, Mr. Chairman. I am going to yield as 

much of my time as he might consume to the gentleman from 

North Carolina. 

Mr. MEADOWS. I thank the gentleman from Kentucky for yielding. And, Ms. Hoffman, I want to follow up on one thing. Because, 

as you talked about the transformers and the—having these 

backup transformers as a redundancy, one of my major concerns is 

that decisions that get made by DOE or DHS or FEMA—all the 

sudden what we do is we transfer that liability to others that are 

providing service. 

So what we—you know, right now all utilities have backup transformers, primarily for distribution purposes, but even for larger, 

you know, transmission-related transformers and switches. However, if you are going to make a decision, it directly impacts 

rateholders for two reasons. I mean if they are—happen to have 

$10 million transformers sitting there, I don’t know that they can 

get a return on that investment, necessarily. 

And so, if you start to extrapolate that out, if it is not in service, 

you know, it just kind of like—generated capacity, there is a certain length of time that they have in order to bring that online so 

that they can get a return. But ultimately, it affects the ratepayer, 

anything that you do. 

And so, I guess when we start to look at the security implications, what I would encourage both of you to do is look at it as we 

would from FEMA—is that it is a Federal redundancy that is required, not a redundancy that needs to be done by utility to utility 

to utility. Do I have that commitment from both of you, that you 

would look at it as a Federal obligation, versus a private obligation? 

Ms. HOFFMAN. Yes, Congressman. Thank you. 

Mr. MEADOWS. All right. OK. I see you nodding your—— 

Ms. DURKOVICH. Yes, sir. 

Mr. MEADOWS. For the record—— 

Ms. DURKOVICH. Yes, sir. 

Mr. MEADOWS [continuing]. Both of them said yes. And so let me 

finish with one other, I guess, concern. When we are talking about 

sharing in a classified setting with the stakeholders, have all of the 

utilities participated in that secured setting, where you have let 

them know of both the threats—potential and real threats that we 

already have experienced? 

27 

So, you know, you were saying that we have done that in a classified setting, and I just find that interesting. I am not challenging, 

but I want to drill down on that because I don’t know of too 

many—you know, maybe the big utilities but there are, you know, 

hundreds of utilities. And so they come in to a classified setting 

and say, ‘‘this is your risk, this is where it is.’’ That is your testimony here today. 

Ms. HOFFMAN. So thank you for that question. Information sharing occurs at multiple levels. We do have classified information 

with the Electricity Subsector Coordinating Council, which is 30 

CEOs from across the whole sector, so there are investor-owned 

utilities, there are municipals, there are co-op utilities that participate in that information sharing, that classified information. 

In addition we have had 1-day read-ins where we have brought 

a larger section of utilities in to do classified information sharing. 

We have done that. DHS has done regional information sharing 

meetings, where they have had opportunities to bring folks in and 

do information—so it occurs on multiple levels. Have we hit every 

single of those—— 

Mr. MEADOWS. Yes, and I am not saying—I want it to be systemic, and I guess I will yield back to my good friend from Kentucky here in just a couple of seconds, but I want to make sure that 

I am clear. As we get to stakeholders what I want it to be is more 

than just a box that we are checking off. I want EEI [Edison Electric Institute], I want all of the groups that are there to buy in and 

say, ‘‘we have a plan.’’ We do it for mass outages like Sandy and 

other hurricanes. We haven’t done that, I believe, adequately as it 

relates to cyber. And do I have both of your commitments that you 

will redouble your efforts to include them as stakeholders? 

Ms. HOFFMAN. Yes, yes, we will redouble our efforts. And the one 

thing that I would say codifies how we are redoubling our efforts 

is the exercise that happens between industry and utilities where 

we are actively exercising this. 

Mr. MEADOWS. I will yield back to my good friend. 

Mr. MASSIE. Thank you. I just have a brief question that occurs 

to me during Mr. Meadows’ question which is, of this classified information, if we sought to get a brief on that would you make yourself available in a classified setting for us, as we contemplate what 

sort of legislation might be necessary? 

Ms. HOFFMAN. Yes, Congressman. We would be glad to have a 

briefing with you. 

Mr. MASSIE. Is that the case for everybody? 

Ms. DURKOVICH. Yes, sir. Of course. 

Mr. MASSIE. Mr. Fugate? 

Mr. FUGATE. I wouldn’t originate most of the data, but I would 

be there. Most of the origination of the classified information would 

actually come from my partners to the left. 

Mr. MASSIE. Understood. Thank you very much. And I yield 

back. 

