Transcripts For CSPAN2 Weather And The Electric Power System 20180124

We will call this hearing to order. Welcome, everyone this hearing is entitled the first power system [inaudible] including the cyclone. I would like to start by calling on the Ranking Member to get her opening statement. Thank you, and good morning to everyone. Im sure senator murkowski will be here shortly. As some people may know, a 7. 2 magnitude earthquake off the coast of alaska impacting kodiak and parts of the Pacific Northwest with tsunami warnings were issued for activities that were expected and those warnings for tsunami waves have been recalled but no doubt, dealing with lots of things this morning related to that and other issues. So i want to thank the witnesses, chairman mcintyre and mr. Walker for being here and many of the staff people that are glad w you are back in operation. We look forward to hearing from all of the witnesses on the subject of the reliability of the grid and its performance. Last year the secretary and staff reviewed the likability in regards of the changing mix and i was relieved when i saw the report in august which i thought was balanced. It distinguished between the reliability and resilience and described the emerging techniques to integrate more Renewable Resources including synthetic and frequency response and also recommended they adopt resilience backtracks still needed to be developed. Unfortunately, when the secretary filed his report at the proposal i was a little more alarmed. It ignored the conclusion of the departments own staff. It was a transparent attempt to prop up the favorite kinds of energy which are getting outpaced in the marketplace. There were many problems with the proposal endeavor to find resilience, a single attribute of power plans and fuel stored onsite and elevated among all other factors. It promised full recovery for coal in some states have chosen a year ago but the biggest problem is that it would hit consumers with billions of dollars of additional added cost to multiple independent assessments. Bailing out coal plants justice and bad policy, it was breathtaking on the consumers pocketbooks. The market monitor found that the secretarys proposal could nearly double the cost of wholesale energy and the largest electricitof the largestelectrio applaud the chair man and the whole commission for unanimously rejecting the secretarys proposal. At the heart of the rejection i believe the consumers, the commission reviewed the federal power act just as a reasonable standard for electricity rates and found the secretary havent met the burden in proving that they are unjust and unreasonable. Consumers couldnt have asked for a better defense giving some of the troubling stories about the interest lobbying the department, its never been more important to maintain its tradition of independence. I hope the secretarys proposal has not given resilience a bad name. The difference between the recovery from hurricanes in florida and texas versus puerto rico shows that it does affect the lives and quality and it deserves more attention so i am pleased we have allison come to think testifying along with others that wrote an excellent report last summer on the grid brazilians and i would like to submit a report fo the report fe record. It also has concrete recommendations to the department of energy that i hope we can explore today so again, thank you to all the witnesses for being here today and calling the hearing. My apologies to the witnesses and Committee Members who had a busy morning in alaska this morning so i appreciate more than ever the value of things like the earthquake and tsunami Early Warning system. Its important that they are there and they were actually operating now that the government is that order. Last week i outlined the agenda of the 12 maintain a focus on legislation nomination oversight which is a critical part of the goal. We are obligated t to examine te performance of agencies under the jurisdiction and today is an opportunity to gauge whether it is helping or hindering improvements in Energy System performance. While it may not have been up to the alaska standards, those endured along the eastern seaboard was quite notable over the holidays and into the new year. Among the worst of it occurred over on the shoulders of a holiday period and we didnt reach the extremes felt into a vortex. The vortex. We did experience a socalled cyclone event. The bomb cyclone is a storm which the Pressure Drops in the short period of time. These have been relatively often up the coast but this is a record breaker with the largest Pressure Drop in the 20 period. Its been since at least 2010 about how the changes in the nations electric grid in the primary electricity sources are stressing system reliability. They noticed the proposed rulemaking and the recent order is response focused on the same issues. Following the vortex we hold a similar hearing to examine challenges to the system. I said then that we need to redouble and continuously improve the reliability and security. I am pleased to say the testimony shows that there were many Lessons Learned from that extreme weather event. There now appears to be improved coordination between the electric and gas systems. They have reformed the market rules and improved Business Practices and updated its approaches. That is all good news. The bad news is that w that wet addressed the more difficult fundamental challenges for electric and Gas Infrastructure. For example, Gas Pipelines remain too constrained. Broad policy changes are not sufficiently taking into account increasing risks that in the future years system operators may have to turn to intentional Service Interruptions to manage certain. One of the witnesses will speak about the situation in new england which is in some respect is as a harbinger of challenge in other parts of the nation. We must ensure that the natural gas supply is a boo a boom to ts activity can be reliably delivered to a changing marketplace. At this time it is clear what the reliability and Economic Impact will be on the grid on the resources are less diverse over time as they slowed it clear to continue to require. Meeting all the challenges. It should be a shared priority. After all promoting competition has been a tenant of the policy that enjoyed wide bipartisan support for more than two decades and should remain so. This morning we will hear from leaders of two agencies under the jurisdiction and we will hear from the heads of three regulated entities with regulatory response of these cut north American Electricity Reliability Corporation and regional transmission organizations we also have the National Academies of science engineering and medicine with us so i welcome each of you to the committee this morning and look forward to your testimony. I would ask that you try to limit your testimony to about five minutes. Your full statements will be included as part of the record. This morning we are joined by the honorable Kevin Mcintyre was the chairman owhowas the chairml Regulatory Commission its the first time youve appeared before the committee in your capacity as chair man and we welcome you. The honorable bruce walker is also with us and the assistant secretary for the office of electricity and delivery and Energy Reliability of the u. S. Doe. Good to see you again. Mr. Charles as the interim president and ceo for the north American Electric reliability corporation. Allison is the president of and senator cantwell mentioned your contribution. Mr. Andrew is the president and ceo for the interconnection. Welcome, and mr. Gordon really i hope im saying that right, the president and ceo of iso new england welcome to each of you and if you would like to begin with your comments this morning. Senator, chairman, members of the kennedy, thank you for the opportunity to appear before you today to discuss the performance of the electric system during the recent weather events. I am honored to serve as the chairman. The Commission Takes seriously the responsibilities congress has entrusted to us concerning the reliability. We are still receiving and reviewing the data related to the performance of the power system. Based on what we know today, it appears notwithstanding the stress and several regions, overall the book for system performed relatively well under challenging circumstances. Looking forward we must both learn from this experience and remain vigilant with respect to challenges for reliability and resistance of the bulk power system. The performance of the power system during the 2014 winter event now commonly known as the polar vortex data provide context for understanding the performance of the bulk power system under the more recent events of the past month. During the 2014 vortex much of the u. S. Experienced extreme cold weather. The challenges presented by these conditions and high electric demand were compounded by unplanned generator shutdowns of the various fuel types. These combined circumstances tested the grid reliability and Power Supplies and contributed to the high electricity crisis. Drawing on that experience, ferc took numerous actions to address the reliability and performance issues for example the commission