I point this out not to diminish Davis' work, which I'm sure was great, but to illustrate the extent to which "smart grid" attacks are in vogue right now in vulnerability research. There were, I believe, at least 4 talks on it at Black Hat this year. Every software security consultancy in the country has done multiple projects targeting "smart grid" components in general and automated metering (AMI) in particular.
Smart grid components are interesting to me not because they're a vector for flashy (and horrific) real-world attacks, but because they demand a different strategy for mitigating attacks.
In conventional software, dev teams can rely on a "get it right and then patch what breaks" approach. While updating software is notoriously difficult, it is at least a plausible response to a serious security flaw.
When you deploy 100,000 smart meters running RTOS's on TI microcontrollers, this strategy doesn't work. Anything straightforward you do to make those meters feasible to update is going to blow up in your face. And this is an extremely unforgiving place to deploy security countermeasures; you face not only strict code-size limits on the meters themselves, but also RF protocols that need to squeeze every bit out of every message.
I think the winning strategy for the "smart grid" is, like Blu-Ray, renewability. Instead of trying to train 500 microcontroller realtime C devs in secure code and crypto protocols, people should sit down and devise mechanisms to recover from security flaws. Things as simple as protocol versioning, or the ability to shun/revoke specific devices, or the ability to fault to manual reads are like to make a bigger difference than whether the devices are using truncated SHA1 vs. SHA256.
* Very legacy systems are very much in play, and compatibility is a requirement -- replacement and modernization is extremely expensive and time consuming.
* Old school engineers who hang on to "the power grid is different, we need specialized, non-standard it systems" mentality. This is partially true, but to the point the make it.
* A general distrust of power grid engineers (including software) of anyone claiming that "evil hackers are everywhere". They don't understand certain software issues, like once an exploit is found it is essentially free to take advantage of, which is the exact opposite of may real-life security issues.
* Utilities that view security as a matter of procedural compliance with some set of rules.
These combine for a bleak picture, the tempering tho comes from:
* vendors and regulators (doe, nerc, ferc) are very concerned with security at all levels.
* researchers are starting to show how real, physical damage can be caused by cyber-security problems (not just hypothetical, but demonstrable, bottom line affecting issues).
* recognition by the more pragmatic older engineers that today's "kids" are maybe on to something using commodity communications and software instead of custom everything. This has inherent security benefits in many places.
All that being said, this is a giant field, and the "smart grid" is not one thing (in fact, if you have n people talking about it, (n-1)^2 definitions of smart grid will usually emerge) -- security for the grid is an exciting and interesting place to be.
Unfortunately, I think software security expertise is going to be relegated to nipping at the edges of this problem, which the vendors and grid operators appear to be delegating to the "national labs" like Sandia and Idaho.
They may be somewhat custom, but they are more cots/standardized than previously. Further there are several FOAs right now that require a built-in security component. These FOAs fund next-gen technology development, so I am not sure how you see this as only an "edge problem".