Mr. BARLETTA. Thank you. With respect to time for our second 

panel, we are going to move on. And I think, if I can summarize— 

and I thank you all for participating today—I think if I could summarize, Administrator Fugate, that planning for local and State 

governments should be—needs to be in terms of weeks, not days. 

28 

And that is important because that is the first time I have actually 

heard what we need to begin to look at in the event of an attack. 

So again, I want to thank you all for your testimony. Your comments have been very helpful in today’s discussion. And we will 

now call on our second panel. 

[Pause.] 

Mr. BARLETTA. I remind you of the subcommittee’s request to 

limit your oral testimony to 5 minutes. 

Mr. Cauley, you may proceed. 

TESTIMONY OF GERRY W. CAULEY, PRESIDENT AND CHIEF EXECUTIVE OFFICER, NORTH AMERICAN ELECTRIC RELIABILITY CORPORATION; WILLIAM H. SPENCE, CHAIRMAN, 

PRESIDENT AND CHIEF EXECUTIVE OFFICER, PPL CORPORATION; AND BOBBI J. KILMER, PRESIDENT AND CHIEF 

EXECUTIVE OFFICER, CLAVERACK RURAL ELECTRIC COOPERATIVE 

Mr. CAULEY. Good morning, Chairman Barletta, Ranking Member Carson, and members of the subcommittee. Very glad to be 

here today, testifying. My name is Gerry Cauley, I am the president and CEO of the North American Electric Reliability Corporation. NERC is a nonprofit international organization overseeing the 

reliability and security of the power grid in the United States, Canada, and a portion of Mexico. We have authority assigned by Congress to develop and enforce standards affecting reliability and security of the grid, and that authority is overseen by the Federal 

Energy Regulatory Commission. 

We can all agree that electricity is the most critical lifeline sector 

for national security, for other lifeline sectors like finance, water, 

and transportation, for the economy, and for public safety. Every 

day we are reminded of the seriousness of our job related to securing the grid. There have been terrorist attacks in France and Belgium and even here, domestically. There have been cyberattacks 

and data breaches across various industries and across Government. 

Of particular relevance to our grid, on December 23, 2015, there 

was a cyberattack in the Ukraine which was launched against 

three distribution companies and in which the perpetrators gained 

control of three distribution companies and were able to put out the 

lights for 225,000 customers for up to 6 hours. 

A team from the U.S. went to investigate that incident in the 

Ukraine, including a member of the NERC staff. And what I can 

tell you is that the cyberthreats are real, but I think we have a 

very different situation in the Ukraine as compared to what we 

have in the United States and North America. Our security controls in North America are very different. 

We are the only industry with mandatory and enforceable reliability standards affecting physical and cybersecurity. We are currently in the fifth generation of our cybersecurity standards. They 

are risk-based standards based on NIST-type [National Institute of 

Standards and Technology-type] controls, so they are adaptable 

and can keep up with the current threats. 

We have a very robust compliance monitoring and enforcement 

program. System operators use modern controls to ensure the secuVerDate Aug 31 2005 11:11 Dec 19, 2016 Jkt 000000 PO 00000 Frm 00038 Fmt 6633 Sfmt 6633 P:\HEARINGS\114\ED\4-14-1~1\99931.TXT JEAN
29 

rity of the system, including separation of corporate and business 

systems from control systems, physical access controls, patch management, aggressive threat hunting and mitigation, and employee 

and contractor training, and many other measures that they take. 

We have established the Electricity Subsector Coordinating 

Council, as we heard previously, at the highest levels of industry 

and Government, including CEOs and top officials from Government. The CEOs and boards of power companies take security very 

seriously, and security is one of their highest priorities on a regular 

basis. 

Our Information Sharing and Analysis Center, which you have 

heard about, the ISAC, provides robust information sharing regarding cyber and physical threats. With the engagement of industry 

leaders we have recently gone through a review and upgrade of the 

capabilities of the ISAC, and the ISAC, I believe, is closely integrated with the security operations and information sharing at individual companies, as well as the State fusion centers and other 

sectors. 

We also operate a tool called CRISP [Cybersecurity Risk Information Sharing Program], which is a way to monitor the electronic 

Internet traffic to key sites around the industry, and compare the 

traffic to threats and vulnerabilities that we are aware of worldwide, and warn the utilities about issues that they may be experiencing in real time. 