directed regional transmission organizations and independent system operators to report on fuel assurance issues and the Commission Revised its regulations to enhance coordination between the natural gas and electric industries in light of the increasing use of natural gas as fuel for the electric generation. For certain regions the Commission Approved capacity market reforms intended to increase financial incentives for improved resource performance and to penalize them on performance or poor performance. The Commission Also approved temporary winter reliability programs in new england. Turning to the Winter Weather events of the past month, its useful to consider the impact of the recent events on the professional service and associated cost of the service. Importantly, there were no significant customer outages that resulted from the billions of the system generators were transmission lines. While there were no significant reliability problems during the recent cold weather event, wholesale Energy Prices were high. Higher wholesale Energy Prices accurately reflect fuel cost instrument system conditions that can be beneficial sending important signals that drive operational and Investment Decisions for both utilities and consumers. We also recognize that the Energy Prices are ultimately borne by retail customers. And so the commission has attempted to the potential behavior that takes advantage of extreme weather events. Just as the commission drew lessons from the polar vortex in 2014 and applied them in ways for this reason the cold weather events we will examine these more recent events very carefully and seek to learn from them. I would like to emphasize a few points the commission made on the issue of recently used more generally. On january 8 the commission responded to the proposed rule on the grid reliability of resistance processing submitted by the secretary of energy. And we initiated a new proceeding to further explore the reselling of fish is beginning with the rto was. As we stated in the order, we appreciate the secretary reinforcing the importance of the resilience of the bulk power system as an issue that warrants further attention and prompt attention. The goal of the new proceeding for first to develop a common understanding among the commission and industry and others as to what resilience of the bulk power system actually means it requires. Second, to understand how each assesses resilience within its geographical footprint and third to use the information to evaluate whether the additional action regarding resilience is appropriate at this time. The commission directed each to submit within 60 days of the order with specific information regarding resilience of the bulk power system within those respective regions and we invite other interested entities to file comments within 30 days after they said that their comments. We expect to review the additional material and promptly decide whether the connection is warranted. In our january the eighth order, the Commission Also recognizes the concept of resilience necessarily involves issues that extend beyond our Commission Statistics and such as Distribution System reliability and modernization. For that reason we encourage them to other interested entities to engage with the state regulators and other stakeholders to address the distribution level more broadly. I assure you that the reliability and resilience of the power system will remain a priority. I look forward to answering your questions. Thank you, chairman mcintyre. Secretary walker, welcome. Chairman murkowski, Ranking Member at distinguished thinkers of the committee thank you for the opportunity to discuss the issue of resilience and the recent cold weather. Just two months ago i testified for the Committee Regarding the Response Recovery efforts in puerto rico and the u. S. Virgin islands and the administration were supportive of the restoration. The topic of the hearing is timely. The reliability of the sector are top priority is in a major focus of the department of energy in fact the first step he requested by the secretary was the Stanford Report electricity markets reliability. They examined the electric markets and impact on the grid reliability as it relates to wholesale Energy Capacity markets with specific attributes of the connection between regulatory burdens and the base load power plants. Many of the findings contained in the study report out of the recent Severe Weather events across the nation. The last several months have been quite demanding from an extremely active Hurricane Season to the deep challenge of tested at the reliability of the Energy Infrastructure in different ways. During the recent cold snap from late december 2017 to early january, the northeast record of temperature fo for second debate for several days but the customer outages over this weather event was the continued reliance on the base Load Generation and the Diverse Energy portfolio without action that recognizes the Reliability Services provided by strategically diversified generational portfolios we cannot guarantee the resilience of the grid. The integrity is maintained by an abundant and diverse supply especially with onsite fuel capabilities. However the question is whether or not it will be here tomorrow. Resilience for the infrastructure has become more important than ever as major parts of the economy are not totally dependent on electricity and even momentary disruptions can result in Major Economic losses at the same time we are in the early stages of transformation where the supply system with the process of change would continue for many years keeping the lights on during the transformation would require unprecedented collaboration among many parties. We are committed to working with ferc and the originals to achieve this mission. Stakeholders are facing multiple connective tissues with growing amounts of Energy Resources, participation, dynamic markets, increasing cybersecurity and physical threat and the advent of the internet of things for granted that sustains this must be designed to ensure the resilience over the next. Today in the marketplace rather than the engineering principles focused on maintaining the resilient system iresilience sye design of the system however, it is clear we need an indepth understanding of the resilience of the related infrastructure in order to know how to best modify existing market structures or and or build new standards into the system. To that end, i propose that the undertaking Detailed Analysis that integrates into a single north american Energy Infrastructure model for the ongoing resilience Planning Efforts of the local, state and regional levels including between canada and mexico. And also any gaps and any inconsistencies with various efforts at the same levels. I understand we currently cannot find these tasks so i take the opportunity to make my position clear. I believe that building this model should be the top priority for the doe office of electricity Energy Reliability over the coming years as does the leadership of the department of energy. To address challenges both at the recent cold snap as well as the systemic Energy Infrastructure issues, it is critical for us to be proactive and cultivate an ecosystem of resilience, the network producers, distributors, regulators, vendors and Public Partners from acting together into strength and ability to repair, responding to recover. Dod continues to partner with federal agencies, state, local governments, and other stakeholders to identify threats, to develop indepth strategies to mitigate the threats and rapidly respond to any distraction. Resilience isnt a onetime activity, but they have it. It is something that cannot be done in 24 or 48 hours before an event. Many of you with little or no notice. Resilience is a converging Energy Infrastructure with longterm planning in mind understanding future benefits resulting from investments made today. In conclusion, today we are faced with various threats that continually become more frequent and impactful. The Energy System that provides the services throughout the nation are prime targets. Accordingly, we need to build upon the reliable system that we have today, realized from the hard work of ferc to make the more resilience stay of the deleterious effects of the present and real threats. The nearterm concern is that the markets are significantly driving these investments being made in generation sources throughout the nation. Indeed, most of these investments are primarily being made to address economic dispatch issues in certain regions and this has resulted in a significant reliance in fact an overreliance in some instances on less costly fuel. In this case today, natural gas. The lack of comprehensive integrated process to drive appropriate investments to improve resiliency that take into account Energy System interdependencies, Critical Infrastructure susceptibilities, Reliability Services as well as affordability increases the risk of a compromised Energy Infrastructure. And plus, the security of this nation. Thank you for the opportunity to testify and i look forward to questions. Thank you, assistant secretary. Chairman murkowski, Ranking Member cantwell, members