Texas 2021 - 87th 3rd C.S.

Texas Senate Bill SB23 Compare Versions

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1	1	By: Hall S.B. No. 23
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46	46	superseded social distancing protocols;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 will protect what
74	74	is important to this state, including its military installations
75	75	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) vulnerabilities regarding installed
115	115	generation capacity located in, or capable of delivering
116	116	electricity to, this state;
117	117	(H) electric generation supply chain
118	118	vulnerabilities including insecure or inadequate fuel
119	119	transportation or storage; and
120	120	(I) insider threats caused by compromised or
121	121	hostile personnel working within government or the utility
122	122	industry.
123	123	(2) "Micro-grid" means a group of interconnected loads
124	124	and distributed energy resources inside clearly defined electrical
125	125	boundaries that act as a single controllable entity with respect to
126	126	the grid.
127	127	(3) "Security commission" means the Texas Grid
128	128	Security Commission.
129	129	Sec. 44.002. TEXAS GRID SECURITY COMMISSION. (a) The Texas
130	130	Grid Security Commission is composed of the following members:
131	131	(1) a representative of the Texas Division of
132	132	Emergency Management appointed by the chief of that division;
133	133	(2) a representative of the State Office of Risk
134	134	Management appointed by the risk management board;
135	135	(3) a representative of the independent organization
136	136	certified under Section 39.151 for the ERCOT power region appointed
137	137	by the chief executive officer of that organization;
138	138	(4) a representative of the Texas Military Department
139	139	appointed by the adjutant general of that department;
140	140	(5) a representative of the Texas Military
141	141	Preparedness Commission appointed by that commission;
142	142	(6) a representative of the Office of State-Federal
143	143	Relations appointed by the director of that office;
144	144	(7) a representative of the Department of Information
145	145	Resources appointed by the executive director of that department;
146	146	(8) a representative of power generation companies
147	147	appointed by the chief of the Texas Division of Emergency
148	148	Management;
149	149	(9) two representatives of transmission and
150	150	distribution utilities appointed by the chief of the Texas Division
151	151	of Emergency Management;
152	152	(10) three individuals with expertise in critical
153	153	infrastructure protection appointed by the chief of the Texas
154	154	Division of Emergency Management, to represent the public interest;
155	155	(11) one representative appointed by the chief of the
156	156	Texas Division of Emergency Management from each of the following
157	157	essential services sectors:
158	158	(A) law enforcement;
159	159	(B) emergency services;
160	160	(C) communications;
161	161	(D) water and sewer services;
162	162	(E) health care;
163	163	(F) financial services;
164	164	(G) food and agriculture;
165	165	(H) transportation; and
166	166	(I) energy;
167	167	(12) an expert in the field of higher education
168	168	appointed by the chief of the Texas Division of Emergency
169	169	Management; and
170	170	(13) an expert in the field of electricity markets and
171	171	regulations appointed by the chief of the Texas Division of
172	172	Emergency Management.
173	173	(b) The chief of the Texas Division of Emergency Management
174	174	may invite members or former members of the United States Air
175	175	Force's Electromagnetic Defense Task Force to advise the security
176	176	commission.
177	177	(c) The Texas Division of Emergency Management shall
178	178	designate a member of the security commission to serve as presiding
179	179	officer.
180	180	(d) The security commission shall convene at the call of the
181	181	presiding officer.
182	182	(e) The security commission shall report to the chief of the
183	183	Texas Division of Emergency Management.
184	184	(f) A vacancy on the security commission is filled by
185	185	appointment for the unexpired term in the same manner as the
186	186	original appointment.
187	187	(g) To the extent possible, individuals appointed to the
188	188	security commission must be residents of this state.
189	189	(h) The presiding officer of the security commission or the
190	190	chief of the Texas Division of Emergency Management may invite
191	191	subject matter experts to advise the security commission, including
192	192	individuals recognized as experts in the fields of electricity
193	193	markets, cybersecurity of grid control systems, electromagnetic
194	194	pulse mitigation, terrestrial and solar weather, and micro-grids.
195	195	The presiding officer may invite an individual for this purpose
196	196	regardless of whether the individual is a resident of this state.
