Cyberattack Restoration Potentially Costlier for Utilities than Natural Disaster Recovery

A report recently published by the Foundation for Defense of Democracies (FDD), in conjunction with insurance provider Intangic, estimates that it could cost more for U.S. utility companies to recover from a cyberattack than a natural disaster.  Although you can question the calculations, one thing is for sure – in this day and age, cybersecurity must be a critical component of utility emergency preparedness efforts.

Comparing the Restoration Costs for a Cyberattack Versus a Natural Disaster

The report utilized a risk-rating system to develop its estimates.  A cyberattack on a critical utility that disrupts power for 5 days is projected to cost over $193 billion, which is roughly 35% higher than the estimated $125 billion cost of Hurricane Katrina in 2005 and 64% higher than the $70 billion price tag for Superstorm Sandy in 2012.

The report comes on the heels of the Colonial Pipeline attack, which caused a service disruption for nearly one week, leading to major gasoline shortages.  But even a largescale, heavily-publicized event like this one is not the end all, be all – smaller attacks on schools, hospitals and government agencies have proliferated during the pandemic, and are even more disruptive in the aggregate than the high-profile cases.

In addition to taking a stab at quantifying the financial impact of a cyberattack, the report also puts forth a call-to-action for government agencies to step up their game.  For example, the report calls for a national breach notification law requiring hacked companies to disclose any breach.  And, the promising news in this regard is that a draft bill has been introduced to do just that.

Yes, life has definitely become easier and more convenient since the introduction of the internet, but at the same time it has definitely made things more complicated for utility emergency preparedness personnel.  There’s no doubt, a cyberattack is no joke, and could very well be the biggest risk currently faced by utility companies.