POWER April 2021 - 17

LEGAL & REGULATORY
Biden Weighs Preserving
Infrastructure EO Focused
on Cybersecurity
Anne K. Dailey
resident Joe Biden on his first day in office sent a clear
signal that he would not follow his predecessor's policies
with respect to energy and climate issues. On Jan.
20, 2021, Biden signed Executive Order (EO) 13990- " Protecting
Public Health and the Environment and Restoring Science
to Tackle the Climate Crisis " -revoking many of former
President Trump's executive orders on energy and climate
matters. However, one of Trump's actions remains in limbo
until April 20, 2021, pending further review: EO 13920, " Securing
the United States Bulk-Power System. " Will this particular
EO with its focus on security for the nation's critical
electricity infrastructure survive the executive chopping block,
and could it survive any court challenges?
P
Protecting the Bulk-Power System
An EO is a tool presidents use to direct policies through
the executive branch of government. EO 13920, issued May
1, 2020, declared a national emergency with respect to the
use of bulk-power system (BPS) equipment made by foreign
adversaries, on the basis such equipment could be used
to " create and exploit vulnerabilities. " The EO prohibits the
acquisition or installation of BPS equipment that poses an
" undue " or " unacceptable " risk to the U.S., and over which
a " foreign adversary " or a national thereof has an interest,
and directs the Energy Secretary to take actions to implement
the prohibition.
In a public stakeholder call recorded shortly after EO
13920 was issued, DOE officials highlighted Russia and
China as expanding their cyber capabilities to target critical
infrastructure, including the electricity sector. They noted
that no equipment was prohibited yet, and said the DOE
would develop recommendations on how to address new
and already-installed equipment, including possible mitigation
procedures for existing equipment.
Citing EO 13920, in December 2020 the DOE issued a
" Prohibition Order Securing Critical Defense Facilities. " Under
this order, certain " Responsible Utilities " are barred from acquiring
or installing certain identified types of BPS equipment
from China that are used to serve a Critical Defense Facility.
The order noted that the DOE would notify utilities of their
obligations to comply.
But that was all under the previous administration. Biden has
suspended EO 13920 until April 20, pending review by Jennifer
Granholm, the new energy secretary, along with the director of
the Office of Management and Budget.
Among the likely considerations for the Biden administration
will be balancing security risks associated with BPS
facilities that come from foreign adversaries alongside renewable
energy goals, as China in particular manufactures
lots of solar equipment. There also are indications the Biden
April 2021 | POWER
administration may in particular take a hard look at cybersecurity
issues involving China and Russia. The suspension
and review of EO 13920 could provide an opportunity to
strengthen the order, both in substance and in its ability to
withstand a court review.
A Legal Basis for the Order
A seminal case regarding limits of the EO is Youngstown
Sheet & Tube Co. v. Sawyer, a Supreme Court case from
1952. During the Korean War, the country's steel mills
were at risk of a shutdown due to labor disputes and a
threatened strike. Citing the " national emergency " of the
ongoing military engagement, and the importance of steel
products to continued military strength, President Truman
issued an EO directing the Secretary of Commerce to take
control of the steel mills to keep them in operation. The
court could find no basis for the EO in either a statute or
any of the constitutional powers granted to the president,
and thus affirmed the lower court's injunction of the EO.
In short, the majority opinion concluded that Congress has
the exclusive authority to make new laws that are to be
carried out by the government.
In its current form, EO 13920 cites to the International
Emergency Economic Powers Act and the National Emergencies
Act as sources for its authority. These acts give the
president broad authority to declare a national emergency
and to take certain steps (including prohibition of certain
transactions) necessary for national security. Thus, on its
face EO 13920 appears to conform with Youngstown's requirement
that the authority for an EO derive from a statute
or the Constitution.
But another consideration for a reviewing court may be
whether the specific action taken in the EO conflicts with
other statutes. This was the case in Chamber of Commerce
v. Reich, where the U.S. Court of Appeals for the D.C. Circuit
concluded that President Clinton's EO directing certain
procurement policies for the government conflicted with the
National Labor Relations Act, and thus exceeded the scope of
the president's authority.
Notably, in Chamber of Commerce v. Reich, the court permitted
the case to move forward on the merits of the EO itself,
rather than as a challenge to rules implementing it. Accordingly,
parties could bring challenges to EO 13920 even before the
DOE pursues further processes. As of this writing, there do not
appear to be any legal challenges to EO 13920 or the prohibition
order yet. If Biden ultimately chooses to revoke the EO,
then any challenges may be moot. ■
-Anne K. Dailey is a partner in the Energy
practice at Troutman Pepper, and represents
electric utilities before the Federal
Energy Regulatory Commission.
www.powermag.com
17
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POWER April 2021

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