Grid Security Redux: What Executive Order 14420 Means for Utilities, Project Developers, and the Supply Chain

On August 26, 2026, President Trump issued Executive Order 14420, “Declaring a National Emergency to Secure the United States Bulk-Power System.” Invoking the International Emergency Economic Powers Act (IEEPA), the National Emergencies Act (NEA), and section 301 of title 3 of the United States Code, the order declares that the foreign supply of “bulk-power system electric equipment” presents an unusual and extraordinary threat to U.S. national security, foreign policy, and the economy. It restricts transactions involving a broad range of grid equipment and associated services, directs the Secretary of Energy to issue implementing rules on an accelerated timetable, and authorizes the imposition of conditions on equipment acquired or installed before the date of the order.

EO 14420 is similar to but in important ways broader and more developed than EO 13920, which President Trump issued in May 2020. Below we explain how EO 14420 expands protections for the U.S. bulk-power system, what it means for equipment already in the ground, and what utilities, project developers, and suppliers should do next.

What Does Executive Order 14420 Do?

EO 14420 “generally prohibits certain foreign-produced bulk-power system electric equipment, including associated critical software and digital capabilities that could pose cybersecurity or operational risks, from being purchased or installed in the United States,” or conditions such purchases and installations to address those risks.[1] It focuses on the “bulk-power system,” meaning “(i) facilities and control systems necessary for operating an interconnected electric energy transmission network (or any portion thereof); and (ii) electric energy from generation facilities needed to maintain electric system reliability.” Importantly, it “includes transmission lines rated at 69,000 volts (69 kV) or more, but does not include facilities used in the local distribution of electric energy.”

The order builds on the administration’s 2020 finding that foreign supply of “bulk-power system electric equipment” presents a national-security vulnerability, asserting that the risk has intensified. Namely, that growth in advanced manufacturing, data centers, artificial intelligence, and defense production has increased reliance on abundant, reliable electricity and enhanced the potential consequences of an attack or supply chain disruption. The order also points to two specific, related vulnerabilities: digital backdoors that could permit remote access by a foreign country and concentrated foreign sourcing that could leave the U.S. market without essential equipment if international trade is disrupted.

Section 2 of the order prohibits any acquisition, importation, transfer, or installation transaction “initiated after the date of [the] order”[2] involving “foreign-produced bulk-power system electric equipment”—or any critical component, software, firmware, digital service, maintenance service, or remote-access capability associated with such equipment—when: (1) a foreign country or national has an interest in the transaction, including through an interest in a contract for the equipment; and (2) the Secretary of Energy has determined that the transaction involves equipment or an associated item designed, developed, manufactured, or supplied by persons owned by, controlled by, or subject to the jurisdiction or direction of a “Covered Foreign Entity.”[3]

The Secretary of Energy must also determine that the transaction poses: (1) an undue risk of sabotage, subversion, unauthorized access, malicious remote action, or supply disruption affecting the design, integrity, manufacturing, production, distribution, installation, operation, or maintenance of the U.S. bulk-power system; (2) an undue risk of catastrophic effects on U.S. critical infrastructure or the economy; or (3) an otherwise unacceptable risk to U.S. national security or the security and safety of U.S. persons. Thus, whether any particular transaction or class of transactions is prohibited going forward depends on the involvement of a “Covered Foreign Entity” and certain specific determinations to be made by the Secretary of Energy.

However, the order also addresses “bulk-power system electric equipment acquired or installed before the date of [the] order” (emphasis added) in two ways. First, upon making any of the risk determinations listed above, the Secretary of Energy “may 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, including requirements to identify, isolate, monitor, secure, disconnect, replace, or remove such equipment.” Thus, there is the possibility of a “rip and replace”-type directive, but the relevant equipment would need to have come from a Covered Foreign Entity, the Secretary would need to make a required risk determination, and “[b]efore directing isolation, disconnection, replacement, or removal” of such equipment, the Secretary must “consider effects on reliability and safety, the availability of secure replacements, and continuity of essential service, and may establish phased compliance.” So, there are several guardrails regarding equipment already in place. Second, the order separately authorizes the Secretary of Energy “to take such actions, including . . . ordering the replacement of equipment posing an unacceptable risk to national security.” That authority, while it also requires a risk determination, is not expressly limited to the “bulk-power system electric equipment” defined in the order or to equipment from a Covered Foreign Entity.

