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Energy Security Legislative Update

Energy Security Legislative Update

Updated April 2011

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Introduction

The United States’ electric grid faces many risks, including natural disasters, energy supply disruptions and deliberate acts of sabotage and terrorism. State policies play an essential role in energy security by ensuring adequate responses to shortages, disruptions, and emergencies, and by hardening infrastructure to increase its resiliency in the face of emergencies.

State Energy Assurance Plans

In August 2009, the U.S. Department of Energy announced that 48 states would receive American Recovery and Reinvestment Act (ARRA) funds to develop and implement energy assurance and resiliency plans. Recipient states must revise current policies or create new plans that aim to build relationships among agencies, train personnel, identify responsibilities within local and state government, and ensure reliability while integrating renewable resources. Regulating agencies need to address infrastructure vulnerabilities; methods of tracking duration, response, and recovery time for disruptions; cyber security; data analysis and information sharing; emergency management; and homeland security integration.

Resources to assist planners include the Energy Assurance Planning Framework, and the State Energy Assurance Guidelines. These documents provide examples that could limit the impacts of short-term disruptions, reduce emergency risk and vulnerability, improve response times, and enhance resiliency. Collaboration among state and local agencies, as well as the private sector, is considered essential to secure interdependent infrastructure that is owned, operated, and regulated by multiple entities.

Tracking Progress

The National Association of State Energy Officials (NASEO) is working with DOE to provide updates on state progress and how funds are being used. Under the grants, states must develop a mechanism to track duration, response, restoration and recovery time of energy supply disruption events, and to improve data analysis and communications. States are working to gather data, and improve statistical analyses and tracking systems that will benefit energy providers and responders before and after emergencies. New procedures will enable information sharing and improve incident responses.

State activities include:

  • Arizona stakeholders are tracking outage data from utilities.
  • Georgia is tracking energy supply disruptions and implementing the Georgia Online Disaster Awareness Geospatial System (GoDAWGS), which will integrate data from various sources for analysis and information sharing.
  • Employees in Massachusetts are quantifying, assessing and evaluating energy supply impacts of infrastructure and asset losses.
  • Michigan is enhancing and expanding capabilities with a supply disruption tracking process, which will further advance workforce capacity. The state’s statistical analysis software has been updated and workers can train for forecasting and modeling.
  • In New York, agencies are developing an Energy Disruption Tracking Process deliverable which will include energy supply, outage and response data that are currently tracked.
  • North Carolina is moving forward with a plan to collect data on location, use and throughput of critical infrastructure, interoperability and dependence.
  • Texas completed an outage database to help track energy disruptions. This allows the Emergency Management Response Team to sort by utility, zip code, or county, and data are available to the public. Texas’ system was already tested by Hurricane Alex, proving successful but also exposing gaps to be addressed in future versions. The Railroad Commission of Texas (RRC) is also developing a Supply Disruption Tracking Plan.
  • Two more states – Washington and West Virginia – are developing supply disruption tracking systems.

State Legislative Action

Energy Supply and Emergency Preparedness Response Plans

At least 11 bills in seven states are pending which would consolidate certain state agencies and ensure coordination, revise provisions for maintaining energy emergency preparedness plans, create energy security acts, promote a reliable energy supply, and enable information sharing. Policies aim to mitigate the effects of energy shortages or help prevent energy emergencies altogether.

