By: Hancock  S.B. No. 936
         (In the Senate - Filed February 21, 2019; March 1, 2019,
  read first time and referred to Committee on Business & Commerce;
  March 27, 2019, reported favorably by the following vote:  Yeas 8,
  Nays 0; March 27, 2019, sent to printer.)
Click here to see the committee vote
 
 
A BILL TO BE ENTITLED
 
AN ACT
 
  relating to a cybersecurity monitor for certain electric utilities.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subchapter E, Chapter 36, Utilities Code, is
  amended by adding Section 36.213 to read as follows:
         Sec. 36.213.  ADJUSTMENT FOR CYBERSECURITY MONITOR COSTS FOR
  CERTAIN UTILITIES. (a)  This section does not apply to an electric
  utility that operates solely outside of ERCOT and has not elected to
  participate in the cybersecurity monitor program under Section
  39.1516.
         (b)  The commission, on its own motion or on the petition of
  an electric utility, shall allow the electric utility to recover
  reasonable and necessary costs incurred in connection with
  activities under Section 39.1516.
         SECTION 2.  Section 39.002, Utilities Code, is amended to
  read as follows:
         Sec. 39.002.  APPLICABILITY. This chapter, other than
  Sections 39.1516, 39.155, 39.157(e), 39.203, [39.903,] 39.904,
  39.9051, 39.9052, and 39.914(e), does not apply to a municipally
  owned utility or an electric cooperative. Sections 39.157(e),
  39.203, and 39.904, however, apply only to a municipally owned
  utility or an electric cooperative that is offering customer
  choice. If there is a conflict between the specific provisions of
  this chapter and any other provisions of this title, except for
  Chapters 40 and 41, the provisions of this chapter control.
         SECTION 3.  Subchapter D, Chapter 39, Utilities Code, is
  amended by adding Section 39.1516 to read as follows:
         Sec. 39.1516.  CYBERSECURITY MONITOR. (a)  In this section,
  "monitored utility" means:
               (1)  a transmission and distribution utility;
               (2)  a corporation described in Section 32.053;
               (3)  a municipally owned utility or electric
  cooperative that owns or operates equipment or facilities in the
  ERCOT power region to transmit electricity at 60 or more kilovolts;
  or
               (4)  an electric utility, municipally owned utility, or
  electric cooperative that operates solely outside the ERCOT power
  region that has elected to participate under Subsection (d).
         (b)  The commission and the independent organization
  certified under Section 39.151 shall contract with an entity
  selected by the commission to act as the commission's cybersecurity
  monitor to:
               (1)  manage a comprehensive cybersecurity outreach
  program for monitored utilities;
               (2)  meet regularly with monitored utilities to discuss
  emerging threats, best business practices, and training
  opportunities;
               (3)  review self-assessments by monitored utilities of
  cybersecurity efforts;
               (4)  research and develop best business practices
  regarding cybersecurity; and
               (5)  report to the commission on monitored utility
  cybersecurity preparedness.
         (c)  The independent organization certified under Section
  39.151 shall provide to the cybersecurity monitor any access,
  information, support, and cooperation that the commission
  determines is necessary for the monitor to perform the functions
  described by Subsection (b). The independent organization shall
  use funds from the fee authorized by Section 39.151(e) to pay for
  the cybersecurity monitor's activities.
         (d)  An electric utility, municipally owned utility, or
  electric cooperative that operates solely outside the ERCOT power
  region may elect to participate in the cybersecurity monitor
  program or to discontinue participation. The commission shall
  adopt rules establishing:
               (1)  procedures for an electric utility, municipally
  owned utility, or electric cooperative to notify the commission,
  the independent organization certified under Section 39.151, and
  the cybersecurity monitor that the utility or cooperative elects to
  participate or to discontinue participation; and
               (2)  a mechanism to require an electric utility,
  municipally owned utility, or electric cooperative that elects to
  participate to contribute to the costs incurred by the independent
  organization under this section.
         (e)  The cybersecurity monitor shall operate under the
  supervision and oversight of the commission.
         (f)  The commission shall adopt rules as necessary to
  implement this section and may enforce the provisions of this
  section in the manner provided by this title. This section does not
  grant enforcement authority to the cybersecurity monitor or
  authorize the commission to delegate the commission's enforcement
  authority to the cybersecurity monitor. This section does not
  grant enforcement authority to the commission beyond authority
  explicitly provided for in this title.
         (g)  The staff of the cybersecurity monitor may communicate
  with commission staff about any cybersecurity information without
  restriction. Commission staff shall maintain the confidentiality
  of the cybersecurity information. Notwithstanding any other law,
  commission staff may not disclose information obtained under this
  section in an open meeting or through a response to a public
  information request.
         (h)  Information written, produced, collected, assembled, or
  maintained under Subsection (b), (c), or (g) is confidential and
  not subject to disclosure under Chapter 552, Government Code. A
  governmental body is not required to conduct an open meeting under
  Chapter 551, Government Code, to deliberate a matter described by
  Subsection (b), (c), or (g).
         SECTION 4.  Section 39.402(a), Utilities Code, is amended to
  read as follows:
         (a)  Until the date on which an electric utility subject to
  this subchapter is authorized by the commission to implement
  customer choice, the rates of the utility shall be regulated under
  traditional cost of service regulation and the utility is subject
  to all applicable regulatory authority prescribed by this subtitle
  and Subtitle A, including Chapters 14, 32, 33, 36, and 37. Until
  the date on which an electric utility subject to this subchapter
  implements customer choice, the provisions of this chapter, other
