Bill Text: TX SB23 | 2021 | 87th Legislature 3rd Special Session | Introduced
Bill Title: Relating to the resilience of the electric grid and certain municipalities.
Sponsorship: Partisan Bill (Republican 1)
Status: (Introduced - Dead) 2021-09-08 - Filed [SB23 Detail]
Download: Texas-2021-SB23-Introduced.html
| By: Hall | S.B. No. 23 | |
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| relating to the resilience of the electric grid and certain | ||
| municipalities. | ||
| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
| SECTION 1. The legislature finds that: | ||
| (1) electric grid blackouts threaten the lives of the | ||
| citizens of this state and pose a disproportionately large risk to: | ||
| (A) the elderly, vulnerable, and underprivileged | ||
| within this state; and | ||
| (B) communities facing environmental justice | ||
| issues such as disproportionate environmental health burdens and | ||
| population vulnerabilities relating to facilities such as chemical | ||
| plants and refineries that can become environmental disaster areas | ||
| when taken off-line due to loss of electricity; | ||
| (2) the 16 critical infrastructures identified in | ||
| President Barack Obama's Presidential Policy Directive "Critical | ||
| Infrastructure Security and Resilience" (PPD-21) including water | ||
| and wastewater systems, food and agriculture, communications | ||
| systems, the energy sector including refineries and fuel | ||
| distribution systems, chemical plants, the financial sector, | ||
| hospitals and health care facilities, law enforcement and | ||
| government facilities, nuclear reactors, and other critical | ||
| functions depend on the electric grid in this state and make the | ||
| grid's protection vital to the economy of this nation and homeland | ||
| security; | ||
| (3) the blackout that occurred in this state in | ||
| February 2021 caused: | ||
| (A) death and suffering in this state; | ||
| (B) economic loss to this state's economy; | ||
| (C) impacts to all critical infrastructures in | ||
| this state; | ||
| (D) the dispatch of generation units that likely | ||
| exceeded limits established by the Environmental Protection Agency | ||
| for sulfur dioxide, nitrogen oxide, mercury, and carbon monoxide | ||
| emissions and wastewater release limits; | ||
| (E) radically increased pricing of electricity | ||
| that resulted in making electric power bills unaffordable to many | ||
| customers across this state; and | ||
| (F) the exacerbation of the COVID-19 pandemic | ||
| risk by forcing many of the state's citizens to consolidate at | ||
| warming centers and in other small spaces where warmth for survival | ||
| superseded social distancing protocols; | ||
| (4) a previous large-scale blackout occurred in this | ||
| state in February 2011 during which 4.4 million customers were | ||
| affected; | ||
| (5) this state is uniquely positioned to prevent | ||
| blackouts because this state is a net exporter of energy and is the | ||
| only state with an electric grid almost exclusively within its | ||
| territorial boundaries; | ||
| (6) the 2011 and 2021 blackouts call into question: | ||
| (A) whether too much risk has been accepted | ||
| regarding weatherization of electric generation infrastructure; | ||
| (B) whether this state lacks the internal | ||
| distribution structure and control systems to manage rolling | ||
| blackouts; and | ||
| (C) whether sufficient resources have been | ||
| allocated toward overall grid resilience; | ||
| (7) the governor has declared reform of the | ||
| independent organization certified under Section 39.151, Utilities | ||
| Code, for the ERCOT power region as an emergency item for the 87th | ||
| Legislature; | ||
| (8) public confidence in the resilience of the | ||
| electric grid in this state is essential to ensuring environmental | ||
| justice, economic prosperity, domestic tranquility, continuity of | ||
| government, and life-sustaining systems; | ||
| (9) a resilient electric grid that offers businesses | ||
| in this state continuity of operations in the event of a natural or | ||
| man-made disaster will be an unrivaled attraction for businesses to | ||
| expand or move their operations to this state and will protect what | ||
| is important to this state, including its military installations | ||
| and its environment; | ||
| (10) current market incentives and regulations are not | ||
| sufficient for electric utilities to: | ||
| (A) prioritize grid security and resilience; and | ||
| (B) protect the grid against hazards; | ||
| (11) protection of the electric grid in this state | ||
| against hazards would assure businesses and the citizens of this | ||
| state that the "lights will be back on first in Texas" in the event | ||
| of a nationwide catastrophe affecting electric infrastructure, | ||
| sparing catastrophic societal and environmental consequences for | ||
| this state; and | ||
| (12) when this state begins implementation of the plan | ||
