II 

114TH CONGRESS 

1ST SESSION S. 1243 

To facilitate modernizing the electric grid, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MAY 7, 2015 

Ms. CANTWELL (for herself, Ms. HIRONO, and Mr. KING) introduced the following bill; which was read twice and referred to the Committee on Energy and Natural Resources 

A BILL 

To facilitate modernizing 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. 

4 This Act may be cited as the ‘‘Grid Modernization 

5 Act of 2015’’. 

6 TITLE I—GENERAL PROVISIONS 

7 SEC. 101. STATEMENT OF POLICY ON GRID MODERNIZA8 TION. 

9 It is the policy of the United States to promote and 

10 advance— 


smartinez on DSK4TPTVN1PROD with BILLS
2 

•S 1243 IS

1 (1) the modernization of the energy delivery in2 frastructure of the United States, including bol3 stering the reliability, affordability, diversity, effi4 ciency, security, and resilience of domestic energy 

5 supplies, through advanced grid technologies; 

6 (2) the modernization of the electric grid— 

7 (A) to continue facilitating the develop8 ment of a Smart Grid as characterized in sec9 tion 1301 of the Energy Independence and Se10 curity Act of 2007 (42 U.S.C. 17381); 

11 (B) to enable a robust multidirectional 

12 power flow that leverages distributed energy re13 sources; and 

14 (C) to facilitate the alignment of business 

15 and regulatory models to achieve a grid that op16 timizes— 

17 (i) the entire electric delivery system; 

18 and 

19 (ii) a sustainable, reliable, and resil20 ient energy future; 

21 (3) relevant research and development in ad22 vanced grid technologies, including— 

23 (A) energy storage; 


smartinez on DSK4TPTVN1PROD with BILLS
3 

•S 1243 IS

1 (B) predictive tools and requisite real-time 

2 data to enable the dynamic optimization of grid 

3 operations; 

4 (C) power electronics that ease the chal5 lenge of intermittent and distributed genera6 tion; 

7 (D) real-time data and situational aware8 ness tools and systems; and 

9 (E) tools to increase data security, physical 

10 security, and cybersecurity awareness and pro11 tection; 

12 (4) the leadership of the United States in basic 

13 and applied sciences to develop a systems approach 

14 to innovation and invention of cybersecure advanced 

15 grid technologies, architectures, and control para16 digms capable of managing diverse supplies and 

17 loads; 

18 (5) the safeguarding of the critical energy deliv19 ery infrastructure of the United States and the en20 hanced resilience of the infrastructure to all hazards, 

21 including— 

22 (A) extreme weather events; 

23 (B) cyber and physical threats; and 

24 (C) other factors that affect energy deliv25 ery; 


smartinez on DSK4TPTVN1PROD with BILLS
4 

•S 1243 IS

1 (6) the coordination of goals, investments to op2 timize the grid, and other measures for energy effi3 ciency, advanced grid technologies, interoperability, 

4 and demand response resources; 

5 (7) partnerships with States and the private 

6 sector— 

7 (A) to facilitate advanced grid capabilities 

8 and strategies; and 

9 (B) to provide technical assistance, tools, 

10 or other related information necessary to en11 hance grid integration, particularly in connec12 tion with the development at the State and local 

13 levels of strategic energy, energy surety and as14 surance, and emergency preparedness, response, 

15 and restoration planning; 

16 (8) the deployment of information and commu17 nications technologies at all levels of the electric sys18 tem; 

19 (9) opportunities to provide consumers with 

20 timely information and advanced control options; 

21 (10) sophisticated or advanced control options 

22 to integrate distributed energy resources and associ23 ated ancillary services; 

24 (11) open-source communications, database ar25 chitectures, and common information model standVerDate Sep 11 2014 06:21 May 14, 2015 Jkt 049200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1243.IS S1243

smartinez on DSK4TPTVN1PROD with BILLS
5 

•S 1243 IS

1 ards, guidelines, and protocols that enable interoper2 ability to maximize efficiency gains and associated 

3 benefits among— 

4 (A) the grid; 

5 (B) energy and building management sys6 tems; and 

7 (C) residential, commercial, and industrial 

8 equipment; 

9 (12) private sector investment in the energy de10 livery infrastructure of the United States through 

11 targeted demonstration and validation of advanced 

12 grid technologies; and 

13 (13) establishment of common valuation meth14 ods and tools for cost-benefit analysis of grid inte15 gration paradigms. 

