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					    An Analysis of the Proposed U.S. Smart
          Grid and its Vulnerabilities
                                      IST 451
                                    Team Sirius
                                    Benjamin Dodge
                                     Jesse Nebling
                                    Elizabeth Bartels
                                    Melissa Huston
                                       Brian Wise
                                      Kenneth Yee




                                   16 November 2011

Table of Contents
   Introduction
   Smart Grid & Vulnerabilities Overview
       Smart Grid Definition
       Smart Grid Vulnerabilities
           Recent Updates in Technology
           Threat Landscape
   Analysis of Smart Grids
       Relevance and Application to Class
       Relation to Network Security
           Implications of Vulnerabilities
           Effect on Network Users and Managers
       Possible Mitigation Techniques
   Conclusion
   Citations
   Progress Report Work Breakdown




Introduction
       Electricity is the most significant asset to business, education, and residential
areas in the United States. The power grid is what distributes electricity throughout, and
as of recent years the United States has started to move away from the legacy systems
to a more advanced system, known as the “Smart Grid.” The Smart Grid is based on a
network of intelligent switches that will help distribute electricity to consumers more
efficiently than the current legacy systems. The term “network” in the previous
statement is what makes the topic of the Smart Grid appealing and relevant to the
course IST 451: Network Security and cyber security concerns in general.
        A more detailed explanation on what the Smart Grid is will be provided later in
this essay along with the purpose of the Smart Grid, how it will work, who it will affect,
who is responsible for it, and how it is at risk. Following will be the reasons we support
the previously mentioned issues, ranging from updates and technology to examples of
potential hacks and US security threat awareness. There will then be a more intricate
connection between the material our team learned in class and the vulnerabilities of the
Smart Grid, a broader look on how the Smart Grid will affect network security in general,
and possible mitigation techniques. The essay will then conclude with the current state
of the Smart Grid, what is next for the future of the Smart Grid, and what our group has
personally learned and taken from our research.

Smart Grid & Vulnerabilities Overview
Smart Grid Definition
   The Smart Grid is an expansion of the current legacy power Grid. The United States
current power Grid system infrastructure is aging and as “components of the system are
retired, they are replaced with newer components often linked to communications or
automated systems” (Campbell). These newer components and upgrades are
increments to the new system and are gradually forming the Smart Grid. In addition to
the component upgrades, there are “[d]evices called ‘phasor measurement units’...being
added to substations” (Campbell). The phasor measurement units “make time and
location-specific measurements of transmission line voltage, current, and frequency” at
a much quicker rate than current industry standards (Campbell).
        The ultimate purpose of the Smart Grid is to create a more efficient, automated
system for distributing electricity. The system should have more advanced switching
capabilities to better enhance current flows and establish control of the Grid (Campbell).
With that said, the Smart Grid can be seen as an interconnection of the major power
sources of the regions of the United States, which can be used to efficiently distribute
electricity anywhere from coast to coast. The Smart Grid is also an economically sound
choice, if implemented correctly. According to the “Electric Power Research Institute
(EPRI)...fully developed Smart Grid costs could reach $476 Billion,” but the benefits
could reach “up to $2 trillion” (Lkarisny). With the benefits taken in account, there are
numerous key stakeholders affected.
        On the most basic level, the Smart Grid would affect every person in the United
States who has some need for electrical power. It would also present a significant
impact to the Department of Energy (DOE), which would need to regulate the Grid, and
the Department of Homeland Security (DHS), which would need to secure the Grid. It is
also possible that the U.S.’ Smart Grid would impact Canada, which exports power to
parts of the United States currently (Campbell).
   The most significant responsibility for the Smart Grid currently looks like it will fall on
the U.S. Government. While the Energy Companies would be investing and operating
under the Smart Grid, it is the Government, through the Department of Energy, which
will be regulating its spread, and it is the Government, through the Department of
Homeland Security and the Department of Defense, that will have to decide how to
secure the Grid against potential attacks (Campbell).

