Electric utilities are left vulnerable to computer-based attacks from foreign countries and hackers, a government-authorized regulatory group recently reports; will this leave related investments and exchange traded funds (ETFs) unprotected as well?

President Barack Obama has just unveiled a $4 billion plan to fund new power-transmission technology, reports Ian Talley for The Wall Street Journal.  Obama wants to spur the development of a new artificially intelligent “smart” grid that could increase the efficiency of the nations electrical infrastructure.

Benefits of the smart grid include better use of renewable energy and a reduction in greenhouse gas emissions. The U.S. power grid has been woefully out-of-date.

U.S. officials verified warnings that experts from Russia, China and other nations have been trying for years to probe and exploit those vulnerabilities. According to Ellen Nakashima and R. Jeffrey Smith for The Washington Post, the Pentagon has spent more than $100 million in the past six months responding to cyber attacks or other network disruptions.

The private industry controls much of the U.S. electrical supply has not taken efforts to defend themselves from attacks that would leave them at risk. The Obama administration is nearing completion of a two-month review of cybersecurity policy, which may spur a stronger Federal policy for security standards protecting vital industry that the U.S. economy needs.

Other experts believe that it is the responsibility of the utility company rather than the Federal government to assess risk and avert any if possible.

• Utilities Select Sector (XLU): down 11.2% year-to-date

Tags: Infrastructure, Obama, Sector ETFs, Utilities, XLU