John Boering    Copyright 2011  All Rights Reserved.

___________________________________________

A upi.com article  stated that Security experts cited by http://www.itbusinessedge.com in a 2009 report cautioned that Smart Grid systems “automated meters could be hacked by someone with $500 worth of equipment and training in electronics and software engineering.  The attacker could potentially take control of millions of meters and shut them off simultaneously or disrupt the load balance and cause a blackout.”

The article “Smart Grid: How Safe Are You?” reported that “In an April 26, 2011 Center for a New American Security (CNAS) www.cnas.org blog posting, Christine Parthemore, a Fellow at CNAS, wrote:  “For years, DOD-focused discussion could be characterized as many heads of hair on fire. We saw tons of arm-waving, sky-is-falling near-hysteria within different parts of the Department of Defense on the cyber vulnerabilities of smart grid technology…”

“Many burning questions remain, and seem to be even more urgent after our off-the-record, this-meeting-never-happened meeting on smart grid cyber security…

there is so little clarity to the nature and scale of the problem that solutions are bound to be incredibly ineffective while wasting massive stacks of cash.”

So why would Private Military Contractors promote Smart Grid?

SAIC (Science Applications International Corporation)

SAIC claims to be among the first to “champion” the “integrated application of advanced transmission and distribution technologies for a modernized grid.”

Did they create a need, so that they could then provide a “solution” and get big contracts and government grant money for cyber “solutions?”  SAIC received $13 million for just one Smart Grid contract in one city in Florida.  And, apparently SAIC is protecting other countries, too, by stating “SAIC brings a proven approach to cyber solutions across federal, commercial and international markets.” 

This “proven approach” could be questioned, since a 2007 Los Angeles Times article reported that “SAIC, Inc., a defense contractor specializing in computer services, may have transmitted personal information about U.S. military members and their relatives over the Internet without encrypting the data first.” 

A 2007 Vanity Fair article by investigative reporters John Bartlett and James Steele claimed that there have been a long list of whistleblower lawsuits and federal criminal investigations against SAIC, which had over 9,000 government contracts and employed 44,000 people, making it  larger than the departments of Labor, Energy, and Housing and Urban Development combined. 

And not to be left out – Boeing, Raytheon, Lockheed Martin and BAE Systems jumped on the Smart Grid bandwagon   

Boeing was named as a security partner on Southern California Edison’s $60 million request to connect a 32-megawatt wind storage battery to the grid, and Raytheon plans to help Tucson Electric Power get a $25 million grant to link solar panels and in-home energy management systems.  SoCal Edison Wants A123’s Biggest Grid Battery Ever           Green Light

Dennis Mullenberg, the head of Boeing’s defense business unit, in explaining the aerospace company’s push into the Smart Grid market, told Bloomberg that the defense contracting business is facing a big shortfall over the coming years.

BAE Systems, a British defense contractor, has a U.S. subsidiary, Balance Energy, which is seeking to commercialize renewable energy, electricity storage and smart grid systems serving office parks, campuses and other self-contained areas.

Its first project could be a microgrid at the University of California at San Diego, if San Diego Gas & Electric is awarded a $100 million Department of Energy smart grid grant.    Balance Energy Wants to Build Microgrids, Starting With San Diego).

Lockheed Martin is involved with eight utilities seeking Department of Energy smart grid grants, including a $150 million smart grid project being proposed by American Electric Power Co. in Ohio and  a $38 million proposal to pilot smart grid technology by PPL Electric Utilities in the area of Harrisburg, PA. 

Did these military contractors know that Smart-Grid cybersecurity was going to be  lucrative? 

By 2015, annual smart-grid cybersecurity spending will be about $3.7 billion (about 15% of the total smart-grid capital investment) 

To re-emphasize the statement in the fourth paragraph of this article regarding cybersecurity for Smart Grid: “there is so little clarity to the nature and scale of the problem that solutions are bound to be incredibly ineffective while wasting massive stacks of cash.”

Not only that, but it seems that private military contractors (private corporations) will have control over the United States’ infrastructure.

Federal Energy Regulatory Commission (FERC)

Under the Energy Policy Act of 2005, FERC was authorized to develop and enforce mandatory electricity reliability standards, including cybersecurity. (per a 2007 GAO report  http://www.gao.gov/new.items/d071036.pdf) 

It wasn’t until 2010, that FERC began a process to consider an initial set of smart grid cybersecurity and interoperability standards for adoption, BUT even then, standards were to remain voluntary.” 

So, in essence, national security is voluntary.  This shows you just how much power the utility companies wield with our government.

Also, regulation of different aspects of the industry are divided between federal, state, and local entities, which complicates oversight of smart grid interoperability and cybersecurity.

The utility companies

It seems that the utility companies focus on achieving minimum regulatory requirements, rather than designing a comprehensive approach to system security, and then view the security problem as being solved once the minimum requirements are met.

After reading “Smart Grid: How Secure Will You Be?”, and finding out that Congress funded Smart Grid before its security was assured and that the old system may have been more secure, and finding out that the utility companies only have a voluntary approach to security and seem to be sharing our Smart Grid technology with the rest of the world, and then seeing that billions of dollars are going to go to defense contractors for security that may not be so secure, this seems to be not only a waste of taxpayer dollars, but a plan that may ultimately sever the backbone of our country.