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introducing                               Utility of the Future Series

Smart Grid Security &
Reliability
 What You Need to Know – February, 2012                       John Chowdhury
About the Author
John Chowdhury:
• has been working in the Utility Industry for the last 23 years
• His clients includes CenterPoint, San Diego Gas & Electric, APS, 
Southern California Edison, Vectren, TXU, NIPSCO to name a few 

Objectives of SmarterUtility.com:
• Create a Federated Knowledge Repository to take 
  advantage of knowledge, regardless of where it is housed
• Support multiple channels from a single knowledge 
  repository (Country‐State‐City‐Utility‐Regulator‐Partner
  ‐Vendor‐etc.)
• Knowledge repository is based on the context and intent
• To Leverage Subject Matter Experts to improve your
  success  factors
• Adaptive Knowledge architecture that will support all your
  needs with a single repository and remain flexible to
  change as needed
• Use the Adaptive Knowledge architecture to support
  Transparency of knowledge, Cloud computing, Mobile
  presentation, and Social use of knowledge with 
  no additional changes
It’s about Success, and Knowledge Sharing

                  © 2012 Smarterutility.com | Not to be reproduced without permission   Page: 2
Why you should consider this report
  • Understand current security issues
  • Understand the reliability standards
  • How to develop a sustainable security and 
    reliability process
  • Approach to governance
  • Tips beyond planning

      System vulnerabilities and threats are constantly changing



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Objective of This Research
             Ultimate objectives of Smart Grid is to have 
             interconnected critical power generation and 
             distribution systems (intelligent supply and 
             demand) 


               Defining, designing, implementing and 
               managing Security should consider the 
               overall objectives of Smart Grid 


                                                          A good framework can be start 


        © 2012 Smarterutility.com | Not to be reproduced without permission   Page: 4
Security Concerns for Smart Grid
The security concerns of smart grid are numerous. For this presentation, we are assuming the 
SG/AMI encompasses Generation to Meter capabilities (or a subset of this process).  Thus 
SG/AMI represents an extremely large network that touches many private networks and is 
designed for command and control in order to support FLISR, Volt/Var, Intelligence Switch, 
Remote Disconnect, Demand Response, Billing, and other features. Combined with a lack of 
industry‐accepted security standards, the smart grid represents significant risk to connected 
systems that are not adequately isolated.  Specific security concerns include the following:

    1. Smart meters are highly accessible and therefore require board‐ and chip‐level security 
    in addition to network security
    2. Smart grid protocols vary widely in their inherent security and vulnerabilities
    3. Neighborhood, home, and business LANs can be used both as an ingress to the AMI, 
    and as a target from the AMI
    4. Smart grids are ultimately interconnected with critical power generation and 
    distribution systems  (main focus of this presentation)
    5. Smart grids represent a target to private hackers (for financial gain or service theft) as 
    well as to more sophisticated and serious attackers (for sociopolitical gain or cyber 
    warfare)



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Challenges Faced by Organizations
With rapid development and deployment of AMI and Smart Grid, security issues with 
ever increasing threat profiles, organizations faced with these challenges, 
organizations ask themselves:
    – What are the potential security threats and vulnerabilities? 
    – Are our Smart Grid security initiatives aligned with our business needs?
    – Are our Smart Grid vendors security implementation within their products 
       compliant with Federal Requirements and compatible with ours? 
    – Are our Smart Grid security practices providing adequate assurance to meet 
       regulation or compliance agreements?
    – Are we perceived as a responsive and proactive organization meeting the 
       needs of our stakeholders, our customers, and trading partners?
    – Do our Smart Grid security controls align with industry‐related and 
       internationally accepted practices, standards and guidelines?
    – Are we aware of our security risks and are they being effectively managed?
    – Are we measuring the effectiveness of our Smart Grid security Investments?

                  Bottom Line…..Are We Secure?
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Security and Sustainability ‐ New School Solutions

               Old School                                                New School
     Develops Reliability,                                    Develops comprehensive, 
      Cyber, Control System, IT                                 sustainable, capable, and 
      in separate silos                                         transforming processes
     Cling to safe, existing                                  Recognizes opportunities to 
      processes even when                                       experimentally change 
      they are inadequate                                       processes and seeks to adapt
     Rely on  past solution to 
      solve today’s issues




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Security and Reliability: Standards and Regulations

                             NERC / 
                                                      NIST
                              CIP                    (DOE/DHS)
                              (under FERC)




