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A top DHS official revealed on Wednesday

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Sniper attack on California power grid may have been 'an insider,' DHS says
Rest assured it was a inside job leading to other deadly explosions.
A top DHS official revealed on Wednesday that an infamous 2013 sniper attack on a California energy grid substation may have been committed by someone on the inside.
The attack, which nearly took out power to parts of Silicon Valley, has been called "the most significant incident of domestic terrorism involving the grid that has ever occurred" by the nation's top electrical utility regulator.
The yet-unsolved case has been shrouded in mystery. No suspects have been named, and as of last year, no motive identified.
But at an energy industry conference in Philadelphia this week, we got our first glimpse at who the government thinks might have attacked the grid.
"While we have not yet identified the shooter, there's some indication it was an insider," said Caitlin Durkovich, assistant secretary for infrastructure protection at the Department of Homeland Security.
Was it a current or former employee of PG&E (PCG)? A hired contractor? DHS will not comment on an ongoing investigation.
Shortly after midnight on April 16, 2013, some people snuck up on PG&E's substation in Metcalf, California. They cut fiber-optic AT&T phone lines, shutting off service to nearby neighborhoods. They also fired more than 100 rounds of .30-caliber rifle ammunition into the radiators of 17 electricity transformers. Thousands of gallons of oil leaked, causing electronics to overheat and shut down.
PG&E engineers were able to reroute power, but it was a struggle to keep the power on during the attack.
The assault lasted only 19 minutes, but it caused $15 million in damage. It also became a harsh wake-up call for energy providers, who have since become obsessed with the physical security of their remote power stations.
PG&E alone has pledged to spend $100 million to improve security at its facilities. Also, it and AT&T (T) have each announced separate $250,000 rewards to catch the attackers.
Why the alarm? Transformers are often custom designed, sometimes costing $3 million each -- and replacements are slow. Plus, physical attacks on energy distribution machines are much more effective at taking out the power grid than a computer hack. And it's incredibly easy to pull off, several energy utility firms told CNNMoney.
Experts attending GridSecCon, held by the North American Electric Reliability Corporation this week, are now discussing the need to enclose electronics in 1/2-inch thick armor plating that can stop high-powered rifle rounds. Power utilities have started loading remote substations with infrared cameras, gunshot audio sensors and even seismic recorders that catch vibrations.
Correction: The headline and first sentence of this story have been updated to reflect the comment made by the DHS official.
File photo: Burned out automobiles caused by the PG&E gas explosfluidnview Drive, in San Bruno, Calif., on September 11, 2010. (LiPo Ching/Bay Area News Group archives)
By George Avalos, gavalos@bayareanewsgroup.com
Posted: 07/20/2016 03:59:36 AM PDT
Updated: 07/20/2016 04:00:32 AM PDT
SAN FRANCISCO -- PG&E spiked the pressure beyond the maximum allowed level on numerous pipelines and was aware of defects in several pipes -- including the one that failed in the San Bruno explosion -- according to an FBI agent
who scoured company records after the disaster.
The utility also was unable to provide investigators with required pressure test records on several lines, the agent testified Tuesday in the company's federal criminal trial.
Separately, PG&E provided federal officials investigating the explosion two different versions of its policy on pipeline pressure spikes, documents showed.
The evidence submitted on Tuesday appeared to bolster prosecutors' allegations that PG&E violated pipeline safety rules before the blast and subsequently obstructed the National Transportation Safety Board's investigation.
Prosecutor Hartley West asked FBI Special Agent Sandra Flores what her review of PG&E pipeline records revealed. The records showed a manufacturing defect in a segment of Line 132, the pipeline that ruptured beneath San Bruno, Flores testified. Eight people were killed and dozens of homes were destroyed in the ensuing explosion.
Additionally, Flores testified that she discovered pressure test reports did not exist for numerous pipelines throughout the Bay Area, including segments in or near San Jose, Sunnyvale, Woodside, Newark and Pittsburg. Records also were
missing for a line near Aptos High School in Santa Cruz County, she said.
Flores said her review found 196 pipe segments with "active" manufacturing defects. For pipelines installed before 1970 -- such as the ill-fated Line 132 -- federal rules allow operators to set the maximum pressure at the highest level
that was used in the pipes in the previous five years.
But the same federal rules also require any lines in which the pressure has spiked above allowed levels -- no matter how tiny -- be tested with water at high pressure. Those tests cost much more than the relatively inexpensive inspection
of external corrosion on pipes, a method preferred by PG&E.
After the explosion, PG&E scrambled to comply with an array of data requests for the NTSB probe. The utility initially gave federal and state investigators one version of its pressurization policy that indicated PG&E spiked pressure
on lines by as much as 10 percent over the legal limits.
Later, PG&E attempted to dismiss that letter as a draft document that was never in effect. The characterization of the document as an unapproved draft of a program is a key element in the prosecution's obstruction allegation.
San Francisco-based PG&E faces 13 criminal counts, including 12 alleged violations of pipeline safety rules and one that it obstructed the NTSB investigation. PG&E has pleaded not guilty to all the charges and could be fined $562 million.
Contact George Avalos at 408-859-5167. Follow him at Twitter.com/georgeavalos.
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