UPDATED – December 3, 2018
The data security agreement (DSA) requires ESCOs to hold cybersecurity insurance in the amount of $5 million per cybersecurity incident. The requirement is effective December 1, 2018, and is a change from an original proposal of twice as much cyber insurance.
The DSA was forged in response to an order instituted by New York’s Public Service Commission in June as part of a broader initiative to establish firmer cybersecurity guidelines within the energy industry. The initiative is driven by recent cybersecurity incidents that the Commission believes warrant stronger cybersecurity protections to be in place.
The insurance requirement is part of the broader DSA governing how information is exchanged between utilities and energy service entities (ESEs), including ESCOs. More information on the cybersecurity situation and most recent DSA in New York can be found here.

Expert Insight

The required $5M cyber liability insurance from New York ESCOs creates a lower barrier to entry than the original $10M per occurrence requirement. However, Staff and the Commission’s failure to consider whether cyber liability insurance is the right policy tool, the “SWAG” as to the right amount of insurance required, and the adoption of a “one size fits all” approach highlights the leadership failure in New York.
The Empire State could have been a leader in establishing well-reasoned cyber security policy in the retail energy space, but the rush to get to an answer right now rather than the right answer created a solution in search of a problem.
*Insight provided by Phillip Golden and reflects his views and not necessarily those of Energy Pages or its Staff.

 

Your Opinion Matters

Have Something To Say About This Story?

Author:
Energy Pages is an online trade publication and business directory for the retail energy industry. We publish editorials, resources, case studies, practical information and industry news. Our content is about and for industry leaders, innovators, investors and influencers.

Sign Up for the Energy Pages Digest

Our weekly must-see brief

You May Also Like

Lessons From Question 3 in Nevada

With more than $63 million dollars spent, Nevada Energy successfully maintained its monopoly status, denying the citizens of Nevada the right, 5 years in the future, to take control of their energy spend and future. Question 3 went down by roughly a 2-1 margin, despite the fact that, 2 years before, it had been approved by a nearly 3-1 margin.

Business Groups Sound Off on Utility Ballot Proposal

Two of Florida’s largest business associations put out statements condemning the freedom of choice measure

U.S. Utilities Face Dramatic Change: Here's How To Succeed At Utility Business Model Reform

Utilities in the United States have adopted new responsibilities, and their century-old business model is struggling to accommodate growing policymaker and customer demands.

Question 3: Both sides of the conversation in Nevada’s energy choice initiative

More than 150 energy plan options cropped up during a recent search of a Texas website that is touted as a model for Nevada and other states considering energy choice.