[Federal Register: March 19, 2004 (Volume 69, Number 54)]
[Proposed Rules]
[Page 12989-12992]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr19mr04-10]
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DEPARTMENT OF AGRICULTURE
Rural Utilities Service
7 CFR Part 1730
RIN 0572-AB92
Electric System Emergency Restoration Plan
AGENCY: Rural Utilities Service, USDA.
ACTION: Proposed rule.
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SUMMARY: The Rural Utilities Service (RUS) is proposing to amend its
regulations on Electric System Operations and Maintenance to
[[Page 12990]]
establish policy requiring electric program distribution, generation
and transmission borrowers to expand a currently established Emergency
Restoration Plan (ERP), or, if no ERP is currently established, to
create an ERP. The ERP shall detail how the borrower will restore its
system in the event of a system wide outage resulting from a major
natural or man made disaster or other causes. The ERP shall include
preventative measures and procedures for emergency recovery from
physical and cyber attacks to borrower's electric systems and core
businesses, and shall also address Homeland Security concerns. This
additional requirement is not entirely new to borrowers as RUS has
recommended similar ``plans'' in the past. Both RUS Bulletin 60-7 and
RUS Bulletin 1730-1 provided language addressing the security of RUS
borrowers' electric systems.
DATES: Written comments must be received by RUS or carry a postmark or
equivalent no later than May 3, 2004.
ADDRESSES: You may submit comments by any of the following methods:
E-mail: RUSComments@usda.gov. Include in the
subject line of the message ``Electric System Emergency Restoration
Plan.'' The e-mail must identify, in the text of the message, the name
of the individual (and name of the entity, if applicable) who is
submitting the comment.
Mail: Addressed to Richard Annan, Acting
Director, Program Development and Regulatory Analysis, Rural Utilities
Service, U. S. Department of Agriculture, 1400 Independence Avenue,
SW., STOP 1522, Washington, D.C. 20250-1522.
Hand Delivery/Courier: Addressed to Richard
Annan, Acting Director, Program Development and Regulatory Analysis,
Rural Utilities Service, United States Department of Agriculture, 1400
Independence Avenue, SW., Room 5168-S, Washington, D.C. 20250-1522 RUS
requires, in hard copy, a signed original and 3 copies of all written
comments (7 CFR 1700.4). Comments will be available for public
inspection during normal business hours (7 CFR part 1).
FOR FURTHER INFORMATION CONTACT: John B. Pavek, Chief, Distribution
Branch, Rural Utilities Service, Electric Program, Room 1256 South
Building, Stop 1569, 1400 Independence Ave., SW., Washington, DC 20250-
1569, Telephone: 202-720-5082, FAX: 202-720-7491, E-mail:
John.Pavek@usda.gov.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
This proposed rule has been determined to be not significant for
purposes of Executive Order 12866 and, therefore, has not been reviewed
by the Office of Management and Budget (OMB).
Executive Order 12372
This proposed rule is excluded from the scope of Executive Order
12372, Intergovernmental Consultation, which may require consultation
with State and local officials. See the final rule-related notice
titled ``Department Programs and Activities Excluded from Executive
Order 12372'' (50 FR 47034) advising that rural electrification loans
and loan guarantees are excluded from the scope of Executive Order
12372.
Executive Order 12988
This proposed rule has been reviewed under Executive Order 12988,
Civil Justice Reform. RUS has determined that this proposed rule meets
the applicable standards provided in section 3 of the Executive Order.
In addition, all state and local laws and regulations that are in
conflict with this rule will be preempted; no retroactive effect will
be given to this rule, and, in accordance with section 212(e) of the
Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 6912
(e)), administrative appeals procedures, if any are required, must be
exhausted before an action against the Department or its agencies may
be initiated.
Executive Order 13132
This regulation will not have substantial direct effects on the
States, on the relationship between the national government and the
States, or on distribution of power and responsibilities among the
various levels of government. Under Executive Order 13132, this rule
does not have sufficient federalism implications to require preparation
of a Federalism Assessment.
