capacity loss could approach 40 per cent of the currently available generating capacity.

This country’s electric power systems have some attributes that may hinder the implementation of security-based improvements. By their very nature, the systems are geographically distributed, making them difficult to protect. Historically, analysis has focused on threats from natural disasters; security from malevolent attack has generally not been a high priority. With the exception of nuclear power plants, the main purpose of security at most electrical facilities has been to keep people out for their own safety, not to deter terrorists. Reserve capacity (the difference between installed capacity and the amount that’s necessary to meet peak demand) has become small for generation, transmission, and distribution; highly stressed systems are less resilient in the face of upsets and take longer to recover. Deregulation has encouraged efficiency, invested-cost utilization, and return on investment rather than redundancy, reliability, and security. For the same reasons, power companies keep fewer spares on hand. Utilities have also reduced their support for research and development;¹ in particular, new protection schemes for countering cyberthreats seriously lag the rapidly advancing cyberweapons available. Another consideration is insider threats. These have been difficult to address because of workplace privacy and individual rights issues, which continue to inhibit the use of screening and profiling tools.

Recommendation 6.1: The federal government should review the current institutional and market settings to determine what, if anything, should be done to facilitate actions for improving the security and resilience of the country’s electric power system.

For a utility or independent power producer, one of the most significant challenges will be to direct its often limited resources to protecting its most important elements. This prioritization must take into account possible threats, probability of threat, consequences of attack, and response capability. At the same time, because the U.S. transmission grids are largely integrated with the