Trump Administration Implements Measures to Protect the U.S. Electric Grid

The Trump Administration has taken a number of recent actions to protect the U.S. electric grid, primarily aimed at restricting foreign-sourced components in the bulk power sector. Citing threats from China in particular, the collective actions of the White House and the Federal Communications Commission (FCC)—in concert with other federal agencies—build on prior efforts to protect power generation resources in the United States.

Key Takeaways

• FCC restricts foreign-produced power inverters. New models of certain foreign-produced power inverters are generally ineligible for the FCC authorization required for importation, marketing, or sale in the United States, unless an exemption applies.
• Previously authorized devices remain unaffected. The FCC restrictions do not apply to existing authorized models, and exemptions have already been granted for certain manufacturers and equipment.
• Executive Order expands scrutiny of foreign-sourced equipment. An August 26, 2026, Executive Order targets certain foreign-produced equipment used in the U.S. bulk-power system when specified national security risks are identified.
• Existing equipment may face additional requirements. The Executive Order authorizes the Department of Energy to impose security measures on previously installed equipment, potentially including monitoring, replacement, or removal.
• New regulations are expected by December 24, 2026. Companies should consider reviewing their supply chains for potentially restricted foreign-sourced equipment and monitoring forthcoming Department of Energy regulations to prepare for compliance.

FCC Covered List

On July 27, 2026, a Trump Administration interagency body issued a National Security Determination that “power inverters produced in a foreign country, regardless of the nationality of the producer, presented the specific unacceptable risks of facilitating a supply chain vulnerability that could disrupt U.S. economic security, including sectors critical to national security, and create a cybersecurity risk that threatens the security of critical infrastructure and the safety of U.S. persons.” Under the authority of the Secure and Trusted Communications Networks Act of 2019, the FCC added foreign-produced power inverters to the FCC Covered List, unless exempt by the Department of War or the Department of Homeland Security. Equipment on the FCC Covered List is prohibited from receiving the FCC equipment authorization that is a prerequisite to importing, marketing or selling most electronic devices in the United States.

As a result, new models of “foreign-produced” power inverters will not be eligible for importation, marketing, or sale in the United States, unless such devices receive an exemption from the Departments of War or Homeland Security. Existing device models already authorized are not affected by the determination.

The national security determination, as amended, defines “power inverters” to mean an electronic device that:

1. Changes dc power to ac power, to include bidirectional devices, that is intended for use in parallel with an electric utility to supply common loads and sometimes deliver power to the utility, i.e., a utility-interactive inverter as that term is defined in UL 1741 sections 2.1.23, 2.1.52; and
2. Contains, or is designed, equipped, or configured to accept, a component that enables remote communication, control, sensing, data-collection, or monitoring through Ethernet, Wi-Fi, cellular, Bluetooth, or other similar connections, whether wired or wireless.

A “foreign-produced” power inverter is an inverter that is not:

1. Eligible for the Advanced Manufacturing Tax Credit in 26 U.S.C. § 45X for domestic production; or
2. A domestic end product, as defined in 48 CFR § 25.101(a), because it is manufactured in the United States and the cost of domestic components exceeds 65% of the total component cost or 75% for items delivered starting in 2029. 

U.S. consumers and manufacturers may obtain relief in the form of exemptions from the ban. To date, three types of power inverters have obtained exemptions: (1) GE Grid Solutions, LLC’s FLEXINVERTER 1.5kV Solar version, 1.5kV BESS version, 2KV Solar version, and SiC Variant power inverters, (2) Dynapower Company, LLC’s CPS-2500, CPS-1250, and MPS-125 series power inverters, and (3) Power Electronics España, S.L.U.’s GEN3 platform utility-scale solar power inverters, including the HEM and the PCSM & Multi PCSM bidirectional battery storage inverters. Consistent with exemptions issued for other equipment on the FCC Covered List (e.g., routers), more exemptions are expected, particularly for power inverters made in allied countries.