Smart Grid Vulnerabilities
                              Recent Updates in Technology
   Every day, the United States is investing increasingly large sums of money into Smart
Grid technologies which will likely revolutionize the energy landscape. However, as the
Smart Grid grows, it will also need smart security. Richard Clark, the author of Cyber
War: The Next Threat to National Security and What to Do About It, has identified the
power Grid as one of the three most important and vulnerable cyberwarfare targets in
the United States. The smarter the power Grid becomes, the more control and
influence it has over all aspects of American life. This “smart” integration of systems,
which is the very concept that makes the Smart Grid useful, also entices and
encourages would-be attackers. Bob Gohn from the market intelligence firm Pike
Research has recognized the following threat:
               “The threat surface expands dramatically when you move from today’s
               situation to a Smart Grid. Today, we have independent, vertically
               integrated companies that are inherently secure. It’s basically security by
               obscurity. But when you have a network that goes from, as they say,
               turbine to toaster, with unified control, attacks can be propagated more
               easily, and there are more places to attack.”
   The United States is no stranger to attacks on its power Grid. The government has
already documented several attempted attacks upon the current “non-smart” power
Grid. Therefore, federal grants for Smart Grid projects are issued with the
understanding that strong measures will be taken to ensure that these technologies are
both useful and secure. Between now and 2015, Pike Research has committed to
invest in Smart Grid technologies. About 15% of this investment is dedicated solely to
the ensuring that these technologies are implemented with the highest level of
cybersecurity. As Gohn says, “you can’t have a Smart Grid without smart security.”
   Due to recent events, there are plenty of reasons for the United States to be
concerned about vulnerabilities in the smart power Grid. In 2007, Israel is purported to
have executed a cyberattack against Syria’s air defenses immediately before launching
an air strike on a Syrian nuclear facility. In 2008, Russia is purported to have used a
cyberattack to cripple Georgia’s lines of communication immediately before launching a
full-scale invasion against the country. During the War in Iraq, it has been reported that
the Bush administration resorted to cyberattacks to disrupt cell phone and computer
communication between Iraqi insurgents. As once separate technologies become more
integrated with the Internet, it is only becoming easier for hackers to launch devastating
and widespread cyberattacks that can literally take out the technological resources of
entire nation. Therefore, due to its very nature, the Smart Grid, if not properly secured,
could unintentionally create a big vulnerable target, which enemies of the United States
will be eager to attack (Stevens).
                                      Threat Landscape
   The threat landscape surrounding Smart Grids is complicated. There are ample
opportunities for vulnerabilities to creep into the software, hardware, people, and
policies which govern and operate the Smart Grid. Currently, there are two policies
which govern Smart Grid security. These security policies have both advantages and
disadvantages. The first policy is the North American Electric Reliability Corporation’s
(NERC) Critical Infrastructure Protection (CIP) standards. The NERC’s CIP standards
encourage perimeter network defenses such as firewalls, strong passwords, identity
and access management controls, and recurring vulnerability assessments such as
penetration testing. However, the CIP standards only apply to small critical sections of
the Smart Grid, and the largest part of the Smart Grid, the distribution system, is
regulated by the state instead of the federal government. Unfortunately, state laws
regarding Smart Grid security are often rather lax. Fortunately, failing to pass CIP
standards often results in substantial and embarrasing fines, and the NERC is working
on revising the CIP standards so that they apply to more Smart Grid components.
   The second policy is the National Institute of Standards and Technology’s
Interagency Report (NISTIR) 7628, which is titled “Guidelines for Smart Grid Cyber
Security.” The NISTIR 7628 discusses high level concepts such as people, policies,
procedures, platform software vulnerabilities, platform vulnerabilities, and network
vulnerabilities. Underneath these high level concepts, the NISTIR 7628 also lists
hundreds of specific cyber vulnerabilities which need to be defended against. These
vulnerabilities include buffer overflows, hard-coded passwords, cross-site request
forgery, and race conditions. A buffer overflows is a programming error where an array
of data is accidentally allowed to access an insecure memory location and execute
arbitrary and potentially malicious code. Hard-coded passwords are easier for hackers
to guess. Cross-site request forgery allows a hacker to twist the Smart Grid in such a
way that unauthorized commands are accidentally authorized. A race condition is a
programming error where the timing of certain threads of execution can clash and allow
hackers to cause damage. Governmental authorities agree that the NISTIR 7628 is an
excellent set of standards. Unfortunately, these authorities cannot enforce it because
the guidelines within version 1.0 are too general. The NIST is currently working on
improving version 1.0 by creating a more detailed implementation guide.
   IBM’s X-Force research group has been tracking the emergence of new Smart Grid
vulnerabilities since the year 2000. According to the group, Smart Grid vulnerabilities
can be classified in the following manner:

