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| APRIL 2018
Energy, Environment and Transportation
Hardening the Grid: How States Are Working to Establish
a Resilient and Reliable Electric System
NATIONAL CONFERENCE OF STATE LEGISLATURES © 2018
The National Conference of State Legislatures is the bipartisan organization dedicated to serving the lawmakers and staffs of the nation’s 50 states, its commonwealths and territories.
NCSL provides research, technical assistance and opportunities for policymakers to exchange ideas on the most pressing state issues, and is an effective and respected advocate for the interests of the states in the American federal system. Its objectives are:
• Improve the quality and effectiveness of state legislatures
• Promote policy innovation and communication among state legislatures
• Ensure state legislatures a strong, cohesive voice in the federal system
The conference operates from offices in Denver, Colorado and Washington, D.C.
Hardening the Grid: How States Are Working
to Establish a Resilient and Reliable Electric System
BY DANIEL SHEA
CONTENTSIntroduction ........................................................................................... 1
Disaster Preparedness .......................................................................... 2
DamagePrevention:HardeningtheGrid andPlanningforDisaster .............................................................. 3
ServiceSurvivability:KeepingtheLightsOn ................................ 4
RapidRecovery:MinimizingtheDangerandDisturbance .......... 5
Grid Modernization and Resource Planning ....................................... 6
Energy Storage ....................................................................................... 7
Baseload Resources............................................................................... 8
Cybersecurity ......................................................................................... 9
Terrorism ............................................................................................. 10
Conclusion ............................................................................................ 10
NATIONAL CONFERENCE OF STATE LEGISLATURES 1
IntroductionQuestionssurroundingenergysecurityarebackinthespotlightafteraneventful2017.Themostdevas-tatinghurricaneseasonofthemodernerawascomplementedbypersistentwildfires,floodingandothernaturaldisastersthatwreakedhavoconelectricinfrastructure.Meanwhile,apolicyproposalfromEnergySecretaryRickPerrysoughttorewardcertainbaseloadelectricgeneratorsforresiliencyattributes.WhiletheFederalEnergyRegulatoryCommission(FERC)ultimatelystruckdowntheproposal,ithasnonethelesssparkeddebateoverthenatureofresiliencyandhowitshouldbevalued.
Theissueitselfcanbebroadlydefined,andismoreoftenbrokendownintoavarietyofsub-categories.Energysecuritytouchesonhowresilientenergysystemsareagainstextremeevents,howreliablysystemsoperateasthegridchangesandmodernizes,howwellthey’reprotectedagainstmaliciousattacks,alongwithhowwellfederal,stateandlocalgovernmentsprepareforthesescenarios.
Throughout2017,statelegislatureshavebeentacklingtheseissues,developingpoliciesaimedatestablishingareliableandresilientelectricsystem.Legislatorsinatleast40statesconsid-eredmorethan260billsthroughoutthe2017legislativesession,withmorethan35billsandresolutionsfromatleast16statespassing.
Statelegislaturesplayakeyroleintheprocessofdevelopingpol-iciesthatcontributetoenergysecurity.Theycansignalthelegis-lature’ssupportoroppositiontocertainpoliciesandinitiatives,likegridhardeningorgridmodernization,andurgeactiononthepartofthefederalgovernment.Theycaninitiatedialogue,establishstudycommitteestodeveloppolicyrecommenda-tionsorissuereports.Moredirectly,theycanprovidefunding,incentives,andmandatesfortechnologiesthathelpstrengthenthegrid.Inthesameway,theycanimposerestrictions,planningrequirementsoractionfromstateagencies.
Forthisreport,NCSLhasdividedenergysecurityintoseveralthemesintendedtoallowforgreaterconsid-erationofthevariouselementsthatmakeupthesomewhatnebuloussubject.In2017,asinrecentyears,thehighestnumberofbillscouldbecharacterizedasdisasterpreparednessbills,althoughonlyahalfdozenofthesepassedintolaw.
Muchmoreproductivewerebillsrelatedtolong-termplanning,gridhardeningandgridmodernization—includingmicrogridsandenergystorage.Infact,wemaylookbackat2017astheyearenergystoragebeganitsmoveintothemainstream,withmorethan20billsintroducedinatleast10states.Ultimately,nineenergystoragemeasurespassed.
