U.S. to Limit Use of Chinese Power Equipment on Military Bases

(Bloomberg) -- The Trump administration is issuing new prohibitions on the use of Chinese power equipment on military bases, citing the need to protect the U.S. facilities from foreign adversaries, according to two senior Energy Department officials familiar with the matter.

Utilities that supply military bases and other critical defense facilities will be barred from using high-voltage transformers and other so-called bulk power equipment from China under an order being issued Thursday by Energy Secretary Dan Brouillette. The order is effective 30 days from issuance.

The order is another step in the Trump administration’s wide-ranging effort to restrict access by Huawei Technologies Co. and other Chinese companies to Western networks and technology. The State Department has pressured allies in Europe and elsewhere to bar Huawei and ZTE Corp. from next-generation 5G communications networks, citing fears of spying. The Commerce Department has worked to choke off the supply of high-tech electronic chips to Huawei.

Brouillette said in a statement that it is “imperative” for the U.S. to secure the power grid “against attacks and exploitation by foreign adversaries.”

The order being issued by the Energy Department specifically affects four types of power equipment: power transformers, generator step up transformers, circuit breakers and reactive power equipment, according to the Energy Department officials, who asked for anonymity to discuss information not yet public. They said the order was expected to impact fewer than 5% of utilities in the U.S.

The order, which officials said is not related to a cyber-attack that has roiled the U.S. government, follows on the heels of an executive order issued by President Donald Trump in May that blocked U.S. purchases of certain power-system equipment from entities deemed a risk to national security. It also empowered the secretary of Energy to identify those parties and establish criteria for restricting transactions with them.

In recent years, members of Congress and the Trump administration have raised concerns about the power grid’s vulnerability to foreign interference. A report by the Director of National Intelligence last year warned that both China and Russia have the ability to launch cyber-attacks targeting both the electrical grid and natural gas pipelines.

Among the companies that have been singled out as a particular threat to American power grid is Huawei, the Chinese producer of solar panels, energy-storage technology and telecommunications infrastructure.

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