  • Arizona – Pending HB 2122 provides for development of, and recommendations for, state energy policies that promote and achieve a reliable energy supply.
  • Connecticut – Pending SB 1017 would consolidate the Department of Emergency Management and Homeland Security and the Board of Firearms Permit Examiners into the Department of Public Safety.
  • Florida – Three pending bills – HB 1349, SB 1724 and SB 1102 – would revise provisions that relate to renewable energy development, stating the need to develop and maintain an energy emergency preparedness plan that would minimize the effects of a shortage within the state.
  • Oklahoma enacted HB 3028 in 2010, which created the Oklahoma Energy Security Act and established a renewable energy standard.
  • Texas – Pending HB 1302 would consolidate the functions of the Public Utilities Commission and the Railroad Commission of Texas.
  • Utah – Three pieces of legislation are pending. House Bills 475 and 80 relate to the Office of Energy Development coordinating with the Division of Homeland Security for activities designed to test an energy emergency plan. The goal is to ensure coordination and information sharing among state agencies and subdivisions. House Bill 97 relates to restructuring and creating an energy emergency plan.
  • Washington – Pending HB 1850 would consolidate agencies.
  • West Virginia – Pending HB 2440 would allow for an energy-related public relations campaign to advocate West Virginia’s coal as an energy resource, and identify and report on energy infrastructure, including critical government services in times of emergency or inoperativeness.

Aggregated Data Sharing

A pending bill in Colorado (HB 1191) would allow aggregated resource consumption data obtained from utilities to be shared. The public utilities commission would have to certify independent data aggregators to obtain consumption data. Oklahoma is considering HB 1079, which would create the Electric Utility Data Protection Act and require electric utilities to provide standard usage data to a customer and set restrictions for disclosing aggregate usage data.

Smart Grid

Effective Energy Assurance Plans (EAP) incorporate smart grid as it enhances energy emergency response times and reduces vulnerability and risk. Smart meters can provide timely and accurate power outage information, improving emergency responses and even preventing some outages altogether.

Cyber security, however, becomes more critical as smart grid investments and initiatives increase. In March 2011, the North American Electric Reliability Corporation (NERC) formed the Cyber Attack Task Force to consider potential impacts of a cyber attack on the reliability of the bulk power system. The task force will identify how to enhance existing protection and recovery capabilities, plans and procedures.

Since January 2010, at least 15 states have considered legislation relating to smart grid deployment or smart meter implementation:

  • California – Pending AB 37 would require the Public Utilities Commission to identify alternative options for customers that decline installation of wireless advanced metering infrastructure devices or smart meters as part of an approved smart grid deployment plan.
  • Colorado – Pending SB 131 concerns creating a smart energy grid and implementing recommendations from the Colorado Smart Grid Task Force.
  • Hawaii – House Bill 1518 and SB 1456, both pending, would establish the Hawaii Electricity Reliability Council to develop and implement grid reliability and interconnection standards. The council would be directed to provide technical guidance concerning smart grid system implementation.
  • Illinois – House Bill 6154, which failed in 2010, would have adopted minimum standards for smart grid technology.
  • Kansas – Pending HCR 5005 would establish a goal of at least 50 percent of all electric meters for each public utility to be smart grid compliant. Also pending, HCR 5012 works towards smart grid compliance and HB 2303 states that any public utility that has deployed smart meters to a majority of its residential customers shall file a tariff for variable time-of-day pricing of electricity.
  • Maine – Pending SB 201 would impose a one-year moratorium on the installation of smart electric meters and HB 563 would require the PUC to establish terms and conditions to govern the installation of smart meters, giving customers the option to opt out of installation or to have them removed.
  • Montana – Pending SB 305 relates to new transmission lines but notes that the need for lines could be mitigated by focusing on efficiency, including smart grid technologies.
  • New Jersey – AB 913, pending, would establish a Smart Grid Pilot Program and Smart Grid Technology Research Center at Rutgers University, and direct the center to evaluate whether and to what extend smart grid deployment would provide earlier detection and quicker repair of failures, and reliability and efficiency to the distribution grid. Also pending, AB 912 would limit cost recovery for public utilities of smart grid equipment or software.
  • New York – Five bills are pending (AB’s 296, 1656 and 2144, and SB’s 1084 and 3466) relating to the installation of smart meters, establishment of a smart grid system, and a nodal metering initiative demonstration project for smart meters to be installed at appropriate places along the grids to measure electricity consumption within a certain community.
  • Rhode Island – SB 457, pending, would raise the cap on net metering.
  • Vermont – Pending SB 78 proposes programs designed to facilitate statewide smart grid deployment.
  • Washington – Two pending energy efficiency bills, HB 1639 and SB 5464, include smart grid provisions.
  • West Virginia – HB 2025 and HB 3088 (both pending) relate to smart meter and smart grid technologies. They would provide for evaluation on whether the technologies are cost effective in reducing consumption and peak demand, and direct implementation of deployment as appropriate.