                                       SECURITY                 ISO‐
                   ISA‐99              THREATS                 27002


                                                     NISPI




        Emerging Technologies in Smart Grid, introducing new 
                  opportunities for security breach 
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NERC CIP Explained
NERC CIP
The NERC CIP reliability standard identifies security measures for protecting critical 
infrastructure with the goal of ensuring the reliability of the bulk power system. Compliance 
is mandatory for any power generation facility, and fines for noncompliance can be steep. 
The CIP reliability standards consist of nine sections, each with its own requirements and 
measures. They are 
CIP‐001‐4—Sabotage Reporting. Requires that all disturbances or unusual occurrences, suspected or determined to be caused by sabotage, 
shall be reported to the appropriate systems, governmental agencies, and regulatory bodies.
CIP‐002‐4—Critical Cyber Asset Identification. Requires the identification and documentation of the Critical Cyber Assets associated with 
the Critical Assets that support the reliable operation of the Bulk Electric System. These Critical Assets are to be identified through the 
application of a risk‐based assessment.
CIP‐003‐4—Security Management Controls. Requires that Responsible Entities have minimum security management controls in place to 
protect Critical Cyber Assets.
CIP‐004‐4—Personnel and Training. Requires that personnel having authorized cyber or authorized unescorted physical access to Critical 
Cyber Assets, including contractors and service vendors, have an appropriate level of personnel risk assessment, training, and security 
awareness.
CIP‐005‐4—Electronic Security Perimeter(s). Requires the identification and protection of the Electronic Security Perimeter(s) inside which 
all Critical Cyber Assets reside, as well as all access points on the perimeter.
CIP‐006‐4—Physical Security of Critical Cyber Assets. Ensures the implementation of a physical security program for the protection of 
Critical Cyber Assets.
CIP‐007‐4—Systems Security Management. Requires Responsible Entities to define methods, processes, and procedures for securing those 
systems determined to be Critical Cyber Assets, as well as the other (noncritical) Cyber Assets within the Electronic Security Perimeter(s).8
CIP‐008‐4—Incident Reporting and Response Planning. Ensures the identification, classification, response, and reporting of Cyber Security 
Incidents related to Critical Cyber Assets.9
CIP‐009‐4—Recovery Plans for Critical Cyber Assets. Ensures that recovery plan(s) are put in place for Critical Cyber Assets and that these 
plans follow established business continuity and disaster recovery techniques and practices



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ISO 27002 Explained
ISO 27002 is a set of security recommendations published by the International Standards 
Organization (ISO) and the International Electrotechnical Commission (IEC), and may be 
referred to as ISO/IEC 27002 or ISO/IEC 27002:2005. ISO 27002 defines “Information 
technology—Security techniques—Code of practice for information security management,” 
and is not specific to industrial network security. ISO standards are widely used internationally 
and can be easily mapped to the recommendations of NIST, NRC, NERC, and others, as they 
consist of functional guidelines for:
     1. Risk assessment 
     2. Security policy and management 
     3. Governance
     4. Asset management 
     5. Personnel security 
     6. Physical and environmental security 
     7. Communications and operations management 
     8. Access control
     9. Asset acquisition, development, and maintenance 
     10. Incident management 
     11. Business continuity management 
     12. Compliance


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ISA‐99 Explained
ISA standard 99 (ISA‐99) is an industrial control security standard created by the International Society of Automation (ISA) to 
protect SCADA and process control systems. ISA‐99 offers varying security recommendations based on the physical and 
logical location of the systems being protected as well as their importance to the reliable operation of the system. In order
to accomplish this, ISA‐99 first attempts to classify functional areas of an industrial system into specific security levels and
then provides recommendations for separating these areas into “zones.” ISA‐99 also defines the interconnectedness of 
zones as well as how to enforce security. For utilities, the most public systems such as Internet or Internet‐facing systems 
within the business LAN would continue level 5, while the rest of the business LAN may map to level 4. Supervisory 
networks (i.e., the SCADA DMZ network) would represent level 3, and so on, with the actual “control system” (the SCADA 
networks, HMI systems, field devices, instrumentation and sensors) at level 0. ISA‐99 organizes security recommendations 
into seven foundational requirements and each foundational requirement consists of multiple system requirements (SRs).
                                                                  SR 1.1—IACS user identification and authentication
                                                                  SR 1.2—Account management
FR1—Access Control (AC)                                           SR 3.1—Communication integrity
                                                                  SR 3.2—Malicious code protection
FR2—Use Control (UC)
                                                                  SR 3.3—Security functionality verification
FR3—Data Integrity (DI)                                           SR 3.4—Software and information integrity
FR4—Data Confidentiality (DC)                                     SR 4.3—Cryptographic key establishment and management
                                                                  SR 5.1—Information flow enforcement
FR5—Restrict Data Flow (RDF)                                      SR 5.2—Application partitioning
FR6—Timely Response to an Event (TRE)                             SR 5.4—Boundary protection
                                                                  SR 7.1—Denial of service protection
FR7—Resource Availability (RA)
                                                                  SR 7.2—Management of network resources
                                                                  SR 7.6—Network and security configuration settings

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NERC Compliance Monitoring Methods
 Initiated by NERC and Regional Entities (Audits)                  Initiated by Entities (Continuing Compliance) 
                                                                   Self‐certification of compliance
 1. Periodic compliance audits 
                                                                   1. Periodic reporting of compliance data and
 2. Post‐event investigations                                         statistics
 3. Random spot‐checking or audits                                 2. Exception reporting of compliance data and
                                                                      statistics (post‐event) 
                                                                   3. Self‐reporting of non‐compliance
                                                                   4. Technical Feasibility Exceptions (TFEs)



