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Third Quarter Letter to Members

Brad Cox
Generator and/or Power Marketer Sector and Board Chair
Sara Patrick
MRO President and CEO

From the Board Chair and President and CEO

Dear Members and Stakeholders:

The MRO Board of Directors held its third quarter meetings last week on September 21-22, 2022. The meetings were held in hybrid format with some attendees participating in person and some remotely. Staff continues to improve the hybrid meeting practices that are a regular part of our now normal. The meeting discussions—which focused on efforts of the ERO Enterprise, MRO, and industry to address reliability and security risks to the North American bulk power system—were engaging, participatory, and valuable.  

The board’s Organizational Group Oversight Committee (OGOC) met on September 21 to hear reports from MRO’s three advisory councils on work the councils are doing to support MRO’s strategic plan. All three councils (Reliability, Security, and Compliance Monitoring and Enforcement Program) have conducted a number of outreach events this year to raise awareness of risk and promote best practices across the region. The Security Advisory Council has its annual security conference and training scheduled in early October and with agenda topics ranging from insider threat programs, cyber attack emulation, supervisory control and data acquisition security in remote areas, and geopolitical tensions, this promises to be yet another engaging and informative event. The OGOC also held a closed roundtable discussion on the benefits and challenges associated with variable transmission line ratings and FERC Order 881. Leadership from MRO’s three advisory councils were invited to attend the roundtable to provide their insights and consider ways in which the councils might help address facility rating challenges and opportunities.

The theme of addressing risk continued at the board meetings on September 22, with focused discussions on cyber security in both the closed and open board sessions. During closed session, the board heard a report on enhancements to MRO’s Insider Threat Program and other actions to strengthen the organization’s overall security posture. Phil Schenkenberg, a privacy and data security expert and partner at Taft Law, provided a presentation on the board’s fiduciary and governance responsibilities related to cyber security oversight and reviewed best practices in this area.

At the open board meeting, we were fortunate to be joined by NERC Board of Trustees Chair Ken DeFontes and Dragos CEO and co-founder Robert Lee. DeFontes spoke to the important work the ERO Enterprise is doing to address the many complex challenges facing the electricity industry. The NERC budget that is pending FERC approval provides significant investment in people and technology to enable continued progress in these critical risk areas. As we look ahead to future challenges, DeFontes noted that collective collaboration will be required and is the true strength of the ERO Enterprise.

Lee provided very thought-provoking and insightful comments on the importance of securing Operational Technology (OT) given rapid increases in connectivity and digitization of assets. He warned that the capabilities of adversaries are also increasing at a rapid pace further underscoring the need for increased investment in OT security. Lee encouraged leaders in the electricity sector to align security investments with risk and expand capabilities to perform successful root cause analysis and scenario planning for both IT and OT infrastructure.

The need to remain vigilant to an ever-evolving risk landscape was the theme of the third quarter board meetings. It was also recognized that the North American bulk power system remains one of the most reliable systems in the world. Despite warnings of potential energy shortfalls in the MRO region, the system remained reliable during what proved to be a very challenging summer season. Two of the four regional planning coordinators exceeded peak demand after several days of record-setting electricity use and high temperatures. Reliability is not happenstance – it is directly attributed to the hard work and dedication of system planners and operators. Thank you.

In addition to hearing board committee reports, the board also approved a resolution to establish a money fund sweep account to generate earnings on the unused portion of MRO’s static operating reserve cash balances.

You can read more about the discussions and actions taken at the second quarter board meetings in the full meeting minutes, which will be available on MRO’s website calendar soon. Future board meetings are available on MRO’s website calendar and the board encourages you to attend.