New National Emergency Reaches Grid Equipment You Are Buying, and Equipment You Already Own

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On August 26, 2026, the President issued Executive Order 14420, declaring a national emergency with respect to the foreign supply of bulk-power system electric equipment.^[1] The order authorizes the Secretary of Energy to prohibit certain transactions involving foreign-produced covered equipment where the Secretary determines that the equipment involves a Covered Foreign Entity and presents an unacceptable risk to national security, electric-system reliability, or critical infrastructure. It also authorizes the Secretary to impose conditions on covered equipment already installed in the United States. The order invokes the International Emergency Economic Powers Act and the National Emergencies Act and names the Secretary of Energy as the implementing official.^[2]

“Bulk-power system” suggests a transmission problem, but it is not limited to transmission. The order reaches equipment used in bulk-power system substations, control rooms, and power generating stations, which puts transmission owners, generators, solar and storage developers, EPC contractors, equipment suppliers, and data center operators inside the same regime.^[3]

The architecture will be familiar. Executive Order 13920 declared a materially similar emergency in May 2020, was suspended in January 2021, and lapsed on May 1, 2021.^[4] This is not a reissuance. The equipment definition is broader, the country trigger is broader and more automatic, the reach over installed equipment is more explicit, and the order adds an anti-evasion clause and express replacement authority.

What the Order Covers, and What Changed

Covered equipment spans the substation, the control room, and the generating station: reactors, capacitors, substation transformers, voltage regulators, shunt capacitor equipment, automatic circuit reclosers, instrument transformers, protective relaying, metering equipment, high voltage circuit breakers, generation turbines, generators, industrial control systems, distributed control systems, and safety instrumented systems.^[5]

Three categories are new in 2026, and they are the ones that matter most to project sponsors: “utility-scale and other grid-connected inverters; battery energy storage systems; and uninterruptible power supply systems supporting critical infrastructure.”^[6] None appeared in the 2020 definition.^[7] The order also adds small generators, where 2020 reached only large and backup generators, and names remote terminal units, programmable logic controllers, and intelligent electronic devices as covered industrial control systems.^[8]

A less conspicuous change: the 2020 order covered generation needed to maintain transmission reliability;^[9] the new order says electric system reliability.^[10] The shift is broader and points in the same direction as the equipment additions.

Nor is the prohibition limited to hardware. It reaches “any critical component, software, firmware, digital service, maintenance service, or remote-access capability” associated with covered equipment.^[11] Service agreements, remote monitoring, and firmware update pathways are in scope, not just the supply agreement.

For Inverters, a Second Regime on the Same Equipment

One category is now subject to two regimes. The Federal Communications Commission added foreign-produced power inverters to its Covered List under the Secure and Trusted Communications Networks Act on July 28, 2026, and revised the governing definitions on August 20, 2026.^[12] The two regimes apply different tests to the same equipment, and a model can fall outside one and inside the other. Diligence for inverters, including inverters incorporated into storage systems, should now address both frameworks; the balance of the equipment list is governed by this order alone.

The Country Trigger

The 2020 order turned on “foreign adversary,” which the Department of Energy applied through a list of six governments: China, Cuba, Iran, North Korea, Russia, and Venezuela.^[13] The new term is “Covered Foreign Entity,” reaching a country, or a person owned by, controlled by, or subject to the jurisdiction or direction of a government, “subject to a United States arms embargo or sanctions regime, under the International Traffic in Arms Regulations (22 C.F.R. 126.1),” plus anyone the Secretary designates.^[14] Section 126.1 currently reaches China, Russia, and roughly two dozen governments in total.^[15]

The covered set is therefore larger, and citing an existing list removes a designation step. Early commentary has read the reference to Section 126.1 as reaching the roughly two dozen governments on its enumerated country lists, observing that, apart from China, few are conventional suppliers to the power industry. It also raises a question the text does not answer: Section 126.1 contains both enumerated country tables and a broader provision reaching any country under a United States arms embargo or sanctions regime, and the order does not say which it incorporates.^[16]

A Domestic Assembly Question

The order prohibits transactions in “foreign-produced” equipment and defines that as an article “not manufactured, produced, or assembled in the United States.”^[17] The 2020 order had no such limitation.^[18] Read on its terms, equipment assembled in the United States is not foreign-produced and falls outside the Section 2 prohibition even where components originate with a Covered Foreign Entity. There is no content threshold and no substantial transformation standard.

