U.S. EO 14421 Will Block Some Foreign Equipment from Connecting to the U.S. Bulk Power System
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The U.S. “bulk power system”, in brief, is the backbone of the electrical grid, including major power plants, high-capacity transmission lines, and the associated control systems. The U.S. bulk power system operates as an interconnected network with Canada’s bulk power system and a portion of Mexico’s electric grid. The State of Texas is part of the U.S. bulk power system, but most of Texas operates on the Texas Interconnection managed by the Electric Reliability Council of Texas (“ERCOT”).
The United States has a tapestry of statutes and regulations intended to protect the cybersecurity of the U.S. bulk power system. For example, the U.S. Energy Policy Act of 2005, Public Law 109-58, amended the Federal Power Act (the “FPA”), 16 U.S.C. §§ 791a–828c, to give the Federal Energy Regulatory Commission (“FERC”) the authority to oversee bulk power system reliability and to approve mandatory, enforceable cybersecurity standards. 16 U.S.C. § 824o. FERC is an independent agency housed within the U.S. Department of Energy (“U.S. DOE”). 42 U.S.C. § 7171. For another example, the Fixing America’s Surface Transportation (“FAST”) Act of 2015, Public Law 114-94, amended the FPA to give the U.S. Secretary of Energy certain additional cybersecurity authority. 16 U.S.C. § 824o-1. Another example is the Cybersecurity Information Sharing Act of 2015, passed as part of the Consolidated Appropriations Act of 2016, Public Law 114‑113.
FERC has certified the North American Electric Reliability Corporation (“NERC”), a not‑for‑profit corporation formed by the electric industry, as the Electric Reliability Organization (“ERO”) under 16 U.S.C. § 824o. NERC in turn has issued “CIP” – Critical Infrastructure Protection Standards.
Many other U.S. Departments and agencies also play important roles in protecting the cybersecurity of the U.S. bulk power system, including the U.S. Department of Homeland Security (“U.S. DHS”) and its Cybersecurity and Infrastructure Security Agency (“CISA”). CISA is the operational lead for U.S. federal cybersecurity and serves as the national coordinator of critical infrastructure security across 16 vital sectors of the U.S. economy, including the energy sector.
U.S. Executive Orders are not law, but they have the force of law to the extent authorized by the U.S. Constitution or statutes.
On August 26, 2026, the Trump Administration issued Executive Order (“EO”) 14421 (“Declaring a National Emergency to Secure the United States Bulk-Power System”). (Note that the White House website currently misnumbers the EO as 14420.) EO 14421 to some extent builds on the somewhat narrower May 1, 2020, Trump Administration EO 13920 (“Securing the United States Bulk‑Power System”).
In brief, EO 14421 establishes a structure administered by the U.S. Secretary of Energy acting in coordination with other federal Departments and agencies that halts certain transactions and installations involving connecting to the bulk power system foreign-produced bulk-power equipment that is associated with a Covered Foreign Entity, i.e., defined bulk power system equipment “designed, developed, manufactured, or supplied, by persons owned by, controlled by, or subject to the jurisdiction or direction of a foreign adversary [a Covered Foreign Entity].” For purposes of EO 14421, a Covered Foreign Entity is a country, other entity, or an individual that is 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 U.S.’s International Traffic in Arms Regulations (22 C.F.R. § 126.1), or that the U.S. Secretary of Energy, in consultation with the U.S. Secretary of War, the U.S. Director of National Intelligence, and the Assistant to the [U.S.] President for National Security Affairs, has determined is engaged in conduct that is detrimental to the national security or foreign policy of the United States. EO 14421 also provides for the Secretary of Energy taking certain actions regarding existing bulk power system equipment in some circumstances.
The U.S. Secretary of Energy has 120 days from EO 14421 to implement the EO. Some industry observers have suggested that EO 14421 will need clarification, perhaps especially as to software. Some industry observers have suggested that the EO may slow supply chains, perhaps especially for battery energy storage equipment and inverters. U.S. DOE and the electric industry can be expected to engage in discussions during and after that 120-day period.
EO 14421 also interacts with, among other things, the U.S. Department of the Treasury’s “Guidance to Apply Interim Safe Harbors for Purposes of Determining a Taxpayer’s Material Assistance from a Prohibited Foreign Entity; Other Prohibited Foreign Entity Guidance”, IRS Notice 2026-15, issued on February 12, 2026. Those rules are part of what often is referred to as the U.S. government’s “foreign entity of concern” (“FEOC”) rules.
18 U.S.C. §§ 824o and 824o-1 may be found here:
42 U.S.C. § 7171 may be found here:
EOs 14421 and 13920 may be found here:
22 C.F.R. § 126.1 may be found here:
IRS Notice 2026-15 may be found here:
U.S. DOE’s “Interpretation of Foreign Entity of Concern” may be found here:
NERC’s CIP may be found here:
ERCOT may be found here:
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