II 

115TH CONGRESS 

2D SESSION S. 2445 

To provide for the modernization of the electric grid, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

FEBRUARY 15, 2018 

Ms. CANTWELL (for herself, Mr. HEINRICH, and Ms. HIRONO) introduced the 

following bill; which was read twice and referred to the Committee on Energy and Natural Resources 

A BILL 

To provide for the modernization of the electric grid, 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 ‘‘Grid Modernization Act’’. 

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

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Definitions. 

Sec. 3. Grid storage program. 

Sec. 4. Technology demonstration on the distribution system. 

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

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

Sec. 7. Voluntary model pathways. 


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Sec. 8. Performance metrics for electricity infrastructure providers. 

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

Sec. 10. Authorization of appropriations. 

1 SEC. 2. DEFINITIONS. 

2 In this Act: 

3 (1) DEPARTMENT.—The term ‘‘Department’’ 

4 means the Department of Energy. 

5 (2) NATIONAL LABORATORY.—The term ‘‘Na6 tional Laboratory’’ has the meaning given the term 

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

8 U.S.C. 15801). 

9 (3) SECRETARY.—The term ‘‘Secretary’’ means 

10 the Secretary of Energy. 

11 SEC. 3. GRID STORAGE PROGRAM. 

12 (a) IN GENERAL.—The Secretary shall conduct a 

13 program of research, development, and demonstration of 

14 electric grid energy storage that addresses the principal 

15 challenges identified in the 2013 Department of Energy 

16 Strategic Plan for Grid Energy Storage. 

17 (b) AREAS OF FOCUS.—The program under this sec18 tion shall focus on— 

19 (1) materials, electric thermal, 

20 electromechanical, and electrochemical systems re21 search; 

22 (2) power conversion technologies research; 

23 (3) developing— 


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1 (A) empirical and science-based industry 

2 standards to compare the storage capacity, 

3 cycle length and capabilities, and reliability of 

4 different types of electricity storage; and 

5 (B) validation and testing techniques; 

6 (4) other fundamental and applied research 

7 critical to widespread deployment of electricity stor8 age; 

9 (5) device development that builds on results 

10 from research described in paragraphs (1), (2), and 

11 (4), including combinations of power electronics, ad12 vanced optimizing controls, and energy storage as a 

13 general purpose element of the electric grid; 

14 (6) grid-scale testing and analysis of storage 

15 devices, including test-beds and field trials; 

16 (7) cost-benefit analyses that inform capital ex17 penditure planning for regulators and owners and 

18 operators of components of the electric grid; 

19 (8) electricity storage device safety and reli20 ability, including potential failure modes, mitigation 

21 measures, and operational guidelines; 

22 (9) standards for storage device performance, 

23 control interface, grid interconnection, and inter24 operability; and 


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1 (10) maintaining a public database of energy 

2 storage projects, policies, codes, standards, and reg3 ulations. 

4 (c) ASSISTANCE TO STATES.—The Secretary may 

5 provide technical and financial assistance to States, Indian 

6 Tribes, or units of local government to participate in or 

7 use research, development, or demonstration of technology 

8 developed under this section. 

9 (d) AUTHORIZATION OF APPROPRIATIONS.—There is 

10 authorized to be appropriated to the Secretary to carry 

11 out this section $50,000,000 for each of fiscal years 2018 

12 through 2027. 

13 (e) NO EFFECT ON OTHER PROVISIONS OF LAW.— 

14 Nothing in this Act or an amendment made by this Act 

15 authorizes regulatory actions that would duplicate or con16 flict with regulatory requirements, mandatory standards, 

17 or related processes under section 215 of the Federal 

18 Power Act (16 U.S.C. 824o). 

19 (f) USE OF FUNDS.—To the maximum extent prac20 ticable, in carrying out this section, the Secretary shall 

21 ensure that the use of funds to carry out this section is 

22 coordinated among different offices within the Grid Mod23 ernization Initiative of the Department and other pro24 grams conducting energy storage research. 


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1 SEC. 4. TECHNOLOGY DEMONSTRATION ON THE DISTRIBU2 TION SYSTEM. 

3 (a) IN GENERAL.—The Secretary shall establish a 

4 grant program to carry out eligible projects related to the 

5 modernization of the electric grid, including the applica6 tion of technologies to improve observability, advanced 

7 controls, and prediction of system performance on the dis8 tribution system. 

