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networks. For example, the Industrial Control Systems Cyber Emergency Response Team
2012 report recorded responses to more than eighty attacks in the energy sector (U.S.
House of Representatives 2013 ). In a 2013 U.S. House of Representatives Report authored
by the staffs of Representatives Markey and Waxman, more than a dozen electric utilities
responded that they were under constant, daily, or frequent cyberattacks, ranging from
phishing emails, to unfriendly probes, to malware (U.S. House of Representatives 2013 ) .
Whilesmartgridcouldhelptoenhanceenergysecurity,theintegrationofmoreinformation
communication technology into the grid could also undermine security by opening new
avenues for outsiders to affect system operation.
2.3.2 Weakened Economic Conditions
Smart grid opponents also cite economic risks, primarily related to the distribution of costs
and benefits. The suite of smart grid technologies may offer aggregate economic benefits
but who pays for the system upgrades and who captures the benefits of the changes will
depend on how the policies, regulations, and incentives are designed and implemented.
Sharing the costs of smart grid investments across the energy sector, including both the
wholesale power system and retail consumers, remains an important issue. Estimated costs
of integrating smart grid technologies range from $27 billion for smart meters to $1.5
trillion for a fully modernized electric system. In the United States, cost estimates for
deploying smart grid range from $338 billion to $476 billion (EPRI 2011 ) .
Increased Costs for Energy Consumers
Althoughmoreefficientuseofsystemassetsshoulddecreaseelectricity systemcosts,those
lower costs will not necessarily result in lower electricity bills for consumers. Some studies
show consumers paying more for electricity with smart grid, even though they can better
manage electricity use (EPRI 2011 ) . Changing the rate structure is hard, and while the
current flat-rate structure does not reflect the true costs of electricity, it is a structure that
consumers are used to. Dynamic pricing, which promises to align customer and system
costs, could lower overall system costs, but it could raise costs for some customers. It has
generated opposition from interest groups who believe their members' rates will increase
under dynamic pricing and that it will expose consumers to additional market risks and
volatility. Another pitfall for consumers relates to the initial investment to upgrade. Costs
of smart grid upgrades paid for by the utility and recovered from the customers include
the meter, as well as associated costs for the information communication technology (ICT)
overlay, network and communication upgrades, and installation. For consumers to fully
benefit from the information provided by smart meters, many will also need to install
a home area network and replace old appliances with new ones. Even highly motivated
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