II 

115TH CONGRESS 

1ST SESSION S. 2232 

To amend the Public Utility Regulatory Policies Act of 1978 to provide 

for the integration of distributed energy resources, to modernize electricity grid infrastructure, to provide for the consideration of non-wires 

alternatives, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

DECEMBER 14, 2017 

Mr. KING introduced the following bill; which was read twice and referred to 

the Committee on Energy and Natural Resources 

A BILL 

To amend the Public Utility Regulatory Policies Act of 1978 

to provide for the integration of distributed energy resources, to modernize electricity grid infrastructure, to 

provide for the consideration of non-wires alternatives, 

and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Next Generation Grid Resources and Infrastructure De6 velopment Act’’ or the ‘‘Next Generation GRID Act’’. 


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1 (b) TABLE OF CONTENTS.—The table of contents for 

2 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. General right of interconnection. 

Sec. 3. Electricity distribution resource planning. 

Sec. 4. Non-wires alternatives. 

Sec. 5. Distribution system operator pilot program. 

Sec. 6. Consideration of performance-based incentive rates. 

3 SEC. 2. GENERAL RIGHT OF INTERCONNECTION. 

4 The Public Utility Regulatory Policies Act of 1978 

5 is amended by inserting after section 4 (16 U.S.C. 2603) 

6 the following: 

7 ‘‘SEC. 5. GENERAL RIGHT OF INTERCONNECTION. 

8 ‘‘(a) DEFINITION OF DISTRIBUTED ENERGY RE9 SOURCE.—In this section, the term ‘distributed energy re10 source’ means a resource, technology, or combination of 

11 resources and technologies interconnected to the electricity 

12 distribution system that generates, manages, or reduces 

13 energy use. 

14 ‘‘(b) RIGHT OF INTERCONNECTION.—Distributed en15 ergy resources shall have a general right of interconnec16 tion under this Act. 

17 ‘‘(c) ANALYSIS OF INTERCONNECTION REQUESTS.— 

18 The methods used to calculate the impacts of proposed 

19 interconnections under this Act shall be transparent, re20 peatable, consistent, clearly established, and agreed to by 

21 the appropriate State regulatory authority. 


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1 ‘‘(d) RATES AND FEES.—As the State or appropriate 

2 State regulatory authority determines to be appropriate, 

3 each electric utility shall adopt standards, conditions, and 

4 requirements for rates and fees for the interconnection of 

5 distributed energy resources under this Act, that— 

6 ‘‘(1) reflect the 2-way costs and benefits for the 

7 distributed energy resource and the electricity grid; 

8 ‘‘(2) provide fair credit for energy exported to 

9 the electricity grid; 

10 ‘‘(3) are transparently derived and consistently 

11 applied; and 

12 ‘‘(4) are not punitive. 

13 ‘‘(e) TIMEFRAMES.— 

14 ‘‘(1) IN GENERAL.—Timeframes for the inter15 connection of distributed energy resources under this 

16 Act shall be well-defined, expeditious, and not un17 duly protracted, as determined by the appropriate 

18 State regulatory authority. 

19 ‘‘(2) DELAYS OR DENIAL.—An interconnection 

20 of distributed energy resources under this Act shall 

21 not be delayed or denied unless the electric utility 

22 demonstrates that— 

23 ‘‘(A) the interconnection is unsafe or im24 practicable; and 


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1 ‘‘(B) any safety or impracticability issue 

2 demonstrated under subparagraph (A) cannot 

3 be mitigated.’’. 

4 SEC. 3. ELECTRICITY DISTRIBUTION RESOURCE PLANNING. 

5 (a) DEVELOPMENT OF ELECTRICITY DISTRIBUTION

6 RESOURCE PLANS.—Section 111(d) of the Public Utility 

7 Regulatory Policies Act of 1978 (16 U.S.C. 2621(d)) is 

8 amended by adding at the end the following: 

9 ‘‘(20) ELECTRICITY DISTRIBUTION RESOURCE

10 PLANNING.— 

11 ‘‘(A) DEFINITIONS.—In this paragraph: 

12 ‘‘(i) DISTRIBUTED ENERGY RE13 SOURCE.—The term ‘distributed energy re14 source’ has the meaning given the term in 

15 section 5(a). 

16 ‘‘(ii) MICROGRID.—The term 

17 ‘microgrid’ means a group of inter18 connected loads and distributed energy re19 sources within clearly defined electrical 

20 boundaries that— 

21 ‘‘(I) acts as a single controllable 

22 entity with respect to the electricity 

23 grid; and 


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1 ‘‘(II) can connect and disconnect 

2 from the electricity grid to operate in 

3 grid-connected mode and island mode. 

