Texas 2021 - 87th Regular

Texas House Bill HB3792 Compare Versions

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1	1	By: Shaheen H.B. No. 3792
2	2
3	3
4	4	A BILL TO BE ENTITLED
5	5	AN ACT
6	6	relating to protecting the population of Texas, its environment,
7	7	and its most vulnerable communities, promoting the resilience of
8	8	the electric grid and certain municipalities.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. The legislature finds that:
11	11	(1) electric grid blackouts threaten the lives of the
12	12	citizens of Texas and pose a disproportionally large risk to the
13	13	elderly, vulnerable and underprivileged within our state and
14	14	especially communities facing environmental justice issues such as
15	15	disproportionate environmental health burdens and population
16	16	vulnerabilities to facilities such as chemical plants and
17	17	refineries that can become environmental disaster areas when taken
18	18	offline due to loss of electricity.
19	19	(2) all 16 critical infrastructures identified in
20	20	President Barack Obama's Presidential Policy Directive 21 (PPD-21)
21	21	including water and wastewater services; food and agriculture;
22	22	communications systems; the energy sector including refineries and
23	23	fuel distribution systems; chemical plants; the financial sector;
24	24	hospitals and health care facilities; law enforcement and
25	25	government facilities; nuclear reactors; and countless other
26	26	critical functions depend on the state's electric grid, making the
27	27	grid's protection vital to our economy and homeland security;
28	28	(3) the February 2021 Texas Blackout caused death and
29	29	suffering to the citizens of Texas, economic loss to the Texas
30	30	economy, impacts to all critical infrastructures in Texas, the
31	31	dispatch of generation units that likely exceeded Environmental
32	32	Protection Agency (EPA) limits for sulfur dioxide, nitrogen oxide,
33	33	mercury, and carbon monoxide emissions, as well as wastewater
34	34	release limits, radically increased pricing of electricity that
35	35	resulted in electric power bills unaffordable by many customers
36	36	across the state, and exacerbated the COVID-19 pandemic risk by
37	37	forcing many of the state's citizens to consolidate at warming
38	38	centers and in other small spaces where warmth for survival
39	39	superseded social distancing;
40	40	(4) a previous large-scale blackout occurred in Texas
41	41	in February 2011 during which 4.4 million customers were affected;
42	42	(5) this state is uniquely positioned to prevent
43	43	blackouts because it is a net exporter of energy and is the only
44	44	state with an electric grid almost exclusively within its
45	45	territorial boundaries;
46	46	(6) the 2011 and 2021 blackouts call into question
47	47	whether too much risk has been accepted regarding weatherization of
48	48	electric generation infrastructure, whether the state lacks the
49	49	internal distribution structure and control systems to manage
50	50	rolling blackouts, and whether sufficient resources have been
51	51	allocated toward overall grid resilience;
52	52	(7) Governor Gregg Abbott has declared reform of the
53	53	Electricity Reliability Council of Texas (ERCOT) as an emergency
54	54	item for the 87th Texas Legislature;
55	55	(8) public confidence in the resilience of the Texas
56	56	electric grid is essential to ensuring environmental justice,
57	57	economic prosperity, domestic tranquility, continuity of
58	58	government, and life-sustaining systems;
59	59	(9) a resilient Texas electric grid that offers
60	60	businesses continuity of operations in the event of a natural or
61	61	man-made disaster will be an unrivaled attraction for businesses to
62	62	expand or move their operations to this state and for protecting
63	63	what is important to Texas, ranging from its military installations
64	64	to its environment;
65	65	(10) insufficient market incentives or regulations
66	66	exist for electric utilities to prioritize security and resilience,
67	67	and to protect the grid against "all hazards;"
68	68	(11) protection of the Texas electric grid against
69	69	"all hazards" would assure businesses and the citizens of this
70	70	state that the "lights will be back on first in Texas" in the event
71	71	of a nationwide catastrophe affecting electric infrastructure,
72	72	sparing catastrophic societal and environmental consequences for
73	73	this state;
74	74	(12) when this state begins implementation of the "all
75	75	hazards resilience" plan to protect the state's electric grid,
76	76	short-term and long-term economic benefit will far exceed even the
77	77	most optimistic estimates of the conventional economic incentives
78	78	provided by tax abatements to attract businesses to this state;