The order also prohibits transactions that evade or avoid, are undertaken for the purpose of evading or avoiding, cause a violation of, or attempt to violate any prohibition or requirement under the order. It separately prohibits conspiracies formed to violate those prohibitions or requirements.

How is EO 14420 Different from EO 13920?

Executive Order 13920, issued on May 1, 2020, addressed the same core risk. Both orders rely on IEEPA, the NEA, and section 301 of title 3; declare a national emergency concerning the foreign supply of bulk-power system electric equipment; and prohibit specified acquisitions, imports, transfers, and installations following a determination by the Secretary of Energy. Each order also permits mitigation measures, allows the Secretary to publish “pre-qualified” equipment and vendor lists, and provides for reporting to Congress.

The principal difference concerns the foreign actors involved. EO 13920 used “foreign adversary,” which encompassed “any foreign government or foreign non-government person engaged in a long-term pattern or serious instances of conduct significantly adverse” to U.S. national security or that of its allies, or to the security and safety of U.S. persons. In a later Prohibition Order issued by then-Secretary of Energy Dan Brouillette in December 2020, the only specific “foreign adversary” identified was the People’s Republic of China.[4] EO 14420 replaces that concept with “Covered Foreign Entity.” That term reaches any country, or a person owned by, controlled by, or subject to the jurisdiction or direction of a government of a foreign country subject to a U.S. arms embargo or sanctions regime under 22 C.F.R. § 126.1. These include China, Russia, Iraq, Iran, North Korea, and many others, updated occasionally in issuances published in the Federal Register. It also covers a country or person the Secretary determines is engaged in conduct detrimental to U.S. national security or foreign policy.

And while EO 13920 identified certain specific “bulk-power system electric equipment,” including “items used in bulk-power system substations, control rooms, or power generating stations,” such as “reactors, capacitors, substation transformers, current coupling capacitors, large generators, backup generators, substation voltage regulators, shunt capacitor equipment, automatic circuit reclosers, instrument transformers, coupling capacity voltage transformers, protective relaying, metering equipment, high voltage circuit breakers, generation turbines, industrial control systems, distributed control systems, and safety instrumented systems,” the list of equipment covered in EO 14420 is broader and more specific. For example, EO 14420 also expressly includes “utility-scale and other grid-connected inverters; battery energy storage systems; and uninterruptible power supply systems supporting critical infrastructure.” It also states that, “[i]n determining whether equipment is within the scope of [the] order, agencies also may consider associated software and firmware, remote access capabilities, lifecycle maintenance and update mechanisms, and other supply chain dependencies that could present an unacceptable risk to the bulk-power system,” which were not covered in EO 13920 (but were, in some cases, addressed in the December 2020 Prohibition Order).

In addition, EO 13920 applied only to transactions initiated after its issuance. It directed the Secretary to develop recommendations for identifying, isolating, monitoring, or replacing equipment that presented the specified risks, but those recommendations had no independent operative force. EO 14420 goes farther in two important ways. First, Section 2(b) authorizes the Secretary of Energy to “impose conditions” on the continued use, operation, maintenance, servicing, or updating of qualifying equipment acquired or installed before August 26, 2026. Second, Section 3(a) separately authorizes the Secretary to “order[] the replacement of equipment” that poses an “unacceptable risk to national security,” which the order does not limit to any particular kind or source of such equipment. However, unlike EO 13920, the Secretary must, “as soon as practicable,” identify the general scope of “bulk-power system electric equipment” of concern—i.e., that is “designed, developed, manufactured, or supplied by persons owned by, controlled by, or subject to the jurisdiction or direction of one or more Covered Foreign Entities that poses an undue risk of sabotage to or subversion of the design, integrity, manufacturing, production, distribution, installation, operation, or maintenance of the bulk-power system in the United States; poses an undue risk of catastrophic effects on the security or resilience of United States critical infrastructure or the economy of the United States; or otherwise poses an unacceptable risk to the national security of the United States or the security and safety of United States persons.” In addition, Section 3(c)(ii) expands the advisory function itself: the Secretary must now also develop and submit to the President, through the Assistant to the President for National Security Affairs, recommendations on ways to identify, inventory, isolate, monitor, or replace risky equipment—adding an explicit inventory obligation and a formal channel that the 2020 order lacked.