of the committee, thank you for holding todays hearing. Hearing. Im in the interim president and ceo of the electric Reliability Organization designated by ferc. In addition to developing and enforcing mandatory reliability standards for the bulk power system, nerc continually assesses the reliability and monitors the system obligations including england and the midatlantic. My testimony covers four points. The monitoring of the system and work with stakeholders industry and government. Performance of the system during the recent extreme cold weather. How nerc fosters a Continuous Learning environment to improve reliability, and recommendations based on nerc reliability assessments. For nerc, fairweather is among other things an opportunity to learn from events to improve reliability for the future. Even when nothing bad happens, stress on the system points to the reliability risks should be addressed. Nerc cover system Awareness Group is our eyes and ears on the system, and an important part of the process. On a daily basis, we continuously monitor operations on the grid, working with the regional entities, reliability coordinators, operators and generators. In conjunction with nercs, the alibis system disturbances that impact or could infect reliability. In turn, this information is shared with industry operators, ferc and dod. In short, these activities provide daily visibility into the system and actionable information to improve liability. During extreme weather events, nercs operates on a daily basis throughout the severe cold weather. Oh, we hold calls with nercs entities in the affected areas and gather information from the reliability coordinators about concerns and issues associated with the impending storm. Multiple coordination calls for help dealing with regional entities and ferc staff to understand fuel levels, natural gas availability and other factors for replenishing plans as well as fuel facilitie abili. Due to high Natural Gas Prices combined with recordsetting consumption of natural gas for heating and abuses. We supply the inventories due to the winter storm impacting new england. Finally the loss of a Nuclear Power station due to a transition transmission outage removed generation for several days but throughout all of this in new england and elsewhere there was no loss of load in conditions that based on information we reviewed to date to date we are seeing improved times improve performance with winter compared to past winters of similar or worse severity. In part this is due to action taken from the lessons of the 2014 polar vortex. No support analyzing the polar vortex under minds the preparation nation and can indication between generator and system operators and reliable fuel supply. Nerds and their regions in close quarters with issue stakeholders conduct webinars concerning Winter Weather preparation provide Lessons Learned and shared practices. Original in todays are important to leveraging work with industry at original level preferred sample the Reliability First Corporation whose footprint includes the midatlantic region conducted 18 onsite visits to generator since the polar cortex. These engagements are targeted at times at times at generator for so these bit of experience freezing or cold weather related related during prior facilities. This remedied winter challenges and share Lessons Learned thereby contributing to improve performance. Other recent extreme cold weather was less of him in 20 polar vortex observations from both events pointed for recommendations that nerc makes in the reliability system. First reliable fuel supply. We recommend market operator solve rules or incentives to encourage increased fuel security particularly during winter months. Policy should also promote reliable natural gas supply and transportation. Second generator owners and operators should maintain and regularly test fuel operability. Third regulation of oil based fuel for backup generation raises the potential need for expeditious consideration of air permit waivers. And finally during the extreme cold a diverse generation mix flexible fuel resources and backup fuel where he meets increased lectures they demand. Accordingly nert promotes fuel diversity and insurance. Thank you for this opportunity and look forward to your questions. Thank you mr. Berardesco. Ms. Clements welcome. Thank you. Thank you and good morning distinguished members of the committee. I am president of a firm that specializes in Energy Policy. In 2016 and 2017 i served on the National Academies of Sciences Engineering and Medicine Committee that produced this extensive. Reporter our nations electricity system. Well i will talk about the reports findings the views i expressed are my own and not the committees. A National Dialogue about resilience comes at a critical moment to the National Academies report notes the u. S. Electricity grid is increasingly vulnerable to the risk of cyber and physical attack and the increased frequency and duration of hurricanes blizzards floods and other extreme weather events caused by climate change. They provide the most vivid examples of the health and safety impacts a prolonged electricity outages can have in our population especially our most vulnerable. As you mentioned great live reliability insures enough transmission exist to satisfy all customer dr. Sadiq and avoiding blackouts at the plant goes down. While implementing reliability is complex the concept itself is relatively straightforward and minimal standards for measuring efficiency. Resilience separately has emerged with this risk brought on by the threat of attack by the impacts of climate change. Although the unpredictable nature like from this mornings tsunami warning may be defining and developing resilience is difficult however nert regional standards for liability provides resilience benefits. The recent winter conditions provide three takeaways to inform resilience related policies. First the Transmission System is reliable. We party her desperate incorporating Lessons Learned from the 2014 polar vortex are ceos reliably manage unexpected outages during the manual shutdown in new england. The Transmission System we should determine what markets operations protocols are to do in terms of supporting resilience and whether additional metrics are necessary necessary. This committee can support the efforts of 11 nert. Efforts should focus on protecting vulnerable communities and insurance texas to hospitals and other Critical Services. Despite the system reliability in the last month 80,000 homes and businesses have little comfort when they lost power during the cyclone. To tackle end use resiliency where people are expected to depend on resilience planning and Emergency Repair disk at the local and state level product of congressional support outlines the National Academies report especially by Publicprivate Partnership can go a long way in supporting planning and improving resilience. Third Renewable Energy and Energy Resources are critical components of the reliable grid. The cyclones in the 2014 polar vortex affirmed when powers role as a critical coldweather reliability resource. When power performs well above capacity values and did not go off line helping to avoid price spikes another blackouts. Distributed energy versus is especially customer getting paid to reduce power can provide significant contributions to extreme weather reliability as well but this was demonstrated during the polar vortex where nearly 3000 megawatts of voluntary demand and production played a key reliability role. Unfortunately for economic productions in these conditions and did not facilitate demand response this month from my understanding. These takeaways affirmed the value competitive markets and a long tradition of Technology Use of support for these markets. This committee should be wary of other and market proposals intended to sustain specific types of power generation. This committee has strong opportunities to support a coat clean reliable and Affordable Energy future. Thank you. Mr. Ott welcome to the committee. Thank you members of the committee that appreciate the opportunity to testify in front of you today about the experience during the recent cold snap from december 27 to january 7. I wish to offer also our perspective on activities we need to engage in the future to ensure our nations electric infrastructure remains reliable and resilient and the supply of electricity is met efficiently fairly and costeffectively. We have a population of 65 Million People so obviously the reliability of the grid is job one for us. During recent cold weather we experienced winter peak demand days of all time. Overall the grid and the generation performed very well. We had very sustained highperformance throughout this cold snap with this cold snap as prolonged as compared to the polar vortex which was the more deeper cold. This cold snap is much more prolonged that we depended on that for improved performance. The supportive ferc we have visited reforms regarding pay for performancebased on the Lessons Learned from the polar vortex as the chairman had indicated. We did see significantly improves performance during this cold weather events all resource types coal generation