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The May 1, 2020 Executive Order on Securing the Bulk-Power System reflects the President’s concern that “the unrestricted acquisition or use in the United States of bulk-power system electric equipment designed, developed, manufactured, or supplied by persons owned by, controlled by, or subject to the jurisdiction or direction of foreign adversaries augments the ability of foreign adversaries to create and exploit vulnerabilities in bulk-power system electric equipment, with potentially catastrophic effects.” 

The Executive Order creates a process by which the federal government can prohibit the purchase/installation of foreign-made electric equipment to be used in the bulk-power system.  Prohibited transactions include those (1) that involve property in which a foreign country/individual has an interest, (2) initiated after May 1, 2020, and (3) the Secretary of Energy (consulting with the heads of other departments/agencies) determines that the transaction (i) involves components of the bulk-power system owned/controlled by, or subject to, the jurisdiction of “a foreign adversary” and (ii) poses an undue risk of sabotage, has the potential for catastrophic effects on security/resiliency for critical infrastructure or the national economy, or otherwise poses a risk to the national security. 

The Secretary of Energy is empowered to take additional actions consistent with the order, including directing the cessation of pending and future transactions, and is directed to issue rules and regulations within 150 days to implement the order.  The Executive Order permits the Secretary to create categories of exempt equipment or vendors.  The Executive Order also directs the Secretary to “[a]s soon as practicable” consult with the heads of other departments/agencies to identify, and to develop recommendations to isolate/replace, components of the bulk-power system that are controlled by foreign adversaries and that poses a particular risk. 

Finally, the Executive Order charges the Secretary of Energy with convening a Task Force made up of the heads of specific departments/agencies, with such Task Force being responsible for developing recommendations for, and coordinating, the federal government’s own procurement of energy infrastructure facilities.  Within one year of the issuance of the Executive Order, the Task Force is to report to the President its progress, findings, and recommendations.

The Executive Order does not address the existing mandatory reliability standards administered by the Federal Energy Regulatory Commission, and through May 6, 2020, the Commission had neither posted the Executive Order nor addressed the intersection of the Executive Order and the Commission’s responsibility with respect to the reliability of the bulk-power system.
 
For further information, please contact Joshua Adrian or Kristen Connolly McCullough.