US Declares National Emergency to Secure Bulk-Power System
A new executive order empowers the Department of Energy to block transactions involving foreign-made electric grid equipment, with implementing rules due by late December 2026.
On August 26, 2026, the White House issued Executive Order 14420, declaring a national emergency to secure the U.S. bulk-power system from foreign threats. The order revives and expands a similar 2020 framework, authorizing the Secretary of Energy to prohibit, condition, or unwind transactions involving electric grid equipment tied to a 'Covered Foreign Entity.' The measure is a response to perceived risks of sabotage and supply-chain disruption from foreign-made components, particularly amid growing electricity demand from data centers, AI, and advanced manufacturing.
Sophisticated counsel and clients across the energy, infrastructure, and technology sectors must take immediate note. The order's reach is extensive, affecting utilities, renewable-energy developers, equipment manufacturers, and their lenders. The prohibition is not self-executing but will be defined by forthcoming rules. Crucially, the Energy Secretary can also impose conditions on already-installed equipment, potentially requiring its monitoring, isolation, or replacement.
The key next development is the Department of Energy's implementing rulemaking, due within 120 days (around December 24, 2026). These regulations will identify the specific equipment, countries, and entities subject to the ban and establish a licensing regime for otherwise-prohibited transactions.