gas fire gasfired Generation Nuclear generation Renewable Generation all performed that are in this cold weather event than what we saw during the polar vortex and certainly we see that improvement was based on her Lessons Learned improvements in investment backing to resources to see that they performed well. I can assure you that the grid is reliable today our work is not done. We certainly cannot become complacent. We need to look at certain initiatives to undertake and certainly we have been undertaking those initiatives to look at the resilience of the grid and how we are going to improve the robustness and resilience of the grid into the future. We look at this from three perspectives. We have the plant grid with the resilience going beyond the traditional criteria. We operate the grid looking at the increased risks and increased threats that we see and also look at recovery of the grids should something happen. Those are the types of things we look at. I want to also bring to this committees attention some of the broader initiatives we will be working on in partnership with the ferc chairman as we go through the process of the dockets to see it mentioned. One of the most important things that we have been focused on is how does our market, lectures of the market actually compensate for resources that are providing Reliability Service . We have proposed new reforms and engage in discussion about new reforms and price formation i want to spend a little bit of time explaining what that means for this committee and for ferc as a whole. Just to be clear but generating units we call upon to serve our customers and produce electricity get paid. They recover their offers and their cost and certainly are not uncompensated but at times will we find is the total cost of operation of those units that provide reliable power each day they dont necessarily get those monies in the market. Sometimes the market price doesnt reflect the fact that they are on line and running and therefore we compensate for what we call in auto market payment. Normally the out of market payments or 500,000 a day for us which is a very small number compared to the total cost of electricity. The cold snap we saw that increase fairly dramatic he to 4 million sometimes 6 million a day. What that shows is we are running those units provide reliability to the grid or the fact that they are running isnt reflected in the power grid in a price of electricity. They get paid but they are seeing a price. Therefore when they go to sell their electricity forward in the market so you will sell it for next month or next year they are selling at a discount thats not reflecting the fact that they were serving the customer reliably in a cold snap so thats the issue we have to address. Thats the issue that all resources will benefit from whether it be coal fire resources gas fire renewable at, forget the price right all of these resources will see the dollar value we are proposing and thats what we want to engage in is that conversation. What we really need because theres so many things we need to address. We need to put time discipline looking at ferc and time discipline in these discussions to address these in a timely matter. Manner. Thank you very much and i look forward to your questions. Thank you mr. Ott. Good morning chairman murkowski and members of the committee thank you for the opportunity to appear before you this morning. In 2013 i appeared before this committee to highlight the concerns which was we are becoming more dependent on Gas Generation without investment in the Gas Infrastructure to supply at the fuel for generators and since that time we have continued to express our concern over the lack of secure fuel in the region and highlighted the possibility that Energy Prices and emissions would rise with nick chubb gas pipeline constraints. We experience impacts of the current fuel constraint as Cool Temperatures drove an increase in demand for natural gas in the region. We have known for several years that when several years that when it gets colder region does not have sufficient Gas Infrastructure to meet demand for home heating and power generation. Constrained pipelines result in substantially higher Natural Gas Prices with gas price gas price of the marketed as a result the bulk of the Replacement Energy is provided by burning oil. The circumstances relate raise reliability problems. It rapidly diminishes oil which inevitably needs to be replaced and it is snow or issa death for punching can be difficult or impossible. Second emission regulations limits the runtime of generators. Finally the fuel constraint and rapid inflation of the oil industry dramatically decrease the reliability consequences of a large transmission in the cold weather event to the circumstances caused us to reduce the operation of a number of the Oil Generators to commit other resources and the market or to manage the end fuel entry through the tail end of that extreme weather event. So far this winter we have been fortunate not to experience any major contingencies that we could not handle and a system has operated reliably. We know the winters far from over and we will continue. Regardless of the outcome of the remainder of the winter believe the last few weeks validate our concern and underscore the importance of the study the release last week. In 2016 we embarked on a study called the operation of fuel security analysis to improve the regions understanding of the reliability risks stemming from the lack of fuel security. Our recent experience leads us to the conclusion that no new incremental Gas Infrastructure will be built. Therefore do not assume to build out the gas supply. We examined 23 different scenarios to analyze how much youll be available to meet demand and to assess the operational risks in particular with the retirement of gasfired resources for the outages were critical of the structure in the system. Energy shortfalls due to inadequate fuel would occur with almost every future fuel base in arabic requiring emergency actions including grid reliability. I will discuss the results of this analysis is tickled as policymakers and regulators throughout 2018 on the fuel Security Risk and determine what the grid operator should accept. It will be costly to remedy these fuel security challenges. The alternative is negative impacts on system reliability chronic price spikes during cold weather higher emissions to burn oil and natural gas in the possibility of further interventions in the markets delay critical resources. The transformation of the system have resulted in significant economic and environmental benefits to the region. The fuel security difficulties are real and they are significant. If we are able to meet these challenges i think it will result in a more reliable power grid benefiting the entire region. Appreciate your committees attention to this important matter and look forward to any questions you may have. Thank you mr. Van welie. Appreciate the testimony for all of you. Senator manchin indicated he had a pressing he asked. You may take the first question. I want to thank chairman murkowski thank you so much and my friend Ranking Member cant well for allowing me to have this opportunity but also for this hearing. West virginia as you know has been the heavy lifting state for some time. We are very blessed and pleased to be able to provide energy is needed starting way back when for building the steel to build the ships that defend our country so we are very proud of the energy part that we play in this great nation. With that i think you all know i havent energy portfolio. Even though cole has been a factor in the marcellus shell and we have been blessed and we been able to help the country for many years to come. With that the reliability and resilience of our grid particularly since the polar vortex of 2014 which you alluded to in the recent cold snap that we hit. I supported the department of energy grid study and subsequent proposal by ferc in the rulemaking. Ive been asked questions about resilience on this committee for committee for sometime of contingents is so particular because we continue to see coal plants going offline. We know that Market Forces that are at play but over the most recent deepfreeze of the bomb site on as many calling it that the grid performed well and i think you already and for what period of time announcing that will happen i dont know but i want to make sure we provide what this country needs and continue to do so for the time its going to be called upon. If i can start with you mr. Mcintyre and ask one question what would this country have done without the backup coal fire plants in the polar vortex and also this last bomb cyclone if you will and want what critical position would have put our country in if any so we can put that to rest and find out how we can stabilize and keep coal by prince so its there for that resilience we need and the dependability this country needs. Saying thank you for the question senator. As you heard from a couple of bar where this is here called to perform well alongside other systems. And the question my asking what the system have been able to be flexible enough to provide the energy we needed . In these