One of the favorite memes of our cyberwar theoreticians is the one in which hackers, or some nation in the eastern hemisphere, hit the American electrical grid.
In reality, the only time the electrical grid was manipulated was by Enron.
Power traders in the employ of that company games the California independent operator one summer a decade ago. Their tricks, aimed at raking in more profit caused brown-outs as the company persuaded various suppliers to idle plants at times of peak usage, or switch power out of the state.. The political fallout brought the recall of governor Gray Davis and the installment of Arnold Schwarzenegger in Sacramento.
This weekend we learn that the masters of the universe have again gamed the electrical system in California, for the purpose of rake-off.
It’s been a decade since companies like Enron Corp. manipulated California’s electricity market to generate billions in excess profits.
Enron went out of business long ago, and California’s energy market has been a place of relative calm. Now, however, another big power trader is being investigated for allegedly gaming the state’s electricity system.
State officials believe a subsidiary of JPMorgan Chase & Co., the New York investment bank, pulled down an extra $73 million by exploiting a small wrinkle in California’s electricity market over several months in 2010 and 2011 ..
While the Federal Energy Regulatory Commission is investigating on the state’s behalf, a prominent energy consultant warns that the ISO’s automated market system remains vulnerable to abuse.
“These things are hidden eight levels down in the computer programming,” said Robert McCullough of McCullough Research in Portland. “If a computer doesn’t catch you, you’re not caught.”
He said JPMorgan’s trading strategy appears to be similar to “Get Shorty,” one of the infamous schemes cooked up by Enron to ramp up profits at California’s expense during the energy crisis of 2000 and 2001.
ISO officials insist this wasn’t a rerun of the energy crisis. They said they’ve made huge strides in protecting the system and are quick to sniff out problems.
The only good news? The magnitude of malfeasance is much less than during the Enron-caused crisis.