I 113th CONGRESS 2d Session H. R. 4298 IN THE HOUSE OF REPRESENTATIVES March 26, 2014 Mr. Waxman introduced the following bill; which was referred to the Committee on Energy and Commerce A BILL To amend the Federal Power Act to protect the bulk-power system and electric infrastructure critical to the defense of the United States against cybersecurity, physical, and other threats and vulnerabilities.

1. Short title This Act may be cited as the Grid Reliability and Infrastructure Defense Act or the GRID Act . 2. Amendment to the Federal Power Act (a) Critical electric infrastructure security Part II of the Federal Power Act ( 16 U.S.C. 824 et seq. ) is amended by adding after section 215 the following new section: 215A. Critical electric infrastructure security (a) Definitions For purposes of this section: (1) Bulk-power system; electric reliability organization; regional entity The terms bulk-power system , Electric Reliability Organization , and regional entity have the meanings given such terms in paragraphs (1), (2), and (7) of section 215(a), respectively. (2) Defense critical electric infrastructure The term defense critical electric infrastructure means any infrastructure located in the United States (including the territories) used for the generation, transmission, or distribution of electric energy that— (A) is not part of the bulk-power system; and (B) serves a facility designated by the President pursuant to subsection (d)(1), but is not owned or operated by the owner or operator of such facility. (3) Defense critical electric infrastructure vulnerability The term defense critical electric infrastructure vulnerability means a weakness in defense critical electric infrastructure that, in the event of— (A) a malicious act using electronic communication or an electromagnetic pulse, would pose a substantial risk of disruption of those electronic devices or communications networks, including hardware, software, and data, that are essential to the reliability of defense critical electric infrastructure; or (B) a direct physical attack on defense critical electric infrastructure, would pose a substantial risk of significant adverse effects on the reliability of defense critical electric infrastructure. (4) Electromagnetic pulse The term electromagnetic pulse means 1 or more pulses of electromagnetic energy, emitted by any device or weapon capable of generating such a pulse, that would pose a substantial risk of disruption to the operation of those electronic devices or communications networks, including hardware, software, and data, that are essential to the reliability of systems necessary for the generation, transmission, and distribution of electric energy. (5) Geomagnetic storm The term geomagnetic storm means a temporary disturbance of the Earth’s magnetic field resulting from solar activity. (6) Grid security threat The term grid security threat means a substantial likelihood of— (A) (i) a malicious act using electronic communication or an electromagnetic pulse, or a geomagnetic storm event, that could disrupt the operation of those electronic devices or communications networks, including hardware, software, and data, that are essential to the reliability of the bulk-power system or of defense critical electric infrastructure; and (ii) disruption of the operation of such devices or networks, with significant adverse effects on the reliability of the bulk-power system or of defense critical electric infrastructure, as a result of such act or event; or (B) (i) a direct physical attack on the bulk-power system or on defense critical electric infrastructure; and (ii) significant adverse effects on the reliability of the bulk-power system or of defense critical electric infrastructure as a result of such physical attack. (7) Grid security vulnerability The term grid security vulnerability means a weakness in the bulk-power system that, in the event of— (A) a malicious act using electronic communication or an electromagnetic pulse, would pose a substantial risk of disruption to the operation of those electronic devices or communications networks, including hardware, software, and data, that are essential to the reliability of the bulk-power system; or (B) a direct physical attack on the bulk-power system, would pose a substantial risk of significant adverse effects on the reliability of the bulk-power system. (8) Large transformer The term large transformer means an electric transformer that is part of the bulk-power system. (9) Protected information The term protected information means information, other than classified national security information, designated as protected information by the Commission under subsection (e)(2)— (A) that was developed or submitted in connection with the implementation of this section; (B) that specifically discusses grid security threats, grid security vulnerabilities, defense critical electric infrastructure vulnerabilities, or plans, procedures, or measures to address such threats or vulnerabilities; and (C) the unauthorized disclosure of which could be used in a malicious manner to impair the reliability of the bulk-power system or of defense critical electric infrastructure. (10) Secretary The term Secretary means the Secretary of Energy. (11) Security The definition of security in section 3(16) shall not apply to the provisions in this section. (b) Emergency response measures (1) Authority to address grid security threats Whenever the President issues and provides to the Commission (either directly or through the Secretary) a