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US Moves to Exclude Chinese Equipment from Electric Power Grid

President Donald Trump speaks during a meeting with Republican lawmakers, in the State Dining Room of the White House, Friday, May 8, 2020, in Washington. (AP Photo/Evan Vucci)
President Donald Trump speaks during a meeting with Republican lawmakers, in the State Dining Room of the White House, Friday, May 8, 2020, in Washington. (AP Photo/Evan Vucci)

Trump executive order proposes to ‘monitor and replace’ electric equipment in the US power grid manufactured by companies from foreign adversaries.

An executive order issued last week proposes to “monitor and replace” any U.S. power grid equipment made by the nation’s foreign adversaries.

Analysts said it would mainly affect Chinese-made products like electrical transformers.

President Donald Trump signed an executive order on May 1 prohibiting bulk power system equipment from foreign companies in the U.S. grid, citing security concerns.

The U.S. Department of Energy noted that under the current rules, contracts are awarded to the lowest bidder when it comes to bulk power system procurement, and that creates a "vulnerability that can be exploited by those with malicious intent."

U.S. Secretary of Energy Dan Brouillette said that it is imperative that “the bulk-power system be secured against exploitation and attacks by foreign threats.”

Analysts believe this means that the United States will set up a whitelist for the procurement of such equipment. Although the order did not name any specific country, observers say China and Russia are the two main countries most capable of posing a threat to the U.S. power grid.

“It's an important set of issues and similar to the debate that's occurring around (companies like) Huawei, ZTE in 5G. Clearly you want to have visibility and confidence across your entire supply chain,” Frank J. Cilluffo, director of Auburn University’s McCrary Institute for Cyber and Critical Infrastructure Security, told VOA.

He added that the move is a “prudent step” aimed at securing “the most critical of critical infrastructure,” because virtually all other infrastructure rely on the power grid to function.

“Just because the dependence is so great. When you look at the implications of COVID-19 and everyone working from home, people are becoming more and more aware of some of those vulnerabilities,” he said. “I think you're going to see closer scrutiny across all of our critical infrastructures.”

The term “bulk-power system” refers to facilities and control systems necessary for national power grids.

'Identify, monitor and replace'

Under the executive order, the DOE will review control center, large-scale power generation machines, power generation turbine engines, high-voltage circuit breakers, transformers and other electrical power equipment, to “identify, monitor and replace as appropriate.”

The U.S. Department of Commerce also announced on Monday that it will start a Section 232 investigation to determine if the volume of imported transformers and related parts threatens America’s national security.

A DOE official said that U.S. electric power companies are buying national electric-grid systems, such as power transformers from foreign adversaries, for their low prices, according to Politico.

China has been exporting large power transformers to the U.S. at competitive prices. Its domestic transformer market is showing signs of overcapacity.

A DOE report in 2014 said that there are about 30 manufacturers in China that can produce transformers of 220 KV or kilovolts and above, and large international manufacturers such as ABB were setting up factories in China.

Charles Durant, deputy director of the U.S. Department of Energy’s Counterintelligence Office, noted in 2019 that over the past decade, more than 200 Chinese large power transformers have entered the U.S. energy system.

“Before that, this number was zero.”

Cilluffo told VOA that there were precedents of hackers attacking a country’s power grid.

On December 23, 2015, the Ukrainian power system suffered a cyberattack that caused a large power outage. Ukraine charged that the Russian security services were behind the attack.

“So if you think about our dependency on electricity, it's not only that immediate structure, it transcends to all of our critical infrastructures,” said Cilluffo.