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On January 31, 2024 FBI Director Christopher Wray testified before the House Select Committee on the Chinese Communist Party, stating:

“China’s hackers are positioning on American infrastructure in preparation to wreak havoc and cause real-world harm to American citizens and communities, if or when China decides the time has come to strike.”

Wray was referring, in part to the discovery of malicious Chinese malware embedded deep inside networks controlling “power grids, communications systems and water supplies that feed military bases in the United States and around the world,” first publicly reported in August 2023 by The New York Times. Wray’s testimony made clear that the malware can not only impact the infrastructure supporting the U.S. military, but that it has the ability to adversely affect the civilian sector as well.

That the Chinese military would attack civilians is not just theoretical, since the People’s Liberation Army (PLA) draws its battle plans from the seminal work “Unrestricted Warfare” published in 1999 by two PLA Colonels who wrote (on page 145):

“Supposing a war broke out between two developed nations already possessing full information technology, and relying upon traditional methods of operation…if the attacking side … at the same time carrying out a network attack against the enemy so that the civilian electricity network, traffic dispatching network, financial transaction network, telephone communications network, and mass media network are completely paralyzed, this will cause the enemy nation to fall into social panic, street riots, and a political crisis. There is finally the forceful bearing down by the army, and military means are utilized in gradual stages until the enemy is forced to sign a dishonorable peace treaty…” [emphasis added]

Wray said that there’s been “far too little public focus” on the types of cyber threats that affect “every American.”  A month earlier, Wray testified before the Senate saying “I see blinking lights everywhere I turn” – harkening back to the ignored warnings prior to the 9/11 attacks.

Unfortunately, there are many more “blinking lights” than just Chinese malware. China’s Unrestricted Warfare has put a major emphasis on using our supply chain as a vector of attack.

Their plans involve overall political influence and economic warfare to strengthen China while weakening the U.S.  China influences U.S. leaders to embrace certain forms of electricity generation such as wind and solar and to promote widespread electrification of transportation infrastructure – which causes the U.S. to invest heavily in China who manufactures these assets.

It is important to note that at the same time, China domestically eschews electric vehicles (EVs), prioritizing hydrogen for transportation, while rapidly building coal and nuclear plants to generate electricity for their electric grids. America, who for years has been advancing the incorporation of non-baseload renewable energy (with materials largely sourced from China) is now is faced with the growing problem of accelerating the development of baseload energy resources to fuel the AI and data processing revolution. Between the quest for “net zero,” renewables and the AI Revolution, the United States faces the dilemma of increasing its base load capacity of available electricity, or facing potential load shedding or power rationing (brownouts and blackouts) due to a lack of generation capacity because we’ve decided to plan to eliminate coal power while China accelerates with that resource.

It is also of great concern that America could face blackouts from Chinese supply chain attacks using the very infrastructures American utilities have purchased from the communist nation to build within the wind and solar infrastructure in our grid. Even the Biden Administration’s Office of the Director of National Intelligence (ODNI) has admitted in a 2021 report:

“Deployment of utility-scale solar and wind technologies in remote areas is likely to require ultra-high-voltage transmission lines to move the power to cities. China is the world’s leading supplier of advanced grid components for ultra-high-voltage systems, such as transformers, circuit breakers, and inverters, which we assess creates cyber vulnerability risks.”

That same year, an independent grid security researcher had documented that the U.S. had already imported 171,288,538 inverters from Communist China. Why should we worry about the fact that the solar and wind generation sites within our electric grid depend on millions of Chinese inverters?  Not only because our allies, such as Australia, have voiced security concerns about these inverters, but also because the Chinese have already “baked in” hardware backdoors to target other vitally important electric grid components.

In the summer of 2019, the Trump Administration’s Department of Energy seized a massive Chinese-manufactured transformer as it entered the Port of Houston and transported it under federal escort to Sandia National Laboratories.  The transformer was inspected, and while the detailed findings are highly classified, “They found hardware that was put into it that had the ability for somebody in China to switch it off,” said Latham Saddler, the former Director of Intelligence Programs at the National Security Council in the Trump administration.

This frightening discovery prompted President Trump to declare a “Grid Security Emergency” on May 1st, 2020, and to pass an executive order “Securing the United States Bulk-Power System” meant to stop the importation of these transformers. At the time, the U.S. grid contained about 300 Chinese transformers. On President Biden’s first day in office, he suspended the Trump E.O., opening the floodgates to the importation of more.

