Utility Dive Trendline on Grid Resiliency

President Donald Trump on August 26 signed an executive order preparing to block utilities from connecting some foreign-made equipment to the bulk power system, including transformers, batteries, inverters and associated software and digital products.

The order also contemplates the replacement of already-installed equipment, allowing the Secretary of Energy to “impose conditions on the continued use, operation, maintenance, servicing, or updating of foreign manufactured or operated bulk-power system electric equipment acquired or installed before the date of this order.”

The EO “focuses on transactions involving foreign nationals that pose an undue risk of sabotage, unauthorized access, or other disruption,” the White House said in a fact sheet, and is aimed non-distribution level equipment. It directs the Secretary of Energy to develop rules within 120 days to implement the order.

The U.S. faces an “extraordinary foreign threat ... involving bulk-power systems produced abroad that may present national security vulnerabilities,” the White House said. “The rapid growth of advanced manufacturing, data centers, artificial intelligence, and defense production has increased the Nation’s dependence on abundant, reliable electricity and magnified the consequences of a successful attack.”

Utilities are committed to working with DOE “on the implementation of [the] order to ensure that we can maintain the reliability and affordability of electricity across the country,” Edison Electric Institute spokesperson Dani Marx said to Utility Dive in an email.

The group represents investor-owned power companies and last year it estimated U.S. electric utilities would invest $1.1 trillion in the 2025-2029 period, a rapid increase in capital expenditures to meet rising demand. Capital expenditures from 2015 to 2024 totaled $1.3 trillion, the trade group noted.

According to the International Energy Agency, China accounts for 80% or more of the world’s production of certain grid equipment, including lithium-ion battery cells and some solar components.

Manufacturers of grid equipment say they are still digesting the order and will likely need clarification on several aspects.

“We've made a lot of progress on ensuring robust supply chains domestically and with our partners,” Bridget Bartol, the head of industry and regulatory affairs at the National Electric Manufacturers Association, told Utility Dive.

She said Trump’s Wednesday order builds off of 2020 Executive Order 13920, which focused on large power transformers from China, adding, “I see this as kind of an update and expansion.”

But Bartol warned there is the potential for confusion in the markets as a result of the order, “and we want to make sure that we continue to engage with the administration.”

Software, in particular, may “raise a lot of questions around what does it mean to be designed and developed by a covered foreign entity,” she said, noting that the order does not call out particular countries.

“There's a need for a lot more clarity” around the covered entity concerns, Bartol said. “I think there's going to be a lot of dialog between the industry and the administration.”