; 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. . 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