  than this subchapter, Sections 39.1516, 39.904, and 39.905, and the
  provisions relating to the duty to obtain a permit from the Texas
  Commission on Environmental Quality for an electric generating
  facility and to reduce emissions from an electric generating
  facility, shall not apply to that utility. That portion of any
  commission order entered before September 1, 2001, to comply with
  this subchapter shall be null and void.
         SECTION 5.  Section 39.452(d), Utilities Code, is amended to
  read as follows:
         (d)  Until the date on which an electric utility subject to
  this subchapter implements customer choice:
               (1)  the provisions of this chapter do not apply to that
  electric utility, other than this subchapter, Sections 39.1516,
  39.904, and 39.905, the provisions relating to the duty to obtain a
  permit from the Texas Commission on Environmental Quality for an
  electric generating facility and to reduce emissions from an
  electric generating facility, and the provisions of Subchapter G
  that pertain to the recovery and securitization of hurricane
  reconstruction costs authorized by Sections 39.458-39.463; and
               (2)  the electric utility is not subject to a rate
  freeze and, subject to the limitation provided by Subsection (b),
  may file for rate changes under Chapter 36 and for approval of one
  or more of the rate rider mechanisms authorized by Sections 39.454
  and 39.455.
         SECTION 6.  Section 39.502(b), Utilities Code, is amended to
  read as follows:
         (b)  Until the date on which an electric utility subject to
  this subchapter implements customer choice, the provisions of this
  chapter, other than this subchapter and Sections 39.1516, 39.904,
  and 39.905, do not apply to that utility.
         SECTION 7.  Section 39.552(b), Utilities Code, is amended to
  read as follows:
         (b)  Until the date on which an electric utility subject to
  this subchapter implements customer choice, the provisions of this
  chapter, other than this subchapter and Sections 39.1516, 39.904,
  and 39.905, do not apply to that utility.
         SECTION 8.  Section 40.001(b), Utilities Code, is amended to
  read as follows:
         (b)  Except as specifically provided in this subsection,
  Chapter 39 does not apply to a river authority operating a steam
  generating plant on or before January 1, 1999, or a corporation
  authorized by Chapter 152, Water Code, or Section 32.053. A river
  authority operating a steam generating plant on or before January
  1, 1999, is subject to Sections 39.051(a)-(c), 39.108, 39.1516,
  39.155, 39.157(e), and 39.203.
         SECTION 9.  Section 40.004, Utilities Code, is amended to
  read as follows:
         Sec. 40.004.  JURISDICTION OF COMMISSION. Except as
  specifically otherwise provided in this chapter, the commission has
  jurisdiction over municipally owned utilities only for the
  following purposes:
               (1)  to regulate wholesale transmission rates and
  service, including terms of access, to the extent provided by
  Subchapter A, Chapter 35;
               (2)  to regulate certification of retail service areas
  to the extent provided by Chapter 37;
               (3)  to regulate rates on appeal under Subchapters D
  and E, Chapter 33, subject to Section 40.051(c);
               (4)  to establish a code of conduct as provided by
  Section 39.157(e) applicable to anticompetitive activities and to
  affiliate activities limited to structurally unbundled affiliates
  of municipally owned utilities, subject to Section 40.054;
               (5)  to establish terms and conditions for open access
  to transmission and distribution facilities for municipally owned
  utilities providing customer choice, as provided by Section 39.203;
               (6)  [to require collection of the nonbypassable fee
  established under Section 39.903(b) and] to administer the
  renewable energy credits program under Section 39.904(b) and the
  natural gas energy credits program under Section 39.9044(b); [and]
               (7)  to require reports of municipally owned utility
  operations only to the extent necessary to:
                     (A)  enable the commission to determine the
  aggregate load and energy requirements of the state and the
  resources available to serve that load; or
                     (B)  enable the commission to determine
  information relating to market power as provided by Section 39.155;
  and
               (8)  to evaluate and monitor the cybersecurity
  preparedness of a municipally owned utility described by Section
  39.1516(a)(3) or (4).
         SECTION 10.  Section 41.004, Utilities Code, is amended to
  read as follows:
         Sec. 41.004.  JURISDICTION OF COMMISSION. Except as
  specifically provided otherwise in this chapter, the commission has
  jurisdiction over electric cooperatives only as follows:
               (1)  to regulate wholesale transmission rates and
  service, including terms of access, to the extent provided in
  Subchapter A, Chapter 35;
               (2)  to regulate certification to the extent provided
  in Chapter 37;
               (3)  to establish a code of conduct as provided in
  Section 39.157(e) subject to Section 41.054;
               (4)  to establish terms and conditions, but not rates,
  for open access to distribution facilities for electric
  cooperatives providing customer choice, as provided in Section
  39.203; [and]
               (5)  to require reports of electric cooperative
  operations only to the extent necessary to:
                     (A)  ensure the public safety;
                     (B)  enable the commission to satisfy its
  responsibilities relating to electric cooperatives under this
  chapter;
                     (C)  enable the commission to determine the
  aggregate electric load and energy requirements in the state and
  the resources available to serve that load; or
                     (D)  enable the commission to determine
  information relating to market power as provided in Section 39.155;
  and
               (6)  to evaluate and monitor the cybersecurity
  preparedness of an electric cooperative described by Section
  39.1516(a)(3) or (4).
         SECTION 11.  To the extent of any conflict, this Act prevails
  over another Act of the 86th Legislature, Regular Session, 2019,
  relating to nonsubstantive additions to and corrections in enacted
  codes.
         SECTION 12.  This Act takes effect September 1, 2019.
 
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