16 SEC. 102. GRID STORAGE PROGRAM. 

17 (a) IN GENERAL.—The Secretary of Energy (acting 

18 through the Assistant Secretary of the Office of Electricity 

19 Delivery and Energy Reliability) (referred to in this Act 

20 as the ‘‘Secretary’’) shall conduct a program of research 

21 and development of electric grid energy storage that ad22 dresses the principal challenges identified in the 2013 De23 partment of Energy Strategic Plan for Grid Energy Stor24 age. 


smartinez on DSK4TPTVN1PROD with BILLS
6 

•S 1243 IS

1 (b) AREAS OF FOCUS.—The program under this sec2 tion shall focus on— 

3 (1) materials and electrochemical systems re4 search; 

5 (2) power conversion technologies research; 

6 (3) other fundamental and applied research 

7 critical to widespread deployment of storage; 

8 (4) device development that builds on results 

9 from research described in paragraphs (1) through 

10 (3), including combinations of power electronics, ad11 vanced optimizing controls, and energy storage as a 

12 general purpose element of the electric grid; 

13 (5) grid-scale testing and analysis of storage 

14 devices, including test-beds and field trials; 

15 (6) cost-benefit analyses that inform capital ex16 penditure planning for regulators and owners and 

17 operators of components of the electric grid; 

18 (7) storage device safety and reliability, includ19 ing potential failure modes, mitigation measures, 

20 and operational guidelines; and 

21 (8) standards for storage device performance, 

22 control interface, grid interconnection, and inter23 operability. 

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

25 provide technical and financial assistance to States, Indian 


smartinez on DSK4TPTVN1PROD with BILLS
7 

•S 1243 IS

1 tribes, or units of local government to participate in or 

2 use research, development, or deployment of technology 

3 developed under this section. 

4 SEC. 103. ELECTRIC SYSTEM GRID ARCHITECTURE, SCE5 NARIO DEVELOPMENT, AND MODELING. 

6 (a) GRID ARCHITECTURE AND SCENARIO DEVELOP7 MENT.— 

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

9 the Secretary shall establish and facilitate a collabo10 rative process to develop model grid architecture and 

11 a set of future scenarios for the electric system to 

12 examine the impacts of different combinations of re13 sources (including different quantities of distributed 

14 energy resources and large-scale, central generation) 

15 on the electric grid. 

16 (2) MARKET STRUCTURE.—The grid architec17 ture and scenarios developed under paragraph (1) 

18 shall account for differences in market structure, in19 cluding an examination of the potential for stranded 

20 costs in each type of market structure. 

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

22 architecture developed under paragraph (1), the Sec23 retary shall make recommendations regarding addi24 tional standards that may be required, if any, to enVerDate Sep 11 2014 06:21 May 14, 2015 Jkt 049200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S1243.IS S1243

smartinez on DSK4TPTVN1PROD with BILLS
8 

•S 1243 IS

1 sure the interoperability of grid systems and associ2 ated communications networks. 

3 (b) MODELING.—Subject to subsection (c), the Sec4 retary shall— 

5 (1) conduct modeling based on the scenarios de6 veloped under subsection (a); and 

7 (2) analyze and evaluate the technical and fi8 nancial impacts of the models to assist States, utili9 ties, and other stakeholders in— 

10 (A) enhancing strategic planning efforts; 

11 (B) avoiding stranded investments; and 

12 (C) maximizing the cost-effectiveness of fu13 ture grid-related investments. 

14 (c) INPUT.—The Secretary shall develop the sce15 narios and conduct the modeling and analysis under sub16 sections (a) and (b) with participation or input, as appro17 priate, from— 

18 (1) the National Laboratories; 

19 (2) States; 

20 (3) State regulatory authorities; 

21 (4) transmission organizations; 

22 (5) representatives of the electric industry; 

23 (6) academic institutions; 

24 (7) independent research institutes; and 

25 (8) other entities. 


smartinez on DSK4TPTVN1PROD with BILLS
9 

•S 1243 IS

1 TITLE II—DEMONSTRATION 

2 PROGRAMS 

3 SEC. 201. TECHNOLOGY DEMONSTRATION ON THE DIS4 TRIBUTION SYSTEM. 

5 (a) IN GENERAL.—The Secretary shall conduct 6 

6 demonstration projects to expand the application of tech7 nologies to improve observability, advanced controls, and 

8 prediction of system performance on the distribution sys9 tem. 

