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DHS Funding: Dueling for Dollars

The big-money question in securing critical infrastructures is: Who pays how much, and for what? Or, in the case of the electric power industry: Where do you draw the line between ratepayers and taxpayers?

This all sounds familiar to Randall Yim, managing director for national preparedness on the Homeland Security and Justice team at the General Accounting Office. "The debate was really similar back in the 1970s," he says, when the environmental movement was taking hold. "There was a whole package of incentives and disincentives that stimulated greater environmental compliance, and people now expect companies to adhere to certain environmental protocols. It's become an accepted part of doing business that you can't simply dump raw waste into streams. [The economic incentives and disincentives] fundamentally changed business so that environmental management was integrated into the business process. I think in homeland security there'll be a similar evolution."

Today's energy infrastructure simply wasn't built with security in mind. Companies weren't accounting for terrorism when they made long-term investment decisionslike whether to build a nuclear reactor or a wind farm, or even whether to plan on having diesel fuel delivered by train or by barge. And now, that has to change.

"[The system] grew up the way it did to best serve our customers and achieve operational excellence," Assante says. "The infrastructure grew up in a threatless environment. We did things like put up fences based on what we perceived the risks were at that timekeeping children and other passersby out so they wouldn't get shocked. Now, security is a design element. That thought process and those requirements will seed themselves into the construction of new infrastructure."

This kind of change doesn't happen quickly or painlessly. Some current ways of generating, transmitting and distributing power might not be economically feasible anymore. There's bound to be shifting and upheaval, some companies going out of business and others coming to life. But in the long run, this type of revolutionpainful as it may becould make the economics of homeland security much more agreeable.

"It's much easier to design homeland security principles as an integral part, rather than as something you bolt on at the end," Yim says. "Homeland security isn't going to just be this fad issue. People are going to need to find ways to fundamentally incorporate homeland security measures into the business process, and I'm confident that the market will find a way to add value to the underlying business process. Right now, we're putting up big jersey barriers and add-on programs instead of thinking fundamentally about how we make the business process more efficient as well as more secure."

That question about who pays? You know the answer, of course. Right now, we're all paying, either out of our customer and stockholder pockets, or out of our taxpayer pocket. The challenge for the energy industry is to find a way to build security into its processes. Then, at the end of the day, maybe no one has to pay.