Virginia and Kentucky. All these attacks occurred during coal mine strikes.22 Two Florida substations were heavily damaged by simultaneous dynamite explosions in 1981 in one of the most expensive incidents. Damages totaled about $3 million, but no significant customer outages resulted. No arrests have been made, but circumstantial evidence points to a contractor labor dispute.23

Incidents stemming from unknown motives include the cutting of guy wires and subsequent toppling of a tower on the 1,800-MW, 1,000-kV DC intertie in California in 1987. There was negligible impact on the power system, because the load on the line was light at the time and it was scheduled for maintenance the next day, so alternate power routes had already been arranged. Damage was repaired in about 4 days.24 No suspects have been announced. Wooden poles were also cut in Colorado in 1980, bringing down a 115-kV line. The damage was repeated later in the year. Total costs were about $200,000 each time.

Another incident demonstrates that saboteurs can mount a coordinated operation. In 1986, three 500-kV lines from the Palo Verde Nuclear Generating Station were grounded simultaneously over a 30-mile stretch. It happened at a time when none of the nuclear reactors was operating, so no disruption occurred. Under different conditions, the reactors would have shut down. No arrests have been made.2

In 1989, several environmental extremists were arrested in the act of cutting a tower on a line in Arizona. The group, which reportedly had been inspired by Edward Abbey's The Monkeywrench Gang, had been infiltrated by the FBI. Two members of this group have prepared a manual detailing how to attack equipment and facilities, including power lines, deemed harmful to the environment.26

Since 1980, only Puerto Rico has experienced extensive attacks that might be characterized as terrorist, as opposed to labor disputes or vandalism. In 1980-82, many bombings occurred at substations and transmission towers. Some of these incidents

Chapter 2-Causes of Extended Outages • 15

have been attributed to Macheteros, a separatist group. Several of the resultant outages lasted for several days.

The FBI and other agencies do not maintain statistics on energy facility sabotage separately from those of other targets. The best available database is that developed from public sources by a private consultant to the Department of Energy, which records a total of 386 attacks on U.S. energy assets from 1980 through 1989, an average of 39 per year.27 Electric power systems, mostly transmission lines and towers, were the target in a large fraction of these 386. This database may understate the problem because some utilities may not publicize attacks out of concern that more may be inspired.

Other Countries

Terrorist sabotage has been much more extensive and violent in Europe and Latin America than in the United States. Attacks have been made by separatists, radical revolutionaries, and anti-technology and anti-nuclear groups. A few examples will illustrate this:

France has experienced assassinations of energy officials as well as bombings, arson, rocket attacks on energy facilities, and grounding of transmission lines. The saboteurs included anarchic, separatist, and political terrorists, and anti-nuclear extremists.

West Germany also is familiar with bombings and assassinations from the Baader-Meinhof group, Red Army Faction, and other groups. In addition, there has been an intensive campaign to destroy transmission lines by cutting or bombing towers. In 1986 alone, about 150 acts of such sabotage were committed. Much of the violence has been by politically motivated or anti-nuclear extremists. Transmission lines from nuclear reactors have been a major focus, and the nuclear industry itself has been a target.

Attacks on electric power systems have been most severe in El Salvador. The Farabundo Marti National Liberation Front (FMLN) has repeatedly bombed or fired on transmission towers, substations,

24Electric Utility Week, Aug. 10, 1987.

25 Mullen, op. cit., footnote 22.

and hydroelectric powerplants. Up to 90 percent of the entire Nation has been blacked out by the FMLN during some sabotage campaigns. The FMLN has even produced a manual detailing how to attack an electric power system. According to official sources, the FMLN has launched over 2,000 attacks on electric systems since 1980. The Sendero Luminosa (Shining Path) revolutionary group has adopted a similar strategy in Peru, frequently leaving Lima, as well as a 600-mile stretch of the country, blacked out or under power rationing for 40 to 50 days.28

Countries where insurgents or hostile forces have targeted electric power systems have found it worthwhile to take protective measures. Passive techniques, such as concrete sheaths around transmission tower legs, make them more difficult to topple. Some countries, including South Korea, maintain army conscripts at key facilities. Because of the expense of adequately protecting distributed systems, others simply repair the damage, and may design their systems to be easily repairable.

The Threat

Intentional damage to an electric power system can be caused by a wide variety of actors. Most common are ordinary vandals, typically hunters who shoot at transmission lines or the insulators attaching them to towers. Utilities are experienced with handling vandalism, which is very unlikely to cause massive damage. Hence this report is not concerned with vandalism except to the extent that remedial measures for more serious attacks might have an incidental value in reducing it.