 NERC Approach
     1. Completeness                                        8. Looked at NIST and other frameworks for 
     2. Clarity                                             suggestions and guidance
     3. Practicality                                        9. Preserved some existing components of CIP‐
                                                            002 through CIP‐009
     4. Commensurate with BES impact
                                                            10. Requirements adapted from the DHS 
     5. Reduce Administrative Overhead                      Catalog of Control Systems Security (subset of 
     6. Minimize the Need for TFEs                          NIST SP 800‐53)
     7. Leverage Investment in Current Standard             11. Includes directives from FERC Order 706




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NERC Proposed Changes
 NERC Approach: 
 1. Looked at NIST and other frameworks for suggestions and guidance
 2. Preserved some existing components of CIP‐002 through CIP‐009
 3. Requirements adapted from the DHS Catalog of Control Systems Security (subset of NIST SP 800‐53)
 4. Includes directives from FERC Order 706


                                                     BES Cyber 
  • A discrete set of one                             System                        • A group of one or more 
    or more                                                                           BES Facilities (i.e., 
    programmable                                                                      Generation Subsystem, 
    electronic devices                • A Cyber System which if 
                                                                                      Transmission 
    organized for the                   rendered unavailable, 
                                                                                      Subsystem, and Control 
    collection, storage,                degraded, or 
                                                                                      Center) used to 
    processing,                         compromised has the 
                                                                                      generate energy, 
    maintenance, use,                   potential to adversely 
                                                                                      transport energy or 
    sharing,                            impact functions critical to 
                                                                                      ensure the ability to 
    communication,                      the reliable operation of 
                                                                                      generate or transport 
    disposition, or display             the Bulk Electric System.
                                                                                      energy.
    of data.
                                                                                          Bulk Electric System 
           Cyber System                                                               Subsystem (BES Subsystem) 




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Proposed CIP‐010‐1 and CIP‐011‐1

 • Reliability Functions identified in the                                                 Leverage Current 
                                                           Potential Impacts
   standard                                                                                  Investments
 • Responsible Entity (Owner) identifies 
   BES Cyber Systems performing                           • Redesign of the                • CA and CCA 
   Reliability Functions                                    ESP                              Lists
 • BES Cyber Systems are categorized                      • Redesign of the                • Restructure ESP
   (High / Medium / Low ) based on BES                      PSP
   Impact Criteria identified in the                                                       • Restructure PSP
   standard                                               • Additional 
 • Security requirements (controls) are                     Network 
   applied based on BES Cyber System                        Security Devices
   impact categorization                                  • Access Controls
 • All assets will be categorized
                                                          • Monitoring and 
   • Retiring Terms: CA, CCAs, ESP, PSP
                                                            Logging
 Major Differences



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                                                                                                 Page: 14
NIST Interoperability and Cyber Security Standards

NIST Framework and Roadmap for Smart Grid Interoperability Standards v1 (NIST SP‐1108)
Smart Grid interoperability standards should be open meaning the standards should be 
developed and maintained through a collaborative, consensus‐driven process 



                                    Phase III                                    Other Issues to Address
Phase II


Smart Grid Interoperability         Smart Grid Conformity Testing  1. Electromagnetic Disturbances
                                    Framework                      2. Electromagnetic interference
Panel (SGIP) is a public‐
private partnership providing                                                    3. Privacy Issues in the Smart Grid
a permanent organizational                                                       4. Safety
structure to support the 
continuing evolution of the 
framework.




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NISTIR 7628 Guidelines for Smart Grid Cyber Security


Volume I                               Volume II                                     Volume III
Smart Grid Cyber Security              Privacy and the Smart Grid                  Supportive Analyses and 
Strategy, Architecture, and                                                        References
High‐Level Requirements
                                       Chp 5 – Privacy and the Smart 
                                       Grid                                        Chp 6 – Vulnerability Classes 
Chp 1 – Cyber Security 
                                       Four Dimensions:                            Chp 7 – Bottom‐Up Security 
Strategy C, I, A, NR
                                                                                   Analysis of the Smart Grid 
Chp 2 – Logical Architecture           1. Privacy of personal 
                                       information                                 Chp 8 – Research and 
Seven Domains 22 Interface                                                         Development CS in the SG 
Categories                             2. Privacy of the person
                                                                                   Chp 9 – Overview of the 
Chp 3 – High Level Security            3. Privacy of personal                      Standards Review 
Requirements                           behavior
                                                                                   Chp 10 – Key Power System 
Chp 4 – Cryptography and Key           4. Privacy of personal                      Use Cases for Security 
Management                             communications                              Requirements




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Regional Reliability Standards – Major Bodies

                                                        •     ERCOT: Electric Reliability Council of 
                                                              Texas, Inc.
                                                        •     FRCC: Florida Reliability Coordinating 
                                                              Council
                                                        •     MRO: Midwest Reliability Organization
                                                        •     NPCC: Northeast Power Coordinating 
                                                              Council
                                                        •     RFC: Reliability First Corporation
                                                        •     SERC: SERC Reliability Corporation
                                                        •     SPP: Southwest Power Pool, Inc.
                                                        •     WECC: Western Electricity Coordinating 
                                                              Council 



