By: Shaheen H.B. No. 3792
A BILL TO BE ENTITLED
AN ACT
relating to protecting the population of Texas, its environment,
and its most vulnerable communities, promoting 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 Texas and pose a disproportionally large risk to the
elderly, vulnerable and underprivileged within our state and
especially communities facing environmental justice issues such as
disproportionate environmental health burdens and population
vulnerabilities to facilities such as chemical plants and
refineries that can become environmental disaster areas when taken
offline due to loss of electricity.
(2) all 16 critical infrastructures identified in
President Barack Obama's Presidential Policy Directive 21 (PPD-21)
including water and wastewater services; 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 countless other
critical functions depend on the state's electric grid, making the
grid's protection vital to our economy and homeland security;
(3) the February 2021 Texas Blackout caused death and
suffering to the citizens of Texas, economic loss to the Texas
economy, impacts to all critical infrastructures in Texas, the
dispatch of generation units that likely exceeded Environmental
Protection Agency (EPA) limits for sulfur dioxide, nitrogen oxide,
mercury, and carbon monoxide emissions, as well as wastewater
release limits, radically increased pricing of electricity that
resulted in electric power bills unaffordable by many customers
across the state, and exacerbated 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superseded social distancing;
(4) a previous large-scale blackout occurred in Texas
in February 2011 during which 4.4 million customers were affected;
(5) this state is uniquely positioned to prevent
blackouts because it 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
whether too much risk has been accepted regarding weatherization of
electric generation infrastructure, whether the state lacks the
internal distribution structure and control systems to manage
rolling blackouts, and whether sufficient resources have been
allocated toward overall grid resilience;
(7) Governor Gregg Abbott has declared reform of the
Electricity Reliability Council of Texas (ERCOT) as an emergency
item for the 87th Texas Legislature;
(8) public confidence in the resilience of the Texas
electric grid is essential to ensuring environmental justice,
economic prosperity, domestic tranquility, continuity of
government, and life-sustaining systems;
(9) a resilient Texas electric grid that offers
businesses 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 for protecting
what is important to Texas, ranging from its military installations
to its environment;
(10) insufficient market incentives or regulations
exist for electric utilities to prioritize security and resilience,
and to protect the grid against "all hazards;"
(11) protection of the Texas electric grid against
"all 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;
(12) when this state begins implementation of the "all
hazards resilience" plan to protect the state's electric grid,
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 resilience" of the electric grid means
protections against threats caused by:
A. terrestrial weather including wind, hurricanes,
tornadoes, flooding, ice storms, extended cold weather events, heat
waves, or wildfires;
B. seismic events including earthquakes or tsunamis;
C. physical threats including terrorist attack with direct
fire, drones, explosives or other methods of physical sabotage;
D. cyberattacks including through malware or hacking of
unprotected or compromised Information Technology (IT) networks,
E. manipulation of Operational Technology (OT) devices
including sensors, actuators, or drives;
F. electromagnetic threats through man-made radio frequency
(RF) weapons, high altitude nuclear electromagnetic pulse (EMP), or
naturally occurring geomagnetic disturbances (GMD),
G. electric generation supply chain vulnerabilities
including insecure or inadequate fuel transportation, or storage;
and
H. "insider threats" caused by compromised or hostile
personnel working within government and/or the utility industry.
(2) "EMP Commission reports" means all reports
released by the Commission to Assess the Threat to the United States
from Electromagnetic Pulse (EMP) Attack, including the July 2017
report titled "Recommended E3 HEMP Heave Electric Field Waveform
for the Critical Infrastructures."
(3) "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.
(4) "Security commission" means the Texas Grid
Security Commission.
Sec. 44.002. TEXAS GRID SECURITY COMMISSION. (a) The
security commission shall report to the Chief of the Texas Division
of Emergency Management (TDEM) and is composed of the following
members:
(1) a representative of the Texas Division of
Emergency Management appointed by the chief of the 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 region appointed by
the chief executive officer of the organization;
(4) a representative of the Texas Military Department
appointed by the adjutant general of the department;
(5) a representative of the Texas Military
Preparedness Commission appointed by the military preparedness
commission;
(6) a representative of the Office of State-Federal
Relations appointed by the director of the office;
(7) a representative of the Department of Information
Resources appointed by the executive director of the 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 members of the public with expertise in
critical infrastructure protection, 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.
(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 (EDTF) to 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) A vacancy on the security commission is filled by
appointment for the unexpired term in the same manner as the
original appointment.
(f) Members of the security commission will primarily be
residents of the state of Texas or bordering states within ERCOT's
jurisdiction. However, the presiding officer or the chief of the
Texas Division of Emergency Management may invite additional
subject matter experts including, but not limited to, those
recognized as experts in the fields of electricity markets,
cybersecurity of grid control systems, EMP mitigation, terrestrial
and solar weather, and micro-grids from outside Texas as needed.
Sec. 44.003. GRID RESILIENCE INFORMATION. (a) Some
information used in determining the vulnerabilities of the electric
grid or that is related to measures to be taken to protect the grid
may be confidential and not subject to Chapter 552, Government
Code.
(b) Information deemed confidential by Subsection (a) shall
be stored and maintained by the independent organization certified
under Section 39.151 for the ERCOT region.
