1. WebCast 5 May 2003 Proposed NERC Cyber Security Standard Presentation to IT Standing Committee Stuart Brindley, IMO May 26, 2003

2. AGENDA Why A Cyber Security Standard Is Needed Why Initiate An Urgent Action Standard Scope Of The Proposed Cyber Security Standard What Is Not In The Scope Compliance The Future For The Cyber Security Standard Q&A

3. Why A Cyber Security Standard Is Needed Due Diligence Responsibility to Stakeholders Responsibility to Interdependent Critical Infrastructures Industry Defined Practices If the Electricity Sector is not able to self- regulate, the federal government will regulate for us.

4. Why Initiate An Urgent Action Standard There has been a rapid increase in the number of reported cyber security incidents January 2003 SQL Slammer Worm Impacted Electricity Sector organizations March 2003 Federal Advisory regarding foreign attack scenarios Weakest Link Principle - The bulk electric system is highly inter- connected, a vulnerability for one can be a vulnerability for all

5. Why Initiate An Urgent Action Standard “A spectrum of malicious actors can and do conduct attacks against our critical information infrastructures. Of primary concern is the threat of organized cyber attacks capable of causing debilitating disruption to our Nation’s critical infrastructures, economy, or national security.” The National Strategy to Secure Cyberspace, The President’s Critical Infrastructure Protection Board, February 2003

6. Scope Of The Proposed Standard Applies to Reliability Authority, Balancing Authority, Interchange Authority, Transmission Service Provider, Transmission Operator, Generator, or Load-Serving Entity functions that manage Critical Cyber Assets. Critical Cyber Assets are those computers, including software and data, and communication networks that support, operate, or otherwise interact with the bulk electric system operations.

7. Scope Of The Proposed Standard Requires: Establishing a Cyber Security Program Policy and Procedures Identify Accountable Management Identifying/Documenting Critical Cyber Assets Defining/Implementing Electronic – Security Perimeters Access Controls Monitoring Controls

8. Scope Of The Proposed Standard Requires: (Cont.) Defining/Implementing Physical – Security Perimeters Access Controls Monitoring Controls Defining/Implementing Personnel Authorization Controls Security Awareness Training Information Protection Controls

9. Scope Of The Proposed Standard Requires: (Cont.) Cyber System Management Controls Cyber System Test Procedures Incident Response and Reporting for Cyber and Physical Security Recovery Planning

10. What Is Not In The Scope The definition of Critical Cyber Assets currently does not include process control systems, distributed control systems, or electronic relays installed in generating stations, switching stations and substations. Does not include cyber assets that otherwise support, operate, or interact with market operations.

11. Compliance Compliance is managed by the Regions There will be a self-certification process No financial penalties – letters only Acknowledgement of partial compliance acceptable for January 2004 Full compliance by January 2005

12. The Future Current review period ends May 11, 23:59 EDT Voting runs from May 12, 00:01 EDT to May 21, 23:59 EDT Requires 2/3 majority to pass If passed, it will be submitted to Board of Trustees at their June 10 meeting The Urgent Action standard expires after one year – a one year extension is possible

13. The Future Formal process to develop the permanent standard was initiated by CIPAG on May 2, 2003. Development will take at least a year The permanent standard will have two separate review and comment cycles – One to refine/finalize SAR requirements One to refine/finalize drafted standard

14. What does this Mean in the Ontario Market ? Components required to support the real-time transfer of RTU system management information between generators and transmitters, and grid operations Critical SCADA systems used to control certain generating and transmission stations Generation dispatch communications Infrastructure components that support functionality in 1, 2, and 3, above (Internet connections, frame relay networks, etc.)

15. What does this Mean in the Ontario Market ?