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▶ 0:08:21welcome to today's hearing keeping the lights on examining the state of regional grid reliability today we will continue this subcommittee's work to address the ongoing electrical reliability crisis facing our nation the witnesses before us are each of the regional grid operators in urot who collectively cover 2third of the country these organizations are charged with overseeing reliability of their state or region administering markets for the sale and purchase of electricity products and
▶ 0:08:51coordinating transmission development while each grid operator function functions in a similar manner they all take unique approaches is to addressing the regional and demographic differences of communities in their Footprints but no matter where in the country they serve they are confronting the challenges facing our power sector it's no secret that our country is in the midst of a reliability crisis and it could not come at a worst time the North American Electric reliability Corporation nerk recently stated
▶ 0:09:21that 52 GW of generation were retire in the next four years to put this into context that is the rough equivalent of 40 nuclear plants or 500 square miles of solar panels while dangerous amounts of Base load generation are leaving the grid we're facing historic levels of demand entering the system and interconnection cues that are backlogged with intermittent resources and Battery sorage facilities we know that Renewables are not a one-on-one replacement
▶ 0:09:51for dispatchable Basel load power that is essential to reliability and provides spinning reserves needed to stabilize the system through fluctuations it is not clear that the pace at which base load generation is coming online will bridge the gap of retiring Supply and meet increasing demands over the next few short years as we are well aware these new demands are largely driven by developments in artificial intelligence and domestic manufacturing and achieve
▶ 0:10:21achieving a leadership position in the development of AI and reshoring domestic manufacturing is not a pipe dream to strive for is a national security imperative that could shape America's future in the global economy Regional grid operators before us today are on the front lines of reliability crisis and this is a new era of historic electricity demand when operating correctly electricity Market should allow clear Market signals to drive investment
▶ 0:10:51into New Generation efficient interconnection of new resources should address increasing demand and coordinated transmission planning should bring needed electricity supplies to Growing centers however these organizations and their electricity markets do not operate in a vacuum excessive Federal overreach like the clean power plan 2.0 drove significant premature retirements a base load power and discouraged long-term investment into base load generation sources
▶ 0:11:22significant subsidies for intermittent generation undermine the economies a base load or on demand dispatchable generation resources ources that are essential to keeping the lights on these grid operators are also tasked with a difficult job of maintaining reliability and resource adequacy of States Implement restrictive policies designed to attack fossil resources because of the interconnected nature of much of our buul power system the decisions of one state to drive out base load power inherently impact the
▶ 0:11:52reliability of our neighboring states all these problems are compounded by systematic permitting sh Alles that make it nearly impossible to develop new infrastructure in large parts of our country markets cannot build what governments do not let them do we need to address these challenges through a pragmatic whole of government approach that recognizes the benefits of different Source fuel sources the limitation of others and prior prioritizes energy expansion
▶ 0:12:23there is a value of of to ensuring a diverse resource mix but it's important to recognize that not all El Ron should be treated equally the variability of intermittent resources like wind and solar innately require backup generation during inclement weather conditions and where battery storage facilities are operationally restricted often as during these periods of inclement weather when we need electricity the most to protect the health and safety to of our communities I look forward to today's discussion regarding the ongoing
▶ 0:12:53reliability crisis and the important steps Regional grid operators are taking to correct Market inefficiencies to keep the lights on for all Americans and with that I yield back the balance of my time and at this time recognize the general lady from Florida the ranking member of the sub subcommittee five minutes for an opening statement well thank you chairman L uh and Welcome to our our Witnesses today and I want to thank you and everyone working to keep America's power system uh as modern and as
▶ 0:13:23efficient affordable and reliable as it can be from the linemen who were restoring power after after the devastating hurricane season in my neck of the woods to folks dealing with wildfires extreme events and just the now the new calls for uh huge New U sources of energy and capacity across the country a resilient and reliable electric grid that utilizes the cleanest resources possible is vital to all Americans and decade after decade
▶ 0:13:53we've modernized energy sources and the grid and we must continue to do so and while I'm pleased that we're focused on strengthening the grid uh the hearing ignores the damage being done by the Trump Administration and Elon Musk to Reliable affordable energy including the Investments under the infrastructure law and the clean energy and climate resilience law the IRA um since I started thinking about this hearing I've had the lyrics from Wicked uh that great
▶ 0:14:23dance number stuck in my head dancing through life we're dancing through life no need to toughen when you can Slough it off as you do uh for example the early Trump shutdown of Grants and Loans halted electricity and grid projects causing chaos and additional costs for co-ops and power producers and consumers then you have the illegal layoffs of energy experts in various agencies the illegal firings of the Department of energy
▶ 0:14:53Inspector General and the disruption of electricity trade between Canada and the US it's all leading to higher costs for American consumers for instance the US imposed a 10% tariff on Canadian electricity Imports and Ontario retaliated with a 25% search charge in electricity exports to Michigan New York and Minnesota and although although Ontario suspended The Sur charge the tariffs have strained the integrated power grib shared by
▶ 0:15:23the two countries this interconnected system has historically provided reliable and Co reliability and cost benefits but tariffs now are threatening its efficiency so I urge colleagues to stand up to this chaos that's fueling higher cost and uncertainties it's weakened our ability to strengthen the grid and as as Republicans hammer out their tax giveaways to billionaires it should not come at the expense of grid infrastructure Investments and clean energy
▶ 0:15:54tax credits for solar wind nuclear and pollution reduction one analysis predicts that repealing the clean energy tax credits would increase annual energy costs for each us household it would cost us about 800,000 jobs and decrease our GDP solar wind and battery storage are the cheapest and cleanest ways to add energy supply to the grid now they're driving energy they're driving down energy cost now
▶ 0:16:24RTO isos and firk are making progress on interconnection cues and Congress should help them uh because we understand there are over 2,000 gaws of energy and storage waiting in line that's equivalent to about1 billion dollar or 1 billion homes uh at Peak demand also there are many common sense practical policy solutions to help our grid connect more resources
▶ 0:16:54and strengthen the grid my by Camal advancing gets is a great example the bill would encourage FK to implement shared savings incentives that promote the deployment of grid enhancing Technologies that's the cheapest way to supercharge our power grid it would allow utilities to earn a profit for saving money and save consumers billions on their electricity bills every year similarly uh the Expediting generator interconnection procedures act would make Common Sense
▶ 0:17:25reforms to the outdated sluggish process that we used to bring energy of all kinds onto the grid we could promote the use of Automation and standardization studies ensuring that grid upgrade costs are fairly allocated to customers who benefit from the interconnection of new resources the energy affordability crisis we uh we're grappling with today requires real forward-looking policy Solutions it requires polit a politically
▶ 0:17:55independent and well staffed uh firk and it requires consist a consistent commitment to energy policy one that keeps Americans safe helps us compete with our foreign adversaries and continues to deliver Investments and jobs Across America thank you Mr chairman chairman I you back thank you the gentlem lady yields back and the chair now recognizes the gentleman from Kentucky the chairman of the Energy and Commerce Committee for five minutes for his opening statement thank you chairman lad thank you for uh the
▶ 0:18:25recognition thank for all of our Witnesses being here there's a lot of sayings that I don't see my friend from Michigan in here on our committee this morning but our husband a lot of sayings attributed to Chairman Dingle over the looking at the globe and say that's the jurisdiction of Energy and Commerce another one is he always said if it for our jurisdiction If It Moves its energy if it's not moving it's Commerce so that's our jurisdiction so I use the Dingle Coral are it takes energy to move Commerce and for us to be successful to turn uh somebody said the other day
▶ 0:18:55that AI turns energy into intell Ence and so it is vitally important that we as a country uh get together and figure out how we're going to beat China and it's by having affordable reliable delivery of electric power and the complicated question of how to deliver that power effectively is compounded by their tremendous increase in demand projected over coming years for specific purposes like Ai and broader increases in consumer demand I know we've met uh
▶ 0:19:26slower energy growth over the last generation ation and also more efficiency which is absolutely part of it is to be more efficient but now we're seeing a rising in demand and so we have to ensure affordable reliable uh delivery of power to meet our needs and the tremendous amount of energy is going to require for the utility grid so here in Congress we must identify and understand the forces impacting the ability of Engineers to plan and operate this system for Better or For Worse and we must address the common sense policy reforms
▶ 0:19:56that would allow utilities and operators to do their work cost effectively over the past decade certain federal and state policies have have made it more difficult for operators to keep the lights on the threats of the Biden administration's electricity policy was to shut down Bas loow coal and limit natural gas generation with honorous new rules and regulations during this time many states also established policies to transition away from fossil generation that is essential for maintaining gve
▶ 0:20:26reliability momentum behind this so-called transition continues just as a generational increase in power demand is emerging consider how new demand growth is clashing with the residual Biden Harris policies today in December the North American Electric reliability Corporation nerk projected Peak power demand to grow by 151 gws 151 gwatt over the next 10 years over the same period ner nerk ex reports
▶ 0:20:56expected retirements of dispatchable generation which is needed for reliability to be as much as 115 gaw this gap between retirements and growth in demand alone counts to over 240 M gws or an equivalent amount of power data to support 195 million homes over an entire year ensuring the availability of reliable power will require stopping and reversing retirements of dispatchable resources and building out new natural gas generation
▶ 0:21:26and eventually nuclear and other reliable sources yet the vast amount of the new generation that is in line today to connect the grid is intermittent wind and solar which cannot be relied upon when there you need it the most as a result half of the nation is at risk of power shortfalls over the next 10 years think about half the nation for all the benefits of all the above resource policies the current path that incentivizes a massive renewal Bill renewable build is putting the Electric System out of balance and dramatically increasing
▶ 0:21:56risk today we will talk to grit the grit operators that are caught at the center of the clash between failing policies and strong economic demand affecting our Nations generation mix they must deal with the consequences so understanding the challenges you face and how you plan to meet the growing demand is essential for our work last week the Secretary of Energy noted that the extens extensional security implications of our race with China on AI and other Advanced Technologies
▶ 0:22:27a focus on meeting the China challenges and with the Deep seek we uh that should wake us up that we are challenging China we can't always expect to be on top if we don't focus on being on top but so that rais should raise serious questions about what is necessary to clear the way inerting and Regulatory policy which will enable tremendous energy and power growth in the coming years recognize we have to be we have to be um focused on making sure we do it everything in the right way
▶ 0:22:58and in sustainable way as much as we can possible but we have to fully appreciate the scale of the pace of change coming because of the AI the data centers in the demand what with Microsoft and Microsoft ders not all but some Microsoft data centers can use as much power as the city of Seattle that puts it into perspective I look forward to this discussion I will yeld back thank you the gentleman yields back the chair now recognizes the gentleman
▶ 0:23:28from new Jersey the ranking member of the full committee for five minutes for an opening statement thank you chairman L for the third time this Congress who've had an important hearing focusing on the reliability and affordability of electricity in this country and for the third time my Republican colleagues are going to purposely ignore the fact they're attempting to repeal the single biggest incentive to build electricity capacity in this country and that is the inflation reduction act repealing billions of dollars in technology neutral
▶ 0:23:58funding for all types of new energy is not the way you address the increasing need for energy it also ignores the fact that the Trump Administration is freezing Federal funding and trying to resend grants for grid reliability projects that the grid operators sitting before us today have said are vital to addressing increasing energy demand it also ignores the fact that President Trump is attempting to put tariffs on elect electricity imports from Canada which could seriously drive up energy cost for people in the Midwest and the Northeast
▶ 0:24:28it's time that we recognize that the chaotic and constantly changing policies of trump and Elon Musk are the single greatest threat right now to grid reliability just last week yet another study came out this time from energy Innovation showing that repealing the inflation reduction act would increase American families power bills Republicans are talking about the importance of affordability but their actions don't match their words despite continued Republican attacks on our grids reliability and affordability today's hearing is is still important
▶ 0:24:59Regional grid operators play a critical role in keeping the lights on for our customers and 27 years ago FK order 888 brought competition to electricity markets around the country since that time the competition encouraged by these markets has broadly lowered wholesale Energy prices and made the grid cleaner all while ensuring reliability but that's not guaranteed and I'm worried that some of the rules of the road that govern Regional transmission organization could start to harm consumers last year partially as a result of poor
▶ 0:25:29Market design capacity prices in the pjm region exploded from $29 to $270 per megawatt day and these price increases aren't abstract they are directly responsible for a roughly $25 per month increase in New Jersey power bills that my constitu constituents will start feeling this June so Mr aan I want to be clear this is completely unacceptable pjm's years of dragging its feet on reforming its capacity
▶ 0:25:59markets and interconnection Q are finally coming home to roost but it's my constituents who are stuck paying the bill PGM has demonstrated a complete inability to connect resources to the Grid in a timely fashion and I recognize that PGM has taken a number of steps in the last few years to rectify this but frankly it's too little too late the years of inaction have already taken their toll a recent report found that if pjm had implemented proactive Transmissions plan transmission planning and simplified interconnection processes
▶ 0:26:30years ago it could have avoided half of these costs and I'm frustrated that PGM is tting its progress in connecting more energy to its grid when it still has not fully complied with F's requirements under order 2023 meanwhile PGM is spending my constituents rate payal Dollars rate payer dollars I should say suing FK over order 2023 creating further uncertainty for potential developers of power plants and Mr asanza I hope I'm pron pronouncing it right your organization simply
▶ 0:27:00must get its act together I appreciate that PGM has introduced some short-term tweaks to its market and it's working together with States including New Jersey to find a pathway to protect rays but this is this all should have been figured out years ago and as we continue this discussion today it's important we recognize that in this time of increased demand for electricity families are increasingly at risk of their power bills becoming unaffordable grid operators and frankly furk must remember that they have a legal obligation
▶ 0:27:30to ensure that their policies are just and reasonable and anything else does a disservice to the American people who depend on you and with that Mr Mr chairman I would yield back thank you very much the J yields back the balance of his time and this now concludes member opening statements the chair reminds members that pursuant to committee rules all members opening statements Will Made part of the record we want to thank all of our Witnesses for being with us today and taking time to testify before the
▶ 0:28:01subcommittee each witness will have the opportunity to give an opening statement followed by a round of questions from the members our Witnesses today are pardon me Manu ashona the president and CEO of pjm interconnection LLC Mr Gordon van Wy president and CEO of independent service operator of New England Miss Jennifer curan the senior vice president for planning and operations at Midcontinent independent
▶ 0:28:32operator Mr Richard dwey president and CEO of New York independent system operator Mr Lanny nickel the vice pardon me the Chief Operating Officer of Southwest power pool Mr Elliot mser the president and CEO of California independent system operator and Mr Pablo Vegas the president and CEO of the electric reliability ccil of Texas aot again we appreciate all our Witnesses for being with us
▶ 0:29:02today and before we get started just a quick uh reminder if you about our light system in front of you uh you'll have five minutes to give an opening statement at uh four minutes you'll get a yellow light meaning you have one minute remaining red light uh is signifies your time is up so if you uh please uh wrap up when you see the red light come on also uh just pull the mic up close uh to you as you're speaking and this time we will begin our before us today Mr ashona you
▶ 0:29:32have five minutes to give an opening statement thanks again for being with us today yeah chairman L ranking member Caster chairman Guthrie ranking member palone and members of the subcommittee good morning my name is Manu aana I am the CEO of PGM interconnection PGM Works to ensure the reliable flow of power to 67 million people across 13 states and we serve about one in five Americans we're fully regulated
▶ 0:30:03by the firk as you know FK plays a critical leadership role in our industry and the value of having a fully staffed well-functioning Federal regulator particularly at this time cannot be understated we don't have a profit motive our core mission is grid reliability our work along with that of Our member companies has ensured a strong and stable grid for almost a century since our founding in 1927 more recently however
▶ 0:30:33we have seen three notable Trends I wanted to share with you that concern us first dispatchable thermal generation is retiring often driven by federal or state policy second most of our interconnection queue is made up of intermittent renewable generation and I want to be clear these generators play an important role on the grid and we want them we want them to come online but they are not a one forone substitute for the machines that they are replacing
▶ 0:31:04finally third electrical demand is growing driven primarily by data center load growth less Supply more demand it adds up to increased reliability risk and higher prices and we're seeing this across large parts of our country this is not just a pjm phenomenon our industry has been working hard on Solutions specifically in pjm amongst other things we have reformed our generator interconnection
▶ 0:31:35process we had a queue of about 200,000 megawatts of generation we have whittel that down to 67,000 megawatts an incredible amount of progress with another 50,000 megawatts through the queue ready to go and actually parts of it have started to construct and some has already come online we have opted we have open open new Pathways for generators to connect to the grid and we have implemented reforms to our Market rules and the good news
▶ 0:32:05is these initiatives are having an impact I am happy to report several generators have withdrawn their retirement decisions we have a shuttered nuclear power plant that has announced its return and is working hard to come back Pennsylvania's former largest coal plant is being studied to come back to life as a gas generator demand response providers are looking for ways to bring more Supply onto the system and developers are working hard to bring their
▶ 0:32:35projects to Market in fact just last week one of the new Pathways to interconnection that I talked about uh resulted in 27,000 almost 27,000 megawatt megawatts of new generation applying to interconnect the PGM which is very exciting but our work is not done it still takes roughly 18 months to build a data center takes 5 years plus to build a power plant and Global Supply chains
▶ 0:33:05for grid components like Transformers and turbin are backlogged the stakes are high and we remain committed to the task at hand in our opinion we have six key areas of focus for the industry looking forward and I wanted to share them with you first we must keep the supply that we have today more retirements are going to make it much harder for us to serve this load growth second we must try to bring back what we can from retirement whether in its current
▶ 0:33:35form or repowered form with a different fuel or using those sites for different gener generators third we need to connect new generators rapidly and that includes uprates of existing generators fourth we need to harness demand flexibility uh which I think is a real hidden opportunity fifth we do need citing and permitting reforms for generation and transmission and we could use help with that um and finally
▶ 0:34:05more investment in natural gas infrastructure is needed to support power generation flexibility thank you uh for the opportunity to testify today I look forward to your questions well thank you very much for your opening statement Mr van Willie you are now recognized for five minutes for your opening statement good morning chairman L ranking member Castor chairman Guthrie ranking member pone and members of the subcommittee thank you for the opportunity to appear here