written directive or determination identifying an imminent grid security threat, the Commission may, with or without notice, hearing, or report, issue such orders for emergency measures as are necessary in its judgment to protect the reliability of the bulk-power system or of defense critical electric infrastructure against such threat. As soon as practicable but not later than 180 days after the date of enactment of this section, the Commission shall, after notice and opportunity for comment, establish rules of procedure that ensure that such authority can be exercised expeditiously. (2) Notification of congress Whenever the President issues and provides to the Commission (either directly or through the Secretary) a written directive or determination under paragraph (1), the President (or the Secretary, as the case may be) shall promptly notify congressional committees of relevant jurisdiction, including the Committee on Energy and Commerce of the House of Representatives and the Committee on Energy and Natural Resources of the Senate, of the contents of, and justification for, such directive or determination. (3) Consultation Before issuing an order for emergency measures under paragraph (1), the Commission shall, to the extent practicable in light of the nature of the grid security threat and the urgency of the need for such emergency measures, consult with appropriate governmental authorities in Canada and Mexico, entities described in paragraph (4), the Secretary, and other appropriate Federal agencies regarding implementation of such emergency measures. (4) Application An order for emergency measures under this subsection may apply to— (A) the Electric Reliability Organization; (B) a regional entity; or (C) any owner, user, or operator of the bulk-power system or of defense critical electric infrastructure within the United States. (5) Discontinuance The Commission shall issue an order discontinuing any emergency measures ordered under this subsection, effective not later than 30 days after the earliest of the following: (A) The date upon which the President issues and provides to the Commission (either directly or through the Secretary) a written directive or determination that the grid security threat identified under paragraph (1) no longer exists. (B) The date upon which the Commission issues a written determination that the emergency measures are no longer needed to address the grid security threat identified under paragraph (1), including by means of Commission approval of a reliability standard under section 215 that the Commission determines adequately addresses such threat. (C) The date that is 1 year after the issuance of an order under paragraph (1). (6) Cost recovery If the Commission determines that owners, operators, or users of the bulk-power system or of defense critical electric infrastructure have incurred substantial costs to comply with an order under this subsection and that such costs were prudently incurred and cannot reasonably be recovered through regulated rates or market prices for the electric energy or services sold by such owners, operators, or users, the Commission shall, after notice and an opportunity for comment, establish a mechanism that permits such owners, operators, or users to recover such costs. (c) Measures To address grid security vulnerabilities (1) Commission authority If the Commission, in consultation with appropriate Federal agencies, identifies a grid security vulnerability that the Commission determines has not adequately been addressed through a reliability standard developed and approved under section 215, the Commission shall, after notice and opportunity for comment and after consultation with the Secretary, other appropriate Federal agencies, and appropriate governmental authorities in Canada and Mexico, promulgate a rule or issue an order requiring implementation, by any owner, operator, or user of the bulk-power system in the United States, of measures to protect the bulk-power system against such vulnerability. Before promulgating a rule or issuing an order under this paragraph, the Commission shall, to the extent practicable in light of the urgency of the need for action to address the grid security vulnerability, request and consider recommendations from the Electric Reliability Organization regarding such rule or order. The Commission may establish an appropriate deadline for the submission of such recommendations. (2) Certain existing cybersecurity vulnerabilities Not later than 180 days after the date of enactment of this section, the Commission shall, after notice and opportunity for comment and after consultation with the Secretary, other appropriate Federal agencies, and appropriate governmental authorities in Canada and Mexico, promulgate a rule or issue an order requiring the implementation, by any owner, user, or operator of the bulk-power system in the United States, of such measures as are necessary to protect the bulk-power system against the vulnerabilities identified in the June 21, 2007, communication to certain Electricity Sector Owners and Operators from the North American Electric Reliability Corporation, acting in its capacity as the Electricity Sector Information and Analysis Center. (3) Rescission The Commission shall approve a reliability standard developed under section 215 that addresses a grid security vulnerability that is the subject of a rule or order under paragraph (1) or (2), unless the Commission determines that such reliability standard does not adequately