A recent cyberattack on the Delta-Montrose Electric Association (DMEA) in Colorado that shut down 90 percent of its internal controls and erased 25 years of historical data is a reminder for Nevada utility companies that bad actors are constantly targeting their infrastructure. It also comes at a time when these companies are experiencing increased demand for service as the state continues to attract new residents and businesses, while drought conditions have led to a new agreement to reduce water consumption from Lake Mead.
DMEA officials said the cyberattack, which began on Nov. 7, 2021, affected internal systems, support systems, payment processing tools, billing platforms, and other customer-facing tools. It also affected the phone and email systems but not the power grid and fiber network. It took the network more than a month to fix the systems affected by the cyberattack and to begin accepting customer payments again.
The attack on DMEA wasn’t the first cyberattack on energy infrastructure, and it won’t be the last. Executives with Nevada utility companies agreed that the potential impact to their infrastructure from a cyberattack was not just a threat but a reality.
“We are very focused on the threats of a cyberattack,” said Doug Cannon, president and CEO of NVEnergy. “We have all seen the media reports. This is a threat we are aware of and take very seriously.”
Cannon said the company employs various defenses to protect their grid but declined to comment on the specific tools NVEnergy deploys to protect their infrastructure state-wide. Cybersecurity risks have increased due to bad actors targeting Nevada companies, as well as the ongoing shift to a remote workforce due to the coronavirus pandemic that often leaves companies with less robust security measures in place.
“Cybersecurity is one of the highest issues we have at the moment,” said John Hester, president and CEO of Southwest Gas. “We are constantly monitoring for threats. We have also partnered with our peer natural gas distribution companies to compare experiences and share information.” Hester explained that the company has taken a number of initiatives, including using minimal consumer data with their account, to minimize the risk to customer information and their systems.
Hester also confirmed he recently travelled to Washington, D.C. for a classified briefing with other natural gas distribution companies from the U.S. Department of Homeland Security about what they are seeing and how companies can protect their systems. “It’s a threat that will continue for the foreseeable future,” Hester said.
Mark Foree, general manager with the Truckee Meadows Water Authority, agreed saying security has become more important. “We are increasing our security in a lot of different ways,” Foree said, without identifying the steps the company has taken.
Nevada has not been immune to ransomware attacks over the last two years, with three incidents impacting students personal information collected by the Clark County School District, patient data at a southern Nevada hospital and payroll systems at several healthcare facilities.
When asked how vulnerable utilities in Nevada are to cyberattacks, Craig Stevens, senior manager of government relations and regulatory affairs at Cox Las Vegas, said they are, “fully committed to protecting our network and our customers who rely on it against cyberattacks. We have a sophisticated security plan in place, which is highly confidential,” Stevens said.
John Entsminger, general manager with the Las Vegas Valley Water District and Southern Nevada Water Authority (SNWA), stressed that the “security of our community’s water supply and infrastructure is of the utmost importance.”
“While we do not share our cybersecurity measures, from a water infrastructure standpoint, we are monitoring our water system around the clock to ensure that we can respond to emergencies like leaks and main breaks,” Entsminger said.
“We also keep a very close eye on the quality of the drinking water within our systems, collecting more than 30,000 water samples a year and conducting more than 300,000 analyses on those samples at our water quality laboratory, he said.
Strong Growth and Crucial Projects
While utility companies are focused on external threats to their infrastructure, they are doing so during a period of massive growth as more businesses and residents move into the Silver State. “We continue to experience significant growth throughout our service territory that includes part of Nevada, Arizona, and California,” said Hester with Southwest Gas. “We had 37,000 new customers over the last year, including 16,000 in Nevada.” Hester said demand for natural gas is as high as it has ever been over the last decade.
“The demand is due to new homes and new business, plus we’ve expanded into new territories,” Hester said. “We are now in Mesquite which, up until two years ago, had no natural gas.” Hester explained that increased demand from residential units and businesses, especially commercial businesses, and light manufacturing, made it financially viable to expand into Mesquite.
Senate Bill 151, which passed unanimously through the Nevada State Legislature in 2015, allowed the city of Mesquite to pursue a natural gas pipeline and required the Public Utilities Commission of Nevada to adopt regulations to allow Southwest Gas to expand its infrastructure into the city. Hester said the company built a permanent service line to connect Mesquite to its Kern River natural gas pipeline, 14 miles north of the city.
“There had been talks with the city about bringing natural gas but what we ultimately did was work with the legislature to get Senate Bill 151 passed that provided for the gas company to bring service to communities that were unserved or underserved,” Hester said.
Hester said customer growth remains strong with no downturn expected soon.
Valley Electric Association CEO Mark Stallons was unavailable for comment. The Pahrump-based cooperative that serves more than 6,800 square miles in southern Nevada and small parts of California has spent the last few years improving its infrastructure and service in rural parts of the state.
Those projects include a partnership with Switch and Churchill County Communications of Fallon to provide fiber-optics to rural communities along the route from Las Vegas to Reno. The company has also taken advantage of renewable energy with solar power by forming SolPower, a fullservice company to assist residents and businesses who choose to install solar.