9 (b) ELIGIBLE PROJECTS.—To be eligible for a grant 

10 under subsection (a), a project shall— 

11 (1) be designed to improve the performance and 

12 efficiency of the future electric grid, while ensuring 

13 the continued provision of safe, secure, reliable, and 

14 affordable power; 

15 (2) demonstrate— 

16 (A) secure integration and management of 

17 two or more energy resources, including distrib18 uted energy generation, combined heat and 

19 power, micro-grids, energy storage, electric ve20 hicles, energy efficiency, demand response, and 

21 intelligent loads; and 

22 (B) secure integration and interoperability 

23 of communications and information tech24 nologies; and 


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1 (3) be subject to the requirements of section 

2 545(a) of the Energy Security and Independence Act 

3 of 2007 (42 U.S.C. 17155(a)). 

4 SEC. 5. MICRO-GRID AND HYBRID MICRO-GRID SYSTEMS 

5 PROGRAM. 

6 (a) DEFINITIONS.—In this section: 

7 (1) HYBRID MICRO-GRID SYSTEM.—The term 

8 ‘‘hybrid micro-grid system’’ means a stand-alone 

9 electrical system that— 

10 (A) is comprised of conventional generation 

11 and at least 1 alternative energy resource; and 

12 (B) may use grid-scale energy storage. 

13 (2) ISOLATED COMMUNITY.—The term ‘‘iso14 lated community’’ means a community that is pow15 ered by a stand-alone electric generation and dis16 tribution system without the economic and reliability 

17 benefits of connection to a regional electric grid. 

18 (3) MICRO-GRID SYSTEM.—The term ‘‘micro19 grid system’’ means a stand-alone electrical system 

20 that uses grid-scale energy storage. 

21 (4) STRATEGY.—The term ‘‘strategy’’ means 

22 the strategy developed pursuant to subsection 

23 (b)(2)(B). 

24 (b) PROGRAM.— 


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1 (1) ESTABLISHMENT.—The Secretary shall es2 tablish a program to promote the development of— 

3 (A) hybrid micro-grid systems for isolated 

4 communities; and 

5 (B) micro-grid systems to increase the re6 silience of critical infrastructure. 

7 (2) PHASES.—The program established under 

8 paragraph (1) shall be divided into the following 

9 phases: 

10 (A) Phase I, which shall consist of the de11 velopment of a feasibility assessment for— 

12 (i) hybrid micro-grid systems in iso13 lated communities; and 

14 (ii) micro-grid systems to enhance the 

15 resilience of critical infrastructure. 

16 (B) Phase II, which shall consist of the de17 velopment of an implementation strategy, in ac18 cordance with paragraph (3), to promote the 

19 development of hybrid micro-grid systems for 

20 isolated communities, particularly for those 

21 communities exposed to extreme weather condi22 tions and high energy costs, including elec23 tricity, space heating and cooling, and transpor24 tation. 


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1 (C) Phase III, which shall be carried out 

2 in parallel with Phase II and consist of the de3 velopment of an implementation strategy to 

4 promote the development of micro-grid systems 

5 that increase the resilience of critical infrastruc6 ture. 

7 (D) Phase IV, which shall consist of cost8 shared demonstration projects, based upon the 

9 strategies developed under subparagraph (B) 

10 that include the development of physical and cy11 bersecurity plans to take appropriate measures 

12 to protect and secure the electric grid. 

13 (E) Phase V, which shall establish a bene14 fits analysis plan to help inform regulators, pol15 icymakers, and industry stakeholders about the 

16 affordability, environmental and resilience bene17 fits associated with Phases II, III, and IV. 

