127 FERC ¶ 61,273 

UNITED STATES OF AMERICA 

FEDERAL ENERGY REGULATORY COMMISSION 

[Docket No. RM06-22-006; Order No. 706-C] 

Mandatory Reliability Standards for Critical Infrastructure Protection 

(Issued June 18, 2009) 

AGENCY: Federal Energy Regulatory Commission. 

ACTION: Order Denying Request for Clarification. 

SUMMARY: The Commission denies a request for clarification of Order No. 706-B. 

EFFECTIVE DATE: This rule will become effective [the date of publication in the 

FEDERAL REGISTER] 

FOR FURTHER INFORMATION CONTACT: 

Jonathan First (Legal Information) 

Office of General Counsel 

888 First Street, NE. 

Washington, DC 20426 

(202) 502-8529 

Regis Binder (Technical Information) 

Office of Electric Reliability 

888 First Street, NE. 

Washington, DC 20426 

(301) 665-1601 

SUPPLEMENTARY INFORMATION:
 

127 FERC ¶ 61,273 

UNITED STATES OF AMERICA 

FEDERAL ENERGY REGULATORY COMMISSION 

Before Commissioners: Jon Wellinghoff, Chairman; 

 Suedeen G. Kelly, Marc Spitzer, 

 and Philip D. Moeller. 

Mandatory Reliability Standards for Critical 

Infrastructure Protection 

Docket No. RM06-22-006 

ORDER NO. 706-C 

ORDER DENYING REQUEST FOR CLARIFICATION 

(Issued June 18, 2009) 

1. In this order, the Commission denies the Edison Electric Institute’s (EEI’s) request 

for clarification of Order No. 706-B.1

 Specifically, the Commission denies EEI’s request 

that the Commission clarify its views with regard to the need and the time frame for the 

Commission’s developing a memorandum of understanding or other means of 

coordinating cyber-security related activities with the U.S. Nuclear Regulatory 

Commission (NRC). Likewise, the Commission denies EEI’s request that the 

Commission clarify that the North American Electric Reliability Corporation (NERC) 

must seek stakeholder input in developing and implementing an “exception process” as 

discussed in Order No. 706-B. 

1 Mandatory Reliability Standards for Critical Infrastructure Protection, Order 

No. 706, 122 FERC ¶ 61,040 (2008) (Order No. 706); order on reh’g, Order No. 706-A, 

123 FERC ¶ 61,174 (2008) (Order No. 706-A); order on clarification, Order No. 706-B, 

126 FERC ¶ 61,229 (2009) (Order No. 706-B). 
Docket No. RM06-22-006 - 2 - 

I. Background

2. In Order No. 706, the Commission approved the Critical Infrastructure Protection 

(CIP) Reliability Standards that require certain users, owners and operators of the BulkPower System, including generator owners and operators, to comply with specific 

requirements to safeguard critical cyber assets. In addition, pursuant to section 215(d)(5) 

of the Federal Power Act (FPA),2

 the Commission directed the ERO to develop 

modifications to the CIP Reliability Standards to address specific concerns identified by 

the Commission. 

3. In Order No. 706-B, the Commission clarified the scope of the CIP Reliability 

Standards approved in Order No. 706 to assure that no “gap” occurs in the applicability 

of these Standards. In particular, each of the CIP Reliability Standards provides that 

facilities regulated by the NRC are exempt from the Standard. The Commission 

explained that NRC staff had raised a concern at a joint public meeting of the NRC and 

the Commission that NRC regulations do not extend to all equipment within a nuclear 

power plant. Thus, to assure that there is no “gap” in the regulatory process, the 

Commission clarified that the “balance of plant” equipment within a nuclear power plant 

in the United States that is not subject to NRC cyber security regulations,3

 is subject to 

 2

 16 U.S.C. 824o(d)(5)(2006). 

3

 U.S. Nuclear Regulatory Commission, Power Reactor Security Requirements; 