      operational systems
           o This includes all the generators, transformers, Supervisory Control and
              Data Acquisition (SCADA), Systems and Energy Management Systems
              (EMS), programmable logic controllers (PLCs), substations, smart meters,
              and intelligent electrical devices (IEDs).
      IT systems
           o This includes the PCs, servers, mainframes, applications, databases, web
              sites, and web services.
      Communications networks and protocols
          o The Ethernet, WiFi, Zigbee, 4G, and DNP3 are all vulnerabilities.
      end points
          o This includes the smart meters, EVs, smart phones, and mobile devices.
      human factors
          o A lack of training and awareness, social engineering attacks, phishing
             attacks, and misuse of USB drives could all add vulnerability to the Smart
             Grid.


   Alarmingly, IBM’s X-Factor research group has seen the number of new Smart Grid
vulnerabilities steadily increase year by year. In the year 2000, the group observed just
under 1,000 new Smart Grid vulnerabilities. Just during the first half of the year 2010,
the group observed 4,396 new Smart Grid vulnerabilities, the record highest number
observed in a single year. The diagram below, which was published by X-Factor,
demonstrates just how quickly these new Smart Grid attacks are emerging:




   From this diagram, it becomes obvious that utility companies cannot solely guard
against all known and documented vulnerabilities. Utility companies must also defend
against a growing supply of “zero-day” attacks which have never been seen before.
 These “zero-day” attacks are especially dangerous because it is extremely challenging
to prevent a poorly defined attack from happening. In fact, the only practical way to
even detect that a “zero-day” attack has occurred is to employ a complicated anomaly-
based statistical intrusion detection system.
         It is also important to note that information technology (IT) systems and
operational technology (OT) systems are often treated differently in terms of security.
 Due to common misconceptions about OT security, organizations often allocate too
many resources to IT security and too few resources to OT security. The Stuxnet attack
brought worldwide attention to this issue. The Stuxnet attack targeted vulnerabilities in
Siemens control systems in order to wreak havoc on centrifuges in an Iranian uranium
enrichment facility. This attack was a matter of OT security rather than IT security. The
attack was not directly aimed at stealing or damaging information, but rather it was
focused on damaging operational equipment. To effectively defend against Smart Grid
attacks, resources must be allocated equally between IT security and OT security.
                     Security Policies of the United States Government
         The United States government first began addressing the issue of Smart Grid
security in 2005 with the passing of the Energy Policy Act of 2005. Through this act, the
Federal Energy Regulatory Commission (FERC) was given the responsibility to ensure
the reliability of the nation’s power Grid. Later, the passing of the Energy Independence
and Security Act of 2007 made it clear that the United States requires “a reliable and
secure electricity infrastructure.” Over time, the FERC appointed the North American
Electric Reliability Corporation (NERC) as the Electric Reliability Organization (ERO) of
the United States. As previously mentioned, NERC wrote a set of standards for Smart
Grid security called the Critical Infrastructure Protection (CIP) standards. The FERC
also reached out to the National Institute of Standards and Technology (NIST) which
published an Interagency Report (NISTIR) numbered 7628 and called “Guidelines for
Smart Grid Cyber Security.” Unfortunately, the CIP standards are limited to small
critical components of the Smart Grid. They are difficult to enforce across the vast
distribution system of the Smart Grid where weak state level laws are in effect. Also,
the guidelines within the NISTIR 7628 are often too general to enforce.
         The government is facing several challenging problems concerning Smart Grid
security. First, as the ERO for the United States, the NERC is regulating its own
industry. In the future, this could be a major conflict of interest. Second, the
Department of Homeland Security, the Department of Energy, and the Federal Energy
Regulatory Commission (FERC) have all claimed responsibility for protecting the