In the unlikely event of a successful cyber or physical attack, I 

believe that we are well prepared. FERC and NERC recently completed a study of the restoration and recovery capability plans and 

drills and exercises of nine major companies in the industry, and 

that report is available publicly, and it is posted on the NERC Web 

site. But I think it demonstrated that the preparation is there, and 

that the plans have been exercised. 

As you have heard before, on November of this past year NERC 

led what I believe is the largest grid security exercise in the world 

called GridEx III. Over 400 entities in North America participated. 

We had over 4,400 registered users and, in my estimation, there 

were probably closer to 10,000 actual participants. The distributed—this is where we are in a central, controlled place, and we 

inject the attacks outward, and so the power companies are actually engaged in the exercise locally in their own control centers, in 

their own substations and power plants. They are receiving the information from us. 

That portion of the exercise—I apologize for my voice; I am just 

getting over a cold—that portion of the exercise lasted 2 days and 

on the second day there was an executive tabletop which brought 

it all together for senior executives from industry and Government. 

The scenario included cyberattacks, physical attacks, including active shooters, truck-mounted and explosive devices, and unmanned 

surveillance drones. This hypothetical event was extreme, and it 

was intentionally extreme to really go beyond our capability and to 

test the system. And really, the point was to find out what can we 

learn and what do we need to do to improve. 

During the distributed play exercise we caused outages in a simulated fashion—no one was actually controlled or affected, but we 

simulated 5 million customers who were out. And in—during the 

30 

executive session, to invoke all the policy questions at the national 

level that we were looking to pull out we actually had 15 million 

customers out and those outages were projected to be extended for 

weeks and even into months to really push the questions that the 

chairman is trying to raise today. 

Participating entities worked through their emergency procedures. They had very extensive contacts with local law enforcement 

and first responders. And actually, those local government officials 

and first responders did participate in the exercise. We had—in the 

exercise we had the White House, DHS, DOE, Department of Defense, Cyber Command, NSA [National Security Agency], 

NORTHCOM [U.S. Northern Command], FBI [Federal Bureau of 

Investigation], FEMA, and the Illinois and Wisconsin National 

Guards are some of the players who participated directly in the executive exercise. 

A number of key takeaways were to make sure that we are able 

to better coordinate between industry and Government in terms of 

the situation assessment, and what do we communicate to the public. It will be a constant race with regard to information to the public. We all know social media and the news are very quick, and we 

want to make sure that we are getting reliable information out to 

the public. 

We are focused on ensuring unity of effort and unity of scale, and 

that we can resolve all of our resources from both industry and 

Government together. 

Looking forward, I would say in this exercise we will continue to 

expand the role of State and local governments and participants in 

the exercise to make sure we can exercise some of the things that 

the chairman is looking to get here, which is how do we engage, 

how do we inform, and how do we set expectations. 

And I look forward to your questions, thank you. 

Mr. BARLETTA. Thank you for your testimony, Mr. Cauley. 

Mr. Spence, you may proceed. 

Mr. SPENCE. Good morning, Chairman Barletta, Ranking Member Carson, and members of the committee. My name is Bill 

Spence. I am president, chairman, and CEO of PPL Corporation. 

We deliver electricity to more than 10 million customers in the U.S. 

and the U.K. Beyond my role overseeing PPL’s operations, I am 

also on the EEI Policy Committee on Reliability and Business Continuity. I also am a member of the Electricity Subsector Coordinating Council that you heard about earlier today. The ESCC 

serves as a principal liaison between the Federal Government and 

the electric power sector to protect against cyberthreats to the Nation’s power grid. 

Protecting the Nation’s power grid, as you heard earlier, is not 

only a top priority of the Federal Government, it is also a top priority for the industry. We have a very strong record of working together closely in all kinds of disasters and storms. Along with our 

Government partners, we identify, assess, and respond to all 

threats. 

The electric sector takes a defense and indepth approach to protecting grid assets. This approach really includes three key elements. The first is rigorous mandatory enforceable and regularly 

audited reliability standards. Gerry talked about that in his testiVerDate Aug 31 2005 11:11 Dec 19, 2016 Jkt 000000 PO 00000 Frm 00040 Fmt 6633 Sfmt 6633 P:\HEARINGS\114\ED\4-14-1~1\99931.TXT JEAN
31 

mony. Also close coordination among industry and with Government partners at all levels. And thirdly, efforts to prepare, respond, 

and recover, should power grid operations be affected. 

Our industry already maintains hundreds of spare transformers. 