Reducing Dependence on Foreign Oil

At least fifteen states are considering legislation that aims to enhance domestic energy security by reducing dependence on foreign oil. Most bills relate to local production of energy to reduce dependence on imported fuels, although some states recommend reducing overall oil development or consumption.

  • Alaska’s pending HRJ 11 urges Congress to not pass legislation that would designate land in a certain area as wilderness since development of oil reserves in that area would reduce U.S. dependence on foreign oil.
  • California – Pending AB 650 would establish a task force on public transportation and require a report on decreasing dependence on foreign oil.
  • Hawaii – Three bills and two resolutions (HB 1366, SB 189, SB 1365, HCR 40 and HR 35) aim to reduce dependence on foreign oil by establishing performance standards and mandates for cool roofs on new buildings, evaluating the feasibility of community solar gardens in the net metering law, and ensuring that agencies enter into energy performance contracts to receive appropriations which would enable certain projects.
  • In Illinois, pending HB 3307 would provide for the creation and operation of an E85 Market Expansion Program to reduce foreign oil use.
  • Maine’s HB 436 proposes development for a plan to reduce Maine’s dependence on oil, which must include targets for reducing total oil consumption that cannot provide less than a 30 percent overall reduction in oil consumption from 2009 by 2030 and a 50 percent reduction by 2050.
  • Massachusetts – Two bills(HB 901 and 2660) address transportation issues pertaining to dependence on foreign oil.
  • New Jersey lawmakers are considering seven bills (SB 298, AB 3476, AB 2104, SB 2085, AB 3123, SB 1413 and AB 1052) that relate to alternative fuel vehicles, biofuels in place of fossil fuels for state vehicles, and certain voltage regulation technologies as a means to decrease dependence on foreign oil.
  • At least ten pending bills in 8 other states – New Mexico, New York, Oklahoma, Oregon, Rhode Island, South Carolina, Washington and West Virginia – directly aim to reduce foreign oil dependency in similar ways.
  • Alaska (HJR’s 9 and 12), Florida (HB 1357) and Montana (Draft 2150 and SJR 12) are considering resolutions or bills that urge Congress to pass legislation that promotes oil and gas exploration and development, noting that developing domestic resources would enhance the nation’s energy security.

Biofuel

While most states have some sort of biofuel incentive, a few states have cited energy security as a reason for focusing on ethanol and biofuel production. Hawaii has been most aggressive, with ten bills pending that broaden ethanol facility and biofuel production tax credits, create income tax credits, and modify existing tax incentives for ethanol production facilities. In 2010, Illinois adopted HR 843 and SR 808, which urge Congress to enact legislation that would extend tax incentives for domestic biodiesel production. Pending HR 1240 in Illinois would urge growth and development of biofuels to reduce dependence on oil and avert potential disasters caused by oil production. Lawmakers in Florida are considering SB 1284, which provides for bonding requirement exemptions for certain biodiesel manufacturers finding that the use of renewable fuel reduces dependence on foreign oil. In New Jersey, two bills (SB 1413 and AB 1052) would require state entities to purchase biofuels in place of fossil fuels when reasonable and cost-effective.

Financing

Many states consider financing energy projects or emergency response programs, specifically to enhance energy security.