security of the nation’s smart power Grid. However, realistically, for the sake of
efficiency, especially during emergencies, only one of these agencies should lead the
effort. Third, as the Smart Grid grows, legacy systems will likely become the weakest
links in the Smart Grid. These legacy systems will have weaker security protection than
the rest of the Smart Grid. High costs will likely discourage utility companies from
improving the security of these legacy systems. Fourth, a secure Smart Grid will likely
cost significantly more than an insecure Smart Grid. Fifth, the government will have to
re-define privacy and data security. Most likely, questions about the sensitivity of
electricity usage information and information privacy rights will be posed over the course
of the Grid’s development. Sixth, the CIP standards rely heavily upon self-reporting.
 This often leads to weak enforcement of the intended policies. Currently, the House of
Representatives and the Senate are working on resolving many of these problems.
 However, some of these problems may need to be constantly addressed throughout
the course of the Smart Grid’s development.
Analysis of Smart Grids
Relevance and Application to Class
       At the beginning of this class we learned about security fundamentals that
demonstrated how attacks have become more prevalent and inventive over the years.
Smart Grids are very vulnerable to different types of attacks learned about in class.
Competitors can use eavesdropping to listen to utility network traffic and try to
understand the messages that devices send to gain a lead. Terrorists may use malware
to set up malicious software intended to do harm to the system. This could include
computer viruses, spyware, software worms, or Trojan horse attacks. Perhaps the most
annoying type of attack that Smart Grids are vulnerable to are Denial of Service attacks.
The attacker may not even be trying to gain access to the system but simply want to
prevent the system from operating. This is a huge vulnerability because if the Grids are
not working then people go without power and substance.
       Later in the course we learned about encryption and authentication. These topics
have a strong correlation to Smart Grids because corresponding techniques are used to
make the Grids secure and less vulnerable. A common authentication framework
frequently used in these kinds of networks is an Extensible Authentication Protocol, or
EAP. The most common EAP security method is Transport Layer Security, or TLS
which provides a methodology to authenticate and encrypt data. Specifically this is
designed to prevent eavesdropping, replaying and spoofing. In a Smart Grid system
network would be authenticated using a mutual authentication technique. Smart Grids
also use certificate authority which requires another topic learned about in class, public
and private keys. This system is based on a public key infrastructure that the certificate
contains a public key that verifies the message sender. Without this authentication
Smart Grids would be substantially more vulnerable.
       Finally, we learned about intrusion detection later in the course. Smart Grids
have several networks, people and software being used all at the same time to detect,
anticipate, and take care of possible intrusions. Smart Grids are vulnerable to many
different attacks but most commonly network based attacks like R2L, U2R, DoS and
probing.


Relation to Network Security
                              Implications of Vulnerabilities
         The development of the Smart Grid takes the US into uncharted territory. There
is much vulnerability to the Smart Grid system and have huge implications if something
goes astray. According to the Wall Street Journal, terrorist groups like Al-Qaida have
specially targeted power Grids because electricity has no substitute and virtually every
other key infrastructure depends on power. These groups could literally put a stop to
daily life in the US and even infiltrate through the Grid to damage everything relying on
power. Since the Grid is connected to the Internet there is also the problem that the
Grids are easy targets for hackers. Hackers could use the attacks discussed previously
to change the efficiency, reliability, and security of the electricity being delivered. In
regards to the vulnerability of competitors gaining secure information, the implication
could be huge. Companies could lose tremendous amount of money trying to fix
problems that would occur because of the competitors or even lose customers.