10 (b) PARTICIPATION.—The demonstration projects 

11 conducted under subsection (a) shall include the participa12 tion of a diverse selection of relevant owners and operators 

13 of distribution systems, including— 

14 (1) a utility; 

15 (2) a political subdivision of a State; and 

16 (3) an electric cooperative. 

17 (c) CYBERSECURITY PLAN.—Each demonstration 

18 project conducted under subsection (a) shall include the 

19 development of a cybersecurity plan. 

20 SEC. 202. RESILIENT COMMUNITIES PROGRAM. 

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

22 program for the development and promotion of grid-scale 

23 energy storage with microgrids to enhance the resilience 

24 of critical infrastructure. 


smartinez on DSK4TPTVN1PROD with BILLS
10 

•S 1243 IS

1 (b) COLLABORATION.—The program established 

2 under subsection (a) shall provide for the collaboration of 

3 relevant stakeholders in the program, including— 

4 (1) States; 

5 (2) Indian tribes; 

6 (3) regional entities and regulators; 

7 (4) units of local government; 

8 (5) institutions of higher education; and 

9 (6) private sector entities. 

10 (c) PHASES.—The program established under sub11 section (a) shall be divided into the following phases: 

12 (1) Phase I, which shall consist of the develop13 ment of a feasibility assessment. 

14 (2) Phase II, which shall consist of cost-shared 

15 demonstration projects that include the development 

16 of physical and cybersecurity plans to take appro17 priate measures to protect and secure the electric 

18 grid. 

19 (3) Phase III, which shall establish a benefits 

20 analysis plan to help inform regulators, policy21 makers, and industry stakeholders about the value 

22 of the resilience investments of Phase II. 


smartinez on DSK4TPTVN1PROD with BILLS
11 

•S 1243 IS

1 TITLE III—STANDARDS AND 

2 ASSISTANCE FOR STATES 

3 SEC. 301. STATE CONSIDERATION OF RESILIENCE. 

4 (a) ADOPTION OF STANDARDS.—Section 111(d) of 

5 the Public Utility Regulatory Policies Act of 1978 (16 

6 U.S.C. 2621(d)) is amended by adding at the end the fol7 lowing: 

8 ‘‘(20) RESILIENCE.— 

9 ‘‘(A) DEFINITION OF ELECTRIC GRID RE10 SILIENCE.—The term ‘electric grid resilience’ 

11 means the ability of the electric grid to adapt 

12 to changing conditions and withstand and rap13 idly recover from disruptions. 

14 ‘‘(B) REQUIRED CONSIDERATION.—Each 

15 electric utility shall incorporate into the inte16 grated resource planning of the electric utility 

17 consideration of electric grid resilience. 

18 ‘‘(C) FACTORS.—Consideration under sub19 paragraph (B) shall include an evaluation of po20 tential benefits of enhancing electric grid resil21 ience, including— 

22 ‘‘(i) system stability under severe and 

23 nontraditional hazards; 

24 ‘‘(ii) adaptation to region-specific nat25 ural threats and vulnerabilities; 


smartinez on DSK4TPTVN1PROD with BILLS
12 

•S 1243 IS

1 ‘‘(iii) adaptation to climate change-re2 lated extreme weather disruptions; 

3 ‘‘(iv) support provided to inter4 dependent critical infrastructures reliant 

5 on energy services to operate; 

6 ‘‘(v) reduced costs under normal oper7 ating conditions; 

8 ‘‘(vi) enhanced distributed generation 

9 and microgrid functionality to operate as 

10 an integrated energy system in intentional 

11 islanding mode; 

12 ‘‘(vii) localized energy generation that 

13 avoids incurrence of transmission and dis14 tribution losses; 

15 ‘‘(viii) system operational flexibility; 

16 and 

17 ‘‘(ix) ancillary environmental benefits, 

18 including greenhouse gas reductions.’’. 

