1. Commissioner Pamela Witmer Pennsylvania Public Utility Commission
The Commission’s Initiatives with Cybersecurity, Gas Retail Markets, Marcellus, the Regulated Utilities & Beyond
Commissioner Pamela Witmer
Pennsylvania Public Utility Commission
AGA//EEI Beyond the Boardroom October 22, 2013

2. PA PUC Role in Cybersecurity
Ensure Compliance with law and regulation
Conduit of information
Break down silos:
State Federal Industry Sectors Industry Sectors
We are ALL working toward a common goal

3. Two Key elements of the statute:
Public Utility Confidential Security Information Disclosure Protection Act (Act 156 of 2006)
Two Key elements of the statute:
Exempts from disclosure, including Right to
Know Requests, confidential security
information
Penalizes Commission employees for
disclosing covered information

4. PA PUC Utility Security Regulations - 2005
All hazards approach to security planning – events may have impacts in multiple areas
Requires utilities to identify mission critical functions and equipment
Develop plans covering physical security, cybersecurity, emergency response, and continuity of business operations
Submission of a self-certification
Annually review, alter and TEST

5. How does the PA PUC certify compliance with the regulations?
Technical Utility Services
PUC’s Emergency Coordinator may visit
Participate in drills
Ask questions
Do inspections/investigations as needed
Audits – Management Audit Division
Will perform audits on all utilities whose plant in service is valued at not less than $10,000,000
May help in special investigations as needed
Tasked with performing a one-time Emergency Preparedness Audit of all PUC jurisdictional water companies regardless of size

6. What else is the PUC doing in the cyber world?
Released a draft Policy Statement – Critical Infrastructure Interdependency Working Group
Creating a voluntary cybersecurity contact list for our regulated and non- regulated companies
Creating a set of best practices that will be provided to industry partners
Facilitated cybersecurity workshop with US DHS and PA OHS for regulated and non-regulated companies
Started a multi-state Commission working group
Working with the PUC IT folks and the Administration’s OA to review and harden the Commission’s systems
Developing cybersecurity training for Commission staff

7. We are ALL working toward a common goal
Ensure Compliance with law and regulation
Conduit of information
Break down silos:
State Federal Industry Sectors Industry Sectors
We are ALL working toward a common goal

8. What Else? Gas Retail Market Investigation
Pennsylvania has a robust electric retail market with over 2.1 million residential customers shopping
Over 45% of commercial customers shop & over 86% of industrial customers shop
BUT…

9. Gas Retail Market Investigation
The same cannot be said of the retail natural gas market
A dismal 13% of residential customers shop
Barely 23% of commercial customers shop
Not surprisingly we do better on the industrial side with over 61% shopping

10. Gas Retail Market Investigation
The purpose of the investigation is to determine:
Why the gas retail market lags
How does the Commission, working with industry, address the issues raised and are there prudent solutions

11. Gas Retail Market Investigation
Set of directed questions were laid out in the motion (Comments due Dec. 12th)
Based on information received through the comments, we may hold en banc hearings to solicit further input in 2014
Pennsylvania sits atop one of the world’s largest sources of natural gas – we need to use more!

12. What Else? Marcellus Shale
The abundance of Marcellus gas is having a price suppression effect not only for developers – which is not viewed positively
Consumers in Pennsylvania are directly benefitting with Purchased Gas Costs 50% lower than they were in 2008
Columbia – approx. 61% from sources in the Appalachian region
Peoples – approx. 31% of their portfolio is Marcellus
Peoples TWP – approx. 24% of their portfolio is Marcellus
PECO – approx. 20% is Marcellus gas
UGI Companies (UGI, PNG, CPG) – 18%, 53%, 41% respectively
Equitable – 100% locally produced and about 50% is Marcellus

13. Marcellus Shale
The effort to drive more usage by NGDCs has spurred legislation:
SR 29 - Study on costs and attitudes
SB Required NGDCs to develop PUC approved plans for NGDC pipeline extensions
Both efforts sponsored by a senator from northeastern part of the state which is where most of the dry gas is found

14. What Else? Regulated Utilities
PA certificated the first brand new NGDC in over 40 years earlier this year
Leatherstocking is located in the northeastern part of the state
“Local gas for local people” – 100% Marcellus
Gas started flowing September 25th

15. Regulated Utilities
Challenge for staff – How do you devise a tariff when there is no existing infrastructure?
Staff got their creative juices flowing and developed:
“Construction Build-Out Contribution in Aid of Construction Fee”

16. Regulated Utilities
Act 11 of 2012 – Distribution System Improvement Charge (DSIC) is allowing for a more rapid schedule for replacement of cast iron and bare steel pipe
Most NGDCs have come in for a DSIC and submitted an associated Long-Term Infrastructure Improvement Plan
One NGDC – UGI – committed to removing all of their cast iron pipe by 2015 as a result of a settlement with the PUC following a 2011 explosion in Allentown
Internal deadline of 2014 and now operating 4 months ahead of schedule

17. What Else???? One might get the impression that that is enough
One would be wrong

18. What Else????
Advancing legislation to move oversight and authority of the PA One Call program from the Dept. of Labor & Industry to the PUC
Actively working with groups to explore removing electric utilities from the default service role
Seeking legislative authority to assess Natural Gas Suppliers and Electric Generation Suppliers acknowledging the increased oversight that the Commission has with suppliers
Advancing a rulemaking to license natural gas marketers and brokers

19. Suggestions for anything the Commission may have missed?
What Else????
Suggestions for anything the Commission may have missed?