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NERC-CIP Compliance and Emerging Technologies – Robotics & Automation News

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What do you think our future is going to look like? Most of us will say AI and cloud computing. It is like a forest fire, spreading rapidly in our world.

Ten or twenty years ago, you wouldn’t have heard the term “work-from-home”, but now most companies all over the world include WFH as the culture.

Yeah, in a sense it is doing a favor. But where there is a yin, there will be a yang, right?

The rise of technology comes with some serious issues like the security of the critical assets for the said technology. Without addressing this, we can probably safely say that the bad things from technology can outweigh the good ones.

Obviously, we cannot let it happen. And that is the NERC-CIP strikes. NERC, AKA North American Electric Reliability Corporation (which we will see about in a bit) makes sure that the heavy power systems (like the ones used in cloud computing) are working as intended.

Now, you know NERC is like a guardian, but how does it work? Let us take a closer look.

The Significance of NERC-CIP Standards in Cloud Computing

Cloud computing has made a big impact on many industries by giving easy access to computer stuff, storage, and apps through the Internet.

A report from MarketsandMarkets says that the global cloud compliance market is predicted to grow from $1.5 billion in 2020 to $8.0 billion by 2025.

Even though the cloud has great advantages like being able to scale up, saving money, getting things up quickly, and making maintenance simple, it also brings new problems when it comes to following rules, especially for fields like electric utilities.

This is where the NERC-CIP standards play a big role. It basically looks after the security of important online assets, which is really important.

Microsoft’s Azure and Azure Government Cloud for Electric Utilities

Microsoft provides two separate cloud environments tailored for electric utilities and registered entities: Azure and Azure Government.

Both of these platforms use logical isolation to separate the applications and data of different customers, ensuring that each customer’s data and applications remain inaccessible to others.

This approach enables the benefits of scalability and cost-efficiency offered by multi-tenant cloud services, all while maintaining stringent safeguards against unauthorized access.

Additionally, Azure Government offers a contractual commitment to store customer data exclusively within the United States and restricts access to systems that handle customer data to individuals who have been screened and approved as US persons.

The Evolution of NERC-CIP Standards

The North American Electric Reliability Corporation (NERC) is a nonprofit regulatory body dedicated to ensuring the dependability of the bulk power system in North America.

NERC supervises the entities – users, owners, and operators – responsible for this system, which serves nearly 400 million people across the continent.

The initial NERC CIP cybersecurity standards gained approval from the Federal Energy Regulatory Commission (FERC) in the United States back in 2007.

Since then, these CIP standards have continually evolved through subsequent revisions, incorporating insights from NERC-registered entities. This iterative process aims to streamline audits while simultaneously enhancing the security of critical infrastructure.

These rigorous standards lay the foundation of regulations for electric utilities and operators of bulk power systems who seek to leverage the advantages of emerging technologies.

A comprehensive understanding of these standards is pivotal for striking the right balance between innovation and regulatory compliance.

How Azure Cloud Platforms Ensure NERC-CIP Compliance

Both Azure and Azure governments have implemented thorough security controls and measures, aligning with Microsoft’s strong commitment to safeguarding customer data and preventing security breaches.

Key security features encompass:

  • Logical Isolation – Customer data and applications are logically separated from those of other users through partitioning and access control mechanisms, ensuring unauthorized access is prevented.
  • Encryption – Data encryption is enabled by default for both data at rest and data in transit. Customer data stored on Azure is encrypted using cryptographic modules validated under the FIPS 140-2 standard.
  • Network Security – Rigorous physical and logical controls ensure that Azure production networks are segregated from Microsoft’s corporate networks. Stringent traffic flow policies govern how resources communicate with each other.
  • High-Quality Data Centers – Azure data centers are equipped with advanced physical security measures, including continuous video surveillance, multi-factor access control, and alarms for security breaches.
  • Compliance Certifications – Azure adheres to essential standards like SOC 1 Type 2, SOC 2 Type 2, PCI DSS, HIPAA, FedRAMP, DOD DISA, and ISO 27001.

