High-Impact, Low-Frequency Event Risk to the North American Bulk Power System

High Impact Low Frequency Event Risk North America NERC VeracityEven though the report “High-Impact, Low-Frequency Event Risk to the North American Bulk Power System” from the North American Electric Reliability Corporation (NERC) and the U.S. Department of Energy (DOE) was released in 2010, its content is still valuable in 2014 as the utility sector is well determined to strengthen its electric infrastructure against high-impact events. The NERC and DOE have given guidelines which are slowly being implemented.

All the quotes are from the report.The full report can be accessed here.

Do not miss our resources blog section to find other relevant reports from the electric utility industry: Veracity Resources Utilities ReportsDefinition

High-Impact, Low-Frequency (HILF) events are “coordinated cyber, physical […] attacks, […] nuclear weapon, and major natural disasters” such as hurricanes, earthquakes, tsunami, pandemics and geomagnetic disturbances.

Their frequency is extremely low, but they have an impact at the regional, national or international level. Power generation, transmission and distribution, as well as health, transportation and other key sectors can easily be paralyzed.

The U.S. Department of Energy and the North American Electric Reliability Corporation have made grid resiliency a priority, with a focus on large equipment, such as power transformers.

“Today, the government and industry must recommit themselves to supporting one another to enhance the protection, resiliency, and response capabilities for the North American bulk power system in the face of these rare events.”

Mitigating such risks requires balanced investments between protection of the facilities, restoration plans and resilience efforts, as well as simply raising utilities’, industry partners’ and end users’ awareness.

Common Characteristics

  • Can occur very quickly with little warning;
  • Cause widespread impact to the sector (human and/or physical);
  • Originate from external sources outside of control;
  • Limits the extent of proactive measure;
  • Operational experience is still little.


3 types of High-Impact Low-Frequency risks

  • Coordinated Attack Risk such as cyber and/or physical attack: “The specific concern with respect to these threats is the targeting of multiple key nodes on the system that, if damaged, destroyed, or interrupted in a coordinated fashion, could bring the system outside the protection provided by traditional planning and operating criteria.” Thus the NERC has developed Critical Infrastructure Protection standards.Coordinated Attack Risk Utility
  • Pandemic Risk: “The principal vulnerability with respect to a pandemic is the loss of staff critical to operating the electric power system.” The lack of qualified personnel would slow down operations and increase risks of failure. But the impact on the power supply is recognized as minor, as the resolution of this type of issues mainly relies on health authorities.
  • Geomagnetic/Electromagnetic Disturbances: caused by the solar weather, they can affect the transmission lines and large transformers. Certain areas are more affected than others. (MAP) The 1989 blackout of Hydro Québec was due to such a electromagnetic disturbance. This event led to new operational procedures for utilities whose substations are located in areas at risk.

Geomagnetic Disturbances***


The North American Electric Reliability Corporation and the U.S. Department of Energy have given guidelines to face such events:

Coordinated Attack Risk
  • Collaboration between U.S. and Canada with direct lines of communication and coordination with the electric sector.
  • Use scenario-based models for analysis, plans and procedures for restoration
  • Evaluation of the efficacy of current bulk power system planning and practices to improve the efficacy.
  • Implementation of restoration and recovery plans.
  • Increase security clearances.
  • Input from stakeholders, government and sector partners to identify areas of improvement and additional costs.
  • Improve the current spare equipment efforts for scarce/long-procurement-cycle assets, identification of inventory of critical spares.
  • Optimize the supply chain in terms of high-impact system components.
  • Develop a lexicon of cyber and physical attack risk terms to ensure clear communication
  • Encourage the development of technological and software solutions for network security tools.
Pandemic RiskPandemic Risks
  • Incorporate previous pandemic crisis (A/H1N1) into current pandemic and business continuity plans.
  • Collaboration between NERC, Federal Electric Reliability Corporation (FERC) and state regulators through the National Association of Regulatory Utility Commissioners (NARUC), and the Federal Emergency Management Agency (FEMA) and all other involved entities.
  • Improve timeliness, granularity and quality of metrics used to measure and report on the emergence and spread of pandemic vectors.
  • Give U.S. and Canada health, transportation and utility services employees from critical sectors priority to access vaccines and travel.
Geomagnetic Disturbances, High Altitude Electromagnetic Pulse Events, Intentional Electromagnetic Interference ThreatsGeomagnetic Risks
  • Assess electromagnetic threats and initiate restoration plans.
  • Support industry efforts.
  • Design a road map for long-term research.