18 (3) REQUIREMENTS FOR STRATEGY.—In devel19 oping the strategy under paragraph (2)(B), the Sec20 retary shall consider— 

21 (A) establishing future targets for the eco22 nomic displacement of conventional generation 

23 using hybrid micro-grid systems, including dis24 placement of conventional generation used for 


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1 electric power generation, heating and cooling, 

2 and transportation; 

3 (B) the potential for renewable resources, 

4 including wind, solar, and hydropower, to be in5 tegrated into a hybrid micro-grid system; 

6 (C) opportunities for improving the effi7 ciency of existing hybrid micro-grid systems; 

8 (D) the capacity of the local workforce to 

9 operate, maintain, and repair a hybrid micro10 grid system; 

11 (E) opportunities to develop the capacity of 

12 the local workforce to operate, maintain, and 

13 repair a hybrid micro-grid system; 

14 (F) leveraging existing capacity within 

15 local or regional research organizations, such as 

16 organizations based at institutions of higher 

17 education, to support development of hybrid 

18 micro-grid systems, including by testing novel 

19 components and systems prior to field deploy20 ment; 

21 (G) the need for basic infrastructure to de22 velop, deploy, and sustain a hybrid micro-grid 

23 system; 


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1 (H) input of traditional knowledge from 

2 local leaders of isolated communities in the de3 velopment of a hybrid micro-grid system; 

4 (I) the impact of hybrid micro-grid systems 

5 on defense, homeland security, economic devel6 opment, and environmental interests; 

7 (J) opportunities to leverage existing inter8 agency coordination efforts and recommenda9 tions for new interagency coordination efforts to 

10 minimize unnecessary overhead, mobilization, 

11 and other project costs; and 

12 (K) any other criteria the Secretary deter13 mines appropriate. 

14 (c) COLLABORATION.—The program established 

15 under subsection (b)(1) shall be carried out in collabora16 tion with relevant stakeholders, including, as appro17 priate— 

18 (1) States; 

19 (2) Indian Tribes; 

20 (3) regional entities and regulators; 

21 (4) units of local government; 

22 (5) institutions of higher education; and 

23 (6) private sector entities. 

24 (d) REPORT.—Not later than 180 days after the date 

25 of the enactment of this Act, and annually thereafter until 


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1 calendar year 2026, the Secretary shall submit to the 

2 Committee on Energy and Natural Resources of the Sen3 ate and the Committee on Energy and Commerce of the 

4 House of Representatives a report on the efforts to imple5 ment the program established under subsection (b)(1) and 

6 the status of the strategy developed under subsection 

7 (b)(2)(B). 

8 SEC. 6. ELECTRIC GRID ARCHITECTURE, SCENARIO DEVEL9 OPMENT, AND MODELING. 

10 (a) GRID ARCHITECTURE AND SCENARIO DEVELOP11 MENT.— 

12 (1) IN GENERAL.—Subject to paragraph (2), 

13 the Secretary shall establish and facilitate a collabo14 rative process to develop model grid architecture and 

15 a set of future scenarios for the electric grid to ex16 amine the impacts of different combinations of re17 sources (including different quantities of distributed 

18 energy resources and large-scale, central generation) 

19 on the electric grid. 

20 (2) MARKET STRUCTURE.—The grid architec21 ture and scenarios developed under paragraph (1) 

22 shall account for differences in market structure, in23 cluding an examination of the potential for stranded 

24 costs in each type of market structure. 


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1 (3) FINDINGS.—Based on the findings of grid 

2 architecture developed under paragraph (1), the Sec3 retary shall— 

4 (A) determine whether any additional 

5 standards are necessary to ensure the interoper6 ability of grid systems and associated commu7 nications networks; and 

8 (B) if the Secretary makes a determination 

9 that additional standards are necessary under 

10 subparagraph (A), make recommendations for 

11 additional standards, including, as may be ap12 propriate, to the Electric Reliability Organiza13 tion under section 215 of the Federal Power 

14 Act (16 U.S.C. 824o). The Electric Reliability 

15 Organization shall not be under any obligation 

16 to establish any process to consider such rec17 ommendations. 

18 (b) MODELING.—Subject to subsection (c), the Sec19 retary shall— 

20 (1) conduct modeling based on the scenarios de21 veloped under subsection (a); and 

22 (2) analyze and evaluate the technical and fi23 nancial impacts of the models to assist States, utili24 ties, and other stakeholders in— 

25 (A) enhancing strategic planning efforts; 


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1 (B) avoiding stranded costs; and 

2 (C) maximizing the cost-effectiveness of fu3 ture grid-related investments. 

