President Trump last week declared a national emergency regarding foreign threats to the bulk power system, issuing new restrictions on the purchase of BPS equipment by federal agencies, citizens and companies from suppliers suspected of connections with foreign adversaries.

In an executive order issued Friday, Trump said “the unrestricted acquisition or use” of BPS equipment developed, manufactured or supplied by entities connected to “foreign adversaries” — defined as any foreign government or nongovernment person engaged in long-term or serious instances of conduct threatening the security of the U.S., its allies or its citizens — could help malicious actors to identify and exploit vulnerabilities in the North American power grid.

“Although maintaining an open investment climate in bulk power system electric equipment, and in the United States economy more generally, is important for the overall growth and prosperity of the United States, such openness must be balanced with the need to protect our nation against a critical national security threat,” the order said. Transactions banned under the order include those involving BPS equipment developed or manufactured by an entity connected with a foreign adversary that:

• poses a danger to the U.S. electric grid;
• creates a risk of catastrophic effects to U.S. critical infrastructure; or
• otherwise threatens the national security of the U.S. or the safety of its citizens.

Authority for determining such transactions will reside with the secretary of energy, in coordination with the director of the Office of Management and Budget and in consultation with the secretary of defense, the secretary of homeland security, the director of national intelligence and heads of other agencies as appropriate.

The energy secretary may also approve exceptions to the prohibition, either on a case-by-case basis or by designating particular products or vendors as prequalified for future transactions. In addition, the order directs the energy secretary to identify BPS equipment meeting these requirements that is already in place and work with utilities to develop plans for isolating, monitoring or replacing such items “as soon as practicable.”

Brouillette to Head Procurement Task Force

In a press release, the Department of Energy said the order will help to close a loophole in government procurement rules that “often result in contracts being awarded to the lowest-cost bids,” which it said could be exploited by malicious actors.

“It is imperative the bulk power system be secured against exploitation and attacks by foreign threats. This executive order will greatly diminish the ability of foreign adversaries to target our critical electric infrastructure,” Secretary Dan Brouillette said.

The order also creates a Task Force on Federal Energy Infrastructure Procurement Policies Related to National Security, to be chaired by Brouillette with participation by the secretaries of defense, the interior, commerce and homeland security; the director of national intelligence; and the director of the Office of Management and Budget. The task force is mandated to develop unified energy infrastructure procurement policies in coordination with the Electricity, Oil and Natural Gas Subsector Coordinating Councils.

In a separate release, NERC said the order would “help support activities already underway in NERC’s supply chain standards and other work” to provide security to the BPS. The organization said it “looks forward to working with industry and government stakeholders toward effective implementation of the executive order.”

Reps. Greg Walden (R-Ore.), Fred Upton (R-Mich.) and John Shimkus (R-Ill.) also spoke in support of the order. The congressmen serve as the ranking members of the House Energy and Commerce Committee and its Energy Subcommittee and Environment and Climate Change Subcommittee, respectively.

“We commend President Trump for taking action today, directing the secretary of energy to take additional steps to enhance the security of our nation’s bulk power system,” they said in a joint release. “We look forward to working with Secretary Brouillette to ensure the department has the resources and authorities it needs to carry out this important mission.”