Electric Grid Needs Protection, But Progress Slow Since Attack

Investor's Business Daily

The labyrinth of electric utilities and government agencies securing the nation's power grid has made slow progress toward defending the nation against a violent assault on its power network — a threat highlighted by last year's attack on a PG&E (PCE) station outside San Jose, Calif.

The April 2013 assault on Pacific Gas & Electric's Metcalf transmission facility was extraordinary. Some 100 gunshots were fired over 52 minutes, knocking out 17 transformers. A blackout was avoided, but it took workers nearly one month to repair the damage. No arrests have been made, and law enforcement officials have yet to publicly state what the attackers' motive was.

Whether or not the Metcalf incident was a dress rehearsal for a future terrorist attack, as former Federal Energy Regulatory Commission Chairman Jon Wellinghoff has speculated, or a mere case of vandalism as the FBI has said, it highlighted the dangers of an assault knocking out electric power to portions of the country for weeks or even months.

Multiple government agencies at federal, state and local levels have a stake in the electric grid, which can slow efforts to protect it. But there has been recent movement. Last week, FERC ordered the North American Electric Reliability Corp. (NERC) to work with utilities to come up with plans to determine which substations are essential and standards to protect the grid.

A Problem For Decades

Electric utilities are well aware of the grid's vulnerability — and have been at least since the terrorist attacks on Sept. 11, 2001, if not longer.

"Physical security issues have been around for many decades," said Joy Ditto, vice president of government relations at the American Public Power Association. "The only thing that's interesting about Metcalf is ... they haven't caught the perpetrator yet.

Electric utilities hesitate to discuss security threats and the measures they take to combat them.

But the Metcalf assault got the industry's attention, causing many electric companies to review their security programs, said NERC President and Chief Executive Gerry Cauley.

"A substantial amount of work has been done since" a November safety drill, he said Wednesday.

A big question in protecting the grid is cost.

Electric utilities, a sector that includes Con Edison (ED), Dominion Resources (D) and Public Service Enterprise Group (PEG), reportedly have boosted their own security, cutting brush and building walls instead of chain-link fences around some of the nation's 150,000 substations — some located in remote areas — to protect the power sources for thousand of miles of high-voltage lines.

Pressures That Slow Progress

But complicating matters are customers who want to keep their electric bills down, shareholders who want to keep profit up and costs tight, and environmental concerns — with the impact reports and potential lawsuits — all of which can slow down security activity.

"Money has been a huge issue," said Massoud Amin, professor of electrical and computer engineering at the University of Minnesota. "The existing system does not have a high return of investment.

Transformers, the most vulnerable part of the grid, are expensive to build at $6 million to $8 million each. They're constructed in far-flung places such as South Korea, requiring months to build, transport and install.

"If transformers get somehow taken out of commission, it could take weeks or months to get them back in place," said M. Granger Morgan, a professor at Carnegie Mellon University who served as chairman on a 2012 report that called for strong federal government action to help prepare for such an attack.

The report recommended that the Department of Homeland Security take the lead and work with the Department of Energy to develop and stockpile important equipment, including high-voltage recovery transformers, among other measures.

Despite physical assaults, natural disasters and the threat of cyberattacks, the U.S. power grid has operated so reliably that most people take for granted their electricity will be there whenever they flip a switch. Major power outages — such as the ones that hit the northeastern U.S. and southeastern Canada in 2003, and blacked out San Diego, Orange County, Calif., and Tijuana, Mexico, in 2011 — are so rare and life-threatening that they are major news events.

As a result, government agencies tend not to respond in a major way until a crisis hits, experts said.

"We only do patchwork," Amin said. "We put out fires and then we forget about it.

At least one bill is now pending in the California Legislature that would require utilities to develop security plans to prevent attacks like the one at the Metcalf substation. Members of Congress, including Democrats from California's delegation, last month wrote to the Department of Homeland Security seeking additional answers on the attack.

Meanwhile, the industry indeed has studied the existing and future performance of the grid, locating which areas are more critical and vulnerable to damage from attack, accident or natural calamity, said Nick Braden, vice president of the American Public Power Association.

A November 2013 emergency drill, involving thousands of utility workers, federal anti-terrorism experts, executives and government officials in the U.S., Mexico and Canada, simulated physical and cyberattacks that could disrupt and damage a large portion of the North American power grid. NERC officials said Wednesday the drill was successful and that there has been an uptick in information-sharing by utilities.

Sharing And Rerouting

Other measures in recent years include the establishment of programs such as the Spare Equipment Database by NERC to share information on extra inventory should some equipment suffer damage in an attack.

Steps also are under way to improve the "self-healing" automation of the grid that reroutes power if there is a failure somewhere. A type of bulletproof vest to place around transformers also has been suggested.

Despite the progress that has been made to protect the grid against a serious attack — for the time being, a rare occurrence — the pace seems slow.

A terrorist attack against the power grid "would have to be done by a nation-state that really understood power systems and ours," said Clark Gellings, a fellow at the Electric Power Research Institute. "Fortunately, we don't seem to have a lot of people in our society that are going around doing that."

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