Energy grid infrastructure in the U.S. is endlessly challenged to keep up with the country’s growth and adapt to ever-changing threats to its stability. Most recently, concerns have been focused on the transmission infrastructure, specifically the supply chain behind it.
The electricity grid has a well-known supply chain issue when it comes to readily available replacement components. In previous years, stock of key components for the transmission grid was not held in reserve, and grid maintenance suffered from it. This became apparent back in 2013 when a PG&E substation in Metcalf, CA was deliberately targeted by individuals with high powered rifles in what can only be labeled as a domestic act of terrorism.
A total of 17 transformers were damaged in the attack causing thousands of gallons of cooling oil to leak out and the transformers to eventually overheat. The utility was forced to shut down the station and the $15 million in damage took nearly a month to fix because many of the transformers were custom-built and did not have readily available replacements.
Grid security has since been taken far more seriously. President Trump recently signed an executive order to further secure its supply chain from what the administration identifies as foreign adversaries. This declared a national emergency over the associated threat to national security that tampering or hacking these components presents.
This order has many implications, but the potential cost increase it presents will inevitably trickle down to the end-users of each ISO. As always, Atlas will continue to monitor how the markets react to this decision and the impact it could have on our client’s businesses.
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