Industrial Control System Security

Industrial Control System Security

FEATURE – The Mysterious Case of the Missing 250-Ton Chinese Power Transformer

Articles, Blog, DOE, Industrial Control System Security
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In May, the Trump administration seized a $3 million transformer on its way to Colorado. What happened to it, and where is it now?

In May, the Trump administration seized a 250-ton, $3 million Chinese high-voltage transformer that was on its way to Colorado. It was taken to Sandia National Labs in New Mexico for reasons unknown. What happened to it still remains a mystery.

On May 1, the Trump Administration issued a surprise Executive Order (EO), “Securing the United States Bulk Power System.” The directive aims to keep critical equipment supplied by foreign adversaries out of the nation’s power grid due to supposed supply chain security threats. It requires the Secretary of Energy to work with other agencies in identifying the specific equipment from adversarial suppliers, particularly Chinese suppliers, that the government should bar from the bulk-power system.

The Department of Energy (DOE) has to issue relevant rules on the matter within 150 days, or by September 28. Shortly after the EO’s release came the surprising revelation that a federally owned utility managed by DOE, the Western Area Power Administration (WAPA), hijacked a nearly $3 million Chinese-manufactured transformer initially intended for one of its substations in Colorado. WAPA instead diverted it to one of DOE’s national laboratories, Sandia National Labs, in New Mexico.

The manufacturer of the high-voltage 500,000-pound transformer was Chinese company JiangSu HuaPeng Transformer Co., Ltd., or JSHP, which shipped the transformer from Shanghai to the Port of Houston in August 2019.JSHP’s North American representative Jim Cai told Motherboard his company planned to spend a couple of hundred thousand dollars to transport the high-grade steel using a particular kind of railroad car to WAPA’s Ault substation in Colorado, where JSHP would then install it. Like all electric substations, the Ault facility’s main purpose is to “step down” high-voltage electricity, typically above 1,000 volts, to lower, more manageable levels that can be distributed safely to homes and businesses.

Before the ship docked in Texas, WAPA told JSHP to cancel its plans to transport and install the transformer and to forget about selling a warranty on the equipment, which is almost always mandatory for highly specialized, expensive electrical system equipment. The utility then transported the transformer itself to Sandia. Since then, WAPA and DOE have been silent on this odd development, which has sparked confusion and concerns among utilities and industrial control system (ICS) security specialists.

[This article appeared in Vice News. To read the rest of the article please visit here.]

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