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Spies Like Us: How Vulnerable Is The Grid? · Not Another Energy Podcast

• Bethany: Hello, hello, hello, and welcome to your new favorite show, not another energy podcast. I'm Bethany. Teresa: And I'm Teresa. Bethany: And together we are Bloom advisory partners. And I want to start off with a little apology for our listeners. I know this one is a little bit delayed. First, we had technical issues. We lost some of Teresa's audio, and I don't want anybody to miss a second of what Teresa has to say. So we decided to re-record. And then the day we were gonna re-record, last Friday, I think, we had horrible storms here in Pittsburgh, and I had a very bad sequence of events where I had lost my power, I was flooding, I trees down in my yard. My Airbnb had a septic system backing up into its basement and power outages. And you know, all of that is actually kind of relating to what we talked about and will be talking about today because we started off talking about something that happened a little bit further away from where Teresa and I are in Indiana. So Teresa, you wanna you wanna kick off what we started talking about last time and let's do this thing. Teresa: Yeah. So Just a quick recap. If you looked for us last week, you probably instead saw a link to a different podcast. my whole idea behind this podcast and the concept of energy security and security of the grid came out of me listening to that diary of a CEO podcast where he had a CIA agent on or former CIA agent, and the guy was just talking about he's like, you know, we're just regular people. Like we didn't predict the Berlin Wall coming down. We just randomly give reports to the president that not randomly, he does them daily, but they're just what's happening right now. It's not here's our prediction of the future or here like and I thought, my gosh. What I can't Bethany: Do we did it make you feel better or worse to think about the fact that CIA agents are basically just normal people observing things? Teresa: It made me feel a little worse, actually. I was like, you know, it's not like in the movies. But then it raised this other concern, which is I think we all have this concept when we think about the energy grid, that it's the main focus is keep it secure and it's the backbone of our economy. And you know, we hear all the marketing spiels and the blah blah blah, like, we're here for you. And then Indiana's out for ten days. And I Bethany: Yeah. Teresa: I you know, I that happened a couple weeks ago. I probably should have looked before today, Bethany, knowing that we were gonna re-record, but I wonder what the economic impact was. Not just loss of food, but businesses. Bethany: Well yeah, and w right. Yeah. I mean we talked about this before and we've talked about this before too in other contexts. A lot of the people that suffer when something does happen are often the people that could afford it the least, right? So people that maybe can't afford to replace their food or their medication and they tend to to get like the least amount of attention. But yeah, you're right. There is a business aspect too. How many small businesses had to throw away freezers full of food or, you know, ice cream or any number of things, the economic impact. Teresa: Yes. Bethany: And I could look it up, Teresa and I like put it in our show notes. So we will by the time this post know what that did cost. cost the people of Indiana because they were out of power for, I believe, almost up to ten days. Teresa: Yeah, I think it might for some it was probably even longer, which that's terrifying on so many levels because again, if you know, if you're one of the bad guys, right, and you are trying to take out part of America, every one of these long duration outages that cover large amounts of people it's a roadmap, isn't it? It's okay, now I know exactly what and where to hit to create the biggest impact and the most amount of pain. And It took me back again. I was like, Well the CI isn't watching and the F who's watching this? Who who is who is solely focused on I don't care about the cost. I just wanna make sure that if somebody tried to come after our grid and the backbone of our economy, that they can't do it easily. Bethany: Yeah. And I think this is an almost, I don't want to say uniquely American problem, but we both know from our combined experience, when we were working under Centrica, which is in the UK, they took it very seriously. We had a training with their head of security and risk, I can't remember his title. The the thing that I remember the most about him, he was lovely, and his favorite band was the Stone Roses. And what do you remember most about him, Teresa? Teresa: He was MI6 and it was super fucking cool. Bethany: Yeah, he was. He was a really cool dude. But I mean, but that's how seriously they took their their security, right? So that was w so we got to experience it on a level outside of the US. So you're saying there's no equivalent of that watching the grid right now. And if there is, it's just a regular person that happens to be in the CIA. Teresa: Well Yeah well So technically before you all start writing in I know the CIA doesn't operate inside the US That was just my inspiration so don't come at me about the CIA so I I will say this. I obviously we had MI6 training and and it was very interesting. it like it was one of those things where we did work for a global corporation who had a responsibility and they took it very seriously. I have in the past. Ohio used to do a once a year it was like a a seasonal readiness thing and they would hold it at the commission and FBI agents would come there and they would talk about what they're seeing. But you don't really hear about that anymore. You don't see people saying, hey, microgrids need to be a critical security infrastructure of our grid. I mean obviously all of our bases run on microgrids. They see it. Why are we ignoring that for the rest of the United States? And it it's Bethany: Well, l let me ask you this, because you said you sat in those meetings, right? What were some of the things that the FBI agents or or representatives or whomever they were were telling you that they were seeing? I mean, w at that point and was this pre-nine eleven or post nine eleven? 