{"id":1442,"date":"2023-06-22T20:40:36","date_gmt":"2023-06-22T20:40:36","guid":{"rendered":"https:\/\/cyberscoop.com\/?p=74931"},"modified":"2023-06-22T20:40:36","modified_gmt":"2023-06-22T20:40:36","slug":"federal-incentives-could-help-utilities-overcome-major-cybersecurity-hurdle-money","status":"publish","type":"post","link":"https:\/\/ddi.mohflo.net\/index.php\/2023\/06\/22\/federal-incentives-could-help-utilities-overcome-major-cybersecurity-hurdle-money\/","title":{"rendered":"Federal incentives could help utilities overcome major cybersecurity hurdle: money"},"content":{"rendered":"<p><head> <meta charset=\"UTF-8\"> <meta name=\"viewport\" content=\"width=device-width, initial-scale=1\"> <meta name=\"robots\" content=\"index, follow, max-image-preview:large, max-snippet:-1, max-video-preview:-1\"> <!-- This site is optimized with the Yoast SEO Premium plugin v20.5 (Yoast SEO v20.5) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ --> <title>Federal incentives could help utilities overcome major cybersecurity hurdle: money | CyberScoop<\/title> <meta name=\"description\" content=\"A new rule that would give electric utilities incentives for investing in cybersecurity is set to go into effect next month.\"> <link rel=\"canonical\" href=\"https:\/\/cyberscoop.com\/ferc-cybersecurity-incentives-electric-grid\/\"> <meta property=\"og:locale\" content=\"en_US\"> <meta property=\"og:type\" content=\"article\"> <meta property=\"og:title\" content=\"Federal incentives could help utilities overcome major cybersecurity hurdle: money\"> <meta property=\"og:description\" content=\"A new rule that would give electric utilities incentives for investing in cybersecurity is set to go into effect next month.\"> <meta property=\"og:url\" content=\"https:\/\/cyberscoop.com\/ferc-cybersecurity-incentives-electric-grid\/\"> <meta property=\"og:site_name\" content=\"CyberScoop\"> <meta property=\"article:published_time\" content=\"2023-06-22T20:40:36+00:00\"> <meta 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class=\"screen-reader-text\">Advertisement<\/span> <\/div>\n<\/div>\n<p> <main id=\"main\" role=\"main\" tabindex=\"-1\"> <\/p>\n<div class=\"ad ad--top ad--top-mobile\">\n<div class=\"ad__inner\"> <span class=\"screen-reader-text\">Advertisement<\/span> <\/div>\n<\/div>\n<section id=\"stickybar\" class=\"stickybar stickybar--newsletter js-stickybar\" readability=\"0.82\"> <button class=\"stickybar__close js-stickybar-close\" aria-controls=\"stickybar\"> <svg class=\"icon icon--close\" width=\"21\" height=\"22\" viewBox=\"0 0 21 22\" fill=\"none\"><path d=\"m.822.518-.805.805L9.695 11 .017 20.678l.805.805 9.678-9.678 9.677 9.678.806-.805L11.305 11l9.678-9.677-.806-.805-9.677 9.677L.822.518Z\" fill=\"currentColor\" \/><\/svg> <span class=\"visually-hidden\">Close<\/span> <\/button> <\/section>\n<article class=\"single-article content\">\n<div class=\"single-article__container js-single-article-content\">\n<header class=\"single-article__header \" readability=\"24.235759493671\">\n<div class=\"single-article__header-content\" readability=\"29.478260869565\">\n<ul class=\"single-article__eyebrow\">\n<li class=\"single-article__category\"> <a class=\"single-article__category-link\" href=\"https:\/\/cyberscoop.com\/news\/government\/\"> <span>Government<\/span> <\/a> <\/li>\n<\/ul>\n<p> A new rule that would give electric utilities incentives for investing in cybersecurity is set to go into effect next month. <\/p>\n<\/p><\/div>\n<div class=\"single-article__cover-wrap\">\n<figure class=\"single-article__cover\"> <img data-recalc-dims=\"1\" fetchpriority=\"high\" width=\"640\" height=\"427\" src=\"https:\/\/i0.wp.com\/ddi.mohflo.net\/wp-content\/uploads\/2023\/06\/federal-incentives-could-help-utilities-overcome-major-cybersecurity-hurdle-money.jpg?resize=640%2C427&#038;ssl=1\" class=\"single-article__cover-image wp-post-image\" alt decoding=\"async\" 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https:\/\/ddi.mohflo.net\/wp-content\/uploads\/2023\/06\/federal-incentives-could-help-utilities-overcome-major-cybersecurity-hurdle-money-1.jpg?resize=252,168 