The Wall Street Journal – How the Big Business Stories of 2014 Turned Out

PG&E’s Metcalf substation near San Jose, Calif.
PG&E’s Metcalf substation near San Jose, Calif. REUTERS

Power-Grid Security Raises Alarm

By Rebecca Smith, The Wall Street Journal

(To view original article, click here.)

Armed gunmen attacked a California electrical substation in April 2013, but it wasn’t until 2014 that the power industry confronted its problems with the physical security of the electric grid.

The industry’s weakness: Essential transmission equipment sits in open-air substations, often remote and poorly protected. Some substations are so crucial that if their equipment is destroyed, parts of the U.S. could face extended blackouts.

After The Wall Street Journal published an article in February that detailed the methodical nature of the attack on the Metcalf substation owned by PG&E Corp. , federal energy officials ordered an industry group to create rules to protect equipment at critical points in the grid.

The result, in November, was a rule adopted by the Federal Energy Regulatory Commission that requires utilities to analyze their networks and develop protection plans for key locations. The plans must be vetted by outside experts.

Not all substations need special protections. Typically, if one fails, power can be rerouted to others so the electricity keeps flowing. But as the Journal reported in May, an analysis by experts at the commission found that if as few as nine key substations were knocked out, it could disrupt power flows across 48 states.

Companies that sell security devices and protection products say utilities are a burgeoning market. Spotter RF in Orem, Utah, sells compact radar systems that detect and track intruders. Chief Executive Logan Harris said that in the past most inquiries came from the military and government agencies.

“Now utilities are interested,” he said. “Security managers are concerned, not just about terrorism but about vandalism and people trying to steal copper.”

PG&E hired a new security company in November to protect the Metcalf substation, which was hit by thieves in August. Intruders cut through fences and stole $38,000 of tools and equipment. No arrests have been made in that case or the April shooting incident.

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