  • Hawaii lawmakers are considering ten bills (HB’s 9, 470, 822, 1386, 1019, 1090, and SB’s 136, 1246, 1317 and 722) that relate to the Energy Security Special Fund. The legislation would increase the environmental response, energy and food security tax and distributions to the energy security special fund, amend allocations, or impose a barrel tax on aviation fuel. Two enacted bills – HB 2421 and SB 2875 – increase the petroleum products tax, allocate money to the Environmental Response Revolving Fund and the Energy Security, Energy Systems Development and Agricultural Development and Food Security Specials Fund.
  • Indiana is considering Senate Bill 251, which would provide for clean energy cost recoveries, and SB 557 which would require certain financial incentives for implementing electric line facilities projects to suppliers to enhance security and reliability.  
  • Minnesota is considering two bills, HB 120 and SB 105, which relate to grants to local governments to pay for costs directly related to disasters, including emergency response, clean-up, repair, replacement or restoration of public infrastructure.
  • New Hampshire’s pending HB 559 would establish a committee to study how to encourage investments in small scale renewable energy resources and the potential energy security benefits.
  • Virginia enacted HB 672 in 2010, creating the Infrastructure Project Loan Fund.
  • Washington lawmakers are considering SB 5745 concerning assistance for financing local government infrastructure, and considering whether the government receiving assistance has experienced fiscal challenges resulting from a natural disaster or emergency infrastructure needs.

Nuclear and Energy Security

Since 2010, at least ten states introduced bills that address nuclear energy as it relates to energy security. While lawmakers in some states recognize potential threats, others encourage nuclear plant deployment as crucial to ensuring U.S. energy security.

  • Illinois and Oregon considered bills relating to the dangers of potential radiation:
    • Illinois recognized naturally occurring radioactive material as posing a threat to Homeland Security by enacting HB 5203 in 2010, which delayed the repeal date of the Radiation Protection Act.
    • In Oregon, four bills are pending. House Bill 2900 calls for a comprehensive report on the transportation of radioactive material and an evaluation of the adequacy of the state’s emergency response agencies. Also pending, SB 168 and HB 2735 require that revenues derived from energy resource supplier assessments be used for certain activities – one of these requirements is that nuclear fueled thermal power plant, or nuclear installation, operators must be assessed to fund emergency preparedness activities. Senate Bill 164 would create the State Energy Commission and require consultation with the Oregon Health Authority and Office of Emergency Management to establish health protection rules and procedures for evacuating communities affected by radiation in the event of an accident or catastrophe caused by operation of a nuclear power plant.
  • Vermont is considering a bill (HB 36) that would declare each owner and operator of a nuclear generating plant independently liable for the cost of post-closure activities.
  • Three states are considering tightening restrictions on weapons.
  • At least four states considered encouraging nuclear development:
    • In Minnesota, SB 50 (pending) would allow certificates of need for new nuclear power plants, but directs the Office of Energy Security to study the likely future costs to ratepayers and taxpayers, and for storing and maintaining spent fuel.
    • New Hampshire – HCR 4 (which failed to pass in 2011) would have urged the NRC to permit the state to relicense nuclear power plants.
    • North Dakota’s pending HCR 3033 recognizes nuclear energy as having an indispensable role to U.S. energy security.
    • In Oklahoma, HB 2043 (pending) would establish a notice and procedure for a new plant application, requiring a description of how it will reduce dependence on other energy resources.

Terrorism

New York is considering a bill that relates to energy transportation and storage security, and the energy security program. If passed, AB 2441 will define acts of terrorism, including biological, chemical or radiological, as disasters for the purpose of local disaster preparedness plans.

Sources:

  • State Energy Assurance Updates (Washington, D.C.: National Association of State Energy Officials, 2010); http://www.naseo.org/energyassurance/updates/index.html.
  • Smart Grid & Cyber Security for Energy Assurance: Planning Elements for Consideration in States’ Energy Assurance Plans (Washington, D.C.: National Association of State Energy Officials, 2010); http://www.naseo.org/energyassurance/Smart_Grid_and_Cyber_Security_for_Energy_Assurance-NASEO_December_2010.pdf

 

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