Two cautions apply. Foreign-produced critical components acquired separately may carry their own exposure, since the determination clause reaches components directly.^[19] And the provision governing installed equipment uses a different, undefined phrase, “foreign manufactured or operated,” which appears broader.^[20] The inconsistency suggests the point was not fully worked through, and the Department may narrow it. We would not build a sourcing strategy on this reading without watching the rulemaking.

Timing, Enforcement, and Installed Equipment

The prohibition is not self-executing. It applies only where the Secretary makes both a sourcing determination and a risk determination.^[21] None has been announced, and the Department has issued nothing since the order. Nothing is prohibited today.

But the prohibition reaches transactions “initiated after the date of this order,” so a determination issued months from now can capture a procurement commenced this week.^[22] The order does not define initiation, and whether it attaches at a letter of intent, purchase order, notice to proceed, or payment is a question for the rulemaking. There is no grandfathering: the prohibitions apply “notwithstanding any contract entered into or any license or permit granted prior to the date of this order.”^[23] A new anti-evasion clause reaches transactions that evade, are intended to evade, or cause a violation, and conspiracies to do so.^[24] It tracks the IEEPA penalty provision, which carries a statutory civil penalty of the greater of $250,000 or twice the transaction value, subject to inflation adjustment, and criminal exposure for willful violations.^[25] Restructuring around the order carries its own risk.

Equipment already installed is not exempt. The Secretary may condition continued use, operation, maintenance, servicing, or updating, including by requiring that equipment be identified, isolated, monitored, secured, disconnected, replaced, or removed.^[26] Before ordering isolation, disconnection, replacement, or removal, the Secretary must consider reliability, safety, replacement availability, and continuity of service, and may phase compliance, but those are considerations rather than limits.^[27] Section 3 separately authorizes “ordering the replacement of equipment posing an unacceptable risk to national security,” language absent in 2020.^[28] Owners of operating fleets should treat forced retrofit or replacement as a low-probability, high-consequence scenario worth evaluating now.

Two Open Scope Questions

Distribution-Connected Assets. The order covers transmission at 69 kV and above and excludes local distribution.^[29] But storage and UPS systems are named with no interconnection threshold, so a behind-the-meter data center UPS or a distribution-interconnected battery cannot be resolved by the text alone. Some early commentary reads the distribution carve-out as removing these assets from scope, but that carve-out speaks to the transmission network while the equipment definition names storage and UPS outright, so the tension survives it. In 2020, the Department floated pre-qualification criteria keyed to defense critical electric infrastructure and to critical transmission feeders at 69 kV and above reported under NERC critical infrastructure protection standards, which may offer guidance.^[30]

An Exhaustive List? The 2020 order excluded items “not included in the preceding list and that have broader application of use beyond the bulk-power system.”^[31] The new order says “or.”^[32] Read literally, the enumerated list is closed, which is difficult to reconcile with “including” earlier in the same sentence and with the order’s invitation to consider associated software, firmware, and supply chain dependencies.^[33]

What Comes Next, and What 2020 Suggests

Implementing rules are due within 120 days, in late December 2026, but the Secretary need only publish them “as needed,” a qualifier absent in 2020, when the order gave 150 days and produced nothing.^{[34] [35]} Recommended Federal Acquisition Regulation revisions are due in 180 days, with 90 days for the FAR Council to consider proposing amendments.^[36] In 2020 that work ran through an interagency task force required to consult the Electricity Subsector Coordinating Council and distribution industry groups; the new order drops the task force and those requirements and halves the FAR Council’s window.^[37] The Secretary may also publish a list of pre-qualified equipment and vendors “therefore exempt” from the prohibition, strengthening a 2020 provision that produced no list.^[38] Suppliers should treat pre-qualification as a differentiator worth pursuing early.

