U.S. Restricts Procurement and Installation of Certain Foreign Large Power Grid Equipment

en.Wedoany.com Reported - On August 26, U.S. President Donald Trump signed Executive Order 14420, declaring that risks associated with large power system electrical equipment supplied by foreign entities constitute a national emergency. The executive order stipulates that, for transactions initiated after August 26, if the U.S. Secretary of Energy, in coordination with relevant agencies, determines that foreign-produced equipment is controlled, governed, or supplied by a "covered foreign entity" and poses risks of sabotage, unauthorized access, malicious remote operation, supply disruption, or other unacceptable national security risks, such equipment will be prohibited from being acquired, imported, transferred, or installed within the United States. The scope of restrictions also covers critical components, software, firmware, digital services, maintenance services, and remote access capabilities associated with the equipment.

The executive order covers large power systems involving transmission lines of 69 kV and above, excluding local distribution facilities. Equipment within scope includes substation transformers, grid-connected inverters, battery energy storage systems, uninterruptible power supplies for critical infrastructure, large and small generators, backup generators, substation voltage regulators, automatic reclosers, instrument transformers, relay protection devices, metering equipment, high-voltage circuit breakers, power generation turbines, as well as remote terminal units, programmable logic controllers, intelligent electronic devices, distributed control systems, and safety instrumented systems. Related software, firmware, remote access, lifecycle maintenance, and update mechanisms may also be subject to review.

The executive order defines "covered foreign entities" as foreign countries subject to U.S. arms embargoes or related sanctions regimes, as well as persons or entities owned, controlled, governed, or directed by such governments, and also includes entities determined by the Secretary of Energy, in coordination with relevant officials, to be engaged in activities detrimental to U.S. national security or foreign policy. Subsequent implementation rules may further specify particular countries, persons, and equipment categories, and establish a licensing process for restricted transactions.

For foreign equipment already procured or installed prior to the signing of the executive order, the Secretary of Energy may require measures such as identification, isolation, monitoring, secure disposal, disconnection, replacement, or removal. Before requiring isolation, disconnection, replacement, or removal, the Department of Energy must consider grid reliability and security, the availability of secure alternative equipment, and the continuity of essential services, and may adopt a phased implementation approach. The Secretary of Energy may also establish a list of pre-qualified equipment and suppliers, granting exemptions for qualifying future transactions.

The executive order requires the Secretary of Energy to issue implementation rules as needed within 120 days, and to identify large power system equipment posing relevant risks as soon as possible, submitting recommendations to the President regarding equipment identification, inventory, isolation, monitoring, or replacement. The Secretary of Energy must also propose amendments to the Federal Acquisition Regulation within 180 days to incorporate national security risks into federal energy infrastructure procurement and prioritize the procurement of U.S.-manufactured energy infrastructure; the Federal Acquisition Regulatory Council shall consider initiating a notice and public comment process for relevant rule amendments within 90 days of receiving the recommendations.