recent weather events we wouldnt have seen any widespread outages as equal. That said kohl was a key contributor. It wasnt exempt from operational problems. There were some issues that i understand it a certain the certain sites and someone but theres no question its a cute cheerleader. I share your overall view and all of the above. Kohl needs to have a place. Absolutely. Mr. Walker. Thank you for the question. He said something with a nuance. Its whether or not we could or should survive without colin they think people that think that we should and its very important to point out the evolution of the electric grid is inextricably tied together at the last systems to route the United States coal natural gas and oil. So much as what we have done is put ourselves in a position where we now have more structure to ensure the safe and reliable distribution of power. Coal did play an important part of on average are presented and provided 30 during this event. If that 38 werent available we would have had a serious problem. The markets would have met the need but simply much higher resources but the point im trying to make and perhaps not well is that when we start relying those resources things like natural gas and oil we also increase our exposure because now the Critical Infrastructure in this country is not coal sitting in a plant where it got nuclear fuel they are. Ive got to rely on thousands of miles of pipeline or Transportation System to get oil to the location so the challenge to manage this particularly in the face of the threats after they mostly physical and cybersecurity really should give us pause to step back and think about the diversity of the mix and whether or not we could think of better question presses should we get rid of oil because because coal rather because each one of those has a certain unique characteristic that is very important and i apologize for that. On page 86 of the staff report theres a chart that defines the different values at that the types of generation happen is really something we have an opportunity Going Forward then i look forward to working with ferc. Its finding that optical optimal mix to minimize their exposure from the threats we face. Can i just ask mr. Ott . You are pressing your luck this morning. I will make it very short. The reality is again for this past event 45,000 megawatts which is 40 or more was coalfired we could not observe customers without the coalfired resources and that the reality. The point is there the prices reflecting the fact that the resources are running in my answer to that is no. The question is how does the transition quite clearly some coal plants dont produce electricity. The ones that are running an on line every day to serve customers should be reflected in the price so we need those. Some can go and some have to stay. They you own think madam chairman for being so considerate. Senator cantwell. Thank you madam chair. Mr. Walker obviously you have heard some of the recommendations on resiliency. Which one of those ideas and report stand out to you is good things to implement . I think basically the position that ferc is taking in reestablishing and bringing the art tos together to evaluate the resiliency and their respective systems will provide an excellent baseline of had the opportunity to meet with mr. Van welie and go for the work of the polar vortex. Those are two fantastic baselines analysis that will enable ferc d. O. E. And the isos to move forward with really having a fundamental standing of where the interdependencies are on the system so that we can build the board more resilient system and be informed by where they risk the risk is. Well i appreciate your comments about the compromised infrastructure and cybersecurity. Given the quadrennial review thats where we should be spending our attention. We have in this committee and 2015 just that very issue were oil and coal were competing for rail supremacy i guess is the right way to say it and definitely, i would say upper midwest utilities without their ability to serve their customers customers. The dynamic is changing so i appreciate the reports and the recommendations of those reports reports. We are fighting the changing nature of economics and the challenges that delivers to the utilities and to those who regulate the utilities. That is why chairman mcintyre and so glad that you persisted what i thought was undue political pressure to try to force a bailout. I know that last week commissioner filed an ex parte notice about coal plant transfer is predicting that was the right thing for him to do. The news was troubling to to me because is said to me there were those who would try to influence the ferc on a political aspect as opposed to the thorny Economic Issues that are at stake here. What do you plan to continue to do to make sure ferc is an independent agency and i will give a little context. I dont think anybody in my state really understood who or what ferc was but after that i guarantee you its become a hostile work because they know it is those that protect them from being gouged unfairly on Energy Prices something so important to the economy. Thank you for the questions. The independence of ferc at the agency as a federal agency is essential to first of all its that way by design in its construction and its very important to me personally as i stated in my confirmation hearing. I intend to do my must to ensure the results of that independence. In this particular instance im delighted we had a 50 vote in our january 8 order. As you know that reflects a bipartisan mission through republicans and democrats and im so pleased we were able to see a common path forward in terms of pursuing this very important issue resilience. C. Will make sure the politics out of it . Thus far honestly it hasnt been a problem. I have not personally felt any undue influence or any effort to affect my decisionmaking on i expect that to continue. Thank you. Ms. Clements the northeast a lot of attention has been focused on natural gas. What are some of the other options and i certainly understand the value of supply. What do you think are some of the solutions for the region for reliance and resilience . Think for the question senator. I think they there are a couplef realities that start with and one is that this transition toward different resource mix one that has marginal cost fuel from the sun and the wind is the predominant choice in parts of the committee on the parts of companies and on the part of citizens is already underway. Sardi happening and what the good operators have always done is the energy mix has transitioned over time from back in the 50s all the way up until today is managed that transition very well. So the idea that this new set of resources coming on cant be reliable is a false place to start. And the last reality in the answer to your question is fuel diversity is one aspect of her resilient grid and a reliable grad. When youre looking at the fuel security reports that just got released from the england he gives us great insight into what is the standard Regional Planning practices for transitional organizations in grid system operators. Its 23 different scenarios. The assumptions included in the report and certainly theres a view by different stakeholders and whether not those are correct assumptions that the report doesnt look at Energy Efficiency to take the most effective resource at predicting what the liability. Does look at Energy Storage or any of those other options. Thank you. Thank you very much madam chairman. Mr. Mcintyre wyoming is the nations leading coal and uranium producing state. Industries are responsible for thousands of jobs and billions in state and local government revenues by colin uranium plated Critical Role in the elect are grid reliability and resilience. During this recent cold snap a coalfired Nuclear Power generation resources were critical to meeting the blood trickled demand during the most extreme conditions. Im concerned about the Economic Impact the electrical liability impact in the continued retirement of these vital resources across the country. As ferc deals with this great resiliency question is the commission going to die weight reliability and resiliency in terms of Coal Resources . Thank you for the question senator. We have been fairly broad in the range of the questions so we have put the boots on the ground here which are the art tos in the isos. Beneath them to give us their best informed views on not only fail personal aspects that need to be taken but also what is needed from a marketing standpoint with respect what it means in the market senses and l ask you mr. Nuclear generation accounted for 23 of the is that fair power plants was surprising to us was are there specific actions you might recommend it for take based on coal generation resources for the value they bring to the grid . Certainly we have discussed that with ferc and certainly we will issue discussion with the chairman is part of this new docket and it really focuses on the Energy Price Formation that we just discussed saying we need to take a hard look at that. For target looked at backdoor pricing and the pricing one effect that. We need to look at the pricing related to these types