'Cause we're we are coming up on the anniversary, the twenty-fifth, which absolutely I cannot believe. But you know, I mean, do you think that that's that that was a tipping point for grid security? Obviously not, or we wouldn't be talking about this. But yeah, what kind of stuff was talked about? Teresa: Yeah, it was definitely post-9-11. And honestly, what they talked the most about was chatter that they would hear, more like very local domestic kind of Looney Tunes people. not necessarily like like coordinated things, though to be fair, I don't think the FBI is gonna show up in a public meeting and be like, Here, here's all of our information. Bethany: Here's our confidential dossier. Teresa: Yeah. But it it still raises the question, which is that commission back then had enough foresight to say, look, we need the FBI in the room to talk about these things. We should be considering these things. And yet we still have the exact same grid that we had more than a hundred years ago. And even worse, we brag about it. We brag about this crumbling thing that is an easy target. And we're not doing all the stuff that to your point other countries are doing to shore up their grid against these kinds of things. I mean, the UK is very big on microgrids. Spain, after what happened, was it last earlier this year, is looking into microgrids. They're really supporting, you know, wind and solar, but also they're bringing back some natural gas fired stuff, right? Like I mean, we had, you know, a lovely guest who talked about what was happening. In his home country. It's just one of those things where I don't care if it's renewables, I don't care if it's natural gas, I don't care what it is, but at some point we need to start investing in a more secure grid that isn't so widely connected, we are putting ourselves into 10-day outages. Bethany: Yeah, well, and I would actually add another layer of alarm here, which is the rise of your mortal enemy, AI, because I think that that adds another entry point into the system that would be pretty easy if you were so inclined to come in and jam things up pretty darn badly. I don't think that there's enough understanding around, you know, how people becoming how utilities becoming more reliant on AI. I mean you hear almost every day now about an AI agent escaping its boundaries at you know, some either OpenAI or or you know a clawed agent just going rogue and and attacking other systems. If that were to happen to the grid, it would be devastating. And I don't know if we've got the the technology currently if we do, please somebody tell me, to to stave that off if it were to happen. Teresa: we we d absolutely do not. And I don't know I okay, Bethany: Teresa is sputtering bad over there. Teresa: so I I don't think we've ever talked I I don't know if I've told this story even to you, Bethany. okay, so I started in the energy business in September 2001. So I went through Enron, I went through 9-11, and then a few years later I went through when First Energy blacked out the entire East Coast. And I don't know if you know what ultimately happened because you're you know, I'm one of those losers that read like the thousand page document that went through everything. Bethany: And you are not a loser. You're just incredibly well read. Teresa: so here's what happened. My I was working in Cleveland, thirteenth floor of the fifth third building on Superior Avenue. And We were the company I worked for at the time, we we my boss and I were on one of those old school plug-in speakers, right? The ones that sat on the desk, but they weren't wireless at that time. And we were talking to our electric trading desk. And the guy go on the other side, who was in Wisconsin at the time, said, What? what? No. And then it went dead. And then like seconds later, our entire power went out. So keep in mind right. Bethany: That's that's like that's like some War of the World shit. I would have I would have been very, very scared and alarmed. Teresa: Right. So leave, right? Obviously walk down thirteen flights of stairs. Go home. trying to everybody's trying to figure out what's going on because remember everything went out. Not just one city. The entire East Coast went out. So what really happened was First Energy didn't at that time they had humans doing all of this, right? And the humans basically were arguing about which basically w which circuit to like flip off to stop this from happening. And the reason it didn't go west was because Duke and AEP and you can read the transcripts and I'm gonna paraphrase a little bit, but their guys were like, fuck this shit. Hit the button basically, right? We're not waiting on them. Bethany: I mean it in all fairness that's maybe what they said completely. Teresa: Yeah, yeah. So and it took a long time to bring it back up because when the grid goes down, it's not like you could just turn everything back on, especially on that large of a scale. Bethany: Yeah, I heck when you g like when