4 ‘‘(B) REQUIREMENT.—Each electric utility 

5 shall develop an electricity distribution resource 

6 plan on a regular basis, as determined by the 

7 appropriate State regulatory authority. 

8 ‘‘(C) COMPONENTS OF ELECTRICITY DIS9 TRIBUTION RESOURCE PLAN.—An electricity 

10 distribution resource plan developed under sub11 paragraph (B) shall identify— 

12 ‘‘(i) the future electricity demand and 

13 distribution system requirements of the 

14 electric utility; 

15 ‘‘(ii) projections for the deployment of 

16 distributed energy resources within the 

17 utility service territory during the period 

18 covered by the plan by size, type, and loca19 tion; 

20 ‘‘(iii) any locational benefits and costs 

21 of distributed energy resources to the dis22 tribution system of the electric utility and 

23 ratepayers, including— 

24 ‘‘(I) benefits to grid resiliency 

25 and reliability; 


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1 ‘‘(II) avoided or incurred invest2 ments in distribution or transmission 

3 infrastructure; 

4 ‘‘(III) avoided or incurred invest5 ments in generation capacity; 

6 ‘‘(IV) any environmental benefits; 

7 and 

8 ‘‘(V) any other costs or benefits 

9 to the electricity grid or to ratepayers; 

10 ‘‘(iv) any temporal benefits or costs of 

11 distributed energy resources to the dis12 tribution system of the electric utility, in13 cluding— 

14 ‘‘(I) any changes in peak de15 mand; and 

16 ‘‘(II) any changes in the distribu17 tion load curve; 

18 ‘‘(v) any investments needed to im19 prove the integration, management, or de20 ployment of distributed energy resources in 

21 the distribution system of the electric util22 ity; 

23 ‘‘(vi) any barriers to the integration of 

24 distributed energy resources in the dis25 tribution system of the electric utility, inVerDate Sep 11 2014 19:47 Dec 18, 2017 Jkt 079200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S2232.IS S2232

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1 cluding limitations to system capacity that 

2 would require upgrades to integrate dis3 tributed energy resources; 

4 ‘‘(vii) any locations on the distribution 

5 system of the electric utility suitable for 

6 microgrid development based on geo7 graphic, resiliency, reliability, or cost fac8 tors; and 

9 ‘‘(viii) any physical and cybersecurity 

10 needs and vulnerabilities of the distribution 

11 system of the electric utility. 

12 ‘‘(D) DESIGNATION OF PARTICIPANTS.— 

13 For each electric utility for which the State or 

14 State regulatory authority has ratemaking au15 thority, the State or State regulatory authority, 

16 as applicable, may designate participants to as17 sist in developing an electricity distribution re18 source plan under subparagraph (B), including, 

19 as the State or State regulatory authority de20 termines to be appropriate— 

21 ‘‘(i) any nonprofit or for-profit entity 

22 with experience in planning, designing, or 

23 operating distributed energy resources or 

24 systems; 


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1 ‘‘(ii) a regional regulatory authority or 

2 other regional entity; 

3 ‘‘(iii) an institution of higher edu4 cation; 

5 ‘‘(iv) a National Laboratory (as de6 fined in section 2 of the Energy Policy Act 

7 of 2005 (42 U.S.C. 15801)); 

8 ‘‘(v) a ratepayer or advocate of rate9 payers; and 

10 ‘‘(vi) any other appropriate entity. 

11 ‘‘(E) ACCESS TO DATA.—In developing an 

12 electricity distribution resource plan under sub13 paragraph (B), the electric utility shall provide 

14 to any participants designated under subpara15 graph (D) access to relevant data regarding the 

16 operation and performance of the electricity 

17 grid, subject to any qualifications and confiden18 tiality requirements that the State regulatory 

19 authority determines to be appropriate.’’. 

20 (b) TECHNICAL AND FINANCIAL ASSISTANCE FOR

21 THE DEVELOPMENT OF ELECTRICITY DISTRIBUTION RE22 SOURCE PLANS.— 

23 (1) DEFINITIONS.—In this subsection: 

24 (A) ELIGIBLE ENTITY.—The term ‘‘eligible 

25 entity’’ means a State, State regulatory authorVerDate Sep 11 2014 19:47 Dec 18, 2017 Jkt 079200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S2232.IS S2232

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1 ity, electric utility, or any other entity des2 ignated by a State or State regulatory authority 

3 as a participant in the development of a plan 

4 under paragraph (20)(D) of section 111(d) of 

5 the Public Utility Regulatory Policies Act of 

6 1978 (16 U.S.C. 2621(d)) (as added by sub7 section (a)). 