Bulk Power Executive Order

On August 26, 2026, President Trump issued an Executive Order finding that the foreign supply of electric equipment for U.S. bulk power systems is a national emergency that threatens U.S. foreign policy and security, in particular as “rapid growth of advanced manufacturing, data centers, artificial intelligence, and defense production has increased the Nation’s dependence on abundant, reliable electricity and magnified the consequences of a successful attack or supply disruption on the bulk-power system.” 

Similar to an Executive Order that President Trump issued during his first term – see our prior alert: President Trump Issues Executive Order on Securing the United States Bulk Power System – the 2026 Executive Order authorizes the Secretary of Energy to implement restrictions on the types of foreign-produced electric equipment that can be used in the bulk power system,¹ while also providing flexibility to address identified risks. 

Specifically, the 2026 Executive Order prohibits any acquisition, importation, transfer, or installation of foreign-produced bulk-power system electric equipment after August 26, 2026, where the transaction (1) involves “bulk-power system electric equipment² — or any critical component, software, firmware, digital service, maintenance service, or remote-access capability associated with such equipment — designed, developed, manufactured, or supplied by persons owned by, controlled by, or subject to the jurisdiction or direction of a country subject to a U.S. arms embargo or is designated by the Secretary of Energy as engaged in conduct “detrimental to the national security or foreign policy of the United States” and (2) the Secretary of Energy and other Executive Branch officials determine the transaction:

1. poses 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 bulk-power system in the United States;
2. 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
3. otherwise poses an unacceptable risk to the national security of the United States or the security and safety of United States persons.

Unlike the FCC rules, which do not apply to existing models, the 2026 Executive Order expressly authorizes the Secretary of Energy to 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 August 26, 2026, “including requirements to identify, isolate, monitor, secure, disconnect, replace, or remove such equipment.” However, before doing so, the Secretary of Energy is required to consider the “effects on reliability and safety, the availability of secure replacements, and continuity of essential service, and may establish phased compliance.”

In addition, the implementing regulations can include mitigation short of prohibition and disconnection, and the Secretary may also create a list of pre-qualified equipment and vendors exempt from the regulations. 

Importantly, the 2026 Executive Order gives the Secretary of Energy until December 24, 2026 to publish regulations implementing the Executive Order, which may apply retroactively to transactions that occurred as of the date of the Executive Order’s issuance on August 26, 2026. 

Implications

Companies that purchase or consume power inverters, or are involved in the bulk power sector, as producers, suppliers, or investors, should continue to monitor regulatory developments in this space, including the addition of power inverters exempted from the Covered List and the implementing regulations for the bulk power executive order. Prior to the issuance of the bulk power regulations, Companies that review their supply chains for potential touchpoints to Chinese equipment will be in the best position to comply with the rules once published.

¹ The term “bulk-power system” means a system that: (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. For the purpose of this order, this definition 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.
² The term “bulk-power system electric equipment” means items used in bulk-power system substations, control rooms, or power generating stations, including reactors; capacitors; substation transformers; utility-scale and other grid-connected inverters; battery energy storage systems; and uninterruptible power supply systems supporting critical infrastructure, current coupling capacitors, large generators, small 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 (including remote terminal units, programmable logic controllers, and intelligent electronic devices), distributed control systems, and safety instrumented systems. 

This memorandum is a summary for general information and discussion only and may be considered an advertisement for certain purposes. It is not a full analysis of the matters presented, may not be relied upon as legal advice, and does not purport to represent the views of our clients or the Firm. David J. Ribner, an O’Melveny partner licensed to practice law in the District of Columbia and New York; Greta L. Nightingale, an O’Melveny partner licensed to practice law in the District of Columbia; Katie Coleman, an O’Melveny partner licensed to practice law in Texas and New Mexico; Jeff Hoffner, an O’Melveny partner licensed to practice law in California; Caroline Lynch, an O’Melveny partner licensed to practice law in California and New York; Phillip Oldham, an O’Melveny partner licensed to practice law in Texas and New Mexico; Alexander Roberts, an O’Melveny partner licensed to practice law in New York; Alexander N. Ely, an O’Melveny counsel licensed to practice law in the District of Columbia; and Alexander Witschey, an O’Melveny counsel licensed to practice law in Texas, contributed to the content of this newsletter. The views expressed in this newsletter are the views of the authors except as otherwise noted.

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