Emergency Declaration Targets Foreign-Produced Bulk Power Grid Equipment: Executive Order 14420

On Wednesday, August 26, 2026, President Trump issued Executive Order 14420 titled “Declaring a National Emergency to Secure the United States Bulk-Power System (the “Order”). The Order declares a national emergency regarding the foreign supply of bulk-power system electric equipment, finding that it constitutes an “unusual, and extraordinary threat” which can impact the United States’ national security, foreign policy, and economy. The order points to heightened vulnerabilities created by foreign actors exploiting the country’s bulk-power system through digital backdoors and supply chain disruptions. (§ 1).

The Order invokes the President’s authority under the International Emergency Economic Powers Act (“IEEPA”) (50 U.S.C. § 1701 et seq.), the National Emergencies Act (“NEA”) (50 U.S.C. § 1601 et seq.), and section 301 of Title 3 of the U.S. Code.

The order prohibits the following:

• The acquisition, importation, transfer, or installation of any foreign-produced bulk-power system electric equipment where the transaction involves property in which a foreign country or foreign national has an interest;
• Where the Secretary of Energy (“Secretary”) determines that:
  • The transaction involves bulk-power system electric equipment (including critical components, software, firmware, etc.) designed, developed, manufactured, or supplied by a Covered Foreign Entity; and
  • The transaction (a) poses an undue risk of sabotage, subversion, unauthorized access, malicious remote action, or supply disruption affecting the bulk-power system of the U.S.; (b) poses an undue risk of catastrophic effects on the security or resilience of the country’s meaningful infrastructure or economy; or (c) poses an unacceptable risk to national security and safety. (§ 2(a)).

The Order allows the Secretary to develop rules regarding the continued use and operation of previously installed foreign manufactured and operated bulk-power system electric equipment.  The Order specifically allows the Secretary to consider rules requiring updating and replacing previously installed foreign manufactured equipment. (§2(b)). In doing so, the Secretary must consider the effects on reliability, safety, availability of replacements, and continuity of essential services. The Order allows the Secretary to implement phased compliance for previously installed equipment.

Additionally, the Order allows the Secretary to develop a pre-qualification list exempting certain vendors and equipment from the Order’s prohibition. (§ 2(e)).

Related rules and regulations must be published within 120 days (December 24, 2026).

“Bulk-power system” means “a system that (i) facilities and control systems necessary for operating an interconnected electric energy transmission network (or any portion thereof) and (ii) electric energy from generation facilities needed to maintain electric system reliability. For the purpose of this order, this definition includes transmission lines rated at 69,000 volts or more, but does not include facilities in the local distribution of electric energy.” (§ 5(a)).

“Covered Foreign Entity” means “a country or any person owned by, controlled by, or subject to the jurisdiction or direction of a government of a foreign country that is subject to a United States arms embargo or sanctions regime, under the International Traffic in Arms Regulations (22 C.F.R. § 126.1), or that the Secretary, in consultation with the Secretary of War, the Director of National Intelligence, and the Assistant to the President for National Security Affairs, has determined is engaged in conduct that is detrimental to the national security or foreign policy of the United States.” (§ 5(e)).

This Order likely will affect components of equipment used in High-voltage transmission substations, control centers and systems, generating stations, large power transformers, utility-scale inverters, battery energy storage systems (BESS), generators and turbines, SCADA, industrial control systems, and associated critical software and digital capabilities.

While the Order’s practical scope will be shaped significantly by the DOE’s implementing regulations, clients should begin preparing now:

• Conduct a supply chain audit: Identify all foreign-produced bulk-power system electric equipment currently in use or under procurement which may be implicated by the order.
• Review pending and planned procurements: Evaluate whether any pending or anticipated acquisitions, imports, or installations of bulk-power equipment involve potentially Covered Foreign Entities.
• Monitor Department of Energy (“DOE”) Rulemaking: The 120-day implementing rules will define critical details, including the specific list of Covered Foreign Entities, licensing procedures, and pre-qualification frameworks.
• Engage proactively with DOE: Clients with significant foreign-sourced equipment may benefit from early engagement with DOE regarding pre-qualification.

We will continue to monitor the implementation of E.O. 14420 and will provide further updates as the DOE rulemaking process unfolds. In the meantime, if you have any questions about how this Order may affect your operations, supply chain, or procurement activities, please contact Michael Best.