Trystan Casey
Electric companies are vulnerable to cyberattacks due to their complex network of private and public entities, each with differing leadership and goals. With cybercriminals and nation-state bad actors targeting the energy industry, electric companies must navigate multiple overlapping cyber incident reporting requirements. These requirements are driven by various regulatory and policy objectives, including national security, public safety, consumer and shareholder protection, and market transparency. The US Securities and Exchange Commission (SEC) has implemented rules for disclosing cybersecurity attacks and risk management strategies, while Congress passed the Cyber Incident Reporting for Critical Infrastructure Act of 2022, creating a council to harmonize federal incident reporting. This act imposes strict deadlines for reporting cyber incidents and ransom payments. As cyberattacks on critical infrastructure can have cascading effects on transportation, healthcare, and communication sectors, it is crucial for electric companies to effectively report and manage such incidents.
| Characteristics | Values |
|---|---|
| Energy industry reporting regulations | Vast amount of reporting regulations |
| Cyber Incident Reporting for Critical Infrastructure Act of 2022 | Imposes a 72-hour deadline for reporting covered cyber incidents and a 24-hour deadline for ransom payments |
| Cyber Incident Reporting Council (CIRC) | Established to coordinate, deconflict, and harmonize federal incident reporting requirements |
| Artificial Intelligence (AI) solutions | Streamline security operations and improve efficiency in identifying abnormalities and automated responses |
| Smart grids | Enhance energy efficiency and distribution but introduce new cyber vulnerabilities due to their interconnected nature |
| Cyberattacks on energy infrastructure | Can disrupt energy production, transmission, and distribution, leading to blackouts, economic losses, and safety hazards |
| Physical attacks | Include the 2013 attack on the California Pacific Gas & Electric Metcalf substation |
| Cybersecurity workforce | A global deficiency in skilled cybersecurity workers exists, and governmental agencies are seeking workers with cybersecurity skills and experience |
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What You'll Learn
Energy industry reporting regulations
Energy companies are subject to a multitude of reporting regulations, which are driven by various regulatory and policy objectives, including national security, public safety, consumer and shareholder protections, and market transparency. These regulations are imposed at every level of government and include both mandatory and voluntary reporting.
In March 2022, the Cyber Incident Reporting for Critical Infrastructure Act of 2022 (CIRCIA) was signed into law by President Biden. CIRCIA requires owners and operators of critical infrastructure, including energy companies, to report cyber incidents and ransom payments to the Cybersecurity and Infrastructure Security Agency (CISA) within 72 hours of a covered cyber incident and within 24 hours for ransom payments.
To address the complex web of reporting regulations, Congress established the Cyber Incident Reporting Council (CIRC) through CIRCIA. CIRC is tasked with harmonizing federal incident reporting requirements and has assessed numerous in-effect or proposed federal cyber incident reporting requirements.
Additionally, the US Securities and Exchange Commission (SEC) has finalized rules regarding the disclosure of cybersecurity attacks, further adding to the reporting requirements for energy companies. These rules mandate disclosure related to cybersecurity risk management, strategy, governance, and incident reporting.
Furthermore, the Federal Energy Regulatory Commission (FERC), under the Energy Policy Act of 2005, has the authority to approve mandatory cybersecurity reliability standards for the bulk power system. FERC has certified the North American Electric Reliability Corporation (NERC) as the Electric Reliability Organization, which has developed Critical Infrastructure Protection (CIP) cybersecurity reliability standards.
To improve the process of reporting cyber incidents, energy companies are increasingly integrating artificial intelligence (AI) and machine learning into their security operations. This helps streamline incident response activities and enhances the identification of abnormalities and automated responses.
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Incident response planning
Electric companies, like any other business, need to have a comprehensive incident response plan in place to deal with cyber security incidents effectively and efficiently. A cybersecurity incident response plan (CIRP) is a written document that outlines the steps a company should take in the event of a cyber attack, data leak, breach, or other security incident.
