[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 2232 Introduced in Senate (IS)]

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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.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Next Generation 
Grid Resources and Infrastructure Development Act'' or the ``Next 
Generation GRID Act''.
    (b) Table of Contents.--The table of contents for 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.

SEC. 2. GENERAL RIGHT OF INTERCONNECTION.

    The Public Utility Regulatory Policies Act of 1978 is amended by 
inserting after section 4 (16 U.S.C. 2603) the following:

``SEC. 5. GENERAL RIGHT OF INTERCONNECTION.

    ``(a) Definition of Distributed Energy Resource.--In this section, 
the term `distributed energy resource' means a resource, technology, or 
combination of resources and technologies interconnected to the 
electricity distribution system that generates, manages, or reduces 
energy use.
    ``(b) Right of Interconnection.--Distributed energy resources shall 
have a general right of interconnection under this Act.
    ``(c) Analysis of Interconnection Requests.--The methods used to 
calculate the impacts of proposed interconnections under this Act shall 
be transparent, repeatable, consistent, clearly established, and agreed 
to by the appropriate State regulatory authority.
    ``(d) Rates and Fees.--As the State or appropriate State regulatory 
authority determines to be appropriate, each electric utility shall 
adopt standards, conditions, and requirements for rates and fees for 
the interconnection of distributed energy resources under this Act, 
that--
            ``(1) reflect the 2-way costs and benefits for the 
        distributed energy resource and the electricity grid;
            ``(2) provide fair credit for energy exported to the 
        electricity grid;
            ``(3) are transparently derived and consistently applied; 
        and
            ``(4) are not punitive.
    ``(e) Timeframes.--
            ``(1) In general.--Timeframes for the interconnection of 
        distributed energy resources under this Act shall be well-
        defined, expeditious, and not unduly protracted, as determined 
        by the appropriate State regulatory authority.
            ``(2) Delays or denial.--An interconnection of distributed 
        energy resources under this Act shall not be delayed or denied 
        unless the electric utility demonstrates that--
                    ``(A) the interconnection is unsafe or 
                impracticable; and
                    ``(B) any safety or impracticability issue 
                demonstrated under subparagraph (A) cannot be 
                mitigated.''.

SEC. 3. ELECTRICITY DISTRIBUTION RESOURCE PLANNING.

