Trump grid order update
The Trump bulk-power system order said guidance would be issued by the US Department of Energy by September 28, but November may be more realistic.
It took the US Department of Commerce until November last year to issue guidance to implement a similar Trump executive order about the US telecom network.
Meanwhile, the Federal Energy Regulatory Commission issued a “notice of inquiry” in September to collect information about what potentially risky equipment is being used by US power companies and what steps they are taking to mitigate the potential for such equipment to harm the grid.
The FERC notice asks five questions. The first question is to what extent equipment or services are being supplied by “covered companies,” meaning Huawei, ZTE or any entity that is “owned or controlled by, or otherwise connected to” the Chinese government.
Two years ago, FERC ordered 288 US utilities and other entities that are subject to North American Electric Reliability Corporation standards to adopt plans that include “security controls for supply-chain management for industrial control system hardware, software, and services associated with bulk electric system operations.” The directive is in FERC Order No. 850.
Responses to the questions in the latest notice of inquiry are due by November 22, 2020.
President Trump issued an executive order on May 1 imposing an immediate ban on the purchase, use or transfer of as-yet unidentified foreign adversary equipment that might be used to harm the US power grid. It is Executive Order 13920.
Many project developers are requiring equipment vendors and construction contractors to represent that no equipment will be used that runs afoul of the Trump executive order. Vendors are being asked to commit to use of commercially reasonable efforts to get their equipment on any pre-approved lists that the US Department of Energy decides to publish. Developers retain the right to terminate contracts that violate the Trump executive order.
Some companies selling projects are concerned about their ability to represent that projects are in full compliance with US law given the uncertainty around the Trump executive order.
There has been a move away from use of Chinese equipment and contractors for some types of equipment. (For more detail about market reaction, see “Trump bans certain power equipment” in the June 2020 NewsWire.)
The Department of Energy named the foreign adversary countries that are the focus of the Trump executive order in July. They are China, Russia, North Korea, Iran, Libya and Venezuela. Only China is a significant supplier to the US power industry. (For more detail, see “DOE starts implementing Trump bulk-power system order” in the August 2020 NewsWire.)
Meanwhile, the US House of Representatives passed three bills at the end of September dealing with cybersecurity and the electricity grid. One of the bills would create a new assistant Energy secretary position focused on emergency and security functions related to energy supply. Another would require the department to set up a voluntary “cyber-sense” program to test the safety of bulk-power system equipment from cybersecurity threats, maintain a database and offer technical assistance to utilities. The bills still need to clear the Senate.