Having an incident response plan is crucial for electric companies to mitigate the impact of cyber security incidents and ensure business continuity. Here are some key aspects of incident response planning:
Define the Incident Response Team:
The first step is to establish a dedicated incident response team with clearly defined roles and responsibilities. This team should include individuals with expertise in various fields, such as a team leader, a lead investigator, a communications lead, a legal representative, and a documentation and timeline lead.
Develop a Comprehensive Plan:
The incident response team should work together to create a detailed and comprehensive CIRP. This plan should outline specific procedures to handle different types of cyber security incidents, including phishing attacks, malware infections, data breaches, and network intrusions. The plan should also include strategies to minimize recovery time, protect critical infrastructure, and mitigate cyber security risks.
Employee Training and Awareness:
All employees should be familiar with the CIRP and understand their roles and responsibilities in the event of a cyber security incident. Regular training and awareness programs can help employees identify potential threats, respond appropriately, and minimize the impact of an attack.
Coordination and Communication:
Effective coordination and communication are essential during a cyber security incident. The incident response team should establish clear communication channels, both internally and externally, to ensure a unified response. Regular updates and timely communications to stakeholders, customers, and the public can help manage expectations and maintain trust.
Regulatory Compliance:
Electric companies must comply with relevant cyber security regulations and reporting requirements. In the United States, for example, the Cyber Incident Reporting for Critical Infrastructure Act of 2022 (CIRCIA) mandates that owners and operators of critical infrastructure, including electric companies, report cyber incidents and ransom payments within specified deadlines. Understanding and adhering to such regulations are crucial to avoid legal consequences.
Continuous Improvement:
By implementing a well-structured incident response plan, electric companies can minimize the impact of cyber security incidents, protect critical infrastructure, maintain customer trust, and ensure compliance with regulatory requirements.
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Cyber Incident Reporting Council (CIRC)
The Cyber Incident Reporting Council (CIRC) was established in 2022 to streamline and harmonize federal cyber incident reporting requirements. CIRC is chaired by the DHS Under Secretary for Policy, Robert Silvers, on behalf of the Secretary of Homeland Security.
CIRC's primary objectives are to coordinate, deconflict, and harmonize existing and future federal cyber incident reporting requirements. This involves simplifying the complex web of regulations and reducing the burden on critical infrastructure partners, allowing federal agencies to receive the information they need without creating additional challenges for impacted companies.
In its inaugural report, CIRC analyzed 52 federal cyber incident reporting requirements in effect or proposed across 22 agencies. It found that 45 requirements were currently in effect, with significant duplication for certain entities, particularly due to cross-sector regulatory requirements and voluntary reporting.
To address these issues, CIRC's report, "Harmonization of Cyber Incident Reporting to the Federal Government," made several key recommendations. These included establishing model definitions, timelines, and triggers for reportable incidents, creating a standardized cyber incident reporting form, and exploring the potential for a single reporting web portal. The report also acknowledged situations where incident reporting might be delayed, such as when it could compromise critical infrastructure, national security, or public safety.
CIRC plays a crucial role in improving cybersecurity, reducing the burden on industries, and enabling the federal government to better identify trends in malicious cyber incidents. By advancing common standards for incident reporting, CIRC supports more efficient and effective responses to cyber threats, ultimately enhancing the nation's cyber resilience.
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Cyberattack detection
Energy companies, including electric companies, are subject to multiple overlapping cyber incident reporting requirements, including national security, public safety, consumer and shareholder protections, and market transparency. In the US, the Biden administration passed the Cyber Incident Reporting for Critical Infrastructure Act of 2022 (CIRCIA), which requires owners and operators of critical infrastructure, including energy companies, to report cyber incidents and ransom payments to the Cybersecurity and Infrastructure Security Agency (CISA) within 72 hours of a cyber incident and 24 hours for ransom payments.
Given the complex web of regulations, energy companies must be well-equipped to detect cyberattacks. Some common methods and technologies for detecting cyberattacks include:
- Intrusion detection systems: These systems help cybersecurity experts detect unauthorized transactions within a network by examining exploitation detection, anomaly detection, and hybrid systems.
- Firewalls: These act as a barrier between a trusted internal network and untrusted external networks, helping to protect against unauthorized access.
