Distributed Energy Demonstration Act of 2019

II 116TH CONGRESS 1ST SESSION S. 1742 To direct the Secretary of Energy to establish certain demonstration grant programs relating to the demonstration of advanced distribution systems, smart water heaters, vehicle-to-grid integration, and granular retail elec- tricity pricing, and for other purposes. IN THE SENATE OF THE UNITED STATES JUNE 5, 2019 Mr. WYDEN introduced the following bill; which was read twice and referred to the Committee on Energy and Natural Resources A BILL To direct the Secretary of Energy to establish certain dem- onstration grant programs relating to the demonstration of advanced distribution systems, smart water heaters, vehicle-to-grid integration, and granular retail electricity pricing, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 3 (a) SHORT TITLE.—This Act may be cited as the 4 ‘‘Distributed Energy Demonstration Act of 2019’’. 5 (b) TABLE OF CONTENTS.—The table of contents for 6 this Act is as follows: 7 VerDate Sep 11 2014 22:38 Jun 11, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1742.IS S1742 kjohnson on DSK79L0C42 with BILLS 2 •S 1742 IS Sec. 1. Short title; table of contents. Sec. 2. Definitions. Sec. 3. Advanced distribution system grant program. Sec. 4. Smart water heater demonstration program. Sec. 5. Vehicle-to-Grid Integration (VGI) Demonstration Grant Program. Sec. 6. Granular retail electricity pricing grant program. Sec. 7. Federal matching fund for smart grid investment costs. Sec. 8. Personal protections for sensitive personal data. Sec. 9. General provisions. SEC. 2. DEFINITIONS. 1 In this Act: 2 (1) COMMISSION.—The term ‘‘Commission’’ 3 means the Federal Energy Regulatory Commission. 4 (2) DISTRIBUTED ENERGY RESOURCE.— 5 (A) IN GENERAL.—The term ‘‘distributed 6 energy resource’’ means an electric device that 7 can produce or consume energy that is lo- 8 cated— 9 (i) on the distribution system or any 10 subsystem of the distribution system; or 11 (ii) behind a customer meter. 12 (B) INCLUSIONS.—The term ‘‘distributed 13 energy resource’’ includes— 14 (i) an energy storage resource; 15 (ii) an energy generation technology; 16 (iii) a demand response resource; 17 (iv) an energy efficiency resource; 18 (v) an electric vehicle and associated 19 supply equipment and systems; and 20 VerDate Sep 11 2014 22:38 Jun 11, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1742.IS S1742 kjohnson on DSK79L0C42 with BILLS 3 •S 1742 IS (vi) aggregations and integrated con- 1 trol systems, including virtual power 2 plants, microgrids, and networks of 3 microgrid cells. 4 (3) ELECTRIC CONSUMER; ELECTRIC UTILITY; 5 RATE; STATE REGULATORY AUTHORITY.—The terms 6 ‘‘electric consumer’’, ‘‘electric utility’’, ‘‘rate’’, and 7 ‘‘State regulatory authority’’ have the meanings 8 given the terms in section 3 of the Public Utility 9 Regulatory Policies Act of 1978 (16 U.S.C. 2602). 10 (4) ENERGY STORAGE.—The term ‘‘energy 11 storage’’ means equipment or facilities capable of 12 absorbing energy, storing energy for a period of 13 time, and dispatching the stored energy, that— 14 (A) uses mechanical, electrochemical, hy- 15 droelectric, or thermal processes, as a single fa- 16 cility or as an aggregation of units, throughout 17 the electric grid, including behind the meter to 18 store energy generated at 1 time for use at a 19 later time; 20 (B) uses mechanical, electrochemical, hy- 21 droelectric, or thermal processes, as a single fa- 22 cility or as an aggregation of units, throughout 23 the electric grid, including behind the meter to 24 store energy generated from mechanical proc- 25 VerDate Sep 11 2014 22:38 Jun 11, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1742.IS S1742 kjohnson on DSK79L0C42 with BILLS 4 •S 1742 IS esses that would otherwise be wasted for deliv- 1 ery at a later time; or 2 (C) stores thermal energy for direct use for 3 heating or cooling at a later time in a manner 4 that avoids the need to use electricity at that 5 later time. 6 (5) GRANULAR.—The term ‘‘granular’’, with re- 7 spect to a rate or other price for electricity, means 8 that the rate or price is established based on precise 9 accounting of the value, as determined by the time 10 and location of the production or consumption of the 11 electricity and the unique type of energy services 12 being provided, of electrical energy, capacity, and 13 ancillary services, including— 14 (A) time-of-use rates; 15 (B) peak-time rebates; 16 (C) critical peak pricing; 17 (D) real-time pricing; 18 (E) transactive energy approaches; 19 (F) inverted time-of-use rates; 20 (G) forward-looking charges; 21 (H) peak-coincident capacity network 22 charges; and 23 (I) 3-part rates. 24 VerDate Sep 11 2014 22:38 Jun 11, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1742.IS S1742 kjohnson on DSK79L0C42 with BILLS 5 •S 1742 IS (6) GRID FLEXIBILITY.