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                                                       Calendar No. 270
116th Congress  }                                            {   Report
                                 SENATE
 1st Session    }                                            {  116-149

======================================================================



 
                     GRID MODERNIZATION ACT OF 2019

                                _______
                                

                October 24, 2019.--Ordered to be printed

                                _______
                                

        Ms. Murkowski, from the Committee on Energy and Natural 
                   Resources, submitted the following

                              R E P O R T

                         [To accompany S. 2332]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 2332) to provide for the modernization of 
the electric grid, and for other purposes, having considered 
the same, reports favorably thereon without amendment and 
recommends that the bill do pass.

                                PURPOSE

    The purpose of S. 2332 is to provide for the modernization 
of the electric grid.

                          BACKGROUND AND NEED

    The United States' electric grid is comprised of a vast 
network of transmission and distribution systems that deliver 
electricity from producers to consumer homes and businesses. 
Many sectors of our economy, including healthcare and 
manufacturing, simply cannot operate without a reliable supply 
of electricity.
    Large, centralized fossil fuel-fired resources have 
historically provided the majority of electricity generation in 
the United States. Recently, however, the generation fuel mix 
has moved toward an increased use of intermittent renewable 
resources and decentralized, behind-the-meter sources of power. 
For example, in 1998 coal accounted for approximately 55 
percent of electricity generation, and non-hydropower 
renewables accounted for just over one percent. In 2018, coal 
declined to only 27.4 percent of generation, and non-hydropower 
renewables increased to slightly over 10 percent.
    Such a dramatic shift in the power supply mix has required 
utilities to spend a significant amount on upgrades and 
additions to transmission infrastructure. In 2016 and 2017 
alone, utilities regulated by the Federal Energy Regulatory 
Commission (FERC)--which represent about 70 percent of all 
electricity demand in the country--spent over $40 billion on 
capital additions for transmission infrastructure. Utilities 
have also invested significantly in energy storage, which helps 
to balance the output of renewable resources. According to Wood 
Mackenzie Power & Renewable's recent report, ``Global Energy 
Storage Outlook 2019: 2018 Year in Review and Outlook to 
2024,'' U.S. energy storage deployments will grow thirteen fold 
over the next six years, with $71 billion in investment.
    S. 2332 would provide the Department of Energy (DOE) with 
the tools it needs to facilitate this grid transition and 
support industry and states as they adapt to the energy needs 
of the future. Specifically, the bill authorizes research, 
development, and demonstration programs at DOE for energy 
storage, distribution infrastructure, and microgrids. It also 
requires DOE to develop model grid architecture and model 
policy pathways to modernize the electric grid.

                          LEGISLATIVE HISTORY

    S. 2332 was introduced by Senators Cantwell, Heinrich, and 
Hirono on July 30, 2019.
    In the 115th Congress, a similar measure was included as 
title II, subtitle D, in S. 1460, the Energy and Natural 
Resources Act of 2017. S. 1460 was introduced by Senators 
Murkowski and Cantwell on June 28, 2017, and placed directly on 
the Legislative Calendar (Cal. 162).
    In the 114th Congress, a similar measure was included as 
title II, subtitle D, in S. 2012, the Energy Policy 
Modernization Act of 2016. An original bill, S. 2012 was 
reported by the Committee on Energy and Natural Resources on 
July 30, 2015, and passed by the Senate, as amended, on April 
26, 2016, by a vote of 85-12.
    The Senate Committee on Energy and Natural Resources met in 
open business session on September 25, 2019, and ordered S. 
2332 favorably reported.

                        COMMITTEE RECOMMENDATION

    The Senate Committee on Energy and Natural Resources, in 
open business session on September 25, 2019, by a majority 
voice vote of a quorum present, recommends that the Senate pass 
S. 2332. Senators Barrasso and Lee asked to be recorded as 
voting no.

                      SECTION-BY-SECTION-ANALYSIS

Section. 1. Short title; table of contents

    Section 1 sets forth the short title of the bill and 
includes a table of contents.

Sec. 2. Definitions

    Section 2 provides key definitions.

