BILL ANALYSIS

Senate Research Center	S.B. 75
89R1144 CXP-F	By: Hall et al.
	Business & Commerce
	3/27/2025
	As Filed

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

S.B. 75 would create the Texas Grid Security Commission under the direction of the Texas Division of Emergency Management (TDEM) to evaluate all hazards to the ERCOT electric grid and vulnerabilities of essential service systems for municipalities.

Despite the many changes made to Texas policy over the last 10 years, the electric grid remains vulnerable to a wide range of both natural and man-made existential threats, including cyber-attacks, malware, electromagnetic pulses (EMP), and geomagnetic disturbances (GMD) that would, at best, disrupt the grid, and at worst, cause the entire grid to go down. Texas-sized growth continues to overwhelm all sectors of our industries, causing extreme stress on electric supply and demand. Electric outages threaten not only individual safety but also elderly, vulnerable, and underprivileged communities who bear disproportionate environmental, health, and financial burdens when facilities are taken offline, namely chemical plants and refineries, and can become environmental disaster areas due to loss of electricity. Ensuring public confidence in its resilience is vital for economic prosperity and essential services, as a robust grid will attract businesses and bolster the state's economy.

It is time Texas takes a more active role in protecting our grid through the establishment of the Texas Grid Security Commission (TGSC). Through the work of the TGSC, a statewide plan for all hazards resilience to protect the grid would provide substantial short-term and long-term economic benefits that would far exceed even the most optimistic estimates of the conventional economic incentives provided by tax abatements to attract businesses to the state.

Under current law, there are several state agencies that plan and prepare for state emergencies, but until Governor Abbott issued Executive Order 49 (GA EO-49), there had not been one agency tasked specifically to evaluate vulnerabilities to essential services and critical infrastructure in the state, and the resilience of municipalities in six essential areas.

S.B. 75 creates a new Chapter 44, "Grid Resilience," in the Texas Utilities Code.

As proposed, S.B. 75 amends current law relating to the resilience of the electric grid and certain municipalities.

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Provides that the legislature finds that:

(1) electric grid outages threaten the lives of the citizens of this state and pose a disproportionately large risk to:

(A) the elderly, vulnerable, and underprivileged within this state; and

(B) communities facing disproportionate environmental health burdens and population vulnerabilities relating to facilities such as chemical plants and refineries that can become environmental disaster areas when taken off-line due to loss of electricity;

(2) the 16 critical infrastructure sectors identified in President Barack Obama's Presidential Policy Directive "Critical Infrastructure Security and Resilience" (PPD-21) (chemical, commercial facilities, communications, critical manufacturing, dams, defense industrial base, emergency services, energy, financial services, food and agriculture, government facilities, healthcare and public health, information technology, nuclear reactors, materials, and waste, transportation systems, water and wastewater systems) depend on the electric grid in this state and make the grid's protection vital to the economy of this nation and homeland security;

(3) the power outage that occurred in this state in February 2021 caused:

(A) death and suffering in this state;

(B) economic loss to this state's economy;

(D) the dispatch of generation units that likely exceeded limits established by the Environmental Protection Agency for sulfur dioxide, nitrogen oxide, mercury, and carbon monoxide emissions and wastewater release limits;

(E) radically increased pricing of electricity and made electric power bills unaffordable to many customers across this state; and

(F) exacerbation of 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 protocols;

(4) a previous large-scale power outage occurred in this state in February 2011 during which 4.4 million customers were affected;

(5) this state is uniquely positioned to prevent power outages because this state 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 power outages call into question whether too much risk has been accepted regarding weatherization of electric generation infrastructure, whether this state lacks the internal distribution structure and control systems to manage rolling outages, and whether sufficient resources have been allocated toward overall grid resilience;

(7) public confidence in the resilience of the electric grid in this state is essential to ensuring economic prosperity, domestic tranquility, continuity of government, and life-sustaining systems;

(8) a resilient electric grid that offers businesses in this state 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;

(9) a resilient electric grid that can operate in the event of a natural or man-made disaster will protect important facets of this state, including its military installations and environment;

