-11 The primary lesson learned was the need to better address the great magnitude of problems resulting from a lengthy blackout in mid-Winter in a major northern metropolitan area. Energy Emergency Preparedness Seminars DOE conducts an outreach program to improve State energy emergency preparedness. A series of State seminars is part of this outreach program. Typical seminar participants include DOE, State Energy Offices, State Emergency Management offices, local government, and energy firms including electric utilities. DOE'S REACTION TO THE OTA REPORT I would now like to discuss DOE's reaction to the OTA report on "Physical Vulnerability of Electric Systems to National Disasters and Sabotage." -12 Electric systems can be disrupted by many natural and manmade events. Some disruptions, such as equipment failures or the acts of sabotage experienced in the U.S. so far, are routinely handled by electric utilities. Large problems, such as the aftermath of a severe earthquake, may require Federal government coordination or assistance. In this context, DOE welcomed an independent analysis and supported the OTA study when it was in the proposal stage. DOE's preliminary assessment is that it was well done. Now that the study is finished, DOE agrees with OTA's characterization of options to reduce vulnerability: (A) preventing damage, (B) limiting consequences, (C) speeding recovery, and (D) general reduction of vulnerability. Within each category, the individual options identified seem appropriate. In performing the NERC National Electric Security Committee work discussed previously, DOE and NERC had discussed the options identified in the OTA study. However, the OTA study is particularly useful in quantifying the costs of implementing various options. For example, the study estimates that the cost of stockpiling 40 large power transformers would run $100 to $200 million plus storage costs. The cost of installing crash resistant fences and concrete walls around a substation would be about $100,000 to $200,000. Also, DOE agrees with OTA's "Policy Package" categories into which the various options fall: (A) Present Trends, (B) Low-Cost Government Initiatives, and (C) Moderate and Major Investments to Reduce Risks. It should be noted that -13 electric utilities are already implementing the "Present Trends" options and other "quiet" options. The question today is should Government and industry be doing more, given the fact that industry has routinely handled all sabotage and natural disaster events to date. DOE will request that the utility industry, through NERC, review the OTA report released today for the purpose of identifying any additional vulnerability mitigating options that may be feasible. It should be pointed out that DOE has no counterterrorism or law enforcement authorities. Relevant authorities relate primarily to recovery following electric power supply disruptions. In the U.S., well planned and executed multisite sabotage represents a potential threat, but sabotage has not caused a major sustained outage. To date, electric systems and Government have been hesitant to implement options other than those listed in the "Present Trends" category. While the vulnerabilities exist, an existing multisite sabotage threat has not been identified. Accordingly, Government and industry perceive the present risk to be low, not justifying implementation of options beyond "Present Trends." The fundamental challenge is to develop an unclassified statement of credible threats for use by Government and industry in electric system planning, engineering and operating. To the extent that addressing these threats may significantly increase Government or industry costs, it is necessary to determine the basis on which ratepayers, industry and Government would bear these costs and to address the associated regulatory issues. |