The Single Saboteur

Most of the U.S. incidents noted above could have been caused by one person. The fact that most have been relatively minor suggests that either the saboteurs did not know how to cause greater damage or they did not want to. In sabotage initiated over labor disputes, the perpetrators usually are trying to hurt the utility or their suppliers, not to cause widespread blackouts. The dispute would have to get extraordinarily bitter before anyone would risk antagonizing a large part of the public. A personal grievance might be a more probable motivation for an individual to try to cause widespread damage. A utility employee who felt misused might want to use his expertise to retaliate in a spectacular fashion. Alternatively, any

28 Ibid.

of the motivations of a group, discussed below, might apply to an individual who decides to take matters into his own hands.

The primary difficulty faced by a single saboteur intent on causing a devastating blackout would be to assemble all the necessary information and supplies. He would have to get the idea in the first place; research how electric power systems work and what the vulnerable points are; determine the layout of his target system; physically locate the actual targets; plan the attack in considerable detail; procure explosives; rehearse; and carry out the actual attack. If any of these steps were deficient, the attack would lose effectiveness.

It is unlikely, though not impossible, that an independent individual will combine the motivation, expertise, contacts to procure explosives, tenacity, and nerve to disable as many as eight facilities simultaneously. This would require visiting all the sites over several days and would entail a significant risk of detection. A more probable scenario for the independent saboteur is a one-night series of assaults on as many facilities as he can reach. Such an attack can still cause major problems for a utility, but far fewer than would more widespread damage. Theoretically, the saboteur could continue his attacks, but once utilities are alerted they can post guards to deter an immediate reoccurrence of the rampage.

Terrorist Groups

Organizations initiating terrorist attacks in other countries include separatists, political radicals, and anti-technology and/or anti-nuclear extremists. The only significant separatist movement in the United States in the past 125 years has been in Puerto Rico, and none seems likely to develop. Nor do the anti-technology or anti-nuclear movements seem likely to turn to large-scale, violent extremes, in part because people have peaceful ways to try to implement their views.

This country has had more experience with politically oriented extremism, particularly in the sixties and seventies. The Weathermen and other groups did bomb some transmission towers and might well have wanted to cause more damage. Much of this violence was in reaction to the war in Vietnam. It should be noted that current trends, if anything, indicate a lessening of terrorist attacks.

However, under some conditions, this threat might reemerge, possibly by environmental extremists. Electric power systems probably are not the most obvious targets but could become fashionable if terrorists choose to inflict great inconvenience and economic cost on society instead of more dramatic acts such as assassinations or destruction of symbolic targets. The Evan Mecham Eco-Terrorist International Conspiracy (EMETIC) targeted electric system facilities in 1987-89.29 Even extortion on a gigantic scale might be considered to raise funds and shake confidence in existing institutions.

Foreign groups could also import violence. American property and individuals abroad have been the targets of attack in many countries. It is not clear why some of the groups hostile to the United States have not carried their struggles here, and therefore it cannot be guaranteed that they won't. Groups in volatile areas such as the Middle East and Central America might want to hurt the United States directly. Separatists might want to pressure this country to influence events in their country, even if they have no direct conflict with us. Drug cartels in Colombia could hope to make our drug wars too costly. Environmental extremists concerned over potential global climate change might see the U.S. electric power system as symbolic of the refusal to curb production of carbon dioxide. The logic does not have to be sound for an attack to be damaging.

A group is much more likely than an individual to be able to mount a major assault on sufficient facilities to cripple a power system. A group combines all its members' skills and contacts and can share tasks. In particular, international contacts among terrorist groups multiply the expertise and resources available to any group. The knowledge gained by destroying substations and power lines in Germany and El Salvador is available in the United States. In fact several "how-to" sabotage manuals are available for sale here. Weapons and explosives are also widely available here and abroad. If foreign terrorist groups wish to attack the United States, they can probably find assistance here in obtaining target

29 Robert K. Mullen, personal communication, Apr. 2, 1990.

Chapter 2-Causes of Extended Outages • 17

information and in camouflaging their activities.30 However, a group is also much more likely to be detected than an individual.

Military Attacks

Commandos with special training and essentially unlimited resources and support could mount a far stronger attack than could even the most sophisticated subnational terrorist group that has yet emerged. The Soviet Union is reported to have such forces, called spetsnaz, available for operations in the United States.31 The object would be to create havoc and demoralization before overt hostilities commence. While this risk is diminishing, it has not disappeared. Alternatively, a hostile country might take this approach if it were unable or unwilling to declare war but wanted to take some military action against the United States.

The ultimate attack would be an overt military operation. The vulnerability of electric power systems can have serious national security implications. For example, in World War II, Germany's highly centralized electric system was not attacked until late in the war. German officials, surprised at this omission, commented after the war that "The war would have finished two years sooner if you (the Allies) had concentrated on the bombing of our powerplants earlier..." When the Allies finally did destroy Germany's electric generating and synthetic fuel facilities, the German economy was crippled.32 This experience will not be ignored in any future hostilities.