79	79	SECTION 2. Subtitle B, Title 2, Utilities Code, is amended
80	80	by adding Chapter 44 to read as follows:
81	81	CHAPTER 44. GRID RESILIENCE
82	82	Sec. 44.001. DEFINITIONS. In this chapter:
83	83	1) "All hazards resilience" of the electric grid means
84	84	protections against threats caused by:
85	85	A. terrestrial weather including wind, hurricanes,
86	86	tornadoes, flooding, ice storms, extended cold weather events, heat
87	87	waves, or wildfires;
88	88	B. seismic events including earthquakes or tsunamis;
89	89	C. physical threats including terrorist attack with direct
90	90	fire, drones, explosives or other methods of physical sabotage;
91	91	D. cyberattacks including through malware or hacking of
92	92	unprotected or compromised Information Technology (IT) networks,
93	93	E. manipulation of Operational Technology (OT) devices
94	94	including sensors, actuators, or drives;
95	95	F. electromagnetic threats through man-made radio frequency
96	96	(RF) weapons, high altitude nuclear electromagnetic pulse (EMP), or
97	97	naturally occurring geomagnetic disturbances (GMD),
98	98	G. electric generation supply chain vulnerabilities
99	99	including insecure or inadequate fuel transportation, or storage;
100	100	and
101	101	H. "insider threats" caused by compromised or hostile
102	102	personnel working within government and/or the utility industry.
103	103	(2) "EMP Commission reports" means all reports
104	104	released by the Commission to Assess the Threat to the United States
105	105	from Electromagnetic Pulse (EMP) Attack, including the July 2017
106	106	report titled "Recommended E3 HEMP Heave Electric Field Waveform
107	107	for the Critical Infrastructures."
108	108	(3) "Micro-grid" means a group of interconnected loads
109	109	and distributed energy resources inside clearly defined electrical
110	110	boundaries that act as a single controllable entity with respect to
111	111	the grid.
112	112	(4) "Security commission" means the Texas Grid
113	113	Security Commission.
114	114	Sec. 44.002. TEXAS GRID SECURITY COMMISSION. (a) The
115	115	security commission shall report to the Chief of the Texas Division
116	116	of Emergency Management (TDEM) and is composed of the following
117	117	members:
118	118	(1) a representative of the Texas Division of
119	119	Emergency Management appointed by the chief of the division;
120	120	(2) a representative of the State Office of Risk
121	121	Management appointed by the risk management board;
122	122	(3) a representative of the independent organization
123	123	certified under Section 39.151 for the ERCOT region appointed by
124	124	the chief executive officer of the organization;
125	125	(4) a representative of the Texas Military Department
126	126	appointed by the adjutant general of the department;
127	127	(5) a representative of the Texas Military
128	128	Preparedness Commission appointed by the military preparedness
129	129	commission;
130	130	(6) a representative of the Office of State-Federal
131	131	Relations appointed by the director of the office;
132	132	(7) a representative of the Department of Information
133	133	Resources appointed by the executive director of the department;
134	134	(8) a representative of power generation companies
135	135	appointed by the chief of the Texas Division of Emergency
136	136	Management;
137	137	(9) two representatives of transmission and
138	138	distribution utilities appointed by the chief of the Texas Division
139	139	of Emergency Management;
140	140	(10) three members of the public with expertise in
141	141	critical infrastructure protection, to represent the public
142	142	interest.
143	143	(11) one representative appointed by the chief of the
144	144	Texas Division of Emergency Management from each of the following
145	145	essential services sectors:
146	146	(A) law enforcement;
147	147	(B) emergency services;
148	148	(C) communications;
149	149	(D) water and sewer services;
150	150	(E) health care;
151	151	(F) financial services;
152	152	(G) food and agriculture;
153	153	(H) transportation; and
154	154	(I) energy.
155	155	(12) an expert in the field of higher education
156	156	appointed by the chief of the Texas Division of Emergency
157	157	Management.
158	158	(13) an expert in the field of electricity markets and
159	159	regulations appointed by the chief of the Texas Division of
160	160	Emergency Management.
161	161	(b) The chief of the Texas Division of Emergency Management
162	162	may invite members or former members of the United States Air
163	163	Force's Electromagnetic Defense Task Force (EDTF) to the security
164	164	commission.
165	165	(c) The Texas Division of Emergency Management shall
166	166	designate a member of the security commission to serve as presiding
167	167	officer.
