Electrical Grid Security

Nationwide rolling blackouts could have a devastating impact on the economy. As a result, many experts also fear that the stress being placed on the nation's power grid could make it more susceptible to disruptions from hackers.

Such was the case in late April of 2001, when computer hackers working through China Telecom and from China's Guadong province, successfully broke into the California's electrical grid system. California's Independent System Operator (CAISO), which maintains the state's power grid system, reported that the hackers had limited success and gained access to the grid for almost three weeks before being discovered.

This hacking was just one of many that occurred from Chinese operators in the wake of the U.S.-China standoff over the EP-3 spy plane that began back in April. Chinese officials have not accepted responsibility for the intrusions, but do suggest China is developing a more complicated system of cyber war for future conflicts.

"From a cybersecurity perspective, the electric power grids in the West are now more fragile, [and] margins for error are significantly less," said Tim Bass, a longtime information security consultant for the U.S. Air Force and now CEO of The Silk Road Group Ltd., a network security consulting firm in Centerville, Va. "With diminishing margins and power reserves, the probability for cascading catastrophic effects are higher."

In addition to cybersecurity concerns, development of competitive power markets, coupled with the emergence of retail markets, has resulted in significant new uses of the interstate transmission grid. The grid has thus been subjected to flows of energy about which little is known, which has created transmission bottlenecks, as well as increased problems related to system reliability. Experts believe that additional investment will be required to expand transmission capacity.

The North American Electric Reliability Council has estimated that annual investments in new transmission facilities have been declining by about $100 million a year for the past two decades. While that precipitous drop was taking place, load growth was moving in the opposite direction. EPRI has estimated that in the ten years ending in 1999, electricity demand in the U.S. rose by approximately 30 percent, while additional transmission capacity grew by just 15 percent. This trend continued to ramp up in 2000, above the ten-year trend, due to weather extremes and the increased use of computer data centers. The diverging trend lines strongly suggest that an immediate, powerful remedy is badly needed.

The National Electrical Manufacturers Association NEMA provides technical standards for the manufacture of electrical equipment and to facilitate technological growth. NEMA has recently submitted a white paper urging the Bush Energy Team to promote a stable power grid. It recommends that the foundation of any new transmission policy should rest upon the creation of a regulatory structure that:

• Promotes the use of technology to protect and enhance the integrity and reliability of the existing interstate transmission grid in the near term;
• Removes siting and permitting impediments that currently serve as a barrier to the construction of new facilities;
• Ensures, through use of rate incentives and other similar market measures, that investments in new transmission facilities will be recovered, along with a competitive return for the investment made;
• Provides states with the authority to enable them to enter into regional compacts to address siting issues;
• Provides FERC with the authority to require utilities to enlarge, extend, or improve transmission facilities upon application and after referring the matter to a joint federal-state board.
• Finally, NEMA recommends that Congress make sure that the Department of Energy's Transmission Reliability program is adequately funded and its programs applied "in a manner that complements and encourages industry's own efforts."

Today's concerns with security on the power grid are very real, and will become increasingly more complex as we march down the road of deregulation throughout the power industry. To stay informed of security related issues as they pertain to the industry, visit the related links above.