It’s a comparable situation in northern Nevada, where the influx of new residents and businesses over the last decades has driven up demand for natural gas, water, and electricity. That demand has caused utilities to invest heavily in new plants and new technologies.
Foree, with Truckee Meadows Water Authority, identified the Mt. Rose water treatment plant as an important infrastructure addition to help protect groundwater resources in the region. Due to a previous dependence on wells and the resulting decline in area groundwater levels, Foree said the plant will be used to augment the area’s water supply.
He said they have additional upstream reservoirs throughout the region, while also relying on Lake Tahoe and the Truckee River to meet the needs of residents and businesses. Foree described Lake Tahoe as the kingpin of their supply, adding that their 20-year resource plan found that even in very dry conditions there is enough supply to meet demand.
Foree stressed that the utility doesn’t get any of its water from the Colorado River, and while the water level in Lake Mead in the southern part of the state has declined in recent years, Lake Tahoe is a sustainable resource to help meet the region’s ongoing demand for water.
Entsminger has said that growth in the Las Vegas basin is possible but requires decreasing existing water demand and tightly controlling new demand, but the utility will have to walk a line to accomplish its goal without impacting the region’s growth. “Water conservation will remain a top priority for us in 2022,” Entsminger said.
“We expect to continue experiencing warmer and dryer conditions in the Colorado River Basin, which will influence the river’s flows and water levels in Lake Mead,” he said. “As a result, we anticipate additional shortage reductions to our water supply in the years ahead.” But, Entsminger said, if “our community remains focused on water conservation, we can continue to sustainably meet southern Nevada’s current and future water needs.” Entsminger said they work on a 50-year water resource plan every year.
“The plan considers a variety of variables that could influence our water supply over the next half-century, including climate change and drought conditions, Colorado River shortages, future population growth and projected water demands,” he said. And, that plan Entsminger said shows us that under a variety of supply-and-demand scenarios we can continue to have economic growth and diversification in southern Nevada if we continue reducing water demands of the existing customer base and tightly control water demands for any new commercial or residential customers.
For example, southern Nevada has reduced its consumption of Colorado River water by 23 percent over the past two decades while at the same time our population has increased by 800,000 new residents. “So, it’s a matter of balancing our water supplies and our water demands, and water conservation continues to be the fulcrum,” Entsminger said.
Entsminger recently signed the 500- plus plan, a memorandum of understanding among the United States and Colorado River officials within the lower Colorado River Basin states, including Nevada, Arizona, and California. The 500-plus plan aims to keep an additional 500,000-acre feet of water in Lake Mead over the next two years to help prevent the reservoir from dropping to critically low elevations.
The additional water – enough water to serve about 1.5 million households annually – would add about 16 feet total to the reservoir’s level. Entsminger stressed that the plan does not affect their ability to continue meeting southern Nevada’s water needs and will help protect water levels within the lake.
“This is the first year that Lake Mead is operating under shortage conditions and, as a result, southern Nevada’s Colorado River allocation is being reduced by 7 percent this year,” Entsminger said. “Arizona is also taking a shortage reduction to its allocation. If Lake Mead water levels continue to decline, we will see further reductions in future years,” he added.
The process for new utilities customers to get hooked up for service has remained mostly unchanged in recent years. Despite an increase in requests for service from developers and businesses who need natural gas, electricity, and water services for their projects state-wide. Hester said in areas with established gas service, they deal directly with developers.
“We send an energy advisor to meet with them to make sure there is existing infrastructure. We also look at what the incremental demand of the new project will be and if they are eligible for tariffs, which allow for potential incentives,” Hester said. He added the developers and companies may get some credits for the new business that there are bringing Southwest Gas.
“[Tariffs] also protect current clients from pushing up rates. Then we sign a contract and start the flow of gas.” Those tariffs, Hester explained, make sure that growth pays for itself, covering the costs of the facilities to expand the system.
According to Southwest Gas, manufacturing, agriculture, hospitality, mining and medical are industries that have shown the most demand for service.
“Mining has been moving off of diesel and onto natural gas,” Hester said. “Those who don’t want natural gas can have an all-electric home or use propane, but they do it at a cost.”
Despite Nevada’s continued growth, Hester said they’ve been able to keep prices in check with the average homeowner in southern Nevada paying $46 a month.
Entsminger said it’s important that any new businesses in southern Nevada understand that water efficiency is imperative.
“About 40 percent of our community’s water supply is used indoors where it hits a drain and flows into the wastewater collection system. Through highly advanced wastewater treatment processes, nearly all of our indoor water use is reclaimed and safely returned to Lake Mead.”
Entsminger stressed that every gallon returned allows us to take another gallon out of the lake. “This sustainably extends our limited water resources to serve the entire community,” he said.
The remaining 60 percent of southern Nevada’s water supply is used outdoors for commercial and residential landscape irrigation and evaporative cooling at large commercial buildings and facilities.
Water used in these two processes is consumed and only used once. It is not reclaimed, recycled, or used again, according to the company.
“While existing development codes already prohibit the installation of grass in commercial developments, the SNWA Board of Directors recently passed a resolution to also prohibit the use of evaporative cooling in new commercial buildings,” Entsminger said. “These actions — coupled with current and future conservation measures — will help minimize the impact that new commercial development can have on our community’s water supply,” he said.