| for all hazards resilience described by Section 44.007, Utilities | ||
| Code, as added by this Act, to protect the electric grid in this | ||
| state, short-term and long-term economic benefit will far exceed | ||
| even the most optimistic estimates of the conventional economic | ||
| incentives provided by tax abatements to attract businesses to this | ||
| state. | ||
| SECTION 2. Subtitle B, Title 2, Utilities Code, is amended | ||
| by adding Chapter 44 to read as follows: | ||
| CHAPTER 44. GRID RESILIENCE | ||
| Sec. 44.001. DEFINITIONS. In this chapter: | ||
| (1) "All hazards" means: | ||
| (A) terrestrial weather including wind, | ||
| hurricanes, tornadoes, flooding, ice storms, extended cold weather | ||
| events, heat waves, and wildfires; | ||
| (B) seismic events including earthquakes and | ||
| tsunamis; | ||
| (C) physical threats including terrorist attacks | ||
| with direct fire, drones, explosives, and other methods of physical | ||
| sabotage; | ||
| (D) cyber attacks including malware attacks and | ||
| hacking of unprotected or compromised information technology | ||
| networks; | ||
| (E) manipulation of operational technology | ||
| devices including sensors, actuators, and drives; | ||
| (F) electromagnetic threats through man-made | ||
| radio frequency weapons, high altitude nuclear electromagnetic | ||
| pulse, and naturally occurring geomagnetic disturbances; | ||
| (G) vulnerabilities regarding installed | ||
| generation capacity located in, or capable of delivering | ||
| electricity to, this state; | ||
| (H) electric generation supply chain | ||
| vulnerabilities including insecure or inadequate fuel | ||
| transportation or storage; and | ||
| (I) insider threats caused by compromised or | ||
| hostile personnel working within government or the utility | ||
| industry. | ||
| (2) "Micro-grid" means a group of interconnected loads | ||
| and distributed energy resources inside clearly defined electrical | ||
| boundaries that act as a single controllable entity with respect to | ||
| the grid. | ||
| (3) "Security commission" means the Texas Grid | ||
| Security Commission. | ||
| Sec. 44.002. TEXAS GRID SECURITY COMMISSION. (a) The Texas | ||
| Grid Security Commission is composed of the following members: | ||
| (1) a representative of the Texas Division of | ||
| Emergency Management appointed by the chief of that division; | ||
| (2) a representative of the State Office of Risk | ||
| Management appointed by the risk management board; | ||
| (3) a representative of the independent organization | ||
| certified under Section 39.151 for the ERCOT power region appointed | ||
| by the chief executive officer of that organization; | ||
| (4) a representative of the Texas Military Department | ||
| appointed by the adjutant general of that department; | ||
| (5) a representative of the Texas Military | ||
| Preparedness Commission appointed by that commission; | ||
| (6) a representative of the Office of State-Federal | ||
| Relations appointed by the director of that office; | ||
| (7) a representative of the Department of Information | ||
| Resources appointed by the executive director of that department; | ||
| (8) a representative of power generation companies | ||
| appointed by the chief of the Texas Division of Emergency | ||
| Management; | ||
| (9) two representatives of transmission and | ||
| distribution utilities appointed by the chief of the Texas Division | ||
| of Emergency Management; | ||
| (10) three individuals with expertise in critical | ||
| infrastructure protection appointed by the chief of the Texas | ||
| Division of Emergency Management, to represent the public interest; | ||
| (11) one representative appointed by the chief of the | ||
| Texas Division of Emergency Management from each of the following | ||
| essential services sectors: | ||
| (A) law enforcement; | ||
| (B) emergency services; | ||
| (C) communications; | ||
| (D) water and sewer services; | ||
| (E) health care; | ||
| (F) financial services; | ||
| (G) food and agriculture; | ||
| (H) transportation; and | ||
| (I) energy; | ||
| (12) an expert in the field of higher education | ||
| appointed by the chief of the Texas Division of Emergency | ||
| Management; and | ||
| (13) an expert in the field of electricity markets and | ||
| regulations appointed by the chief of the Texas Division of | ||
| Emergency Management. | ||
| (b) The chief of the Texas Division of Emergency Management | ||
| may invite members or former members of the United States Air | ||
| Force's Electromagnetic Defense Task Force to advise the security | ||
| commission. | ||
| (c) The Texas Division of Emergency Management shall | ||
| designate a member of the security commission to serve as presiding | ||
| officer. | ||
| (d) The security commission shall convene at the call of the | ||
| presiding officer. | ||
| (e) The security commission shall report to the chief of the | ||