This report brings up the following questions:

  • How much risk is the private sector willing to accept?
  • How much risk is the public sector willing to accept?
  • How much are consumers (or society at large) willing to pay to reduce this risk?
  • Who makes the determination for society’s tolerance for risk and the cost of employing protections?
  • How should the costs of employing protections be paid for?
  • How is damage measured: cost to replace damaged equipment, number of people-hours without power, number of other critical infrastructure nodes affected?
  • Where are interdependencies most critical?


Go further

The following blog posts can help you learn more about critical equipment and grid resilience:

Equipment Criticality

Transformers: An Essential Link of the Electrical Grid

The Transformer Problem

Key points from “Economic Benefits of Increasing Electric Grid Resilience to Weather Outages”

9 Key Facts from the “Large Power Transformers and the U.S. Electric Grid” Study

Critical Spares Infographic

Your Veracity Connect Newsletter – Volume 6


Learn more about our Critical Spares Management Solution for Utilities: Veracity Connect, collaborative platformMake electrical equipment procurement easy and efficient. Locate a matching power transformer before a failure occurs, maximize your mutual aid efforts!

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Veracity Is Part of the CDMN’s Outbound Soft Landing Program

The Canadian Digital Media Network (CDMN), a federal Centre of Excellence in Commercialization and Research, is dedicated to establishing Canada as a world leader in digital media (ICT + mobile) by creating and enabling connections and collaboration between entrepreneurs, companies, research institutes, government and intermediary organizations across the country. CDMN helps bring more digital media solutions to market to create more companies, jobs and wealth in Canada.
With a worldwide network, CDMN guide startup companies target new markets.

Veracity Asset Management Group (www.veracityamg.com) participates in the Canadian Digital Media Network’s Outbound Soft-Landing Fall 2014 Program to help forge the partnerships and connections with utilities it needs for its expansion across North America. Georgia, Alabama, Florida and North Carolina are some of the States targeted by Veracity through its Soft-Landing trip.

CDMN Press Release

Outbound Soft Landing program announces fall cohort, with new support from TD

By Emmett O’Kane on Sep 26, 2014 / Categories: CDMN News, Featured, Soft LandingFifteen Canadian companies have been selected to participate in the Canadian Digital Media Network’s outbound Soft Landing program this fall, and they’ll have a new supporter in their corner.TD Bank Group, North America’s sixth largest bank by branches, has partnered with the CDMN to help small- to medium-sized enterprises pursue growth in international markets.“‎TD is very pleased to be supporting the Canadian Digital Media Network Outbound Soft Landing program, which provides funding to promising startups selected by the CDMN, in order to promote their growth opportunities abroad,” said Jeff Martin, SVP & CIO Digital Channels Technology Solutions, TD Bank Group.Companies selected will receive up to $4,000 towards travel costs and a free working space at partnered locations abroad for up to three months, to help them expand into new markets and develop relationships with key contacts in targeted economies.The Fall 2014 companies are:

Plasticity Labs

Landing: U.S. (Las Vegas)

Plasticity is building the happiest workforces every day, through an integrated mobile and web app that changes how organizations measure, manage and stimulate positive workplace culture. Its mission is to improve the experience of life, and work, for millions of people and the organizations where they work. http://www.plasticitylabs.com/

Maerospace Corp.

Landing: India

Maerospace’s mission is to improve the world through the mastery of data. Working with some of the world’s most advanced companies and nations, Maerospace turns complex data into actionable information to make missions safer, borders more secure, environmental responses more effective and companies more profitable. http://www.maerospace.com/

Slimcut Media

Landing: U.S. (New York City)

Slimcut Media helps digital publishers increase their revenue while engaging their audiences. With offices in Toronto and Paris, their platform combines a reward program, targeted video advertising and a payment system to build a symbiotic relationship between publishers and their audiences. http://www.slimcutmedia.com/