19 (b) COMPLIANCE.— 

20 (1) TIME LIMITATIONS.—Section 112(b) of the 

21 Public Utility Regulatory Policies Act of 1978 (16 

22 U.S.C. 2622(b)) is amended by adding at the end 

23 the following: 

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

25 enactment of this paragraph, each State regulatory 


smartinez on DSK4TPTVN1PROD with BILLS
13 

•S 1243 IS

1 authority (with respect to each electric utility for 

2 which it has ratemaking authority), and each non3 regulated electric utility, shall— 

4 ‘‘(i) commence the consideration referred 

5 to in section 111; or 

6 ‘‘(ii) set a hearing date for such consider7 ation, with respect to the standard established 

8 by paragraph (20) of section 111(d). 

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

10 enactment of this paragraph, each State regulatory 

11 authority (with respect to each electric utility for 

12 which it has ratemaking authority), and each non13 regulated electric utility, shall— 

14 ‘‘(i) complete the consideration required 

15 under subparagraph (A); and 

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

17 section 111 with respect to the standard estab18 lished by paragraph (20) of section 111(d).’’. 

19 (2) FAILURE TO COMPLY.—Section 112(c) of 

20 the Public Utility Regulatory Policies Act of 1978 

21 (16 U.S.C. 2622(c)) is amended by adding at the 

22 end the following: ‘‘In the case of the standard es23 tablished by paragraph (20) of section 111(d), the 

24 reference contained in this subsection to the date of 


smartinez on DSK4TPTVN1PROD with BILLS
14 

•S 1243 IS

1 enactment of this Act shall be deemed to be a ref2 erence to the date of enactment of that paragraph.’’. 

3 SEC. 302. VOLUNTARY MODEL PATHWAYS. 

4 (a) ESTABLISHMENT OF VOLUNTARY MODEL PATH5 WAYS.— 

6 (1) FINDING.—Congress finds that a set of vol7 untary model pathways for modernizing the electric 

8 grid would provide policymakers and regulators with 

9 valuable and flexible options to consider in adapting 

10 policy or regulatory mechanisms to match the needs 

11 of an evolving electric grid. 

12 (2) ESTABLISHMENT.—Not later than 90 days 

13 after the date of enactment of this Act, the Sec14 retary shall initiate the development of voluntary 

15 model pathways for modernizing the electric grid 

16 through a collaborative, public-private effort that— 

17 (A) produces illustrative policy pathways 

18 that can be adapted for State and regional ap19 plications by regulators and policymakers; 

20 (B) facilitates the modernization of the 

21 electric grid to achieve the objectives described 

22 in paragraph (3); 

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

24 safe, and secure electric system; and 


smartinez on DSK4TPTVN1PROD with BILLS
15 

•S 1243 IS

1 (D) acknowledges and provides for dif2 ferent priorities, electric systems, and rate 

3 structures across States and regions. 

4 (3) OBJECTIVES.—The pathways established 

5 under paragraph (2) shall facilitate achievement of 

6 the following objectives: 

7 (A) Near real-time situational awareness of 

8 the electric system. 

9 (B) Data visualization. 

10 (C) Advanced monitoring and control of 

11 the advanced electric grid. 

12 (D) Enhanced certainty for private invest13 ment in the electric system. 

14 (E) Increased innovation. 

15 (F) Greater consumer empowerment. 

16 (G) Enhanced grid resilience, reliability, 

17 and robustness. 

18 (H) Improved— 

19 (i) integration of distributed energy 

20 resources; 

21 (ii) interoperability of the electric sys22 tem; and 

23 (iii) predictive modeling and capacity 

24 forecasting. 


smartinez on DSK4TPTVN1PROD with BILLS
16 

•S 1243 IS

1 (4) STEERING COMMITTEE.—Not later than 90 

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

3 Secretary shall establish a steering committee to fa4 cilitate the development of the pathways under para5 graph (2), to be composed of members appointed by 

6 the Secretary, consisting of persons with appropriate 

7 expertise representing a diverse range of interests in 

8 the public, private, and academic sectors, including 

9 representatives of— 

10 (A) the Smart Grid Task Force; and 

11 (B) the Smart Grid Advisory Committee. 

12 (b) TECHNICAL AND FINANCIAL ASSISTANCE.— 

13 (1) IN GENERAL.—The Secretary may provide 

14 technical and financial assistance to States, Indian 

15 tribes, or units of local government to adopt 1 or 

16 more elements of the pathways developed under sub17 section (a)(2). 

