Study: U.S. Power Grid Is Vulnerable to State-Sponsored Hackers

All networks, equipment, and computers can be hacked. A smart coffee maker can be hacked. So too, can a power station that figures in the grid of an entire country. Are such threats overstated? Or, is there a genuine reason to be concerned?

Here’s the good news first. Malicious attackers haven’t pulled the plug to switch off the power from their remote locations. The bad news? It may be entirely possible that a group of ill-intending hackers may have gained the necessary blueprints and knowledge to do just that, after an investigation by the Associated Press revealed that cyber-attackers have systematically carved a hole to gain access to critical operation networks. These compromised networks can be manipulated in such a way that a small group of sophisticated hackers from halfway across the world could potentially unplug the electricity consumed by millions.

In a comprehensive investigation, AP amazed dozens of data sets, private analyses, government reports and over a hundred interviews to look at the cybersecurity infrastructure of the U.S. power grid. The findings make for grim reading.

The complete AP Investigation can be found here.

A Breach of Capline Power Corp

The discovery was first made by security researcher Brian Wallace from Cylance Inc, a cybersecurity firm. Wallace was looking into an incident wherein hackers had stolen the house files from a California-based university when he unwittingly discovered something far more diabolical and significant – the trail of a group of hackers who had gained access to networks housing the power grid of the United States.

Calpine Corporation is the largest generator of electricity from geothermal resources and natural gas in the U.S., with 83 power plants currently in operation in 18 states in the U.S. and Canada. When Wallace stumbled into the breach, he discovered FTP servers that contained a cache of nearly 20,000 stolen files. These files were gathered from thousands of computers from around the world and they also contained important documents from Calpine.

I saw a mention in our logs that the attackers stored their malware in some FTP servers online. It wasn’t even my job to look into it, but I just thought there had to be something more there.

Despite the discovery, Wallace had his priorities – tracking the attackers and figure out their next move and if possible, stop them. Staying up late into the night after being caffeinated became the norm while he worked on reverse-engineering malware that he found injected into the company’s FTP servers. It was months before he received a ping, alerting him of the attackers that he discovered were using IP addresses from Tehran, Iran.

With the ping, Wallace discovered the hackers deploying a Trojan malware called TinyZbot, a keylogger program that also took screenshots of the targeted computer’s screen and helped the hackers obtain backdoor access to the targets.

Wallace was persistent and stuck to the trail, trying to gather as much evidence as he could before finding what could conceivably be the hackers’ prized heist – a folder containing comprehensive, detailed engineer diagrams of Calpine’s power plants.

The investigation by AP also confirmed that usernames and passwords were included among the drawings, credentials that could be used by a malicious attacker to gain access to a critical firewall. The firewall performs a substantial role, one that separates Calpine’s communications network from its operations network. Sources attest to the fact that the blueprints also contain specific locations of devices inside the process control networks of power plants, devices that obtain critical information from power-generating equipment that’s fundamental to a plant’s operations.

With all of those above details, experts have confirmed that hackers could fundamentally breach the operations network of Calpine to shut down power generating stations to induce a blackout.

Remarkably, it was also discovered that the hackers lacked proper security measures themselves, as the stolen trove of information was discovered in seven unencrypted FTP servers. The FTP servers also revealed custom-authored malware that cloaked its originating computers’ locations. It was a small bunch of comments written in Persian that led investigators and Wallace to believe that the hackers are likely to be operating out of Iran.

As things stand, the deduction is still purely circumstantial, as U.S. officials could not confirm that Iran was categorically involved in the Calpine Corp breach.

Dark power grid


The investigation led by AP also revealed hackers to obtain:

  • Passwords and user names that could be used remotely to connect to Calpine’s two networks by the hackers.
  • Detailed blueprints. The investigation also revealed a total of 71 networks and power stations coast-to-coast between New York and California were found with detailed engineering drawings showing the exact locations of critical devices. These devices often relay and communicate with boilers, gas turbines and other vital equipment.
  • Information flow diagrams. Furthermore, diagrams showed the patterns and means through which plants relayed information back to the company’s virtual cloud. A man-in-the-middle attack could potentially see attackers gaining stealth access to this information.