Regulatory Flexibility Act Certification
It has been determined that the Regulatory Flexibility Act is not
applicable to this rule since the Rural Utilities Service is not
required by 5 U.S.C. 551 et seq. or any other provision of the law to
publish a notice of proposed rulemaking with request to the subject
matter of this rule.
Information Collection and Recordkeeping Requirements
This rule contains no additional information collection or
recordkeeping requirements under OMB control number 0572-0025 that
would require approval under the Paperwork Reduction Act of 1995 (44
U.S.C. chapter 35).
Unfunded Mandates
This proposed rule contains no Federal mandates (under the
regulatory provision of the Unfunded Mandates Reform Act of 1995 (2
U.S.C. Chapter 25)) for State, local, and tribal governments or the
private sector. Thus, this proposed rule is not subject to the
requirements of sections 202 and 205 of the Unfunded Mandates Reform
Act.
National Environmental Policy Act Certification
The Administrator of RUS has determined that this proposed rule
will not significantly affect the quality of the human environment as
defined by the National Environmental Policy Act of 1969 (42 U.S.C.
4321 et seq.). Therefore, this action does not require an environmental
impact statement or assessment.
Catalog of Federal Domestic Assistance
The program described by this proposed rule is listed in the
Catalog of Federal Domestic Assistance Programs under No. 10.850, Rural
Electrification Loans and Loan Guarantees. This catalog is available on
a subscription basis from the Superintendent of Documents, U.S.
Government Printing Office, Washington, DC 20402-9325, telephone number
(202) 512-1800.
Background
Electric power systems have been identified in Presidential
Decision Directive (PDD-63) as one of the critical infrastructures of
the United States. The term ``critical infrastructure'' is defined in
section 1016(e) of the USA Patriot Act of 2001 (42 U.S.C. 5195c(e)) as
``systems and assets, whether physical or virtual, so vital to the
United States that the incapacity or destruction of such systems and
assets would have a debilitating impact on security, national economic
security, national public health or safety, or any combination of those
matters.'' The United States electric power system consists of the
generation of energy and the transmission and distribution of energy
(collectively comprising the electric grid). The other critical
infrastructures identified in PDD-63 are all dependant to some degree
upon the electric power system. Damage to or loss of critical or
significant parts of the U.S. electric power system can cause enormous
damage to the environment, loss of life, economic loss and can affect
the national security of the United States.
[[Page 12991]]
Such damage or loss can be caused by an act of nature or an act by man,
ranging from an accident to an act of terrorism. Of particular concern
are physical and cyber threats from terrorists.
Protecting America's critical infrastructure is the shared
responsibility of Federal, state, and local government, in active
partnership with the private sector. Homeland Security Presidential
Directive /Hspd-7 established a national policy for Federal departments
and agencies to identify and prioritize United States critical
infrastructure and key resources and to protect them from terrorist
attacks. The Department of Homeland Security's Directorate of
Information Analysis and Infrastructure Protection (IAIP) is the lead
organization in coordinating the national effort to secure the nation's
critical infrastructure. This IAIP function will give state, local, and
private entities one primary contact instead of many for coordinating
protection activities within the Federal government, including
vulnerability assessments, strategic planning efforts, and exercises.
RUS and, most importantly, RUS electric borrowers must be diligently
proactive in electric infrastructure security.
RUS is uniquely coupled with the electric infrastructure of rural
America and its electric borrowers serving rural America. A substantial
portion of the electric infrastructure of the United States resides in,
and is maintained by, rural America. To ensure that the electric
infrastructure in rural America is adequately protected, RUS is
instituting the requirement that all electric borrowers conduct a
vulnerability and risk assessment of their respective systems and
utilize the results of this assessment to enhance a current ERP or, if
none exists, develop and maintain an ERP. Prior to approving any RUS
grant, loan or loan guarantee, borrowers will have to demonstrate that
they have an ERP.