        Emerging Technologies in Smart Grid, introducing new 
                  opportunities for security breach 
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Reliability Considerations

•   Coordination of controls and protection systems
•   Cyber security in planning, design, and operations
•   Ability to maintain voltage and frequency control
•   Disturbance ride‐through (& intelligent reconnection)
•   System inertia – maintaining system stability
•   Modeling harmonics, frequency response, controls
•   Device interconnection standards
•   Increased reliance on distribution‐level assets to meet 
    bulk system reliability requirements




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Reliability Functional Model




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Reliability Standard Categories

             Resource and Demand                                          Modeling, Data, and
BAL          Balancing                                 MOD                Analysis

             Critical Infrastructure
CIP          Protection                                ORG                Organization Certification
                                                                          Personnel Performance,
                                                                          Training, and
COM          Communications                            PER                Qualifications

             Emergency Preparedness
EOP          and Operations                            PRC                Protection and Control
             Facilities Design,
             Connections and
FAC          Maintenance                              TOP                 Transmission Operations

             Interchange Scheduling
INT          and Coordination                          TPL                Transmission Planning
             Interconnection Reliability
             Operations and
IRO          Coordination                             VAR                 Voltage and Reactive




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Functional Entity/Reliability Standard Relation
                                 BAL    CIP   COM     EOP    FAC    INT   IRO    MOD    ORG   PER   PRC    TOP   TPL     VAR
              Standards
              Developer
              Compliance
              Monitor

              Reliability
              Coordinator         X      X      X       X      X     X     X                   X             X
              Regional
              Reliability Org     X      X              X      X     X            X                  X               X
              Planning
              Coordinator                                      X                  X                                  X
              Interchange
              Authority                  X                           X
              Balancing
              Authority           X      X      X       X            X     X                   X     X
              Transmission
              Service Provider           X                           X     X      X                          X
              Transmission
              Operator            X      X      X       X            X     X                   X     X       X            X
              Generator
              Operator            X      X      X       X                  X                         X       X            X
              Transmission
              Owner                      X                     X           X      X                  X
              Generator Owner            X              X      X           X      X                  X                    X
              Transmission
              Planner                                          X                  X                                  X
              Resource
              Provider                                                            X
              Load Serving
              Entity              X      X              X      X           X      X                  X       X
              Purchasing-
              Selling Entity                                         X                                       X            X
              Distribution
              Provider                                         X                                     X       X




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Smart Grid Components


 Devices                             Applications                     Measurement                  Communications
 •Synchrophasors and PMU             •State Estimator and
                                                                      /Data                        •Precision time protocols
 Concentrators                       Contingency Analysis             •Voltage and current angle   • Information  Management
 •Wholesale and customer             •Wide‐area situational           differences                  protocols
 smart meters                        awareness                        •Voltage and current         •Wide‐area networks and
 • Intelligent end devices           •Event detection                 phasors and DLR              communications
 (IEDs)                              •Disturbance location            • Frequency                  • Field area networks and
 •Switched/controllable              •Dynamic Ratings                 • Three‐phase AC voltage     communications
 capacitor banks                     •Pattern recognition             and/or current waveforms     •Premises networks and
 •Digital fault recorders            •Protection systems              •Power system modeling       communications
 • Plug‐in electric vehicles         •Remedial action                 data and real‐time data      •Wireless communications
 •Power quality meters               •Demand Response                 from DLR                     •Substation LANs
 •Direct control load                •Automatic meter Reading         •Meter data common           •Global Positioning System
 management                          •Voltage/reactive control        profiles                     •Encryption
 •DLR for operations                 •Operator training               •Dynamic Line Ratings        •Phasor Management
 • Tension and Sag                   simulator                                                     Networks
 Measurement                         •Data storage and retrieval



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Smart Grid Conceptual Architecture
   Generation                    Transmission                 Substation                       Distribution                Advanced                                                                                DER
   Automation                    Automation                   Automation                       Automation                  Metering                 DR/EV                                EE                      (DG/DS)                Smart City

                                                                                                                            Theft detection      EV Management


                                                                                                                              Meter data 
                  Operator Simulation                                                                                                                  Pricing
                                                                                                                             management

   Renewable load                                                                                                                                                                                                       Microgrid/    Street light monitor 
                                 Wide area monitoring          Asset monitoring                    Grid/Asset monitoring & mapping                         Load disaggregation & targeting
                                                                                                                                                                                                                        Islanding 
      following                                                                                                                                                                                                                            & control

                                   Remedial action                                                                                                Load control &                     Recommendation               DG/DS dispatch        Parking meter 
 Market management
                                      scheme
                                                                     Fault detection & management                           Outage detection
                                                                                                                                                     shaping                                                       optimization            monitor
                                                                                                                                                                                         engine

 Automatic generation                             Load management
                                                                                                  Volt‐VAR                                                          Consumer portal
                                                                                                                                                                                                                                          Public EV 
      control                                                                                    optimization                                                                                                                            Management

                                                                                                                                                                                                                                      Municipal services 
                         SCADA                                                        SCADA                                Meter management                                M&V                                                              apps