—The term ‘‘grid flexi- 1 bility’’ means the ability of a power system— 2 (A) from an operational perspective, to re- 3 spond to changes in supply and demand, such 4 as abrupt changes in load conditions or sharp 5 ramps in generation; and 6 (B) from a long-term planning and invest- 7 ment perspective, to respond to changes in tech- 8 nology, markets and policy, without incurring 9 stranded assets. 10 (7) IOT.—The term ‘‘IoT’’ means a set of tech- 11 nologies (including endpoint devices, such as sensors, 12 actuators, management systems, user interfaces, ve- 13 hicles, machinery, and household appliances) that— 14 (A) are linked via communication networks 15 to enable advanced control and valuable serv- 16 ices; and 17 (B) may provide real-time information and 18 actionable analytics, as appropriate. 19 (8) LIGHT-DUTY CONSUMER VEHICLE.—The 20 term ‘‘light-duty consumer vehicle’’ has the meaning 21 given the term ‘‘light-duty vehicle’’ in section 22 1037.801 of title 40, Code of Federal Regulations 23 (as in effect on the date of enactment of this Act). 24 VerDate Sep 11 2014 22:38 Jun 11, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1742.IS S1742 kjohnson on DSK79L0C42 with BILLS 6 •S 1742 IS (9) MICROGRID.—The term ‘‘microgrid’’ means 1 a localized grid that can disconnect from the tradi- 2 tional grid to operate autonomously and help miti- 3 gate grid disturbances to strengthen grid resilience. 4 (10) NATIONAL LABORATORY.—The term ‘‘Na- 5 tional Laboratory’’ has the meaning given the term 6 in section 2 of the Energy Policy Act of 2005 (42 7 U.S.C. 15801). 8 (11) SECRETARY.—The term ‘‘Secretary’’ 9 means the Secretary of Energy. 10 (12) TRANSIT AGENCY.—The term ‘‘transit 11 agency’’ has the meaning given the term in section 12 630.3 of title 49, Code of Federal Regulations (as 13 in effect on the date of enactment of this Act). 14 (13) TRANSIT VEHICLE.—The term ‘‘transit ve- 15 hicle’’ has the meaning given the term ‘‘bus’’ in sec- 16 tion 1192.3 of title 36, Code of Federal Regulations 17 (as in effect on the date of enactment of this Act). 18 SEC. 3. ADVANCED DISTRIBUTION SYSTEM GRANT PRO- 19 GRAM. 20 (a) DEFINITIONS.—In this section: 21 (1) ELIGIBLE ENTITY.—The term ‘‘eligible enti- 22 ty’’ means an electric utility, such as— 23 (A) an investor-owned electric utility; 24 (B) a publicly owned utility; and 25 VerDate Sep 11 2014 22:38 Jun 11, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S1742.IS S1742 kjohnson on DSK79L0C42 with BILLS 7 •S 1742 IS (C) an electric cooperative. 1 (2) PROGRAM.—The term ‘‘program’’ means 2 the program established under subsection (b). 3 (b) ESTABLISHMENT.—The Secretary shall establish 4 a program under which the Secretary shall provide grants 5 to support projects designed to advance the integration 6 and optimization of distributed energy resources. 7 (c) APPLICATIONS AND SELECTION.— 8 (1) IN GENERAL.—To be eligible to receive a 9 grant under this section, an eligible entity shall sub- 10 mit to the Secretary an application at such time, in 11 such manner, and containing such information as 12 the Secretary determines to be appropriate, includ- 13 ing— 14 (A) an interoperability plan for the pro- 15 posed project; 16 (B) a cybersecurity plan for the proposed 17 project; 18 (C) a privacy plan for the proposed 19 project, including a provision relating to— 20 (i) the protection of the privacy of in- 21 dividual customer information; 22 (ii) the secure storage, handling, and 23 destruction of data; and 24 VerDate Sep 11 2014 22:38 Jun 11, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S1742.IS S1742 kjohnson on DSK79L0C42 with BILLS 8 •S 1742 IS (iii) the access of energy use data by 1 third parties; 2 (D) the anticipated benefits of the pro- 3 posed project, from a business perspective and 4 the perspective of the customer; 5 (E) for a project proposed by an investor- 6 owned electric utility, a formal approval of the 7 project from the regulatory body of jurisdiction, 8 such as a State public utility commission; and 9 (F) an assurance that, as a condition of 10 receiving the grant, the eligible entity will par- 11 ticipate in a working group in accordance with 12 section 9(a), including with respect to prepara- 13 tion of the report under section 9(b). 14 (2) PRIORITY.—In selecting recipients of grants 15 under this section, the Secretary shall give priority 16 to— 17 (A) a proposed project that is submitted by 18 a multiutility partnership with a diverse cus- 19 tomer profile; 20 (B) a proposed project that is submitted 21 by a partnership that includes at least 1 Na- 22 tional Laboratory or institution of higher edu- 23 cation; 24 VerDate Sep 11 2014 22:38 Jun 11, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S1742.IS S1742 kjohnson on DSK79L0C42 with BILLS 9 •S 1742 IS (C) a proposed project that promotes edu- 1 cation and training in disciplines that are es- 2 sential for distribution system development, as 3 determined by the Secretary; and 4 (D) a proposed project that proposes a 5 scaled deployment strategy for the technology 6 and systems of the project, with an emphasis on 7 achieving adoption of a standard for, and inter- 8 operability among several manufacturers of, de- 9 vices that create grid flexibility. 