Modern smart grids offer several types of digital control and monitoring of electric power transmission and distribution that enable greater efficiency and integrative functionality than traditional power grids. These benefits, however, introduce greater complexity and greatly disrupt and expand the threat landscape. The number of vulnerabilities is increasing as grid-connected devices proliferate. The potential costs to society of these vulnerabilities are difficult to determine, as are their likelihoods of successful exploitation. In this article, we present a method for comparing the net economic benefits and costs of the various cyber-functionalities associated with smart grids from the perspective of cyberattack vulnerabilities and defending against them. The economic considerations of cyber defense spending suggest the existence of optimal levels of expenditures, which might vary among digital functionalities. We illustrate hypothetical case studies on how digital functionalities can be assessed and compared with respect to the costs of defending them from cyberattacks.