I don’t believe that came up earlier, but you should be aware of 

that. In addition, we just recently launched, as an industry, a new 

project called Grid Assurance. Under Grid Assurance, many of the 

major utilities in this sector are coming together to establish regional centers where we will not only store spare transformers, but 

other critical equipment necessary to quickly recover the power 

system in any type of an event. 

Among all the critical infrastructure sectors, you should know 

that the electric sector invests more annually than any other critical infrastructure sector. Last year alone we invested more than 

$100 billion. 

Regarding security standards and regulations, as you heard we 

are subject to NERC’s reliability standards. Entities found violating these standards face penalties of up to $1 million per violation per day. In fact, our industry is the only industry subject to 

mandatory, federally enforceable cyber and physical standards. 

The industry is also implementing requirements for physical security as part of a broader suite of NERC standards, and using voluntary standards, as well, to drive improvement. Secondly, we are 

coordinating closely with the Federal Government, sharing threat 

information between the Government and industry to protect the 

grid. 

According to the National Infrastructure Advisory Council, the 

electric power sector is viewed as a model for how other critical infrastructure sectors can more effectively partner with the Government. Our intent is to keep it that way. The Electricity Subsector 

Coordinating Council brings senior Government and industry executives like myself together with agency officials to improve 

sectorwide resilience against all hazards and potential threats. 

The ESCC and our Electricity Information Sharing and Analysis 

Center offer programs like the Cybersecurity Risk Information 

Sharing Program, as Gerry also mentioned, through which we 

share information on potential threats. This is an area where I 

think the Federal Government has been very helpful to the industry, by allowing us to utilize proprietary hardware and software 

that was developed at the national labs and is now helping to protect the grid. 

Over 75 percent of the U.S. customer base is covered by industry 

participation in this critical program. The ESCC has also focused 

on several other key areas, including planning and exercising responses to major disruptions. Our last exercise was a combined 

cyber and physical threat scenario. 

In addition, we are focused on rapid threat communication 

amongst share owners and stakeholders. We are also developing 

Government-held technologies on electric power systems that improve situational awareness and cross-sector coordination. 

Last but not least we are focused on incident response and recovery efforts. Electric power companies continuously plan and exercise for a broad range of potential threats. We share crews and 

equipment in times of trouble, and we regularly drill for potential 

32 

emergencies. For our part, PPL is actively engaged in the industry 

efforts I have highlighted, and pursing an aggressive defense-indepth approach to protecting the power grid. 

Thank you, and I look forward to your questions. 

Mr. BARLETTA. Thank you for your testimony, Mr. Spence. 

Ms. Kilmer, you may proceed. 

Ms. KILMER. Chairman Barletta, Ranking Member Carson, and 

all members of the committee, thank you for inviting me to testify 

today on how electric cooperatives manage the consequences of a 

power outage. 

Regardless of the cause, getting power restored quickly and safely requires advance thinking and planning. My name is Bobbi Kilmer, and I am testifying today on behalf of Claverack Rural Electric Cooperative and the National Rural Electric Cooperative Association. 

Claverack delivers electricity to member owners at over 18,000 

locations in rural northeastern Pennsylvania. We have low consumer density, averaging less than six consumers per mile of line, 

and we serve primarily residential accounts. We are 1 of Pennsylvania’s 13 electric cooperatives, and our electric distribution system is not directly connected to the bulk power system. 

The National Rural Electric Cooperative Association, NRECA, is 

the service organization dedicated to representing the national interests of electric cooperatives and their consumers. NRECA represents more than 900 not-for-profit, consumer-owned rural electric 

utilities that provide electricity to over 42 million people in 47 

States. 

Electric co-ops are accountable to their consumer members. 

Those same members own and govern the co-op through a locally 

elected board of directors. Electric co-ops reflect the values of their 

membership and are uniquely focused on providing reliable energy 

at the lowest reasonable cost. 

Responding to power outages is a major part of our business. Assessing the situation, knowing who to call, and determining how to 

proceed is imperative, and it requires coordinated efforts in the 

public and private sectors during major events. One of the seven 

principles of the cooperative business model is cooperation among 

cooperatives. This cooperation is integral to our emergency planning and response. 

In Pennsylvania, as in many States, the electric cooperative 

statewide association plays an important role in emergency coordination. Electric co-ops have mutual assistance agreements between 

one another so that during a major event the process of securing 

additional crews and resources is simplified. There is also a national cooperative database which facilitates cross-state mutual assistance. As I noted in my written testimony, this network helped 

our statewide association secure crews from Florida to assist us in 

our restoration following Hurricane Sandy. 