Inaddition,statesconsideredmanmadethreatstotheelectricgrid,withlegislationthatfocusedoncyber-security,physicalthreatsandelectromagneticpulses(EMPs).
NATIONAL CONFERENCE OF STATE LEGISLATURES 2
Disaster PreparednessGiventheextentofthedamagein2017,itseemsincreasinglylikelythatstatelegislatureswillfindthem-selvesinundatedbydisasterpreparednesslegislationinthecomingyears.In2013,theyearfollowingSuperstormSandy,statelegislaturessawaneardoublingofenergysecuritylegislationintroduced,andonlyinthepastcoupleofsessionshasthenumberdropped.
Lastyearwasthemostdestructiveyearfornaturaldisastersinmodernhistory,withnearlyeveryregionofthecountryaffectedinsomeway.Notonlydid2017tiethepreviousrecordforthemostbillion-dollardisastersinacalendaryear—therewere16—butitwasbyfarthemostcostlyyearonrecord.Totalofficialdamagescameinat$306billion,whilethepreviousrecordwas$214billion,accordingtotheNationalOceanicandAtmosphericAdministration(NOAA).HurricaneHarveycaused$125billionindamagesonitsown,whileHurricanesMariaandIrmaaccountedforanother$140billion.
Bycomparison,SuperstormSandywasestimatedtohavecostabout$75billionindamages,whileHurri-caneKatrinawasabout$110billion.
Disasterpreparednessbillsfocusontheinevitabilityofyearslike2017.Theyaimtoreadythestateanditsenergyinfrastructurewiththreeprimarygoalsinmind:preventingdamage,increasingthesurviv-abilityofservice,andprovidingforarapidrecoveryintheaftermathofanevent.It’simportanttonote,however,theinterconnectivityofthevariouselements.Forexample,front-endinvestmentstoprotectthegridfromdamageandtomodernizethegridhelptoensurethegridcanrecoverfasteronthebackend,whilethesamecouldbesaidformicrogridsandothertechnologiesintendedtokeepthelightsonthroughoutanevent.
NorthDakota, SouthDakotaandMontanadrought,
Spring-Fall
Westernwildfires,Californiafirestorm,
Summer-Fall
Californiaflooding,Feb.8-11
ColoradohailstormandCentralsevereweather,
May8-11
Midwestsevereweather,June27-29
Midwestsevereweather,June12-16
South/Southeastsevereweather,March26-28
HurricaneHarvey, Aug.25-31
HurricaneIrma, Sept.6-12
HurricaneMaria, Sept.9-21
SoutherntornadooutbreakandWesternstorms, Jan.20-22
Southeastfreeze, March14-16
MissouriandArkansasfloodingandCentralsevereweather,April25-May7
Central/Southeasttornadooutbreak,Feb.28-March1
Midwesttornadooutbreak,March6-8
MinnesotahailstormandUpperMidwestsevereweather,June9-11
This map denotes the approximate location for each of the 16 billion-dollar weather and climate disasters that impacted the United States in 2017.
Source: NOAA
2017 U.S. Billion-Dollar Weather and Climate Disasters
NATIONAL CONFERENCE OF STATE LEGISLATURES 3
Theefficacyofthesefront-endinvestmentswasreinforcedinarecentreportfromtheNationalInstituteofBuildingSciences,whichupdatescost-estimatesforhowmuchmitigationprojectssaveonthebackendofadisaster.Accordingtothereport,every$1spentthroughfederalgrantstomitigatedamagefromdisastersavoids$6ofdisasterresponsecosts.Previousestimatesestablisheda$1-for-$4ratiousedinbudgetsandplanning.Thenewestimatecouldmaketheeconomiccaseeasierforpolicymakers.
Legislatorsfromatleast18statesconsideredmorethan60billsrelatedtodisasterpreparednessin2017.Anumberofthesemeasuresfocusedondamageprevention,includingfloodmitigationplanningrequirements,andbolsteringtree-trimmingpracticesforutilitiesorundergroundingelectricallines.Otherbillsfocusedonsurvivabilityofservice,requiringbackupgenerationatcriticalfacilities,likepublicshelters,hospitalsandhousingdevelopments.Stillothersdealtwithfacilitatingarapidrecovery,includingtheexemptionofout-of-stateworkersfromstateandlocaltaxesandregistrationrequirementsfordisasterrecoverywork.
