Regulating Toward (In)Security in the U.S. Electricity System

By design, the centralized electricity grids stand without protection and are highly vulnerable to both cyber and physical attacks. A solely centralized approach to electricity procurement is not, however, required. The centralized electricity grids do not generate meaningful positive networked effects (i.e., unlike communications products, additional users of electricity via a network do not make electricity itself more valuable), and decentralized approaches to electricity procurement have become economic over the past 24 months. Nonetheless, virtually the entire electricity industry including its regulatory entities remains dedicated to a solely centralized model of electricity delivery, for reasons that are primarily historic. That dedication diverges from the U.S. national security interest, which is simply for consumers (e.g., military, industry, and individuals) to have universal access to secure and economic electricity. The security risks presented by a solely centralized electricity delivery system are untenable and call for federal regulatory action in the form of promulgated security standards (“Independence Standards”) to steer electricity delivery toward a more secure model. The framework of Independence Standards, supported by federal block grant funding for locally-determined implementation, is a needed counter to current regulatory approaches. Independence Standards provide a security lodestar for the ongoing transition of the U.S. electricity system.The Kay Bailey Hutchison Center for Energy, Law, and Busines