    (a) Development of Electricity Distribution Resource Plans.--
Section 111(d) of the Public Utility Regulatory Policies Act of 1978 
(16 U.S.C. 2621(d)) is amended by adding at the end the following:
            ``(20) Electricity distribution resource planning.--
                    ``(A) Definitions.--In this paragraph:
                            ``(i) Distributed energy resource.--The 
                        term `distributed energy resource' has the 
                        meaning given the term in section 5(a).
                            ``(ii) Microgrid.--The term `microgrid' 
                        means a group of interconnected loads and 
                        distributed energy resources within clearly 
                        defined electrical boundaries that--
                                    ``(I) acts as a single controllable 
                                entity with respect to the electricity 
                                grid; and
                                    ``(II) can connect and disconnect 
                                from the electricity grid to operate in 
                                grid-connected mode and island mode.
                    ``(B) Requirement.--Each electric utility shall 
                develop an electricity distribution resource plan on a 
                regular basis, as determined by the appropriate State 
                regulatory authority.
                    ``(C) Components of electricity distribution 
                resource plan.--An electricity distribution resource 
                plan developed under subparagraph (B) shall identify--
                            ``(i) the future electricity demand and 
                        distribution system requirements of the 
                        electric utility;
                            ``(ii) projections for the deployment of 
                        distributed energy resources within the utility 
                        service territory during the period covered by 
                        the plan by size, type, and location;
                            ``(iii) any locational benefits and costs 
                        of distributed energy resources to the 
                        distribution system of the electric utility and 
                        ratepayers, including--
                                    ``(I) benefits to grid resiliency 
                                and reliability;
                                    ``(II) avoided or incurred 
                                investments in distribution or 
                                transmission infrastructure;
                                    ``(III) avoided or incurred 
                                investments in generation capacity;
                                    ``(IV) any environmental benefits; 
                                and
                                    ``(V) any other costs or benefits 
                                to the electricity grid or to 
                                ratepayers;
                            ``(iv) any temporal benefits or costs of 
                        distributed energy resources to the 
                        distribution system of the electric utility, 
                        including--
                                    ``(I) any changes in peak demand; 
                                and
                                    ``(II) any changes in the 
                                distribution load curve;
                            ``(v) any investments needed to improve the 
                        integration, management, or deployment of 
                        distributed energy resources in the 
                        distribution system of the electric utility;
                            ``(vi) any barriers to the integration of 
                        distributed energy resources in the 
                        distribution system of the electric utility, 
                        including limitations to system capacity that 
                        would require upgrades to integrate distributed 
                        energy resources;
                            ``(vii) any locations on the distribution 
                        system of the electric utility suitable for 
                        microgrid development based on geographic, 
                        resiliency, reliability, or cost factors; and
                            ``(viii) any physical and cybersecurity 
                        needs and vulnerabilities of the distribution 
                        system of the electric utility.
                    ``(D) Designation of participants.--For each 
                electric utility for which the State or State 
                regulatory authority has ratemaking authority, the 
                State or State regulatory authority, as applicable, may 
                designate participants to assist in developing an 
                electricity distribution resource plan under 
                subparagraph (B), including, as the State or State 
                regulatory authority determines to be appropriate--
                            ``(i) any nonprofit or for-profit entity 
                        with experience in planning, designing, or 
                        operating distributed energy resources or 
                        systems;
                            ``(ii) a regional regulatory authority or 
                        other regional entity;
                            ``(iii) an institution of higher education;
                            ``(iv) a National Laboratory (as defined in 
                        section 2 of the Energy Policy Act of 2005 (42 
                        U.S.C. 15801));
                            ``(v) a ratepayer or advocate of 
                        ratepayers; and
                            ``(vi) any other appropriate entity.
                    ``(E) Access to data.--In developing an electricity 
                distribution resource plan under subparagraph (B), the 
                electric utility shall provide to any participants 
                designated under subparagraph (D) access to relevant 
                data regarding the operation and performance of the 
                electricity grid, subject to any qualifications and 
                confidentiality requirements that the State regulatory 
                authority determines to be appropriate.''.
    (b) Technical and Financial Assistance for the Development of 
Electricity Distribution Resource Plans.--
            (1) Definitions.--In this subsection:
                    (A) Eligible entity.--The term ``eligible entity'' 
                means a State, State regulatory authority, electric 
                utility, or any other entity designated by a State or 
                State regulatory authority as a participant in the 
                development of a plan under paragraph (20)(D) of 
                section 111(d) of the Public Utility Regulatory 
                Policies Act of 1978 (16 U.S.C. 2621(d)) (as added by 
                subsection (a)).
                    (B) Plan.--The term ``plan'' means an electricity 
                distribution resource plan developed under paragraph 
                (20)(B) of section 111(d) of the Public Utility 
                Regulatory Policies Act of 1978 (16 U.S.C. 2621(d)) (as 
                added by subsection (a)).
                    (C) Secretary.--The term ``Secretary'' means the 
                Secretary of Energy.
                    (D) State regulatory authority.--The term ``State 
                regulatory authority'' has the meaning given the term 
                in section 3 of the Public Utility Regulatory Policies 
                Act of 1978 (16 U.S.C. 2602).
            (2) Technical and financial assistance.--At the request of 
        a State or State regulatory authority, the Secretary shall 
        provide--
                    (A) technical assistance to eligible entities to 
                assist in the development of a plan; and
                    (B) grants to eligible entities to contract for 
                qualified technical assistance to assist in the 
                development of a plan.
            (3) Authorization of appropriations.--There is authorized 
        to be appropriated to the Secretary to carry out this 
        subsection $200,000,000, to remain available until expended.

SEC. 4. NON-WIRES ALTERNATIVES.