Damage Prevention: Hardening the Grid and Planning for DisasterStatelegislatureshaveworkedtomitigatethedamagedonebyextremeweathereventsbyencouragingutilitiestoinvestinupgrades,maintenanceandplanningformoreresilientinfrastructure.Theymayre-quireutilitiesunderthejurisdictionofstateregulatorstomakeinvestmentsthroughintegratedresourceplans,inadditiontorequiringthatcertainregionsandfacilities—especiallythosepronetocertaintypesofdamage,likeflooding—developplanstoaddressvulnerabilities.Inaddition,somestateshaveurgedthefederalgovernmenttoreassessandissuenewstandardsforreliabilityandredundancyonthepowergrid.
Theconceptofundergroundingelectricallinesfallsunderthiscategory,andatleastthreestates—Illinois,NewJerseyandVirginia—introducedmeasuresthatwouldhaverequiredtheundergroundingofcertainelectricallinesforaddedresiliency.Whilethereissignificantinterestinundergrounding,fiscalrealitiesoftenlimitwidespreadimplementation,asmostindustryestimatesputthecostatabout$1millionpermile.
Statescanalsoprovidefinancingoptionsandassistancewithgridhardeningprojects,asNewJerseydidin2014whenitestablishedanEnergyResilienceBank.Otherstates,suchasConnecticutandNewYork,haveauthorizedcleanenergybankstoalsofinanceresiliencyprojects.
Inall,atleastsixstatesconsidered42billsrelatedtodamagepreventionfortheenergysector,withthreemeasurespassingin2017.NewJerseyaloneintroducednearly30bills,noneofwhichpassed.
KEY BILLS FROM 2017
n IL S.B. 1494 (pending)wouldamendthemunicipalcodetorequirethatallnewelectrictransmissionlinesover138kilowattstobeundergrounded,andtoallowutilitiestorecoverthecostfromconsumers.
n MA S.B. 2196/H.B. 2147 (pending)wouldestablishacomprehensiveadaptationmanagementplaninpreparationforactualandexpectedchangesintheenvironmenttoenhanceresiliencyandreducevulner-abilitytonaturalevents.
n NJ S.B. 216 (pending)wouldrequiretheinstallationofemergencypowersupplysystemstocertaincommonareasofnewrealestatedevelopments,andprovidetaxincentives.
n ND H.C.R. 3010 (adopted)recognizestheeffortsundertakenandthecontinuedneedforNorthDakotaandtheUnitedStatestoundertakeresponsiblemeasurestohardenthecommercialelectricgridagainstmultipleseriousthreats.
n VA S.B. 1473 (enacted)declaresthatitisinthepublicinterestthatcertainexistingoverheadelectricallineswithanelevatedhistoryofunplannedoutageeventsoverthepast10yearsshouldbereplacedbyundergroundlinestoincreasesystemreliability,andthatassociatedcostsarepresumedtobereasonableandprudent.
NATIONAL CONFERENCE OF STATE LEGISLATURES 4
Service Survivability: Keeping the Lights OnWhilepartsofthegridmaybedown,backupgeneratorsandmicrogridscankeepcertainloadspoweredandoperational,whichisespeciallyimportantforcriticalfacilities.Microgridshavereceivedsignificantconsiderationinrecentlegislativesessions—andnotonlyfortheirabilitytosupplypowerandruninde-pendentlyofthegrid,butalsofortheirabilitytosupportthegrid’snormaloperationsthroughfrequencyresponseandvoltageregulation.
In2017,therewereatleast24billsintroducedinsevenstatesrelatingtomicrogrids,althoughConnecticutwastheonlystatetopassmeasures.NewJerseyconsideredatleast11billsandNewYorkconsideredatleastfour.
PerhapsnostatehasbeenmoreaggressiveinestablishingpoliciestosupportmicrogriddevelopmentthanConnecticut.FollowingtheimpactfromSuperstormSandyin2012,thestatehasenactedfourprimarypoliciestouchingonmicrogrids.
First,itestablishedapilotprogram,offering$18milliontowardninemicrogridprojectstargetingcriticalfacilities—| aprogramwhichwassuccessfulenoughtomeritasecondroundwithanadditional$30million.Afterthat,Connecticutincludedmicrogridprojectsunderitsdefinitionof“energyimprovements”thatthestate’sgreenbankcouldassistwithfinancing.Thiswasfollowedbylegislationthatincludedmicrogridsunderprojectsthatlocalgovernmentscandevelopunder“energyimprovementdistricts.”Finally,in2017,thelegislatureincludedmicrogridsinitsPropertyAssessedCleanEnergyfinancingprogram.
