Texas 2021 - 87th 1st C.S.

Texas Senate Bill SB28 Compare Versions

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1	1	By: Hall S.B. No. 28
2	2
3	3
4	4	A BILL TO BE ENTITLED
5	5	AN ACT
6	6	relating to the resilience of the electric grid and certain
7	7	municipalities.
8	8	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	9	SECTION 1. The legislature finds that:
10	10	(1) electric grid blackouts threaten the lives of the
11	11	citizens of this state and pose a disproportionately large risk to:
12	12	(A) the elderly, vulnerable, and underprivileged
13	13	within this state; and
14	14	(B) communities facing environmental justice
15	15	issues such as disproportionate environmental health burdens and
16	16	population vulnerabilities relating to facilities such as chemical
17	17	plants and refineries that can become environmental disaster areas
18	18	when taken off-line due to loss of electricity;
19	19	(2) the 16 critical infrastructures identified in
20	20	President Barack Obama's Presidential Policy Directive "Critical
21	21	Infrastructure Security and Resilience" (PPD-21) including water
22	22	and wastewater systems, food and agriculture, communications
23	23	systems, the energy sector including refineries and fuel
24	24	distribution systems, chemical plants, the financial sector,
25	25	hospitals and health care facilities, law enforcement and
26	26	government facilities, nuclear reactors, and other critical
27	27	functions depend on the electric grid in this state and make the
28	28	grid's protection vital to the economy of this nation and homeland
29	29	security;
30	30	(3) the blackout that occurred in this state in
31	31	February 2021 caused:
32	32	(A) death and suffering in this state;
33	33	(B) economic loss to this state's economy;
34	34	(C) impacts to all critical infrastructures in
35	35	this state;
36	36	(D) the dispatch of generation units that likely
37	37	exceeded limits established by the Environmental Protection Agency
38	38	for sulfur dioxide, nitrogen oxide, mercury, and carbon monoxide
39	39	emissions and wastewater release limits;
40	40	(E) radically increased pricing of electricity
41	41	that resulted in making electric power bills unaffordable to many
42	42	customers across this state; and
43	43	(F) the exacerbation of the COVID-19 pandemic
44	44	risk by forcing many of the state's citizens to consolidate at
45	45	warming centers and in other small spaces where warmth for survival
46	46	superseded social distancing protocols;
47	47	(4) a previous large-scale blackout occurred in this
48	48	state in February 2011 during which 4.4 million customers were
49	49	affected;
50	50	(5) this state is uniquely positioned to prevent
51	51	blackouts because this state is a net exporter of energy and is the
52	52	only state with an electric grid almost exclusively within its
53	53	territorial boundaries;
54	54	(6) the 2011 and 2021 blackouts call into question:
55	55	(A) whether too much risk has been accepted
56	56	regarding weatherization of electric generation infrastructure;
57	57	(B) whether this state lacks the internal
58	58	distribution structure and control systems to manage rolling
59	59	blackouts; and
60	60	(C) whether sufficient resources have been
61	61	allocated toward overall grid resilience;
62	62	(7) the governor has declared reform of the
63	63	independent organization certified under Section 39.151, Utilities
64	64	Code, for the ERCOT power region as an emergency item for the 87th
65	65	Legislature;
66	66	(8) public confidence in the resilience of the
67	67	electric grid in this state is essential to ensuring environmental
68	68	justice, economic prosperity, domestic tranquility, continuity of
69	69	government, and life-sustaining systems;
70	70	(9) a resilient electric grid that offers businesses
71	71	in this state continuity of operations in the event of a natural or
72	72	man-made disaster will be an unrivaled attraction for businesses to
73	73	expand or move their operations to this state and for protecting
74	74	what is important to this state, including its military
75	75	installations and its environment;
76	76	(10) current market incentives and regulations are not
77	77	sufficient for electric utilities to:
78	78	(A) prioritize grid security and resilience; and
79	79	(B) protect the grid against hazards;
80	80	(11) protection of the electric grid in this state
81	81	against hazards would assure businesses and the citizens of this
82	82	state that the "lights will be back on first in Texas" in the event
83	83	of a nationwide catastrophe affecting electric infrastructure,
84	84	sparing catastrophic societal and environmental consequences for
85	85	this state; and
86	86	(12) when this state begins implementation of the plan
87	87	for all hazards resilience described by Section 44.007, Utilities
88	88	Code, as added by this Act, to protect the electric grid in this
89	89	state, short-term and long-term economic benefit will far exceed
90	90	even the most optimistic estimates of the conventional economic
91	91	incentives provided by tax abatements to attract businesses to this
92	92	state.
