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