(10) current market incentives and regulations are not sufficient for electric utilities to prioritize grid security and resilience and protect the grid against hazards;

(11) protection of the electric grid in this state against 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 this state from catastrophic societal and environmental consequences; and

(12) when this state begins implementation of the plan for all hazards resilience described by Section 44.007, Utilities Code, as added by this Act, to protect the electric grid in this state, short-term and long-term economic benefits 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. Amends Subtitle B, Title 2, Utilities Code, by adding Chapter 44, as follows:

CHAPTER 44. GRID RESILIENCE

Sec. 44.001. DEFINITIONS. Defines "all hazards," "micro-grid," and "security commission."

Sec. 44.002. TEXAS GRID SECURITY COMMISSION. (a) Provides that the Texas Grid Security Commission (security commission) is composed of the following members:

(1) a representative of the Texas Division of Emergency Management (TDEM) appointed by the chief of that division;

(2) a representative of the Public Utility Commission of Texas (PUC) appointed by the PUC;

(3) a representative of the Railroad Commission of Texas (RRC) appointed by RRC;

(4) a representative of the independent organization certified under Section 39.151 (Essential Organizations) for the ERCOT power region appointed by the chief executive officer of that organization;

(5) a representative of power generation companies appointed by the chief of TDEM; and

(6) a representative of transmission and distribution utilities appointed by the chief of TDEM.

(b) Requires TDEM to designate a member of the security commission to serve as presiding officer.

(d) Requires the security commission to report to the chief of TDEM.

(e) Provides that a vacancy on the security commission is filled by appointment for the unexpired term in the same manner as the original appointment.

(f) Requires individuals appointed to the security commission, to the extent possible, to be residents of this state.

(g) Authorizes the chief of TDEM to invite officials or former officials of the United States Department of Defense or Department of Homeland Security with expertise on electromagnetic pulse defense to advise the security commission.

(h) Authorizes the presiding officer of the security commission or the chief of TDEM to invite to advise the security commission any person whose expertise the security commission considers necessary to carry out the purposes of this chapter, including individuals recognized as experts in the fields of law enforcement, emergency services, communications, water and sewer services, health care, financial services, agriculture, transportation, electricity markets, cybersecurity of grid control systems, electromagnetic pulse mitigation, terrestrial and solar weather, and micro-grids.

Sec. 44.003. GRID RESILIENCE INFORMATION. (a) Requires each of the following members of the security commission to apply for a secret security clearance or an interim secret security clearance to be granted by the federal government: the representative of the independent organization certified under Section 39.151 for the ERCOT power region,� the representative of TDEM, and the representative of the PUC.

(b) Provides that a member of the security commission listed under Subsection (a) who is granted an applicable security clearance under that subsection is a member of the information security working group.

(1) which information created or obtained by the security commission is confidential;

(2) which members of the security commission are authorized to access which types of information received by the security commission; and

(3) which members, other than members of the working group, should apply for a secret security clearance or interim clearance granted by the federal government.

(d) Requires that information that the information security working group determines is confidential under Subsection (c) be stored and maintained by the independent organization certified under Section 39.151 for the ERCOT power region.

(e) Requires the security commission to maintain a reasonable balance between public transparency and security for information determined to be confidential under Subsection (c).

(f) Provides that confidential information created or obtained by the security commission is not subject to disclosure under Chapter 552 (Public Information), Government Code.

(g) Provides that a meeting of the security commission that involves the discussion of confidential information is not subject to Chapter 551 (Open Meetings), Government Code.

Sec. 44.004. GRID RESILIENCE EVALUATION. (a) Requires the security commission to evaluate, using available information on past power outages in ERCOT, all hazards to the ERCOT electric grid, including threats that can cause future outages. Requires the security commission to evaluate the resilience of municipalities in this state in the following essential areas:

(1) emergency services;

(2) communications systems;

(3) water and sewer services;

(4) health care systems;

(5) financial services;

(6) energy systems, including whether energy, electric power, and fuel supplies are protected and available for recovery in the event of a catastrophic power outage; and

(7) transportation systems.

