The President’s Executive Order on Grid Security Creates Peril and Uncertainty for US Power Companies

    View Author May 2020

    The security of the bulk-power system has long been an issue of deep concern in the US. In purported response to these concerns, on May 1, 2020, President Trump issued an Executive Order on Securing the United States Bulk-Power System (the Executive Order), which prohibits any acquisition, importation, transfer or installation of any US bulk-power system electric equipment where the transaction involves any property in which any foreign country or foreign national has any interest (including through supply contracts), and where the Secretary of Energy has determined that such transaction poses an undue risk of sabotage, catastrophic effects or risk to national security. The Secretary of Energy, in consultation with the heads of other agencies as appropriate, may design or negotiate mitigation measures, which may serve as a precondition to the approval of certain transactions or of a class of transactions, and establish and publish prequalification criteria and procedures.

    However, the lack of clarity in the order has raised serious concerns, not only among foreign suppliers, but among US energy companies who use foreign-sourced equipment in their business. In our publication, we consider the implications for the US power industry in general, as well as the political, national security and trade implications of this Executive Order.