18 (2) DISTRIBUTION OF FINANCIAL ASSIST19 ANCE.—Any financial assistance provided to a State 

20 under paragraph (1) may be distributed by the State 

21 to units of local government in the State for pur22 poses of implementing the pathways developed under 

23 subsection (a)(2). 


smartinez on DSK4TPTVN1PROD with BILLS
17 

•S 1243 IS

1 SEC. 303. PERFORMANCE METRICS FOR ELECTRICITY IN2 FRASTRUCTURE PROVIDERS. 

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

4 date of enactment of this Act, the Secretary shall— 

5 (1) develop baseline, voluntary model perform6 ance metrics to facilitate and promote the adoption 

7 of best practices and processes for electricity infra8 structure providers to design, build, and implement 

9 a modernized electric grid and maximize opportuni10 ties to enhance progress in grid technologies and ca11 pabilities, consumer engagement, and policy; 

12 (2) quantify the potential performance improve13 ments that could be achieved through deployment of 

14 new grid technologies and systems; and 

15 (3) distribute through appropriate channels a 

16 report describing the findings under paragraph (1). 

17 (b) CONSIDERATIONS.—In developing the perform18 ance metrics under subsection (a)(1), the Secretary shall 

19 consider— 

20 (1) standard methodologies for calculating im21 provements or deteriorations in the performance 

22 metrics, such as reliability, grid efficiency, power 

23 quality, consumer satisfaction, sustainability, and fi24 nancial incentives; 

25 (2) standard methodologies for calculating value 

26 to ratepayers, including broad economic and related 


smartinez on DSK4TPTVN1PROD with BILLS
18 

•S 1243 IS

1 impacts from improvements to the performance 

2 metrics; 

3 (3) appropriate ownership and operating roles 

4 for electric utilities that would enable improved per5 formance through the adoption of emerging, com6 mercially available or advanced grid technologies or 

7 solutions, including— 

8 (A) multicustomer microgrids; 

9 (B) distributed energy resources; 

10 (C) energy storage; 

11 (D) electric vehicles; 

12 (E) electric vehicle charging infrastructure; 

13 (F) integrated information and commu14 nications systems; and 

15 (G) advanced demand management sys16 tems; and 

17 (4) with respect to States, the role of the grid 

18 operator in enabling a robust future electric system 

19 to ensure that— 

20 (A) electric utilities remain financially via21 ble; 

22 (B) electric utilities make the needed in23 vestments that ensure a reliable, secure, and re24 silient grid; and 


smartinez on DSK4TPTVN1PROD with BILLS
19 

•S 1243 IS

1 (C) costs incurred to transform to an inte2 grated grid are allocated and recovered respon3 sibly, efficiently, and equitably. 

4 SEC. 304. DISTRIBUTION PLANNING. 

5 (a) IN GENERAL.—Upon the request of a State or 

6 regional organization, the Secretary shall partner with 

7 States and regional organizations to facilitate the develop8 ment of State and regional distribution plans by— 

9 (1) conducting a resource assessment and anal10 ysis of future demand and distribution requirements; 

11 and 

12 (2) developing open source tools for State and 

13 regional planning and operations. 

14 (b) EXISTING TOOLS.—The tools developed under 

15 subsection (a)(2) shall build on existing tools used or de16 veloped by the Department of Energy. 

17 (c) RISK AND SECURITY ANALYSIS.—The assessment 

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

19 (1) the evaluation of the physical and cyberse20 curity needs of an advanced distribution manage21 ment system and the integration of distributed en22 ergy resources; and 

23 (2) advanced use of grid architecture to analyze 

24 risks in a holistic all-hazards approach that includes 


smartinez on DSK4TPTVN1PROD with BILLS
20 

•S 1243 IS

1 communications infrastructure, control systems ar2 chitecture, and power systems architecture. 

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

4 developing electricity distribution plans, the Secretary 

5 shall provide technical assistance to— 

6 (1) States; 

7 (2) regional reliability entities; and 

8 (3) other distribution asset owners and opera9 tors. 

10 TITLE IV—AUTHORIZATION OF 

11 APPROPRIATIONS 

12 SEC. 401. AUTHORIZATION OF APPROPRIATIONS. 

13 There is authorized to be appropriated to the Sec14 retary carry out this Act (including the amendments made 

15 by this Act) and other related activities $200,000,000 for 

16 each of fiscal years 2017 through 2021. 

Æ 


smartinez on DSK4TPTVN1PROD with BILLS