Statelegislaturesalsomayrequirethatcertaintypesofcriticalfacilitieshavebackupgenerators,orthatnewresidentialdevelopmentsincludecommunityspaceswiththesebackups.Severalbillsincentivizenat-uralgas-poweredcogeneration,whichcananchormicrogridsandrelyonpipelineinfrastructure—oftenmoreresilientthanelectricallines.
Inaddition,legislaturescanenactpoliciesthatimposerequirementstoensurethatcertainmotorfuelstorage,distributionanddispensingfacilitiesremaininoperationduringadisaster,andaddressconcernsrelatedtoprice-gouging.
KEY BILLS FROM 2017
n CT H.B. 7208 (enacted)includesmicrogridsinthecommercialpropertyassessedcleanenergyfinancingprogram.
n CT H.B. 7036 (enacted)promotestheuseoffuelcellsfordistributionsystembenefitsandreliability,includingtheiruseinmicrogrids,andamendsrelatedprogramsandrequirementstoincludefuelcells.
n NJ A.B. 5184 (failed-adjourned)woulddirecttheNewJerseyBoardofPublicUtilitiestoadoptcertainstandardsfordistrictenergycollaborativeandestablishagrantprogramforcogenerationfacilities.
n NY A.B. 8212 (failed)wouldestablishagrantprogramundertheNewYorkStateEnergyResearchandDevelopmentAuthoritytoawardfundingformicrogridprojects.
NATIONAL CONFERENCE OF STATE LEGISLATURES 5
Rapid Recovery: Minimizing the Danger and DisturbanceFinally,statesarepursuingmeasurestofacilitatearapidresponsetodisasters.SixmonthsafterHurricaneMariahitPuertoRico,morethan10percentoftheisland’sresidentswerestillwithoutpower.Similarly,ittooktheU.S.VirginIslandsmorethanfourmonthstofullyrestorepowerafterbeinghitbyHurricanesIrmaandMaria.BothU.S.territorieshaveproventobetragictalesofwhathappensintheabsenceofelectricity:watersystemsfail,theeconomygrindstoahalt,foodgoesbadandpublichealthisatrisk.
Meanwhile,therecoveryinotherareashasbeenmuchquick-er—inpartbecausethey’reeasiertoaccess.AfterIrmahittheSoutheast,knockingoutpowerto7.8millioncustomers,60,000utilityworkersfromacrossthecountrydeployedandrestoredpowerto97percentofthepopulationinaboutaweek.FloridaPower&Light,whichinvestedabout$3billioningridharden-ingoverthepastdecade,saidtherestorationeffortswerefourtimesfasterthanafterHurricaneWilmain2005.
Stateshavesoughttofacilitatethatkindofrapidresponsebyallowingout-of-stateutilityworkerstopourintoaregioninthewakeofadisastertorebuildthedamagedinfrastructure.Thesebillsoftenexemptout-of-stateworkersfrompayingcertainstateandlocaltaxesorlimitingtheirliabilitywhileperformingdisasterresponsework.In2017,NorthDakotawastheonlystatetopassthistypeoflegislation,butNewJerseyandNewYorkalsoconsideredbills.
Inaddition,HawaiiandIndianaconsideredlegislationthattouchedonplanningforarecoverytoensurethatstateagenciesandofficialswouldbereadytoactivatecertainprotocolintheeventofanemergency.
KEY BILLS FROM 2017
n HI S.B. 909 (enacted)providespolicyguidanceonpreparingfor,respondingtoandrecoveringfromanenergyemergencyorenergysupplydisruption.
n ND S.B. 2199 (enacted)facilitatesentryofanout-of-statebusinesstoperformdisasteroremergencyremediationworkinthestatebyexemptingthemfromstateandlocaltaxes,fees,andlicensingrequire-mentsduringtherecoveryperiod.