The 2020 pace is the best available calibration. A July 2020 request for information signaled phasing by transformers rated at 20 MVA with a low-side voltage of 69 kV and above, reactive power equipment, circuit breakers, and transmission-level generation.^[39] The only prohibition order issued December 17, 2020, took effect January 16, 2021, and reached a narrow class: utilities owning or operating Defense Critical Electric Infrastructure under Section 215A(a)(4) of the Federal Power Act serving a designated Critical Defense Facility.^[40] It targeted equipment from persons subject to the jurisdiction or direction of the People’s Republic of China, and was revoked effective April 20, 2021, before the emergency expired May 1, 2021.^[41] Implementation was slower and narrower than the text suggested. That is a reason to plan, not to assume the same trajectory, particularly since this order’s stated rationale expressly invokes data centers and artificial intelligence.^[42]

One scheduling note: the emergency terminates on its anniversary unless the President publishes a continuation notice in the Federal Register and transmits it to Congress within the preceding ninety days, and each House must meet every six months to consider a termination resolution.^[43]

Practical Steps

1. Inventory Covered Equipment and Supply-Chain Exposure. Capture the equipment manufacturer, country of manufacture, place of final assembly, and providers of critical components, firmware, digital services, and remote-access capabilities. For installed equipment, identify contractual rights and practical options if continued operation or servicing becomes restricted.
2. Obtain Supplier Representations with Ongoing Notification. Seek representations covering manufacturer, country of manufacture, final assembly, and critical-component, firmware, and remote-access providers, and pair those representations with a covenant requiring prompt notice of any change that could cause the equipment to become prohibited or restricted.
3. Allocate Regulatory-Change Risk. Address the parties’ rights and obligations if equipment becomes unavailable or restricted after contract execution, including substitute-equipment approval, schedule relief, termination rights, and cost responsibility. These provisions will require negotiation and will likely be contentious if addressed after an issue has already arisen.
4. Monitor Implementation and Consider Commenting. Track Department of Energy determinations and any pre-qualified equipment list. Affected parties should consider commenting on issues such as domestic assembly, distribution-connected assets, transition periods, and substitute-equipment availability.

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[1] Exec. Order No. 14420, Declaring a National Emergency to Secure the United States Bulk-Power System (Aug. 26, 2026). Not yet published in the Federal Register as of the date of this alert.

[2] Exec. Order No. 14420, §§ 2(a)-(b), 5(e); id. pmbl.; 50 U.S.C. §§ 1701 et seq.; 50 U.S.C. §§ 1601 et seq.; 3 U.S.C. § 301.

[3] Exec. Order No. 14420, § 5(b).

[4] Exec. Order No. 13920, Securing the United States Bulk-Power System, 85 Fed. Reg. 26,595 (May 4, 2020); Exec. Order No. 13990, § 7(c), 86 Fed. Reg. 7,037, 7,042 (Jan. 25, 2021); Revocation of Prohibition Order Securing Critical Defense Facilities, 86 Fed. Reg. 21,308, 21,309 (Apr. 22, 2021).

[5] Exec. Order No. 14420, § 5(b).

[6] Exec. Order No. 14420, § 5(b).

[7] Exec. Order No. 13920, § 4(b), 85 Fed. Reg. at 26,598.

[8] Exec. Order No. 14420, § 5(b).

[9] Exec. Order No. 13920, § 4(a), 85 Fed. Reg. at 26,598.

[10] Exec. Order No. 14420, § 5(a).

[11] Exec. Order No. 14420, § 2(a)(i).

