There’s often a lot of rhetoric in the press and in the security
community around threats to the utilities industry, and risk
exposure surrounding critical infrastructure. We’ve determined that
the utilities industry (power, water, waste) has been, and likely
will continue to be, a target for cyber espionage primarily from
Chinese APT groups. We also anticipate that U.S. utilities
infrastructure is vulnerable to computer network attack (CNA) from a
variety of threat actors motivated by a desire to disrupt, deny
access, or destroy. It’s important to recognize the difference
between actors seeking to steal data or intellectual property, and
actors seeking to destroy systems or cause mass destruction. Often
the distinction between computer network exploitation (CNE) and CNA
gets lost in media coverage that bundles diverse cyber activity
together. The type of cyber activity has implications for how we
tackle the problem, thus it’s key to distinguish.

As part of
our incident response and managed defense work, Mandiant has observed
Chinese APT groups exploiting the computer networks of U.S.
utilities enterprises servicing or providing electric power to U.S.
consumers, industry, and government. The most likely targeted
information for data theft in this industry includes smart grid
technologies, water and waste management expertise, and negotiations
information related to existing or pending deals involving Western
utilities companies operating in China.

Why would Chinese
APT Groups Seek to Exploit Utilities?

Since 2010, Mandiant has responded to what we assessed were Chinese
cyber espionage incidents occurring at multiple utilities companies
involved in electric power generation. We recognize the PRC’s
utilities sector for electric power development, construction,
operations, and distribution is heavily concentrated on a select few
state-owned enterprises (SOE) with close ties to the central
government. We suspect these relationships provide APT groups with a
fundamental incentive to conduct espionage to attain advanced
technology and operations expertise.

By way of possible
motivation, the PRC is in the midst of a historic makeover that
involves the transformation of urban infrastructures, which, by
2025, is likely to produce 15 mega-cities with an average of 25
million inhabitants, or about the entire population of the United
States.[i] The impacts from this transition are
intensifying pressures on an already fragile and outdated utilities
infrastructure in China that currently struggles to provide
sufficient electric power, water, and waste treatment. We believe
APT groups are stealing data that will allow them to improve
historic PRC urbanization efforts and the modernization of
infrastructure, which is receiving billions of government investment
dollars for development.

While we have tracked multiple
attributed Chinese APT groups active in the utilities industries, we
certainly don’t discount that other, non-Chinese state-sponsored (or
independent) actors could be engaged in data theft related to
utilities.

The Risk of Disruptive Cyber Attacks

Computer network attacks (CNA) – that is, offensive cyber
operations meant to disrupt or destroy-are also a threat to the
utilities industry from state actors in times of major conflict.
Perpetrators may include hostile adversaries, possibly
nation-states, during times of escalated tensions, or terrorist
operatives who gain the required expertise. The threat of a
state-sponsored actor or proxy targeting this industry using CNA is
a growing concern, particularly in the case of Iran, though
wide-scale data theft is the primary type of threat we’ve observed
to this point. Several large US news outlets did recently report
that Iranian-based actors infiltrated some of the US’ industrial
control systems, however, and some have speculated their motivation
in doing so was to map the network or identify resources for future
attack scenarios.

For more intelligence reporting and
specific details related to data theft in the utilities industry,
the involved actors, and other threats, consider subscribing to the
Mandiant Intelligence Center.

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