For defenses to be effective against military assault, either commando or overt, they would have to be extraordinarily strong and expensive, well beyond anything that might be justified against subnational terrorists. Since even a limited terrorist attack could have extremely serious consequences, this report focuses on responses to that threat. Actions necessary only to counter military threats are beyond the scope of this report, but it notes potential benefits of a few of the counterterrorism steps.

Chapter 3

Impacts of Blackouts

The United States has had little experience with blackouts that last more than a few days. The only major blackouts over the past 25 years have been the 1965 Northeast blackout, the 1977 New York City blackout, the August 1988 downtown Seattle blackout, and the 1989 blackout in the Carolinas. Most of what we know is anecdotal evidence, drawn primarily from the well-documented 1965 Northeast and 1977 New York City blackouts. The lessons learned from the recent Hurricane Hugo experience should provide additional information on the impacts of blackouts. This is particularly important in light of the technological changes that have occurred in the last decade especially the proliferation of computers and automation in all sectors and the advances in telecommunications which require a reliable supply of power.

This chapter provides an overview of costs and reviews the quantitative estimates for both actual and hypothetical outages. The remainder of the chapter discusses the impacts of blackouts on the industrial, commercial, and residential sectors and on essential services and infrastructure.

OVERVIEW OF COSTS OF

BLACKOUTS

Blackouts have impacts that are both direct (the interruption of an activity, function, or service that requires electricity) and indirect (due to the interrupted activities or services). Examples of direct impacts include food spoilage, damage to electronic data, and the inoperability of life-support systems in hospitals and homes. Indirect impacts include property losses resulting from arson and looting, overtime payments to police and fire personnel, and potential increases in insurance rates. Direct and indirect impacts can be characterized by whether they are quantifiable in monetary terms (economic impacts); relate to the interruption of leisure or occupational activities (social impacts); or result in organizational, procedural, and other changes in response to blackout conditions (organizational impacts).1

Direct impacts can be avoided if the end-user has backup systems, but these have often proved unreliable. Indirect impacts may be partially mitigated through contingency planning, improved communications, customer education, social programs, and other planning approaches.2

Estimating the costs of electric power outages is difficult and imprecise because the economic value of electric reliability to different customers is not well-understood. Only recently has much progress been made in developing economic values for reliability, including the development of analytical techniques for measuring or estimating the direct and indirect costs of actual and hypothetical outages.

To estimate costs, utilities and public utility commissions (PUCs) rely on either hypothetical cost analysis or reconstruct the level of economic activity that might have occurred had there been no blackout. Both of these methods have inherent uncertainties, and theoretical models have their own shortcomings. Also, indirect and social costs often cannot be quantified but only enumerated.3

Types of Costs

The kinds of costs considered in value of reliability estimations include both short-term outage and long-term coping or adaptive response costs.

The true economic cost of any outage is the opportunity value of profit, earnings, leisure, etc. that would have been produced but for the loss. Therefore, one must ascertain what the lost opportunities were and how they would have been valued by those who suffered the loss. The short-term outage costs are incurred during and shortly afterward, and include product spoilage, lost sales, foregone leisure, and other opportunity costs. Long-term coping costs are incurred when customers invest in equipment to mitigate the effects of a shortfall. Investment in backup generators, for example, is clearly made to mitigate the impact of future outages. Historically, mitigation costs have been relatively insignificant in

2Tbid.

3Ibid., p. 66.

most parts of the United States due to the high standard of reliability.4

Short- and long-term costs may have both direct and indirect elements (see table 3). Direct costs are those suffered by the direct customer, such as spoilage or lost production. Indirect costs include those realized by customers of an impacted firm; they may have to purchase higher cost substitutes, incur additional production costs, or have unrecovered costs. Indirect costs can be several times as large as direct costs because the loss of a single input may retard an entire production process. Other components of indirect costs include the multiplier effect from lost wages and other factors of productions and potential social costs stemming from looting and vandalism. Social costs are difficult to quantify and have been generally neglected in estimations. For example, while losses resulting from looting and arson can be identified and assigned dollar values, the secondary or ripple

effects often cannot be enumerated. These secondary effects, such as a potential increase in insurance rates, represent long-term and far-reaching economic implications.6

Hypothetical Outage Cost Estimates

Numerous analyses have estimated the costs of unserved electricity for various consumer sectors. Most of these are based on survey data from particular utility service areas. They vary substantially among classes of customers and among customers within each class.

Table 4 shows some estimates of the costs of power outages. The more recent estimates, based on survey data, reflect the value of service reliability in terms of the average dollar change in a consumer's monthly bill that would offset a change in service reliability. These estimates cannot be compared directly because of differing methodologies, as