By: Hall S.B. No. 1003
 
 
 
   
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to 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)  A resilient Texas electric grid that offers
  businesses continuity of operations in the event of a natural or
  man-made disaster, including hurricanes, flooding, terrorist
  attacks, cybersecurity threats, electromagnetic pulse threats, and
  geomagnetic disturbance threats, will be an unrivaled attraction
  for businesses to expand or move their operations to this state and
  for protecting military installations;
               (2)  this state's food and water supplies, fuel supply,
  communications systems, banking, hospitals and health care
  facilities, law enforcement, and countless critical functions
  depend on the electric grid, making the grid's protection vital to
  our economy and homeland security;
               (3)  the United States Department of Homeland Security
  has recommended protection against these threats and has published
  Electromagnetic Pulse (EMP) Protection and Resilience Guidelines
  for Critical Infrastructure and Equipment, which can be used to
  mitigate the effects of such a disaster;
               (4)  Texas Governor Greg Abbott has outlined in his
  most recent state-wide address that he is giving the legislature
  time during this legislative session "to make Texas more resilient
  to future disasters" by "making disaster response an emergency
  item;"
               (5)  public confidence in the resilience of the Texas
  electric grid is essential to ensuring economic prosperity,
  domestic tranquility, continuity of government, and
  life-sustaining systems;
               (6)  protection of the electric grid would assure these
  businesses and the citizens of this state that the "lights will be
  back on first in Texas" in the event of a catastrophic failure of
  the grid;
               (7)  the federal government has failed to protect the
  citizens of this state by addressing the vulnerability of the
  electric grid;
               (8)  Texas is uniquely positioned to be the first state
  to take action to protect its electric grid, because it is the only
  state with a grid exclusively within its boundaries; and
               (9)  when this state begins implementation of the
  electric grid resilience plan, short- 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)  "EMP Commission reports" means the July 2017
  report released by the Commission to Assess the Threat to the United
  States from Electromagnetic Pulse (EMP) Attack titled "Recommended
  E3 HEMP Heave Electric Field Waveform for the Critical
  Infrastructures" and all other reports by the EMP Commission. 
               (2)  "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.
               (3)  "Security commission" means the Texas Grid
  Security Commission.
         Sec. 44.002.  TEXAS GRID SECURITY COMMISSION. (a) The
  security commission 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 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)  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; and
                     (G)  food and agriculture;
               (11)  an expert in the field of higher education
  appointed by the chief of the Texas Division of Emergency
  Management.
         (b)  The chief of the Texas Division of Emergency Management
  may appoint a member of the United States Air Force's
  Electromagnetic Defense Task Force 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.
         Sec. 44.003.  GRID RESILIENCE INFORMATION. (a) Information
  used in determining the vulnerabilities of the electric grid or
  that is related to measures to be taken to protect the grid is
  confidential and not subject to Chapter 552, Government Code.
         (b)  Information described by Subsection (a) shall be stored
  and maintained by the independent organization certified under
  Section 39.151 for the ERCOT region.
         (c)  A member of the security commission may not access
  confidential information described by Subsection (a) unless the
  member has a secret security clearance granted by the federal
  government.
         (d)  The following members of the security commission may
  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.
         Sec. 44.004.  CRITICAL COMPONENT RESILIENCE. (a) The State
  Office of Risk Management shall select a contractor to identify
  critical components of the ERCOT electric grid vulnerable to EMP,
  GMD, cyber, or physical attack. The contractor must identify the
  critical components before the expiration of six months after the
  date the contractor is engaged.
         (b)  Not later than January 1, 2021, an entity that owns or
  operates a component identified by the contractor under Subsection
  (a) as critical shall upgrade the component as necessary for the
  component to meet the applicable standard proposed in the EMP
  Commission reports.
         (c)  The State Office of Risk Management shall select a
  contractor to verify whether affected entities have upgraded
  components as required by Subsection (b).
         (d)  Each contractor selected by the State Office of Risk
  Management under this section must have experience hardening
  electrical systems to meet military standards at the federal level.
         Sec. 44.005.  PLAN FOR CONTINUITY OF SERVICES. (a) Not
  later than January 1, 2020, the security commission shall prepare
  and deliver to the legislature a plan for continuity of services in
  the event of a catastrophic loss of power in the state.
         (b)  The plan must include:
               (1)  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, 2024;
               (2)  a timeline for upgrading remaining infrastructure
  to meet recommendations of the EMP Commission reports; and
               (3)  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; and
                     (F)  food supply; and
               (4)  any additional provisions deemed 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 plan as necessary to incorporate the progressive
  improvement of the system.
         Sec. 44.006.  ALTERNATIVE TIMELINE OR STANDARD. A panel
  composed of members of the security commission who have obtained a
  secret security clearance granted by the federal government 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. 44.007.  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. 44.008.  MICRO-GRIDS. (a) The security commission
  shall establish resilience standards for micro-grids and certify a
  micro-grid that meets the standards.
         (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)  An Energy Resilient Community is one where provisions
  have been made to ensure that energy, electric power,
  and fuel supplies are protected and available for
  recovery in the event of a catastrophic power outage.
         (b)  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; and
               (5)  financial services.
         (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; or
               (5)  a Resilient Financial Services Community.
         (d)  The Texas Grid Security Commission may designate a
  municipality that meets the resilience standards in all five
  service areas as a Five Star Gold Resilient Community.
         (d)  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.
         SECTION 4.  Not later than January 1, 2021, 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.  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 II, Texas Constitution. If this Act
  does not receive the vote necessary for immediate effect, this Act
  takes effect September 1, 2019.