▶ 0:34:36today like other regions New England's Electric System is undergoing an energy transition historically P system planning is focused on having enough resources we refer to this as U resource adequacy however as we transition to more weather dependent resources one of the biggest challenges facing New England is making sure that there's sufficient energy in the system to meet expected electricity growth the wholesale markets run by I New England effectively pric supply and demand conditions providing important
▶ 0:35:06signals to developers when investment is needed however the wholesale markets alone cannot assure resource adequacy state and federal policies also play a key role in achieving Regional resource adequacy while the wholesale markets operate on shorter time frames the states have the ability to to structure longer term commitments through V various hedging strategies to incentivize the development of sufficient resources to meet the resource adequacy standard
▶ 0:35:36that is priced in our capacity Market moreover the states have the ability to address barriers to entry for resources participating in the wholesale electricity markets these longer term commitments can also protect consumers against price volatility in both the energy and the capacity markets in short the iso and the and the New England State have a joint and complimentary role in achieving resource adequacy furthermore investor confidence in the wholesale markets is dependent on
▶ 0:36:06a supportive policy and Regulatory framework at both the state and the level as a region New England has made progress in evolving the market design to align the resour to align with the resources that are coming forward we are implementing new approaches to plan the transmission system to meet the state's policy objectives and we have new tools to help help us better quantify reliability risks in a rapidly changing power system um across the region incentified by state policies
▶ 0:36:36the region has invested heavily in Energy Efficiency and behind the meter solar resources which have effectively reduced demand for electricity from the grid operated By Us in New England these Investments coupled with relatively little interest from data centers and other AI driven activities has meant that New England has thus far not seen the rapid growth in consumer demand forecasted in other regions the reliability and Market Outlook for the near-term is favorable though
▶ 0:37:07potential challenges lie ahead our latest 10year forecast projects Regional electricity consumption will increase by about 177% over the next decade it remains to be seen whether that load growth will outpace the net effect of generator retirements and new Supply coming online it is difficult to build new grid scale energy infrastructure in New England and recent developments give us cause for concern about the region staying on Pace
▶ 0:37:37with maintaining resource and energy adequacy as load grows this may have implications towards the end of this decade due to recent Federal Executive actions New England is facing new uncertainty about the timing of of offshore wind development which has been planned as a major new domestic source of energy for our region as of January battery storage and wind resources make up the largest proposals in our interconnection Queue at 47% in respectively
▶ 0:38:08there are no there are currently no other categories of resources proposed at that scale and this could have implications in both the near and the short term the current deliberations about new tariffs on Imports have have the potential to affect not only the price of electricity in New England but also the availability of power to England from our long-standing electricity trading partners in Eastern Canada this could also have implications in both the near and the long term as demand grows for electricity in New England the region will need
▶ 0:38:38new resources to meet resource adequacy needs and it will be critical to ensure that we have a supportive policy and Regulatory framework in place to allow for the entry of those resources thank you well thank you very much for your statement and Miss Curran you are recognized for five minutes for your statement thank you good morning morning chair L ranking member casor chairman Guthrie ranking member palone and members of the subcommittee I'm Jennifer Curran Vice President of Operations and planning for the Midcontinent independent system
▶ 0:39:08operator or myo as we are more commonly known it's a pleasure to be here today as you consider the state of regional grid reliability and its impact on our nation I hope my so's experiences and insights will be helpful as you con continue your work on this myo serves over 45 million customers in a territory that spans all our part of 15 states uh we created in 2024 alone $5 billion in value for the region uh that in turn has an impact on cost for consumers in the
▶ 0:39:40region unlike some other RTO in myo um our utilities and load serving entities are the ones with the responsibility for resource adequacy we work closely with them to ensure that there is an accurate picture of the evolving and current resource risks that exist so that as they make their investment decisions they can be better informed we are fuel source and policy neutral in myo that means we do not Advocate prefer or um
▶ 0:40:10favor any kind of fuel type or electric policy instead we work to implement state and federal policies and the goals and objectives of our members that doesn't mean of course that we're disinterested observers uh reliability of the bulk Electric System is our mission and that's the topic today um as we consider the energy landscape I think we've already talked about a number of the factors and myo is no different uh we see rapid retirement of existing resources significant growth
▶ 0:40:40of non-carbon emitting resources many of which do not have the same attributes in terms of uh duration of operation uh as those retiring resources and of course load growth G driven not just by uh data centers but also the reshoring of manufact facturing into the us we've been following and working to get ahead of these issues for a number of years through an initiative we call the reliability imperative over the last several years we've made a number of changes including instituting
▶ 0:41:11changes to how we accredit generation resources that's how we determine um how they will perform during those most high-risk hours and gives us all a more accurate picture of the resource adequacy picture we're updating our markets things like market price signals to ensure uh that we're sending the right signal to incent generation output during the times of the tightest operating conditions over the past few years we've approved over $30 billion of new Regional transmission lines
▶ 0:41:41that will substantially improve electric transfer capability across the region uh and ensure electric reliability and the associated economic growth uh we like others have instituted a number of improvements to the generator interconnection queue process to hasten the the approval of generation and we're currently seeking approval at FK for something we call the expedited resource addition study uh that study is a temporary framework to provide an ability to expedite uh certain New Generation
▶ 0:42:11projects that are desperately needed uh to meet resource adequacy and risks but much more work remains to be done one of the easiest approaches is to slow down the retirement of the existing resources we need to keep as many of the resources as we have online uh until adequate Replacements are in place to ensure that we are able to continue to provide customers 24 hours a day 7 days a week 365 days a year but that doesn't mean we can slow down
▶ 0:42:42investment in new infrastructure we need to continue at a very rapid Pace the development of new generation resources of all types to serve that growing electricity need and we need to ensure that we're investing in the transmission assets that are needed to deliver that energy to where it is needed finally we need to continue to work on process reforms to ensure that our markets and planning processes um enable the changes to meet
▶ 0:43:12the changes we need in the future things like the expedited resource adequacy study that I mentioned uh things like ensuring that we have the right accreditation for demand side and other resources the addition of market products and the like are all going to be important uh to our future miso's extensive analytical work and operational experience make it clear that no single electric generating resource type transmission line new technology or process change is going
▶ 0:43:42to solve all of our problems on its own it's a multifaceted problem that is going to take a coordinated approach that leverages all of these tools I appreciate your attention to these vital issues and I look forward to working with Congress and federal and Regulators to ensure a reliable Electric System well thank you for your opening statement and Mr dwey you are recognized for 5 minutes for your opening statement thank you uh Mr chairman on behalf of the nyso I would like to thank uh chairman L uh Vice chairman Weber
▶ 0:44:13ranking member caster and ranking member palone subcommittee members uh staff uh and all for the invitation to discuss the state of grid reliability with you today my name is Rich dwey I'm the president and CEO and a 25 your veteran of the New York ISO uh my full statement has been filed uh with your offices but I want to share a couple of key points with you uh at the start here for the past 25 years uh New York ISO has operated the New York state power system to the strongest reliability criteria
▶ 0:44:43in the nation in addition to standards uh uh enforced by the North American Electric reliability Corporation or nerk we comply with standards by the npcc or the Northeast power coordinating Council as well as the New York State reliability ility Council which is specific to New York we are champions of the essential role that the power grid plays in preserving the health and safety of New Yorkers empowering our modern economy it is our number one priority um in in addition or in filling this role we perform essential
▶ 0:45:13planning studies uh that are continuously monitored to ensure reliability and we administer wholesale electricity markets that allow for the most efficient scheduling and solutions to meet the reliability needs for consumers which is a critical piece in New York state today primarily driven by public policy and like many other parts of the country the power system is rapidly transitioning to a cleaner Supply resources this transition uh presents significant challenges because firm dispatchable
▶ 0:45:44generation primarily powered by fossil fuels is being replaced by intermittent wind and solar and storage resources that are dependent on the weather at the same time demand is growing significantly due to the electrification of the economy and welcome Economic Development and Manufacturing more than twice as much Legacy generation has been retired in recent years as the entry of this new Supply uh in my filed comments in these remarks I'm going to highlight how our planning processes and how our markets position
▶ 0:46:14us to tackle these challenges from a planning perspective we have a comprehensive reliability planning process that examines the future in three ways we do a 20-year scenario-based analysis to show options of how the power system could transform over the next 20 years we have detailed reliability studies that look for potential reliability violations over a 10-year Horizon and on a quarterly basis we do short-term assessments to allow us to rapidly react to changing conditions in short
▶ 0:46:44we are continuously studying the reliability of the grid and be and are prepared to take actions when it's necessary our most rele recent reliability study which looks at the 10-year Horizon identifies reli ability violations as early as 2033 um acceleration of load growth or unplanned generator retirements could accelerate these deficiencies our report also highlighted The increased Reliance on electricity in Winter the heightened severity of winter reliability
▶ 0:47:14events the uncertainty of fuel supply as well as the Reliance on a rapidly aging generation Fleet in order to satisfy load growth projections necessary to meet these economic factors more generation and transmission assets are needed from a Market's perspective our wholesale electricity markets play a crucial role in delivering reliable outcomes and at the least production cost properly designed markets Ure pricing signals attract necessary new resources to the right location
▶ 0:47:45incentivize needed performance response from existing resources and shift investment risk from consumers the nyso markets optimize schedules to supply resources to maximize value to Consumers performance from suppliers and provide the right attributes for reliability recent Innovative market products at the nyso encourage Dynamic scheduling of reserves encourage flexibility of load through demand response and Signal entry of distributed energy resources and energy
▶ 0:48:15storage that will improve the flexibility of the system this flexibility will be crucial to manage the intermittency inherent in the grid of the future and are important components of the market I want to thank you for the opportunity to share these thoughts with you I look forward to your questions and future dialogue thank you well thank you very much for your opening statement and Mr nickel you are now recognized for five minutes for your statement well good morning uh chairman L Vice
▶ 0:48:45chairman Weber ranking member casor ranking member palone and members of the subcommittee thank you for the opportunity to speak to you this morning about grid reliability I am Lanny nickel I am currently Executive Vice President and Chief Operating Officer of Southwest powerpool and I am the incoming CEO as of April 1st we are a regional grid operator serving 18 million people across 14 states in the central part of our country
▶ 0:49:16we are responsible simply for keeping the lights on today and in the future our industry is at an inflection point as it experienced es a rate of change I have not previously seen in my 32 plus year career over the last decade the transition in resource mix and demand growth has drastically increased operational complexity and has almost exponentially increased risk of
▶ 0:49:46having to interrupt electric service due to Supply we've already witnessed significant growth in both our summer and winter Peak demands our current summer Peak was 10% higher than the highest peak set two years earlier and this winter we set a winter Peak that was 2 and a half% higher than the previous winter record demand electricity use in our region grew about 25% over the last
▶ 0:50:1610 years this growth in demand is expected to continue in unprecedented fashion as we are forecasting Peak demands to be as much as 50% higher over the next 10 years mostly driven by the AI data center boom as consumption has grown we have also witnessed a rapid shift from a more steady source of dispatchable generation to a more
▶ 0:50:47intermittent renewable heavy generation mix in other words many aging coal and gas plants have been retired and repaced with wind generation in our region shrinking The Firm capacity margin that we have long depended on for reliability this growing imbalance between Rising demand and a less dispatchable more intermittent resource mix lies at the heart of what we have referred to as our
▶ 0:51:17generational challenge without a collective set of corrective actions we will struggle to keep up with future needs needs and our risk of not being able to continuously Supply electric service to Consumers will be at an all-time high on our end in Sp we have been acting to increase Regional requirements for excess capacity and we are urging generators to stay online until sufficient replacement capacity
▶ 0:51:48is ready we are working feverously to accelerate our study processes for generator interconnections and we've recently approved a transmission expansion plan requiring over five times the transmission investment of our previous largest project portfolio we need significantly more generation and more transmission to meet the growing demand and we need it to be interconnected much quicker
▶ 0:52:18than we've historically seen we will also need more of the generation being interconnected to be dispatchable so that it is available when needed to offset the variability of intermittent weather generation simply put we need a lot more still in the ground and time is short meeting this challenge will require everyone's cooperation we have to work together for example we need a fully
▶ 0:52:49functioning FK so that they can continue their good work ensuring reliability permitting infrastructure and supporting competitive energy markets additionally utilities can bring generation and transmission RTO can work together to lead and envision this future that we're all depending on we all have to do our part to safeguard the grid so that the life enhancing and life sustaining product of power
▶ 0:53:19can continue to be provided as affordably as possible I am confident that we can meet this challenge that we cannot do it alone we need your help thank you and I look forward to your questions well thank you very much for your statement and Mr Miner you are recognized for five minutes for your opening statement chairman Lea ranking member Caster chairman Guthrie ranking member palone and members of the subcommittee thank you for the opportunity to testify today my name is Elliot mser I serve as president
▶ 0:53:49and CEO of the California independent system operator Corporation commonly referred to as the kaiso the kaiso was a non profit public benefit corporation that does not own any generation or transmission assets we play a number of key roles to ensure the grid is reliable including transmission planning overseeing interconnection of new resources operation of electricity markets and providing reliability coordinator services to entities Across the Western interconnection we do not operate a centralized capacity Market but work with
▶ 0:54:19State and Municipal entities to ensure adequate procurement and deployment of generation and storage resources like other regions of the country California has faced extreme weather and other challenges but the kaiso and our state Partners have made major advances in reliability in recent years due to Common Sense approaches to expanding energy Supply efficiently interconnecting new resources and proactively planning for transmission upgrades new resources are coming online at a rapid Pace since 2020 over 24 gwatt of new generation
▶ 0:54:50capacity has been added to the kaiso grid including approximately 7 gwatt last year this new capacity includes over 11 gaw of battery storage the kaiso relies on these new resources as well as a diverse generation mix that includes solar wind geothermal biogas Hydro natural gas and nuclear generation to maintain reliability during the next 5 years we expect resource growth to continue to be comprised largely of battery storage solar and wind resources at the kaiso we work to ensure
▶ 0:55:20safe and reliable service to electricity customers through collaboration with California state agencies and other local regulatory authorities the kaiso the California Public Utilities Commission and the California energy commission have entered into a memorandum of understanding to help synchronize load forecasting power and transmission planning interconnection queuing and procurement of new resources this enhanced coordination has been essential to onboarding the thousands of megawatts of new generating capacity and battery energy storage that have
▶ 0:55:50come online in recent years and will continue to guide our approach to ensuring reliability and resource adequacy in California the reliability of our grid has also been Advanced by thoughtful and timely oversight by firk last year furk approved a comprehensive set of interconnection queue reforms resulting from an extensive kaiso stakeholder process that was anchored in our approach to coordinated planning based on our implementation so far we have observed a significant reduction in projects clogging our interconnection study process
▶ 0:56:20the kao's most recent transmission plan included 26 new projects at an estimated cost of 6.1 billion dollar to support over 85 gwatt of new Resources by 2035 we are also actively engaged in several interregional transmission projects that will access clean energy resources identified in the cpu's resource planning efforts that will also help deliver new generating resources and support reliability for Utilities in other states electrification of Transportation in buildings has been the primary
▶ 0:56:50driver of load growth to date within the kaiso footprint the CC's latest demand forecast shows a 33% growth in Peak demand over the next 10 years and a 45% growth in Peak demand over the next 15 currently there is about one gigawatt of data center load connected to the kaiso system the C projects an increase in data center loads of the next 15 years with a sharp increase projected to start around the 2028 time frame the kaiso is working diligently to serve emerging large electric loads within our footprint including
▶ 0:57:21major transmission enhancements to the transmission system in the Silicon Valley reliability in the west is further enhanced by the success of the kaiso Western Energy imbalance Market which has been in operation since 2014 optimizing supply and demand in 15 minute and 5 minute intervals the Western Energy imbalance market today spans 22 Market participants in 10 states and leverages the significant transmission connectivity and resource diversity across parts of the West which is particularly valuable during extreme
▶ 0:57:51weather events we are now working to extend a new day ahead Market platform to others in the West fully approved by firk in 2024 the extended day ahead Market will expand the ability to optimize supply and demand in the day ahead time frame which will further enhance market efficiency and reliability and reduce cost to the rate pairs of participating utilities the kaiso recognizes that our work continues in order to maintain the pace of new resource development to meet growing electric demands and state policy goals we remain focused on
▶ 0:58:21implementing our coordinated planning and interconnection processes and extending our markets surface offerings to other entities across the West we look forward to further engagement with the federal government to ensure reliability and cost savings for electricity consumers thank you again for the opportunity to be here this morning and that concludes my testimony and thank you very much for opening statement and vas you are recognized for five minutes for your opening statement chairman L ranking member Castor chairman Guthrie ranking member palone and vice chairman Weber
▶ 0:58:51and members of the subcommittee it's an honor to be here representing the electric liability Council of Texas or urot as we're referred to where we manag the flow of electricity to over 27 million Texans Texas continues to experience unprecedented economic and population growth driving electricity demands to record levels each year at the same time the energy mix that powers Texas is evolving rapidly with intermittent resources and battery storage playing an ever increasing role in system operations this transition
▶ 0:59:22presents opportunities but also real challenges that require planning and Investments to ensure system reliability today I want to share how Ott is managing the shift while keeping reliability at the Forefront the lessons that we've learned from recent weather events and why ensuring a balanced and resilient power supply remains essential for the future in the summer of 2023 urot set a new all-time Peak demand record of
▶ 0:59:53525 megawatts a demand level that is normally seen and experienced in the summer this isn't just about a growing population Texas has become a magnet for industries that require increasing amounts of electricity from semiconductor plants to Data Centers broad industrial growth and large scale industrial Industrial electrification in the perian Basin today wind and solar make up 42% of our install generation capacity both of those represent the most installed
