Governors' Wind Energy Coalition

President Biden has suspended a Trump administration executive order aimed at banning grid equipment sourced from foreign nations deemed a security risk — particularly from China.

The move halts one of President Trump’s only executive actions on grid security, though it was not immediately clear if Biden plans to overturn the order following a 90-day suspension. In a suite of executive actions signed on his first day in office, Biden directed the Energy secretary and director of the Office of Management and Budget to consider whether to recommend a replacement of Trump’s order.

Trump’s May 1 order last year caught many in the electricity industry by surprise. While supply chain worries have long been a concern — and some utility executives were aware the Trump administration had been working on the issue — the White House made the announcement with little consultation from top grid officials (Energywire, May 29, 2020).

Scott Aaronson, vice president for security and preparedness at the Edison Electric Institute, which represents investor-owned utility companies, said that they “greatly appreciate President Biden’s executive order, which provides the Department of Energy with the time it needs to onboard the new officials who will be leading these supply chain security efforts.”

“Protecting the energy grid is a shared responsibility between the electric power industry and our government partners, and, given the complexities involved with implementing new bulk power supply chain regulations, we all benefit from taking this extra time to get these new regulations right,” Aaronson said.

DOE last month issued a rulemaking with a focus on protecting defense-critical electric grids, and it briefly took effect on Jan. 16.

Trump ordered DOE to work with agencies like the Defense and Homeland Security departments to enforce the rule, which barred utilities that serve certain military installations from “acquiring, importing, transferring, or installing” equipment sourced from China (Energywire, Dec. 18, 2020).

Trump’s order prompted other concerns: Its broad wording caused early confusion about the scope of the ban, and some power providers worried that the federal government might press for a narrow list of approved vendors. Industry comments to a DOE request for information on the order showed mixed support months after it was signed.

The order was one of many actions that showcased Trump’s ire at Beijing, and it led to increased tensions between China and the U.S.

While DOE’s initial request for information suggested that Russia, Venezuela and even Cuba were all among the nations deemed a security risk, China was by far the main focus of the order, and DOE’s final rulemaking did not mention any other nation. Additionally, China is one of the main exporters of grid equipment, particularly large power transformers.

Shortly after DOE published its rulemaking last month, Chinese Foreign Ministry spokesperson Wang Wenbin said Trump must stop “politicizing trade issues and abusing national security concepts to crack down on foreign companies.”

White House spokesperson Jen Psaki at a press briefing yesterday did not answer a question on Biden’s decision to freeze Trump’s order. The White House did not respond to requests for comment.

Speaking more generally, Psaki said Biden is committed to “stopping China’s economic abuses on many fronts” and that the administration has just begun a series of cross-agency reviews to determine how the U.S. will respond.

She noted the U.S. is in a “serious competition with China” and that Beijing “is now challenging our security, prosperity and values in significant ways that require a new U.S. approach.”

Psaki added that technology is at the center of the competition, accusing Beijing of being “willing to do whatever it takes to gain a technological advantage, stealing intellectual property, engaging in industrial espionage, and forcing technology transfer.

“Our view, the president’s view, is we need to play a better defense, which must include holding China accountable for its unfair and illegal practices and making sure that American technologies aren’t facilitating China’s military buildup,” she said.