93	93	SECTION 2. Subtitle B, Title 2, Utilities Code, is amended
94	94	by adding Chapter 44 to read as follows:
95	95	CHAPTER 44. GRID RESILIENCE
96	96	Sec. 44.001. DEFINITIONS. In this chapter:
97	97	(1) "All hazards" means:
98	98	(A) terrestrial weather including wind,
99	99	hurricanes, tornadoes, flooding, ice storms, extended cold weather
100	100	events, heat waves, and wildfires;
101	101	(B) seismic events including earthquakes and
102	102	tsunamis;
103	103	(C) physical threats including terrorist attacks
104	104	with direct fire, drones, explosives, and other methods of physical
105	105	sabotage;
106	106	(D) cyber attacks including malware attacks and
107	107	hacking of unprotected or compromised information technology
108	108	networks;
109	109	(E) manipulation of operational technology
110	110	devices including sensors, actuators, and drives;
111	111	(F) electromagnetic threats through man-made
112	112	radio frequency weapons, high altitude nuclear electromagnetic
113	113	pulse, and naturally occurring geomagnetic disturbances;
114	114	(G) electric generation supply chain
115	115	vulnerabilities including insecure or inadequate fuel
116	116	transportation or storage; and
117	117	(H) insider threats caused by compromised or
118	118	hostile personnel working within government or the utility
119	119	industry.
120	120	(2) "Micro-grid" means a group of interconnected loads
121	121	and distributed energy resources inside clearly defined electrical
122	122	boundaries that act as a single controllable entity with respect to
123	123	the grid.
124	124	(3) "Security commission" means the Texas Grid
125	125	Security Commission.
126	126	Sec. 44.002. TEXAS GRID SECURITY COMMISSION. (a) The Texas
127	127	Grid Security Commission is composed of the following members:
128	128	(1) a representative of the Texas Division of
129	129	Emergency Management appointed by the chief of that division;
130	130	(2) a representative of the State Office of Risk
131	131	Management appointed by the risk management board;
132	132	(3) a representative of the independent organization
133	133	certified under Section 39.151 for the ERCOT power region appointed
134	134	by the chief executive officer of that organization;
135	135	(4) a representative of the Texas Military Department
136	136	appointed by the adjutant general of that department;
137	137	(5) a representative of the Texas Military
138	138	Preparedness Commission appointed by that commission;
139	139	(6) a representative of the Office of State-Federal
140	140	Relations appointed by the director of that office;
141	141	(7) a representative of the Department of Information
142	142	Resources appointed by the executive director of that department;
143	143	(8) a representative of power generation companies
144	144	appointed by the chief of the Texas Division of Emergency
145	145	Management;
146	146	(9) two representatives of transmission and
147	147	distribution utilities appointed by the chief of the Texas Division
148	148	of Emergency Management;
149	149	(10) three individuals with expertise in critical
150	150	infrastructure protection appointed by the chief of the Texas
151	151	Division of Emergency Management, to represent the public interest;
152	152	(11) one representative appointed by the chief of the
153	153	Texas Division of Emergency Management from each of the following
154	154	essential services sectors:
155	155	(A) law enforcement;
156	156	(B) emergency services;
157	157	(C) communications;
158	158	(D) water and sewer services;
159	159	(E) health care;
160	160	(F) financial services;
161	161	(G) food and agriculture;
162	162	(H) transportation; and
163	163	(I) energy;
164	164	(12) an expert in the field of higher education
165	165	appointed by the chief of the Texas Division of Emergency
166	166	Management; and
167	167	(13) an expert in the field of electricity markets and
168	168	regulations appointed by the chief of the Texas Division of
169	169	Emergency Management.