protect against such vulnerability or otherwise does not satisfy the requirements of section 215. Upon such approval, the Commission shall rescind the rule promulgated or order issued under paragraph (1) or (2) addressing such vulnerability, effective upon the effective date of the newly approved reliability standard. (4) Large transformer availability Not later than 1 year after the date of enactment of this section, the Commission shall, after notice and an opportunity for comment and after consultation with the Secretary and other appropriate Federal agencies, issue an order directing the Electric Reliability Organization to submit to the Commission for approval under section 215, not later than 1 year after the issuance of such order, reliability standards addressing availability of large transformers. Such standards shall require entities that own or operate large transformers to ensure, individually or jointly, adequate availability of large transformers to promptly restore the reliable operation of the bulk-power system in the event that any such transformer is destroyed or disabled as a result of a reasonably foreseeable physical or other attack or geomagnetic storm event. The Commission’s order shall specify the nature and magnitude of the reasonably foreseeable attacks or events that shall provide the basis for such standards. Such standards shall— (A) provide entities subject to the standards with the option of meeting such standards individually or jointly; and (B) appropriately balance the risks associated with a reasonably foreseeable attack or event, including any regional variation in such risks, and the costs of ensuring adequate availability of spare transformers. (d) Critical defense facilities (1) Designation Not later than 180 days after the date of enactment of this section, the President shall designate, in a written directive or determination provided to the Commission, facilities located in the United States (including the territories) that are— (A) critical to the defense of the United States; and (B) vulnerable to a disruption of the supply of electric energy provided to such facility by an external provider. The number of facilities designated by such directive or determination shall not exceed 100. The President may periodically revise the list of designated facilities through a subsequent written directive or determination provided to the Commission, provided that the total number of designated facilities at any time shall not exceed 100. (2) Commission authority If the Commission identifies a defense critical electric infrastructure vulnerability that the Commission, in consultation with owners and operators of any facility or facilities designated by the President pursuant to paragraph (1), determines has not adequately been addressed through measures undertaken by owners or operators of defense critical electric infrastructure, the Commission shall, after notice and an opportunity for comment and after consultation with the Secretary and other appropriate Federal agencies, promulgate a rule or issue an order requiring implementation, by any owner or operator of defense critical electric infrastructure, of measures to protect the defense critical electric infrastructure against such vulnerability. The Commission shall exempt from any such rule or order any specific defense critical electric infrastructure that the Commission determines already has been adequately protected against the identified vulnerability. The Commission shall make any such determination in consultation with the owner or operator of the facility designated by the President pursuant to paragraph (1) that relies upon such defense critical electric infrastructure. (3) Cost recovery An owner or operator of defense critical electric infrastructure shall be required to take measures under paragraph (2) only to the extent that the owners or operators of a facility or facilities designated by the President pursuant to paragraph (1) that rely upon such infrastructure agree to bear the full incremental costs of compliance with a rule promulgated or order issued under paragraph (2). (e) Protection of information (1) Prohibition of public disclosure of protected information Protected information— (A) shall be exempt from disclosure under section 552(b)(3) of title 5, United States Code; and (B) shall not be made available pursuant to any State, local, or tribal law requiring disclosure of information or records. (2) Information sharing (A) In general Consistent with the Controlled Unclassified Information framework established by the President, the Commission shall promulgate such regulations and issue such orders as necessary to designate protected information and to prohibit the unauthorized disclosure of such protected information. (B) Sharing of protected information The regulations promulgated and orders issued pursuant to subparagraph (A) shall provide standards for and facilitate the appropriate sharing of protected information with, between, and by Federal, State, local, and tribal authorities, the Electric Reliability Organization, regional entities, and owners, operators, and users of the bulk-power system in the United States and of defense critical electric infrastructure. In promulgating such regulations and issuing such orders, the Commission shall take account of the role of State commissions in reviewing the prudence and cost of investments within their respective jurisdictions. The Commission shall consult with appropriate Canadian and Mexican authorities to