252w, https:\/\/ddi.mohflo.net\/wp-content\/uploads\/2023\/06\/federal-incentives-could-help-utilities-overcome-major-cybersecurity-hurdle-money-1.jpg?resize=505,337 505w, https:\/\/ddi.mohflo.net\/wp-content\/uploads\/2023\/06\/federal-incentives-could-help-utilities-overcome-major-cybersecurity-hurdle-money-1.jpg?resize=1012,675 1012w, https:\/\/ddi.mohflo.net\/wp-content\/uploads\/2023\/06\/federal-incentives-could-help-utilities-overcome-major-cybersecurity-hurdle-money-1.jpg?resize=1264,843 1264w\" sizes=\"(max-width: 1012px) 100vw, 1012px\"><figcaption> High voltage towers in the dusk of the evening. (Getty Images) <\/figcaption><\/figure>\n<\/p><\/div>\n<\/header>\n<div class=\"single-article__content\">\n<div class=\"single-article__content-inner has-drop-cap\"> <html readability=\"52.088656491426\"><body readability=\"104.68275075988\"><\/p>\n<p>Starting next month, utilities around the country may be able to fund certain cybersecurity investments through increases in consumer electric bills, a move that could help resource-poor owners and operators better protect themselves against malicious hackers. <\/p>\n<p>A new <a href=\"https:\/\/www.federalregister.gov\/documents\/2023\/05\/03\/2023-08929\/incentives-for-advanced-cybersecurity-investment\" target=\"_blank\" rel=\"noreferrer noopener\">voluntary cyber incentive<\/a> framework<strong> <\/strong>from the Federal Energy Regulatory Commission that was required by the Biden administration\u2019s bipartisan Infrastructure Investment and Jobs Act will allow utilities to make the case for receiving an incentive-based rate recovery when they make certain pre-qualified cybersecurity investments or join a threat information-sharing program.<\/p>\n<p>The new rule also helps clear the path for one of the biggest issue for critical infrastructure owners and operators: a lack of money to invest in cybersecurity.<\/p>\n<p>\u201cIt\u2019s about removing the excuses and one of the huge excuses for anyone in the utility space to do anything with cyber has to do with resources and dollars,\u201d said Ron Fabela, field CTO at cybersecurity firm XONA Systems. \u201cWhether it\u2019s an investor-owned utility or a local co-op, they are still beholden to the approved rates for power and that rate is heavily regulated and they can\u2019t necessarily go to the ratepayer \u2014 you and me \u2014 to cover all their expenditures.\u201d<\/p>\n<div class=\"ad ad--inline_1 \">\n<div class=\"ad__inner\"> <span class=\"screen-reader-text\">Advertisement<\/span> <\/div>\n<\/div>\n<p>For instance, in most states public utility commissions are unlikely to approve a rate increase unless it\u2019s directly tied to the ability to generate and deliver power to customers, says Fabela. Those requirements can change depending on the state but nearly all are an arduous process and how they will respond to new cyber investments is still an open question, he said.<\/p>\n<p>\u201cThis is essentially telling the public utility commissions that utilities that wish to invest in cybersecurity in these areas and these ways can effectively get rate relief from their customers,\u201d Fabela said.<\/p>\n<p>The new rule that goes into effect July 3 comes as the federal government is grappling with ways to add cyber mandates for critical infrastructure and to help \u201ctarget rich, cyber poor\u201d owners and operators improve digital defenses. Additionally, <a href=\"https:\/\/cyberscoop.com\/biden-national-cybersecurity-strategy-2023\/\" target=\"_blank\" rel=\"noreferrer noopener\">the recently released National Cybersecurity Strategy<\/a> outlined goals for the administration to pursue more cybersecurity regulations for critical infrastructure.<\/p>\n<p>The electric sector is already regulated by FERC, an independent agency under the Energy Department, and the North American Electric Reliability Corp., an international nonprofit corporation. FERC can tell NERC to develop a certain standard to mitigate a threat with input from industry. Once NERC develops new rules, FERC considers whether to implement them. NERC then acts as the enforcer with regular audits and fines.