197	197	Sec. 44.003. GRID RESILIENCE INFORMATION. (a) Each of the
198	198	following members of the security commission shall apply for a
199	199	secret security clearance or an interim secret security clearance
200	200	to be granted by the federal government:
201	201	(1) the representative of the independent
202	202	organization certified under Section 39.151 for the ERCOT region;
203	203	(2) the representative of the Texas Division of
204	204	Emergency Management; and
205	205	(3) the representative of the State Office of Risk
206	206	Management.
207	207	(b) A member of the security commission listed under
208	208	Subsection (a) who is granted an applicable security clearance
209	209	under that subsection is a member of the information security
210	210	working group.
211	211	(c) The information security working group shall determine:
212	212	(1) which information received by the security
213	213	commission that is used in determining the vulnerabilities of the
214	214	electric grid or that is related to measures to be taken to protect
215	215	the grid is confidential and not subject to Chapter 552, Government
216	216	Code;
217	217	(2) which members of the security commission may
218	218	access which types of information received by the security
219	219	commission; and
220	220	(3) which members, other than members of the working
221	221	group, should apply for a secret security clearance or interim
222	222	clearance granted by the federal government.
223	223	(d) Information that the information security working group
224	224	determines is confidential under Subsection (c) shall be stored and
225	225	maintained by the independent organization certified under Section
226	226	39.151 for the ERCOT power region.
227	227	(e) The security commission must maintain a reasonable
228	228	balance between public transparency and security for information
229	229	determined to be confidential under Subsection (c).
230	230	(f) Nothing in this section abrogates any rights or remedies
231	231	under Chapter 552, Government Code.
232	232	Sec. 44.004. GRID RESILIENCE EVALUATION. (a) The security
233	233	commission shall evaluate, using available information on past
234	234	blackouts in ERCOT, all hazards to the ERCOT electric grid,
235	235	including threats which can cause future blackouts.
236	236	(b) The security commission may create groups or teams to
237	237	address each hazard as necessary. The security commission must
238	238	assess each hazard both on the likelihood of occurrence of the
239	239	hazard and the potential consequences of the hazard.
240	240	(c) The security commission shall identify methods by which
241	241	this state can support an overall national deterrence policy as
242	242	proposed by the Cyberspace Solarium Commission, including by:
243	243	(1) identifying means to ensure that all hazards
244	244	resilience for electric utilities supports critical national
245	245	security functions in this state; and
246	246	(2) engaging the Texas National Guard to be trained as
247	247	first responders to cybersecurity threats to the ERCOT electric
248	248	grid and other critical infrastructure.
249	249	(d) The security commission shall evaluate nuclear
250	250	generation sites in this state, the resilience of each nuclear
251	251	reactor to all hazards, and the resilience to all hazards of
252	252	off-site power for critical safety systems that support the reactor
253	253	and spent fuel. The security commission may communicate with the
254	254	Nuclear Regulatory Commission to accomplish the evaluation.
255	255	(e) The security commission shall evaluate current Critical
256	256	Infrastructure Protection standards established by the North
257	257	American Electric Reliability Corporation and standards set by the
258	258	National Institute of Standards and Technology to determine the
259	259	most appropriate standards for protecting grid infrastructure in
260	260	this state.
261	261	(f) The security commission shall investigate the steps
262	262	that local communities and other states have taken to address grid
263	263	resilience. The security commission may request funding to conduct
264	264	site visits to these locations as required.
265	265	(g) The security commission shall identify universities
266	266	based in this state that have expertise in cybersecurity and other
267	267	matters that can contribute to the security commission's goal of
268	268	mitigating all hazards to the grid in this state.
269	269	(h) In carrying out the security commission's duties under
270	270	this section, the security commission may solicit information from:
271	271	(1) defense contractors with experience protecting
272	272	defense systems from electromagnetic pulse;
273	273	(2) electric utilities that have developed
274	274	electromagnetic pulse protections for the utilities' grid assets;
275	275	(3) the United States Department of Homeland Security;
276	276	and
277	277	(4) the Commission to Assess the Threat to the United
278	278	States from Electromagnetic Pulse (EMP) Attack.