The vulnerability and risk assessment is utilized to identify
assets and infrastructure owned or served by the electric utility,
determine the criticality and risk level associated with such assets
and infrastructure, identify threats, depict vulnerabilities, if any,
review existing mitigation procedures, assist in the development of new
and additional mitigation procedures, if necessary, and perform a risk
versus cost analysis. The ERP will provide written procedures detailing
response and restoration efforts in the event of a major system outage
resulting from a natural or man made disaster. An annual Exercise of
the ERP will ensure operability, employee competency and serve to
identify and correct deficiencies in the existing ERP. For the purpose
of this regulation, ``Exercise'' means a borrower's tabletop execution
of, or actual implementation of, the ERP to verify the operability of
the ERP. Such Exercise may be implemented singly by an individual
borrower or, as a participant in a multi-party (State, County, utility
or combination thereof) tabletop execution or actual implementation of
the ERP. For the purpose of this regulation, ``Tabletop'' means a
hypothetical emergency response scenario in which participants will
identify the policy, communication, resources, data, coordination, and
organizational elements associated with an emergency response. The
Exercise must, at a minimum, verify:
1. Operability of alert and notification systems;
2. Efficacy of plan;
3. Employee competency of procedures;
4. Points of contact (POC) of key personnel, both internally and
externally; and
5. Contact numbers of POC.
List of Subjects in 7 CFR Part 1730
Electric power, Loan programs-energy, Reporting and recordkeeping
requirement, Rural areas.
For the reasons set forth in the preamble, chapter XVII of title 7
of the Code of Federal Regulations, RUS proposes to amend part 1730 as
follows:
PART 1730--ELECTRIC SYSTEM OPERATIONS AND MAINTENANCE
1. The authority citation for part 1730 continues to read as
follows:
Authority: 7 U.S.C. 901 et seq., 1921 et seq., 6941 et seq.
Subpart B--Operations and Maintenance Requirements
2. Section 1730.20 is revised to read as follows:
Sec. 1730.20 General.
Each distribution borrower and power supply borrower shall operate
and maintain its system in compliance with prudent utility practice, in
compliance with its loan documents, and in compliance with all
applicable laws, regulations and orders, shall maintain its systems in
good repair, working order and condition, and shall make all needed
repairs, renewals, replacements, alterations, additions, betterments
and improvements, in accordance with applicable provisions of the
borrower's security instrument. Each borrower is responsible for on-
going operations and maintenance programs, performing a system security
vulnerability and risk assessment, establishing and maintaining an
Emergency Restoration Plan (ERP), maintaining records of the physical
and electrical condition and security of its electric system and for
the quality of services provided to its customers. The borrower is also
responsible for all necessary inspections and tests of the component
parts of its system, and for maintaining records of such inspections
and tests. Each borrower shall budget sufficient resources to operate
and maintain its system and annually exercise its ERP in accordance
with the requirements of this part. For portions of the borrower's
system that are not operated by the borrower, if any, the borrower is
responsible for ensuring that the operator is operating and maintaining
the system properly in accordance with the operating agreement.
3. Section 1730.21 is amended by:
a. Revising paragraph (a) and
b. Adding to the end of the first sentence in paragraph (c), ``or
has been determined as a critical component of national security.''
The revision reads as follows:
Sec. 1730.21 Inspections and tests.
(a) Each borrower shall conduct all necessary inspections and tests
of the component parts of its electric system, annually exercise its
emergency restoration plan, and maintain adequate records of such
inspections and tests. ``Exercise'' means a borrower's Tabletop
execution of, or actual implementation of, the ERP to verify the
operability of the ERP. Such Exercise may be implemented singly by an
individual borrower or, as a participant in a multi-party (State,
County, utility or combination thereof) Tabletop execution or actual
implementation of the ERP. ``Tabletop'' means a hypothetical emergency
response scenario in which participants will identify the policy,
communication, resources, data, coordination, and organizational
elements associated with an emergency response.