Landing: Australia

blueRover provides a unique and advanced technology platform that offers businesses employing machine-to-machine (M2M) applications access to infinite, data-driven intelligence about their assets. With blueRover, customers can monitor, track and react to real-time data about their assets and resources from anywhere around the globe. http://www.bluerover.ca/


Landing: U.S. (Orlando; Dallas; Charlotte)

Bonfire prides itself on making the easiest, simplest and friendliest way for purchasers to accept and evaluate supplier proposals, tenders, quotes as part of RFx (request for information, proposal or quotation), bid projects and more. The Waterloo-based company is already trusted with over $1 billion in procurement projects with much more to come. http://www.gobonfire.com/

I Think Security

Landing: Hong Kong

I Think Security Ltd. is an award-winning R&D security lab that provides secure solutions for data, cloud and mobile. Supported by sophisticated analytics and control, and leveraging existing local infrastructure, I Think Security Ltd. products are backed by a team of security professionals experienced in designing and implementing the highest in advanced security. Its technologies are used in data protection to prevent cyber attacks, corporate espionage and insider threats. http://www.ithinksecurity.com/

Analyze Re Inc.

Landing: London, CTA@UK

Analyze Re provides pricing and risk management software for the reinsurance industry. Their innovative SaaS platform employs high-performance computing and big data analysis to unlock a holistic view of risk, enabling reinsurers to make smarter decisions, minimize their risk and maximize their profits in real time. http://www.analyzere.com/

REfficient Inc.

Landing: Mexico

REfficient.com is a matchmaking site connecting “who has what” and “who is looking for what.” Its online marketplace allows companies to buy quality Telecom, A/V and IT equipment at significant discounts from sustainable sources. REfficient shows customers that they can drive financial results while doing something good for the environment. http://www.refficient.com/

ProjectSpeaker Inc.

Landing: London; Munich; Venice

ProjectSpeaker turns event planners into event heroes. Their platform is a curated event planner resource of the world’s leading speakers, speakers bureaus and event suppliers that allows planners to be more efficient and successful in finding the best speakers for their events. http://www.projectspeaker.com/

MetricAid Inc.

Landing: U.S. (Philadelphia)

MetricAid provides browser-based technology, analysis and consultation services to improve hospital emergency department efficiency. Its goal is to improve the satisfaction of the patient, the experience of the physician and the effectiveness of the emergency department. http://www.metricaid.com/

District M Inc.

Landing: U.S. (New York City; Florida)

District M is a digital technology company that specializes in unique campaign management. Its exclusive and proprietary advertising technology segments data and user profiles, giving clients the ability to reach diverse and specific audiences at the right time. http://www.districtm.ca/

Veracity Asset Management Group

Landing: U.S (Georgia; Florida; Alabama; North Carolina)

Veracity Asset Management Group works with organizations across various industries to develop policies and procedures to maximize asset utilization. Veracity provides software solutions and services that enable its customers to purchase, manage and dispose of surplus assets, allowing organizations to focus on core business issues. http://www.veracityamg.com/


Landing: U.S. (California)

LemonFree.com is a fresh and simple approach to shopping for cars online. Launched in 2007 by three Winnipeg entrepreneurs, LemonFree.com is an online automotive shopping and research marketplace with the mission to become the most trusted place to shop for a car. http://www.lemonfree.com/

INETCO Systems Ltd.

Landing: London, CTA@UK

INETCO Systems offers real-time transaction monitoring and analytics software that isolates IT performance issues affecting ATM, POS, Mobile Banking and Internet Banking transactions. In addition to software, INETCO offers consulting in APM, Business Transaction Management analytics reporting, and configuration services. http://www.inetco.com/

Energy Aware Technology Inc.

Landing: U.S. (Silicon Valley)

Founded in 2005, Energy Aware Technology is a leading developer of demand management solutions for utilities and aims to improve awareness of the ways we use energy, enabling us to reduce waste, save money and become more sustainable. By analyzing energy consumption data and displaying it in a concise, useful manner, people more fully understand their energy use and how to save money. This is how Energy Aware is creating smarter, more sustainable homes. http://www.energy-aware.com/

© 2014 CDMN. All rights reserved. Contact CDMN at info@cdmn.ca for permission to reproduce in any way.”

Learn more about our Critical Spares Management Solution for Utilities: Veracity Connect, collaborative platform

Don’t miss a chance to get in touch with us by calling us at 866-694-1252 or info@veracityamg.com. Find out how we can help your utility company source critical spares.