170	170	(b) The chief of the Texas Division of Emergency Management
171	171	may invite members or former members of the United States Air
172	172	Force's Electromagnetic Defense Task Force to the security
173	173	commission.
174	174	(c) The Texas Division of Emergency Management shall
175	175	designate a member of the security commission to serve as presiding
176	176	officer.
177	177	(d) The security commission shall convene at the call of the
178	178	presiding officer.
179	179	(e) The security commission shall report to the chief of the
180	180	Texas Division of Emergency Management.
181	181	(f) A vacancy on the security commission is filled by
182	182	appointment for the unexpired term in the same manner as the
183	183	original appointment.
184	184	(g) To the extent possible, individuals appointed to the
185	185	security commission must be residents of this state.
186	186	(h) The presiding officer of the security commission or the
187	187	chief of the Texas Division of Emergency Management may invite
188	188	subject matter experts to advise the security commission, including
189	189	individuals recognized as experts in the fields of electricity
190	190	markets, cybersecurity of grid control systems, electromagnetic
191	191	pulse mitigation, terrestrial and solar weather, and micro-grids.
192	192	The presiding officer may invite an individual for this purpose
193	193	regardless of whether the individual is a resident of this state.
194	194	Sec. 44.003. GRID RESILIENCE INFORMATION. (a) Each of the
195	195	following members of the security commission shall apply for a
196	196	secret security clearance or an interim secret security clearance
197	197	to be granted by the federal government:
198	198	(1) the representative of the independent
199	199	organization certified under Section 39.151 for the ERCOT region;
200	200	(2) the representative of the Texas Division of
201	201	Emergency Management; and
202	202	(3) the representative of the State Office of Risk
203	203	Management.
204	204	(b) A member of the security commission listed under
205	205	Subsection (a) who is granted an applicable security clearance
206	206	under that subsection is a member of the information security
207	207	working group.
208	208	(c) The information security working group shall determine:
209	209	(1) which information received by the security
210	210	commission that is used in determining the vulnerabilities of the
211	211	electric grid or that is related to measures to be taken to protect
212	212	the grid is confidential and not subject to Chapter 552, Government
213	213	Code;
214	214	(2) which members of the security commission may
215	215	access which types of information received by the security
216	216	commission; and
217	217	(3) which members, other than members of the working
218	218	group, should apply for a secret security clearance or interim
219	219	clearance granted by the federal government.
220	220	(d) Information that the information security working group
221	221	determines is confidential under Subsection (c) shall be stored and
222	222	maintained by the independent organization certified under Section
223	223	39.151 for the ERCOT power region.
224	224	(e) The security commission must maintain a reasonable
225	225	balance between public transparency and security for information
226	226	determined to be confidential under Subsection (c).
227	227	(f) Nothing in this section abrogates any rights or remedies
228	228	under Chapter 552, Government Code.
229	229	Sec. 44.004. GRID RESILIENCE EVALUATION. (a) The security
230	230	commission shall evaluate, using available information on past
231	231	blackouts in ERCOT, all hazards to the ERCOT electric grid,
232	232	including threats which can cause future blackouts.
233	233	(b) The security commission may create groups or teams to
234	234	address each hazard as necessary. The security commission must
235	235	assess each hazard both on the likelihood of occurrence of the
236	236	hazard and the potential consequences of the hazard.
237	237	(c) The security commission shall identify methods by which
238	238	this state can support an overall national deterrence policy as
239	239	proposed by the Cyberspace Solarium Commission, including by:
240	240	(1) identifying means to ensure that all hazards
241	241	resilience for electric utilities supports critical national
242	242	security functions in this state; and
243	243	(2) engaging the Texas National Guard to be trained as
244	244	first responders to cybersecurity threats to the ERCOT electric
245	245	grid and other critical infrastructure.
