President Declares National Emergency: Foreign Adversaries Creating Vulnerability in U.S. Electric Grid
May 5, 2020
By Kelly A. Daly
On May 1, 2020, President Trump declared a national emergency relating to threats facing the bulk-electric power system in the United States. Specifically, the President issued Executive Order on Securing the United States Bulk-Power System, which concludes that foreign adversaries are increasingly creating vulnerabilities in the U.S. electric grid that supports the country’s national defense, vital emergency services, critical infrastructure and economy. According to the President, “the unrestricted foreign supply of bulk-power system electric equipment constitutes an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States.”
Although the Executive Order does not identify any specific foreign adversaries (or companies they may control), the vulnerability of the U.S. electric grid has been the subject of considerable attention in the last several years. In January 2019, the sitting Director of the U.S. National Intelligence reported that China and Russia pose the greatest espionage and cyber attack threats to our nation’s critical infrastructure systems, such as the electric grid.
In response to this mounting threat, the Executive Order prohibits the acquisition, importation, transfer or installation of any bulk-power system electric equipment designed, developed, manufactured or supplied by a foreign adversary that has been determined to pose:
- An undue risk of sabotage to or subversion of the design, integrity, manufacturing, production, distribution, installation, operation or maintenance of the bulk-power system in the United States;
- An undue risk of catastrophic effects on the security or resiliency of United States critical infrastructure or the economy of the United States; or
- An unacceptable risk to the national security of the United States or the security and safety of United States persons.
“Bulk-power system electric equipment” is defined as bulk-power system substations, control rooms or power generating stations, including reactors, capacitors, substation transformers, current coupling capacitors, large generators, backup generators, substation voltage regulators, shunt capacitor equipment, automatic circuit reclosers, instrument transformers, coupling capacity voltage transformers, protective relaying, metering equipment, high-voltage circuit breakers, generation turbines, industrial control systems, distributed control systems and safety instrumented systems. Items not included in the preceding list and that have broader application of use beyond the bulk-power system are outside the scope of this Order.
The Executive Order provides that the Secretary of Energy is authorized to take action, including directing the timing and manner of cessation of pending and future prohibited transactions. Moreover, the Order creates a process for establishing rules and regulations, among other things, to determine which countries or persons are foreign adversaries, to identify any bulk-power electric equipment that may be creating the identified vulnerabilities and to develop recommendations to identify, isolate, monitor or replace existing bulk-power system assets that expose the United States to energy security or cybersecurity risk.
Finally, the Executive Order establishes a Task Force on federal energy infrastructure procurement policies related to national security. The Task Force shall have numerous responsibilities including the obligation to develop energy infrastructure procurement policies for all federal agencies (and to provide such recommendations to the Federal Acquisition Regulatory Council), and to submit a report to the President by May 1, 2021, summarizing the Task Force progress, findings and recommendations.
A copy of the Executive Order is available here.
©2022 Snell & Wilmer L.L.P. All rights reserved. The purpose of this publication is to provide readers with information on current topics of general interest and nothing herein shall be construed to create, offer, or memorialize the existence of an attorney-client relationship. The content should not be considered legal advice or opinion, because it may not apply to the specific facts of a particular matter. As guidance in areas is constantly changing and evolving, you should consider checking for updated guidance, or consult with legal counsel, before making any decisions.