A spokesman for Calpine, Brett Kerr, noted that the company’s information was stolen from a third-party contractor who had previous business ties with the power manufacturer. While Kerr admitted that the company was unaware of the breach until Wallace’s discovery, he claimed stolen diagrams and passwords to be ‘old’, as old as 2002 and will pose no threat. Independent cybersecurity experts polled by AP however, disagree.

During his investigation, Wallace discovered the hacking group to possess members physically located in Canada, Netherlands and the United Kingdom, besides Iran.

A Real Reason for Concern or an Overstated Gloomy Prediction?

This might not come as a surprise if you’re a regular reader of Hacked. The AP investigation revealed the Calpine breach –while significant—was hardly unique. Plenty of ‘top experts,’ the publication notes, who spoke on the condition of anonymity have confirmed that offshore hackers have gained plenty of remote access controls over the period of the past decade.

About a dozen times in the last decade, sophisticated foreign hackers have gained enough remote access to control the operations networks that keep the lights on, according to top experts.

While breaches affecting large masses of people such as the infamous cases of Ashley Madison and the OPM breaches gain more publicity, word of power plants being vulnerable or exploited in a cyber-attack rarely gets headlines. This is despite the potential outcome of the fallout of such a breach where hackers do take remote control of critical power infrastructure, a scenario that is arguably direr than a breach that could result in the identity theft of millions of citizens.

Although critical infrastructure breaches haven’t led to any blackouts yet, the underlying threat comes from the capabilities of hackers who have the means to engage in cyber warfare at a time of their choosing.

Robert M. Lee, a former U.S. Air Force cyberwarfare operations officer explained:

If the geopolitical situation changes and Iran wants to target these facilities, if they have this kind of information, it will make it a lot easier. It will also help them to stay quiet and stealthy inside.

There is the school of thought that threats against critical infrastructure are overstated. Taking down the power grid is no easy task. The power grid structure is designed in such a way that the constant flow of electricity is maintained, even when lines go down routinely for maintenance or other reasons.

Keith Alexander, the former director of the NSA who now heads a cybersecurity firm said:

The grid is a tough target, but a lucrative target. There is a constant, steady upbeat (in the growing number of sophisticated attacks). I see a rising tide.

Despite an increase in cybersecurity measures, there is no foolproof system to curb the threat of attackers gaining access to crucial systems. Two recent examples of intrusions adds to the above theory.

  • In summer 2014, a hacker took control of an unnamed utility provider’s wind far by simply using the anonymity software, Tor. Once the connection was established, the hacker was able to change the automatic voltage regulator for the wind farm from “automatic” to “manual.”
  • An operations supervisor working for a subsidiary of the largest power grid operator in the United States – American Electric Power, opened his personal email containing a zip attachment, on his work computer. As it turned out, he downloaded ransomware malware, unknowingly, in the form of CryptoLocker. Before any real damage was done, the AEP security team were able to wipe the supervisor’s computer clean.

Ransomware fundamentally encrypts all files and folders on a victim’s computer before demanding a ransom in return for the decrypting key required to gain access to the files again. If CryptoLocker found a tunnel connection from the work computer to AEP’s network, the outcome may have been catastrophic.

It’s notable that AEP’s power plants, equipment and sub stations, much like most big utilities are on an intranet network separating its in-house software with multiple layers of encryption and is also not accessible by the internet. This fundamental separation is a vital step to ensure attackers are kept at bay in their attempts to gain access to critical infrastructure.

Experts agree that knocking the power grid of a country offline would be a monumentally hard for hackers but the same naysayers who note that cybersecurity risks are exaggerated, also agree that it is entirely within the realm of possibility for hackers to knock sectors in the power grid offline.

A previous study by the Federal Energy Regulatory Commission claimed:

A coordinated attack on just nine critical power stations could cause a coast-to-coast blackout that could last months.

Images from Shutterstock.

Samburaj is the contributing editor at Hacked and keeps tabs on science, technology and cyber security.