The National Academy of Engineering called the grid the world’s largest integrated machine and a central part of the greatest engineering achievement of the 20th century—electrification of modern society. Reliable electricity service is essential to health, welfare, national security, communication, and commerce. Because of its scale, geographic reach, and complexity, however, the grid also poses many security challenges in maintaining reliable operation. Furthermore, more than 90 percent of the U.S. power grid is privately owned and regulated by the states, making it challenging for the federal government to address potential vulnerabilities to its operation, and perhaps especially its vulnerability to terrorist attack. This report examines those vulnerabilities.