President 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?
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 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.