                                                                            Network Management SW (including device monitoring and APIs to support the SW components)

                                                             Intra‐SS comms (Enet,            Neighborhood Area                 RF Mesh        WiMAX             PLC        3G/GPRS             RF Tower
                                                               fiber, WiFi, serial)           Networks 


                                                                                                                                                              Home Area Network (2.4 GHz ZigBee, SEP 2.0, PLC, Zwave)                 Emergency services


            Dedicated Circuits (fiber, T1)                                             Backhaul (fiber, WiMAX, cellular)                               Alternative Networks (Broadband, Cellular)



 Generation Control              Phasor measurement           Load tap changer &              Cap Bank controller & 
                                                                                                                             Electric Meters           EVSE                           Smart Appliances              PV/Inverters          Street lights
      Devices                            unit                  voltage regulator                voltage regulator

                                                                                                Recloser/Switch 
     Generation                  Digital fault recorder      Transformer Monitor                                              Gas Meters           Load Switch                                                          Batteries        Parking meters
                                                                                                  controllers


                                                                Circuit breaker                  FCI/line sensor             Water Meters               PCT                                                             Flywheels        Mobile devices


                                                                                                  Low‐voltage                                                          IHD/Gateway                                        PMU
                                                                     RTUs                                                                                                                                                                 Public EVSE
                                                                                              transformer monitor



    Generation                                                              T&D                                                                                               Consumer                                                      Non‐utility




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Security compliance must be tested for each 
Network Gateway
  Backhaul to Office
  typically Fiber, PTP or Cellular Network


                     NAN to Concentrator/Substation
                     typically Radio, PLC or Cellular


                                             Meter/HAN to Concentrator
    WAN                                      typically Radio, Mesh, PLC or Cellular
                         LAN
                                                       NAN                              HAN


  Current offerings have better cyber security, increased situational awareness, lower cost 
                  of ownership, and improved data surfacing capabilities.


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Network Security – Multiple Layers




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A Note About DNP3

DNP3 ‐ Security Concerns
While much attention is given to the IP network, there is no 
authentication or encryption inherent within DNP3 (although there is 
within Secure DNP3). Because of the well‐defined nature of DNP3 
function codes and data types, it then becomes relatively easy to 
manipulate a DNP3 session. Also, while DNP3 does include security 
measures, the added complexity of the protocol increases the chances 
of vulnerability.  There are several known vulnerabilities with DNP3 
that are reported by ICS‐CERT.

Because there are known exploits in the wild and DNP3 is a heavily 
deployed protocol, proper penetration testing and patching of DNP3 
interconnections is recommended.


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The risks are enormous… and internal and external pressure 
continues to mount
Effective management of Smart Grid security risks using a framework can drive 
better business and technology decisions and achieve better results. It can:
 •   Protect electric grid
                                                                                                    Compliance
                                                                         Escalating Costs
 •   Ensure Smart Grid integrity, availability,                                                     Liability

     confidentiality
 •   Reduce compliance liability 
                                                              Unprotected Grid                             Business
 •   Provide performance, compliance and                      and AMI Network               Risks          Liability
     reliability
 •   Enhance productivity and quality
 •   Protect company assets                                              Reduced                    Publicity
                                                                         Effectiveness              Nightmare
 •   Align Smart Grid programs with business 
     objectives
 •   Improve customer service and 
     responsiveness
 •   Leverage risk to support competitive 
     opportunities
 •   Protect the Company reputation
 •   Reduce cost by enhancing efficiency

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Managing the risks to Smart Grid requires a management 
lifecycle
                                                Smart Grid Risk Management Elements


                                                                      Standards &                         Architectures and Standards –
 Management Processes                                                 Architecture                        Standards‐based, business driven security 
 – Business management processes are                                                                      architecture is used to develop and 
 refined and calibrated to efficiently 
                                                                                                          implement an enterprise‐level security 
 integrate security standards and expertise 
                                                                                                          program, operating model – core security 
 throughout the system development 
                                                                                                          program and architecture established
 lifecycle and day‐to‐day operations –
 evolutionary integration of security across 
 the enterprise including AMI and Smart 
 Grid
                                                                   Management  
                                                                    Processes
                                                                   Processes  & Methods
                                                                  Roles & Responsibilities
                                                                     Tools / Enablers
                                                                   Training & Awareness

                                                                                                 Solution 
                                                Compliance 
                                                                                               Implementati
                                                Monitoring
  Compliance / Monitoring                                                                           on
  – Monitoring solutions are established to                                                                   Solution Implementation 
  allow mid‐level and senior management                                                                       – Security for Smart Grid Applications 
  to monitor and report security 
                                                                                                              and Architectures is defined, developed 
  performance effectiveness by measuring 
                                                                                                              and deployed consistent with the 
  key performance indicators – is 
                                                                                                              organization’s desired risk profile  – end‐
  everything ok?
                                                                                                              to‐end transaction integrity achieved




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Qualitative Risk Assessment
Risk Assessment: activities that are carried out to discover, analyze, and describe risks.
Risk assessments may be qualitative, quantitative, or a combination of these.
Internal audit is related to risk assessment; 

Qualitative Risk Assessment: A qualitative risk assessment occurs with a pre‐defined
scope of assets or activities. Assets can, for example, consist of software applications, 
information systems,  CIP equipment, or physical security. Activities may consist of activities 
carried out by an individual, group, or department.