    (a) Definition of Non-Wires Alternative.--Section 3 of the Federal 
Power Act (16 U.S.C. 796) is amended by adding at the end the 
following:
            ``(30) Non-wires alternative.--The term `non-wires 
        alternative' means an electricity grid investment or project 
        that uses one or more nontraditional solutions, including 
        distributed generation, energy storage, energy efficiency, 
        demand response, microgrids, or grid software and controls, to 
        defer or replace the need for specific equipment upgrades or 
        new infrastructure, such as transmission or distribution lines 
        or transformers, at a substation or circuit level.''.
    (b) Consideration of Non-Wires Alternatives in Regional 
Transmission Plans.--Section 202 of the Federal Power Act (16 U.S.C. 
824a) is amended by adding at the end the following:
    ``(h) Issuance of Rule Relating to Consideration of Non-Wires 
Alternatives in Regional Transmission Plans.--As soon as practicable 
after the date of enactment of this subsection, the Commission shall 
issue a final rule that--
            ``(1) requires public utility transmission providers--
                    ``(A) to solicit non-wires alternatives in the 
                development of regional transmission plans; and
                    ``(B) to identify opportunities for non-wires 
                alternatives;
            ``(2) requires Transmission Organizations to develop 
        procedures to control or manage non-wires alternatives 
        providing transmission services; and
            ``(3) authorizes Transmission Organizations to allocate and 
        recover costs of non-wires alternatives providing transmission 
        services that are demonstrated to be a cost-effective 
        alternative to an upgrade to, or the construction of new, 
        transmission infrastructure in the same manner as the upgrade 
        to, or construction of new, transmission infrastructure would 
        have been allocated and recovered.''.
    (c) Consideration of Non-Wires Alternatives by State Regulatory 
Authorities.--Section 111(d) of the Public Utility Regulatory Policies 
Act of 1978 (16 U.S.C. 2621(d)) (as amended by section 3(a)) is amended 
by adding at the end the following:
            ``(21) Non-wires alternatives.--
                    ``(A) In general.--To the extent a State regulatory 
                authority has the authority to allow electric utilities 
                to recover costs associated with electricity 
                transmission and distribution projects, each State 
                regulatory authority shall consider non-wires 
                alternatives (as defined in section 3 of the Federal 
                Power Act (16 U.S.C. 796)) in instances in which an 
                entity proposes transmission or distribution projects 
                seeking cost-of-service rate recovery.
                    ``(B) Cost recovery.--To reduce the costs to 
                ratepayers associated with potential upgrades to 
                transmission or distribution infrastructure, the cost 
                of a non-wires alternative considered under 
                subparagraph (A) shall be recovered from ratepayers in 
                the same manner as an upgrade to transmission or 
                distribution infrastructure would have been.''.

SEC. 5. DISTRIBUTION SYSTEM OPERATOR PILOT PROGRAM.

    (a) Definitions.--In this section:
            (1) Distribution system operator.--The term ``distribution 
        system operator'' means an entity, independent of the normal 
        operations of an electric utility, that--
                    (A) plans for, integrates, and manages distributed 
                energy resources within the service territory of an 
                electric utility;
                    (B) implements reliability standards for 
                distributed energy resources within the service 
                territory of an electric utility; and
                    (C) aggregates the economic attributes of 
                distributed energy resources within the service 
                territory of an electric utility for sale into a 
                wholesale energy or other market.
            (2) Electric utility.--The term ``electric utility'' has 
        the meaning given the term in section 3 of the Public Utility 
        Regulatory Policies Act of 1978 (16 U.S.C. 2602).
            (3) National laboratory.--The term ``National Laboratory'' 
        has the meaning given the term in section 2 of the Energy 
        Policy Act of 2005 (42 U.S.C. 15801).
            (4) Pilot program.--The term ``pilot program'' means the 
        pilot program established under subsection (b).
            (5) Regional transmission organization.--The term 
        ``Regional Transmission Organization'' has the meaning given 
        the term in section 3 of the Federal Power Act (16 U.S.C. 796).
            (6) Secretary.--The term ``Secretary'' means the Secretary 
        of Energy.
    (b) Pilot Program.--Not later than 1 year after the date of 
enactment of this Act, the Secretary shall establish a pilot program 
within the National Laboratories--
            (1) to research, develop, and test technology platforms and 
        operational procedures for a distribution system operator;
            (2) to evaluate best practices in designating the roles and 
        responsibilities of a distribution system operator relative to 
        other entities, including the relevant electric utility and 
        Regional Transmission Organization; and
            (3) to simulate the functions of a distribution system 
        operator in a range of grid conditions.
    (c) Working Group.--
            (1) In general.--The Secretary shall establish a working 
        group to participate in the design and operation of the pilot 
        program.
            (2) Membership.--The working group established under 
        paragraph (1) shall be composed of members, to be appointed by 
        the Secretary, at least one of which shall represent each of 
        the following:
                    (A) The Department of Energy.
                    (B) The National Laboratories.
                    (C) An electric utility.
                    (D) The North American Electric Reliability 
                Corporation.
                    (E) A Regional Transmission Organization.
                    (F) A State or regional energy agency.
                    (G) A national research body or institution of 
                higher education.
    (d) Report to Congress.--Not later than 2 years after the date on 
which funds are first made available to the pilot program, the 
Secretary shall submit to Congress a report that--
            (1) describes the results of the pilot program; and
            (2) provides an analysis of the feasibility of implementing 
        a distribution system operator.
    (e) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out the pilot program $20,000,000, to remain 
available until expended.

