Protecting America’s Power Grids

By Mary Scott Nabers, president and CEO of Strategic Partnerships Inc.

America’s power grids have been vulnerable to physical and cyberattacks for a very long time. But now, the very frightening possibility of losing power because of a security breach is getting an abundance of attention.

This threat should receive attention — it is long overdue. Just to put the danger in perspective, consider the consequences. A major successful cyberattack on a U.S. grid could cause the economy to quickly suffer between $243 billion and $1 trillion dollars of loss. That’s the cost of 40—50 major hurricanes.

A successful cyberattack on a U.S. grid would also cause the loss of personal and commercial information and it could damage physical assets, disrupt energy storage and cause large-scale blackouts resulting in more damages also exceeding billions.

Consider the probable effects of a large-scale blackout. Both people and businesses would suffer immediately. In addition to direct damages to physical assets and infrastructure, indirect damages would also result.

Public transportation, disabled rail systems and airports could be shut down without access to fuel supplies. Clean water could be limited because of impacted pumps. Hospitals would have immediate concerns related to backup generator capabilities. Businesses without lighting and security systems could easily become victims of looting. Cyberattacks would cause a multitude of long-term, devastating and costly problems.

In spite of this, a recent survey reported that more than four in 10 utility executives say that cybersecurity risks are not a major focus in their risk management plans.

Just two days after Trump’s infrastructure plan was announced, the U.S. Department of Energy (DOE) launched its own infrastructure initiative and it centers on protecting our power and energy sources. Its name is long — The Office of Cybersecurity, Energy Security and Emergency Response (CESER).

CESER will focus on energy infrastructure and also help support the expanded national security role assigned to the DOE. President Trump, in his proposed budget, suggests allocating $96 million to CESER.

The DOE is actually a little late to the game because a number of states are already advancing cybersecurity energy infrastructure plans. However, the new federal focus is opening up many opportunities for collaboration between public- and private-sector partners.

Just this month, the Hawaii Public Utilities Commission approved a plan for $205 million in grid modernization. The plan includes both short- and long-term opportunities. Long term, the objective is to prepare the grid to allow the state to switch to 100 percent alternative energy by 2045. The modernization will also increase the utility’s cyber security and take a proactive approach to fending off any type of attack.

The Arizona legislature is poised to pass a clean energy bill that will require 3GW energy storage to be installed by 2030. Upon passage, this will become the largest energy storage mandate in the country. With the much larger energy storage, the need to protect the grid, upgrade networks and protect the physical infrastructure from a cyber-attack is critically important. It’s anticipated that the state will finalize some contracts for grid modernization projects by the end of the year.

Missouri is close to implementing a five-year $1 billion smart grid project. Currently the state legislature is debating a rate hike bill to finance at least part of the modernization project. The bill focuses on providing greater protection against cybersecurity threats and upgrading the grid so that it is more resilient to power outages.

The state of Virginia is also considering legislation that will overhaul the state’s energy policy. Legislators want to use secure communications networks to ensure greater capabilities to target cybersecurity threats. Currently, discussions center on funding options and a public-private partnership is a possibility.

Forward-thinking state leaders must not be slow or complacent. Waiting for assistance from the federal government should not be an option. A White House report from the Council of Economic Advisers states that insufficient investment in cybersecurity will result in risks that should be avoided at all cost. Power grids must not be vulnerable. The report also notes that the private sector is best positioned to provide cybersecurity solutions.

Companies with cybersecurity offerings will find hundreds of immediate opportunities … but this market sector is going to get even larger and it will encounter huge demand spikes in the very near future.

Mary Scott Nabers recently released a book, Inside the Infrastructure Revolution: A Roadmap for Building America, a handbook for contractors, investors and the public at large seeking to explore how public-private partnerships or joint ventures can help finance their infrastructure projects.