279	279	Sec. 44.005. GRID RESILIENCE STANDARDS. Based on the
280	280	findings of the evaluations and investigations conducted under
281	281	Section 44.004, the security commission shall develop resilience
282	282	standards for critical components of the ERCOT electric grid.
283	283	Sec. 44.006. CONTRACTOR SUPPORT FOR CRITICAL SYSTEM AND
284	284	COMPONENT RESILIENCE. (a) The State Office of Risk Management,
285	285	with assistance from the security commission, shall select
286	286	contractors with proven expertise to identify critical systems and
287	287	components of the ERCOT electric grid vulnerable to hazards
288	288	described by Section 44.004(a) with a specific emphasis on the most
289	289	dangerous cyber and electromagnetic threats.
290	290	(b) A contractor selected under Subsection (a) must
291	291	identify the critical components, including industrial control
292	292	systems, not later than six months after the date the contractor is
293	293	engaged.
294	294	(c) Not later than January 1, 2023, an entity that owns or
295	295	operates a component identified by a contractor under Subsection
296	296	(a) as critical shall upgrade the component as necessary for the
297	297	component to meet the applicable standards set by the security
298	298	commission under Section 44.005.
299	299	(d) The State Office of Risk Management shall select
300	300	contractors with demonstrated expertise to verify whether an entity
301	301	with a component identified as critical under Subsection (a) has
302	302	upgraded components as required by Subsection (c).
303	303	Sec. 44.007. PLAN FOR ALL HAZARDS RESILIENCE. (a) Not
304	304	later than January 1, 2022, the security commission shall prepare
305	305	and deliver to the legislature a plan for protecting the ERCOT
306	306	electric grid from all hazards, including a catastrophic loss of
307	307	power in the state.
308	308	(b) The plan must include:
309	309	(1) weatherizing requirements that may be implemented
310	310	not later than January 1, 2023, to prevent blackouts from extreme
311	311	cold weather events, an analysis of whether these requirements
312	312	would induce cyber vulnerabilities, and an analysis of the
313	313	associated costs for these requirements;
314	314	(2) provisions that may be implemented not later than
315	315	January 1, 2023, for installing, replacing, or upgrading industrial
316	316	control systems and associated networks, or the use of compensating
317	317	controls or procedures, in critical facilities to address cyber
318	318	vulnerabilities;
319	319	(3) provisions that may be implemented not later than
320	320	January 1, 2026, for installing, replacing, or upgrading extra
321	321	high-voltage power transformers and supervisory control and data
322	322	acquisition systems to withstand 100 kilovolts/meter E1
323	323	electromagnetic pulses and 85 volts/kilometer E3 electromagnetic
324	324	pulses;
325	325	(4) a timeline for making improvements to remaining
326	326	infrastructure to meet standards set by the security commission
327	327	under Section 44.005;
328	328	(5) long-term resilience provisions for supporting
329	329	industries including:
330	330	(A) nuclear reactors, materials, and waste;
331	331	(B) fuel supply;
332	332	(C) health care;
333	333	(D) communications;
334	334	(E) water and sewer services;
335	335	(F) food supply; and
336	336	(G) transportation; and
337	337	(6) any additional provisions considered necessary by
338	338	the security commission.
339	339	(c) The security commission may consult with the Private
340	340	Sector Advisory Council in developing the plan.
341	341	(d) The Texas Division of Emergency Management shall
342	342	incorporate the plan into the state emergency management plan and
343	343	update the state emergency management plan as necessary to
344	344	incorporate progressive resilience improvements.
345	345	Sec. 44.008. GRID RESILIENCE REPORT. (a) Not later than
346	346	January 1 of each year, the security commission shall prepare and
347	347	deliver a nonclassified report to the legislature, the governor,
348	348	and the commission assessing natural and man-made threats to the
349	349	electric grid and efforts to mitigate the threats.
350	350	(b) The security commission shall make the report available
351	351	to the public.
352	352	(c) In preparing the report, the security commission may
353	353	hold confidential or classified briefings with federal, state, and
354	354	local officials as necessary.
355	355	Sec. 44.009. ALTERNATIVE TIMELINE OR STANDARD. A panel
356	356	composed of members of the security commission may approve a
357	357	resilience standard or implementation timeline for an electric
358	358	utility or other entity that differs from a resilience standard or
359	359	implementation timeline adopted under Section 44.006.