8 (B) PLAN.—The term ‘‘plan’’ means an 

9 electricity distribution resource plan developed 

10 under paragraph (20)(B) of section 111(d) of 

11 the Public Utility Regulatory Policies Act of 

12 1978 (16 U.S.C. 2621(d)) (as added by sub13 section (a)). 

14 (C) SECRETARY.—The term ‘‘Secretary’’ 

15 means the Secretary of Energy. 

16 (D) STATE REGULATORY AUTHORITY.— 

17 The term ‘‘State regulatory authority’’ has the 

18 meaning given the term in section 3 of the Pub19 lic Utility Regulatory Policies Act of 1978 (16 

20 U.S.C. 2602). 

21 (2) TECHNICAL AND FINANCIAL ASSISTANCE.— 

22 At the request of a State or State regulatory author23 ity, the Secretary shall provide— 

24 (A) technical assistance to eligible entities 

25 to assist in the development of a plan; and 


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1 (B) grants to eligible entities to contract 

2 for qualified technical assistance to assist in the 

3 development of a plan. 

4 (3) AUTHORIZATION OF APPROPRIATIONS.— 

5 There is authorized to be appropriated to the Sec6 retary to carry out this subsection $200,000,000, to 

7 remain available until expended. 

8 SEC. 4. NON-WIRES ALTERNATIVES. 

9 (a) DEFINITION OF NON-WIRES ALTERNATIVE.— 

10 Section 3 of the Federal Power Act (16 U.S.C. 796) is 

11 amended by adding at the end the following: 

12 ‘‘(30) NON-WIRES ALTERNATIVE.—The term 

13 ‘non-wires alternative’ means an electricity grid in14 vestment or project that uses one or more nontradi15 tional solutions, including distributed generation, en16 ergy storage, energy efficiency, demand response, 

17 microgrids, or grid software and controls, to defer or 

18 replace the need for specific equipment upgrades or 

19 new infrastructure, such as transmission or distribu20 tion lines or transformers, at a substation or circuit 

21 level.’’. 

22 (b) CONSIDERATION OF NON-WIRES ALTERNATIVES

23 IN REGIONAL TRANSMISSION PLANS.—Section 202 of the 

24 Federal Power Act (16 U.S.C. 824a) is amended by add25 ing at the end the following: 


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1 ‘‘(h) ISSUANCE OF RULE RELATING TO CONSIDER2 ATION OF NON-WIRES ALTERNATIVES IN REGIONAL

3 TRANSMISSION PLANS.—As soon as practicable after the 

4 date of enactment of this subsection, the Commission shall 

5 issue a final rule that— 

6 ‘‘(1) requires public utility transmission pro7 viders— 

8 ‘‘(A) to solicit non-wires alternatives in the 

9 development of regional transmission plans; and 

10 ‘‘(B) to identify opportunities for non-wires 

11 alternatives; 

12 ‘‘(2) requires Transmission Organizations to de13 velop procedures to control or manage non-wires al14 ternatives providing transmission services; and 

15 ‘‘(3) authorizes Transmission Organizations to 

16 allocate and recover costs of non-wires alternatives 

17 providing transmission services that are dem18 onstrated to be a cost-effective alternative to an up19 grade to, or the construction of new, transmission 

20 infrastructure in the same manner as the upgrade 

21 to, or construction of new, transmission infrastruc22 ture would have been allocated and recovered.’’. 

23 (c) CONSIDERATION OF NON-WIRES ALTERNATIVES

24 BY STATE REGULATORY AUTHORITIES.—Section 111(d) 

25 of the Public Utility Regulatory Policies Act of 1978 (16 


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1 U.S.C. 2621(d)) (as amended by section 3(a)) is amended 

2 by adding at the end the following: 

3 ‘‘(21) NON-WIRES ALTERNATIVES.— 

4 ‘‘(A) IN GENERAL.—To the extent a State 

5 regulatory authority has the authority to allow 

6 electric utilities to recover costs associated with 

7 electricity transmission and distribution 

8 projects, each State regulatory authority shall 

9 consider non-wires alternatives (as defined in 

10 section 3 of the Federal Power Act (16 U.S.C. 