| Texas Division of Emergency Management. | ||
| (f) A vacancy on the security commission is filled by | ||
| appointment for the unexpired term in the same manner as the | ||
| original appointment. | ||
| (g) To the extent possible, individuals appointed to the | ||
| security commission must be residents of this state. | ||
| (h) The presiding officer of the security commission or the | ||
| chief of the Texas Division of Emergency Management may invite | ||
| subject matter experts to advise the security commission, including | ||
| individuals recognized as experts in the fields of electricity | ||
| markets, cybersecurity of grid control systems, electromagnetic | ||
| pulse mitigation, terrestrial and solar weather, and micro-grids. | ||
| The presiding officer may invite an individual for this purpose | ||
| regardless of whether the individual is a resident of this state. | ||
| Sec. 44.003. GRID RESILIENCE INFORMATION. (a) Each of the | ||
| following members of the security commission shall apply for a | ||
| secret security clearance or an interim secret security clearance | ||
| to be granted by the federal government: | ||
| (1) the representative of the independent | ||
| organization certified under Section 39.151 for the ERCOT region; | ||
| (2) the representative of the Texas Division of | ||
| Emergency Management; and | ||
| (3) the representative of the State Office of Risk | ||
| Management. | ||
| (b) A member of the security commission listed under | ||
| Subsection (a) who is granted an applicable security clearance | ||
| under that subsection is a member of the information security | ||
| working group. | ||
| (c) The information security working group shall determine: | ||
| (1) which information received by the security | ||
| commission that is used in determining the vulnerabilities of the | ||
| electric grid or that is related to measures to be taken to protect | ||
| the grid is confidential and not subject to Chapter 552, Government | ||
| Code; | ||
| (2) which members of the security commission may | ||
| access which types of information received by the security | ||
| commission; and | ||
| (3) which members, other than members of the working | ||
| group, should apply for a secret security clearance or interim | ||
| clearance granted by the federal government. | ||
| (d) Information that the information security working group | ||
| determines is confidential under Subsection (c) shall be stored and | ||
| maintained by the independent organization certified under Section | ||
| 39.151 for the ERCOT power region. | ||
| (e) The security commission must maintain a reasonable | ||
| balance between public transparency and security for information | ||
| determined to be confidential under Subsection (c). | ||
| (f) Nothing in this section abrogates any rights or remedies | ||
| under Chapter 552, Government Code. | ||
| Sec. 44.004. GRID RESILIENCE EVALUATION. (a) The security | ||
| commission shall evaluate, using available information on past | ||
| blackouts in ERCOT, all hazards to the ERCOT electric grid, | ||
| including threats which can cause future blackouts. | ||
| (b) The security commission may create groups or teams to | ||
| address each hazard as necessary. The security commission must | ||
| assess each hazard both on the likelihood of occurrence of the | ||
| hazard and the potential consequences of the hazard. | ||
| (c) The security commission shall identify methods by which | ||
| this state can support an overall national deterrence policy as | ||
| proposed by the Cyberspace Solarium Commission, including by: | ||
| (1) identifying means to ensure that all hazards | ||
| resilience for electric utilities supports critical national | ||
| security functions in this state; and | ||
| (2) engaging the Texas National Guard to be trained as | ||
| first responders to cybersecurity threats to the ERCOT electric | ||
| grid and other critical infrastructure. | ||
| (d) The security commission shall evaluate nuclear | ||
| generation sites in this state, the resilience of each nuclear | ||
| reactor to all hazards, and the resilience to all hazards of | ||
| off-site power for critical safety systems that support the reactor | ||
| and spent fuel. The security commission may communicate with the | ||
| Nuclear Regulatory Commission to accomplish the evaluation. | ||
| (e) The security commission shall evaluate current Critical | ||
| Infrastructure Protection standards established by the North | ||
| American Electric Reliability Corporation and standards set by the | ||
| National Institute of Standards and Technology to determine the | ||
| most appropriate standards for protecting grid infrastructure in | ||
| this state. | ||
| (f) The security commission shall investigate the steps | ||
| that local communities and other states have taken to address grid | ||
| resilience. The security commission may request funding to conduct | ||
| site visits to these locations as required. | ||
