By Illinois Radio Network

SPRINGFIELD – The threat of cyber attacks may cause utility companies to raise rates for consumers.

Moody’s Credit Services Analyst Lesley Ritter said the “credit negative” labeling of all utilities is because of the growing risk of a cyber attack and the damage a successful one could do.

“Their ability to collect rates would go down,” said Ritter. “They could have serious damage to their infrastructure, which would require them to raise much more debt. In the public image side, if they’re seen as much less safe, it might make it more difficult to access the market and raise the debt that they need.”

Ritter explained it means higher interest rates when borrowing money. She said that cost is passed down to ratepayers.

“They would have to pay more in interest to their debt-holders,” she said. “That’s a direct flow-through to you and me as ratepayers.”

Moody’s notes that the “credit negative” term isn’t a full downgrade but merely a warning to lenders of the risk of an event.

The City of Burlington, Vermont Electric Department reported last month that they were the victims of a cyber attack. While no damage was reported, it was described as “an example of the utility sector’s vulnerability — and its attractiveness to those seeking to disrupt the national electrical grid.”

Since the company can’t quantify how prepared a utility is to combat an attack, it compares a cyber attack to the damage done by major destructive weather events: for instance, the report mentions the damage to Entergy New Orleans in the aftermath of Hurricane Katrina in 2005 and utilities in New York, New Jersey and Connecticut after Hurricane Sandy in 2012.