These robust security measures empower electric utilities to leverage the innovative capabilities of Azure while fulfilling their NERC-CIP responsibilities.

Categorizing NERC-CIP Data and Workloads

In order to determine whether NERC-CIP standards apply to data and workloads hosted on cloud platforms, it’s essential to grasp the concept of the Bulk Electric System (BES) Cyber System.

The BES pertains to the collective network of electrical generation resources, transmission lines, interconnections, and related elements operating as a synchronized whole.

NERC emphasizes that accurately defining the BES is crucial to pinpoint critical cyber assets that necessitate compliance with NERC CIP standards.

NERC furnishes the following pertinent definitions to aid in characterizing NERC-CIP assets:

  • BES Cyber Asset (BCA) – Refers to programmable electronic devices and communication networks linked with BES operations.
  • BES Cyber System (BCS) – Encompasses one or more BES Cyber Assets grouped logically to perform reliability tasks for a BES facility.
  • BES Reliability Operating Services (ROS) – Denotes services responsible for ensuring the real-time dependable operation of the interconnected BES.

Registered entities are mandated to review these definitions and classify their data and workloads as either BES Cyber Assets or otherwise. Those meeting the criteria for BCAs must comply with relevant NERC-CIP requirements when transitioning to cloud hosting.

Ensuring NERC-CIP Compliance in the Cloud

While migrating BES Cyber Assets to the cloud can yield substantial advantages, registered entities must ensure compliance through several strategies:

  • Understand the Shared Responsibility Model: Cloud computing follows a shared responsibility model. The cloud service provider (Microsoft) manages the security of the cloud, while the customer (registered entity) is accountable for the security of the cloud. Registered entities must uphold NERC-CIP obligations for their data and workloads on Azure.
  • Conduct Third-Party Audits: Azure is subject to rigorous third-party audits such as SOC 1/2 and ISO 27001 to validate its security controls. Registered entities can assess these audit reports to better understand Azure’s security measures.
  • Collaborate During NERC Audits: Microsoft supports registered entities by offering audit resources and documentation that showcase Azure’s alignment with standards like ensuring logical isolation of customer data.

By employing these strategies, registered entities can confidently manage the migration of BES Cyber Assets to the cloud while maintaining compliance with NERC-CIP requirements.

Cloud Security Alliance (CSA) Security, Trust & Assurance Registry (STAR)

The CSA STAR registry presents an industry-endorsed certification initiative that verifies the security readiness of cloud services.

Notably, both Microsoft Azure and Azure Government have achieved STAR certification, showcasing their dedication to maintaining top-tier benchmarks in cloud security and adherence to standards.

This comprehensive exploration of NERC-CIP compliance considerations within cloud environments, such as Azure, equips electric utilities with the essential knowledge to leverage innovation while effectively adhering to regulations governing the security of critical infrastructure.


1. How does Microsoft Azure ensure NERC-CIP compliance in a multi-tenant cloud environment?

Azure uses logical isolation to segregate applications and data belonging to different customers, ensuring rigorous prevention of unauthorized access.

2. What should electric utilities consider when moving NERC-CIP workloads to the cloud?

Utilities must categorize data and workloads as BES Cyber Assets or not, and migrate only eligible assets. They should collaborate with Microsoft and auditors while maintaining compliance obligations.

3. How do certifications like STAR demonstrate a cloud platform’s security?

STAR provides independent validation of a cloud service’s security controls, assurance mechanisms, and compliance with regulations. This builds trust for customers like electric utilities.

Final Thoughts

Electric utilities stand to gain significant advantages from emerging technologies such as cloud computing, the Internet of Things (IoT), and artificial intelligence (AI), which can enhance innovation, operational efficiency, sustainability, and customer satisfaction.

Nevertheless, it’s vital to maintain steadfast compliance with vital infrastructure regulations like NERC-CIP.

Through partnerships with premier cloud platforms like Microsoft Azure and Azure Government, which are tailored to provide advanced capabilities alongside robust safeguards, utilities can boldly embrace the future.

By fostering proactive collaboration, undergoing thorough audits, and implementing unwavering security controls, a promising path forward is illuminated.

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