A qualitative risk assessment will typically identify a number of characteristics about an
asset or activity, including:
     • Vulnerabilities. These are weaknesses in design, configuration, documentation,
     procedure, or implementation.
     • Threats. These are potential activities that would, if they occurred, exploit specific
     vulnerabilities.
     • Threat probability. An expression of the likelihood that a specific threat will be carried
     out, usually expressed in a Low‐Medium‐High or simple numeric (1–5 or 1–10) scale.
     • Countermeasures. These are actual or proposed measures that reduce the risk
     associated with vulnerabilities or threats.



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Risk Assessment Methodologies

There are several different approaches and methodologies exist, 
among these approaches are:
• OCTAVE: (Operationally Critical Threat, Asset, and Vulnerability Evaluation): Developed by 
Carnegie Mellon University’s Software Engineering Institute (SEI), OCTAVE is an approach 
where analysts identify assets and their criticality, identify vulnerabilities and threats, 
evaluate risks, and create a protection strategy to reduce risk.
• FRAP: (Facilitated Risk Analysis Process). This is a qualitative risk analysis
methodology that can be used to pre‐screen a subject of analysis as a means to
determine whether a full blown quantitative risk analysis is needed.
• Spanning Tree Analysis: This can be thought of as a visual method for identifying
categories of risks, as well as specific risks, using the metaphor for a tree and its
branches. This approach would be similar to a Mind Map for identifying categories
and specific threats and/or vulnerabilities.
• NIST 800‐30:  Risk Management Guide for Information Technology Systems. This
document describes a formal approach to risk assessment that includes threat and
vulnerability identification, control analysis, impact analysis, and a matrix depiction of
risk determination and control recommendations.


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Steps in Creating Smart Grid Security Governance Process  
   Security and 
   Reliability
   Mission
                Smart Grid Security                  Smart Grid 
                 Vision  & Mission                Security Strategy

                                                     Smart Grid 
                                                 Security Principles

                                             Motivation                    Smart Grid Security 
                   Risk Tolerance                            Implication      Architecture
                                                                                                  Smart Grid Security 
                Legislation and              Motivation                                           Architecture Design 
            Regulatory Compliance                                                                      Principles

                                                                                                                           Smart Grid Security 
                                    Corporate                                                                            Conceptual Architecture
                                     Policies
                                                 Smart Grid Security                                                       Smart Grid Security 
                                                  Policy Framework                                                       Functional Architecture

                                                 Smart Grid Security                                                       Smart Grid Security 
                                                       Policies                                                           Physical Architecture

                                                 Smart Grid Security 
                                                                                                                          Smart Grid Security 
                                                     Standards
                                                                                                                         Operational Processes

                                                 Smart Grid Security 
                                                                                                  Smart Grid Security 
                                                    Management 
                                                                                                       Controls
                                                     Processes




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Security & Reliability Framework

                          Security & Reliability Framework
                                     Smart Grid Security Drivers
                        Reliability,  Risk Tolerance ,  Legislation  &  Regulations

                                  Security and Reliability Management
                                             Strategy
                                     Requirements  &  Planning


                        Security & Reliability Governance

                                                                                  Risk
                                                                               Management
                        Principles
                         Policies                     Smart Grid 
                       Standards                       Security 
                       Guidelines                    Architecture
                       Procedures

                                                      Operations               Awareness  & 
                          Audit                                                  Training
                                                      Monitoring  & 
                       Enforcement
                                                      Management

                                      Measurement  &  Assessment




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Security & Reliability Architecture
 …. provides a mechanism to deliver a consistent approach to Smart Grid security decisions 
 and solutions

 Conceptual          (Models )
  ‐   Security & Reliability Principles                                                                                             Security & Reliability 
  ‐   Security & Reliability Policies                  User Communities                                                                  Operation
                                                                                   Trust Model             Security Zones
  ‐   Security & Reliability Design Objectives         Business Partners                                                              Administration,
                                                                                   Availability       Information Flow Control
                                                         Stakeholders                                                             Monitoring & Compliance
  ‐          /
       Threat Risk Profile
  ‐    Security & Reliability Architecture Principles 



  Functional  ( Components )                                                     Confidentiality
  ‐ Security & Reliability Standards                        Identity           Business Continuity      Intrusion Detection          Logging  & Monitoring
                                                        Authentication         Backup  & Recovery     Network Access Control        Incident Management
  ‐ Security & Reliability Design Decisions                                      Non‐repudiation
                                                         Authorization                                Network Segmentation                 Reporting
  ‐ Security & Reliability Design Patterns  )
                                  (                Credential Management          Trusted Time          Data Management           Security Operation Centre
  ‐ Security & Reliability Component              Role Based Access Control     Secure Storage  &               DMZ              Vulnerability & Configuration 
     Definition                                                                    Destruction                                           Management
                                                                                Physical Security