(c) The following members of the security commission will
lead an information security working group and 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.
(d) The information security working group will determine
what information should be categorized as confidential information
as described by Subsection (a), which particular members of the
security commission may access various types of information, and
which additional members should apply for a secret security
clearance or interim clearance granted by the federal government.
(e) With regard to confidential information as described by
Subsection (a), a reasonable balance of public transparency shall
be maintained. Nothing in this section abrogates any rights or
remedies under Chapter 552, Government Code.
Sec. 44.004. GRID RESILIENCE EVALUATION. (a) The security
commission will evaluate all hazards to the ERCOT electric grid by
utilizing all available information on past blackouts in the ERCOT
system as well as threats which can cause future blackouts
utilizing the definition of "all hazards resilience" in Sec.
44.001(1). The commission may create sub-groups or teams to address
each hazard as needed and must assess hazards both on the likelihood
and the level of consequence of each hazard.
(b) The security commission shall identify methods where
the state can support an overall National Deterrence Policy as
proposed by the Cyberspace Solarium Commission by:
i) identifying how to ensure all hazards resilience for
electric utilities supporting critical national security functions
within the state; and
ii) engaging the Texas National Guard to be trained as first
responders to cybersecurity threats to the ERCOT grid and other
critical infrastructures.
(c) The security commission shall evaluate the state's
nuclear generation sites and the all hazards resilience of the
reactors as well as off-site power for critical safety systems that
support the reactor and spent fuel. The commission has direct
liaison authority to communicate with the Nuclear Regulatory
Commission (NRC) to accomplish this evaluation.
(d) The security commission shall evaluate current Critical
Infrastructure Protection (CIP) standards established by the North
American Electric Reliability Corporation (NERC) and the National
Institute of Standards and Technology (NIST) standards to determine
the most appropriate standards for protecting the state's grid
infrastructure.
(e) The security commission shall explore what local
communities and other states have done to address grid resilience,
The commission may request funding to conduct site visits to these
locations as required.
(f) The security commission shall identify Texas-based
universities which can contribute with expertise in cybersecurity
and other areas to mitigate all hazards.
(g) The security commission shall solicit information from
defense contractors with experience protecting defense systems
from EMP, as well as electric utilities who have developed EMP
protections for their grid assets.
(h) The security commission shall solicit information from
the United States Department of Homeland Security which has
published Electromagnetic Pulse (EMP) Protection and Resilience
Guidelines for Critical Infrastructure and Equipment that can be
used to mitigate the effects of such a disaster.
(i) The security commission will solicit information from
the Congressional EMP Commission which assesses that protection
against the worst threat, nuclear EMP attack, will mitigate lesser
threats.
Sec. 44.005. CONTRACTOR SUPPORT FOR CRITICAL SYSTEM AND
COMPONENT RESILIENCE. (a) With the assistance of the security
commission the State Office of Risk Management shall select
contractors with proven expertise to identify critical systems and
components of the ERCOT electric grid vulnerable to "all hazards,"
with a specific emphasis on the most dangerous cyber and
electromagnetic threats. The contractors must have the
demonstrated expertise to identify the critical components,
including industrial control systems, before the expiration of six
months after the date the contractors are engaged.
(b) Not later than January 1, 2023, an entity that owns or
operates a component identified by the contractor under Subsection
(a) as critical shall upgrade the components as necessary for the
components to meet the applicable standard proposed in the EMP
Commission reports.
(c) The State Office of Risk Management shall select
contractors with demonstrated expertise to verify whether affected
entities have identified potential affected systems and components
and whether these entities have upgraded systems and components as
required by Subsection (b).
Sec. 44.006. 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 grid
from a catastrophic loss of power in the state.
(b) The plan must include:
(1) provisions for determining weatherizing
requirements to prevent blackouts from extreme cold weather events,
whether these requirements will induce cyber vulnerabilities, and
the associated costs for these requirements not later than January
1, 2022;
(2) provisions for installing, replacing, or
upgrading industrial control systems and associated networks (or
the use of compensating controls/procedures) in critical
facilities to address cyber vulnerabilities not later than January
1, 2022;
(3) provisions 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 not later than January 1, 2026;
(4) a timeline for upgrading remaining infrastructure
to meet recommendations of the EMP Commission reports;
(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.
(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. 44.007. 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 44.005.
Sec. 44.008. 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. 44.009. MICRO-GRIDS. (a) The security commission
shall establish resilience standards for micro-grids and certify a
micro-grid that meets the standards. These standards must be
developed for both alternating current (AC) and direct current (DC)
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 380.004 to read as follows:
Sec. 380.004. 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.
(f) A municipality that does not qualify in at least five of
the seven areas as a resilient community may not offer economic
incentives or tax abatements for any purposes for any entity to
locate in the municipality.
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 under Sections 44.004 and 44.005, Utilities Code, as added
by this Act.
Section 5. Not later than January 1 of each year, the
commission shall prepare and deliver a non-classified report to the
legislature, the Governor and the Public Utility Commission of
Texas assessing natural and man-made threats to the electric grid
and efforts to mitigate the threats. Such report shall be prepared
for public distribution The commission shall hold confidential or
classified briefings with officials as necessary.
SECTION 6. 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 September 1, 2021.