Another crucial difference between EO 14420 and EO 13920, as implemented through the December 2020 Prohibition Order, is that the latter was limited to bulk-power system electric equipment “that directly serves Critical Defense Facilities.” Thus, only certain “Responsible Utilities” that owned or operated “Defense Critical Electric Infrastructure” serving “Critical Defense Facilities” and were notified by the Department of Energy would have been directly affected by the implementation of EO 13920 through the Prohibition Order. EO 14420 includes no such limiting concepts, so it is broader on its face. However, the rules, regulations, or orders issued by the Secretary of Energy under EO 14420 may also include similar limitations.

Next Steps – Required Actions and Practical Recommendations

Beyond the “as soon as practicable” actions discussed above, Section 3(b) of the order directs the Secretary of Energy to publish implementing rules or regulations within 120 days of August 26, 2026, or by December 24, 2026, in consultation with the Secretary of War, the Secretary of Homeland Security, the Director of National Intelligence, and any other senior executive branch official the Secretary deems appropriate.

In addition, within 180 days, or by February 22, 2027, the Secretary must develop and submit recommended revisions to the Federal Acquisition Regulation (FAR) that account for national-security risks in federal energy-infrastructure procurement and prioritize U.S.-manufactured energy infrastructure. Within 90 days after receiving those recommendations, the FAR Council must consider proposing amendments for notice and public comment.

Utilities—especially those previously identified as “Responsible Utilities” in connection with the December 2020 Prohibition Order—should develop plans for manufacturer- and country-of-origin analysis of installed equipment, with particular attention to the newly specified inverters, storage systems, and ICS components. Because the order reaches hardware and software, firmware, remote-access capabilities, and maintenance services, existing vendor service agreements should be reviewed alongside purchase and supply contracts. And utilities, project developers, and equipment suppliers should of course consider whether any pending or future transactions might be affected by EO 14420 and monitor the 120-day rulemaking process, including how the Department of Energy identifies “Covered Foreign Entities” and establishes licensing or “whitelisting” procedures. Federal contractors should likewise anticipate FAR changes that could favor U.S.-manufactured energy infrastructure.

The Foley energy team will continue to track developments in this area and welcomes questions on these issues.

[1] The White House, “Fact Sheet: President Donald J. Trump Declares a National Emergency to Secure America’s Bulk-Power System” (Aug. 26, 2026) (available here).

[2] Notably, Section 3(a) authorizes the Secretary of Energy to “direct[] the timing and manner of the cessation of pending and future transactions prohibited pursuant to section [2]” (emphasis added). This was also the case in EO 13920.

[3] “Covered Foreign Entity” is defined as “a country or any person owned by, controlled by, or subject to the jurisdiction or direction of a government of a foreign country that is subject to a United States arms embargo or sanctions regime, under the International Traffic in Arms Regulations (22 C.F.R. 126.1), or that the Secretary [of Energy] . . . has determined is engaged in conduct that is detrimental to the national security or foreign policy of the United States.”

[4] U.S. Dep’t of Energy, Prohibition Order Securing Critical Defense Facilities (6450-01-P), at 1 (Dec. 17, 2020) (“December 2020 Prohibition Order”) (available here).