▶ 1:00:24capacity in the United States with thousands of megawatts being added each year battery storage which was just emerging a few years ago is playing a critical role in balancing supply and demand during tight grid conditions and it's acting as a growing Bridge asset during critical hours from an operations perspective solar generation helps to meet Peak afternoon demand and batteries provide rapid response to system fluctuations with their growing presence in the ancillary Services Market wind and solar power are
▶ 1:00:54variable by nature meaning that their output is not always available when it's needed most batteries help significantly but current storage technology is still Limited in duration and in our Market typically one to two hours meaning that it cannot fully replace the need for traditional long duration dispatchable generation natural gas coal and nuclear power still Supply 65% of the delivered energy on the OT Grid in 2024 those long duration dispatchable resources Remain the backbone
▶ 1:01:24of reliability Prov providing critical generation Around the Clock we are seeing an uptick in the generation interconnection queue from gas generation and efforts that have been spearheaded by the Texas legislature such as the Texas energy fund are providing incentives for disfa power development we cannot lose sight of a fundamental reality a reliable grid must have a balanced mix of generation resources especially with the all of the above approach we see in the Ott power region additionally flexible demand is becoming a more critical
▶ 1:01:54component of reliable operation and we are exploring ways to best leverage that potential in the face of the significant forecasted demand growth ahead of us immediately following winter storm Yuri the Texas legislature put in place a set of weatherization standards during the 2021 legislative session and to date urot has conducted over 3,300 inspections of generation resources and transmission facilities the weatherization program inspects facilities for various preparation measures intended to reasonably ensure sustained operation
▶ 1:02:24at weather zones specific cold and hot conditions and new programs such as the firm fuel supply service is available to ensure reliability during winter events in the event of a fuel curtailment for gas resources this combination of efforts has shown to be beneficial over the last several winter seasons where the performance held to the standard that Texans have come to expect from their grid as we look to the Future urot remains focused on ensuring that Texas has a grid capable of supporting its continued growth and economic success
▶ 1:02:55that means in encouraging investment in dispatchable generation expanding and modernizing transmission infrastructure leveraging demands side Solutions and new technologies and enhancing grid security and resilience the OT grid is not alone at being in an inflection point we are balancing record-breaking demand growth with a rapidly evolving generation mix all while ensuring that we are focused on reliability for millions of Texans it is a challenge but it is also an opportunity to build a smarter stronger
▶ 1:03:25and more resilient grid that can continue to support Texas and the United States for generations to come I appreciate the opportunity to testify today and I look forward to your questions well thank you very much for your statement and that concludes our opening statements from our Witnesses and that this time we will start questions from our members and I'll start with uh myself for five minutes and I'm going to ask the same question I've asked for the last two years if I can just get more answer more or less from everyone we have to have more
▶ 1:03:55more or less power produced in this Cent more more more a lot more significantly more agreed we need more thank you very much Mr Ashlin if I could start my questions with you there are reports of supply chain delays for dispatchable Generation resources as well as ongoing delays for essential grid components such as distribution Transformers how important is it to address these delays
▶ 1:04:27quickly yeah I think it's it's both critical uh to address the delays quickly as well as try to be creative with the tools that we do have immediately and we're trying to do both um well let me let me follow up your testimony also details a striking graph displaying the Delta between grid additions and deactivations how much value is there to bring back mothball uh power plants back online to meet either short-term or long-term Rel viability challenges I
▶ 1:04:57think it's an important part of the mix um and I think it's an important part of the mix because it requires less uh Reliance on the supply chain because these plants exist and so it's easier in some cases to actually restore them and to build a whole new one but I think it's it's part of the solution if we can get plants back from mothball we would appreciate just follow up real quick on that in your testimony you mentioned you said how long does it take to build an AI plant data Center maybe 18 months okay and
▶ 1:05:27then how long to buy to build a power generation station five plus years is that including the permitting um including the permitting yeah okay thank you uh M Miss curan uh your testimony similar discusses the need to allow reliability to inform the pace of retiring generation resources how can we ensure that the pace of retiring generation resources does not outpace the addition of new resources so first and foremost it's considering
▶ 1:05:58reliability in those retirement decisions uh today as those decisions are made they are generally driven by policy in some cases economics uh but there is not a check at least at the myo to determine what the impact would be on the ability to have sufficient energy to serve the system okay thank you um Mr Ash if I can go back to you again your testimony went on to highlight some of the barriers of generation growth including cluding federal and state gener energy policies
▶ 1:06:28supply chain constraints and systematic permitting challenges as I stated in my opener the markets you administer do not operate in a vacuum how are the policies outside the purview of the electricity markets and grid operations causing premature retirements and inhibiting growth and development absolutely so there's multiple mostly decarbonization policies that are state and federal that have either forced generators to you know choose between really expensive upgrades that
▶ 1:06:58they couldn't afford or to go offline and have pushed generation offline um and um you know I wrote down something you said U chairman markets cannot build what governments do not let them I think we're seeing that it's also true for power plants cannot operate if governments do not let them and we have seen policies um that do that and an example of that is the EPA 111d decarbonization policy and again I don't make a value judgment climate change
▶ 1:07:28in my opinion is real and needs to be addressed but I think reliability needs to be addressed also and simultaneously let me follow up one last question to you um I've heard concerns from workers in an Ohio c-plant about what are detrimental effects of the previous administration's policy and recent state level initiatives that could threaten their jobs as you gra grapple with challenges resulting from Rapid and widespread retirements the dispat of generation with without adequate replacement is there Merit in cusing the
▶ 1:07:58adoption of harmful policies at the federal and state levels from a reliability perspective definitely there is Merit in uh in making sure that we don't retire generation uh that we will need to keep the lights on thank you in my last 38 seconds Mr nickel it'll be real quick if I may uh while much of the focus of our electric grid is on increasing demands for electricity from data centers and domestic manufacturing we also have to make sure the rap p are not unduly burdened as you mentioned your testimony
▶ 1:08:29SP enjoys some of the lowest wholesale electricity prices in the country because of your diverse generation mix and Renewables and base load will new investments into energy intensive Industries raise costs on rate payers or how can these new Investments lower price for households I only have about three or four seconds yes it could it depends on how you do it and I think we have to be really smart about how we move forward with that today transmission needed to serve new load is
▶ 1:09:00spread across the region it's cost shared we may not be able to do that when large data centers are located in certain very specific locations so we're evaluating that now thank you very much my time has expired and I recognize the general lady from Florida the ranking member of the subcommittee for five minutes for her questions well thank you Mr chairman uh last week the president fired illegally fired the commissioners from the Federal Trade Administration uh two of those members Commissioners on
▶ 1:09:30the Federal Energy Regulatory Commission and the uh nuclear Regulatory Commission enjoy basically this identical uh statutory protections as the FTC Commissioners meaning that the president likely thinks he can fire the furk and nerk um NRC Commissioners too and I think politization of our energy Regulators allowing the president's whims to dictate which FK and NRC Commissioners can serve is an awful idea
▶ 1:10:00uh and it it follows the the national nuclear Security Administration firings uh by Elon Musk all of this really socks it to Consumers whether we're talking affordability reliability it's just dangerous and costly um Mr Anana I heard you talk uh explicitly about a stable FK and what that means to your operation in fact at one of our last hearings uh a witness said they
▶ 1:10:30never wants to see proceedings before furk and state utility commissions to become politicized so I'd like to ask each of you is more politization of furk a good thing or a bad thing um yeah I would say FK is an incredibly professional body and um and I think they make technical decisions and we rely on that on their technical expertise if you could answer um maybe more or less more should FK be more politicized or less politicized I think less between those two choices
▶ 1:11:01for sure so my observation over the years is FK has tried to stay in the middle to the extent possible and I think that um less politicization is helpful another point I'd make is there needs to be um alignment between federal and state policies more or less politic um for the same reasons I will also say less the stability of FK is very important to move all of these things forward uh a less politicized
▶ 1:11:31balance approach would make uh all this transition a whole lot easier less politicized independent absolutely is important for keeping the lots a strong and independent f is essential to the success of our industry so i' say less politization speaking on behalf of my peer since FK really doesn't provide much oversight in Texas uh I think stable independent FK it works best thank you um one of our greatest challenges today is getting new
▶ 1:12:01sources of electricity onto the grid as quickly as possible in this era of of increased electricity demand interconnection processes while critical to maintaining the reliability of the grid can also take far too long under the current framework uh last week FK commissioner David Rosner wrote a letter to each of you detailing new opportunities to streamline the interconnection process uh in a recent study by the Midcontinent independent system operator miso an automated process
▶ 1:12:32was able to nearly replicate in 10 days the results of an interconnection study that took nearly two years to conduct so miss Curran can you briefly talk about what myo found what are the results how can other grid operators uh start looking at automating and speeding up their interconnection studies sure absolutely one of the challenges actually in operating the grid is that there's not a lot of software development that happens in this space there is a vendor that has come to Market
▶ 1:13:02that has put some automation around work that currently takes more of a guess and check approach by our engineers and by automating some of that work with a um codified rule set we have been able uh to speed up on small samples uh the progress of the Q study uh by quite a bit we're very optimistic about it we are starting to apply it uh to larger samples we do spend a lot of time uh with our peer RTO sharing best practices um including information
▶ 1:13:32about what we're doing here thank you and Mr nickel you've also had some success here what would you uh what else can FK do to support this kind of innovation encourage us which clearly is happening with the letter from commissioner Rosner very much appreciate what he's tried to do with that um Miss Curran spoke about the fact that we share best practices already um and we've got a lot that we're really focusing on we call it transformative technology we're going to have to rely on that
▶ 1:14:03and we're going to have to depend on artificial intelligence to make the solutions not only quicker but but much better so thank you for your support and we'll need that that support from F and the encouragement that they've already begun to provide thank you very much I'll you back thank you the general lady yields back the chair now recognizes the gentleman from Kentucky the chairman of the energy and conference committee for 5 minutes for questions thanks thanks Mr chair I appreciate the the recognition and thank you for all being here um you know on the the firk and and the other agencies I get
▶ 1:14:33we just can't assume that the members of those agencies don't have agendas as well and so uh we want them to work want them work properly but we also have oversight and checks and balances we need to have um when I when I first came into the role I'm going to have have that I have this Congress right before actually I've kind of been Associated more with the healthc care side of this committee our committee's bro as I pointed to Mr Mr Dingle early we have a lot of broad jurisdiction and um and and I had had an opportunity that we're actually going to have a great opportunity in a couple of weeks uh to have a hearing
▶ 1:15:04Eric Schmidt from the Google Eric Schmidt not Senator Eric Schmidt wrote a book with Henry ker called Genesis presented at the Library of Congress and I walked away with my my mouth open my heart beating going wow what this is the fight of our lives are we going to win the AI battle with China and and it really is is a fight of this committee I think or at least that direction I want to take the committee and and uh he didn't say this these are my words not his but essentially he said it he said that it's like being the dollar being the world currency somebody's going to have the world currency
▶ 1:15:34Europe has chosen not to be that by their energy policies and their regulatory policies which is right in the purview of this committee China um we don't want to have the the regulatory policies of of China but we so if you talk to people in this this area they say we have the brain power we have the capital we have to have a St regulatory environment and we have to have the energy we absolutely have to have the energy and and so if you look at the the demand and growth of energy what's the scary thing
▶ 1:16:04about it is even if we said all right let's go full boore uh we're still probably a decade behind where we need to be and so when I talked in my opening statement so this is for Mr Asana and Mr niichel in my opening statement I mentioned that we're going to take offload power base load power we're going to take it offline as much as almost as much as we're going to demand's going to grow in the next few years and so what do we need to do Mr and um as is how you say that correctly and
▶ 1:16:34and Mr nickel so what do we need to do to reverse just retirement of generation we know that produces energy that we need I think there's a couple of things uh chairman one is just sending the right price signals so that those generators can afford to stay um those do lead to increases in prices for custom customers but I think that's how do we send the right price signal uh we are our markets are doing that our markets are holding up a mirror and reflecting back the supply demand situation and the price signal is
▶ 1:17:04being sent so that happens without government doing anything there there no there's no initiative we need to do to not for congress I would say I think FK is is critical in making sure that the markets are holding up a true mirror to the supply demand situation but not for congress I think what would be a not true mirror if they're holding up what would FK do to hold up not a true mirror well there's a would say it there's a lot of tweaking that can happen around the market rules and we have been continuously improving them but the fact is I think that our all of our markets are
▶ 1:17:35uh in some shape or form signaling we need more Supply and that's so if you're but that's my question I guess so if the Market's signaling you need more Supply and you're saying you're taking base low power offline not because of what Congress or the government's doing is because the market signal is not there I don't understand that then yeah so let me get to the second part of my mat which is is the markets cannot keep a power plant open if it's illegal to operate the power plant no matter what price signal you send and I think so their their laws whether they're environmental laws uh passed by the
▶ 1:18:05states or the federal government I'll give you point there's not a role in the market there's a role in us to allow you to participate in the market okay okay that makes sense all right Mr niichel you bet and thank you for the question so I mentioned in my um testimony earlier that RTO have a role to play and and and that role consists of leadership and vision and communication we have to be more visible and within s's footprint we've done just that we have been communicating
▶ 1:18:36the challenge that we're facing um we've also Mr aana talked about Market signals for us what that looks like is setting a requirement that all load serving entities have to meet for excess generation and that requirement has been increased now three times over the last two years um so the know that in order to be able to meet that requirement they can't retire generation until significant replacement Generations available all right
▶ 1:19:06thanks and I only have 20 seconds so I mean if if if the world existential threat is climate change or if you believe it I'm simplifying this to two that's a little more complicated dominating AI over being the world platform for AI if you go the European route and say it's all climate change and we're let AI I not participated in that market that world if you go that route you're going to see the AI to China and China's building a coal plan every two weeks to support the energy first of all you're not going to win
▶ 1:19:36I you're going to lose both and that's why we have to focus on making sure we win this battle in a responsible way so thank you and I will yield back thank you the gentlemen yields back the chair now recognizes the gentleman from New Jersey the ranking member of the full committee for five minutes for questions thank you chairman you know I I want to say with the full committee chairman I want to I want to win the AI battle with China too but you got a national security advisor who can't even send an email without jeopardizing National Security I mean I don't know how the hell we're going to win
▶ 1:20:06an a AI battle with China with these characters running the show including the vice president and the Secretary of Defense and the others I mean it's it's like a clown show but in any in any case let me go back to the issue here Mr estana as I alluded in my opening statement I'm incredibly frustrated at the cost that pjm's failures are imposing on my constituents the vast majority of the rate increase in New Jersey families is due to what happened with pjm's capacity market so could do
▶ 1:20:36you think it's fair that families around the region are seeing their bills Spike simple question let me correct the record so New Jersey imported last year 20 or 43% of the energy that it consumed okay and that's New Jersey's right to have that plan that's a benefit of being in PGM but New Jersey's plan to make up that Gap was to build offshore wind from 2018 onward New Jersey came
▶ 1:21:06to us and said hey can you help us with the offshore wind plan and we put in probably more effort than we have with any other state to help New Jersey with the offshore wind plan and we were proud to do it uh and and in fact the New Jersey BPU uh gave us credit for saving New Jersey consumers $900 million through work now the problem is there's not one turban spinning offer I I I have to get to other questions but yeah the Trump Administration is doing whatever they can to stop any kind of offshore wind they they
▶ 1:21:36repealed all the permits whatever so you know I to talk about offshore wind when you have Administration that's totally opposed to any kind of wind power I don't even know what the point is but look you said in your testimony more Supply more demand you said that you uh you're you're trying to create more Supply now but I just think it's a shame that New Jersey families are paying for what I consider pgms mistake the changes that PGM is making that you talked about whether it's the processes to get energy hooked up to the Grid
▶ 1:22:07or for regional transmiss PL transmission planning or capacity markets all of these changes should have been made years ago in my opinion so why didn't pjm make its reforms to its interconnection que and grid planning processes a decade ago why did it wait so long well just to clarify my answer earlier since uh you asked the the reason we don't have turban spinning offshore in New Jersey it happened before the current no I know but look he Trump has killed
▶ 1:22:37the whole thing so I don't you know would he made that decision to pull it all it's a political decision it's a mistake back to this why didn't PGM make its reforms to its interconnection cues and grid planning process a decade ago why did it wait so long I appreciate you testified about how you're trying to increase Supply and address these things but what was the reason for the delay it wasn't a delay ranking member we have been making continuous reforms for the last decade and the process for interconnection needs
▶ 1:23:07to match the type of generators that are interconnecting and so when the generators shifted to more intermittent renewable generators we shifted our process with the support of FK and I would point to you we have 50,000 megawatts of generation ready to go ready to go on a system that only consumes 150,000 at Peak third of our made these changes uh sooner and the the pace of changed just it hasn't been acceptable but I want to shift to a national problem the inflation reduction
▶ 1:23:38Act is in large part responsible for making nearly all the planned new electricity generation in this country feasible without it the economy economics for many of these projects simply wouldn't work driving rates up even higher for families so let me just ask I know there's only a minute Mr vanin wheelie in your testimony you mentioned that battery storage wind resources and grids scale solar make up nearly the entire of iso's New England's interconnection que would it be good or bad for your grids reliability if the repeal of the inflation
▶ 1:24:08reduction act meant that none of those projects were ever built if you will I think it's going to excuse me it's going to make it harder for the supply resources to come forward all right see I mean my point with the two you both gentlemen is I think that we need more Supply there's greater demand we need to have all kinds of energy generation I'm a advocate for wind for solar for nuclear and I understand that what we also need more with fossil fuels
▶ 1:24:38I we need all of the above but um that what what I see Happening Here is that you know right now because of the efforts by the Republicans you know to repeal the inflation reduction act that's not going to happen and there's going to be less Supply at greater demand and that's not a good thing so thank you thank you Mr chairman thank you the gentleman's time has expired and yields back the chair now recognizes the gentleman from Texas the vice chair of the subcommittee for five minutes for questions I thank
