US Declares National Emergency Over Foreign Power-Grid Equipment
A new executive order authorizes the Department of Energy to prohibit or unwind transactions for foreign-produced bulk-power system equipment, citing national security risks.
President Trump has issued an executive order declaring a national emergency to address security risks in the U.S. bulk-power system supply chain. The order, grounded in the International Emergency Economic Powers Act, authorizes the Department of Energy (DOE) to prohibit, condition, or unwind transactions involving electric-grid equipment sourced from designated foreign adversaries. This authority applies to transactions initiated after August 26, 2026. The administration cited growing electricity demand from AI, data centers, and advanced manufacturing as magnifying the potential consequences of supply-chain vulnerabilities.
This creates significant regulatory uncertainty for utilities, power producers, transmission developers, and equipment manufacturers. Companies may face increased scrutiny of their sourcing decisions, potentially leading to project delays and a need to find alternative suppliers for critical components like transformers and control systems. The order could also affect large-load interconnections for facilities like data centers.
Key upcoming developments include the DOE's deadline to issue implementing regulations within 120 days (by December 24, 2026) and to recommend changes to the Federal Acquisition Regulation (FAR) to prioritize U.S.-manufactured equipment in government procurement within 180 days. Counsel should advise clients to immediately review procurement strategies and vendor contracts to mitigate potential disruptions.