Sec. 3. Grid storage program

    Section 3(a) directs the Secretary of Energy (Secretary) to 
conduct a program of research, development, and demonstration 
of grid-scale energy storage that addresses the principal 
challenges identified in the 2013 Department of Energy 
Strategic Plan for Grid Energy Storage.
    Subsection (b) specifies the program's focus areas, 
including systems research; power conversion technologies 
research; grid-scale testing and analysis of storage devices; 
and electric storage device safety and reliability.
    Subsection (c) authorizes the Secretary to provide 
technical and financial assistance to States, Indian Tribes, or 
units of local government to participate in or use the program.
    Subsection (d) authorizes $50 million for each of fiscal 
years (FYs) 2020 through 2028 for purposes of this section.
    Subsection (e) states that nothing in this Act shall 
conflict with or duplicate regulatory requirements or mandatory 
standards pursuant to section 215 of the Federal Power Act (16 
U.S.C. 824o).
    Subsection (f) directs the Secretary to ensure that the use 
of funds to carry out this section is coordinated among all 
Department offices within the Grid Modernization Initiative and 
other programs conducting energy storage research.

Sec. 4. Technology demonstration on the distribution system

    Section 4(a) requires the Secretary to establish a grant 
program to carry out projects related to the modernization of 
the electric grid, including for distribution system 
technologies.
    Subsection (b) specifies that to be eligible for the grant 
program projects must be: (1) designed to improve the 
performance and efficiency of the future electric grid: and (2) 
demonstrate (A) secure integration of two or more energy 
resources and (B) secure integration and interoperability of 
communications and information technologies.

Sec. 5. Micro-grid and hybrid micro-grid systems program.

    Section 5(a) provides key definitions for this section.
    Subsection (b)(1) requires the Secretary to establish a 
program to promote the development of: (A) hybrid micro-grid 
systems for isolated communities and (B) micro-grid systems to 
increase the resilience of critical infrastructure.
    Subsection (b)(2) divides the program into the following 
five phases: Phase I consists of developing a feasibility 
assessment; Phase II consists of developing an implementation 
strategy for hybrid micro-grid systems for isolated 
communities; Phase III, to be done in parallel with Phase II, 
consists of developing an implementation strategy for micro-
grid systems that increase the resilience of critical 
infrastructure; Phase IV consists of cost-shared demonstration 
projects; and Phase V consists of a benefits analysis plan to 
inform regulators, policymakers, and stakeholders about the 
program's benefits.
    Subsection (b)(3) specifies requirements for the Secretary 
to consider in developing the strategy to promote the 
development of hybrid micro-grid systems for isolated 
communities in paragraph 2(B). These requirements include 
establishing targets for the potential for renewable 
integration into hybrid micro-grid system; local workforce 
opportunities; additional infrastructure needs for such 
systems; and the impact of hybrid micro-grid systems on 
defense, homeland security, economic development, and 
environmental interests.
    Subsection (c) provides that the Secretary shall carry out 
the program with relevant stakeholders, including States, local 
governments, Indian Tribes, and private sector entities.
    Subsection (d) requires the Secretary to submit within 180 
days, and annually thereafter through calendar year 2029, a 
report to the Senate Energy and Natural Resources Committee and 
the House Energy and Commerce Committee on the efforts to 
implement the program and the status of the program's strategy.

Sec. 6. Electric grid architecture, scenario development, and modeling

    Section 6(a) requires the Secretary to establish and 
facilitate a collaborative process to develop model grid 
architecture and a set of future scenarios to examine the 
impacts of different combinations of resources on the electric 
grid. Based on the findings of the model architecture and 
scenarios, which must account for market structure differences, 
the Secretary is required to determine whether any new 
standards are necessary for the grid, and if so, make 
recommendations for such standards.
    Subsection (b) directs the Secretary to conduct modeling 
based on the scenarios developed in subsection (a) and analyze 
and evaluate the impacts of the models to assist stakeholders 
in enhancing planning, avoiding stranded costs, and maximizing 
cost-effective grid-related investments.
    Subsection (c) directs the Secretary to develop the 
scenarios and conduct the modeling and analysis under this 
section with a variety of stakeholders, including States, 
National Laboratories, academic institutions, and industry.
    Subsection (d) states that nothing in this section grants 
any person the right to review protected information concerning 
grid architecture or scenarios.

