Relating to the resilience of the electric grid and certain municipalities.

89(R) SB 75 - Enrolled version - Bill Text

S.B. No. 75

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 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, health care 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;

(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

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superseded social distancing protocols;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:

(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;

(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:

(A) prioritize grid security and resilience; and

(B) 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. Section 38.077, Utilities Code, is amended to

read as follows:

Sec. 38.077.
RELIABILITY
[
LOAD SHEDDING
] EXERCISES. (a)

In this section, "critical facility" means a transmission

substation and any associated control centers that, if rendered

inoperable or damaged because of a physical attack, could cause

widespread instability, uncontrolled separation, or cascading

outages within an interconnection.

(b)
The commission and the independent organization

certified for the ERCOT power region
under Section 39.151
shall

conduct simulated or tabletop load shedding exercises with

providers of electric generation service and transmission and

distribution service in the ERCOT power region.

[
(b)
] The commission shall ensure that each year at least

one simulated or tabletop
load shedding
exercise is conducted

during a summer month and one simulated or tabletop
load shedding

exercise is conducted during a winter month.

(c)

The commission and the independent organization

certified for the ERCOT power region under Section 39.151 shall

conduct simulated or tabletop exercises with providers of electric

generation service and transmission and distribution service in the

ERCOT power region to mitigate and prepare for a threat of an attack

or an actual physical attack on a critical facility. The exercises

required by this subsection are in addition to the exercises

required by Subsection (b) and any requirements of the North

American Electric Reliability Corporation Critical Infrastructure

Protection plan standards. The commission and the independent

organization shall conduct the exercises under this subsection at

least once every two years.

(d)

A simulated or tabletop exercise conducted under

Subsection (c) must identify the roles and responsibilities of the

following in the event of a threat of an attack or an actual

physical attack on a critical facility:

(1) transmission and distribution service providers;

(2) providers of electric generation service;

(3) law enforcement;

(4)

the independent organization certified for the

ERCOT power region under Section 39.151; and

(5) the commission.

(e)

A transmission and distribution service provider is not

required to disclose the specific location of the provider's

critical substations to the commission or the independent

organization certified for the ERCOT power region under Section

39.151 for the purposes of a simulated or tabletop exercise

conducted under Subsection (c).

(f)

Each provider of electric generation service and of

transmission and distribution service that participates in a

simulated or tabletop exercise conducted under Subsection (c) shall

provide to the independent organization certified for the ERCOT

power region under Section 39.151 a written attestation that the

provider has coordinated with law enforcement when identifying

roles and responsibilities under Subsection (d).

SECTION 3. 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

pulses, 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)

"Public utility"

means an entity that generates,

transmits, or distributes electric energy to the public, including

an electric utility, an electric cooperative, a municipally owned

utility, and a river authority.

(4)

"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;

(6)

a representative of transmission and distribution

utilities, electric cooperatives, municipally owned utilities, and

river authorities appointed by the chief of the Texas Division of

Emergency Management; and

(7)

at the discretion of the security commission's

presiding officer, any other representative of a state agency,

board, commission, or organized volunteer group designated by the

head of that entity.

(b)

The Texas Division of Emergency Management shall

designate a member of the security commission to serve as presiding

officer.

(c)

The security commission shall convene at the call of the

presiding officer.

(d)

The security commission shall report to the chief of the

Texas Division of Emergency Management.

(e)

A vacancy on the security commission is filled by

appointment for the unexpired term in the same manner as the

original appointment.

(f)

To the extent possible, individuals appointed to the

security commission must be residents of this state.

(g)

The chief of the Texas Division of Emergency Management

may 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)

The presiding officer of the security commission or the

chief of the Texas Division of Emergency Management may 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)

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 critical infrastructure

of 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 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 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 United States Cyberspace Solarium Commission,

including by:

(1)

identifying means to ensure that measures taken to

increase resilience of critical infrastructure 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)

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

United States 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 inform the

security commission's recommended standards for protecting

critical 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 critical infrastructure 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 pulses;

(2)

public 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

infrastructure 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 December 1, 2026, the security commission

shall prepare and deliver a report to the legislature on the

security commission's recommended resilience standards, the

estimated costs associated with implementing the recommended

standards, the potential effects if the recommended standards are

not implemented, and the anticipated timeline for implementation of

the recommended standards.

Sec.

44.006.

MICRO-GRIDS.

The security commission shall

recommend resilience standards for micro-grids.

The standards must

be developed for both alternating current and direct current.

Sec.

44.007.

PLAN FOR ALL HAZARDS RESILIENCE. (a) Not

later than December 1, 2026, the security commission shall prepare

and deliver to the legislature a plan for protecting critical

infrastructure from all hazards, including a catastrophic loss of

power in the state.

(b) The plan must include:

(1)

any weatherization recommendations in addition to

requirements established under Section 35.0021 necessary to

prevent outages of critical infrastructure from extreme cold

weather events, an analysis of whether these recommendations would

induce cyber vulnerabilities, and an analysis of the associated

costs for these recommendations;

(2)

recommendations 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)

recommendations 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 critical

infrastructure to meet resilience standards recommended by the

security commission under Section 44.005;

(5)

long-term resilience recommendations for

supporting industries, including:

(A) communications;

(B) food supply;

(C) fuel supply;

(D) health care;

(E) nuclear reactors, materials, and waste;

(F) transportation; and

(G) water and sewer services; and

(6)

any additional recommendations considered

necessary by the security commission.

(c)

The security commission may consult with the Private

Sector Advisory Council in developing the plan.

Sec.

44.008.

CRITICAL INFRASTRUCTURE 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 critical infrastructure 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.

SECTION 4. Not later than December 31, 2026, the Public

Utility Commission of Texas and the independent organization

certified under Section 39.151, Utilities Code, for the ERCOT power

region shall conduct a simulated or tabletop exercise with each

provider of electric generation service and of transmission and

distribution service as required by Section 38.077(c), 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 III, Texas Constitution. If this

Act does not receive the vote necessary for immediate effect, this

Act takes effect September 1, 2025.

______________________________

______________________________

President of the Senate

Speaker of the House

I hereby certify that S.B. No. 75 passed the Senate on

April 16, 2025, by the following vote: Yeas 31, Nays 0; and that

the Senate concurred in House amendments on May 26, 2025, by the

following vote: Yeas 31, Nays 0.

______________________________

Secretary of the Senate

I hereby certify that S.B. No. 75 passed the House, with

amendments, on May 21, 2025, by the following vote: Yeas 144,

Nays 0, two present not voting.

______________________________

Chief Clerk of the House

Approved:

______________________________

Date

______________________________

Governor