168	168	(d) The security commission shall convene at the call of the
169	169	presiding officer.
170	170	(e) A vacancy on the security commission is filled by
171	171	appointment for the unexpired term in the same manner as the
172	172	original appointment.
173	173	(f) Members of the security commission will primarily be
174	174	residents of the state of Texas or bordering states within ERCOT's
175	175	jurisdiction. However, the presiding officer or the chief of the
176	176	Texas Division of Emergency Management may invite additional
177	177	subject matter experts including, but not limited to, those
178	178	recognized as experts in the fields of electricity markets,
179	179	cybersecurity of grid control systems, EMP mitigation, terrestrial
180	180	and solar weather, and micro-grids from outside Texas as needed.
181	181	Sec. 44.003. GRID RESILIENCE INFORMATION. (a) Some
182	182	information used in determining the vulnerabilities of the electric
183	183	grid or that is related to measures to be taken to protect the grid
184	184	may be confidential and not subject to Chapter 552, Government
185	185	Code.
186	186	(b) Information deemed confidential by Subsection (a) shall
187	187	be stored and maintained by the independent organization certified
188	188	under Section 39.151 for the ERCOT region.
189	189	(c) The following members of the security commission will
190	190	lead an information security working group and shall apply for a
191	191	secret security clearance or an interim secret security clearance
192	192	to be granted by the federal government:
193	193	(1) the representative of the independent
194	194	organization certified under Section 39.151 for the ERCOT region;
195	195	(2) the representative of the Texas Division of
196	196	Emergency Management; and
197	197	(3) the representative of the State Office of Risk
198	198	Management.
199	199	(d) The information security working group will determine
200	200	what information should be categorized as confidential information
201	201	as described by Subsection (a), which particular members of the
202	202	security commission may access various types of information, and
203	203	which additional members should apply for a secret security
204	204	clearance or interim clearance granted by the federal government.
205	205	(e) With regard to confidential information as described by
206	206	Subsection (a), a reasonable balance of public transparency shall
207	207	be maintained. Nothing in this section abrogates any rights or
208	208	remedies under Chapter 552, Government Code.
209	209	Sec. 44.004. GRID RESILIENCE EVALUATION. (a) The security
210	210	commission will evaluate all hazards to the ERCOT electric grid by
211	211	utilizing all available information on past blackouts in the ERCOT
212	212	system as well as threats which can cause future blackouts
213	213	utilizing the definition of "all hazards resilience" in Sec.
214	214	44.001(1). The commission may create sub-groups or teams to address
215	215	each hazard as needed and must assess hazards both on the likelihood
216	216	and the level of consequence of each hazard.
217	217	(b) The security commission shall identify methods where
218	218	the state can support an overall National Deterrence Policy as
219	219	proposed by the Cyberspace Solarium Commission by:
220	220	i) identifying how to ensure all hazards resilience for
221	221	electric utilities supporting critical national security functions
222	222	within the state; and
223	223	ii) engaging the Texas National Guard to be trained as first
224	224	responders to cybersecurity threats to the ERCOT grid and other
225	225	critical infrastructures.
226	226	(c) The security commission shall evaluate the state's
227	227	nuclear generation sites and the all hazards resilience of the
228	228	reactors as well as off-site power for critical safety systems that
229	229	support the reactor and spent fuel. The commission has direct
230	230	liaison authority to communicate with the Nuclear Regulatory
231	231	Commission (NRC) to accomplish this evaluation.
232	232	(d) The security commission shall evaluate current Critical
233	233	Infrastructure Protection (CIP) standards established by the North
234	234	American Electric Reliability Corporation (NERC) and the National
235	235	Institute of Standards and Technology (NIST) standards to determine
236	236	the most appropriate standards for protecting the state's grid
237	237	infrastructure.
238	238	(e) The security commission shall explore what local
239	239	communities and other states have done to address grid resilience,
240	240	The commission may request funding to conduct site visits to these
241	241	locations as required.
242	242	(f) The security commission shall identify Texas-based
243	243	universities which can contribute with expertise in cybersecurity
244	244	and other areas to mitigate all hazards.
245	245	(g) The security commission shall solicit information from
246	246	defense contractors with experience protecting defense systems
247	247	from EMP, as well as electric utilities who have developed EMP
248	248	protections for their grid assets.