- Antivirus software: This type of software can detect and remove malicious software (malware) that has been installed on a computer system.
- SIEM (Security Information and Event Management): SIEM enables centralized monitoring and detection of cyberattacks by aggregating and analyzing security events in real time. It can identify patterns indicative of cyber threats, such as unauthorized access attempts, malware infections, or data exfiltration.
- EDR (Endpoint Detection and Response): EDR solutions protect individual endpoints, such as computers, laptops, and mobile devices, from advanced cyber threats. They combine continuous monitoring of endpoint activities with advanced threat detection capabilities to identify and respond to cyber attacks in real time.
- Anomaly detection: This involves monitoring system behavior and user activities to identify deviations from standard patterns that may indicate potential cyber attacks. Machine learning algorithms and statistical analysis are used to establish baseline behavior profiles, and any deviations can trigger alerts for further investigation.
- Signature detection: This method identifies cyber attacks by looking for specific patterns or signatures in the data traffic or code of an attack, such as specific strings of text or sequences of bytes in a file. It relies on a constantly updated database of known attack signatures.
- Heuristic detection: This approach focuses on identifying anomalies and patterns in the behavior of a system or network to detect new or unknown threats.
By employing a combination of these methods and technologies, energy companies can strengthen their cyber defenses and mitigate the threat of security breaches caused by cyberattacks.
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Cybersecurity workforce
Electric companies are subject to a vast number of reporting regulations when it comes to cyber security incidents. In the US, the Biden administration signed the Cyber Incident Reporting for Critical Infrastructure Act of 2022 (CIRCIA) into law, requiring critical infrastructure owners and operators to report cyber incidents and ransom payments to the Cybersecurity and Infrastructure Security Agency (CISA). This act also established a Cyber Incident Reporting Council (CIRC) to coordinate and streamline the complex web of federal incident reporting requirements.
To ensure a reliable and secure supply of electricity, electric cooperatives (co-ops) employ a layered defence strategy to protect their physical and digital assets from various threats, including cyber incidents. Co-ops routinely monitor and manage cyber risks, and cooperation among cooperatives is a vital part of this process. They work together and share cybersecurity information with each other and with industry and government partners.
The National Rural Electric Cooperative Association (NRECA), representing nearly 900 local electric cooperatives, has been awarded funding to launch Project Guardian, an initiative to strengthen the cybersecurity posture of electric co-ops. This project includes cultivating "Cyber Champions", who are responsible for disseminating relevant information and updates to other electric co-ops within their region. These Cyber Champions will establish two-way communication channels and synchronize messaging related to cyberattack reporting and collaboration before, during, and after cyberattacks.
The NRECA is also working with DOE's National Laboratories to catalogue cybersecurity job roles and descriptions, creating standardized job descriptions and career trajectories to help co-ops secure and retain a robust cybersecurity workforce. This workforce development aspect is crucial to ensuring that electric companies have the necessary skills and resources to identify, respond to, and recover from cyber threats and attacks.
Additionally, electric companies plan and exercise emergency response procedures for various situations that could impact their ability to provide electricity. The Electricity Subsector Coordinating Council (ESCC) serves as the principal liaison between the federal government and the electric power sector, coordinating efforts to prepare for national-level incidents or threats to critical infrastructure.
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Frequently asked questions
The Cyber Incident Reporting for Critical Infrastructure Act of 2022 (CIRCIA) is a law that requires owners and operators of critical infrastructure, including electric companies, to report cyber incidents and ransom payments to the Cybersecurity and Infrastructure Security Agency (CISA).
The CIRCIA imposes a 72-hour deadline for reporting covered cyber incidents and a 24-hour deadline for reporting ransom payments.
Entities monitoring for cyberattacks often struggle to filter out irrelevant data, including low-level attacks, false positives, and an overwhelming amount of data. This makes it difficult to identify meaningful and timely insights on potential cyber incidents.
Cyberattacks on electric companies can disrupt energy production, transmission, and distribution, leading to blackouts, economic losses, and potential safety hazards. Attacks on energy infrastructure can have far-reaching impacts, affecting transportation, healthcare, communication, and other sectors that rely on a stable energy supply.
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