of events where the resources are flexible and moving around on line and surfing customers. Thank you madam chairman. Thank you. Inky madam chairman for organizing this very important hearing and i very much appreciated reading your testimony though im sorry i missed your comments here today. Its apropos because minnesota is this morning digging out from a major snow event and at minnesota that means a lot of snow, not a little bit of snow. Its uppermost on my mind about the impact of the dangers whether offense on the resilience of the whole community so i really appreciate how important this is to all come together. Last week we heard in the committee from the International Energy Agency Director about Renewable Energy and how Renewable Energy like wind and solar are going to be than lowest cost new generation around the world within the next 10 years and also how Energy Storage costs are dropping as well. Id be very and just in hearing from this panel about how you think these changes will affect the grid, the reliability and the resilience of the grid and it seems to me that diversifying would contribute to that but ive been very ingested knowing what your perspectives are on that, really. Anybody. I will jump in briefly for senator and welcome to washington. Renewable generation is already clearly a Success Story and it gets better every year. It is contributing reliably to the satisfaction of our nations electricity needs today and i expect that trend to continue. It performs well during harsh winters as we have heard including improved performance of wind resources in cold weather issues. That said its still the case that the present operational challenges and that wind isnt always blowing in the and the sun is now a shining so that brings reality to predicting Energy Storage which are question reference also will be something that was advanced the balls significantly towards addressing that. Not so much today as a computation issue is a technological one. We need the technology to take that next big step. But with that picture of that cited industry is already under improvement. Senator thank you for the comment. I would note that the diversity that you speak to does in fact add to the capability to provide power and the integration of the Renewables Provide strategic use of those resources to meet certain demands and certain requirements in certain areas that really commander tremendous level of capability. That being said storage as i noted you might confirmation i consider the grail of the system and that being said its one of the top five goals of my department to focus and on really moving grid megawatt scale storage forward so that we can integrate that as a resource and help enable the integration of renewables and other resources to be key parts of our resiliency. Let me ask you some followups with ms. Clemens on this. What world d. C. Energy efficiency and you also have talked some about demand response and resilience. Minnesota we had homes to Lower Energy Consumption and that takes some of the pressure off of it. He interested in hearing your thoughts on that. Thanks for the question senator. Energy efficiency system the most underrated we have the cheapest by far proven talking about it for a long time so perhaps is not as exciting a new but the potential is high. The order of magnitude of 25 to 30 of perceptions are available available. In the states that have pursued as a policy matter ill costeffective Energy Vision see they are take him down decreases in total demand at the level of 3 a year to together with other distributed Energy Resources like demand response was has provided as high in some years as 12,000 megawatts meaning power plants you dont need in certain instances and are really exciting. I think three things about distributed Energy Resources in addition to bringing down these numbers of megawatts. They provide the flexibility to times the resource flexibility to integrate the high penetrations of Renewable Energy potential that you described and they can provide flexibility. Finally they are great resilient resource. If you think about storage during Hurricane Sandy when microribs were able island themselves and provide power for hospitals and that fire stations stations. Thats a real opportunity on the resiliency side so i think the potential is tremendous and thats where we should start. Thank you very much. Senator capito. Yankee madam chairman i think the panel. Its obviously interesting to me being the other senator from West Virginia and sub12 obviously an important part of our economy by this senator manchin said very proud of the Energy Production we have had in our state. We also have the marcellus shell which is very exciting. A quick question mr. Ott did i get it right to ask he mentioned how many retiring nuclear or coal plants are in the area. What is that big year for pjm . As far as t. J. Am we do have 620megawatt station coming up to four 2020. As far as coal plans we have experienced 20,000 coal plants. We are looking in the 4000 range range. Certainly there could be more. Was 17 different units. Thats what i have here. Again some of them have not been formally announced. There are some that have concerns financially. Let me continue with the peak load during the cold snap natural gas generators provided only 40 of what you predicted. Coal overtook the outcome is that correct . Could you talk about that a little bit. What we saw was during the recent cold snap we saw more Coal Production the normal. The gas prices went up there for coal came on at a higher level so certainly we saw a lot more Coal Production coal Fire Protection in that cold snap. Could you help me and maybe chairman u. Could help me with this the pricing of natural gas spiked up to an alltime high during this time maybe 60 times the normal price. Do you know that chairman . I dont know for was an alltime high. We did experience significant price increases and as i mentioned earlier that the kind of thing that can in a broad sense be helpful. Important that we have signals that reflect shortages spikes in demand and proper signals to consumers. The price is brought into the 100dollar range. That gets me to another issue that was talked around but certainly in the new england area the accessibility to natural gas and the permitting with the pipeline i mean we are having difficulty in West Virginia sometimes permitting our pipeline. The chairwoman can speak about this as well. New england doesnt seem to have the appetite for the pipeline so i read in the Financial Times that says gas from russia and lng coming from russia. We have a Natural Resource in my home state and region i would that would love to be selling our natural gas in this country and in the northeast. I think the first problem is finding the gas pipeline. The structural issue is that a customers prepared to sign a longterm contract to have the pipeline blown the second issue you have to confront this citing issue. For us to move the shale into new england you to overcome those two obstacles. Think the decision from a policy point of view for the region is to regional policymakers want to make those investments or do they live with the constraints and work around them and if youre going to workaround the constraints you have to use alternative fuels like lng and the jones act means you are free importing energy from faraway places and exporting it from terminals a few hundred miles off of us. Obviously they are to have a customer. Have the supplies gotten so low during the bomb cyclone . The gas supplied drops to low levels customers in the gas market for example workflow call for gas supplies. You get contracting in the world our kids. From another perspective as well the Russian Gas Company here we had cargo vessels going with lng tours of imports from louisiana into europe to try to help them meet their challenge. We are looking at an overall system here from costs and missions and of things it doesnt make a whole lot of sense. It doesnt make a lot of sense. Our job is to make sense of those. Lets go to senator king. I hate to follow the admonition that it makes sense. Mr. Van welie i very much enjoy singing i remember meeting with u. N. 2015 on this very issue and madam chairman i love this panel. We should take them with us everywhere. You all have done a really good job in illustrating a lot of important issues. I do want to promote something for the audience and anyone insure sitting in these issue and its an app called iso to go produced by iso and it gives you moment to moment prices all over new england where the demand curve by the way mr. Van welie that demand is exceeding the forecast at this moment by half a megawatt. You may want to call your office when we finish here. But it also gives where the resources are renewables or oil, gas, sub 12 nuclear. Its very very useful and thank you for this. Its incredibly helpful. I want to put some visual visuals. But ive learned visually about where talking about today. The bottom red line on this chart is the marcellus shale cost in the region around pennsylvania going back to the beginning of december. The blue line is the cost to new england so what this tells us is its not a natural gas price problem its