A few years ago, a report on the electric grid by the U.S. Department of Defense chided the power industry for not taking cybersecurity seriously: “Ninety to ninety-five percent of the people working on the smart grid are not concerned about security and only see it as a last box they have to check.”
Since then, more utilities are paying attention and starting to look for ways to protect their data and transmission and distribution networks, said Doug Westlund, CEO of N-Dimension Solutions, a Canadian cybersecurity company, during an interview this week. N-Dimension announced earlier this week it had raised an A round of $3.85 million, led by EnerTech Capital.
“I’m seeing utilities, including some municipal and public power utilities and co-op utilities, that are taking this seriously,” Westlund said.
Efforts by government, security companies and the Electric Power Research Institute, an R&D organization for the U.S. utility industry, have raised awareness among electric whole sellers and retailers. More importantly, regulatory mandates on cybersecurity, enforced by the North American Electric Reliability Corporation, are forcing utilities to act.
The emergence of the smart grid, which uses a lot more digital and standard-based communication technologies that automate data collection, is one of the reasons why preventing cyber attacks has become an important task. Threats aren’t always coming from the outside. Sometimes, the problems are internal, such as when utility employees inadvertently use infected USB drives to download data. A report by the U.S. Department of Energy last September outlined key challenges and solutions for building a strong defense for a smart grid.
N-Dimension and its investors are banking on this trend. The company, founded in 2002, had been self-funded. With the new funding, it wants to expand its reach internationally and also line up customers in industries such as transportation and oil and gas.
The company develops software and creates deployment plans for tightening the security of a utility’s operation, from the control center to the smart meters. N-Dimension uses servers and other equipment from suppliers such as Hewlett-Packard and Schweitzer Engineering Laboratories and add layers of its own software, Westlund said. N-Dimension’s software will block access by unauthorized people and other malware intrusion, and issue alerts and reports.
The company makes money by licensing its software, selling equipment and providing maintenance services. N-Dimension’s customers also can contract the company to run their security systems.
Companies that have bought equipment with N-Dimension’s security software include Alabama Municipal Electric Authority and Jo-Carroll Energy. Those are the ones that have showed up in press releases. Westlund declined to disclose the names of other customers.
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