  We propose using a hierarchical retail market structure to alert and dispatch
resources to mitigate cyber-physical attacks on a distribution grid. We
simulate attacks where a number of generation nodes in a distribution grid are
attacked. We show that the market is able to successfully meet the shortfall
between demand and supply by utilizing the flexibility of remaining resources
while minimizing any extra power that needs to be imported from the main
transmission grid. This includes utilizing upward flexibility or reserves of
remaining online generators and some curtailment or shifting of flexible loads,
which results in higher costs. Using price signals and market-based
coordination, the grid operator can achieve its objectives without direct
control over distributed energy resources and is able to accurately compensate
prosumers for the grid support they provide.