Grid security advocates have filed numerous formal complaints on this matter with the federal regulators of the bulk power system, namely the Federal Energy Regulatory Commission (FERC). On February 16th of this year, FERC was warned yet again that our nation has now imported 449 Chinese built transformers.

Even though the Biden Administration decided on February 24th to begin addressing the security threat associate with Chinese manufactured “ship-to-shore” cranes at U.S. Commercial Strategic Seaports, there still seems to be no appetite among the federal government agencies of the Biden Administration, or even the U.S. electric industry, to address the looming threat of Chinese manufactured transformers.

With China’s relentless, predatory, and hostile actions targeting our energy infrastructure, and the federal government’s dangerously slow response, now is the time for states to fill the gap.

Some states have taken action, such as Texas in 2021 when Governor Abbott signed into law the “Lone Star Infrastructure Protection Act,” co-authored by Texas state Senator Donna Campbell and then-state-Representative (now Senator) Tan Parker. In a statement about the bill, Parker said that the legislation “sends a clear message that we will not allow hostile foreign actors to access these vital elements of our great state.” Members of the South Carolina House of Representatives, attempted to follow Texas’ lead with a similar bill authored by Representative Leon D. “Doug” Gilliam, but the legislation died in the S.C. Senate.

In Louisiana, our own Public Service Commission fortunately does not need the legislature to direct prudent measures for our utilities to take to protect our state’s citizens from China’s hostile Unrestricted Warfare. That’s why last year I proposed, and four of five members of our Commission adopted a directive that orders our state’s grid operators to cease purchasing, and including, any foreign produced devices in electric utilities from specified jurisdictions.

“Specifically, no equipment or device of any kind manufactured in the People’s Republic of China, Democratic People’s Republic of Korea, the Russian Federation or the Islamic Republic of Iran shall be purchased, included or utilized by any electric utility, whether investor owned or member cooperative,” the directive states.

It’s time other states explore methods by which they too can address the China threat because it’s clear that the Federal Government isn’t doing nearly enough. Moving forward, as states seek to protect their existing energy infrastructure from hostile threats, it’ll also be important for us to band together to promote sound strategies to build the electric grid of the future, relying on promising developments in areas that don’t support opponent states like Communist China and instead make us energy independent. Largely untapped sources of generation ranging from hydrogen, slightly used nuclear fuel and new nuclear (nuclear batteries, micro nuclear reactors and small modular reactors) must be explored for the grid of the future.

Simply put, protect the system, protect the public, protect the nation – and start with the states.

About the author: Public Service Commissioner Eric Skrmetta

Eric Skrmetta was elected to the Louisiana Public Service Commission in 2008, holding one of 5 seats on the statewide body that governs utility providers and other public services in the Pelican State. Eric is serving his third term on the Commission.

Eric is a lifelong resident of Louisiana. A graduate of Brother Martin High School and holding a BS from LSU-BR, he also holds a Juris Doctorate from Southern University Law School and an LL.M Masters in Maritime and Admiralty law from Tulane Law School. Eric has attended the Harvard University Kennedy School of Government.

Eric is the past President of the Southeast Association of Regulatory Utility Commissioners (SEARUC). He serves on the Board of Directors of the National Association of Regulatory Commissioners(NARUC) where he also serves on the Washington Action Committee, and he is a member of that organizations Electricity and Gas committees, the national gas infrastructure task force, among others. Eric leads the State of Louisiana’s advanced nuclear power task force currently studying including nuclear batteries, micro nuclear reactors and small modular reactors in the states generation resource planning. Eric serves on the board of directors of the Organization of MISO States and has served in various capacities, lastly as president of the Entergy Regional States Committee. Eric is proud to represent all, or a portion, of 10 Louisiana Parishes.

His undergraduate education and his life experiences inmanufacturing have uniquely positioned him to clearly understand the technical nature of issues that are brought before the Commission. His legal education provides him with unique insight into regulatory issues. Eric is the only attorney serving as a member of the LPSC.  His experience as a Triple AAA Arbitrator and mediator has helped him to achieve rapid resolution to problems, balancing the rights of utility providers to make a profit with the needs of citizens to receive the best services at the lowest possible cost. During his tenure, Eric has been a strong consumer advocate and had brought about reforms to benefit the citizens of Louisiana including achieving among the lowest residential utility rates in the nation.

Eric is father to two adult children.

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