4 (c) INPUT.—The Secretary shall develop the sce5 narios and conduct the modeling and analysis under sub6 sections (a) and (b) with participation or input, as appro7 priate, from— 

8 (1) the National Laboratories; 

9 (2) States; 

10 (3) State regulatory authorities; 

11 (4) transmission organizations; 

12 (5) representatives of all sectors of the electric 

13 power industry; 

14 (6) academic institutions; 

15 (7) independent research institutes; and 

16 (8) other entities. 

17 (d) EFFECT.—Nothing in this section grants any per18 son a right to receive or review confidential, proprietary, 

19 or otherwise protected information concerning grid archi20 tecture or scenarios. 

21 SEC. 7. VOLUNTARY MODEL PATHWAYS. 

22 (a) ESTABLISHMENT OF VOLUNTARY MODEL PATH23 WAYS.— 

24 (1) ESTABLISHMENT.—Not later than 90 days 

25 after the date of the enactment of this Act, the SecVerDate Sep 11 2014 21:20 Feb 22, 2018 Jkt 079200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\S2445.IS S2445

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1 retary, in consultation with the steering committee 

2 established under paragraph (3), shall initiate the 

3 development of voluntary model pathways for mod4 ernizing the electric grid through a collaborative, 

5 public-private effort that— 

6 (A) produces illustrative policy pathways 

7 encompassing a diverse range of technologies 

8 that can be adapted for State and regional ap9 plications by regulators and policymakers; 

10 (B) facilitates the modernization of the 

11 electric grid and associated communications 

12 networks to achieve the objectives described in 

13 paragraph (2); 

14 (C) ensures a reliable, resilient, affordable, 

15 safe, and secure electric grid; and 

16 (D) acknowledges and accounts for dif17 ferent priorities, electric systems, and rate 

18 structures across States and regions. 

19 (2) OBJECTIVES.—The pathways established 

20 under paragraph (1) shall facilitate achievement of 

21 as many of the following objectives as practicable: 

22 (A) Near real-time situational awareness of 

23 the electric system. 

24 (B) Data visualization. 


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1 (C) Advanced monitoring and control of 

2 the advanced electric grid. 

3 (D) Enhanced certainty of policies for in4 vestment in the electric grid. 

5 (E) Increased innovation. 

6 (F) Greater consumer empowerment. 

7 (G) Enhanced grid resilience, reliability, 

8 and robustness. 

9 (H) Improved— 

10 (i) integration of distributed energy 

11 resources; 

12 (ii) interoperability of the electric sys13 tem; and 

14 (iii) predictive modeling and capacity 

15 forecasting. 

16 (I) Reduced cost of service for consumers. 

17 (J) Diversification of generation sources. 

18 (3) STEERING COMMITTEE.—Not later than 90 

19 days after the date of the enactment of this Act, the 

20 Secretary shall establish a steering committee to 

21 help develop the pathways under paragraph (1), to 

22 be composed of members appointed by the Secretary, 

23 consisting of persons with appropriate expertise rep24 resenting a diverse range of interests in the public, 


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1 private, and academic sectors, including representa2 tives of— 

3 (A) the Federal Energy Regulatory Com4 mission; 

5 (B) the National Laboratories; 

6 (C) States; 

7 (D) State regulatory authorities; 

8 (E) transmission organizations; 

9 (F) representatives of all sectors of the 

10 electric power industry; 

11 (G) institutions of higher education; 

12 (H) independent research institutes; and 

13 (I) other entities. 

14 (b) TECHNICAL ASSISTANCE.—The Secretary may 

15 provide technical assistance to States, Indian Tribes, or 

16 units of local government to adopt or implement one or 

17 more elements of the pathways developed under subsection 

18 (a)(1), including on a pilot basis. 

19 SEC. 8. PERFORMANCE METRICS FOR ELECTRICITY INFRA20 STRUCTURE PROVIDERS. 

21 (a) IN GENERAL.—Not later than 2 years after the 

22 date of the enactment of this Act, the Secretary, in con23 sultation with the steering committee established under 

24 section 7(a)(3), shall submit to the Committee on Energy 

25 and Natural Resources of the Senate and the Committee 


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1 on Energy and Commerce of the House of Representatives 

2 a report that includes— 

3 (1) an evaluation of the performance of the 

4 electric grid as of the date of the report; and 

5 (2) a description of the projected range of 

6 measurable costs and benefits associated with the 

7 changes evaluated under the scenarios developed 

8 under section 6. 