                         Effect on Network Users and Managers
       Network users will be affected by these implications in multiple ways. Users
could have their power usage falsified by hackers and criminals to pass on charges to
neighbors, install viruses, or even take down entire systems. User’s specific traffic that
they use within their own personal network could be monitored and may even be
violated by privacy laws. As Smart Grids are connected over the Internet users personal
information could be stored for the power company like credit card numbers, address,
etc. This information would become additionally susceptible to hackers. Network
managers would have entire new aspects to worry just based on the various
vulnerabilities. Increased time and funding would be needed to implement new
management systems and personal to handle the Smart Grid. When crisis or
unexpected events happens the managers would have additional responsibility for
these problems or attacks.

Conclusion

         Electricity is the major asset in which businesses, organizations, schools and
residential areas utilize. Think about all the devices and tools businesses and people use
that is relied on for a reliable electric supply to in which you may be located. The power
Grid is the most essential aspect of distributing electricity throughout places all over the
United States, and in more recent years we have moved away from the old power Grid to
the development of a more advanced power Grid called the “Smart Grid”. The Smart Grid is
advanced and will be an essential asset in future businesses, education facilities and
residential areas all over the United States. The current state of the Smart Grid is that
multiple states are already laying out the groundwork for market development of the Smart
Grid. The next step for the Smart Grid is convince investors and customers that they will be
able to reduce power cost by buying low and selling high into the power markets. After
convincing consumers that the Smart Grid is more efficient and profitable, the next step will
be to implement the groundwork for the Smart Power Grid over the United States,
eventually having the Smart Grid implemented everywhere in the United States. The Smart
Grid utilizes a network of intelligent switches that will help distribute electricity more
efficiently and effectively than the traditional power Grid. The topic that we chose of the
Smart Grid is unique and is relates well with the course IST 451- Network Security and also
with cyber and network security issues in general. It seems that the Smart Grid will
revolutionize the way electricity is distributed and its main purpose is to create a more
efficiently automated system for distributing electricity. Even though the Smart Grid is an
expansion of the current legacy power Grid, it has updated components which have
replaced the old components which have been retired and also is linked to communications
or automated systems. The Smart Grid can been viewed as a major interconnection of the
major power sources of the regions of the United States and can be used to efficiently
distribute electricity from coast to coast. Another update to the Smart Grid compared to the
legacy power Grid is the integration of “phasor measure units” which are devices that make
time and location specific measurements of transmission line voltage, current and frequency
at a faster rate than the current industry standards of the legacy power Grid. The costs of
implementing a fully developed Smart Grid can cost a lot of money, as much as $476
Billion, but research from the Electric Power Research Institute states that the benefits
could reach as much as $2 Trillion. Overall, the Smart Grid will revolutionize the way
electricity is distributed and will be more efficient at a faster current to regions all over the
United States. If all goes right and stakeholders take the benefits into perspective, the
Smart Grid will become a reality and be economically sound, if implemented correctly.

Citations
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Campbell, Richard. United States. Smart Grid and Cybersecurity— Regulatory Policy and
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Clemente, Jude. "The Security Vulnerabilities of Smart Grid ." Journal of Energy Security.
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Lafferty, Shawn and Ghazi, Tauseef. “The Increasing Importance of Security for the Smart
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Lkarisny. “Smart Grid security: trillion dollar boom or bust?” MuniWireless. 12 May 2011:
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Meserve, Jeanne. “'Smart Grid' may be vulnerable to hackers.” CNN Tech. 20 Mar. 2009:
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Hayden, Ernie. “The 4 Layers of Smart Grid Security.” SOURCE Conference Seattle 2011.
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