Also important are the relationships that we have with State and 

local government agencies. During major events our statewide association is in regular contact with the Pennsylvania Public Utility 

Commission and the Pennsylvania Emergency Management Agency. The statewide association communicates outage information as 

well as requests for assistance from other governmental divisions 

33 

on our behalf. Locally, we are in touch with our county emergency 

management agencies. We advise them of outages in their counties 

and expected restoration times. This allows them to coordinate 

with other organizations like the Red Cross to set up services such 

as warming shelters. 

We also have close relationships with our local police and fire departments, and along with other agencies and utilities we too participate in tabletop exercises which simulate emergency scenarios 

and strengthen our community networks. 

Communication with our members is important, too. We always 

provide the option to speak with a live customer service representative. We use outgoing telephone messages, informational postings 

on our Web site and social media, and use radio and television 

broadcasts, which could be used, even in the event the Internet is 

down, to keep members and the public informed about outages. 

We test our business continuity and disaster recovery plans annually, and we have plans in place so that we could operate from 

a remote location, if necessary. 

Cybersecurity and awareness is a critical part of our operational 

preparedness. Though we are a small utility, we strive to follow industry best practices, such as the use of network scanning and intrusion detection programs in protecting our operational data, as 

well as our business and member information. We also participate 

in the Pennsylvania Department of Homeland Security’s Task 

Force on Cybersecurity. 

Our preparedness in the field is tested throughout the year during localized outages caused by weather events and other conditions. Lessons learned through experience, along with the coordination with our national, statewide, and local networks would form 

the basis of our response to a national or cyber event. 

Again, thank you for the opportunity to testify today on our 

emergency preparations and recovery efforts. 

Mr. BARLETTA. Thank you for your testimony, Ms. Kilmer. I will 

now begin our first round of questioning. And this question is to 

all. 

I am going to ask you the same question I asked our first panel. 

What is the planning scenario that State and local governments 

should be using for a cyberattack on the electric grid? Will the 

power be out for days or weeks or months, considering both a 

cyberattack and a physical attack? The worst-case scenario, how 

widespread could the outage be? 

Mr. Cauley, NERC runs an exercise on the failure of the grid. 

What scenario do you use? And I will let you begin. 

Mr. CAULEY. Thank you, Mr. Chairman, for the question. As I 

mentioned in my presentation, we do probably pose a scenario that 

is 10 times beyond any sort of realistic expectation, in terms of the 

magnitude. That is really to test and sort of shake this out and see 

what we can do. 

I think the difficulty in understanding the question is that there 

is many kinds of hazards that can cause outages. And in fact, if 

we look at—we do a lot of data and analysis about what causes 

blackouts. That is one of our jobs. And since 2011—so 4 years running—in our data weather has been in the top 10 causes of all 

major outages in North America. So we have that sort of baseline. 

34 

So the question for me, I phrase it as what kinds of things can 

cause outages from a few hours up to 2 to 3 days? And there are 

a lot of things that can contribute toward that and what kind of 

response capability we could have. So it could be storms, it could 

be equipment failure, it could be a number of things. 

And then I think, as we get to the kinds of things we are talking 

about here, in terms of cyber and physical attacks, I think it is reasonable to ask—and severe storms, ice storms, hurricanes—it is 

reasonable to ask the question, ‘‘How are we taking care of people 

in a 1- to 2-week outage?’’ It may not be everywhere, but it might 

be in some local areas, it might be some cities that could reasonably be facing a 1- to 2-week outage. 

But I would hate for us to say, ‘‘it is a cyber event,’’ or, ‘‘it is a 

storm,’’ because, really, the public safety issue is very similar. The 

major difference would be—to me, the major difference would be we 

know there is some kind of security concerns, law enforcement 

would be involved. But it is still the same fundamental—without 

electricity, you need to take care of people, you need to get them 

fuel and food and water, those kinds of things. 

The one scenario I think that is the exception—and I think it 

was appropriate that the committee participated in the legislation 

around spare equipment—the one scenario I think realistically concerns me longer than the 1- to 2-week timeframe is damage to 

spare equipment, particularly the transformers. That could happen 

from a bomb blast, shootings, other—GMD [geomagnetic disturbance] storms. The question is not what caused it, but the question 

is what are you going to do if you lose transformers. And they are 

not going to be replaceable for an extended period of time. 

