have not, and as the role of state and federal regulators and other oversight bodies has shifted.

Today most power is generated by large central generating stations that are located far from the customers they serve. Transformers increase the voltage so that it can be carried efficiently over long distances. Substations then reduce the voltage and carry the power into the distribution network for delivery to customers.1 Unlike trains or natural gas in pipelines, electric power cannot simply be sent via specific lines wherever dispatchers choose. Current flows through the system according to a set of physical laws. The system must be continually adjusted to keep all parts synchronized and in electrical balance. If corrections are not made immediately when imbalances occur, the result can be oscillations and other disturbances in the system that can result in a cascading failure over a wide area, as happened in the Northeast blackout of 2003.

Recent years have witnessed dramatic organizational changes in the U.S. electric power system. In some states, traditional vertically integrated companies that owned and operated the entire system from the generators to the customers’ meters have been restructured in an effort to introduce competition. However, a few states are trying to undo some of the changes, and some states may never restructure. The push by federal regulators to introduce competition in bulk power across the country also has resulted in the transmission network being used in ways for which it was not designed. There have also been shifts in the relative responsibility of state and federal regulators.

Largely as a consequence of the uncertainties introduced by these changes, incentives for investment by private firms have become mixed, with the result that the physical capabilities of much of the transmission network have not kept pace with the increasing burden that is being placed on it. Other trends are more promising. The Energy Policy Act of 2005 includes provisions to strengthen the electric grid, including provisions for the introduction of mandatory reliability standards. Although not aimed specifically at protecting the grid against terrorism, the activities initiated under this statute will—if implemented—lead to a more robust transmission system that will be better able to withstand major disruptions.

Physical Vulnerability

Disruption in the supply of electric power can result from problems in any part of the system. The primary concern of this report is with power delivery. Substations and the large high-voltage transformers they contain are especially vulnerable, as are some transmission lines where the destruction of a small number of towers could bring down many kilometers of line. Terrorist attacks on multiple-line transmission corridors could cause cascading blackouts.

High-voltage transformers are of particular concern because they are vulnerable to attack, both from within and from outside the substation where they are located. These transformers are very large, difficult to move, custom-built, and difficult to replace. Most are no longer made in the United States, and the delivery time for new ones can run to months or years. The industry has made some progress toward building an inventory of spares, but these efforts could be overwhelmed by a large attack. Although easier to move and replace, other large components, such as high-voltage circuit breakers, are also a concern.

These problems are exacerbated by the current state of the transmission grid. It is aging and increasingly stressed, leaving it especially vulnerable to multiple failures following an attack. Many important pieces of equipment are decades old and lack improved technology that could help limit outages.

Cyber Vulnerability

Modern power systems rely heavily on automation, centralized control of equipment, and high-speed communications. The most critical systems are the supervisory control and data acquisition (SCADA) systems that gather real-time measurements from substations and send out control signals to equipment, such as circuit breakers. The many other control systems, such as substation automation or protection systems, can each only control local equipment. Other online computer systems, such as energy management systems (which analyze the reliability of the system against contingencies) or market systems (which manage the buying and selling of electricity), have only an indirect impact on the grid. But all such systems are potentially vulnerable to cyber attacks, whether through Internet connections or by direct penetration at remote sites. Any telecommunication link that is even partially outside the control of the system operators is a potentially insecure pathway into operations and a threat to the grid.

If they could gain access, hackers could manipulate SCADA systems to disrupt the flow of electricity, transmit erroneous signals to operators, block the flow of vital information, or disable protective systems. Cyber attacks are unlikely to cause extended outages, but if well coordinated they could magnify the damage of a physical attack. For example, a cascading outage would be aggravated if operators did not get the information to learn that it had started, or if protective devices were disabled.

Personnel Vulnerability

Workforce issues are critically important to maintaining a reliable supply of electricity, particularly in the event of a terrorist attack. Utility employees and contractors interact with the electric power system as managers, operators, line-crews,

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1A few transmission lines operate with direct current (DC), which requires conversion from alternating current (AC) at one substation and then back again at the receiving substation. DC also is used to interconnect the four major regions in the United States and Canada because its use avoids the necessity of keeping their AC systems synchronized.



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