(b) Authorizes the security commission to create groups to identify and address each hazard as necessary. Requires the security commission to assess each hazard both on the likelihood of occurrence of the hazard and the potential consequences of the hazard.

(c) Requires the security commission to identify methods by which this state can support an overall national deterrence policy as proposed by the United States Cyberspace Solarium Commission, including by:

(1) identifying means to ensure that measures taken to increase resilience of electric utilities against all hazards support critical national security functions in this state; and

(2) engaging the Texas National Guard to be trained as first responders to cybersecurity threats to the ERCOT electric grid and other critical infrastructure.

(d) Requires the security commission to evaluate nuclear generation sites in this state, the resilience of each nuclear reactor to all hazards, and the resilience to all hazards of off-site power for critical safety systems that support the reactor and spent fuel. Authorizes the security commission to communicate with the Nuclear Regulatory Commission to accomplish the evaluation.

(e) Requires the security commission to evaluate current Critical Infrastructure Protection standards established by the North American Electric Reliability Corporation and standards set by the National Institute of Standards and Technology to determine the most appropriate standards for protecting grid infrastructure in this state.

(f) Requires the security commission to investigate the steps that local communities and other states have taken to address grid resilience. Authorizes the security commission to request funding from TDEM to conduct site visits to these locations as required.

(g) Requires the security commission to identify universities based in this state that have expertise in cybersecurity and other matters that can contribute to the security commission's goal of mitigating all hazards to the grid in this state.

(h) Authorizes the security commission, in carrying out the security commission's duties under this section, to solicit information from:

(1) defense contractors with experience protecting defense systems from electromagnetic pulses;

(2) electric utilities that have developed electromagnetic pulse protections for the utilities' grid assets;

(3) the United States Department of Homeland Security; and

(4) the Commission to Assess the Threat to the United States from Electromagnetic Pulse (EMP) Attack.

Sec. 44.005. RESILIENCE STANDARDS. (a) Requires the security commission, based on the findings of the evaluations and investigations conducted under Section 44.004, to consider and recommend resilience standards for municipalities and critical components of the ERCOT electric grid.

(b) Provides that standards considered and recommended for energy systems of municipalities should 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) Requires the security commission, not later than October 1, 2026, to prepare and deliver a report to the legislature on the recommended resilience standards required under this section and an anticipated timeline for implementation of the standards.

Sec. 44.006. MICRO-GRIDS. Requires the security commission to recommend resilience standards for micro-grids. Requires that the standards be developed for both alternating current and direct current.

Sec. 44.007. PLAN FOR ALL HAZARDS RESILIENCE. (a) Requires the security commission, not later than October 1, 2026, to prepare and deliver to the legislature a plan for protecting the ERCOT electric grid from all hazards, including a catastrophic loss of power in the state.

(b) Requires the plan to include:

(1) any weatherization requirements in addition to requirements established under Section 35.0021 (Weather Emergency Preparedness) necessary to prevent power outages from extreme cold weather events, an analysis of whether these requirements would induce cyber vulnerabilities, and an analysis of the associated costs for these requirements;

(2) provisions for installing, replacing, or upgrading industrial control systems and associated networks, or the use of compensating controls or procedures, in critical facilities to address cyber vulnerabilities;

(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;

(4) a timeline for making improvements to remaining infrastructure to meet resilience standards adopted by the security commission under Section 44.005;

(5) long-term resilience provisions for supporting industries including communications, food supply, fuel supply, health care, nuclear reactors, materials, and waste, transportation, and water and sewer services; and

(6) any additional provisions considered necessary by the security commission.

Sec. 44.008. GRID RESILIENCE REPORT. (a) Requires the security commission, not later than January 1 of each year, to prepare and deliver a nonclassified report to the legislature, the governor, and the PUC assessing natural and man-made threats to the electric grid and efforts to mitigate the threats.

(b) Requires the security commission to make the report available to the public.

(c) Authorizes the security commission, in preparing the report, to hold confidential or classified briefings with federal, state, and local officials as necessary.

SECTION 3. Effective date: upon passage or September 1, 2025.