▶ 1:25:08the chairman for the recognition I do want to make note that the member of New Jersey is calling the administration clowns was an editorial statement not necessarily reflecting the view of the management I want to get that in the record I do also want to ask some of y'all we'll start over here with you on the left do you ever feel or hear or you feel about hearing about you're somewhat unfairly criticized because sudden environmental changes happened which you had zero
▶ 1:25:39control over youall ever feel like you're unfairly criticized in that regard thank you for the question um I think I would say yes but I also think it's fair to hold us to a high standard we want to be held to a high standard okay your next your feeling yes or no criticized yes okay ma'am sure sir uh absolutely we strive to be the
▶ 1:26:09authoritative Source the independent source of information so as long as we can stick to the facts and its balanced assessment of what the impact of some of these policies are that's generally a safe place to be and it's helpful for sound like Sergeant Friday just stick to the facts ma'am sir you asked a difficult question we deserve the criticism that we deserve um there there are things that we can do better and we will do better uh and I we deserve criticism for those I think at the end of
▶ 1:26:39the day it all starts with accountability we feel extreme accountability for reliability if we get criticized we'll take it but we're always going to stay focused on producing results Mr Vegas Vice chairman we're always working to get better continuous Improvement is our motto absolutely and I hope and people watching this interview are seeing it later this hearing recognize that you all have a very critical place to to to play um and role to play so I'm going to come back to you Mr Vegas in Texas as you discussed in your testimony Texas is seeing significant investments into Data Centers
▶ 1:27:09and Manufacturing facil facilities because of our business friendly State posture um and access to Reliable and affordable power quite frankly can you discuss how these particular opportunities are important to potential economic development projects it's it's critical economic growth is directly correlated with energy reliability and affordability and we recognize that in Texas the light regulatory environment that we have enables resources to be added
▶ 1:27:40to our grid more quickly than virtually any place else in the US on both the supply and on the demand side that's the engine for economic growth and we continue to try to do everything to make support and we recognize I'm glad you all do and to our colleagues across the aisle here have filed a proposition position to make OT join the rest of the grid you know we have a bum sticker that says Don't Mess with Texas so we want to adhere to that how do you conduct generation and resource planning to ensure all electricity consumers are paying the lowest
▶ 1:28:10possible rates and yet still have reliable power you actually alluded to it in your testimony yeah affordability is something that's the front of our strategic pillar and focus so we think about reliability as well as affordability and the way we do allocations in Texas you know everything has flows down to load to Consumers uh large and small alike and so it's really important especially as we go into a growth environment which we're all going into to look at how that cost allocation is done to make sure it's continued to done be done fairly we have a method that we've
▶ 1:28:40been using for the last 20 years it's been working but we're going into a new phase go looking forward it's a good time to look at that again and make sure it remains Fair well thank you with that and Ott leads the nation in renewable energy of course you weren't there when the Cris project went into effect uh you know I spent four years in the Texas house before I got demoted to Congress and so we passed that project we made sure that energy was efficient so wind and solar are compromising 42% of a Cuts installed generation capacity and yet Texas remains well balanced with dispatchable sources
▶ 1:29:10providing 65% of deliverable energy given that solar is one of the fastest energy generation sources and its role that it plays in OT how important is Us in Texas that solar Tech techology is manufactured right here in the US OFA it's critical that we see the supply chain move here to the United States the security and the reliability of that supply chain is fueling the growth in a lot of the energy Supply in the country so the ability to have that supply chain protected here in America is critical so when you see
▶ 1:29:41restraints on Supply chains I know this is a question Rich every one of you but I'm down to 27 seconds on those Supply chains and these things are getting built in China as well as other countries you all have to cringe you have to know know in your heart of hearts that this stuff needs to be done in the United States of America Mr chairman I'm going to yield back you 10 seconds gentlemen y back and the chair now recognize the gentlemen from New Jersey's e8th district for five minutes for questions thank you chairman this summer my
▶ 1:30:11constituents in New Jersey are bracing for a 177% increase in their utility bills this jump is completely unacceptable and unsustainable especially considering it was avoidable PGM blames these increases on increasing demand and decreasing Supply i' like to understand these claims a bit better specifically the point on decreasing Supply one of the biggest drivers in the last capacity auction was a significant change in how Dependable PGM assumed natur natural gas plants were according
▶ 1:30:41to its independent Market monitor fully half of the price increase we saw in this auction was due to the change and how reliability was calculated to put it in plain English it turns out the natural gas plant were less reliable than we thought and now our constituents are paying the price Mr estana can you talk about why PGM only updated those accreditation values for natural gas plants last year and not earlier especially after winterstorm Yuri in Texas where we saw thermal plant
▶ 1:31:11outages drive a huge amount of the unexpected outages thank you for that that's a great question um the answer to that is because after winter storm urine in Texas we get our natural gas from the Marcel us and UDA shells from the from our region and we went to the industry in that region and said hey are we protected are we winterized are we protected against this sort of winter outage risk in the fuel supply system and the answer was yes and then we had winterstorm Elliott uh
▶ 1:31:41and we learned that we weren't we lost almost a quarter of Our Generation and so immediately after winterstorm Elliott we said we have to recognize this risk that we have now seen in how we credit generation and that's when we took action okay and but we have to acknowledge right there's incred incredibly changing increasingly changing weather patterns right and so we have to sort of be a little bit more on the forecast Front um than we can do in sort of historical Trends because these changes are happening so quickly that to prevent these types of allergies
▶ 1:32:11and shortages we need to be a little bit more Forward Thinking think about redundancy to ensure we're not just hoping for the best case outcome but preparing for the worst case outcome I know you've also referenced State policies driving generator retirements I just want to make the point that even though policy may have influence on such retirements PGM and its Partners have reasonably known for years about a large number of these retirements surely the capacity Market has known about these retirements for a long time as well and priced them in the discussion about transitioning to
▶ 1:32:41clean energy sources has been ongoing for decades these retirements decarbonization policies policies excuse me which PGM blames for de decreasing Supply should not have been a surprise as ranking member palone mentioned PGM by far has the worst backlog and slowest interconnection process of any other grid operator in the country thousands of projects are waiting to get connected as you talked to us about the importance of building more power your organization has lagged in its ability to actually connect power to the
▶ 1:33:12grid now our constituents are paying for this mismanagement and I'm concerned that my constituents will continue to foot the bill with additional increases in 2026 and Beyond so will PGM commit to taking every step possible to bring new generation online including the clean energy sources already in the queue and bring down costs for new jerseyans yes we're definitely committed to that I do have to correct you we do not have the worst queue in the country particularly when you adjust for the size of our system we serve 21% of
▶ 1:33:42US GDP we believe we have less than 20% uh much less than 20% of the national Q so the work that we've done on our queue is showing dividends but to your to your question absolutely absolutely New Jersey is critical to us we want to do everything we can to support you and we are committed to accelerating our queue continuously as much as we can I appreciate that what what immediate steps is PGM taking to address their interconnection backlog well the steps we've taken already that I pointed out uh have got us from
▶ 1:34:12almost 200,000 megawatts in the queue down to 67,000 left to go with 50,000 more through the queue signed ready to build some of which are building so so for 67,000 we have a firk approved process we're executing it now we'll get 177,000 of that by the end of this year the other 50,000 by the end of next year then we will be on a regular one to twoyear Q cycle which is um a huge advancement from where we've come
▶ 1:34:42and we're not stopping there on top of that we have just opened two additional windows for generators to come into the queue to add to what we already have so we're growing the queue by opening the door and we have a lot of people that want to come through that door and we're committed to processing them as well and just real quickly uh with respect to um the energy capacity has cleared but has yet to be connected to the grid What challenges are those developers facing and getting their projects online a lot of supply chain issues
▶ 1:35:12financing issues and a lot of what we call nimia issues not in my backyard people don't want the infrastructure um where they live and with respect to supply chain and financing does the disruptive nature of this Administration help with supply chain issues and with financing issues yes or no uh I'm not sure I think the answer is no thank you so much I yeld back gentlemen y's back chair now recognize gentl Alabama Mr
▶ 1:35:44Palmer um M kururin miso issued warnings about brown outs and blackouts what was the basis for those warnings um if you are speaking to the nerk assessment uh that recently came out we do a forward projection of the expected that the basis the nerk assessments well the nerk assessment I think was where that forast was made via nerk wasn't the nerk assessment that the biggest challenge for
▶ 1:36:14meeting power demand and avoiding the blackouts and brown outs the change of the resource mix no the nurk assessment Pro relayed the information that we showed which says that our forecast of the amount of Supply that's available to meet the demand that we expect um faces shortfalls in the coming years but that I think the Miso um report also indicated that it was the um shutting down of hydrocarbon produced power and trying to replace
▶ 1:36:44it with Renewables um had created basically in my terminology a deficit and and power output that has not yet been met the nerk report particularly in 2023 in assessing the challenges facing our power grid said that the single biggest challenge or or threat for power output was the change in resource mix that in other words to put it in Lay terms uh We've uh shuttered too many hydrocarbon plants
▶ 1:37:15without bringing online enough Renewables to to meet the demand when you take that in in context to the fact that we're in an arms race with China for development of artificial intelligence and Quantum Computing I think it really becomes problematic and we keep talking about we get into to my colleagues on the other side of the aisle and they're concerns about the climate we all are concerned about issues uh but we we're losing sight of what I think is a major national
▶ 1:37:45issue uh if China uh whoever U takes the lead in artificial intelligence Quan computing they're they're they're going to be the superpower and we don't have the power generation capacity right now uh that we're going to need we we got to build these data centers they're going to require massive amounts of power so um I'm glad to hear um and and I'm not sure I've heard this before from some of my colleagues that they support all the above including
▶ 1:38:16nuclear uh which is where I think we need need to go I'm going to ask uh Mr Vegas Mr aana M kerran Mr Nickel in your opinion did the EPA take each of you co-authored comments I set this up to the EPA during the previous administration to express strong concerns about the clean power 2.0 uh because of the impact it would have on reliability within each of your Footprints and as um and then those in
▶ 1:38:47charge of ensuring grid reliability in your respected areas it it it should have been imperative that the EPA who does not have the necessary expertise to analyze reliability listen to those concerns and put I would to ask each of you and your opinion did the EPA take your concerns into consideration when they were finalized in clean power plan 2.0 uh Mr Vegas no I don't think EPA uh adequately considered reliability in making their final determinations at their Mr estana
▶ 1:39:17yeah I would say the same thing as Mr Vegas said Miss Curran so a little more nuanced for me I think that they did make some changes in response to our feedback but as my colleagues noted not nearly sufficient to address the issue at hand Mr nickel Congressman Palmer I would agree with Miss Curran uh I think they did listen I don't think they went far enough but would you all agree that that the clean power plan 2.0
▶ 1:39:47impacts your liability in your area and and ultimately will impact the rate payer uh Mr Vegas Yes it has the potential to shut down nearly 14,000 megawatts of coal plants in our region which would affect reliability and cost which makes goes back to the point I'm making earlier that we've shut down too much hydrocarbon generated power without bringing Renewable Power online or some other form of power generation to meet the demand same question to you Mr AO yeah it
▶ 1:40:17definitely raised reliability concerns for us miss curan yes reliability concerns thank you Mr nickel yes absolutely increases our reliability concerns and increases our concerns about the affordability of electricity as long as those units are needed to be maintain quickly my last second here would it have been more workable if if FK or some other agency had had done the actual liability assessment quickly yes or no
▶ 1:40:48Vegas I'm sorry I didn't understand the question would the EPA rule have been more workable if the agency or FK had conducted an actual reliability assessment of the rules impacts and adjusted the rule prevent these impacts very quickly please it would have been more yes it would have been more effective Mr estana that is a tough hypothetical for me to answer well M Curran somebody needs to be doing reliability analysis that's a good answer thank you Mr nickel I
▶ 1:41:18agree Mr chairman I yield back gentleman yields back the gentleman recognizes the lady Virginia Miss mcclelen for at least 5 minutes thank you Mr chairman uh and ranking member Caster uh for having this hearing um Mr Sana I'm glad that you mentioned the lessons learned from uh winterstorm Elliott uh as you know virgins will never forget winter storm Elliott uh in in
▶ 1:41:482022 when more than 100,000 people uh in the Commonwealth and one 1.5 million others in nearby States lost power um and while we expected some outages 40 gwatt of coal and natural gas plants failed uh shutting down as you said a quarter of pgms generation capacity gas plants alone whether due to the issues at the power plant or issues with gas availability were responsible for 70%
▶ 1:42:18of the outages now that didn't need to happen and with more clean energy generation and smarter long-term transition planning we could have kept the lights on and have saved families money Renewables actually performed well during the storm and wind power exceeded expectations thanks to the Strong Winds of the hurricane as you mentioned we can't afford to ignore these lessons particularly as climate change continues to make winter storms and Other Extreme
▶ 1:42:49weather events uh more frequent and severe um and so while we want to ensure that we have enough generation to meet demand we want to also make sure it's reliable and can meet Peak demand um and so when clean energy combines with storage these generation sources can play a key role in stabilizing the grid during Peak demand uh and clean and reli uh renewable energy are also becoming cheaper to operate
▶ 1:43:19than fossil fuel-based generation and help protect consumers from fuel cost spikes so the coastal Virginia offshore wind project is one that we care very much about in Virginia Democrats and Republicans and if it had been up and running during winter storm Elliott it is estimated it could have saved ratee payers and estimated $10 million in a single day so Mr ass can you would you agree that adding renewable energy paired with storage
▶ 1:43:50to the grid can benefit uh grid reliab ility yes it definitely can and we would love more of that and we support Co Coastal Virginia offshore wind uh significantly if I may I just wanted to add one clarification the outages that consumers saw during winter storm Elliott in Virginia were not because we didn't have generation it was because of icing and storm damage for more local power lines okay but it was the gas power plants right it
▶ 1:44:20wasn't really because of the gas power plants it was because of storm damage to the local even though we had a lot of gas power plants fail uh in part thanks to exports from um rich in New York we had enough power to serve all our customers but the point is you had gas power plants fail and if the wind project had been up the wind generation could have uh helped to keep people on online during that it would have helped us import less from New York I think I'm going to take that as a yes so
▶ 1:44:50you can understand why I'm perplexed that the Trump Administration has this allout war on wind and wants to prohibit any new wind projects when we keep hearing from our friends uh on this committee on the other side of the aisle that we need more generation that includes uh more Renewables in the mix and so I'm glad we agreed that that would help um and I hope pjm keeps this in mind as it makes selections for its projects uh that it's Expediting under the new reliability
▶ 1:45:20resource initiative framework uh because I'm concerned that if Frameworks like that um are used for more than a one-time fix it could permanently imperil the benefits that consumers see from Regional grids and competition so can you confirm that pjm views R RI as a one-time intervention into its interconnection queue yes thank you now I was very glad to hear all of the witnesses talk about how important and independent FK
▶ 1:45:51is and and I agree F's not the only Federal agency that is important to whether New Generation Um projects come online is that right Mr s I'll start with you yeah there's there's various agencies that have a role and two of those are the department of energy and EPA right and you cannot have a new generation come online without mandated by law reviews by EPA right
▶ 1:46:23I think it depends on the state um so I don't know the answer to that question specifically okay well subject to check it's yes um so but but you would agree that the department of energy and EPA play an important role in New Power Generation coming online yes I agree okay and yet president Trump and uh Doge have led to the firing of over a thousand employees from the Department of General ladies time has expired
▶ 1:46:53and the EPA and that's going to take us in the wrong direction and I yield G time expired chair now recognize gentleman George and Mr Allen for five minutes uh thank you chair for uh Weber for con uh and chair L for convening uh this n uh this hearing to review our nation's uh Regional grid operators I'd also like to thank uh all of you for your testimony today obviously we pointed out the importance of grid reliability is Paramount
▶ 1:47:25uh we have Rising electricity demand and we must ensure that our Grid's capacity meets that uh demand uh Georgia benefits from a vertically integrated Energy System which I believe delivers reliable and affordable power tailored to our state's unique needs uh nuclear energy plays a uh vital role in this equation uh my district is a location of plant vogo we're very proud of this uh achievement it's the
▶ 1:47:55nation's largest clean nuclear energy facility the first two new reactors built in over 30 years and it exemplifies our commitment to to sust sustainable Dependable power uh Mr M as themma and Mr Dewey while state and federal efforts have aimed to prevent the premature closure closure of nuclear power plants some facilities have nonetheless shut down earlier than anticipated if those plants not been allowed to close what effect would they
▶ 1:48:25have had on wholesale energy and capacity prices and how would open plants have impacted consumers in your region just ask man yeah we need more nuclear and if we had it uh it would other things being equal result in lower prices okay Mr Dey uh same situation in New York the closure of the Indian Point plant was deemed to be a safety issue by New York State uh as a POC policy matter uh that
▶ 1:48:55U eliminated uh 2,000 megawatt of carbon free Supply close to New York City that uh would have certainly uh uh certainly did impact capacity prices okay uh Mr Kieran and Mr Vegas Congress has been working to speed the licensing and deployment of nuclear reactor Technologies or either of you working to develop incentives on how Pro how in how prices are formed to encourage investment in the very long-term assets nuclear power provides to the systems yes uh
▶ 1:49:25Congressman Allen we are looking at opportunities inside of the Texas legislature to incentivize the development of nuclear power in the state of Texas okay Mr Kieran oh miss Kieran I'm sorry that's okay just making sure it was me yeah um so in myo our states are largely vertically integrated and so it is the state utility regulatory commissions that are making those resource decisions so while our Market signal does provide information um about
▶ 1:49:55the overall Supply demand balance ultimately those choices are made in the states uh question for all of our Witnesses nearly 20% of our nation's electricity is generated by 94 nuclear reactors constructed 40 to 50 years ago these reactors represent enduring assets continue to deliver significant value long value long after the Visionary decisions to build them were made today's market conditions have would likely discourage companies from pursuing
▶ 1:50:25pursuing such generational Investments as States grapple with Rising power demands they are seeking Innovative tools to drive the deployment of Next Generation nuclear facilities so offer this question to all of our Witnesses how can these potential State actions fit within your Market starting with you Mr as yeah I'd like to clarify about half of our states are actually vertically integrated where the states can make that decision decision on what they want to build uh and in the other half
▶ 1:50:55it's based on the market um but I do think it's difficult for private Capital to build nuclear power plants today it that it's just really difficult it's very risky and very expensive and so I think if we as a nation want more nuclear power we should think about ways to support it uh federally MH Mr benwell Good Question um so uh it really comes down to the States I mentioned in my testimony that the states have the ability to select resources