11 796)) in instances in which an entity proposes 

12 transmission or distribution projects seeking 

13 cost-of-service rate recovery. 

14 ‘‘(B) COST RECOVERY.—To reduce the 

15 costs to ratepayers associated with potential up16 grades to transmission or distribution infra17 structure, the cost of a non-wires alternative 

18 considered under subparagraph (A) shall be re19 covered from ratepayers in the same manner as 

20 an upgrade to transmission or distribution in21 frastructure would have been.’’. 

22 SEC. 5. DISTRIBUTION SYSTEM OPERATOR PILOT PRO23 GRAM. 

24 (a) DEFINITIONS.—In this section: 


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1 (1) DISTRIBUTION SYSTEM OPERATOR.—The 

2 term ‘‘distribution system operator’’ means an enti3 ty, independent of the normal operations of an elec4 tric utility, that— 

5 (A) plans for, integrates, and manages dis6 tributed energy resources within the service ter7 ritory of an electric utility; 

8 (B) implements reliability standards for 

9 distributed energy resources within the service 

10 territory of an electric utility; and 

11 (C) aggregates the economic attributes of 

12 distributed energy resources within the service 

13 territory of an electric utility for sale into a 

14 wholesale energy or other market. 

15 (2) ELECTRIC UTILITY.—The term ‘‘electric 

16 utility’’ has the meaning given the term in section 

17 3 of the Public Utility Regulatory Policies Act of 

18 1978 (16 U.S.C. 2602). 

19 (3) NATIONAL LABORATORY.—The term ‘‘Na20 tional Laboratory’’ has the meaning given the term 

21 in section 2 of the Energy Policy Act of 2005 (42 

22 U.S.C. 15801). 

23 (4) PILOT PROGRAM.—The term ‘‘pilot pro24 gram’’ means the pilot program established under 

25 subsection (b). 


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1 (5) REGIONAL TRANSMISSION ORGANIZATION.— 

2 The term ‘‘Regional Transmission Organization’’ 

3 has the meaning given the term in section 3 of the 

4 Federal Power Act (16 U.S.C. 796). 

5 (6) SECRETARY.—The term ‘‘Secretary’’ means 

6 the Secretary of Energy. 

7 (b) PILOT PROGRAM.—Not later than 1 year after 

8 the date of enactment of this Act, the Secretary shall es9 tablish a pilot program within the National Labora10 tories— 

11 (1) to research, develop, and test technology 

12 platforms and operational procedures for a distribu13 tion system operator; 

14 (2) to evaluate best practices in designating the 

15 roles and responsibilities of a distribution system op16 erator relative to other entities, including the rel17 evant electric utility and Regional Transmission Or18 ganization; and 

19 (3) to simulate the functions of a distribution 

20 system operator in a range of grid conditions. 

21 (c) WORKING GROUP.— 

22 (1) IN GENERAL.—The Secretary shall establish 

23 a working group to participate in the design and op24 eration of the pilot program. 


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1 (2) MEMBERSHIP.—The working group estab2 lished under paragraph (1) shall be composed of 

3 members, to be appointed by the Secretary, at least 

4 one of which shall represent each of the following: 

5 (A) The Department of Energy. 

6 (B) The National Laboratories. 

7 (C) An electric utility. 

8 (D) The North American Electric Reli9 ability Corporation. 

10 (E) A Regional Transmission Organiza11 tion. 

12 (F) A State or regional energy agency. 

13 (G) A national research body or institution 

14 of higher education. 

15 (d) REPORT TO CONGRESS.—Not later than 2 years 

16 after the date on which funds are first made available to 

17 the pilot program, the Secretary shall submit to Congress 

18 a report that— 

19 (1) describes the results of the pilot program; 

20 and 

21 (2) provides an analysis of the feasibility of im22 plementing a distribution system operator. 

23 (e) AUTHORIZATION OF APPROPRIATIONS.—There is 

24 authorized to be appropriated to carry out the pilot pro25 gram $20,000,000, to remain available until expended. 


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1 SEC. 6. CONSIDERATION OF PERFORMANCE-BASED INCEN2 TIVE RATES. 