Sec. 7. Voluntary model pathways

    Section 7(a) requires the Secretary to initiate, within 90 
days of enactment, the development of voluntary model pathways 
for modernizing the electric grid through a collaborative 
public-private effort that, among other goals, produces 
illustrative policy pathways for States, regions and 
regulators, and facilitates the modernization of the grid and 
associated communications networks. The goal of the pathways is 
to achieve a number of objectives, including situational 
awareness of the electric system; increased innovation; 
consumer empowerment; and enhanced grid resilience. This 
section further directs the Secretary to establish a steering 
committee, within 90 days of enactment, consisting of experts 
from the public, private, and academic sectors to develop such 
pathways.
    Subsection (b) authorizes the Secretary to provide 
technical assistance to States, Indian Tribes, or units of 
local government to adopt or implement one or more pathway 
elements.

Sec. 8. Performance metrics for electricity infrastructure providers

    Section 8(a) directs the Secretary, in consultation with 
the steering committing, to submit to the Senate Energy and 
Natural Resources Committee and the House Energy and Commerce 
Committee, within two years of enactment, a report that 
includes an evaluation of grid performance and a description of 
the costs and benefits associated with the changes evaluated in 
the scenarios under section 6.
    Subsection (b) specifies requirements for the Secretary to 
consider in developing metrics for the required report, 
including standard methodologies for calculating performance 
metrics and costs and benefits to ratepayers; identification of 
tools, resources, and deployment models that enable improved 
performance through adoption of emerging technologies; and the 
role of States and local regulatory authorities in enabling a 
robust future electric grid.

Sec. 9. Voluntary State, regional, and local electricity distribution 
        planning

    Section 9(a) directs the Secretary to provide, on the 
request of a State, regional organization, or electric utility, 
assistance to develop electricity distribution plans by 
conducting resource assessments and analysis of future demand 
and distribution requirements, and developing open source tools 
for State, regional, and local planning and operations.
    Subsection (b) states that such assessments must include 
the evaluation of physical security, cybersecurity, 
communications needs, and the advanced use of grid architecture 
to analyze risks in an all-hazards approach.
    Subsection (c) specifies that information collected in the 
course of conducting a resource assessment and analysis of 
future demand and distribution requirements shall be considered 
critical electric infrastructure information under section 215A 
of the Federal Power Act.
    Subsection (d) directs the Secretary to provide technical 
assistance to States, regional reliability entities, and other 
distribution asset owners and operators in the development of 
distribution plans.
    Subsection (e) states that any entity that requested 
technical assistance under this section may withdraw the 
request at any time and, at such time of withdrawal, the 
Secretary shall terminate all assistance efforts.
    Subsection (f) provides that nothing in this section 
authorizes the Secretary to require any entities to adopt any 
model, tool, plan, analysis, or assessment.

Sec. 10. Authorization of appropriations

    Section 10 authorizes $200 million for each of FYs 2020 
through 2028 to carry out section 4 through section 10.

                   COST AND BUDGETARY CONSIDERATIONS

    The Congressional Budget Office estimate of the costs of 
this measure has been requested but was not received at the 
time the report was filed. When the Congressional Budget Office 
completes its cost estimate, it will be posted on the internet 
at www.cbo.gov.

                      REGULATORY IMPACT EVALUATION

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee makes the following 
evaluation of the regulatory impact which would be incurred in 
carrying out S. 2332. The bill is not a regulatory measure in 
the sense of imposing Government-established standards or 
significant economic responsibilities on private individuals 
and businesses.
    No personal information would be collected in administering 
the program. Therefore, there would be no impact on personal 
privacy.
    Little, if any, additional paperwork would result from the 
enactment of S. 2332, as ordered reported.

                   CONGRESSIONALLY DIRECTED SPENDING

    S. 2332, as ordered reported, does not contain any 
congressionally directed spending items, limited tax benefits, 
or limited tariff benefits as defined in rule XLIV of the 
Standing Rules of the Senate.

                        EXECUTIVE COMMUNICATIONS

    Executive views on S. 2332 were not requested by the 
Committee.

                        CHANGES IN EXISTING LAW

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, the Committee notes that no 
changes in existing law are made by S. 2332 as ordered 
reported.

                                  [all]