10 (d) PROGRAM GOALS.—The goals of the program 11 are— 12 (1) to demonstrate innovative and cost-effective 13 techniques for the integration and optimization of 14 distributed energy resources, including microgrid 15 and networked microgrid systems; 16 (2) to develop highly flexible, configurable, and 17 interactive networks of utility, customer, and third- 18 party systems with an IoT community enabling 19 framework; 20 (3) to inform the creation of standards and reg- 21 ulations; and 22 (4) to increase regulatory and utility confidence 23 in technologies and systems that are instrumental to 24 VerDate Sep 11 2014 22:38 Jun 11, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S1742.IS S1742 kjohnson on DSK79L0C42 with BILLS 10 •S 1742 IS the integration and optimization of distributed en- 1 ergy resources, including integrated energy systems. 2 (e) USE OF FUNDS.—A grant provided under this 3 section may be used for any project that implements meas- 4 ures to advance the integration and optimization of dis- 5 tributed energy resources, as determined by the Secretary, 6 including a project— 7 (1) on advanced voltage control or optimization 8 systems; 9 (2) addressing dynamic protection schemes to 10 manage reverse power flows, communications, sen- 11 sors, energy storage, switching, and smart-inverter 12 networks; 13 (3) on advanced distribution management sys- 14 tems, such as automated substations; 15 (4) on cybersecurity technologies and applica- 16 tions; 17 (5) supporting nonrecurring engineering costs 18 of adoption and implementation, among multiple 19 manufacturers of grid-connected devices, of stand- 20 ards that enhance interoperability and connectivity 21 on electricity systems; and 22 (6) for manufacturers of grid-connected devices 23 or electric utilities to establish full-time positions to 24 VerDate Sep 11 2014 22:38 Jun 11, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S1742.IS S1742 kjohnson on DSK79L0C42 with BILLS 11 •S 1742 IS design and implement technologies that promote grid 1 flexibility. 2 (f) AUTHORIZATION OF APPROPRIATIONS.—There is 3 authorized to be appropriated to carry out this section 4 $50,000,000, to remain available for a period of 10 years 5 following the fiscal year for which the amounts were ap- 6 propriated. 7 SEC. 4. SMART WATER HEATER DEMONSTRATION PRO- 8 GRAM. 9 (a) DEFINITIONS.—In this section: 10 (1) ELIGIBLE ENTITY.—The term ‘‘eligible enti- 11 ty’’ means— 12 (A) an electric utility; and 13 (B) a retail service provider of electricity. 14 (2) PROGRAM.—The term ‘‘program’’ means 15 the demonstration program established under sub- 16 section (b)(1). 17 (b) DEMONSTRATION PROGRAM.— 18 (1) ESTABLISHMENT.—Not later than 1 year 19 after the date of enactment of this Act, the Sec- 20 retary, in consultation with the Director of the Na- 21 tional Science Foundation, shall establish a dem- 22 onstration program under which the Secretary shall 23 provide grants to eligible entities to carry out 24 VerDate Sep 11 2014 22:38 Jun 11, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S1742.IS S1742 kjohnson on DSK79L0C42 with BILLS 12 •S 1742 IS projects for the design and production of smart 1 water heater optimization programs. 2 (2) PROGRAM GOALS.—The goals of the pro- 3 gram are— 4 (A) to demonstrate large-scale implementa- 5 tion of smart water heaters as an energy stor- 6 age resource used on a regular basis as part of 7 grid operation to improve the operational effi- 8 ciency of the electric grid; 9 (B) to demonstrate control of water heat- 10 ers to compensate for the intermittent nature of 11 renewable energy resources; 12 (C) to diminish the market barriers to the 13 broad adoption of smart water heaters; 14 (D) to provide funding to address non- 15 recurring engineering costs; and 16 (E) to demonstrate best practices for— 17 (i) customer participation and satis- 18 faction; and 19 (ii) maximizing customer benefits. 20 (3) APPLICATIONS.— 21 (A) IN GENERAL.—To be eligible to receive 22 a grant under the program, an eligible entity 23 shall submit to the Secretary an application at 24 such time, in such manner, and containing such 25 VerDate Sep 11 2014 22:38 Jun 11, 2019 Jkt 089200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S1742.IS S1742 kjohnson on DSK79L0C42 with BILLS 13 •S 1742 IS information as the Secretary may require, [Text truncated for display. Full text available on Congress.gov.]