▶ 1:51:26and make longer term commitments to certain resource classes there is renewed entry in small modular reactors in New England so there's conversations happening at in state legislatures and amongst the governors and so you know ultimately I'd make the same point Miss karran made which is the iso does not select these resources it's really up to State policy makers to decide how they want to go about incentivizing or Contracting for certain resource types yeah m yes I have nothing to add to that okay
▶ 1:51:56Mr Dewey New York state has initiated a blueprint process for exploring the development of new nuclear specifically small modular reactors uh we would welcome that from a grid operation standpoint and with our Allin approach towards uh towards generation we think would be a good mix for our Fleet okay I am out of time so if you would uh submit for the record uh the answer to that question I would appreciate it and I had an additional question that I'll submit to to you and if you would answer that for the record uh with that I yield back Mr
▶ 1:52:26chairman gentleman yields back the chair recogniz G A from Colorado for at least five minutes thank you so much Mr chairman Mr Allen I have such good news for you because in the last Congress when uh uh we had chair Duncan of the subcommittee and I was the ranking Democrat on the subcommittee we passed the advance Act which we actually all voted for on both sides of the aisle
▶ 1:52:56in this committee it went to the floor and we passed it and President Biden signed it and what this bill was designed to do is exactly what you're concerned about which is to streamline and modernize the regulations around nuclear power and as Mr palone said uh my colleagues on the other side of the aisle really every time seem stunned that Democrats support an all of the above approach but as we're seeing large loads like data centers and increasing
▶ 1:53:26demand for electricity all across America we recognize that we're going to have to have an all of of the above approach including Renewables and everything else so I I you know let's stop acting like we haven't done anything because the last Congress we did some very important things one of the important things we did was the um uh inflation reduction act I want to talk to some of you about that now all of the panelists early in this hearing all of you said
▶ 1:53:57that in that demand for electricity is going to increase in this country is there anybody who disagrees with that no they're all shaking their heads no and and so the second question is regardless of the the source of the power to accommodate the increase we're just going to need to have a variety of sources for for elect electricity transmission and we're going to have to increase reliability does anybody disagree
▶ 1:54:27with that statement no they're all shaking their heads no well so um one other question is all of your grids that you're talking about here today they don't just rely on fossil fuels they also rely increasingly on renewable energy does anybody disagree with that statement no they're all shaking their heads no here's why I asked that because my colleagues on the other side of the aisle are
▶ 1:54:58implying that the way we're going to solve the issue of increased demand and increased reliability is by just simply jettisoning renewable energy and going I guess to nuclear and fossil fuels is there anybody who thinks that your agencies and the people who you are running the grids could jettison all energy no they're all shaking their heads no
▶ 1:55:28there was a recent study um that was published by a a think tank called RMI and what it said is that the inflation reduction Act made clean energy cheaper than more than 90% of proposed gas plants and Mr chairman I would ask unanimous consent to put that article into the record so ordered thank you now collectively the iig and the IRA allocated almost $17
▶ 1:55:58billion in loans and grants for grid development but despite that the Republicans voted 54 times to repeal the clean energy P plan since the Democrats passed the IRA so I don't have time to ask all of these wonderful Witnesses today so the one close to me closest to me is Mr asan I'm sorry for you but but what what I want to ask you is um if if we repealed all of that money going
▶ 1:56:29for grid development from the um Ira would that help or hurt our ability to stabilize the grid and to increase uh production I think in the near- term the interconnection queue is full of a lot of renewable projects many of whom are I'm sure counting on the IRA and so uh I'm sure it would make those less likely to come and we do need them to come okay anybody disagree with that on this panel
▶ 1:56:59no they're all shaking their heads no now um I just want to ask one more thing to follow up on what Miss mlen was asking um uh Mr uh van wheelie uh in your written testimony you talked about offshore wind as a potential vital resource for grid reliability in New England is that right correct now um were you aware that on as part of the very early executive orders president Trump
▶ 1:57:30signed an executive order um uh putting a halt to wind production off Nationwide yes what would that do to the ability to have uh reliable grid production in New England it has an impact as I said in my testimony towards the end of the decade because we were counting on these resources coming into the system by the end of the thank you and Mr chairman I'd ask unanimous consent to put a copy of that executive order into the record without objection to or the thank you so much I Y back time
▶ 1:58:00has expired Shields back the gentleman now recognized gentleman from Texas Mr fluger for five minutes thank you Mr chairman um want to state that I believe in the best of the above not all of the above um and I think that differs from state to state uh in West Texas we have no access to hydr power unfortunately like they do in the Pacific Northwest but if you have access to Affordable reliable sources then then we should use those uh Mr Vegas I I'll
▶ 1:58:30I I think we need to do a math problem here um so sorry for math in public but let's talk about what the current uh demand is um in Texas for for what arot is is serving what what are we seeing annually Uh current demand peak in the summer is around 80 to 85,000 and in the winter about 80 okay thousand and in the next three or four years with um added industrialization added population data centers what do we think that is going to grow to in Texas
▶ 1:59:01we're now forecasting that by 2030 we expect around 150,000 megawatts so that's an additional 65,000 megawatts over where we are today almost double almost double in three to four years this is incredible so what I want to get to is when you look at the the balance your balance price you're balancing reliability you're balancing all these different things you know what are the best sources that you are looking for today at 85
▶ 1:59:31and in three years at 150 plus so we're getting to a point on the Texas grid where you can start to see that the peak demand is exceeding the dispatchable generation that we have available on the grid so it's important as we look forward to meet the demands of this growth to grow the supply in a balanced way the balanced resource mix brings I think the best portfolio for consumers it brings cost combinations that vary and give the optimal price and
▶ 2:00:01it also brings characteristics around reliability and resilience that are important so as we look forward we need to make sure we keep up with firm dispatchable generation in addition to the strong growth that we continue to see on Renewables firm dispatchable generation so I just looked it up on your website ot.com um and right now in my hometown at 78 degrees um and we've got a little bit of wind uh which is serving 18% of the grid 45% solar but talk to us about when it's hot or when it's
▶ 2:00:31cold uh and how reliable on those days where you have 100 degree plus which we have about 90 plus days uh in the summer in Texas of 100 degrees or more uh or when it's cold how reliable are those sources yeah as as I said earlier over the course of a year the actual delivered energy on the Texas grid 65% of it comes from our thermal Fleet which is our coal our natural gas and our nuclear they are the backbone of reliability they compl what is what we're getting from the renewable mix as well
▶ 2:01:02and right now we need all of the supply that's there it's clear that we need it all we're seeing 63% right now coming from Renewables but when the wind isn't blowing and when it's nighttime and in the summer when it's hot you still need a lot of energy to support that air conditioning load and that requires long duration dispatchable resources to do that I've only taken a few weather classes uh in in in my life but I would invite my colleagues on the other side of the aisle to come out to West Texas in the summer it's miserable when the wind blows in the in the springtime it at least cools you off
▶ 2:01:32but not in the uh Not In the Heat of the summer um nerk said that we're in a reliability crisis uh that's their 2024 overview their analysis do you agree with that going forward I think the concern with the pace of load growth and the pace of retirements coupled with the lack of dispatchable long duration resources coming online leads to that that being a logical conclusion um Mr asna uh I feel like there were um responses that you had um in
▶ 2:02:02a previous line of questioning and I'd like to give you uh a minute or so if you want to clear up anything or talk about the role of natural gas which obviously uh I I think as you look at urot is very important and it seems like it is to you as well yeah thank you for that the only clarification I would make is about half of our system our capacity is natural gas and um the rate of investment in natural gas infrastructure has significantly lagged the
▶ 2:02:32rate of growth of natural gas utilization and so natural gas is becoming less flexible for us and that's why one of the things I mentioned in my top six Hit List is making sure that we invest in natural gas infrastructure because we need it to be flexible and Mr Vegas I'll end with you in the last few seconds um when government dictates policy that doesn't allow you uh to have the right capacity the right mixture what does that do to affordability reliability and at the end what does it du to our
▶ 2:03:02uh National Security it's absolutely detrimental to affordability and to reliability and it uh risks our energy security thank you Mr chairman he back gentleman he's back chairman I recognize general of California Miss masui for at least 5 minutes thank you very much M chairman I want to thank the chairman and the you member caster for calling this hearing today and I want to have a special welcome to uh the California ISO president um Elliot mser uh you haven't been asked many questions so I will ask you
▶ 2:03:33a lot of them today at any rate um grid operators face many challenges today Rising electricity demand aging infrastructure Rising energy costs and the need to reduce greenhouse gas pollution my Republican colleagues often say we need more energy not less well I I agree we need more energy but it must be cleaner cheaper and built faster than we have in decades yet president Trump is deliberately obstructing energy projects
▶ 2:04:03freezing funding halting critical projects and firing federal employees responsible for maintaining and permitting our energy infrastructure reuter reported last week that President Trump and elam's mass layoff had predictably slowed Federal Energy permitting Mr mser hypothetically if many energy projects in California were delayed because there's no federal employees to review permits how would that impact grid reliability
▶ 2:04:33given the increasing demand for electricity the anything that that crimps the supply will have detrimental impacts on on reliability it's also been reported that President Trump and Elon Musk have fired Bureau Reclamation employees that operate and maintain critical hydropower infrastructure Mr remainer hypothetically if we see a significant reduction in hydropower output because these systems are not adequately maintained how would that impact good reliability
▶ 2:05:04well hydrop power plays a critical role not only within California but in the broader West also in the Pacific Northwest so maintaining and maintaining the health of those assets is critically important okay the federal government is not Twitter we cannot let Elon Musk play around and gamble with our critical infrastructure if a dam fails or the electric grid goes down the consequences could be catastrophic meanwhile Congressional Republicans are planning to repeal Federal Energy tax credits that are currently financing
▶ 2:05:34hundreds of energy projects across the country independent analyses from Aurora Energy Research and energy Innovation show that repealing the IRA tax credits will cost American families billions and higher energy costs and reduce new energy dep employment by hundreds of gigabots Mr maer hypothetically if there's a significant drop in the number of financially viable energy projects over the next 10 years how would that affect
▶ 2:06:05reliability again I think as as I and and my other colleagues have have mentioned here today anything that's going to impact the supply of commercially viable projects to meet the rapidly growing demand in our grids is going to be problematic and could potentially compromise reliability and affordability okay so that would impact our ability to meet new energy demand and slow down the time to power for new centers yes okay I know a lot of my Republican colleagues think clean energy is unreliable and many of
▶ 2:06:35my colleagues like to point to California as proof that clean energy is unreliable but that view is really badly outdated Mr mser very briefly can you talk about how grid reliability has improved in California over the last few years a a reliable grid relies on a portfolio of resources of different attributes and complimentary characteristics what we found in California as we have seen the state uh choose to elect a much larger
▶ 2:07:06proportion of solar energy in particular that by pairing those Resources with dispatchable batteries that that has helped to increase reliability in recent years so it is a portfolio effect you need to plan carefully but by by carefully considering all the different resource attributes and making sure that they're all available to the system we have been able to significantly improve reliability in recent years okay thank you kaiso has also worked to improve reliability meeting Rising demands by supporting the build out of long-distance
▶ 2:07:36transmission infrastructure and by participating in larger energy Market spanning 10 Western States Mr maer can you briefly explain how improving inter Regional energy transfer Across the Western us helps to improve reliability and meet res Rising demand yes thank you we've been very fortunate over the last decade to be able to take advantage of the significant transmission connectivity uh that exists between California and the Northwest and the desert Southwest and by leveraging
▶ 2:08:06that transmission connectivity and resource diversity we've been able to operate a Western Energy imbalance Market that has significantly improved reliability and affordability we're also engaged in working with other states and other utilities to further enhance the Western grid which will make a big difference in liability going forward okay thank you very much my time isn't it back G lady's back chair recn G from Tennessee for five at least five minutes at least five minutes thank you Mr chairman thank you to the witnesses for being here today
▶ 2:08:37Mr nickel I'm going to start with you so closely uh I'm going to come up with the scenario for you and in this scenario let's assume that Southwest power poool increases its wind capacity by 30-fold over two decades and let's say that on a very windy day as much as 90% of your Region's demands met by wind power the dates February 27th and let's just say that changing wind speeds cause generation to plummet by 12,000 megawatts
▶ 2:09:07in just two hours so what are you going to do when the wind dies down in this scenario it's an interesting scenario I don't know where you picked up on that but um it is real it's a real scenario it's something we've experienced mhm and what we were forced to do is to rely on the backup generation that we had available and that primarily consists of gas generation because it can be started quickly it can be ramped up quickly and it can meet the need uh very reliably so that's what we did
▶ 2:09:37okay thank you for that answer uh Miss Kieran it's your turn in this scenario let's say that you experience a wind drought that lasts 40 consecutive hours how do you make up for thank you another familiar uh scenario that did happen to us um the way you make up for it is with resources that do have uh fuels that are available on demand so in myo uh that would be coal and gas generation um that is able to run for that duration
▶ 2:10:07yeah thank you ma'am now Mr estana it's your turn um the dates December 24th 2022 uh during one of the coldest days that the Tennessee Valley regions ever in decades and TVA calls and says it doesn't have enough power to meet this demand so what do you do sir it's a great question thank you and they did call they called me directly yes they did um and we um did our best to support them with a significant
▶ 2:10:38amount of exports yeah so what kind of exports they were on the margin uh natural gas um and oil and why did you still have enough power on your wires to help TVA uh while still meeting your own needs well we had healthy reserves uh then and so we were able to support our neighbors and it wasn't just TVA we were exporting power um to multiple Neighbors at the same time yeah I remember that and I had brown outs and
▶ 2:11:08and blackouts and you know I've looked at all your testimony and and the key challenges every one of you have talked about or the rising demand in energy due to electrification manufacturing growth data centers you know producing AI then you talk about generation transition accelerated retirements of transitional power plants are outpacing new renewable generation capacity talked about extreme weather impacts and then transmission
▶ 2:11:38limitations in current infrastructure is inadequate to meet growing needs and new projects face Regulatory and logistic hurdles and uh you know the testimony paints a really clear story and for one um wind energy may have value to power companies but it cannot be dependent upon when people need it most this wind energy has been widely deployed around the country because of generous government subsidies which increase
▶ 2:12:09reliability problems as it crowded out more reliable sources so I personally um think that is it's astonishing that when continues to receive government subsidies and especially while the utility companies still have to keep their other power plants online even when they aren't making any money just to make up for the over belt wind as long as the policies that we make cure continue to emphasize unreliable
▶ 2:12:39weather dependent energy rather than supporting the noell grid blackouts are going to keep happening aren't they and so I think it's time we have to revisit our priorities and uh focus our efforts toward keeping the lights on ladies and gentlemen so with that Mr chairman I yeld back thank you all gentle lady HS back the chair now recognizes the gentle lady from Washington for at least five minutes
▶ 2:13:10thank you Mr chairman uh thank you to our witnesses as well uh as all of you know the Pacific Northwest does not have an RTO or ISO represented here our energy markets and balancing authorities are very different uh RTO are not though most of us are seeing exploding load Grove in the Northwest because of affordable uh energy in the Pacific Northwest it's Chip fabrication and data center expansion that are the
▶ 2:13:41drivers now depending on who you ask we are likely facing a nearly 16% increase in load growth by the end of the decade five-fold increase in what was previously forecasted and we've heard today about how long it takes to interconnect and to build new energy um now I say likely because we don't have great quality of data inputs for these models and accurately for forecasting load growth from data centers is
▶ 2:14:11difficult because they are notoriously secretive we also know these companies shop around to multiple utilities potentially duplicating the same load in several service territories for the existing data centers operators often don't want to share data about their energy uses for proprietary or national security concerns M Mr Asana you you've been on a lot today I've got another one for you given the surge of demand that you're seeing at pjm
▶ 2:14:42I'm more concerned about uh making sure we're building strategically than about overbuilding uh but considering all of these challenges how do we ensure that power planners have the right tools to accurately predict load growth a wonderful question thank you for that we're at a time where both demand is growing rapidly and the rate of growth is incredibly uncertain I mean it is really hard all the issues you talked about whether you know you're double counting something or not and so we significantly
▶ 2:15:12discount down from the gross numbers that are being submitted to our utilities in fact they will discount their numbers based on their own criteria some of which are have people put up money behind this project or is this just a a conversation or sign contract uh but I do think this is an opportunity for continued refinement does discounting numbers mean like lowballing the estimate no not lowballing but applying criteria so if you start with a gross pool that is huge and it's just not plausible
▶ 2:15:42how do you cut down to what you think is reasonable there filters you apply like is have these people you know put up money do they have a signed contract have they acquired the land that got it okay thank you um we all agree we're going to need a lot of energy and really fast and we want more domestic manufacturing we talk about that all the time we want to win we need to win the AI race with China and that's going to require a ton of energy uh and no power planner is saying natural gas won't be part of that puzzle
▶ 2:16:13absolutely will um but really we should all have the goal of deploying more non ghd emitting uh energy so let's do these things like nuclear and geothermal and the like my next question is for Mr mser and Mr nickel um at the last hearing with your organizations I asked both kaiso and SP about the governing structures of day ahead markets uh developing in the west and there have been significant developments since then
▶ 2:16:43uh with Bonville draft decision to join SP markets plus uh but I'd love to hear from each of you uh how utility membership in your Market would uniquely benefit the Pacific Northwest in the face of surging growth from data centers and Manufacturing and I'm going to start with Mr niichel so thank you for that question congresswoman um sp's current 14 State footprint is flush with a lot of wind generation
▶ 2:17:13uh in fact you heard it um earlier today that we've seen as much as 90% of our demand ser by wind generation we know it's not always available it's it's plenty available when the wind is blowing um and the same thing can be said of the solar generation that's in the desert Southwest part of the United States when the Sun's shining it's a tremendous resource and we love having it available to us the same thing is true of hydro generation in the Pacific Northwest we
▶ 2:17:44find that for those participants that want to participate in our Market a tremendous opportunity to leverage a diverse portfolio of renewable generation that's very important to you and to your constituents in the Northwest Mr Mainer I would I would just add that from a physics and economics perspective we have that connectivity today to the Bonville system we've been leveraging it for years and providing billions of dollars of Economic and reliability reliability benefits and I give Bonville a lot of credit for pushing the envelope
▶ 2:18:14on governance and we are also reforming our governance structure to address their concerns thank you and thank you for heading up onaville for so many years thank you y back the G lady's time has expired and yields back the chair now recognizes the G lady from Iowa's first district for five minutes for questions thank you chairman L and ranking member caster for holding this important hearing on grid reliability Iowa's first district has emerged as a national leader in renewable energy including wind energy with 59% of our electricity now generated from this renewable