NATIONAL CONFERENCE OF STATE LEGISLATURES 6
Grid Modernization and Resource PlanningSmartgridtechnologiescanservetohelputilitiesassessdamageandrecoverfromnaturaldisastersmorequickly,inadditiontoallowingcustomerstouseenergymoreefficientlyandgridoperatorstomanagesystemsmoreeffectively.Onaday-to-daybasis,gridmodernizationinitiatives—includingsmartmeterdeployment,integrationofdistributedgeneration,energystorage,demandresponse,distributionsystemmanagement,andmuchmore—facilitateamorereliableelectricgrid.
Oftenthefundingforgridmodernizationiswrappedintoautility’sintegratedresourceplan(IRP),butseveralstateshaveprovidedadditionalfundingtospurinvestmentsthroughgrantprograms.IRPsarethevehiclesforensuringlong-termresourceandinfrastructureadequacy,andallowutilitiestoaddressvari-oussystemdeficiencies.Inthissameway,statelegislaturescanpasslawsthatrequireregulatorsandutilitiestomakeconsider-ationsandinvestmentsthatmeetstategoals.
Atleastsevenstatesconsidered13billsrelatedtoIRPsin2017,whileanotherninestatesconsideredcloseto20billsthatwouldhavepromotedgridmodernizationinitiatives.Meanwhile,atleastsevenstatesconsideredresolutionsthaturgedfederalandstateagenciesandutilitiestoinvestingridmodernization,withspecialconsiderationgiventoadvancedandinnovativetrans-missionlines.
KEY BILLS FROM 2017
n CA S.B. 338 (enacted)requiresstateelectricutilityregulatorstoconsidertheroleofenergytechnologiesandenergyefficiencytoolsintheintegratedresourceplanningprocesstoensureenergyandreliabilityneedsaremet,whilereducingtheneedfornewgenerationandtransmission.
n LA H.R. 161 (adopted)requeststheLouisianaPublicServiceCommissiontopromotethedeploymentofadvancedtransmissiontechnologies.
n MN S.B. 1456 (enacted)establishesaLegislativeEnergyCommissiontostudyandmakerecommenda-tionstotheLegislature,requiresutilityownersofthestate’stwonuclearplantstopayintoaRenewableDevelopmentAccount,whichcanbeusedongridmodernizationefforts,includingrenewableintegration,storage,loadcontrol,smartmeters,microgrids,demandresponseorinnovativeprojectstoreducede-mandorincreaseefficiencyandflexibility.Nuclearplantsmustpaybetween$350,000and$500,000foreverydrycaskofspentfuelstoredattheplantforeachyeartheplantisinoperation.
n NM S.J.M. 21 (adopted)encouragesstateagenciestosupportthedevelopmentofanenergyroadmapforNewMexico.
n TN H.B. 438 (enacted)createstheEnergyPolicyCounciltomakerecommendationstothegovernorandGeneralAssemblyonhowtomanageenergyresourcesinthestate.
n WA S.B. 5965 (enacted)allocates$13millioninfundingforgrantstoadvancedtransmissionanddistri-butioncontrolstoenhancereliabilityandresiliencyoftheelectricgrid,includinggrantsforresearchanddevelopmentforsmartgridtechnologiesandgridmodernization.
NATIONAL CONFERENCE OF STATE LEGISLATURES 7
Energy StorageEnergystoragecouldhavefitneatlyintotwoofthepreviouscategories:survivabilityofserviceandgridmodernization.However,itseemsappropriatetohighlightthegrowingtechnologybecauseofthedegreetowhichstatelegislatureshavemovedforwardwithenergystoragemeasuresin2017.
Atleast10statesconsideredabouttwodozenenergystoragemeasuresduringthe2017legislativesession,withatleastninemeasuresenacted.Thesebillsrequirestateagenciestoconductstudies,establishgoalsandprovidefundingforenergystorageinitiatives.Sofar,threestateshaveestablishedenergystorageprocurementmandates—California,MassachusettsandOregon.NevadaandNewYorkalsocommittedtoestablishingmandates,requestingthatstateregulatorsestablishtargets.
Themeasuresappearlessfocusedontheresiliencyattributesofferedbyenergystoragethanthereliabilityattributes—focus-ingontheabilitytorespondquicklytosystemrequirementsandmanagetheintermittencyissuesassociatedwithahighpene-trationofrenewables.Duetoitsabilitytoactasbothloadandgenerator,energystorageprovidessystemflexibilitiesthatareincreasinglyattractivetosystemoperatorsthatnotonlyhavetomanagechangesinload,butalsorapidchangesinsupply.
