An article in the New York Times (November 16,2012) describes a recently unclassified National Academy report describing the vulnerability of the US power grid. Solutions described include custom step up and step down generators to maintain transmission across the grid that can be deployed during an emergency, battery backup for traffic lights and natural gas powered backup pumps in for gas supply. But how should the supply chain for such backup transformers be designed ? How should the costs to maintain this backup be allocated ? Should the cost of these alternatives be financed by a premium charged, similar to an insurance ?