Mr. BARLETTA. I guess what I am getting at, what—I want to get 

this down—to connect the dots down to the local and State. And 

you know, I feel pretty confident that getting to that point we have 

got all the ducks in order. I am just concerned that there is a missing link to what should the States and local governments be preparing for or planning for in length of time, because they need to 

do the same thing that you are doing. They need to know the scenario of worst-case, what do we need to prepare for. 

Mr. CAULEY. Right. And I have been doing reliability for 35 

years. I really think there are two levels. There is normal expected, 

you would see a number of times a year, is that 1 to 3 days as a 

normal kind of scenario that everybody should be prepared for. I 

think a 1- to 2-week scenario is a scenario that, if you are prudent, 

I would be talking with the mayors and the city councils about 

what you can do to be ready for a 1- to 2-week outage in the extreme case of hurricanes, earthquakes, and those kinds of things. 

My only exception is spare equipment damage may be more challenging. 

But I think it really is independent of the cost, whether it is 

cyberattack—I can’t imagine a cyberattack that is going to damage 

equipment to have an outage more than hours or days. 

Mr. SPENCE. I would agree with Mr. Cauley. I think the prudent 

thing would be the same as what we are doing today for devastating storms, which is really a 1- to 2-week outage preparation. 

I think there are a lot of resources that are currently available 

to local communities, both at the State and the local community 

35 

level that are really great resources that, unfortunately, I don’t 

think all the towns and communities take full advantage of. There 

are a lot of really good best practices that have been used by towns 

and cities that have been more experienced with devastating 

storms. For example, the State of Florida has a lot of experience, 

so there is a lot of lessons learned there that are available to towns 

and communities. 

I think the other thing—and I think this was mentioned by the 

representative of FEMA earlier today—it really boils down to, in 

many cases, the probability of the event happening, the risk of the 

event, and willingness to put in place and spend the money for 

backup generation or other backstops that would be necessary for 

a 1- to 2-week event. So I think that is where I would direct the 

towns and communities to be aware of what is available, utilize 

that fully, and then make the critical investments that they need 

to survive a 1- to 2-week period. 

Mr. BARLETTA. OK. I am going to connect the dots. So do you 

think it is the Federal Government’s responsibility or the State 

government’s responsibility to make sure that the local government 

is doing all that? Because I am just concerned that we are going 

to have everybody pointing fingers at each other, ‘‘well, I thought 

you had said,’’ ‘‘I thought you did,’’ and nobody did. 

Whose responsibility should it be that we make sure that the 

local governments are prepared? Because today is really the first 

time that I am hearing a length of time. 

Mr. SPENCE. Right. 

Mr. BARLETTA. And you know, in my own mind—again, I am 

going to keep putting that mayor’s hat back on—I am beginning to 

think, well, geez, if it is 1 week or 2 weeks, there’s a lot of things 

I need to be prepared for here, and we are probably not. 

Mr. SPENCE. Well—— 

Mr. BARLETTA. Which means that most cities are probably not 

prepared—— 

Mr. SPENCE. Yes. 

Mr. BARLETTA [continuing]. And I think that is what this hearing 

is about—— 

Mr. SPENCE. Right. 

Mr. BARLETTA [continuing]. Is really to raise a red flag here 

today that we are not prepared in the event of something drastic, 

major, unlikely, but could be—— 

Mr. SPENCE. Well, a couple comments, Mr. Chairman. First I 

would say—and you probably would not want to hear this, necessarily, but I think it is a shared responsibility between local government and the Federal Government. And I really do believe that 

because you are just not going to be able to have Federal boots on 

the ground in all these local communities to get the communities 

back up and running. 

Secondly, I would say that, you know, there are things that the 

local utilities do have at their disposal to help local communities 

in terms of communication and even backup generators, portable 

generators, that we can deploy to high-priority areas to make sure 

that when we need to restore the system and we can’t do it in a 

timely fashion, then at least there is some basic level of service 

that we can provide. 

36 

So I think in an extended period of outage, you are still going 

to have power to certain areas. You are going to have a backbone 

of power. It may not be this town or that town. But I think, collectively, there will be ways to get resources available to the local 

towns and communities. 

You know, to be quite frank, I was very skeptical when we started this Electricity Subsector Coordinating Council, on whether the 

Federal Government was really going to be able to help us, as an 

industry, to restore power quicker. But I have been pleasantly surprised at the level of cooperation and collaboration that has gone 

on in the last 3 to 4 years. And there are simple things like providing fuel that we desperately needed during Hurricane Sandy to 

restore towns and communities in New Jersey and Pennsylvania. 

