US Declares National Emergency Over Power Grid Security
A new executive order invokes national emergency powers to prohibit or condition transactions involving foreign-made electric grid equipment from certain countries, citing national security risks.
The President has issued Executive Order 14420, declaring a national emergency to address foreign threats to the U.S. bulk-power system. Invoking the International Emergency Economic Powers Act (IEEPA), the order creates a new security review process and generally bars the acquisition or installation of bulk-power system equipment from designated 'Covered Foreign Entities'—initially including countries under U.S. sanctions or arms embargoes like China and Russia.
The Secretary of Energy gains broad authority to investigate, halt, or impose conditions on transactions involving such equipment. Critically, the Secretary can also mandate new conditions for the continued use of equipment already installed on the grid, potentially requiring costly retrofits or replacements. The order also directs federal procurement agencies to prioritize U.S.-manufactured energy infrastructure. Companies across the energy supply chain—including generators, transmission owners, equipment vendors, and contractors for data centers—should assess their supply chains for exposure and monitor forthcoming Department of Energy regulations that will define the scope of these new prohibitions and establish any pre-qualification or licensing procedures.