Stateshavealsoexpressedaninterestinhowthegridcanbene-fitfromtheenergystoragethat’sbeendeployedrollingaroundcitystreets.Electricvehiclesarerollingbatteries.Getenoughofthemorganized,andtheycouldserveasasubstantialassettothegrid.Severalstateshaveconsideredbillstostudyandimplementpilotprojectsforvehicle-to-gridtechnology.
KEY BILLS FROM 2017
n CA A.B. 546 (enacted)requirescertaincitiesandcountiestomakeallpermittingdocumentationandrequirementsforadvancedenergystoragesystemsavailableonpublicwebsites,includingprovidingappli-cations,guidance,bestpracticesandotherfactorsunderconsiderationbylocalgovernment.
n MD H.B. 773 (enacted)requiresthePowerPlantResearchProgramtostudyregulatoryreformsandmarketincentivesthatcouldbebeneficialtoenergystorageinthestate.
n LA H.R. 133 (adopted)requeststheLouisianaPublicServiceCommissiontostudyaresidentialbatterystoragepilotprojectandfeasibilityofimplementation.
n NV S.B. 145(enacted)establishesaprogramforthepaymentofincentivesfortheinstallationofcertainenergystoragesystemsundertheSolarEnergySystemsIncentiveProgram,inadditiontocreatingtheElectricVehicleInfrastructureDemonstrationprogram.
n NV S.B. 204(enacted)requirestheNevadaPublicUtilitiesCommissiontoinvestigateandestablishbiennialtargetsforcertainutilitiestoprocureenergystoragesystems,andrequiressystemsprocuredbyutilitiestomeetcertaincriteria.
n NY A.B. 6571(enacted)establishesanEnergyStorageDeploymentProgramtoencouragetheinstal-lationofqualifiedenergystoragesystems.Thegovernorhassignedthelawontheconditionthatthelegislaturepassamendmentsnextyear,whichwouldsendthemattertotheNewYorkPublicServiceCommissiontostudythematterandestablishaprogramforthestate.
n VA H.B. 1760(enacted)authorizedutilitiestopetitiontheVirginiaCorporationCommissionforap-provalofarateadjustmentforrecoveryofcostsofforpumpedhydroelectricitygenerationandstoragefacilitiesthatutilizerenewableenergyandarelocatedinthecoalfieldregionofVirginia.
NATIONAL CONFERENCE OF STATE LEGISLATURES 8
Baseload ResourcesTheroleoflegacybaseloadgenerators—primarilycoalandnuclearplants—hasbeenthefocusofsignif-icantdebateoverthepastseveralyears,butitclearlyintensifiedin2017.Astheelectricsystemchangesrapidly,therehavebeenconcernsovertheeffectthatincorporatingnewtechnologiesandsystemscouldhaveonelectricreliability.Theshifttowardnaturalgas-firedgeneratorsandrenewables,inparticular,hascausedcoalandnuclearplantstostruggleinthecurrentmarketenvironmentandevenforcedplantstoshutdown.
Withtheseconcernsasabackdrop,EnergySecretaryRickPerrycommissionedastaffreportongridreliability,followedbyadi-rectivefortheFederalEnergyRegulatoryCommission(FERC)tomandatethatcompetitivemarketsvaluefuel-secure,baseloadresourcesthroughaGridResiliencyPricingRule.Thedirectivehasbeenhighlycontroversial,andinJanuary2018FERCunan-imouslyrejectedtheproposal.However,thedebateoverthenatureofelectricitypricingandhowtoaccountforreliabilityandresiliencyappearstohavejustbegun.
Stateshavebeenaddressingthisinvariouscapacitiesforseveralyears—eitherthroughresolutionsthaturgedthefederalgov-ernmenttorelaxenvironmentalregulationsduetotheeffectcoalplantretirementscouldhaveonthegrid,ormorerecentlythroughpoliciestoprovidefinancialsupporttonuclearplants.Sofar,IllinoisandNewYorkhaveimplementednuclearsupportpolicies,whileConnecticutrecentlypassedlegislationthatgivesstateagenciesthatoption.Severalotherstateshavealsoconsid-eredpoliciestoprovidefinancialsupporttocoalplants.
Thesestatepolicieshaveforcedsomeregionalgridoperatorstointroducetheirownproposalstochangethewaymarketscompensatevariousresources.