Visit our website veracityamg.com, our blog http://wordpress.veracityamg.com and our social media platform:

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Unlock the POWER of Collaboration with Veracity Connect

Unlock the POWER of Collaboration

Enhancements in efficiency and greater economies of scale can be achieved by effective collaboration among Utilities, OEM’s, Resellers and Industry Partners. Veracity Connect gives you the tools you need to achieve the benefits of collaboration and virtual horizontal integration.

Veracity Connect, collaborative platform

The benefits are numerous:

  •   Immediate access to Critical Spares and preplanned Logistics
  •   Connect to Utility Members
  •   Connect to supply chain partners to efficiently source equipment and parts
  •   Get accurate reporting and understand your critical assets

Source critical spares through Veracity Connect

For electric power utilities, transformers are one of the most vital components of the network. In the event of network failure, access to spare transformers is a key element in recovery efforts. In fact, the marketplace for used, reconditioned, rewound, remanufactured and new surplus transformers exists because of several critical challenges to the market for new equipment. The most critical challenge is availability. Many transformers are not available from stock and may take weeks to deliver. Large transformers may take months. Generation, Transmission and Distribution transformers come in so many different sizes, voltages, and physical configurations that there is seldom immediate stock. The sudden need for a transformer typically has drastic consequences if an immediate replacement cannot be found.

Veracity Connect consolidates the spare inventories of utilities, brokers, resellers, OEM’s and industrial end users, allowing you to access critical spares from across North America. Veracity Connect allows you to quickly locate the equipment you need, help reduce surplus stock and identify replacements for no longer manufactured items.

Veracity Connect allows members to leverage asset intelligence to ensure reliability, mitigate risks, and offset capital expenditures.

Contact us at 1-866-694-1252 and learn more about how Veracity Connect can help you manage Critical Spares!

 Also check our website: http://www.veracityamg.com/veracity-connect

Veracity to Present Tag Luncheon

On Friday, November 22nd, join the Sault Ste. Marie Innovation Centre, along with the founders of Veracity Asset Management Group, for a lunchtime discussion on Investment Recovery/Surplus Management and why it is a critical link in the supply chain. Veracity will outline the key elements of an effective program and discuss the numerous immediate benefits that Investment Recovery (IR) can provide.

Veracity will also be introducing the Critical Spares Network, a new cloud based collaboration service offering that will allow Utilities to share critical asset, equipment and inventory information.

Visit the following link for more details – http://bit.ly/18mAPJN

Corporate Sustainability – A New Perspective

After reading several articles on critical success factors for sustainable purchasing, the focus is always on the purchase. There is a huge gap in most large organizations that fails to understand the importance of surplus equipment, supplies and inventories. In many instances, the corporation may be able to avoid the purchase as it potentially has surplus items in one location that can be used at another? A key aspect in sustainability is to change the mind-set of buyers regarding used assets or surplus. With support of senior management, procurement can play a key role in ensuring that surplus items are not already available within the company, before committing to the new purchase.

This role called Investment Recovery or Surplus Management can be created within the company or contracted out to a company like Veracity who only specializes in surplus management. The key function is to help Procurement understand where surplus items may be within the organization and to redeploy those items into other departments and functional areas. Items that cannot be reused are then put through a rigid hierarchical process to maximize the value of the surplus. Not only is this a cost avoidance strategy, it is a success factor in corporate sustainability!

The Investment Recovery Association and Certified Managers of Investment Recovery(CMIR) work to maximize the value of surplus within an organization. Assets or surplus that is no longer required can then be traded in, sold, donated or recycled. The ultimate goal is to keep assets and inventories out of landfills and into hands of those who will re-purpose the item(s) and use it!.

Often people think about the cost when they think about environmental sustainability. Adding in the Investment Recovery framework can help shift that idea and show them it is possible to have profitable sustainability! Investment Recovery is often referred to as the missing link in supply chain and not only will it create immediate payback to the company but it also reduces a company’s environmental liability exposure risk.

To learn more about investment recovery, please contact Veracity Asset Management Group. Also be sure to check us out on Linkedin, Facebook and Twitter.

Veracity Asset Management Group