And there are other things, like providing beds for crews that are 

coming from out of State. We were able to access barracks at the 

Department of Defense facilities. We were able to access portable 

generators. We were able to access experts in emergency response. 

So there are some things that the Federal Government can be very, 

very helpful for. 

And I think, now that we have a playbook that really dictates 

who does what when, which was always my concern in a major 

event—who do I call, and are they going to be ready for that call— 

I can say that, from what I have seen so far, I believe we are more 

ready than we have ever been in the past, and we have a very good 

system and a playbook that we can go right down the line and have 

access—in this case, when we are talking about this committee— 

to cyber resources at the highest levels of the Federal Government. 

Mr. BARLETTA. Thank you. 

Ms. Kilmer? 

Ms. KILMER. I agree with my fellow panelists on the shared responsibility. 

I would also like to emphasize to the subcommittee the importance of communications during crisis periods. My experience has 

been that sometimes it is not the length of the outage, but simply 

knowing how long it is going to be, or what the expectation is. It 

can help both residential consumers, as well as townships and 

towns, understand how they need to plan. 

I would also like to add one thing that we have seen in our rural 

area, especially since Hurricane Sandy, and that is a focus on individual preparedness. I am seeing our local county emergency management agencies doing a great job in trying to educate the public 

on being prepared. We try to do the same thing. Of course, we are 

in a rural area, we are subject to many weather events. So I think 

that our consumers are relatively prepared. And again, I am not 

suggesting that we can rely on that, but I think that that is an element in all of this. Thank you. 

Mr. BARLETTA. The Chair recognizes Ranking Member Carson. 

Mr. CARSON. Thank you, Chairman Barletta. 

Ms. Kilmer, you mentioned that Claverack Rural is not connected to the bulk power system, but you receive services from a 

subtransmission system. What does that mean for your cooperative 

in the event of a nationwide cyberattack on the grid? 

Ms. KILMER. In the event there was a cyberattack that took down 

the grid, we would be affected by that. If Penelec’s transmission 

37 

system was affected and power was disrupted to our substations, 

we would also be out of power. 

Mr. CARSON. Mr. Cauley, there was a newspaper article yesterday that indicated that the FBI and the Department of Homeland 

Security have been warning the power industry over the last 

month about a potential cyberattack. What role has the Electricity 

Information Sharing and Analysis Center—what role might they 

play in distributing this kind of information? 

Mr. CAULEY. Thank you, Congressman. That is exactly really 

what the Information Sharing and Analysis Center does. We—in 

fact, I am not aware of that particular one, but we do dozens of 

these a day. We get information out, post it to industry. We have 

several thousand participants in industry who receive those notices 

every day. 

Mr. CARSON. Yes, sir. 

I yield back, Mr. Chairman. Thank you. 

Mr. BARLETTA. The Chair recognizes Mr. Meadows. 

Mr. MEADOWS. Thank you, Mr. Chairman. 

Mr. Cauley, did I hear you correctly? You said that in the event 

of a cyberattack, the longest period of time that people would be 

without power—an hour? Is that what you said? 

Mr. CAULEY. Thank you for allowing me to follow up on my— 

whatever I said. My point—— 

Mr. MEADOWS. Sometimes I don’t hear correctly, but I just wanted to give you a chance—— 

Mr. CAULEY. The point I was trying to get to—but I rushed—was 

it is a very difficult form of attack to go from a cyberattack—it is 

easier to steal information or disrupt electronics. It is very technically challenging to go from an electronic cyberattack to causing 

physical damage to equipment. 

Even in the Ukraine attack there was no damage to the equipment. It was opened, the breakers were operated to basically shut 

down the feeders that were going to the customers, but there was 

no damage, so that once they realized what was happening they 

basically could defeat the computers and have people go to the station manually, flip the switch, which is a mechanical switch, and 

put the power back on. 

So, my point—and I would love to continue working on this and 

getting some actual data to support that—is it is very hard to 

transform from a cyberattack into long-term damage that would be 

measured in weeks or months—— 

Mr. MEADOWS. All right. 

Mr. CAULEY [continuing]. Because you have to hurt the equipment to do that. 

Mr. MEADOWS. OK. And that is really my focus, is not turning 

a switch off here or there or, you know, tripping a breaker or, you 

know, making a jack go out. That is minor. 

I guess the type of cyberattacks that we are seeing and hearing 

about in classified settings not directly related to the electric utility 

business are very sophisticated. And so, being able to come in 

and—so I assume, you know, going into a generated capacity—so 

let’s say you got a generator and you—you know, there is all kinds 

of controls and switches to make sure that you don’t run into problems with the electrons, let’s put it that way. 