  Physical  (Nodes )                                                               Encryption              Firewalls /VPNs
  ‐    Technical Operating Standards                      Credentials            Private Keys  &         Switches /  Routers             SIM  & SEM
  ‐   Product Standards                                     Profiles               Certificates          IPS , NIDS  & HIDS           KPIs  & Dashboard
  ‐   Security & Reliability Design Patterns          Authorization Rules       Message Digest               FIPS 140‐2           Vulnerability Assessment
                                                     Credential Repository      Digital Signature              Anti‐Virus             Security Baseline
  ‐   Process Documents                                                                                       URL Filter
                                                                                       NTP
  ‐   Configuration Guidebooks
  ‐   Security & Reliability Node Definitions
                                                           Access                                        AMI Network  &             Security & Reliability 
                                                         Management           Trust  &  Assurance       SG Infrastructure              Management




        2/22/2012                 © 2012 Smarterutility.com | Not to be reproduced without permission                                  Page: 33
Smart Grid Security Assessment

Information Gathering           Review environment
                                Types of systems
                                Timing requirements
                                Locations
                                Security & Reliability requirements
Network Analysis              Gain understanding of network architecture and systems in place
                              Identify Security & Reliability issues related to the network architecture
                              Identify Security & Reliability issues based on observed network
                               components and network traffic
                              Identify interconnections with other networks - Intranets, wireless, dialup
Network Vulnerability         Identify vulnerabilities in devices
Analysis                      Identify vulnerabilities in applications
System Vulnerability          Identify vulnerabilities in devices
Analysis                      Identify system configuration and procedural vulnerabilities such as weak
                                 passwords, virus protection, patch management, system logging, etc.
Application                   Identify vulnerabilities in Smart Grid application components
Vulnerability Analysis
Vulnerability                 Review all data from automated tools and, where possible, check systems
Identification/Validation        to verify identified vulnerabilities




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How does the Smart Grid security program operate? – Define the 
links, start with ISO and ELSSI
                                                     ISO 27002 Information Security Management System
                                 INFORMATION TECHNOLOGY & SECURITY OPERATING MODEL
    Strategic Planning




                                                                      STANDARDIZATION                                                       RESILIENCE




                                                                                                                                                                                          Information Security Program
                                               Normalized
                                                Normalized         Enterprise
                                                                    Enterprise       Approved
                                                                                       Approved
                                                                                       Approved           Compliance
                                                                                                           Compliance
                                                                                                           Compliance             Backup &&
                                                                                                                                   Backup&
                                              Requirements
                                               Requirements       Architecture
                                                                   Architecture       Asset List           Reporting             Restoration      Diversification
                                                                                                                                                 Diversification
                                                                   Architecture      Asset List
                                                                                       Asset List         Reporting               Restoration
                                                                                                                                  Restoration

                                                  Exceptions
                                                   Exceptions       Tools &&
                                                                      Tools          Risk Control
                                                                                      Risk Control          Risk
                                                                                                             Risk                                  Network
                                                                                                                                                    Network
                                                    Policy       Infrastructure                                                  Redundancy
                                                                                                                                  Redundancy
                                                     Policy        Infrastructure      Library
                                                                                        Library
                                                                                        Library            Reporting
                                                                                                           Reporting                               Defense
                                                                                                                                                    Defense




                                                                                                        GOVERNANCE
                                                    Architecture
                                                       Architecture          Policy
                                                                               Policy                  Project/Portfolio
                                                                                                         Project/Portfolio       Third Party
                                                                                                                                   Third Party          Performance
                                                                                                                                                         Performance      Risk Budget
                                                                                                                                                                           Risk Budget
                                                                                                                                                                           Risk Budget
                                Executive
                                 Executive           Definition             Definition                     Review                Management               Metrics &&           &
                                                        Definition            Definition                    Review                Management               Metrics
                                                                                                                                                           Metrics                   &&
                             Steering Committee     Committee               Committee                    Committee                Committee              Incentives        Planning
                                                       Committee
                                                       Committee             Committee                     Committee               Committee              Incentives         Planning
                                                                                                                                                                             Planning




                                     SECURITY MANAGEMENT                                           ACCESS MANAGEMENT                                      OPERATIONS MANAGEMENT
    Delivery




                            Risk Office
                             Risk Office  Policy
                                           Policy   Certification &&
                                                     Certification                                                                                 Change
                                                                                                                                                    Change   Vulnerability
                                                                                                                                                              Vulnerability   Customer
                                                                                                                                                                               Customer
                                                                                       Identity
                                                                                        Identity             Data
                                                                                                             Data            Application
                                                                                                                              Application
                           Management
                            Management Management
                            Management   Management Accreditation
                                                     Accreditation                                                                               Management
                                                                                                                                                  Management Management
                                                                                                                                                              Management      Support
                                                                                                                                                                               Support