360	360	Sec. 44.010. RESILIENCE COST RECOVERY. A regulatory
361	361	authority shall include in establishing the rates of an electric
362	362	utility consideration of the costs incurred to install, replace, or
363	363	upgrade facilities or equipment to meet a resilience standard
364	364	established under this chapter. A regulatory authority shall
365	365	presume that costs incurred to meet a resilience standard under
366	366	this chapter are reasonable and necessary expenses.
367	367	Sec. 44.011. MICRO-GRIDS. (a) The security commission
368	368	shall establish resilience standards for micro-grids and certify a
369	369	micro-grid that meets the standards. The standards must be
370	370	developed for both alternating current and direct current
371	371	micro-grids.
372	372	(b) Except as provided by Subsection (c), a municipality or
373	373	other political subdivision may not enact or enforce an ordinance
374	374	or other measure that bans, limits, or otherwise regulates inside
375	375	the boundaries or extraterritorial jurisdiction of the
376	376	municipality or political subdivision a micro-grid that is
377	377	certified by the security commission under this section.
378	378	(c) The owner or operator of a micro-grid certified by the
379	379	security commission is a power generation company and is required
380	380	to register under Section 39.351(a). The owner or operator of the
381	381	micro-grid is entitled to:
382	382	(1) interconnect the micro-grid;
383	383	(2) obtain transmission service for the micro-grid;
384	384	and
385	385	(3) use the micro-grid to sell electricity and
386	386	ancillary services at wholesale in a manner consistent with the
387	387	provisions of this title and commission rules applicable to a power
388	388	generation company or an exempt wholesale generator.
389	389	SECTION 3. Chapter 380, Local Government Code, is amended
390	390	by adding Section 380.005 to read as follows:
391	391	Sec. 380.005. FIVE STAR GOLD RESILIENT COMMUNITIES. (a)
392	392	The Texas Grid Security Commission shall establish resilience
393	393	standards for municipalities in the following essential service
394	394	areas:
395	395	(1) emergency services;
396	396	(2) communications systems;
397	397	(3) clean water and sewer services;
398	398	(4) health care systems;
399	399	(5) financial services;
400	400	(6) energy systems; and
401	401	(7) transportation systems.
402	402	(b) Standards for energy systems under Subsection (a) must
403	403	include provisions to ensure that energy, electric power, and fuel
404	404	supplies are protected and available for recovery in the event of a
405	405	catastrophic power outage.
406	406	(c) On the application of a municipality for the
407	407	designation, the Texas Grid Security Commission may designate a
408	408	municipality that meets the resilience standards in the applicable
409	409	service area as:
410	410	(1) a Resilient Emergency Services Community;
411	411	(2) a Resilient Communications Systems Community;
412	412	(3) a Resilient Clean Water and Sewer Services
413	413	Community;
414	414	(4) a Resilient Health Care Systems Community;
415	415	(5) a Resilient Financial Services Community;
416	416	(6) a Resilient Energy Community; or
417	417	(7) a Resilient Transportation Community.
418	418	(d) The Texas Grid Security Commission may designate a
419	419	municipality that meets the resilience standards in five of the
420	420	seven service areas as a Five Star Gold Resilient Community.
421	421	(e) A municipality may not use a resilient community
422	422	designation in advertising, marketing, or economic development
423	423	initiatives unless the Texas Grid Security Commission has awarded
424	424	the municipality with the designation in the applicable service
425	425	area or as a Five Star Gold Resilient Community.
426	426	SECTION 4. Not later than January 1, 2023, the Texas Grid
427	427	Security Commission shall prepare and deliver a report to the
428	428	legislature on the progress of implementing resilience standards
429	429	adopted and implemented under Sections 44.005 and 44.006, Utilities
430	430	Code, as added by this Act.
431	431	SECTION 5. This Act takes effect immediately if it receives
432	432	a vote of two-thirds of all the members elected to each house, as
433	433	provided by Section 39, Article III, Texas Constitution. If this
434	434	Act does not receive the vote necessary for immediate effect, this
435	435	Act takes effect on the 91st day after the last day of the
436	436	legislative session.