a delivery problem and thats what we have been talking about today. If the infrastructure problem we been talking about up it a bit of problem with the infrastructures does anybody want to build a two or three billiondollar pipeline to deal with those if its not going to be necessary the rest of the year and thats where we get into the tradeoffs between storage and lng as an option and building the infrastructure. I just want to indicate how these things interrelate. The other pieces the relationship between what we just saw which is Natural Gas Prices and electricity and absolute almost entire straightforward correlation as you see in this goes back 15 years. Hurricanes at the golf gas goes up and electricity in new england goes up in the same thing over the winter of 2014 the polar vortex and we are up in this area. 32 a megawatt hour recently so these things are all interrelated. One of my favorite comments was from a friend of mine in maine who said theres rarely a silver bullet. There is often silver buckshot. Thats what we are talking about here, the multiplicity of resources and ms. Clements talked about efficiency. The cheapest kilowatt hours the one he never used that we have efficiency opportunities. We got renewables and we have got demand response. B. Storage. We have got infrastructure and we have got rate structure mr. Mcintyre. We have rate structure which will influence how we use power in terms of efficiency during the day. I realize im making a speech here. You can find a question here you are welcome to it. Mr. Van welie talk to me about how we deal with this. Do we build a pipeline or do more storage . I think its going to come down to what policymakers decide to do. There were two parallel tracks in terms of this conversation in new england. The one track is how do we make sure we have the strength price in the market. To chairman mcintyres point we arent going to get the reliability that we seek and we heard something for the past few weeks. I think the parallel discussion is how to alleviate constraints. Ms. Clements you may have misted in our analysis that we have taken into account the average efficiency and the New England States lead the nation in terms of Energy Efficiency but i think the evolution is going farther than what the states are doing with regard to the efficiency investments and my fear is retirements will happen more quickly than the investments being made. One of the problems im seeing his gas is the cheapest possible cost and yet you are taking the price risk and thats one of the tradeoffs but the way her system is working everyone is looking for low rates next year and thereafter we dont have longterm power purchase agreements that will support Capital Investment is a scary for of the other options. I think the demand for this field is the issue and we will be stuck with this problem for a long time because if you think about it if we want to take carbon out of transportation and heating to drive the demand in the region so over time you will have best utilization of the pipeline when you needed and need it and you will really needed in a big way. Our issue is seasonal storage. I think the region needs to work through the possibility and understand the costs. Again you are talking about grid double storage but its hard to justify the cost of grid levels gorge if you only needed two weeks a year. Exactly and grade level storage is not useful enough multiseason event. Thank you chairman schakowsky and Ranking Member cant well. It seems like each Winter Energy demands peak in december and we are reminded of reliable and Affordable Energy. Im from one of those garden state to montana. We respect terms like polar vortex and bomb cyclones and a montana we call that january but thats the way it goes. The importance of keeping the supply on hand to keep the lights on and the infrastructure necessary to support that system this winter has been no different. This hearing is timely in my office is kicking off Planning Efforts for an energy summit. It will be in billings in may. You are invited to attend secretary perry and others. Hope to have important conversations related to an Energy Infrastructure and jobs the Energy Created in our states and we hope they can both attend. As you probably heard me say more than once one critical piece of our infrastructure in montana is the Pacific Northwest power plant. It supports about 750 jobs and generates about powerful 1. 7 million homes in the Pacific Northwest. Through heavyhanded they were taking the borders down for maintenance. They were scrambling. I said with a problem and he said heres the problem. He said we have tremendous Balance Energy portfolios in montana. We are developing a renewables and we have high resources and we have wind resources but the High Pressure system moved into the northwest and when High Pressure systems move and what happens . Temperatures go up and the wind stops blowing. And because they had coal stripped from boiler maintenance we were struggling to keep up with the baseload at that moment because the wind stopped blowing blowing. We will refer to wind is intermittent power and its not a critique of that renewable source of energy but we still have to solve the storage issue with win to make it a more reliable part of our energy portfolio. I just came back from taiwan last year in september and remember what happened in taiwan in august. They lost electricity to about half the homes across taiwan. It was a major outage and why . Good stewards to aggressively Going Forward on the air energy for their balanced portfolio. At a plant that was battling some of the regulatory schemes up and running with that pete latta hot day in august they lost their baseload. I understand a lot of coalfired generations retired. New england has relied on the distinct coal for this winter event as more States Energy mixes are changing towards more Renewable Generation and to policies and so forth. We must find ways to keep a diverse all of the above energy above energy maximization especially during the speech times of load. My question for mr. Walker in your experience how important is it to keep a Diverse Energy portfolio at all times but especially during peak load . Thank you for the question senator. I believe its extremely important and its not only during peak load. I think its throughout the year. Importantly the diversity of the load provides the opportunity for us to build resiliency into the model. With cyber and physical security which are very real, they are emerging, they are involving an increasing and the impact of the use could be very significant in the country. Things that provided for the baseload for each of the different types of generators, so as you look at this its like optimization when you look at the underlying goal to provide a safe reliable. Its about optimizing the generation components that we have as well as the systems that tie into the systems to be able to get and achieve what we need. When i told this quick story its not meant to be disparagi disparaging, but i was in a debate one time about running operations at procter and gamble and they needed to have capacity to cover spikes and we believe they need to be over here and engineers were in their tower doing calculations and thankfully we had a Senior Executive listening to debate and would step back. First of all the operation folks deal with reality but number two, if an engineer were to design the amount of bits needed for a family of three to capacity they would say you only need one bad for a family of three because on average everybody sleeps eight hours a day so it was related to peak capacity. Senator heinrich. I am also, it is a curse and a blessing. I wanted to start out talking about the term base load power, because we hear more of it today than we did ten or 15 years ago and i find that fascinating. I grew up in a family where my dad was a lineman when i was young. Those were the days when coal and nuclear and hydro were the only games in town. I bring that up because i think baseload often times today is more of a political term and engineering and it tends to come up often times when its sort of code for trying to subsidize a generation that is no longer competitive in the marketplace, and i would point out when the coalfired generators go down they are providing often times unplanned maintenance and its not unusual they are providing zero baseload megawatts to the grid and we need to find ways today to think about our grid and meet the supply and demand together and know what the weather is going to be tomorrow and the next day so we can match those things up from whatever generations forces that are using. I want to go to mr. Walker first because you said something to mr. Manchin i dont want to misquote you. If i understood you correctly that inherently, coal at a coal generating station is less exposed to the threats of physical or cyber threat to the grid than say oil and Gas Pipelines and the reason i bring that up is because from my perspective, once you use that coal to generate, you have to give it to the customer. You have to do that over transmission lines and distribution lines, and it seems to me all of these infrastructures are equally