                            Training & &
                              Training        Risk
                                               Risk
                                               Risk         Compliance
                                                              Compliance                                                                         Configuration
                                                                                                                                                  Configuration Incident
                                                                                                                                                                  Incident  Systems
                                                                                                                                                                             Systems
                                                                                    Infrastructure
                                                                                      Infrastructure      Personnel
                                                                                                           Personnel
                                                                                                           Personnel          Physical
                                                                                                                               Physical
                                                                                                                               Physical          Management
                            Awareness
                             Awareness
                             Awareness     Management
                                            Management      Management
                                                             Management
                                                             Management                                                                           Management Management
                                                                                                                                                                Management Management
                                                                                                                                                                            Management
                                                                                                                                                                            Management




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A sound Smart Grid security strategy should have proper 
balance and integration with the security governance, 
architecture and operations




   A security strategy
   is supported by                                                   Strategy
   three critical                                        Strategy links security initiatives
                                                          with business and technology
   components …                                                      objectives




                                                                 Architecture provides
                                                                technology standards,
                                                             models and technologies to
                                                            be leveraged by the business


                                                                   Architecture


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Smart Grid Security Process Integration
                                                     Functional-
                                                                              Organization
                                                     Technical
                                                                              Definition and
                                                     Architecture
                                                                              Planning
                                                     Definition                                        Unit And
                                                                                                       Integration
                              Solution                                        Application              Testing
       Requirements           Design                 Process                  Build
                                                                                                                                 Rollout And
       Definition             And Package            Design                   and
                                                                                                                                 Deployment
                              Selection                                       Configuration
                                                                                                       Communications
                                                                                                       And Training
                                                     Detailed                 Infrastructure
                                                     Application              Build And                                                Monitor and
                                                     Design                   Configuration                                            Continuous
                                                                                                                                       Improvement



                                                                                     Develop Security Related Training,
Determine Business
                                                                                     Communications, and Procedures
Risks And Security                       Security Functional-
Requirements
                                         Technical                                   Pre-Deployment Security
                                         Architecture And                            Testing
                                         Application Security Design
                     High Level
                     Security            Design Security Processes
                     Design                                                                                          Establish Users And
                                                                       Design Security Roles And                     Permissions
                                                                       Operational Support
                                                                       Requirements                                  Rollout Security Architecture

                                                                       Build Application And Infrastructure          Deploy Processes, Procedures,
                                                                       Security Components And Ensure                And Organization
                                                                       Secure Configurations




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Suggested Approach
 • Develop a prudent and compliant cyber security program
 • Identify systems considered business critical
 • Identify systems considered critical per NERC standards
 • Perform risk assessment for each category to determine the 
   financial impact of cyber security for each category
 • Develop documentation that meets needs for business critical 
   systems and documentation to meet NERC requirements
         – Be compliant with the NERC standards
         – Also, be prudent in the application of cyber security programs across 
           business and support systems, in addition to operational systems
         – Strive for compliant and prudent cyber security practices




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Cyber Security is On‐going

• System vulnerabilities and threats are constantly changing
   – Any modification, integration, upgrade, or test can impact a system’s 
     cyber vulnerability
   – Vulnerability assessments are only a snap‐shot in time


• There is NO silver bullet
   – No single technology is sufficient to protect control systems
   – Relevant control system security policies and procedures are the best 
     solutions that we have without new technology developments 
   – Without appropriate policies, any technology can be defeated




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Tips beyond Planning

1.  Do a gap analysis between requirements and what is provided by the vendors
2.  Get your vendors to comply with all security requirements
3.  Follow‐up and make sure your vendors are complying with all security 
    requirements
4. Select a system based on SIEM to help manage and do compliance
5. Using multiple layers of defense 
6. Using alternate threat detection mechanisms 
7. Use the full capability of security monitoring and analysis tool
8. Look for either intentionally as an act of sabotage or in innocence and ignorance
9. Only a properly trained and motivated staff can ultimately ensure that the 
    established technical controls will operate successfully 
10. Secure all wireless network
11. Misconfigurations – most vulnerabilities comes form configuration weaknesses



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How to Choose a SIEM Tool

 What is SIEM?
 SIEM is the combination of two different types of products, SIM (Security Information 
 Management) that gathers and creates reports from security logs and SEM (Security 
 Event Manager) that uses event correlation and alerting to help with the analysis of 
 security events. 

 What to look for in a SIEM solution?
 Now that we know what a SIEM is and the resource commitments it requires, we can 
 take a look at various features and characteristics that you should pay attention to when 
 choosing a product:

 Licensing and scalability: Different SIEM vendors license their products differently. Some 
 of the most common licensing modes are:
 1. Number of monitored computers/devices
 2. Number of events per day/hour/minute and log volume size (in MB). If you have a 
     baseline of the logs you wish to monitor, you should already know most (if not all) of 
     this information beforehand.



     2/22/2012     © 2012 Smarterutility.com | Not to be reproduced without permission   Page: 41
If you have any questions…
                                                             Please email or call me:
                                                                    John Chowdhury
                                                                      Phone: 214‐213‐6226
                                                        John.chowdhury@smarterutility.com
                                                             http://www.smarterutility.com.

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introducing                               Utility of the Future Series

Smart Grid Security &
Reliability
 What You Need to Know – February, 2012                       John Chowdhury

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