249	249	(h) The security commission shall solicit information from
250	250	the United States Department of Homeland Security which has
251	251	published Electromagnetic Pulse (EMP) Protection and Resilience
252	252	Guidelines for Critical Infrastructure and Equipment that can be
253	253	used to mitigate the effects of such a disaster.
254	254	(i) The security commission will solicit information from
255	255	the Congressional EMP Commission which assesses that protection
256	256	against the worst threat, nuclear EMP attack, will mitigate lesser
257	257	threats.
258	258	Sec. 44.005. CONTRACTOR SUPPORT FOR CRITICAL SYSTEM AND
259	259	COMPONENT RESILIENCE. (a) With the assistance of the security
260	260	commission the State Office of Risk Management shall select
261	261	contractors with proven expertise to identify critical systems and
262	262	components of the ERCOT electric grid vulnerable to "all hazards,"
263	263	with a specific emphasis on the most dangerous cyber and
264	264	electromagnetic threats. The contractors must have the
265	265	demonstrated expertise to identify the critical components,
266	266	including industrial control systems, before the expiration of six
267	267	months after the date the contractors are engaged.
268	268	(b) Not later than January 1, 2023, an entity that owns or
269	269	operates a component identified by the contractor under Subsection
270	270	(a) as critical shall upgrade the components as necessary for the
271	271	components to meet the applicable standard proposed in the EMP
272	272	Commission reports.
273	273	(c) The State Office of Risk Management shall select
274	274	contractors with demonstrated expertise to verify whether affected
275	275	entities have identified potential affected systems and components
276	276	and whether these entities have upgraded systems and components as
277	277	required by Subsection (b).
278	278	Sec. 44.006. PLAN FOR ALL HAZARDS RESILIENCE. (a) Not
279	279	later than January 1, 2022, the security commission shall prepare
280	280	and deliver to the legislature a plan for protecting the ERCOT grid
281	281	from a catastrophic loss of power in the state.
282	282	(b) The plan must include:
283	283	(1) provisions for determining weatherizing
284	284	requirements to prevent blackouts from extreme cold weather events,
285	285	whether these requirements will induce cyber vulnerabilities, and
286	286	the associated costs for these requirements not later than January
287	287	1, 2022;
288	288	(2) provisions for installing, replacing, or
289	289	upgrading industrial control systems and associated networks (or
290	290	the use of compensating controls/procedures) in critical
291	291	facilities to address cyber vulnerabilities not later than January
292	292	1, 2022;
293	293	(3) provisions for installing, replacing, or
294	294	upgrading extra high-voltage power transformers and supervisory
295	295	control and data acquisition systems to withstand 100
296	296	kilovolts/meter E1 electromagnetic pulses and 85 volts/kilometer
297	297	E3 electromagnetic pulses not later than January 1, 2026;
298	298	(4) a timeline for upgrading remaining infrastructure
299	299	to meet recommendations of the EMP Commission reports;
300	300	(5) long-term resilience provisions for supporting
301	301	industries including:
302	302	(A) nuclear reactors, materials, and waste;
303	303	(B) fuel supply;
304	304	(C) health care;
305	305	(D) communications;
306	306	(E) water and sewer services;
307	307	(F) food supply; and
308	308	(G) transportation.
309	309	(6) any additional provisions considered necessary by
310	310	the security commission.
311	311	(c) The security commission may consult with the Private
312	312	Sector Advisory Council in developing the plan.
313	313	(d) The Texas Division of Emergency Management shall
314	314	incorporate the plan into the state emergency management plan and
315	315	update the state emergency management plan as necessary to
316	316	incorporate progressive resilience improvements.
317	317	Sec. 44.007. ALTERNATIVE TIMELINE OR STANDARD. A panel
318	318	composed of members of the security commission may approve a
319	319	resilience standard or implementation timeline for an electric
320	320	utility or other entity that differs from a resilience standard or
321	321	implementation timeline adopted under Section 44.005.
322	322	Sec. 44.008. RESILIENCE COST RECOVERY. A regulatory
323	323	authority shall include in establishing the rates of an electric
324	324	utility consideration of the costs incurred to install, replace, or
325	325	upgrade facilities or equipment to meet a resilience standard
326	326	established under this chapter. A regulatory authority shall
327	327	presume that costs incurred to meet a resilience standard under
328	328	this chapter are reasonable and necessary expenses.
