The hurried deployment of smart-grid technology could leave critical infrastructure and private homes vulnerable to hackers. Security experts at the Black Hat conference in Las Vegas last week warned that smart-grid hardware and software lacks the necessary safeguards to protect against meddling.

Utilities are being encouraged to install this smart-grid technology–network-connected devices to help intelligently monitor and manage power usage–through funding from the U.S. government’s 2009 stimulus package. The smart systems could save energy and automatically adjust usage within homes and businesses. Customers might, for example, agree to let a utility remotely turn off their air conditioners at times of peak use in exchange for a discount.

But to receive the stimulus money, utilities will have to install new devices across their entire customer base quickly. Security experts say that this could lead to problems down the road–as-yet-unknown vulnerabilities in hardware and software could open up new ways for attackers to manipulate equipment and take control of the energy supply.

Smart-grid deployments involve installing smart meters in homes and businesses across a utility’s coverage area. These meters can communicate with the utility and with other networked devices–usually via a wireless network of some type. Some ways to hijack this type of equipment have already been revealed. Last year, Mike Davis, a senior security consultant at IOActive, created a piece of software that could spread automatically between smart grid hardware in different homes. The software would then be capable of shutting equipment down.

The security of the smart grid was a major topic at Black Hat. The conference brings together researchers from academia, industry, government, and the hacking underground.

Jonathan Pollet, founder and principal consultant at Red Tiger Security, a firm that analyzes the security of critical infrastructure, says the smart grid could be vulnerable to a range of attacks. Customers might simply figure out, for example, how to lower their electricity bills by manipulating how much energy their meters say they’re using. But he says large-scale attacks may also be possible. A serious vulnerability might make it possible to shut down the power supply to an entire city.

The devices being deployed by utilities are meant to last for 15 to 20 years. It may be difficult and costly to apply security patches to these distributed systems, especially because they can’t easily be taken out of commission for routine maintenance.

Smart-grid devices also connect back to the older control equipment–known as Supervisory Control and Data Acquisition (SCADA) systems–used at utility companies. “SCADA systems are far less secure than enterprise IT systems,” Pollet says. He explains that they are often connected to the Internet, but don’t have security features such as firewalls and antivirus protection.

Nathan Keltner, a consultant on FishNet Security’s assessment team, has been analyzing smart-grid technology for clients. He said the smart grid amounts to “old-school SCADA that’s been bolted into some sort of a newer technology.”

It may be particularly hard to protect the smart grid because would-be attackers will have physical access to components connected to the network. Pollet says that all it takes is for one determined attacker to find a way in–information about how to hack a device is then quickly shared online. “Those who have the intent and motivation can do this stuff,” he says.

Shawn Moyer, who is the principal consultant on FishNet Security’s assessment team, says he’s concerned that utilities don’t have expertise in network security. For example, he says, many advertise that they offer encryption in their smart-grid products, but on further inspection, there are problems with how that encryption is implemented.

Moyer and Keltner revealed a proof-of-concept smart-grid attack at Black Hat. They used a customizable piece of radio equipment and some freely available software to find smart meters on a network and circumvent the encryption used to protect them. If an attacker were to do the same, they say, it would be possible to issue commands that could misreport data to the utility or shut off power to some users.

Moyer notes that utilities have battled meddling for a long time, but the smart grid adds another dimension to the problem. “Theft of service isn’t new, tampering isn’t new–only the scale of what’s possible,” he says.