Markets 
President Donald Trump’s new national emergency declaration could restrict U.S. purchases and imports of certain foreign-made power grid equipment and potentially force utilities and infrastructure operators to replace equipment already in service as the administration moves to address national security risks to the electric system.
Under an executive order signed Wednesday, the Energy Department can prohibit the acquisition, importation, transfer or installation of foreign-produced bulk-power equipment if officials determine the transaction involves a covered foreign entity and poses an unacceptable security risk.
The order goes further for equipment already operating on the U.S. grid. The energy secretary can require foreign-manufactured or operated equipment to be identified, isolated, monitored, secured, disconnected, replaced or removed, potentially requiring utilities and other infrastructure operators to make changes to existing systems.
Those provisions could carry financial and operational consequences for the power sector, although the order does not estimate potential costs or identify which equipment or vendors could ultimately be affected.
TRUMP BLASTS BIG OIL FOR ‘MAKING TOO MUCH MONEY’
The administration said the restrictions are necessary because foreign-produced equipment could contain vulnerabilities, including digital backdoors capable of providing remote access to critical infrastructure. The White House also argues that reliance on foreign suppliers leaves the U.S. vulnerable to equipment shortages caused by trade disruptions or other supply shocks.
The stakes have increased as artificial intelligence, data centers, advanced manufacturing and defense production drive greater demand for reliable electricity, according to the order.
NEW YORK’S AI DATA CENTER PAUSE SPARKS WARNINGS US COULD LOSE GROUND TO CHINA
The equipment potentially covered spans major pieces of grid infrastructure, including transformers, generators, battery energy storage systems, grid-connected inverters, turbines and industrial control systems, as well as associated software, firmware and remote-access capabilities.
The order directs officials to weigh reliability and safety, the availability of secure replacement equipment and continuity of essential service before requiring equipment to be isolated, disconnected, replaced or removed. The Energy Department can also phase in compliance.
The order does not impose a blanket ban on all foreign-made grid equipment. Restrictions depend on Energy Department determinations involving covered foreign entities and national security risks, and the department can establish a list of pre-qualified equipment and vendors.
The Energy Department has 120 days to publish implementing rules or regulations as needed, providing the power industry with a clearer picture of which suppliers and equipment could face restrictions.
CLICK HERE TO GET FOX BUSINESS ON THE GO
Trump is also directing the federal government to reconsider how it purchases energy infrastructure. Within 180 days, the energy secretary must recommend changes to federal procurement rules aimed at addressing national security risks and prioritizing U.S.-manufactured energy infrastructure in federal procurement.
That provision could have another business impact, shifting some federal demand away from foreign suppliers and toward domestic manufacturers as Washington seeks to secure the equipment underpinning an increasingly power-hungry U.S. economy.
Read the full article here