9 (b) CONSIDERATIONS FOR DEVELOPMENT OF

10 METRICS.—In developing metrics for the evaluation and 

11 projections under subsection (a), the Secretary shall con12 sider— 

13 (1) standard methodologies for calculating im14 provements or deteriorations in the performance 

15 metrics, such as reliability, grid efficiency, power 

16 quality, consumer satisfaction, sustainability, and fi17 nancial incentives; 

18 (2) standard methodologies for calculating po19 tential costs and measurable benefits value to rate20 payers, applying the performance metrics developed 

21 under paragraph (1); 

22 (3) identification of tools, resources, and de23 ployment models that may enable improved perform24 ance through the adoption of emerging, commerVerDate Sep 11 2014 21:20 Feb 22, 2018 Jkt 079200 PO 00000 Frm 00017 Fmt 6652 Sfmt 6201 E:\BILLS\S2445.IS S2445

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1 cially available or advanced grid technologies or solu2 tions, including— 

3 (A) multicustomer micro-grids; 

4 (B) distributed energy resources; 

5 (C) energy storage; 

6 (D) electric vehicles; 

7 (E) electric vehicle charging infrastructure; 

8 (F) integrated information and commu9 nications systems; 

10 (G) transactive energy systems; and 

11 (H) advanced demand management sys12 tems; and 

13 (4) the role of States and local regulatory au14 thorities in enabling a robust future electric grid to 

15 ensure that— 

16 (A) electric utilities remain financially via17 ble; 

18 (B) electric utilities make the needed in19 vestments that ensure a reliable, secure, and re20 silient grid; and 

21 (C) costs incurred to transform to an inte22 grated grid are allocated and recovered respon23 sibly, efficiently, and equitably. 


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1 SEC. 9. VOLUNTARY STATE, REGIONAL, AND LOCAL ELEC2 TRICITY DISTRIBUTION PLANNING. 

3 (a) IN GENERAL.—On the request of a State, re4 gional organization, or electric utility, the Secretary shall 

5 provide assistance to States, regional organizations, and 

6 electric utilities to facilitate the development of State, re7 gional, and local electricity distribution plans by— 

8 (1) conducting a resource assessment and anal9 ysis of future demand and distribution requirements; 

10 and 

11 (2) developing open source tools for State, re12 gional, and local planning and operations. 

13 (b) RISK AND SECURITY ANALYSIS.—The assessment 

14 under subsection (a)(1) shall include— 

15 (1) the evaluation of the physical security, cy16 bersecurity, and associated communications needs of 

17 an advanced distribution management system and 

18 the integration of distributed energy resources; and 

19 (2) advanced use of grid architecture to analyze 

20 risks in an all-hazards approach that includes com21 munications infrastructure, control systems architec22 ture, and power systems architecture. 

23 (c) DESIGNATION.—The information collected for the 

24 assessment and analysis under subsection (a)(1)— 


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1 (1) shall be considered to be critical electric in2 frastructure information under section 215A of the 

3 Federal Power Act (16 U.S.C. 824o–1); and 

4 (2) shall only be released in compliance with 

5 regulations implementing that section. 

6 (d) TECHNICAL ASSISTANCE.—For the purpose of 

7 assisting in the development of State and regional elec8 tricity distribution plans, the Secretary shall provide tech9 nical assistance to— 

10 (1) States; 

11 (2) regional reliability entities; and 

12 (3) other distribution asset owners and opera13 tors. 

14 (e) WITHDRAWAL.—A State or any entity that has 

15 requested technical assistance under this section may 

16 withdraw the request for technical assistance at any time, 

17 and on such withdrawal, the Secretary shall terminate all 

18 assistance efforts. 

19 (f) EFFECT.—Nothing in this section authorizes the 

20 Secretary to require any State, regional organization, re21 gional reliability entity, asset owner, or asset operator to 

22 adopt any model, tool, plan, analysis, or assessment. 


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1 SEC. 10. AUTHORIZATION OF APPROPRIATIONS. 

2 There is authorized to be appropriated to the Sec3 retary to carry out section 4 through this section 

4 $200,000,000 for each of fiscal years 2018 through 2027. 

Æ 


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