develop protocols for the sharing of protected information with, between, and by appropriate Canadian and Mexican authorities and owners, operators, and users of the bulk-power system outside the United States. (3) Submission of information to congress Nothing in this section shall permit or authorize the withholding of information from Congress, any committee or subcommittee thereof, or the Comptroller General. (4) Disclosure of non-protected information In implementing this section, the Commission shall protect from disclosure only the minimum amount of information necessary to protect the reliability of the bulk-power system and of defense critical electric infrastructure. The Commission shall segregate protected information within documents and electronic communications, wherever feasible, to facilitate disclosure of information that is not designated as protected information. (5) Duration of designation Information may not be designated as protected information for longer than 5 years, unless specifically redesignated by the Commission. (6) Removal of designation The Commission may remove the designation of protected information, in whole or in part, from a document or electronic communication if the unauthorized disclosure of such information could no longer be used to impair the reliability of the bulk-power system or of defense critical electric infrastructure. (7) Judicial review of designations Notwithstanding subsection (f) of this section or section 313, a person or entity may seek judicial review of a determination by the Commission concerning the designation of protected information under this subsection exclusively in the district court of the United States in the district in which the complainant resides, or has his principal place of business, or in the District of Columbia. In such a case the court shall determine the matter de novo, and may examine the contents of documents or electronic communications designated as protected information in camera to determine whether such documents or any part thereof were improperly designated as protected information. The burden is on the Commission to sustain its designation. (f) Judicial review The Commission shall act expeditiously to resolve all applications for rehearing of orders issued pursuant to this section that are filed under section 313(a). Any party seeking judicial review pursuant to section 313 of an order issued under this section may obtain such review only in the United States Court of Appeals for the District of Columbia Circuit. (g) Provision of assistance to industry in meeting grid security protection needs (1) Expertise and resources The Secretary shall establish a program, in consultation with other appropriate Federal agencies, to develop technical expertise in the protection of systems for the generation, transmission, and distribution of electric energy against geomagnetic storms or malicious acts using electronic communications or electromagnetic pulse that would pose a substantial risk of disruption to the operation of those electronic devices or communications networks, including hardware, software, and data, that are essential to the reliability of such systems. Such program shall include the identification and development of appropriate technical and electronic resources, including hardware, software, and system equipment. (2) Sharing expertise As appropriate, the Secretary shall offer to share technical expertise developed under the program under paragraph (1), through consultation and assistance, with owners, operators, or users of systems for the generation, transmission, or distribution of electric energy located in the United States and with State commissions. In offering such support, the Secretary shall assign higher priority to systems serving facilities designated by the President pursuant to subsection (d)(1) and other critical-infrastructure facilities, which the Secretary shall identify in consultation with the Commission and other appropriate Federal agencies. (3) Security clearances and communication The Secretary shall facilitate and, to the extent practicable, expedite the acquisition of adequate security clearances by key personnel of any entity subject to the requirements of this section to enable optimum communication with Federal agencies regarding grid security threats, grid security vulnerabilities, and defense critical electric infrastructure vulnerabilities. The Secretary, the Commission, and other appropriate Federal agencies shall, to the extent practicable and consistent with their obligations to protect classified and protected information, share timely actionable information regarding grid security threats, grid security vulnerabilities, and defense critical electric infrastructure vulnerabilities with appropriate key personnel of owners, operators, and users of the bulk-power system and of defense critical electric infrastructure. (h) Certain federal entities For the 11-year period commencing on the date of enactment of this section, the Tennessee Valley Authority and the Bonneville Power Administration shall be exempt from any requirement under subsection (b) or (c) (except for any requirement addressing a malicious act using electronic communication). . (b) Conforming amendments (1) Jurisdiction Section 201(b)(2) of the Federal Power Act ( 16 U.S.C. 824(b)(2) ) is amended by inserting 215A, after 215, each place it appears. (2) Public utility Section 201(e) of the Federal Power Act ( 16 U.S.C. 824(e) ) is amended by inserting 215A, after 215, .