In2017,sixstatesconsideredmorethanadozenbillsinsupportofbaseloadresources.
KEY BILLS IN 2017
n CT S.B. 501 (enacted)givesstateagenciestheoptionofallowinganuclearplanttosellupto75percentofitselectricityinamarketsetasideforrenewableenergy,ifdeemedintheinterestofthestateandratepayers.
n ND S.C.R. 4008 (adopted)urgesthefederalgovernmenttorefrainfromregulationsthatcouldthreatenelectricreliabilityandtosupportresearchanddevelopmentfornext-generationcarbon-basedtechnolo-gies.
n PA S.R. 227/H.R. 576(adopted)urgesFERCtoswiftlyconsidertheU.S.DepartmentofEnergy’sproposedGridResiliencyPricingRuleandimplementpoliciestoensurefuel-securebaseloadelectricgen-erationresourcesreceivepropercompensationforthepositiveattributestheyprovidetothecommon-wealth’selectricsystem.
n VA H.B. 2291(enacted)allowsutilitiestopetitiontheVirginiaCorporationCommissionforaratead-justmentforrecoveryofcostsrelatedtoupgradingsystemsandequipmentatanucleargeneratingfacilityforthepurposeofextendingthefacility’soperatinglicensewiththeNuclearRegulatoryCommission.
NATIONAL CONFERENCE OF STATE LEGISLATURES 9
CybersecurityTherapidriseincyberattackshasbeencauseforconcernthroughouttheU.S.economy,andtheenergysectorisnoexception.Theenergyindustrywasthemostheavilytargetedsub-sectorofallU.S.criticalinfrastructure,beforeattackersturnedtheirattentiontowaterandwastewatersystemsoverthepasttwoyears,accordingtotheU.S.DepartmentofHomelandSecurity.
Cybersecurityisanincreasinglyimportantconsiderationinlightofgridmodernizationefforts.New,intel-ligentcomponentsareworkingintandemwithlegacyequipmentthatmaybedecadesold.Informationtechnologyandoperationstechnologyhaveconverged,linkingcomputersystemswithphysical,equip-ment-orientedtechnologies.
Withthoseadvancementshascomeanincreasedsusceptibilitytocyberintrusions,andaheightenedefforttocoordinateamongindustryandgovernmententitiestopromoteanddeploythemosteffectivedefenses.Giventhecomplexityandevery-chang-ingnatureofcybersecurity,communicationbetweenindustryandgovernmenthasbeeninstrumentaltoensuringcommonvulnerabilitiesareaddressedbeforesystemsarecompromised.
TheelectricpowerindustrycoordinateswiththeNorthAmer-icanElectricReliabilityCorporation(NERC),alongwiththeNationalSecurityAgency(NSA),theFederalEnergyRegulatoryCommission(FERC),theU.S.DepartmentofHomelandSecurity(DHS)andtheU.S.DepartmentofEnergy(DOE).FERChasap-provedcybersecuritystandardsdevelopedbyNERC,andthetwoorganizationsreleasedajointrestorationandrecoveryreportin2017thatofferedadditionalrecommendationstoentitiesthatwouldberesponsibleforrestoringthegridintheabsenceofthemoderncontrolsystems.
Thatisn’ttosaystatesaresittingonthesidelines.AnumberofstatesparticipateinNERC-sponsoredgridsecurityexerciseslikeGridEx,whilealsoexploringwaystostrengthenthegrid’scyberdefensesandensurestateagenciesarepreparedforrecoveryandrestorationefforts.
Thirtybillswereintroducedinstatelegislaturesthissessionthatdealwithcyberthreatstocriticalinfra-structure.Ofthose,atleastsevenbillspassed.Themajorityofthebillswouldaccomplishtwoitems:Createataskforceorcommitteetoconsidertheissue,orrestrictpublicdisclosurethroughtheFreedomofInformationAct(FOIA)ofcertaininformationthatcouldrevealcybervulnerabilitiestocriticalinfra-structure.
IowapassedtwoFIOAexemptionbills(IAH.B.445andIAH.B.601),whileVirginiapassedthree(VAH.B.817,VAS.B.645,andVAH.B.1539).Virginia’sbillsinparticularfocusspecificallyonvulnerabilitiestocriticalinfrastructure,informationrelatedtoresponseplansandplanningactivitiesandinformationthatwouldhinderantiterrorismefforts.Formoreinformationonstateandfederaleffortstoexemptcertaincriticalenergyinfrastructure,NCSLrecentlypublished,“OpenGovernmentLawsandCriticalEnergyInfra-structure.”