you have your power shut off and they have to turn it back on and you're home, they want you to turn everything off, make sure all the lights are off, 'cause they don't want to do a you know, a cold start and and to have a surge. So I can't imagine on that scale. Teresa: Right right. So let's take it a different direction with your AI point. What if there was no human intervention and AI had taken over and it was the first energy version? And there was no Duke or AEP from stopping it going west. What if it went everywhere? Because nobody stopped it. And it's not necessarily just the AI part, it's the fact that we still have that exact kind of grid, right? Bethany: Yeah, yeah. No no improvements were made after after this. Teresa: So maybe I mean to be fair, maybe they did make improvements, maybe the training's different, maybe the reclosers are automatic, but if you have some sort of AI bug in there that's like, I know if I do this and then keep everything open because of the squirrel, right? It was that's what it was. It was a combination of a squirrel and something else. you just have a a you could have a quite literally a nationwide outage. And I know there's gonna be but no, Teresa, that can't happen, blah, blah, blah. There's a lot of things we say can't happen and then they do. And the reason that something like that could happen is because we're not allowing smaller grids to exist that can sh separate themselves from the rest of everything. Bethany: So what would it take in your mind? 'Cause I know you you do think a lot about this. I know you take your little neighborhood walks and you beef with your neighborhood pets, but I know you also listen to a lot of podcasts and think a lot of big deep thoughts about this stuff. So in Teresa world, what kind of a plan would you start to build to I don't want to say protect the grid, but to protect the people if the grid goes down? Teresa: So two things. One, the original recording of this was before the president had put in place his executive order that said no foreign built equipment on the grid. And I know everybody sort of leaned into there's a cost and things like that, but if you listen to this podcast, what you're gonna find out is John Deere had sent some equipment, I think it was to Russia. You guys can check me on the story, but the the ultimate point is the same, which is they figured out like that they could remotely shut these things down. So if somebody was trying to steal their IP or whatever, think about that and the equipment on our grid. Bethany: Yeah. Teresa: Right? How are we testing for that? How are we watching for that? How are we making sure that our grid is safe even from the equipment that we're putting on? So I know everybody freaked out and was like, this is gonna raise costs and blah blah blah blah blah. But I was kind of like, that might not be such a bad move right now, right? The world isn't exactly happy with us. Bethany: Yeah, and Yeah, right. That is an understatement. Canada, we're so sorry. we Teresa: Ha ha ha. Bethany: love you. so to to that point about the the foreign and the costs, I do think that there is this thing where what what is the juice is worth the squeeze, right? I mean, I think that our national security and national safety are worth the extra money that it would cost to do all America made. But I also do understand people are just energy cost fatigued and anything that th that we're doing to get I mean it's just smacking people and it's unfair, but Teresa: Right. Bethany: you know, I don't I don't disagree with you. Teresa: So the other piece in all of this is we should allow people to build their own microgrids. And I don't just mean like throw some solar panels on your roof. I mean a real microgrid. A world where our like my subdivision could own its own gen and grid and benefit by supporting the grid around us, but also being able to island ourselves and control our costs in different ways. that's a world where to your point, Bethany, it it still connects to the bigger grid so it benefits and helps to bring down costs, but all of the costs to run the grid this little microgrid fall on the people that are actually using it. Now, you got the big eyes, I know, that are gonna be like, death spiral and now everybody's costs are up. I don't think that's the world that's not a realistic way to do it. That's just gatekeeping, right? A realistic Bethany: Yeah. Teresa: way to do it is to create it as like a local energy market, but the ability to separate everybody's ever everything if you need to. And that's the way to do it the right way. Bethany: So we always too we always do, I should say rather, talk about how a lot of times the hold up is in the policy, right? So what sort of policy changes I mean, could you see this being embraced at all on like a national level? Or is there still gonna be holdups all the way down the chain to like down to like the local level and the state commissions? Teresa: Okay. I'm just gonna I'm gonna do it. I know, I know, I know. Okay. Bethany: did I put you the spot again? Just do it. Just take a deep breath and dive on in, Teresa. Teresa: In a perfect world, the US government would pass a law that basically says microgrids and privately owned generation cannot be prohibited by any state. It's a it's a national security risk and you need to allow for it. that that would be great because it gets rid of right it's a broad sweeping you guys can't just like reside in one company's pocket. You have to think about what's important. So you have sort of that part of it. And then you have really cool laws. Like I know I always talk about Ohio, but Ohio