Electric utilities are modernizing the grid to improve visibility, flexibility and resilience. They’re also creating a more connected operating environment where advanced metering infrastructure, distributed energy resources, digital substations, cloud analytics and remote access tools all play a larger role in daily operations. That shift is essential, but it comes with a hard truth: every new digital connection can create a new vector for disruption to both information technology (IT) and operational technology (OT). Cybersecurity can no longer sit on the edge of grid modernization as a downstream compliance task. It must be treated as a core engineering and operational requirement well in advance of the engineering and design stage.

Modernization Increases the Grid’s Digital Exposure

In 2025, Homeland Security Today noted that a more digital energy system “requires coordinated action across government and the private sector.” Industry responded with the launch of the Alliance for Critical Infrastructure, a coalition advancing cross-sector planning, information sharing and incident response during major cyber and physical incidents. Its members span communications, energy and financial services, reflecting a shared understanding that cyber resilience must be designed with interdependence in mind.

Security by Design is Now an Operational Requirement

For utilities, that shift in mindset matters because cyber incidents in a modern grid aren’t confined to servers or back-office systems. Modern operations depend on the continuous exchange of trusted data across supervisory control and data acquisition (SCADA) environments, advanced distribution management systems, intelligent electronic devices (IED), distributed energy resource (DER) management systems, demand response platforms and field communications networks. When any of those pathways are compromised, operators can become vulnerable to an outage or physical attack, and their response times can be delayed.

China-linked Volt Typhoon’s infiltration of the Littleton Electric Light and Water Departments’ in Massachusetts—where actors maintained network access for more than 300 days—underscores the need to build resilience from day one. Even without a service disruption, that kind of access suggests adversaries are not only probing utilities for immediate gain but also positioning themselves for future leverage. These and countless other examples prove that cyber risk to energy infrastructure is real, persistent and increasingly strategic.

This reality becomes more urgent as utilities add more DERs, distribution-level intelligence and vendor-managed software into the operating environment. Indeed, grid-edge digitization and increased dependence on communications and software vendors are widely recognized as compounding risk. In 2024, for example, SecurityScorecard and KPMG reported that third-party risk accounted for 45% of breaches in the US energy sector, with software and IT vendors linked to 67% of those third-party incidents. At the same time, rapid advancements in AI models, such as Anthropic’s Claude Mythos, which has the power to autonomously identify vulnerabilities and execute cyberattacks, further increase the urgency for operators to secure their systems and supply chains.

Compliance Matters, but it’s not the Finish Line

Regulatory frameworks such as NERC CIP remain essential, but they don’t eliminate the need for broader cyber-informed engineering and operational discipline. In fact, FERC’s 2024 lessons learned from commission-led CIP audits found that while most registered entities had cybersecurity processes that met mandatory requirements, security risks and potential noncompliance still remained. The practical takeaway is straightforward: By incorporating cybersecurity into grid modernization efforts, electric utilities can ensure compliance with industry regulations and standards while staying vigilant against emerging threats. Only then can utilities withstand real-world threats that evolve faster than regulations.

Integrating Cybersecurity into a Modern Grid

Utilities must begin cybersecurity integration earlier than they historically have. Cybersecurity should shape architecture, supply chain decisions, procurement, network design, and asset selection before systems reach the field. Utilities should define how patches will be tested and applied, what data is shared with vendors, and how operations will continue if communications degrade. Security requirements belong in specifications for substations, automation systems, communications networks and DER integrations, not in post-commissioning fixes. The same applies to resilience testing: tabletop exercises, incident playbooks, and cross-functional planning should engage engineering, operations, IT, OT, compliance and supply chain teams so response plans align with operational reality, not just policy.

The power sector often frames modernization around speed, flexibility, decarbonization, and customer value. While these priorities remain essential, they can no longer be separated from cybersecurity. As power systems, energy generation, and digital infrastructure—particularly data centers and AI—converge, the operating environment grows more complex and interconnected. An intelligent grid that is not equally secure is not truly resilient. The utilities that lead in the future will move beyond treating cybersecurity as a parallel workstream and embed it into modernization strategy, protecting reliability, strengthening public trust and unlocking the full value of grid transformation.