246	246	(d) The security commission shall evaluate nuclear
247	247	generation sites in this state, the resilience of each nuclear
248	248	reactor to all hazards, and the resilience to all hazards of
249	249	off-site power for critical safety systems that support the reactor
250	250	and spent fuel. The security commission may communicate with the
251	251	Nuclear Regulatory Commission to accomplish the evaluation.
252	252	(e) The security commission shall evaluate current Critical
253	253	Infrastructure Protection standards established by the North
254	254	American Electric Reliability Corporation and standards set by the
255	255	National Institute of Standards and Technology to determine the
256	256	most appropriate standards for protecting grid infrastructure in
257	257	this state.
258	258	(f) The security commission shall investigate the steps
259	259	that local communities and other states have taken to address grid
260	260	resilience. The security commission may request funding to conduct
261	261	site visits to these locations as required.
262	262	(g) The security commission shall identify universities
263	263	based in this state that have expertise in cybersecurity and other
264	264	matters that can contribute to the security commission's goal of
265	265	mitigating all hazards to the grid in this state.
266	266	(h) In carrying out the security commission's duties under
267	267	this section, the security commission may solicit information from:
268	268	(1) defense contractors with experience protecting
269	269	defense systems from electromagnetic pulse;
270	270	(2) electric utilities that have developed
271	271	electromagnetic pulse protections for the utilities' grid assets;
272	272	(3) the United States Department of Homeland Security;
273	273	and
274	274	(4) the Commission to Assess the Threat to the United
275	275	States from Electromagnetic Pulse (EMP) Attack.
276	276	Sec. 44.005. GRID RESILIENCE STANDARDS. Based on the
277	277	findings of the evaluations and investigations conducted under
278	278	Section 44.004, the security commission shall develop resilience
279	279	standards for critical components of the ERCOT electric grid.
280	280	Sec. 44.006. CONTRACTOR SUPPORT FOR CRITICAL SYSTEM AND
281	281	COMPONENT RESILIENCE. (a) The State Office of Risk Management,
282	282	with assistance from the security commission, shall select
283	283	contractors with proven expertise to identify critical systems and
284	284	components of the ERCOT electric grid vulnerable to hazards
285	285	described by Section 44.004(a) with a specific emphasis on the most
286	286	dangerous cyber and electromagnetic threats.
287	287	(b) A contractor selected under Subsection (a) must
288	288	identify the critical components, including industrial control
289	289	systems, not later than six months after the date the contractor is
290	290	engaged.
291	291	(c) Not later than January 1, 2023, an entity that owns or
292	292	operates a component identified by a contractor under Subsection
293	293	(a) as critical shall upgrade the component as necessary for the
294	294	component to meet the applicable standards set by the security
295	295	commission under Section 44.005.
296	296	(d) The State Office of Risk Management shall select
297	297	contractors with demonstrated expertise to verify whether an entity
298	298	with a component identified as critical under Subsection (a) has
299	299	upgraded components as required by Subsection (c).
300	300	Sec. 44.007. PLAN FOR ALL HAZARDS RESILIENCE. (a) Not
301	301	later than January 1, 2022, the security commission shall prepare
302	302	and deliver to the legislature a plan for protecting the ERCOT
303	303	electric grid from all hazards, including a catastrophic loss of
304	304	power in the state.
305	305	(b) The plan must include:
306	306	(1) weatherizing requirements that may be implemented
307	307	not later than January 1, 2023, to prevent blackouts from extreme
308	308	cold weather events, an analysis of whether these requirements
309	309	would induce cyber vulnerabilities, and an analysis of the
310	310	associated costs for these requirements;
311	311	(2) provisions that may be implemented not later than
312	312	January 1, 2023, for installing, replacing, or upgrading industrial
313	313	control systems and associated networks, or the use of compensating
314	314	controls or procedures, in critical facilities to address cyber
315	315	vulnerabilities;
316	316	(3) provisions that may be implemented not later than
317	317	January 1, 2026, for installing, replacing, or upgrading extra
318	318	high-voltage power transformers and supervisory control and data
319	319	acquisition systems to withstand 100 kilovolts/meter E1
320	320	electromagnetic pulses and 85 volts/kilometer E3 electromagnetic
321	321	pulses;
322	322	(4) a timeline for making improvements to remaining
323	323	infrastructure to meet standards set by the security commission
324	324	under Section 44.005;
325	325	(5) long-term resilience provisions for supporting
326	326	industries including:
327	327	(A) nuclear reactors, materials, and waste;
328	328	(B) fuel supply;
329	329	(C) health care;
330	330	(D) communications;
331	331	(E) water and sewer services;
332	332	(F) food supply; and
333	333	(G) transportation; and
334	334	(6) any additional provisions considered necessary by
335	335	the security commission.
