By: Hall, et al. S.B. No. 330     (Schaefer, Spiller, Anderson)           A BILL TO BE ENTITLED   AN ACT   relating to 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 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 infrastructures identified in   President Barack Obama's Presidential Policy Directive "Critical   Infrastructure Security and Resilience" (PPD-21) including water   and wastewater systems, 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 other critical   functions 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;                      (C)  impacts to all critical infrastructures in   this state;                      (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   that resulted in making electric power bills unaffordable to many   customers across this state; and                      (F)  the exacerbation of 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many of the state's citizens to consolidate at   warming centers and in other small spaces where warmth for survival   superseded social distancing protocols;                (4)  a previous large-scale power outage occurred in   this state in February 2011 during which 4.4 million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:                      (A)  whether too much risk has been accepted   regarding weatherization of electric generation infrastructure;                      (B)  whether this state lacks the internal   distribution structure and control systems to manage rolling   outages; and                      (C)  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 and for protecting   what is important to this state, including its military   installations and its environment;                (9)  current market incentives and regulations are not   sufficient for electric utilities to:                      (A)  prioritize grid security and resilience; and                      (B)  protect the grid against hazards;                (10)  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 catastrophic societal and environmental consequences for   this state; and                (11)  when this state begins implementation of the plan   for all hazards resilience described by Section 44.006, Utilities   Code, as added by this Act, to protect the electric grid in this   state, 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" means:                      (A)  terrestrial weather including wind,   hurricanes, tornadoes, flooding, ice storms, extended cold weather   events, heat waves, and wildfires;                      (B)  seismic events including earthquakes and   tsunamis;                      (C)  physical threats including terrorist attacks   with direct fire, drones, explosives, and other methods of physical   sabotage;                      (D)  cyber attacks including malware attacks and   hacking of unprotected or compromised information technology   networks;                      (E)  manipulation of operational technology   devices including sensors, actuators, and drives;                      (F)  electromagnetic threats through man-made   radio frequency weapons, high-altitude nuclear electromagnetic   pulse, and naturally occurring geomagnetic disturbances;                      (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 or the utility   industry.                (2)  "Micro-grid" means a group of interconnected loads   and distributed energy resources inside clearly defined electrical   boundaries.                (3)  "Security commission" means the Texas Grid   Security Commission.          Sec. 44.002.  TEXAS GRID SECURITY COMMISSION. (a) The Texas   Grid Security Commission is composed of the following members:                (1)  a representative of the Texas Division of   Emergency Management appointed by the chief of that division;                (2)  a representative of the commission appointed by   that commission;                (3)  a representative of the Railroad Commission of   Texas appointed by that commission;                (4)  a representative of the independent organization   certified under Section 39.151 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 the Texas Division of Emergency   Management; and                (6)  a representative of transmission and distribution   utilities 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 to advise 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 presiding officer may invite to advise the security   commission any person whose expertise the security commission   considers necessary to carry out the purposes of this chapter.          (e)  The security commission shall convene at the call of the   presiding officer.          (f)  The security commission shall report to the chief of the   Texas Division of Emergency Management.          (g)  A vacancy on the security commission is filled by   appointment for the unexpired term in the same manner as the   original appointment.          (h)  To the extent possible, individuals appointed to the   security commission must be residents of this state.          (i)  The presiding officer of the security commission or the   chief of the Texas Division of Emergency Management may invite   subject matter experts to advise the security commission, 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. The presiding officer may invite an individual   for this purpose regardless of whether the individual is a resident   of this state.          Sec. 44.003.  GRID RESILIENCE INFORMATION. (a)  Each of the   following members of the security commission 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 power   region;                (2)  the representative of the Texas Division of   Emergency Management; and                (3)  the representative of the commission.          (b)  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.          (c)  The information security working group shall determine:                (1)  which information created or obtained by the   security commission is confidential;                (2)  which members of the security commission may   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)  Information that the information security working group   determines is confidential under Subsection (c) shall be stored and   maintained by the independent organization certified under Section   39.151 for the ERCOT power region.          (e)  The security commission must maintain a reasonable   balance between public transparency and security for information   determined to be confidential under Subsection (c).          (f)  Confidential information created or obtained by the   security commission is not subject to disclosure under Chapter 552,   Government Code.          (g)  A meeting of the security commission that involves the   discussion of confidential information is not subject to Chapter   551, Government Code.          Sec. 44.004.  GRID RESILIENCE EVALUATION. (a)  The security   commission shall evaluate, using available information on past   power outages in ERCOT, all hazards to the ERCOT electric grid,   including threats that can cause future outages.  The security   commission shall 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 an evaluation of 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)  The security commission may create groups or teams to   identify and address each hazard as necessary. The security   commission must assess each hazard both on the likelihood of   occurrence of the hazard and the potential consequences of the   hazard.          (c)  The security commission shall identify methods by which   this state can support an overall national deterrence policy as   proposed by the Cyberspace Solarium Commission, including by:                (1)  identifying means to ensure that all hazards   resilience for electric utilities supports 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)  The security commission shall 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. The security commission may communicate with the   Nuclear Regulatory Commission to accomplish the evaluation.          (e)  The security commission shall 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)  The security commission shall investigate the steps   that local communities and other states have taken to address grid   resilience. The security commission may request funding from the   Texas Division of Emergency Management to conduct site visits to   these locations as required.          (g)  The security commission shall 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)  In carrying out the security commission's duties under   this section, the security commission may solicit information from:                (1)  defense contractors with experience protecting   defense systems from electromagnetic pulse;                (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)  Based on the   findings of the evaluations and investigations conducted under   Section 44.004, the security commission shall consider and   recommend resilience standards for municipalities and critical   components of the ERCOT electric grid.          (b)  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)  Not later than October 1, 2024, the security commission   shall prepare and deliver a report to the legislature on the   recommended resilience standards as required under this section and   an anticipated timeline for implementation of the standards.          Sec. 44.006.  PLAN FOR ALL HAZARDS RESILIENCE. (a) Not   later than October 1, 2024, the security commission shall 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)  The plan must include:                (1)  weatherizing requirements 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:                      (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; and                (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.          Sec. 44.007.  GRID RESILIENCE REPORT. (a) Not later than   January 1 of each year, the security commission shall prepare and   deliver a nonclassified report to the legislature, the governor,   and the commission assessing natural and man-made threats to the   electric grid and efforts to mitigate the threats.          (b)  The security commission shall make the report available   to the public.          (c)  In preparing the report, the security commission may   hold confidential or classified briefings with federal, state, and   local officials as necessary.          Sec. 44.008.  MICRO-GRIDS.  The security commission shall   recommend resilience standards for micro-grids.  The standards must   be developed for both alternating current and direct current.          SECTION 3.  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, 2023.