| (g) The security commission shall identify universities | ||
| based in this state that have expertise in cybersecurity and other | ||
| matters that can contribute to the security commission's goal of | ||
| mitigating all hazards to the grid in this state. | ||
| (h) In carrying out the security commission's duties under | ||
| this section, the security commission may solicit information from: | ||
| (1) defense contractors with experience protecting | ||
| defense systems from electromagnetic pulse; | ||
| (2) electric utilities that have developed | ||
| electromagnetic pulse protections for the utilities' grid assets; | ||
| (3) the United States Department of Homeland Security; | ||
| and | ||
| (4) the Commission to Assess the Threat to the United | ||
| States from Electromagnetic Pulse (EMP) Attack. | ||
| Sec. 44.005. GRID RESILIENCE STANDARDS. Based on the | ||
| findings of the evaluations and investigations conducted under | ||
| Section 44.004, the security commission shall develop resilience | ||
| standards for critical components of the ERCOT electric grid. | ||
| Sec. 44.006. CONTRACTOR SUPPORT FOR CRITICAL SYSTEM AND | ||
| COMPONENT RESILIENCE. (a) The State Office of Risk Management, | ||
| with assistance from the security commission, shall select | ||
| contractors with proven expertise to identify critical systems and | ||
| components of the ERCOT electric grid vulnerable to hazards | ||
| described by Section 44.004(a) with a specific emphasis on the most | ||
| dangerous cyber and electromagnetic threats. | ||
| (b) A contractor selected under Subsection (a) must | ||
| identify the critical components, including industrial control | ||
| systems, not later than six months after the date the contractor is | ||
| engaged. | ||
| (c) Not later than January 1, 2023, an entity that owns or | ||
| operates a component identified by a contractor under Subsection | ||
| (a) as critical shall upgrade the component as necessary for the | ||
| component to meet the applicable standards set by the security | ||
| commission under Section 44.005. | ||
| (d) The State Office of Risk Management shall select | ||
| contractors with demonstrated expertise to verify whether an entity | ||
| with a component identified as critical under Subsection (a) has | ||
| upgraded components as required by Subsection (c). | ||
| Sec. 44.007. PLAN FOR ALL HAZARDS RESILIENCE. (a) Not | ||
| later than January 1, 2022, the security commission shall prepare | ||
| and deliver to the legislature a plan for protecting the ERCOT | ||
| electric grid from all hazards, including a catastrophic loss of | ||
| power in the state. | ||
| (b) The plan must include: | ||
| (1) weatherizing requirements that may be implemented | ||
| not later than January 1, 2023, to prevent blackouts from extreme | ||
| cold weather events, an analysis of whether these requirements | ||
| would induce cyber vulnerabilities, and an analysis of the | ||
| associated costs for these requirements; | ||
| (2) provisions that may be implemented not later than | ||
| January 1, 2023, for installing, replacing, or upgrading industrial | ||
| control systems and associated networks, or the use of compensating | ||
| controls or procedures, in critical facilities to address cyber | ||
| vulnerabilities; | ||
| (3) provisions that may be implemented not later than | ||
| January 1, 2026, for installing, replacing, or upgrading extra | ||
| high-voltage power transformers and supervisory control and data | ||
| acquisition systems to withstand 100 kilovolts/meter E1 | ||
| electromagnetic pulses and 85 volts/kilometer E3 electromagnetic | ||
| pulses; | ||
| (4) a timeline for making improvements to remaining | ||
| infrastructure to meet standards set by the security commission | ||
| under Section 44.005; | ||
| (5) long-term resilience provisions for supporting | ||
| industries including: | ||
| (A) nuclear reactors, materials, and waste; | ||
| (B) fuel supply; | ||
| (C) health care; | ||
| (D) communications; | ||
| (E) water and sewer services; | ||
| (F) food supply; and | ||
| (G) transportation; and | ||
| (6) any additional provisions considered necessary by | ||
| the security commission. | ||
| (c) The security commission may consult with the Private | ||
| Sector Advisory Council in developing the plan. | ||
| (d) The Texas Division of Emergency Management shall | ||
| incorporate the plan into the state emergency management plan and | ||
| update the state emergency management plan as necessary to | ||
| incorporate progressive resilience improvements. | ||
| Sec. 44.008. GRID RESILIENCE REPORT. (a) Not later than | ||
| January 1 of each year, the security commission shall prepare and | ||
| deliver a nonclassified report to the legislature, the governor, | ||
| and the commission assessing natural and man-made threats to the | ||
| electric grid and efforts to mitigate the threats. | ||