▶ 2:18:44resource it has the power to be transformative for our region driving down energy costs for families and businesses while also creating jobs in manufacturing our success with wind demonstrates how quickly clean energy can be deployed at scale in just 5 years we've reduced coal dependence from 45% to 23% while maintaining some of the lowest electricity rates in the country however as I've already heard we have to recognize that a balanced Diversified approach is critical for grid reliability
▶ 2:19:15our natural gas facilities in Coralville and Burlington provide flexible generation needed our historic Kakak hydroelectric plant contributes Basel load Renewable Power that's been operating reliably since 1913 and we have an additional hydroelectric plant at Lake Redrock the closure of Iowa's only nuclear plant Dwayne Arnold represented a loss of 601 megawatts of carbon free Basel load power and I'm encouraged by NEX era's discussion about potentially restarting operations at this facility and as we listen to testimony from the
▶ 2:19:45regional grid operators today I'm particular particularly interested in myso I've been there I had a wonderful tour and I encourage all members to visit their grids um and how they're uh integrating increasing amounts of renewable energy while insuring we maintain sufficient dispatchable resources to address the reliability challenges um highlighted in your memorandum the recent loss of load expectation uh 2025 2026 study found that winds effective load carrying capability in Winter Dro
▶ 2:20:15d uh drastically from 53% to 29 uh percent and we of course saw that in the polar polar vortex um in Texas as a state that has invested heavily in Wind this is concerning what's driving this change and what are the implications for future wind development and Miss Curran what's your approach to maintaining reliability thank you one of the implications of this portfolio shift that is underway is that we have increasing
▶ 2:20:46um dependencies and correlations between our type of Generation Um and we are increasingly looking at um what is available when it is most challenging from an operational perspective um including the time when you most need when resources may be changing and that certainly affects that accreditation we are very focused on making sure that we are coming up with the right values so that those that are making the decisions to invest in resources um can understand uh what value they provide both from that capacity
▶ 2:21:16perspective as well as energy uh the other piece of the equation that we have not talked a lot about today is transmission uh so transmission is necessary to get the resources um from where they are generating to where they are needed in myo we benefit from a large Geographic diversity and that means we have the opportunity um to transport power across multiple states that may have different weather patterns at different times to help meet that need thank you Mr asan President Trump has made it clear that he sees collocation as a key arrangement
▶ 2:21:46to power data centers however collocation Arrangements imp GM have become a major policy Topic at furk and in states that have inhibited timely access to energy for data centers when structured correctly collocation can provide timely access to energy while ensuring other rate payers are held harmless how can PGM ensure that collocation arrangements are allowed to move forward in a timely manner we actually made a filing with FK yesterday um highlighting three different
▶ 2:22:17ways in our current rules that um you can actually accomplish collocation and then we suggested five other mechanisms to do that and now we're awaiting feedback from FK uh on how best to proceed thank you uh in the 2024 long-term reliability assessment report nerk recommends that to maintain demand and Supply balance dispatchable generators including carbon-based fuel generators must be available and capable of following changing electricity demand and for the past uh two
▶ 2:22:47years when I was on this committee we've hammered on this to ensure reliability what measures are you taking to discourage premature retirement of carbon-based fuels uh fuel generators such as the power plant 2.0 rule how are we able to maintain dispatchable our energy uh when we're retiring uh carbon based uh fuel prematurely yeah I mean for for me I think I I partially answered this earlier but
▶ 2:23:17part of it is through sending the right market price signal to induce some the stay part of it is through um working with uh our states and you know Federal Regulators to to try to ensure that we don't have rules that Force these generators offline prematurity and I would say the same Market rules that ensure that these resources get appropriate compensation and then in our ability as having a regional view providing information about what the supply demand balance uh really is and we have seen States
▶ 2:23:47taking action based on that information that we we've provided thank you so much uh Mr chair I have a question to submit for the record and I yield back thank you the General's time has expired and yields back the chair now recognizes the gentle lady from Texas 7th District for five minutes for questions well thank you so much chairman L um and thank you to our Witnesses for your time and your testimony today uh I am glad to have Mr Vegas here from OT um as a fellow Texan for this important hearing and um no
▶ 2:24:17surprise I will have a few questions for you um but I think there's been a really important uh theme that's come out of today's hearing um and as we have discussed right the United States is on the brink of a new boom and energy demand and that demand arises from things we've touched on uh from the data centers and AI development from widespread electrification to as you uh noted Miss curan uh efforts to reshore American manufacturing that we've undertaken over the last four years um including through some
▶ 2:24:48very important legislation passed by Congress and I think you all have made clear that this is an area where smart policy is needed and that this committee and this Congress have an important role to play in setting that policy it's kind of contrary to the efforts underway to take a chainsaw to the federal government this is precisely where we need smart policy and Nationwide coordination and sharing of knowledge um this is really core to what government is about right pooling
▶ 2:25:18our resources and our expertise to keep us safe right to make sure that the lights come on 24 hours a day 365 days a year to make sure that we have power when we need it it's important to our safety it's important to our national security it's important to our ability to grow our economy it is important to life liberty and the pursuit of happiness and so before we look forward to some of the issues um that have been raised I want to look back on one thing um chairman L just to to um
▶ 2:25:49to touch on this I understood you to say something in your opening statement about wind and solar not being as reliable during weather events and I just want to point out that um during winter storm Yuri we actually found that solar generation was the only one of the resources to outperform ot's worst case scenario uh expected output um so I do think that there are are lessons to be learned from our experience in Texas and I'd be glad to share them uh when we have more time on this committee but I do want to talk about this energy demand
▶ 2:26:19um and growth I know it varies by region and in Texas we're already home to 330 data centers uh approximately 60,000 Texans employed there more on the way and I understand that urot is forecasting nearly 70 76% load growth by 2030 um and while we've seen commitments to build a variety of Generation Um we know that demand is going to exceed current generation capacity without continued investment so Mr Vegas I want to ask you last month urot released
▶ 2:26:49its capacity demand demand and reserves report uh for 2025 through 2029 and it indicates that absent major changes ot's Reserve margins will drop to negative values within two years can you just explain what that means for consumers in real terms does that mean rolling blackouts higher energy bills how are you protecting UT customers from the market shocks that the large data centers might bring and this increased demand so I think it's helpful to set a little context on that report that report is a very
▶ 2:27:19rigid structured report that requires us to report effectively the amount of generation that's in our queue that we expect to come online the amount of load that is expected to be built based on the rules on how we count load and so it what it does not reflect is as important as what it does what it does not reflect is the response of the market to the conditions as they evolve over time so what we would expect to see as we get to a condition where Supply is grow I mean demand is growing Supply needs to keep up we would expect to see prices start to be more elevated on a
▶ 2:27:50consistent level in the wholesale Market that would send signals to develop resources it would also send signals to slow down load growth load is very responsive to prices and so it doesn't reflect those dynamics of the market working and so I I don't want consumers to think it's it's it's forecasting blackouts or brown outs in the future what it's forecasting is that there needs to be a concerted effort to match the demand growth with Supply the market economics should deliver that but without that market dynamic
▶ 2:28:20we are looking at shortfalls in the future okay well I think that that's helpful so that folks aren't too worried but I do know that there are um proposals in the legislature for example uh that would sort of hamstring ot's ability I think to quickly add some uh renewable assets to the grid and um and that you know you're forced to pair them with natural gas and or coal plants um so I think you know from your perspective as the grid operator do those kinds of policies that limit the development
▶ 2:28:50of certain energy resources help or hurt your ability to meet Demand right now we need policies that support the growth of all the resources that can come onto the grid and it is and I emphasize again the balance of those resources is so critical to meet the future demand that's coming because it's such a large growth we need to have a balanced portfolio going forward thank you so much I have gone over my time but again thank you all and thank you Mr chairman and I yeld back thank you very much General A's time has expired and yields back the chair now recognizes
▶ 2:29:21the general of South Carolina's 7eventh district for five minutes thank you uh Mr chairman really appreciate that uh this issue is especially critical for South Carolina in the Seventh District where economic growth and energy security really go hand inand as we continue to witness Rising energy demands with manufacturing with data centers uh and electrification efforts we have to be prepared to ensure our grid remains reliable and resilient your testimon has talked about that a lot South
▶ 2:29:51car has faced fewer reliability risks thanks to our strategic decisions uh but they still do exist uh Miss Curran as we've discussed today it's unclear whether the generation expected to come online will be enough to meet future demand um and replace retiring resources developers seeking to enter the market are hampered by permitting delays supply chain issues and overly burdensome environmental regulations are there changes to Market rules or new technologies that can help us maximize the capacity
▶ 2:30:22and efficiency of our current grid to improve reliability over the next few years sure so having some of those um new technologies or other changes are one of the pieces of the portfolio we'll have to do maximizing our existing system um is important one of the most important tools U from the myo perspective is actually the operations of the myo Market one of the things we do is seek to actually get the most out of the existing assets we have within the constraints of reliability
▶ 2:30:52which means we're not leaving excess capacity on the system be that generation or transmission capacity and I think that's a model for um all electricity operation do you find that that model duplicated across other um other sectors I mean like with with your neighbors here do they do the same thing roughly so we have um and do that maximization for example with our neighbors pjm and SP um it is not necessarily though the same um across the country including in those areas that don't have a regional transmission organization thank you
▶ 2:31:22for that and is myo currently utilizing AI models to improve operational efficiencies and system management and if so can you expand on how these tools are enhancing your ability to forecast demand manage resources and mitigate reliability risks absolutely as we've talked about a lot today um there are a lot of new variables in the system you have this intermittent generation you have changing uh load patterns be it from data center or just consumer changes um we impact and the like there's a lot more uncertainty in the
▶ 2:31:52system uh we use in our operations something we call an uncertainty management model where we leverage artificial intelligence um to better forecast what the next day might look like with all of that variability so taking in all of those very hard to forecast variables and trying to come up um with an impact uh we have seen uh tremendous results both in reliability but probably more importantly getting that reliability more affordably so we've been able to plan better and thus result in lower costs
▶ 2:32:22for customers from using that technology thank you for that Mr Aston your testimony highlights the importance of reliability must run RMR agreements as a critical tool for uh ensuring short-term reliability as plants retire and new resources come online can you describe how pjm utilizes these agreements to maintain grid reliability during those transitions yeah we like to use reliability must-run contracts as little as possible they're really only used for local trans transmission constraints so when a generator wants to retire
▶ 2:32:53and submits that request to us and we feel like we need that generator to keep the grid reliable for local transmission constraints until we can build the transmission system then we enter or seek to enter into a reliability must run agreement with that generator but we want to use it as little as possible and let the markets work as much as possible you want to build new plant well New right we definitely want new generation yeah are there ways that these agreements can be improved to offer additional flexibility uh particularly
▶ 2:33:23in light of the supply chain challenges and infrastructure delays that we have are you asking about reliability must run contracts or just cor yes sir yeah we're def we're working with our members right now on ways that we might improve our reliability must run process and how would that look just curious um we haven't we haven't decided but some of the things that we're thinking about are whether we have a standard uh contract with every generator that wants or that ends up needing to sign up or um aort of bespoke
▶ 2:33:54contract so that's an example but there's a host of issues that are on the table and being considered okay thank you for that Mr chairman i y back thank you the gentleman yields back the chair now recognize the gentleman from New York's 20th district for five minutes for questions thank you Mr chair I associate myself with the consensus that we've heard from our Witnesses and thank you all for being here on the importance of building new transmission for improving reliability and bringing new resources online but I'd also
▶ 2:34:24like to hear more about how New York is pursuing other strategies for addressing reliability challenges so Mr dwey first let me thank you for your leadership at my home ISO uh I appreciate the work you and the team that at the iso do each and every day uh and respond to New York's needs um we know New York is dealing with increasing electric demand especially chip manufacturing Upstate and an aging generation Fleet for the past several hearings I've been trying to highlight the role that demand
▶ 2:34:54management including Energy Efficiency and demand response can play in reducing Peak demand improving system reliability so can you discuss what New York is doing to simultaneously support grid reliability and energy intensive Economic Development and do you see a role for demand side policies to contribute to uh New York's I New York efforts um thank you congressman um I I would say that um the ability for
▶ 2:35:24demand to be flexible and to recognize the um the opportunities for flexibility and demand whether it be demand response whether it be load shifting to different hours of the day is going to be absolutely crucial to maintain reliability uh in this modern grid where the intermittency of uh variable resources like wind and solar uh can vary a lot over time um we're going to need to have that flexibility in the load profile we're going to need to be able to recognize which loads can be flexible some of the data
▶ 2:35:55center loads and some of the chip manufacturing which is so crucial to both jobs and uh uh and National Security issues to onshore more of that processing uh they have a very constant uh fixed demand and they can't be as flexible so we've got to look for opportunities that other load that can participate in that way can do so and coming up with the appropriate Market mechanisms in place to provide the right kind of incentives and provide the right kind of Reven Vues to recognize the willingness to do that thank you and part of the challenge of meeting this new demand
▶ 2:36:25is certainly interconnecting new resources so what changes have you made to your interconnection process and have they been working so we have reformed our interconnection process uh really three times over the last six years uh most recently uh the the reform process culminated in our filing we mentioned uh I think the gentleman from New Jersey mentioned for order 2023 uh we have uh issued uh and filed our compliance
▶ 2:36:55flying to be completely compliant with that new rule making from firk and we have initiated uh our transition cluster that does the combined study of all the resources uh in that mix we have the largest uh interconnection queue that we've uh that we've ever seen at the New York ISO and we're proceeding along a timeline that will allow us to finish it quicker than we ever have thank you and if the overwhelming majority of projects in the queue today are battery and solar and wind projects is it fair to
▶ 2:37:25say these Technologies are important to Future reliability in New York I I would clarify that the entirety of the New York ISO Q is wind solar and storage uh so it's crucial that we be bring these resources online that we locate them and site them at the right location so they maximize the benefit and reliability of the system and uh and we come up with uh uh the necessary upgrades including transmission expansion that would enable their reliable operation yes there's been much talk in Congress about repealing federal tax
▶ 2:37:55energy incentives like the ITC and PTC through the reconciliation process if those credits were to disappear I think it's pretty safe to assume it will be you know a huge implication for the wholesale Market project developers may need to bid into the energy Market at higher prices to make their projects economically viable capacity payments may need to be higher to introduce or to induce a stronger investment signal if fewer projects are going to be developed so Mr doy I realize you may not have done independent
▶ 2:38:25analyses on this issue yet maybe you could just talk in hypotheticals does what I'm suggesting check out what what could be the impact on Energy prices and investments in the iso Market if these tax incentives go away in a hypothetical sense I would expect that some of the viability of these projects generally uh would come into question based on the financing Arrangements that they have to develop and construct them um at a minimum I would anticipate higher costs uh when they come interconnect into the system
▶ 2:38:56which would ultimately result uh in higher cost pass down to Consumers and we know that there have been considerable confusion much considerable confusion about how tariffs on Canadian energy might affect New York's electricity our systems are interconnected and New York has long benefited from that importation of clean reliable Canadian hydrop power um we also know that on has considered imposing a search charge on its electricity exports how has nice has the iso prepared for the
▶ 2:39:26possible imposition of tariffs and Export charges on Canadian power I would say that the interconnection uh between New York ISO and really the whole North Eastern United States and Canada is mutually beneficial from both a reliability and an economic standpoint uh and I say mutually beneficial because it works both ways across the border uh with tremendous benefits throughout the region uh we have put in mechanisms to collect and remit those tariffs if we need to um and we're working closely from a reliability
▶ 2:39:56standpoint to make sure that at least on an emergency basis but hopefully on an economic day-to-day basis that power will continue to flow thank you thank you so much and with that Mr chair I yield back thank you the gentlemen time has expired and yields back the chair now recognizes the general lady from Florida's 15th district for five minutes for questions thank you Mr chairman for convening this important hearing and thank you to all of our Witnesses for being here today to testify as our energy demand continues to rise due to growth in manufacturing advances in
▶ 2:40:26technology like artificial intelligence and increasing electrification it is critical that our electricity production and transmission are prepared to meet these needs alarmingly in their 2024 long-term reliability assessment the North American Electric reliability Corporation found that most of the continent is at risk of experiencing electricity shortfalls within the next 5 years considering these developments I look forward to speaking with our Witnesses who represent Regional grid operators from across
▶ 2:40:56the country on how we can best strengthen our electric grid prevent shortfalls and meet this growing demand for power Mr van wheelie in your testimony you mentioned that independent system operators and States play a joint and complimentary role in resource adequacy I am interested in discussing further the role that state policies can have on Rel liability and affordability of the electric grid the Trump Administration recently discussed moving forward with building natural gas pipelines
▶ 2:41:27across New York and into New England to help supply energy to that region what would additional natural gas capacity mean for reliability in the New England area and what impact do you see winter weather conditions having on consumer demand for natural gas so I'll start at the end of your question which is um New England is excuse me has lived with a natural gas pipeline constraint for 20 years so we know what happens when it gets cold it will switch to burning other stored
▶ 2:41:57fuels typically oil and imported uh LG so the question you know with regard to the benefits of relieving that pipeline constraint um clearly the region recognizes and I think State the states understand that additional pipeline capacity would be beneficial but they have made very distinct policy choices over the last um several decades to work around that issue so there are workarounds um but ultimately this about
▶ 2:42:27uh fuel infrastructure is really in the state's hands and if you would tell me about some of those workarounds and as lawmakers seek to address the growing electric demand what factors are the most important for them to be considering I think in um New England uh what policymakers generally doing is trying to weigh affordability versus decarbonization objectives and so as they think about uh the relative weight of those two objectives uh they tend to steer the policies in One Direction or other