38 

And so, all the sudden, somebody coming in with nefarious—not 

just turning a switch off, you know, can scramble it in such a way 

that it would create unbelievable damage, certainly from a standpoint of generated capacity, I mean—I don’t want to talk about it 

in an open forum like this, but I guess my concern—are you not 

having those kinds of conversations which are more than just turning the power switch off, as happened in the Ukraine, but really 

causing long-term damage either to generation capacity or transmission capacity? 

Mr. CAULEY. Yes, Congressman. I have the privilege of going to 

very similar highly classified briefings, as well. But I also have 35 

years of experience working in substations with equipment. And I 

understand the threats of black energy or aurora, or those things. 

It is very difficult to transform an action—the predominant behavior we are seeing today is surveillance-type behavior. But to transform that into an action that destroys a piece of equipment is technically very—— 

Mr. MEADOWS. Well, that is comforting to know. I mean—— 

Mr. CAULEY [continuing]. Very complex. 

Mr. MEADOWS. And so that is real comforting, because what I am 

going to do is I will follow up with both you and Mr. Spence as it 

relates to this because, you know, again, it is one of the numberone questions that I get, is just a real concern. You know, it is 

about hitting the grid. And most people don’t understand the 

interconnectivity between utilities. And so a lot of that gets blown 

way out of proportion. 

Mr. CAULEY. Right. 

Mr. MEADOWS. But yet, at the same time, your confidence level, 

if there were a cyberattack on an investor-owned utility, you know, 

somewhere in the Midwest, the damage they could cause, in your 

opinion, would be minimal. 

Mr. CAULEY. The damage on the—— 

Mr. MEADOWS. Physical damage. 

Mr. CAULEY [continuing]. Business and information systems, that 

would be their business risk. But on the grid it is very difficult. It 

is very unlikely to put a grid out for 1 to 2 weeks. I think—— 

Mr. MEADOWS. So what you are saying is mass outages for multiple weeks or days, are—in your opinion, is going to be a weatherrelated event. 

Mr. CAULEY. Or the other thing is a physical attack, which is 

shooting explosive devices at the substation are the two things I 

think can get into that 1 to 2 weeks and beyond—— 

Mr. MEADOWS. But those are a lot easier to anticipate and plan 

for. 

Mr. CAULEY. It is very complicated to do 20 sites at once with 

a physical attack with the current law enforcement we have. So I 

think that risk is mitigated as well. But it is the one I worry about 

the most, is a physical attack. 

Mr. MEADOWS. Well, that is very helpful. I will follow up with 

all of you. And from an REA [Rural Electrification Administration] 

standpoint I just want to say thank you, as a member of my local 

REA. I have a great affinity for my REAs. 

Ms. KILMER. Thank you very much. 

Mr. MEADOWS. All right. I yield back. 

39 

Mr. BARLETTA. Thank you. I just have one more question, Mr. 

Spence. My colleague—Mr. Spence, my colleague from Pennsylvania highlighted that too many coal power plants have closed. Are 

you concerned that having fewer generation facilities online makes 

the grid, as a whole, more vulnerable? 

Mr. SPENCE. I am not. In fact, Mr. Cauley and his team are also 

responsible, as part of their duties, to evaluate with very detailed 

modeling region by region, the impact of retirements of any sort on 

the grid of a major power station. So they have evaluated this multiple times, in fact, and have found that we continue to maintain 

an adequate reserve of capacity, should we see more retirements 

than actually forecast. 

So, even with the forecasted retirements, which are many, particularly on the coal side, we still have adequate capacity to meet 

all of our projected needs for power. 

Mr. BARLETTA. Thank you. I look forward to working with each 

and every one of you, and welcome your input as we move forward 

on this initiative. 

I thank you all for your testimony. Your comments have been 

helpful to today’s discussion. 

If there are no further questions, I would ask unanimous consent 

that the record of today’s hearing remain open until such time as 

our witnesses have provided answers to any questions that may be 

submitted to them in writing, and unanimous consent that the 

record remain open for 15 days for any additional comments and 

information submitted by Members or witnesses to be included in 

a record of today’s hearing. 

[No response.] 

Mr. BARLETTA. Without objection, so ordered. 

I would like to thank our witnesses again for their testimony. If 

there are no further questions to add, the subcommittee stands adjourned. 

[Whereupon, at 1 p.m., the subcommittee was adjourned.] 

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