3 (a) IN GENERAL.—Section 111(d) of the Public Util4 ity Regulatory Policies Act of 1978 (16 U.S.C. 2621(d)) 

5 (as amended by section 4(c)) is amended by adding at the 

6 end the following: 

7 ‘‘(22) PERFORMANCE-BASED INCENTIVE MECH8 ANISMS.— 

9 ‘‘(A) IN GENERAL.—Each State regulatory 

10 authority, with respect to each electric utility 

11 for which the State regulatory authority has 

12 ratemaking authority, shall consider the use of 

13 performance-based incentive mechanisms to 

14 achieve public interest goals established by the 

15 State or State regulatory authority in accord16 ance with subparagraphs (B) and (C). 

17 ‘‘(B) CONSIDERATIONS FOR ESTABLISH18 MENT OF PUBLIC INTEREST GOALS.—In estab19 lishing public interest goals under subparagraph 

20 (A), the State or State regulatory authority, as 

21 applicable, shall consider— 

22 ‘‘(i) overall system efficiency, includ23 ing reductions in peak demand; 

24 ‘‘(ii) the integration and adoption of 

25 distributed energy resources; 


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1 ‘‘(iii) process improvements, such as 

2 predictable and timely interconnection 

3 processes; 

4 ‘‘(iv) the resiliency and reliability of 

5 the electricity grid; 

6 ‘‘(v) customer engagement and satis7 faction; 

8 ‘‘(vi) environmental benefits, including 

9 reductions in particulate and greenhouse 

10 gas emissions; and 

11 ‘‘(vii) any other factor determined to 

12 be appropriate by the State or State regu13 latory authority. 

14 ‘‘(C) METRICS.—In establishing public in15 terest goals under subparagraph (A), the State 

16 or State regulatory authority, as applicable, 

17 shall specify quantifiable metrics with respect to 

18 the public interest goals that can be measured 

19 and verified.’’. 

20 (b) COMPLIANCE.— 

21 (1) OBLIGATIONS TO CONSIDER AND DETER22 MINE; PRIOR STATE ACTIONS.—Section 112 of the 

23 Public Utility Regulatory Policies Act of 1978 (16 

24 U.S.C. 2622) is amended— 


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1 (A) in subsection (b), by adding at the end 

2 the following: 

3 ‘‘(7)(A) Not later than 1 year after the date of 

4 enactment of this paragraph, each State regulatory 

5 authority (with respect to each electric utility for 

6 which it has ratemaking authority) shall, with re7 spect to the standards established by paragraphs 

8 (20) through (22) of section 111(d)— 

9 ‘‘(i) commence the consideration referred 

10 to in section 111; or 

11 ‘‘(ii) set a hearing date for the consider12 ation. 

13 ‘‘(B) Not later than 2 years after the date of 

14 enactment of this paragraph, each State regulatory 

15 authority (with respect to each electric utility for 

16 which it has ratemaking authority) shall— 

17 ‘‘(i) complete the consideration required 

18 under subparagraph (A); and 

19 ‘‘(ii) make the determination referred to in 

20 section 111 with respect to the standards estab21 lished by paragraphs (20) through (22) of sec22 tion 111(d).’’; 

23 (B) in subsection (c), by adding at the end 

24 the following: ‘‘In the case of the standards es25 tablished by paragraphs (20) through (22) of 


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1 section 111(d), the reference contained in this 

2 subsection to the date of enactment of this Act 

3 shall be deemed to be a reference to the date 

4 of enactment of those paragraphs.’’; 

5 (C) in subsection (d), in the matter pre6 ceding paragraph (1), by striking ‘‘(19)’’ and 

7 inserting ‘‘(22)’’; and 

8 (D) by adding at the end the following: 

9 ‘‘(g) PRIOR STATE ACTIONS.—Subsections (b) and 

10 (c) shall not apply to the standard established by para11 graphs (20) through (22) of section 111(d) in the case 

12 of any electric utility in a State if, before the date of enact13 ment of this subsection— 

14 ‘‘(1) the State has implemented for the electric 

15 utility the standard (or a comparable standard); 

16 ‘‘(2) the State regulatory authority for the 

17 State or the relevant nonregulated electric utility has 

18 conducted a proceeding to consider implementation 

19 of the standard (or a comparable standard) for the 

20 electric utility; or 

21 ‘‘(3) the State legislature has voted on the im22 plementation of the standard (or a comparable 

23 standard) for the electric utility.’’. 

24 (2) PRIOR AND PENDING PROCEEDINGS.—Sec25 tion 124 of the Public Utility Regulatory Policy Act 


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1 of 1978 (16 U.S.C. 2634) is amended by adding at 

2 the end the following: ‘‘In the case of the standards 

3 established by paragraphs (20) through (22) of sec4 tion 111(d), the reference contained in this sub5 section to the date of enactment of this Act shall be 

6 deemed to be a reference to the date of enactment 

7 of those paragraphs.’’. 

Æ 


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