President restricts risky foreign equipment in the U.S. power grid

The Energy Secretary may prohibit covered transactions involving foreign-produced bulk-power equipment. This covers equipment used in major transmission networks, power plants, and substations, but not local electricity distribution. It applies when a foreign country or national has an interest and the transaction involves a Covered Foreign Entity. The Secretary must find that the equipment or related software, services, or access capability creates an undue or unacceptable risk to the power system, critical infrastructure, the economy, national security, or people’s safety. The order allows exceptions through statutes, regulations, orders, directives, or licenses issued under the order. Attempts to evade the restrictions, violations, and conspiracies to violate them are also prohibited. Implementation must follow applicable law and available funding. The restrictions cover transactions initiated after August 26, 2026, the order’s date. The Secretary must publish needed implementing rules within 120 days.

The Energy Secretary may require continued use of covered equipment to be identified, isolated, monitored, secured, disconnected, replaced, or removed. This applies to foreign-made or foreign-operated bulk-power equipment acquired or installed before August 26, 2026, when the Secretary makes the required risk findings. Before ordering isolation, disconnection, replacement, or removal, the Secretary must consider grid reliability, safety, secure replacements, and continued essential service. The Secretary may use phased compliance and may create mitigation measures or conditions for transactions. The order authorizes agencies to take appropriate steps within their legal authority. These measures may apply after the Secretary makes the findings required by the order. No specific end date is stated.

The Energy Secretary must publish needed rules, identify risky equipment, recommend ways to secure or replace it, and propose changes to federal energy-procurement rules. The purchasing recommendations concern federal contracts for energy infrastructure and would prioritize U.S.-manufactured infrastructure. Any later Federal Acquisition Regulation changes would require a separate proposal and public comment. The Secretary must consult with specified national security, energy, homeland security, intelligence, and procurement officials. The order directs recommendations and proposed rulemaking; it does not itself change the Federal Acquisition Regulation. Implementation remains subject to applicable law and available appropriations. The Secretary must publish implementing rules within 120 days and submit procurement recommendations within 180 days. The FAR Council must consider proposing amendments within 90 days after receiving those recommendations.