Department of Energy Issues Request for Information to Bolster Bulk Power System Executive Order
On July 8, 2020, the Department of Energy (“DOE”) issued a Request for Information (“RFI”) that seeks input from industry participants in order to implement the May 1, 2020 Executive Order on Securing the United States Bulk-Power System (“Executive Order”).
The Executive Order directed the Secretary of Energy (“Secretary”) to restrict the acquisition and use of electric equipment designed, developed, manufactured, or supplied by foreign adversaries and any entities controlled by or subject to the jurisdiction of such foreign adversaries in connection with the Bulk-Power System (“BPS”). Among other things, the Executive Order (1) authorized the Secretary to restrict transactions of BPS equipment that involve a foreign adversary, (2) design mitigation measures that may serve as preconditions to a transaction’s approval, and (3) establish and publish pre-qualifying criteria and a list of acceptable equipment or vendors. Despite this sweeping mandate, the Executive Order left many questions unanswered, including which countries represent “foreign adversaries” and what types of equipment are subject to the order.
Shedding light on one of these questions, the RFI names the countries that will be considered “foreign adversaries” with whom transactions will be restricted: China and Russia (which the National Counterintelligence and Security Center assesses as “near-peer foreign adversaries”), as well as Cuba, Iran, North Korea, and Venezuela.
In terms of identifying affected BPS equipment, the RFI proposes a phased approach by which DOE can prioritize the review of BPS electric equipment by function and impact to the overall BPS. The RFI explains that the Secretary is considering pre-qualification criteria for components that support defense critical electric infrastructure and other critical loads and critical transmission feeders (69kV+) reported under North American Electric Reliability Corporation critical infrastructure protection reliability standards.
More specifically, the RFI seeks comment on the following types of equipment: “Transformers (including generation step-up transformers), reactive power equipment (reactors and capacitors), circuit breakers, and generation (including power generation that is provided to the BPS at the transmission level and back-up generation that supports substations).”
Finally, the RFI seeks information in order to conduct an economic analysis of the costs of compliance with the Executive Order. Among other things, the RFI asks respondents to provide “estimated one-time and recurring costs of developing, implementing, and periodically revising compliance plans and procedures associated with the executive order.”
A full list of the specific questions posed in the RFI can be found at:
This necessary step in the process will help DOE to further shape the contours of the Executive Order’s roll-out. Substantial participation by the industry will help to ensure that the DOE has a comprehensive and representative picture of the BPS and is not overinclusive in its identification of restricted equipment. While the RFI sheds important light on the adversarial countries contemplated by the Executive Order and the types of equipment DOE will consider going forward, there remain many details to iron out. The RFI provides an additional opportunity for the industry to influence the ultimate implementation of a thoroughly consequential executive action.
DOE expects to issue a Notice of Proposed Rulemaking in the fall, which will give industry participants an opportunity to comment on concrete proposals. As such, it is unlikely that there will be final rules in place by September 28, 2020, the date identified in the Executive Order.