has this really good law that they passed a few years ago. It's House Bill 15. And it said if you are a commercial or industrial customer of a certain size, you 100% have a right to behind the meter generation that you own and manage yourself. And it took it a step further, which is, and you can connect to another site that's within a mile of you. That would I like it to be further? Yes. But it's the first step to what we're talking about, which is grid security and reliability. If you want to pay for it yourself, then have at it. Stop making everybody pay for your shit. Bethany: Yeah, and you know, and Teresa and I were we were talking before we hit record. We do feel like we talk about Ohio and Pennsylvania a lot, but in our defense, that's where we both live. But if Teresa: Yeah. Bethany: you listener have a cool energy story from wherever you're ca tuning in from, please send them. We're always on the lookout for cool stories to talk about and cool ideas. So feel free to send, send, send. I do I always love picking your brain on this one too, because there's one thing about Teresa. She's gonna have an opinion. Where do you think where's a place where they might be doing it right? Where do they take security seriously? Are there any states that are kind of doing it? Or, you know, maybe it maybe even out of the US. Are there any shining examples of how this can be done if you put your mind to it? Teresa: I I don't think there's perfection anywhere. I think there's little pockets in different places where they're doing pretty cool stuff to allow for these types of things. I mean th you we've talked about this before, right? There's there's a neighborhood in Mississippi that has a a microgrid. I I know some of our listeners are gonna be like Clutching their pearls because it's utility owned. But I mean, it is a reality when we're talking about grid security, that even if it's utility-owned, it's a way to protect in the way that we've been talking about. So I'm not gonna go competition, rah-ba-rah. You know you all know where my heart lies. you've heard me talk before about the Cornwall project in the UK, which was a very, Bethany: huh. Teresa: very cool local energy market that focused on these types of things. There are places I I feel like I'm always kinda like shitting on California a little bit, but it's more because I feel like they're walking back good policies right now. they did a lot Yeah, yeah. Bethany: Yeah. You've used them a few times in a good way, so you're you're fair and balanced. Teresa: They did a lot with solar. I actually think some of like the really good solar companies, and you and I are gonna talk about this in a future podcast, Bethany: Yes. Teresa: because I used to really be sort of down on rooftop solar, but I think some of the stuff that I hated before has shifted and pivoted because California was so supportive. But their rollback of some of their net metering and some of their other things I think could be a detraction from the progress they made. listen. You want something solved, just go to Texas. Like, they they get it done. We are, we are. But they I mean Bethany: Yeah. Hey we we are going to Texas. We'll be we'll be in hey, Texas. We'll be there next month. Teresa: it's a funny thing because you know we are all out here like shouting at each other, like, why aren't we doing this? We should do this. And Texas is like, cool, done. If you if if there's a competitive market there, let them solve for it. And to be fair, a lot of the stuff that you and I see in Ohio and Pennsylvania or the East Coast, whether it came from the utility or not, it originated from the competitive market in Texas. So if you if you want to see the Bethany: Yeah. Teresa: next round of stuff, Urcott's doing some really, really interesting changes. changes to how you interconnect with them and what they're doing with batteries and other things to actually incent more security and resiliency on their grid. So there you go. Bethany: Well, I mean, I c I think so they had some lessons learned coming out of the superstorm from gosh, a few years back. What year was that? Teresa: They did, but then they didn't sit on it, right? They weren't like, yeah, let's just wait for something else to happen again in the exact same spot. Bethany: Yeah, well everything's bigger in Texas, including apparently their motivation to actually solve problems. So everybody take Teresa: Yes, yes. Bethany: a look. all right. Well, so I think that obviously we're not gonna solve this problem today, but I hope that we have gotten people interested in this issue as an issue because it truly is one of national security. It was it's it's a very vulnerable spot in the United States infrastructure, and I don't know if I feel comfortable that it's being protected enough or taken seriously enough. I think I would like to nominate Teresa to solve this for everybody. Okay. You already have a plan. Teresa: I mean I'll talk about it. I'll tell you what to Bethany: Mm. Teresa: do. Just stick everybody just listen to me and like everything will be fine. Bethany: Literally, if the world would just listen to Teresa, it would be a better place. all right, well on that note, we're gonna wrap for today. Thank you for your patience, guys. Sorry for the technical difficulties and the mother nature and my own rolling power outages. But we are back and we will be back again next week with another brand new episode. But until then, I am Bethany. Teresa: And I am Teresa. Bethany: And we are Bloom Advisory Partners. And we will see you again on the next episode. And until then, remember, energy is never just about energy.