[12] See Brian J. Nese & Zack Taylor, U.S. Reportedly Drafting Restrictions on Foreign-Made Inverters: What Solar and Storage Buyers Should Know Now, Stoel Rives LLP (July 22, 2026), https://www.stoel.com/insights/publications/u-s-reportedly-drafting-restrictions-on-foreign-made-inverters-what-solar-and-storage-buyers-should-know-now; Brian J. Nese & Zack Taylor, It Happened: FCC Adds Foreign-Produced Power Inverters to the Covered List, Stoel Rives LLP (July 30, 2026), https://www.stoel.com/insights/publications/it-happened-fcc-adds-foreign-produced-power-inverters-to-the-covered-list; Public Safety and Homeland Security Bureau, Public Notice, DA 26-870 (rel. Aug. 20, 2026), WC Docket No. 18-89, ET Docket No. 21-232, EA Docket No. 21-233.

[13] Exec. Order No. 13920, § 4(d), 85 Fed. Reg. at 26,598 (defining “foreign adversary”); Securing the United States Bulk-Power System, 85 Fed. Reg. 41,023, 41,024 (July 8, 2020) (request for information) (identifying the six governments).

[14] Exec. Order No. 14420, § 5(e).

[15] 22 C.F.R. § 126.1(d)(1), (d)(2) (current as of Aug. 25, 2026).

[16] Compare 22 C.F.R. § 126.1(d) (enumerated country tables), with id. § 126.1(c)(3) (arms embargoes and sanctions).

[17] Exec. Order No. 14420, §§ 2(a), 5(c).

[18] Exec. Order No. 13920, § 1(a), 85 Fed. Reg. at 26,595.

[19] Exec. Order No. 14420, § 2(a)(i).

[20] Exec. Order No. 14420, § 2(b).

[21] Exec. Order No. 14420, § 2(a).

[22] Exec. Order No. 14420, § 2(a).

[23] Exec. Order No. 14420, § 2(d).

[24] Exec. Order No. 14420, § 2(f).

[25] 50 U.S.C. § 1705(a)-(c). The $250,000 figure is the statutory maximum and is subject to adjustment under the Federal Civil Penalties Inflation Adjustment Act.

[26] Exec. Order No. 14420, § 2(b).

[27] Exec. Order No. 14420, § 2(b).

[28] Exec. Order No. 14420, § 3(a); compare Exec. Order No. 13920, § 2(a), 85 Fed. Reg. at 26,596.

[29] Exec. Order No. 14420, § 5(a).

[30] Securing the United States Bulk-Power System, 85 Fed. Reg. 41,023, 41,025 (July 8, 2020) (request for information); see also Securing the United States Bulk-Power System, 85 Fed. Reg. 44,061 (July 21, 2020) (extending the comment period to August 24, 2020).

[31] Exec. Order No. 13920, § 4(b), 85 Fed. Reg. at 26,598.

[32] Exec. Order No. 14420, § 5(b).

[33] Exec. Order No. 14420, § 5(b).

[34] Exec. Order No. 14420, § 3(b).

[35] Exec. Order No. 13920, § 2(b), 85 Fed. Reg. at 26,596.

[36] Exec. Order No. 14420, § 4(a)-(b).

[37] Exec. Order No. 13920, § 3(c)(iii), (h), 85 Fed. Reg. at 26,597-98.

[38] Exec. Order No. 14420, § 2(e); compare Exec. Order No. 13920, § 1(d), 85 Fed. Reg. at 26,596.

[39] Securing the United States Bulk-Power System, 85 Fed. Reg. 41,023, 41,025 (July 8, 2020) (request for information).

[40] Prohibition Order Securing Critical Defense Facilities, 86 Fed. Reg. 533 (Jan. 6, 2021), described in Revocation of Prohibition Order Securing Critical Defense Facilities, 86 Fed. Reg. 21,308, 21,309 & n.4 (Apr. 22, 2021); see 16 U.S.C. § 824o-1(a)(4), (c).

[41] Revocation of Prohibition Order Securing Critical Defense Facilities, 86 Fed. Reg. at 21,309.

[42] Exec. Order No. 14420, § 1.

[43] 50 U.S.C. § 1622(d); see also id. § 1622(b).