| (b) The security commission shall make the report available | ||
| to the public. | ||
| (c) In preparing the report, the security commission may | ||
| hold confidential or classified briefings with federal, state, and | ||
| local officials as necessary. | ||
| Sec. 44.009. ALTERNATIVE TIMELINE OR STANDARD. A panel | ||
| composed of members of the security commission may approve a | ||
| resilience standard or implementation timeline for an electric | ||
| utility or other entity that differs from a resilience standard or | ||
| implementation timeline adopted under Section 44.006. | ||
| Sec. 44.010. RESILIENCE COST RECOVERY. A regulatory | ||
| authority shall include in establishing the rates of an electric | ||
| utility consideration of the costs incurred to install, replace, or | ||
| upgrade facilities or equipment to meet a resilience standard | ||
| established under this chapter. A regulatory authority shall | ||
| presume that costs incurred to meet a resilience standard under | ||
| this chapter are reasonable and necessary expenses. | ||
| Sec. 44.011. MICRO-GRIDS. (a) The security commission | ||
| shall establish resilience standards for micro-grids and certify a | ||
| micro-grid that meets the standards. The standards must be | ||
| developed for both alternating current and direct current | ||
| micro-grids. | ||
| (b) Except as provided by Subsection (c), a municipality or | ||
| other political subdivision may not enact or enforce an ordinance | ||
| or other measure that bans, limits, or otherwise regulates inside | ||
| the boundaries or extraterritorial jurisdiction of the | ||
| municipality or political subdivision a micro-grid that is | ||
| certified by the security commission under this section. | ||
| (c) The owner or operator of a micro-grid certified by the | ||
| security commission is a power generation company and is required | ||
| to register under Section 39.351(a). The owner or operator of the | ||
| micro-grid is entitled to: | ||
| (1) interconnect the micro-grid; | ||
| (2) obtain transmission service for the micro-grid; | ||
| and | ||
| (3) use the micro-grid to sell electricity and | ||
| ancillary services at wholesale in a manner consistent with the | ||
| provisions of this title and commission rules applicable to a power | ||
| generation company or an exempt wholesale generator. | ||
| SECTION 3. Chapter 380, Local Government Code, is amended | ||
| by adding Section 380.005 to read as follows: | ||
| Sec. 380.005. FIVE STAR GOLD RESILIENT COMMUNITIES. (a) | ||
| The Texas Grid Security Commission shall establish resilience | ||
| standards for municipalities in the following essential service | ||
| areas: | ||
| (1) emergency services; | ||
| (2) communications systems; | ||
| (3) clean water and sewer services; | ||
| (4) health care systems; | ||
| (5) financial services; | ||
| (6) energy systems; and | ||
| (7) transportation systems. | ||
| (b) Standards for energy systems under Subsection (a) must | ||
| include provisions to ensure that energy, electric power, and fuel | ||
| supplies are protected and available for recovery in the event of a | ||
| catastrophic power outage. | ||
| (c) On the application of a municipality for the | ||
| designation, the Texas Grid Security Commission may designate a | ||
| municipality that meets the resilience standards in the applicable | ||
| service area as: | ||
| (1) a Resilient Emergency Services Community; | ||
| (2) a Resilient Communications Systems Community; | ||
| (3) a Resilient Clean Water and Sewer Services | ||
| Community; | ||
| (4) a Resilient Health Care Systems Community; | ||
| (5) a Resilient Financial Services Community; | ||
| (6) a Resilient Energy Community; or | ||
| (7) a Resilient Transportation Community. | ||
| (d) The Texas Grid Security Commission may designate a | ||
| municipality that meets the resilience standards in five of the | ||
| seven service areas as a Five Star Gold Resilient Community. | ||
| (e) A municipality may not use a resilient community | ||
| designation in advertising, marketing, or economic development | ||
| initiatives unless the Texas Grid Security Commission has awarded | ||
| the municipality with the designation in the applicable service | ||
| area or as a Five Star Gold Resilient Community. | ||
| SECTION 4. Not later than January 1, 2023, the Texas Grid | ||
| Security Commission shall prepare and deliver a report to the | ||
| legislature on the progress of implementing resilience standards | ||
| adopted and implemented under Sections 44.005 and 44.006, Utilities | ||
| Code, as added by this Act. | ||
| SECTION 5. This Act takes effect immediately if it receives | ||
| a vote of two-thirds of all the members elected to each house, as | ||
| provided by Section 39, Article III, Texas Constitution. If this | ||
| Act does not receive the vote necessary for immediate effect, this | ||
| Act takes effect on the 91st day after the last day of the | ||
| legislative session. | ||