Atleastsixstates—California,Nevada,NewJersey,NewYork,TexasandWashington—consideredmea-surestoestablishtaskforcesorstudycommittees.
KEY BILLS FROM 2017
n AL H.R. 88(adopted)urgesprotectionoftheU.S.electricgridfromcyberthreats.
n NM S.B. 380 (enacted)authorizestheactivationoftheNationalGuardinresponsetoacybersecuritythreatundervariouscircumstances,includingtheprotectionofcriticalinfrastructure.
n NY S.B. 4615(pending)wouldoffertaxcreditsforthepurchaseofdatabreachinsuranceforbusinesses.
NATIONAL CONFERENCE OF STATE LEGISLATURES 10
Terrorism Thetopicofterrorismandphysicalassaultstoenergyinfrastructurecontinuestobeaconcernforpolicy-makers.Thesethreatsincludeeverythingfromagunmanshootinganddestroyingpartofakeysubstationtoahigh-altitudenuclearweapondetonationthatresultsinanelectromagneticpulse(EMP)attack.
TheDepartmentofEnergyissuedafinalruleinJanuary2018thatgrantstheenergysecretarybroadauthoritytoorderemergencymeasurestoprotectandrestoretheelectricgridintheaftermathofagridsecurityemergency,asdeclaredbythepresident.Accordingtotherule,suchanemergencycouldresultfromaphysicalattack,cyberattackorEMPeventthatresultsinsignificantdamagetocriticalelectricinfrastructure.Thefinalruleisintendedtoensurethat,intheeventofsuchanemergen-cy,thefederalgovernmenthastheauthoritytoissueemergencyordersundertheFederalPowerActthatwillminimizedamageanddisruption.
Atleastsevenstatesconsiderednearly20measuresrelatingtoprotectingtheenergyindustryandcriticalinfrastructurefromthesephysicalattacks.Texasintroducedninebills—noneofwhichpassed—whileMaine’sgovernorvetoedameasurethatwouldhaverequiredutilitiesinthestatetobeginpreparingforandreportingonactionstoinsulatethestate’sinfrastructurefromtheeffectsofanEMPattack.ThecostsassociatedwithEMPprotectionshaveoftenproventobebarrierstothepassageofthesetypesofmeasures.
KEY BILLS FROM 2017
n ND H.C.R. 3010(adopted)recognizestheeffortsundertakenandcontinuedneedforthestateandU.S.tohardenthecommercialpowergridagainstmultipleseriousthreats,includinganelectromagneticpulse(EMP).
n ME H.B. 373 (vetoed)wouldhaverequiredelectriccompaniestoreporttotheMainePublicUtilitiesCommissionannuallyonactionstakenregardingprotectionsfromgeomagneticdisturbancesandEMPs,andrequiresthecommissiontocompiletheinformationreceived.
n OK H.B. 1123 (enacted)prohibitstrespasswithoutownerpermissionforcriticalfacilities,andprovidespenaltiesforpersonswhowillfullydamage,destroy,vandalizeorotherwisetamperwithcriticalinfrastruc-turefacilitiesusedfor:petroleumrefining,electricgeneration,chemicalmanufacturing,waterinfrastruc-ture,telecommunications,ports,railroads,damsandpipelines.
ConclusionStatelegislatorscontinuedtoadvancemeasuresthataddressthemanyaspectsofenergysecurityin2017,workingtoensurethatresidents,businessesandindustrieshaveaccesstothereliableenergytheyneed.Theseeffortscontinuetoadapttothechangingoperatingenvironment,asthegridgrowsincreas-inglyconnectedandcomplex.
In2018,weexpecttoseeacontinuationofmanyofthetrendsfrompreviousyears,withaparticu-larfocusonenergystorage,microgridsandgrid-hardeningmeasuresinresponsetothedevastationwroughtinthepreviousyear.Inaddition,itappearsincreasinglylikelythatcontinuedstatedecisionstoincentivizecertainresourceswillforcemarketoperatorstomakefundamentalchangestothewaytheypriceelectricity.
William T. Pound, Executive Director
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NCSLContact:
Daniel Shea Energy Policy Specialist