<\/p>\n<p>However, that process can take years from concept to enforcement. And the slow pace of NERC rule-makings has been a common concern among experts as cyberthreats can quickly outpace policy. The cyber incentives plan could help utilities adopt to new threats at a faster pace, experts say.<\/p>\n<div class=\"ad ad--inline_1 \">\n<div class=\"ad__inner\"> <span class=\"screen-reader-text\">Advertisement<\/span> <\/div>\n<\/div>\n<p>\u201cThere\u2019s the carrot and the stick and sometimes the stick is going to have limitations,\u201d said Jason D. Christopher, director of cyber risk at industrial cybersecurity firm Dragos. \u201cIf NERC CIP hasn\u2019t made it mandatory, enforceable, then it\u2019s harder for utilities to get rate recovery and it\u2019s hard for them to necessarily fund the initiative and this provides that flexibility.\u201d<\/p>\n<p>For instance, one of the two pre-qualified investments is <a href=\"https:\/\/www.federalregister.gov\/documents\/2023\/02\/09\/2023-01453\/internal-network-security-monitoring-for-high-and-medium-impact-bulk-electric-system-cyber-systems\" target=\"_blank\" rel=\"noreferrer noopener\">internal network security monitoring<\/a>, which is also a new standard the NERC drafting team is exploring. That proposed rule would require covered utilities to have internal network security monitoring within environments that impact the bulk electric system. However, that rule is still in an early phase and will likely be years before the standard is in place.<\/p>\n<p>\u201cSo, we\u2019re talking about years of a period where there\u2019s not going to be a mandatory regulation in place for internal network security monitoring, which is \u2014 in our [operational technology] context \u2014 how we detect whether or not attackers are in our systems,\u201d said Christopher. \u201cThe incentives order says, \u2018Hey, if you want to do this before it\u2019s mandatory, enforceable we will help you with that and will provide an incentive in those areas.\u201d<\/p>\n<p>So far, only internal network security monitoring and joining an ISAC are on the pre-qualified list for investments. However, FERC plans on allowing for case-by-case incentives where a utility can make a case why the investment would \u201cmaterially improve a utility\u2019s security posture.\u201d<\/p>\n<p>Additionally, FERC would consider additional controls from the National Institute of Standards and Technology catalog of \u201csecurity and privacy controls for information systems and organizations,\u201d NIST\u2019s cybersecurity framework technical subcategory, and specific recommendations from federal agencies like CISA, the FBI, National Security Agency, or DOE.<\/p>\n<div class=\"ad ad--inline_1 \">\n<div class=\"ad__inner\"> <span class=\"screen-reader-text\">Advertisement<\/span> <\/div>\n<\/div>\n<p>Other potential investments have yet to be defined as the commission needs \u201ca high degree of confidence that such items will likely materially improve cybersecurity for all utilities,\u201d according to the rule. FERC will re-evaluate the pre-qualified investment list \u201cfrom time to time.\u201d<\/p>\n<p><\/body> <\/p>\n<footer class=\"single-article__footer\">\n<div class=\"single-article__tags-container\">\n<h4 class=\"single-article__tags-title\">In This Story<\/h4>\n<\/p><\/div>\n<\/footer>\n<p> <\/html><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div class=\"single-article__ads js-single-article-sidebar\">\n<div class=\"ad ad--sidebar js-single-article-sidebar-5 ad--rightrail_1 \">\n<div class=\"ad__inner\"> <span class=\"screen-reader-text\">Advertisement<\/span> <\/div>\n<\/div>\n<div class=\"ad ad--sidebar js-single-article-sidebar-4 ad--rightrail_2 \">\n<div class=\"ad__inner\"> <span class=\"screen-reader-text\">Advertisement<\/span> <\/div>\n<\/div>\n<div class=\"ad ad--sidebar js-single-article-sidebar-3 ad--rightrail_3 \">\n<div class=\"ad__inner\"> <span class=\"screen-reader-text\">Advertisement<\/span> <\/div>\n<\/div><\/div>\n<\/article>\n<div class=\"popular-stories 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