SEC. 6. CONSIDERATION OF PERFORMANCE-BASED INCENTIVE RATES.

    (a) In General.--Section 111(d) of the Public Utility Regulatory 
Policies Act of 1978 (16 U.S.C. 2621(d)) (as amended by section 4(c)) 
is amended by adding at the end the following:
            ``(22) Performance-based incentive mechanisms.--
                    ``(A) In general.--Each State regulatory authority, 
                with respect to each electric utility for which the 
                State regulatory authority has ratemaking authority, 
                shall consider the use of performance-based incentive 
                mechanisms to achieve public interest goals established 
                by the State or State regulatory authority in 
                accordance with subparagraphs (B) and (C).
                    ``(B) Considerations for establishment of public 
                interest goals.--In establishing public interest goals 
                under subparagraph (A), the State or State regulatory 
                authority, as applicable, shall consider--
                            ``(i) overall system efficiency, including 
                        reductions in peak demand;
                            ``(ii) the integration and adoption of 
                        distributed energy resources;
                            ``(iii) process improvements, such as 
                        predictable and timely interconnection 
                        processes;
                            ``(iv) the resiliency and reliability of 
                        the electricity grid;
                            ``(v) customer engagement and satisfaction;
                            ``(vi) environmental benefits, including 
                        reductions in particulate and greenhouse gas 
                        emissions; and
                            ``(vii) any other factor determined to be 
                        appropriate by the State or State regulatory 
                        authority.
                    ``(C) Metrics.--In establishing public interest 
                goals under subparagraph (A), the State or State 
                regulatory authority, as applicable, shall specify 
                quantifiable metrics with respect to the public 
                interest goals that can be measured and verified.''.
    (b) Compliance.--
            (1) Obligations to consider and determine; prior state 
        actions.--Section 112 of the Public Utility Regulatory Policies 
        Act of 1978 (16 U.S.C. 2622) is amended--
                    (A) in subsection (b), by adding at the end the 
                following:
            ``(7)(A) Not later than 1 year after the date of enactment 
        of this paragraph, each State regulatory authority (with 
        respect to each electric utility for which it has ratemaking 
        authority) shall, with respect to the standards established by 
        paragraphs (20) through (22) of section 111(d)--
                    ``(i) commence the consideration referred to in 
                section 111; or
                    ``(ii) set a hearing date for the consideration.
            ``(B) Not later than 2 years after the date of enactment of 
        this paragraph, each State regulatory authority (with respect 
        to each electric utility for which it has ratemaking authority) 
        shall--
                    ``(i) complete the consideration required under 
                subparagraph (A); and
                    ``(ii) make the determination referred to in 
                section 111 with respect to the standards established 
                by paragraphs (20) through (22) of section 111(d).'';
                    (B) in subsection (c), by adding at the end the 
                following: ``In the case of the standards established 
                by paragraphs (20) through (22) of section 111(d), the 
                reference contained in this subsection to the date of 
                enactment of this Act shall be deemed to be a reference 
                to the date of enactment of those paragraphs.'';
                    (C) in subsection (d), in the matter preceding 
                paragraph (1), by striking ``(19)'' and inserting 
                ``(22)''; and
                    (D) by adding at the end the following:
    ``(g) Prior State Actions.--Subsections (b) and (c) shall not apply 
to the standard established by paragraphs (20) through (22) of section 
111(d) in the case of any electric utility in a State if, before the 
date of enactment of this subsection--
            ``(1) the State has implemented for the electric utility 
        the standard (or a comparable standard);
            ``(2) the State regulatory authority for the State or the 
        relevant nonregulated electric utility has conducted a 
        proceeding to consider implementation of the standard (or a 
        comparable standard) for the electric utility; or
            ``(3) the State legislature has voted on the implementation 
        of the standard (or a comparable standard) for the electric 
        utility.''.
            (2) Prior and pending proceedings.--Section 124 of the 
        Public Utility Regulatory Policy Act of 1978 (16 U.S.C. 2634) 
        is amended by adding at the end the following: ``In the case of 
        the standards established by paragraphs (20) through (22) of 
        section 111(d), the reference contained in this subsection to 
        the date of enactment of this Act shall be deemed to be a 
        reference to the date of enactment of those paragraphs.''.
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