336	336	(c) The security commission may consult with the Private
337	337	Sector Advisory Council in developing the plan.
338	338	(d) The Texas Division of Emergency Management shall
339	339	incorporate the plan into the state emergency management plan and
340	340	update the state emergency management plan as necessary to
341	341	incorporate progressive resilience improvements.
342	342	Sec. 44.008. GRID RESILIENCE REPORT. (a) Not later than
343	343	January 1 of each year, the security commission shall prepare and
344	344	deliver a non-classified report to the legislature, the governor,
345	345	and the commission assessing natural and man-made threats to the
346	346	electric grid and efforts to mitigate the threats.
347	347	(b) The security commission shall make the report available
348	348	to the public.
349	349	(c) In preparing the report, the security commission may
350	350	hold confidential or classified briefings with federal, state, and
351	351	local officials as necessary.
352	352	Sec. 44.009. ALTERNATIVE TIMELINE OR STANDARD. A panel
353	353	composed of members of the security commission may approve a
354	354	resilience standard or implementation timeline for an electric
355	355	utility or other entity that differs from a resilience standard or
356	356	implementation timeline adopted under Section 44.006.
357	357	Sec. 44.010. RESILIENCE COST RECOVERY. A regulatory
358	358	authority shall include in establishing the rates of an electric
359	359	utility consideration of the costs incurred to install, replace, or
360	360	upgrade facilities or equipment to meet a resilience standard
361	361	established under this chapter. A regulatory authority shall
362	362	presume that costs incurred to meet a resilience standard under
363	363	this chapter are reasonable and necessary expenses.
364	364	Sec. 44.011. MICRO-GRIDS. (a) The security commission
365	365	shall establish resilience standards for micro-grids and certify a
366	366	micro-grid that meets the standards. The standards must be
367	367	developed for both alternating current and direct current
368	368	micro-grids.
369	369	(b) Except as provided by Subsection (c), a municipality or
370	370	other political subdivision may not enact or enforce an ordinance
371	371	or other measure that bans, limits, or otherwise regulates inside
372	372	the boundaries or extraterritorial jurisdiction of the
373	373	municipality or political subdivision a micro-grid that is
374	374	certified by the security commission under this section.
375	375	(c) The owner or operator of a micro-grid certified by the
376	376	security commission is a power generation company and is required
377	377	to register under Section 39.351(a). The owner or operator of the
378	378	micro-grid is entitled to:
379	379	(1) interconnect the micro-grid;
380	380	(2) obtain transmission service for the micro-grid;
381	381	and
382	382	(3) use the micro-grid to sell electricity and
383	383	ancillary services at wholesale in a manner consistent with the
384	384	provisions of this title and commission rules applicable to a power
385	385	generation company or an exempt wholesale generator.
386	386	SECTION 3. Not later than January 1, 2023, the Texas Grid
387	387	Security Commission shall prepare and deliver a report to the
388	388	legislature on the progress of implementing resilience standards
389	389	adopted and implemented under Sections 44.005 and 44.006, Utilities
390	390	Code, as added by this Act.
391	391	SECTION 4. This Act takes effect immediately if it receives
392	392	a vote of two-thirds of all the members elected to each house, as
393	393	provided by Section 39, Article III, Texas Constitution. If this
394	394	Act does not receive the vote necessary for immediate effect, this
395	395	Act takes effect on the 91st day after the last day of the
396	396	legislative session.