329	329	Sec. 44.009. MICRO-GRIDS. (a) The security commission
330	330	shall establish resilience standards for micro-grids and certify a
331	331	micro-grid that meets the standards. These standards must be
332	332	developed for both alternating current (AC) and direct current (DC)
333	333	micro-grids.
334	334	(b) Except as provided by Subsection (c), a municipality or
335	335	other political subdivision may not enact or enforce an ordinance
336	336	or other measure that bans, limits, or otherwise regulates inside
337	337	the boundaries or extraterritorial jurisdiction of the
338	338	municipality or political subdivision a micro-grid that is
339	339	certified by the security commission under this section.
340	340	(c) The owner or operator of a micro-grid certified by the
341	341	security commission is a power generation company and is required
342	342	to register under Section 39.351(a). The owner or operator of the
343	343	micro-grid is entitled to:
344	344	(1) interconnect the micro-grid;
345	345	(2) obtain transmission service for the micro-grid;
346	346	and
347	347	(3) use the micro-grid to sell electricity and
348	348	ancillary services at wholesale in a manner consistent with the
349	349	provisions of this title and commission rules applicable to a power
350	350	generation company or an exempt wholesale generator.
351	351	SECTION 3. Chapter 380, Local Government Code, is amended
352	352	by adding Section 380.004 to read as follows:
353	353	Sec. 380.004. FIVE STAR GOLD RESILIENT COMMUNITIES. (a)
354	354	The Texas Grid Security Commission shall establish resilience
355	355	standards for municipalities in the following essential service
356	356	areas:
357	357	(1) emergency services;
358	358	(2) communications systems;
359	359	(3) clean water and sewer services;
360	360	(4) health care systems;
361	361	(5) financial services;
362	362	(6) energy systems; and
363	363	(7) transportation systems.
364	364	(b) Standards for energy systems under Subsection (a) must
365	365	include provisions to ensure that energy, electric power, and fuel
366	366	supplies are protected and available for recovery in the event of a
367	367	catastrophic power outage.
368	368	(c) On the application of a municipality for the
369	369	designation, the Texas Grid Security Commission may designate a
370	370	municipality that meets the resilience standards in the applicable
371	371	service area as:
372	372	(1) a Resilient Emergency Services Community;
373	373	(2) a Resilient Communications Systems Community;
374	374	(3) a Resilient Clean Water and Sewer Services
375	375	Community;
376	376	(4) a Resilient Health Care Systems Community;
377	377	(5) a Resilient Financial Services Community;
378	378	(6) a Resilient Energy Community; or
379	379	(7) a Resilient Transportation Community.
380	380	(d) The Texas Grid Security Commission may designate a
381	381	municipality that meets the resilience standards in five of the
382	382	seven service areas as a Five Star Gold Resilient Community.
383	383	(e) A municipality may not use a resilient community
384	384	designation in advertising, marketing, or economic development
385	385	initiatives unless the Texas Grid Security Commission has awarded
386	386	the municipality with the designation in the applicable service
387	387	area or as a Five Star Gold Resilient Community.
388	388	(f) A municipality that does not qualify in at least five of
389	389	the seven areas as a resilient community may not offer economic
390	390	incentives or tax abatements for any purposes for any entity to
391	391	locate in the municipality.
392	392	SECTION 4. Not later than January 1, 2023, the Texas Grid
393	393	Security Commission shall prepare and deliver a report to the
394	394	legislature on the progress of implementing resilience standards
395	395	adopted under Sections 44.004 and 44.005, Utilities Code, as added
396	396	by this Act.
397	397	Section 5. Not later than January 1 of each year, the
398	398	commission shall prepare and deliver a non-classified report to the
399	399	legislature, the Governor and the Public Utility Commission of
400	400	Texas assessing natural and man-made threats to the electric grid
401	401	and efforts to mitigate the threats. Such report shall be prepared
402	402	for public distribution The commission shall hold confidential or
403	403	classified briefings with officials as necessary.
404	404	SECTION 6. This Act takes effect immediately if it receives
405	405	a vote of two-thirds of all the members elected to each house, as
406	406	provided by Section 39, Article III, Texas Constitution. If this
407	407	Act does not receive the vote necessary for immediate effect, this
408	408	Act takes effect September 1, 2021.