Uncertainty over the grid’s vulnerability to sabotage could lead to wasteful and excessive spending, a new Congressional Research Service report warns.

“There is widespread agreement among state and federal government officials, utilities and manufacturers that HV [high voltage] transformers in the United States are vulnerable to terrorist attack, and that such an attack potentially could have catastrophic consequences. But the most serious, multi-transformer attacks would require acquiring operational information and a certain level of sophistication on the part of potential attackers,” concludes the June 17 report Physical Security of the U.S. Power Grid: High-Voltage Transformer Substations.

“Consequently, despite the technical arguments, without more specific information about potential targets and attacker capabilities, the true vulnerability of the grid to a multi-HV transformer attack remains an open question. Incomplete or ambiguous threat information may lead to inconsistency in physical security among HV transformer owners, inefficient spending of limited security resources at facilities that may not really be under threat or deployment of security measures against the wrong threat.”

Enticing Target for Sabotage

Officials have known for decades that the grid presents an enticing target for terrorists.

The Congressional Office of Technology Assessment (OTA) reported in 1990 that “in most cases, the nearly simultaneous destruction of two or three transmission substations would cause a serious blackout of a region or utility, although of short duration where there is an approximate balance of load and supply. … The destruction of more than three transmission substations would cause long-term blackouts in many areas of the country.”

The report cited the example of an unnamed city served by eight transmission substations along a 250-mile line through five states. “A knowledgeable saboteur would be needed to identify and find the eight transmission substations. A highly organized attack would also be required. However, the damage would be enormous, blacking out a four-state region, with severe degradation of both reliability and economy for months.” (See related story, Physical Security Cure: More Transmission?)

The CRS report quotes from a sabotage manual associated with white supremacist groups and recounts the Irish Republican Army’s plans to attack six substations in the United Kingdom in 1997. The attack, which was prevented, reportedly could have caused widespread power outages in London and southeast England for months.

Metcalf’s Significance

The issue caught Congress’ attention early this year as a result of a campaign by former Federal Energy Regulatory Commission Chair Jon Wellinghoff.

Wellinghoff cited a 2013 FERC analysis to identify critical high-voltage substations. The “Electrically Significant Locations (ESLs)” analysis reportedly concluded that a coordinated attack that knocks out nine critical substations could cause an extended blackout in the continental U.S.

Wellinghoff also cited the April 2013 rifle attack on Pacific Gas & Electric Co.’s Metcalf substation, which he called a “dry run” for a larger attack on multiple substations. The FBI has declined to characterize the attack as a terrorist incident. (See Substation Saboteurs ‘No Amateurs’.)

“Because the perpetrators have not been identified, it is impossible to know [their motives], but the ambiguity has significant implications for HV substation security going forward,” the CRS report says.

Utilities’ Responses to Date

Before this year’s heightened concern over sabotage, grid owners’ physical security initiatives focused primarily on preventing vandalism and theft of copper wire — incidents that are common and whose costs are well-understood.

Investing in security against terrorist attacks is more problematic, as the Electric Power Research Institute noted in a 2006 report: “Security measures, in themselves, are cost items, with no direct monetary return. The benefits are in the avoided costs of potential attacks whose probability is generally not known. This makes cost-justification very difficult.”

The CRS report cites four utilities — PG&E, Dominion, Bonneville Power Administration and the Tennessee Valley Authority — that have recently announced plans to significantly increase spending on physical security.

At a conference of state regulators last week, Bill Gausman, Pepco’s senior vice president of asset management, described steps his company is taking. At its Burches Hills substation in suburban Maryland, for example, Pepco is adding more surveillance cameras. It is also enclosing some open-air transformers.

“Differences in the interpretation or application of threat information … may be a reason why some large utilities have announced major new substation security initiatives while others have not,” the CRS report said.

Recommendations for Congress

The report recommends Congress focus its attention on “identifying critical transformers, confidentiality of critical transformer information, adequacy of HV transformer protection, quality of federal threat information and recovery from HV transformer attacks.”

The report also raises concerns about the proposed physical security standards that the North American Electric Reliability Corp. submitted to FERC May 23, noting that it allows transmission owners to identify any critical transformers in their territories. (See Grid Security Rules Win NERC Stakeholder OK Despite Criticism.)

Although the owners’ identification will be subject to independent validation, “the standard’s reliance on company-by-company assessments may still allow for important differences in analytic methodology or assumptions and thus inconsistent conclusions about transformer criticality. Furthermore, company-specific studies may not align with a ‘top down’ assessment of asset criticality like that performed by FERC in its Electrically Significant Location (ESL) analysis.”

“Properly identifying which HV transformer substations are critical is a key issue. Otherwise, the electricity sector risks the possibility of hardening too many substations, hardening the wrong substations, or both. Either outcome could increase ultimate costs to electricity consumers without commensurate security benefits and could potentially divert limited security resources from other important grid priorities (e.g., cybersecurity).”