Final Rule, 74 FR 13,926 (Mar. 27, 2009). 
Docket No. RM06-22-006 - 3 - 

 

compliance with the CIP Reliability Standards approved in Order No. 706. The 

Commission explained that: 

a nuclear power plant licensee may seek an exception from the ERO to the 

extent that the licensee believes that specific equipment within the balance 

of plant is subject to NRC cyber security regulations. If the ERO grants the 

exception, that equipment within the balance of plant would not be subject 

to compliance with the CIP Reliability Standards. We would expect that the 

ERO would make such determinations with the consultation of NRC and 

oversight of Commission staff. Thus, to further the development of this 

ERO process, the ERO should consider the appropriateness of developing a 

memorandum of understanding with the NRC, or revising existing 

agreements, to address such matters as NRC staff consultation in the 

exception application process and sharing of Safeguard[s] Information.4

 

4. In response to comments suggesting that the NRC and the Commission develop a 

memorandum of understanding, the Commission agreed that it is advisable for the two 

commissions to coordinate their respective cyber security-related activities with regard to 

nuclear power plants.5

 However, the Commission declined to resolve for purposes of the 

proceeding the need for a new memorandum of understanding between the two 

commissions. 

4 Id. P 50. Safeguards information is a special category of sensitive unclassified 

information to be protected pursuant to Section 147 of the Atomic Energy Act, 42 U.S.C. 

2167 (2006). Safeguards information concerns the physical protection of operating 

power reactors, spent fuel shipments, strategic special nuclear material, or other 

radioactive material. See 10 C.F.R. 73.21 (2009) (setting forth requirements for the 

protection of safeguards information, including access to such information). 

5 Id. P 55. 
Docket No. RM06-22-006 - 4 - 

II. EEI Request for Clarification

5. EEI requests that the Commission clarify its views with respect to the need and the 

time frame for the Commission’s developing a memorandum of understanding or other 

means of coordinating cyber security-related activities with the NRC. EEI suggests that, 

given the volume of work on cyber security matters and recent regulatory changes such 

as the NRC’s issuance of its cyber security regulations, it is vital that the Commission 

and the NRC commit to develop a memorandum of understanding on an expeditious 

schedule. EEI expresses concern that the Commission’s deferral of a decision on the 

need for a memorandum of understanding may lead to confusion and regulatory 

uncertainty. 

6. EEI also requests that the Commission clarify that NERC should seek stakeholder 

input in developing and implementing both the “exception process” and any process for 

sharing Safeguards Information. EEI posits that stakeholder input and industry technical 

expertise will be critical to implementing both processes. 

III. Discussion

7. The Commission denies EEI’s request for clarification. The Commission and the 

NRC entered into a memorandum of agreement in September 2004.6

 The Commission 

views the decision of whether to develop a new or revised memorandum of agreement 

 6

 The memorandum of agreement is available on the Commission’s web site, at 

http://www.ferc.gov/legal/maj-ord-reg/mou.asp. 
Docket No. RM06-22-006 - 5 - 

with the NRC, and the timing of that decision, as an intra-governmental matter between 

the two commissions. Accordingly, the Commission will not make commitments to EEI 

or others in this proceeding regarding the scope or timing of any coordinated activities 

between the Commission and the NRC. 

8. As for EEI’s request that the Commission clarify that NERC should seek 

stakeholder input in developing and implementing an exception process and process for 

sharing Safeguard Information, we note that NERC sought stakeholder input in a “Town 

Hall Meeting” on “Auditing of U.S. Nuclear Plants for CIP Standards Compliance” held 

on June 11, 2009. We expect that NERC will allow for further stakeholder input 

regarding these processes. Thus, we see no need to address EEI’s request. 

The Commission orders:

Edison Electric Institute’s request for clarification is hereby denied, as discussed 

in the body of this order. 

By the Commission. 

( S E A L ) 

Kimberly D. Bose, 

Secretary.