▶ 2:42:58now in my home state of Florida a recent report from Tampa Electric found that 70,000 Florida businesses are directly fueled by natural gas would more natural gas capacity Drive investments into Economic Development projects like manufacturing facilities that require significant amounts of energy I think it's um U this there's a complex answer to a simple question in the sense that ultimately to build new gas infrastructure into New England you need to have a custom for for that so the pipelines will
▶ 2:43:28not build on uh speculatively they need uh customers to do this and ultimately the customer uh decision uh rests with the states ultimately and we've had this conversation about a decade ago so I think the the prevailing policy uh wisdom has been to rely on stored fuels and imported LG I think the conversation is starting to turn to whether or not it makes sense to relieve those constraints
▶ 2:43:59directly thank you and Mr aana you mentioned in your testimony that pjm facilitates the transfer of power to and from interconnected neighboring systems including the Midcontinent independent system operator and the Southwest power poool to help meet electricity demands can you elaborate on how PGM works with neighboring jurisdictions to coordinate operations yeah thank you we have joint operating agreements with our neighbors so when we when when we export to the Southwest
▶ 2:44:29power pool they're not an immediate neighbor we go through the Midwest ISO but um particularly with the Midwest ISO and with New York we are continuously coordinating power flows back and forth and then with uh Duke in the Carolinas and with TVA um also sort of all day our operators are talking and Co coordinating U between our systems because our systems impact each other is actually one big electrical system and so you do have to coordinate at the seams thank you Mr chairman I yield
▶ 2:44:59back thank you very much General I yields back and the chair now recognizes the gentleman from Texas's 33rd district for five minutes for questions uh thank you Mr chairman um I think everybody knows and it's been briefly talked about uh Mr vas knows this very well that Texas is growing very very rapidly uh we're having a record uh setting growth we're also having record setting heat uh and every now and then we'll have some record setting cold uh and demand is likely to continue growing
▶ 2:45:30and as I st in our last Hearing in the subcommittee OT does a great job in enabling New Generation uh in its interconnection uh process and to his credit urot vastly outpaces other regions in bringing a new generation online uh but that's only part of the question uh you know we constrained by our grid uh infrastructure and our failure to invest in Grid infrastructure is a threat uh to our economic and National Security and unfortunately I don't think that we're doing
▶ 2:46:00enough uh there's been a lot of talk today about generation and load growth and rightly so uh but today I would like to hear from Mr Vegas about a couple of other things focusing on Texas and our grid and that's ot's transmission planning and his demand uh response initiatives Mr Vegas how is OT coning transmission planning uh given ongoing congestion issues around the state trans thank you for the question Congressman transmission planning is absolutely
▶ 2:46:30one of the critical legs of the stool to ensuring the reliability resiliency and to enable the growth that we've been talking about we have recently actually published a new Regional transmission plan which lays out what the Grid in OT needs over the next 10 years and it has new elements in it uh today the OT transmission system operates at a peak of 345,000 volts we have laid out a plan that continues that strategy but also one that adds uh
▶ 2:47:01a new extra high voltage Network at 765,000 volts that is helping to address the large power flows that are going to have to move around the state helps with congestion management could eliminate a lot of the congestion constraints that we have and will support the kind of growth that we're talking about yeah also want to ask you too we had the winterstorm Yuri that you know we were what 1 minute and 30 seconds away from the entire grid crashing down uh you know one of the things that hasn't been talked enough about that I think that we
▶ 2:47:31should talk more about uh is the winterization of uh Texas infrastructure um you know we saw failures in both renewable uh and uh you know natural gas uh components during that storm and I wanted to ask you in a state like Texas it would be fairly inexpensive to do things like winter you know wind turbine blades uh but you wouldn't want to spend a lot of money in closing for instance uh outdoor you know gas facilities and things like that that could end up being very very costly
▶ 2:48:01uh in a state like Texas what can they do to protect those larger older uh platforms uh that are going to be much much tougher to winterize yeah the kind of um tactics that they're using are putting in Wind brakes putting in thermal heaters near where there's critical components valves compressors elements that when they're exposed to the wind typically are the ones that are at high at highest risk historically Texas has always been weatherized their system for the heat of of the of the
▶ 2:48:31hot summer so that they could run and so enclosing was never really a strategy so now that we're seeing more significant cold winter uh weather what we need to do is deal with the the changes that brings in and that's what they're doing to those gas plants as well as to the Natural Gas facilities is managing the wind chills through weather breaks and things like that if we have another storm like Yuri next winter uh has enough already been done to prevent those older larger platforms from crashing again I think the weatherization measures we have in place today are very
▶ 2:49:01good um during any extreme weather event there is always a risk of impact remember these are 40 50 60 year old machines that we're talking about they do fail under duress and extreme uh conditions but we are much better prepared today than we were during winterstorm Yuri uh and also to wanted to just ask you very briefly in the last remaining seconds here uh everybody's always concerned about reliability and affordability uh and not just the large industrial loads that that we talk a lot about here uh what strategies are being implemented
▶ 2:49:32to increase uh demand response participation among uh residential and small business customers thank you for that question we actually have initiated a strategic program this year to initiate a new consumer residential demand response program that is going to be financially supported by OT that work is going to be done in conjunction with the Public Utility Commission and our goal is to have that meaningfully advaned throughout this year and available for residential consumers soon I'd like to also add we do have good residential programs in place today but we
▶ 2:50:02want to grow them even further I think it's a great opportunity yeah no thank you very much thank you Mr chairman you back the gentleman use back balance of his time the chair now recognizes the gentleman Texas's no this way no we heading that way okay let's see we have uh G from Texas uh uh for the next five minutes for for his questions thank you Mr chairman
▶ 2:50:32um thank you all very much for being here and for your time um Mr Vegas just for the record so everyone knows you were not there uh during Warner storm Yuri that's correct and um and have done a remarkable job since then urot has the entire team has the entire new team that's been put there it it was a perfect storm it was extremely unique as people said a 100-year storm and um just for the record as well have yall had a shed load at all
▶ 2:51:02or request a shedding of load in the state of Texas since you've been in power no we have not thank you very much I'm kind of rest my case with that is is my opinion there certainly was a human error involved during the record storm and um and I just want to thank you for your leadership and all of urot for what you've been able to accomplish and do in the last several years so thank you very much thank you um with that I'll turn a little bit of the panel
▶ 2:51:33um Mr as not you talked about uh permitting reform um what reform needs to happen in and permitting and I'm sorry if these questions been asked we here at the end uh get as get get the very last questions and so I'm sorry if that was asked earlier but if you don't mind what kind of reforms need to be put in for permitting yeah I mean there was bipartisan permitting reform that was being advanced in Congress before and we were supportive of that but I think the the broader point is um it is taking too
▶ 2:52:03long to build new generation and very difficult to build new transmission and there are good reasons for that people don't want large infrastructure on their property and near them and we need to respect that but I think we're going to have to to solve this issue and I think uh giving Authority um uh to uh and there are various bodies you could give authority to but giving centralized authority to approve permitting uh I think is uh is is one idea so does something like
▶ 2:52:33the nuclear module reactors that excite you or concern you I think it's exciting it's definitely exciting Good okay um Mr van wheel um you said there was a new Supply coming online what what type of new Supply is coming online in your area well so the proposed new Supply was offshore wind so I um as I mentioned in my testimony given sorry I'm sorry to interrupt you you said the new Supply is when coming online offshore wind offshore
▶ 2:53:04wind yeah what happens if the wind doesn't blow I think the region is going to have to well your question is whether the wind doesn't blow or whether the offshore wind comes online so you said the new generation is offshore wind coming online right yeah what happens if the offshore wind blow I think you have to have enough resource on the system to back that up uh so do you have enough will you have enough if if that's the new coming online what's the backup to that if the wind doesn't blow also the
▶ 2:53:34good thing about offshore wind in the winter time it actually helps with the gas constraint that we have on the system because the wind profiles in the winter are actually quite favorable um so it helps displace the use of stored fuels um of course there will be times when offshore wind does not blow and in at those times you have to depend on other resources like natural gas or oil resources do you have enough natural gas at uh so now modeling we have enough in combination with the offshore wind to make it
▶ 2:54:05work right now right now yeah so what's the solution moving forward and the solution moving forward is that the region is going to have to deal with this energy constraint um really comes down to storage of energy in some form uh the question is what does that look like or you could solve this problem through moving to other Technologies like small modular reactors so there's a variety of options and the states are going to have to think about where they want to see a policy to
▶ 2:54:35address this over time and what's your personal position on the modular reactors I'm in favor of them okay thank you very much um Mr chairman that I'll yield the rest of my time thank you very much thank you pel very much for your time well thank you very much gentleman you'll just back the balance of his time the chair now recognizes the gentleman from California's 50th district for five minutes for questions thank you Mr chairman I had to step out a little bit but I I don't didn't hear and I don't think there's been probably any discussion whatsoever a conservation as part of this
▶ 2:55:05conversation the idea that you we don't even think about not burning energy um as part of this approach to supply um I think we're get letting it get away from us and in fact this week what we're voting on The Business of the House of Representatives is to is to overturn efficiency standards for for refrigeration that would help us save energy uh and make it make us that have to produce that much less energy and I just think it's crazy uh the other thing I would still recommend and still interested in is the energy Innovation and carbon
▶ 2:55:35dividend act which is a way to price carbon and then return the Divi the dividends to people so that their overall tax burden doesn't go higher but they have an incentive to conserve energy we should we should provide that incentive from every economic decision maker in the in the economy from a household to the biggest corporation it just makes sense to me as we Face a challenge which is really unprecedented I certainly think we ought to build everything we we can uh we ought to build as much generation in its transmission as we can and for years I've said I've sounded the the alarm
▶ 2:56:06that our energy grid is too small it's too old and it's dumb and we have to do better um but construction of new high voltage transmission in the US which is which allow us to send energy from where it's abundant to where it's has slowed to a trickle in 2023 we built just 55 miles of new high voltage transmission uh at our current Pace we will build uh in in this decade a fifth of the transmission we did a decade ago um the truth is that building big projects in America has become extraordinar
▶ 2:56:36difficult our agencies don't have enough people or funding to permit these projects in a timely manner large scale projects also face litigation complex environmental review bureaucratic delays uh and um um we all ought to be about fixing that and certainly this committee knows that I've been working on permanent reform um to the displeasure of some of the incumbents uh on the on the environmental side because we have to get this done um but I think conservation ought to be something that we think about as well um let me just ask you
▶ 2:57:06know Mr assana you you were asked for some specifics on pering reform I'm going to just say what what I would ask for all of you and maybe you could provide this in writing is if your companies have experiences that they have uh you can go to your lawyers about this uh if you need to but if you've got experiences that this committee should understand that you think are don't make any sense that can be improved if you have specific recommendations on laws that could be changed I would love to hear them I think we're ready for that um here and I think uh
▶ 2:57:37all of the above means all the above you know credit to Texas by the way which has the closest thing to a a free market in energy that we have they're building more wind than anybody uh and because that's what the that's with the market demands and good for them you know we we just they deserve our congratulations and I think some in some ways we um we um we could learn some lessons from them um Mr maer um I know in California we've been working hard on interconnection as a priority for years um California's
▶ 2:58:07added 20 gwatt of new resources 11 gwatt of storage while investing in transmission can you talk about how grid capacity is a is a barrier to getting new resources on the grid and how kaiso uh trying to interconnect in smarter ways that we might learn from here absolutely thank you Congressman so we've also been um just actually just last year submitted a very significant package of reforms to our interconnection queuing process to FK they were fully approved we've already put them into place last fall we've seen a 67% reduction uh in request and
▶ 2:58:37acue in our current cluster so we are absolutely taking friction out of the system there we need to keep moving we need to keep going and that process is grounded in the coordination that we have with the state agencies to on board up to 85 gwatt of new resources over the decade um I put forward a number of bills to help uh efficiently plan and permit transmission projects one of them is my bipartisan speed and reliability act which streamline streamlines per permitting for lines that significantly relieve grid congestion and improve reliability
▶ 2:59:08miss kerran you say in your testimony that approving and uh building new high voltage trans transmission lines is a complex and lengthy process congratulations on that that's pretty that's that's well stated um but maybe you could give me a little bit of color on that how what is what do you find is a challenge for you and what's the complexity you think doesn't need to be so complex sure so um really I think about the the length of time and the complexity in three phases first planning then permitting then actually building it and the role of the iso
▶ 2:59:38is really on the side of the planning um we have been successful in taking an approach where we look at multiple values for transmission not just economic but but also reliability also enabling whatever those state or member needs are um and have gotten a fair amount of transmission built our states have really uh leaned in on the permitting questions uh but we've also made decisions like trying to utilize existing uh transmission um the key in our world is who pays for it
▶ 3:00:08uh and so having a business case that shows benefits well in excessive cost has been uh I think the secret to getting that transmission approved great okay well I'm out of time Mr chairman but I would ask the the that that I'd be permitted to ask that those questions be submitted to the record answers on specific ideas from the from the um The Operators on permit form and I yield back thank you very much gentleman yields back and the chair now recognizes General a from North Dakota for five minutes for questions excellent thank you uh thank you all for being here
▶ 3:00:39uh I have said to a few of you that this panel is the most powerful uh panel of people in our whole and I I mean that sincerely because at this table and I hope my colleagues appreciate just how much experience technical expertise exists at this table uh you have the power to pretty much bring us all to our knees shut our whole country down so thank you for everything that you do every day to keep our our economy
▶ 3:01:10uh going and our community safe um safe so couple questions uh I'd like to dig into here um first of all are government incentives affecting what types of resources are coming into the market getting into the queue and if you could each just kind of say like either in your view in your Market uh the impact that the government incentives are having on what resources come would be either significant modest minimal
▶ 3:01:40or any any qualification you want to say starting with you Mr Asana yeah I would say there's significant and uh the incentives from the federal government are significant and then our states different states have different incentives that make a difference as okay I'd agree with that point significant significant yes state and excellent yes also significant we've seen over a number of years that depending on what the incentive is the makeup of RQ and the volume
▶ 3:02:10of generation and it does change fairly dramatically okay it's a very significant driver in New York yes I agree with everything that's been said so far significant I would probably characterize it as modest as significant only because this the major driver of our queue is really State policy at this particular juncture so but it's certainly an impact and in Texas it's a significant impact as well okay and so across the board significant and state policy Al also being significant
▶ 3:02:41what I didn't here um or what I think is missing in there is that it's Market forces that driving what comes to the into the queue or even like the demand what you need what the markets need doesn't seem to be factoring in there that to me is a pretty significant problem that we all ought to be thinking about um moving forward um there's a lot of talk about costs and you know what's low cost you know
▶ 3:03:11everyone wants low cost everyone wants to keep the cost down for consumers um Mr Nicholls and in s um and I'm going to ask um Miss curan to and myo what costs um are often not included in this calculation of of different comparisons between fuel um you know in terms of their total costs to the grid what costs are not included in that often in your
▶ 3:03:42opinion I think you know the cost of reliability risk are often not included we know from winter storm Yuri at least reports have indicated 200 billion plus dollars of cost just as a result of that one event and I think we often times too quickly forget about the cost of not being able to provide reliable electric service we think all too often about the cost of investment yeah the cost to invest
▶ 3:04:12new transmission the cost to invest New Generation we forget about the benefits of reli of resilience and we forget about the cost of not having reliable service okay very good and miss Karen I'm going to skip you for now and ask everybody one quick question um if you could tell us if you could pick one thing I know there's many things you've highlighted today that you want us to take away but what's the one thing if you could pick one thing we need to correct um to meet
▶ 3:04:42and maintain reliability meet the demand what is the sort of one thing you would say we need to do quickly or first I think hang on to the generation that we have already to start with I'll add the paying attention to the gas electric interdependency uh because we need to view this as one system not separate systems excellent um I will also say hold on to the generation we have slow down those retirements
▶ 3:05:13of existing units I would say hold on to the generation but all also make sure that the market signals and the development of the markets align with the uh the type of reliability attributes that you need so we attract the right kind of investment excellent only because I want to be a little different it's okay to be the same Lanny um I think we need to more effectively use the grid we already have okay I would say we want to ensure we have strong accountability mechanisms for resource
▶ 3:05:43adequacy I agree with all of my peers and I would just add incentivizing reliability discreetly and explicitly would be very helpful excellent thank you uh all I yield back General L time has expired and years back the chair now recognizes the gentleman from Massachusetts fourth district five minutes for questions thank you chairman before I begin the questions I do want to dig into the concept of the market for energy production because Democrats actually really agree we want
▶ 3:06:14competition in the market for energy generation because the gentleman from Texas uh Mr fluger said earlier different types of generation portfolios make sense in different states um and we want low cost and reliability to be rewarded which is why we passed the inflation reduction act which said one there's an overall negative externality associated with fossil fuel emitting types of generation and so we're going to issue a tech neutral tax credit to all clean sources of generation
▶ 3:06:44that don't have greenhouse gas emissions which have a negative externality but we're not going to pick winners or losers in that form of clean energy generation it was the IRA was a energy prom Market piece of legislation and it is in fact the Trump Administration who is picking winners and losers and distorting energy markets they're doing so with tariffs on electricity from Canada they're doing so by cancelling offshore wind contracts despite the fact that in some states offshore wind is an important part of that generation
▶ 3:07:14portfolio they're doing so by trying to get uh fossil fuel to jump the queue so when we talk about energy markets it is Democrats who are supporting well-functioning energy markets and it's the Trump Administration that's impairing them let's talk now about how this is affecting Massachusetts Mr vanwell uh first of all tariffs New England is a net importer of electricity correct correct and we get that from Canada um and from New York New
▶ 3:07:44York gets some from Canada too correct now under chapter 27 of the harmonized Tariff schedule of the United States electrical energy is identified as a good but has a quote free tariff designation and is not subject to the Border entry procedures to which custom Duties are imposed public statements have suggested that uh it would not be tariffed but do you know we do not know we have asserted what you have just said but we have also put in a back stop which is to ask the FK to give us the permission to allocate the