* * * * *
4. Section 1730.22 is amended by revising paragraph (a) and
paragraph (b) introductory text to read as follows:
Sec. 1730.22 Borrower analysis.
(a) Each borrower shall periodically analyze and document its
security, operations and maintenance policies, practices, and
procedures to determine if they are appropriate and if they are being
followed. The records of inspections and tests are also to be reviewed
and analyzed to identify any
[[Page 12992]]
trends which could indicate deterioration in the physical condition or
the operational effectiveness of the system or suggest a need for
changes in security, operations or maintenance policies, practices and
procedures. For portions of the borrower's system that are not operated
by the borrower, if any, the borrower's written analysis would also
include a review of the operator's performance under the operating
agreement.
(b) When a borrower's security, operations and maintenance
policies, practices, and procedures are to be reviewed and evaluated by
RUS, the borrower shall:
* * * * *
5. Section 1730.26 is amended by:
a. Revising the section title;
b. Designating the text as paragraph (a) and adding a paragraph
heading; and
c. Adding a new paragraph (b).
This redesignation and addition are to read as follows:
Sec. 1730.26 Certification.
(a) Engineer's certification. * * *
(b) Emergency Restoration Plan certification. If the self-
certification of an ERP and vulnerability and risk assessment are not
received prior to completion of the loan approval process, approval of
the loan will not be considered until the certifications are received
by RUS.
5. Sections 1730.27 and 1730.28 are added to read as follow:
Sec. 1730.27 Vulnerability and risk assessment.
(a) Each borrower shall perform an initial and periodic
vulnerability and risk assessment of its electric system and maintain
adequate records of such assessments.
(b) The borrower vulnerability and risk assessment is to be
utilized by the borrower to assist in identifying critical facilities
and business operational assets, the exposure of these identified
facilities and assets to harm via natural or manmade acts, and methods
or methodology to mitigate the exposure to harm.
(c) The vulnerability and risk assessment shall include, but not be
limited to, identifying:
(1) Critical assets or infrastructure served by the borrowers'
electric system that are identified as elements of national security;
(2) Critical asset components and elements unique to the RUS
borrowers system;
(3) External system impacts (interdependency) with loss of
identified system components;
(4) Threats to facilities and assets identified in paragraphs
(c)(1) or (2) of this section; and
(5) Criticality and risk level of the borrowers system.
Sec. 1730.28 Emergency Restoration Plan (ERP).
(a) Each borrower shall have a written ERP. The ERP should be
developed by the borrower through the borrower's unique knowledge of
its system, prudent utility practices and the borrower's completed
vulnerability and risk assessment. The ERP shall include, but not be
limited to:
(1) A list of key contact emergency numbers (emergency agencies,
borrower management and other key personnel, contractors and equipment
suppliers, other utilities, and others that might need to be reached in
an emergency);
(2) A list of key utility management and other personnel and
identification of a chain of command and delegation of authority and
responsibility during an emergency;
(3) Procedures for recovery from loss of power to the headquarters,
key offices, and/or operation center facilities.
(4) A Business Continuity Section describing a plan to maintain or
re-establish business operations following an event which disrupts
business systems (computer, financial, and other business systems).
(b) The ERP must be approved and signed by the borrower's manager
or chief executive officer and approved by the Board of Directors, as
applicable.
(c) Copies of the most recent approved ERP must be made readily
available to key personnel at all times.
(d) The ERP shall be Exercised at least annually to ensure
operability and employee familiarity.
(e) If modifications are made to an existing ERP:
(1) The modified ERP must be prepared in compliance with the
provisions of paragraphs (b) and (c) of this section; and
(2) Additional Exercises will be necessary to maintain employee
operability and familiarity.
(f) Each borrower shall maintain records of such Exercises.
Dated: March 8, 2004.
Hilda Gay Legg,
Administrator, Rural Utilities Service.
[FR Doc. 04-6167 Filed 3-18-04; 8:45 am]
BILLING CODE 3410-15-P