▶ 3:08:14cost if we need to collect those monies and what is the cost of that uncertainty to New England rate payers it depends on the level of the tariffs um at the level of 25% there probably of the order of about $160 million a year and even the uncertainty is impairing your ability to run the grid not at this point so tariffs you know will affect price in some way um they shouldn't it shouldn't affect reliability if but are you having to spend resources and
▶ 3:08:44time on figuring out how you would Levy that tariff yes of course yeah and that has an indirect cost um let's talk about uh our Reliance on liquified natural gas that is our sort of Swing winter source of energy yes correct and it comes mostly from Trinidad and Tobago correct the Everett Port Terminal correct and it's subject to Global spot prices well I would say there's another major import point for New England which is the St John terminal in New Brunswick between that terminal
▶ 3:09:15and ever is where the gas comes but subject to the spot price globally right that LNG correct so Massachusetts is at the whim of global movements in L prices right so when something uh exogenous happens like I don't know Russia invades Ukraine we bear the brunt of higher l& prices that's correct so Massachusetts is not in control of its own energy Destiny right now correct I I think Massachusetts could do some things to to reduce those
▶ 3:09:45effects and those things could include wind and yes or dual fueling or relieving the gas pipeline constraints let's talk about some of those in in in the next minute um offshore wind as you said actually the wind does blow in the winter time pretty consistently which is exactly when we have that Peak LNG demand and so offshore wind would be very helpful in offsetting our our vulnerability to Global LG spot prices um nuclear would it help us if we built a nuclear power plant in Massachusetts it would
▶ 3:10:15but I think that'll be some time before that would be practically realized well the best time to plant a tree is 20 years ago but the second best time is now right I agree and then tell me about dual use in our last 30 seconds I'm say again dual use the Dual fueling a dual fuel so that's really um to allow we have some 7,000 megawatts of gas only resources that cannot access gas from the pipelines when it gets cold so one way of working around the gas constraint is for the New England
▶ 3:10:45states to allow for permitting of dual fueling which would allow them to switch to um fuel oil and and utilize that fuel instead of gas thanks for your time and your expert testimony Mr benwell thank you the gentleman yields back the chair now recognizes the gentleman from New York's 23rd District five minutes for questions thank you very much Mr chairman Mr dwey the New York ISO has repeatedly raised strong concerns over our state's aggressive transition away from sources of energy
▶ 3:11:16like Natural Gas towards quote Renewables uh like wind and solar in a 2023 report the iso stated uh it is important to note that commercially available Technologies to provide dispatchable non-emitting Supply do not exist at scale at this time uh does the iso's definition of dispatchable Encompass the ramp up time for this non-emitting Supply mentioned in this and other reports yes it does uh when we talk about dispatchable
▶ 3:11:46emission free resources um we are projecting the need and the necessity to have a resource that can both meet the state's climate legislation which mandates a carbon- free Electric System by 2040 as well as continuing to meet the dispatchability requirements and managing the grid that Gap that resource does not exist today the technology does not exist today what impact does a longer ramp up time for these sources of generation like wind and solar have on grid reliability in a state particular
▶ 3:12:17when we experience weather events like winter storm Elliot that hit my district in the winter of 2022 uh it requires extensive planning uh it requires uh um a lot of focused attention on the planning models so that we are not caught surprised by those uh swings in weather um it it requires us to have additional and and subsequent uh resources on standby in case we get those forecasts wrong so that we can quickly shift uh to fill in the gaps that
▶ 3:12:47uh uh that can sometimes surprise us if it happens too quickly thank you and as you point out in your testimony today the uh 2024 uh to 2034 RNA directly implicates our state's own public policies in the concerns over declining reliability margins uh specifically since the enactment of New York's climate leadership and Community protection act more than twice the capacity of generation has been deactivated uh that has been added to the system uh you go on your in your testimony
▶ 3:13:18to mention how this transition is Raising new challenges for grid reliability in the event of significant weather events Mr dwey has any oversight been conducted uh by the Federal Energy Regulatory Commission into these reliability concerns voiced by New York ISO and has F given any warning signals to the state of New York based on what seemed to be very consistent concerns with reliability resulting from public policy choices
▶ 3:13:48we've had a lot of uh engagement and a lot of oversight with the North American Electric reliability Corporation or nerk which is the reliability arm of the firk uh they are predominantly the enforcement arm uh to make sure a reliability criteria is met uh we work very closely with them to make sure that the market rules that we develop that we administer under the firk tariffs uh contemplate some of the changes uh that we're going to see on the on the electric power grid so primarily that engagement is with with nerk um on reliability
▶ 3:14:19and with furk on the uh on the implementation of the market rules uh necessary to uh to be able to meet those reliability criteria okay and on the subject of state level policy choices impacting reliability and affordability Mr uh van wheelie in 2013 you testified before this committee that there were concerns in ISO New England that insufficient natural gas infrastructure would result in increased costs increased emissions and reduced reliability uh you reiterated your uh testimony in 2017
▶ 3:14:49and in today's testimony uh you've stated that ISO New England gets more than 50% of its electricity from natural gas uh yet it doesn't have enough natural gas pipeline capacity in the winter uh with this history Monday's Washington Post reports that electricity costs in New England are uh 40% more than in the rest of the country uh do you continue to have fuel security concerns and would additional pipeline capacity sourcing domestic supplies to Source efficient natural gas
▶ 3:15:20lower cost for consumers and address fuel security concerns so the the actions the states have taken in the last decade have mitigated some of the price effects of the gas constraint by essentially taking demand off the system um and they've done that three investment in generation and demand response in Energy Efficiency but the long run concern still is there and to your point I think the gas constraints have resoled in big costs every winter when it gets cold and we've had to rely
▶ 3:15:50on LG um or oil so I think the the policy question for the states is how best to mitigate those effects uh their actions have in have also focused on trying to add offshore wind into the mix because that would be beneficial to the extent offshore wind is delayed uh I think the conversation will turn to what are the other possibilities and so the options on the table would be additional infrastructure um the Dual fueling
▶ 3:16:20that I mentioned uh and I would say one thing Congress could help us with here is the Jones act so I saw an article just earlier this week that Puerto Rico is now finally getting domestic L ship to it uh it would be helpful if New England could access domestic L we exported at $6 per million btu but we're having to import it at $35 to $40 per million btu I think Congress that's something they could I'm sorry the gentleman's time has expired time has expired thank you now you'll
▶ 3:16:50back thank you very much uh the chair now recognizes we're on the list here the gentleman from Ohio's fth district for five minutes for questions your colleague from Ohio thank you Mr chairman um thank you all for being here today I do have to just in case Mr Vegas I don't get to you I have a question for you but we miss you in Ohio good seeing you um my first question is for Mr Ana excuse EXC me uh I'd like to start with you and follow up on a conversation I had with your colleague
▶ 3:17:21awesome Hawk during a hearing this subcommittee held earlier this month pjm's existing installed capacity mix is overwhelmingly made up of dispatchable power generation such as natural gas nuclear and coal however as a few days ago only 5% of the active projects in the PGM Q are thermal generation additionally between 2022 and 2023 pjm saw over 11,000 me megawatts of generation deactivated and only 4,000 megawatts of new generation
▶ 3:17:51added to the grid do you have any concerns with the lack of dispatchable powder generation entering pgms interconnection queue and are there enough of these projects to offset premature retirements and meet the rising uh growth demand yes we do have concerns with the lack of dispatchable generation in the que and we have taken significant action to deal with that including our reliability resource initiative and I'm happy to talk about that like thank you um f FK recently approved pgms
▶ 3:18:21reliability resource initiative or r r to allow shovel ready projects that enhance a grid reliability to get built and connected to the grid as quickly as possible um so I I do want you to expand on a little bit PGM recently announced that the rri received 94 applications totaling over 26 G gigawatts of name plate capacity mran I understand PGM is actively reviewing these applications can you discuss how you will score away these projects to ensure they'll get built and online as
▶ 3:18:51quickly as possible yeah thank you for the question representative so our goal with this initiative was to get shovel ready projects that had certain attributes and those attributes were really reliability supporting attributes we're really excited that we've gotten almost 2x subscription of this opportunity at 27 gws almost and now we're scoring them we're scoring them based on a 100 Point Scale based on criteria like um elcc and
▶ 3:19:22ukap which are technical terms for just firmness and reliability uh support uh also on viability uh and project support and things like locations so if they're located projects are located in a more constrained area they will get extra points um so there's a set of criteria um adds up to 100 points and that really we're looking for viability constructability um how quickly they can come online and how much they can support the reliability of the grid okay I follow up to
▶ 3:19:52that is how can grid operators FK and Congress buildt off this initiative to get more generation built and connected yeah I'm happy to ask uh my colleagues here I know we've all talked about this and and some other systems are considering similar initiatives um but uh I think it's really important when we're facing a problem without a clear solution which is generators are retiring we need to serve more load that we be creative and come up with ways to fill the pipeline with the type of generators that will serve
▶ 3:20:22that load and that's what we're trying to do with this initiative and we're happy to share our experience with others thank you very much uh Mr Vegas I did have time for you uh but it's also for a but I would like Mr Vegas to go first last year pjm urot SP and myo jointly filed an ampus brief with the DC circuit court against the Biden epa's clean power plan 2.0 I'm extremely grateful that just a few weeks ago administrator zeldon announced the EPA will be reconsidering
▶ 3:20:52the clean power plan 2.0 along with dozens of other Biden air rules and regulations since I'm limited on time Mr ass and Mr Vegas and Mr Vegas you go first if the clean power plant 2.0 were to remain in effect would your service territory see an increased risk of rolling brown outs and blackouts yes that that plan had risked uh more than 14,000 megawatts of existing coal plants that are serving the grid today they would be at risk and that would be a significant reliability concern thank you very much Mr SAA
▶ 3:21:23yes that plan would have increase the reliability risk and will in our region if it goes forward thank you both thank you everybody be Mr chairman i y back thank you very much and just let everyone know they did just call votes um see how many we can get through we still have about six members that are still on the list and so at this time we're going to go to the gentleman from Colorado um for uh five minutes for questions thank you Mr chairman and ranking member thank you of course to the witnesses
▶ 3:21:53uh for coming today uh Mr nickel my first question will be to you we've heard a lot of conversation uh today about how we need more power um and and I don't know that um I've fully wrapped my mind around some of the nuances that I'm sure you're much more familiar with particularly when it comes to uh Power versus dispatchable Power and things like uh cost efficiency uh versus reliability in terms of actually obtaining that power and so what I mean by that is uh I've been on uh the the floor for
▶ 3:22:23some of my largest uh electric utility providers in Colorado um uh where they're talking about not just what is currently powering the grid um but looking forward into the future in terms of weather reporting to figure out what's the weather going to be is the wind going to be blowing is the Sun going to be shining um where is not only the affordable power going to come from or forecasted to come from in the next couple of hours to days um but is it the most cost efficient um is it the most reliable so can you just speak a little bit to the complexities of managing a grid
▶ 3:22:54understanding that not all power is created equal and and drawing some of the distinctions between uh the dispatchable power dispatchable power and the variable power and also the most affordable power versus the most power sure and thank you for the question um it's a difficult question to answer but I'll do my best so when I think of dispat able power that's generation that has fuel that can be stored it's not weather dependent
▶ 3:23:24and so gas for example is a primary source of dispatchable generation today in sp's footprint as is coal generation nuclear as well uh is is is a dispatchable although not as quickly dispatchable as gas and coal so when we have we weather dependent situations on the grid we have to depend on dispatchable generation to show up in order to deal with that intermittent nature of renewable
▶ 3:23:55generation I'll give you an example on June 6th of 2024 last year out of 32,000 megaw of name plate wind capacity only 100 megawatt were produced 100 divided by 32,000 megawatts is a really small number it's practically zero and that's across 14 states in the middle part of America where wind is supposed to be at its
▶ 3:24:25potential so we have to have dispatchable generation that has fuel available to be able to offset the fact that that wind generation didn't show up so in that space we talked about the the dispatchability and the reliability can you also speak to the affordability um I'm I'm from a state that does a wholes wholesale power um and so I've had conversations with the folks that are looking to the next 24 hours the next 72 hours for those those bulk power purchases uh can you speak to
▶ 3:24:55the end impact for the consumer in terms of uh not only the reliability but the affordability in looking at the power mix that's going to supply the grid so affordability comes into play one at the state level for SP we still have vertically integrated utilities and the state Regulators have jurisdiction over the affordability equation I will say that if for example a power plant um that's a wind generator only gets a certain
▶ 3:25:25amount of capacity credit and for example it only um let's say on average is about 20% a gas generator gets about 90% capacity credit it would take five times as much nearly of wind generation to offset the cost of a single gas plant so that's that's the equation that's the cost equation that each of our utilities and their states have to manage in order to figure out what's the most affordable uh plan
▶ 3:25:56going forward to serve demand so to your previous example you're were talking about 32,000 megawatts of wind generation uh and you've seen that dip down to 100 megawatts of wind generation you still got to be able to to fuel the grid right uh is it more or less expensive in those in those situations to have to go get uh uh power from a dispatchable Source versus from a 32,000 megawatt facility that at that particular moment is only producing 100 well it's not a matter of affordability at that point
▶ 3:26:26it's a matter of keeping the lights on so you have no other choice but to use what is available what's actually already been paid for uh by the rate the rate payers in in the footprint so it's at that point it's not a matter of affordability it's a matter of reliability thank you yield back Mr chairman the Gent yields back the chair now recognizes the gentleman from Georgia for two minute or five minutes for questions and again we're about five minutes and two votes right
▶ 3:27:01now I'm sorry I guess they had the order wrong on my sheet uh the gentleman from Pennsylvania uh first I want to thank chairman L for allowing me to wave on to this important hearing when it comes to energy production all energy is not created equal the capacity factors of wind and solar are simply too small to provide the reliable energy that our grid requires today what we need in plain terms is more base load generation we need more
▶ 3:27:31coal more gas and more nuclear it does not matter how many gigawatts of wind and solar capacity are built if they are not generating them when you need them unfortunately we are doing worse than not building disp bable generation we're actually retiring it we're shutting it down pjm and I thank you for testifying here today is the nation's largest RTO and includes my district in Pennsylvania pjm released
▶ 3:28:02a report in 2023 projecting 40 GW of reliable dispatchable generation will retire by 2030 roughly 25% of the systems installed capacity at that time pjm labels the majority of these retirements as policy-driven decisions this is a time when demand is actually growing Pennsylvania is in a great position to benefit from the investment in jobs of the AI Revolution
▶ 3:28:33but we need to have the energy available to build it with Microsoft and Amazon poised to build collocated data centers in Pennsylvania we need to study the ship we need to encourage investment to unleash the energy that is underneath the feet of my constituents Mr aana do you agree with me that we need more dispatchable generation built within pjm yes very much so Mr aana pjm has a variety
▶ 3:29:03of tools to incentivize building new generation and I'm encouraged by the success of the reliability resource initiative but it is a one-time fix and the potential 26.6 gaw of addition power is simply not enough holding consistent capacity auctions are critical to providing long-term solutions for the pjm market do you believe that the capacity auctions are working to incentivize building and retaining that generation
▶ 3:29:33and if not how can it be changed to attract new investment yes we are seeing the capacity auctions work so we have seen multiple generators withdraw their retirement notices for example we've seen um a nuclear power plant uh the crane clean energy center uh 835 megaw announced that it's coming back Homer City in Pennsylvania the the plant was demolished but they're looking at repowering using that site to build a very large gas
▶ 3:30:03generator and while the capacity Market isn't the only reason it is definitely setting the stage for these decisions now I think the challenge that we're facing looking forward is that there is a big backlog for turbin and so there's a big price premium for turbin and so the price of the capacity Market will have to send to incent New Generation that's not already Beyond what's in the queue already is going to be really high and I think it's going to create affordability issues that we're going to have to
▶ 3:30:33deal with Mr estana I'm concerned that pjm gave into Political pressure of some of the governers of its member states and this is a very distressing precedent what are the dangers of govern ERS in the future influencing pjm's Market to score short-term political points yeah thank you for that question we did have fairly bipartisan support for instituting I think a short-term price Gap that's what you're referring to we had 11 of our 13 states
▶ 3:31:04write to us and support that and five governors but I do think it's important to let our markets work and we're going to have to make sure that we really um allow that in the future I think that the path the PGM currently is on is unsustainable when some member states shut down Basel load power plants and others harm investment in New Generation this is creating a situation that will make the unstable if this continues there
▶ 3:31:34will be blackouts during extreme weather events and my concern is that this will ultimately cost human lives I thank you chairman L for holding this important hearing and allowing me to wave on I yield the balance of my time thank you gentlemen yields back the balance of time the chair now recognize gentlemen from Georgia uh for questions thank you Mr chairman thank you for allowing me to wave on I'll be very brief um thank all of youall for being here this is extremely important particularly the state of Georgia 11 years in a row
▶ 3:32:04number one state in which to do business we have over over 50 major data centers so as you can see we have a great need for electricity we are very blessed to have providers in our state who have um Georgia power ogor power have invested in um in in in a nuclear reactors so that's that's very important but delivery of that is is extremely important too so in the the brief time that I want to um to ask you just a couple of questions
▶ 3:32:34and I'll I'll go to you Mr niichel I'll ask you um what what tell me about the permitting process because that's that's one thing that we really want to concentrate on in this Administration and in this session and this Congress is is the permitting I don't care what sector of our economy you're talking about whether you're talking about energy whether you're talking about health care technology I have people in my office all the time permitting regulations crushing us crushing us all the same so tell me that
▶ 3:33:05so I think the bipartisan permitting process is absolutely fundamental and and critical to support a quicker buildup of the resources and the transmission infrastructure that we need um we we hear all the time about how projects have been slowed down because they can't get built for a various uh number of reasons and I think that's the number one problem that we have to to that we have to deal with in order to speed up the
▶ 3:33:35uh construction of the actual infrastructure that we need Mr curin would you have a uh would you have an opinion on that as well m I'm sorry it's fine I think it is the the same kind of answer we have seen uh good work in our states uh to accelerate permitting particularly of transmission lines uh but there are still a number of roadblocks that we run into we recently had a transmission line uh go into service after uh I think it was about
▶ 3:34:0613 years after approval during per due to permitting issues great again thank all of you for being here this is extremely important and we appreciate your attention to it now you'll back Mr I thank the gentleman for you back and seeing no other members wishing to ask questions I want to thank our Witnesses for appearing today members have 10 additional question or may have additional questions for you I remind members they have 10 business days to submit additional questions for the record and I ask the witnesses to submit the responses within 10 business days upon the receipt of the questions I also
▶ 3:34:36ask unanimous consent to insert the record the documents included on the staff hearing documents list without objection so ordered and without objection the subcommittee is adjourned and I want again thank our Witnesses for their excellent uh testimony today