exposed. You have the same systems at the substations and relating to the transmission and distribution that you would use in the pipelines. You have the same physical threats to those distribution networks. So i dont see the difference in terms of exposure and Critical Infrastructure. Am i missing something . What you heard me say in a byword reiterate is hard to believe and from the perspective that we are taking we are focused on protecting Critical National infrastructure and as ferc focuses on the marketplace and we provide the safety and resilience in the grade, if i had a stockpile of coal in this instance in a location for sufficient period of time, im not placing at risk the infrastructure as if it were natural gas. What if it is too frozen or whacked . Then theres the possibility we are realizing the vortex. And i think through much of the work that was done, provisions have been placed at the utility and generation plants that utilize things like coal to prevent whether techniques and things like that. Said even in this latest cyclone if im getting the term correct, the unsung hero that i think about it gets very little attention is actually demand response, and so i think from the folks at iso new england, how important is the demand response at this point in these sort of events and has the market been fully implemented and are there federal policies in place to assure the demand response is allowed to compete as effectively as possible in the kind of event . The market has been responsive. We speak of th three this is probably in new england. The one is passive demand resources and that is very well developed in new england because of the state progress supporting that investment. The active demand response during system events and so forth we have little or penetration to the marke of thes and the issue has been the economics. If you give me a minute i just want to reinforce Something Else instead. You said. I think the policy conundrum with regards to the discussion between the field diversity and security i think the policy conundrum is the term is at odds with the idea of the competitive wholesale market because it contains Central Planning orchestration of the resources of the system whereas the markers what youre trying to do too create a construct with the most Economic Resources produced by service which is why you dont hear us using the term diversity that we use the term security. Senator cassidy. Gentlemen, im going to refer to some testimony we had in june of 2016 from a fellow, jonathan prayers, the director of the Environmental Defense fund, and it was a very good hearing last time so now i will raise questions from that. Seeing that there is a price spike in fuel cost, it was going to far higher. This gentle man last year said that there was a lot of unused capacity and Pipeline System and got ferc was working to add flexibility to the schedule and to better use that capacity. Do you agree it is an assertion from three years ago. Do you agree that the assertion worked to add flexibility in terms of delivering gas tax i know that we worked on the reforms in the market structures and practices into schedules and the relationship between natural Gas Pipelines which would regulate and the transmission which of course is critical to gain the power. You said that only 54 of the capacity was used in the polar vortex to the event which he was referring. I guess im asking if it is still an issue or has it been addressed specifically . We do have as you have heard others committees presented the situation in new england and that is where indeed we have ongoing longterm challenges in transportation infrastructure. Is that related to the capacity and im sure it is either or were due to the lack of capacity. In new england it is this point. The gentleman made this point and its very provocative but if you look at the lack of the capacity it was only two weeks out of the year in which there was a lack of capacity and at this point it is cheaper to pay the prices on those two weeks out of the year as opposed to pay for the infrastructure that would be underutilized for the remaining 50 weeks of the year. Any thoughts about that . It depends on the view of the cost and benefit of running blackouts for the examples that there is a point beyond which we will maintain the supply and demand balance by taking them out of the system so i think that is the tradeoff. One could look at it and say its not for making investment because we only use it among the year lets say. But you have to weigh that against the other consequences as well and i think what the study intends to do is to show we are very close to the edge in new england and we need to find a way to either through investment in the Pipeline Infrastructure or continued investments in other sources of energy that will take the pressure off the pipeline and reduce demand on the system comes with those are the three avenues available to the system. I think they have different implications with regards to cost. So it wouldnt be adequate for the two to four weeks a year which are truly constrained. We will become much more dependent today. I think that the market monitor has raised another question which is far the two supplies that are pivotal suppliers into the marketplace so you would expect to pay high prices for natural gas when we have these constraints and i think the policy tradeoff is do you want to pay these high prices whenever it gets cold or do you want to soften the economics by investing in the infrastructure. This is a critical question the pipelines are so expensive that its actually cheaper to do with the episodic highpriced van to do the infrastructure. He is not here to make the point directly, but it sounds almost like you are disagreeing with that. I think the region needs to work with the cost tradeoffs. Okay. I yield back. Thank you senator. Thank you for holding this important conversation. My two colleagues are not here but i just wanted to remind them that multiple people are sharing the same bed in the United States navy and there are young sailors and submariners who are doing it right now in order to defend the nation to lets say a quiet prayer of thanks to them for what they are willing to put up with to keep us safe. My question really goes back to the work that states have been doing for Renewable Energy. My home state has made tremendous gains in this area and in addition to requiring Renewable Energy by 2025, we also prioritized investment and job Training Programs that are focused on lowincome individuals to create thousands of Clean Energy Jobs and these would make the grid more reliable and resilient, not less, while also creating more jobs. In your opinion, how will the Energy Policy impacts the system in the context of extreme weather events . Thank you, senator. I think that the decent Illinois Energy act as on is one of the t examples of the way that they are leading into this transition to say we are going to use American Ingenuity to harness the resources that we have and to create Economic Opportunity and jobs from making it more resilient and reliable but by increasing the system through wind and solar is increasing resource diversity at this point nationally it is about 7 it is not hydro renewable and when you think about the characteristics every kind of resource has a set of benefits and issues that weve just been talking about so we are now in the conversation of gas versus coal and there is an overly narrow view of the opportunities. The wholesale Energy Markets have been a good job of what theyve intended to do which is to provide lowcost reliable energy. As it changes and states like illinois take these actions, the markets are going to have to start by doing things like the forcresource flexibility for the strategic Energy Resources and that is exciting but when we talk about th the trace to the caprice formation in the markets lets not forget we cant undervalue the benefits that the Renewable Energy resources and efficiency are also bringing to the table so when they are over performing and providing this to the grid they should also be getting paid for those services so i think illinois along with,h minnesota and hawaii and new york and california are showing the way that other states can look to him as an example. Can you speak to the cost of the renewables and how it compares to other fields . The wind and the sun are free so they were able to help and we are still getting the information from the bomb cyclone, but the roll in particular was to help avoid price spikes or mitigate the natural spikes by over performing at low marginal cost. In every tragedy there is some opportunity and even though four months have passed since hurricane murrieta made landfall and the lack of electricity and Reliable Communications remain a central challenge and struggles to return to life and im committed to developing a policy that will remain operational driven to the next super storms would like to see investments made so they are not in the same place they were before maria hit. In your opinion wit what policis that stimulate this be useful on this endeavor to better position them for the next storm because we know what Global Warming and other extreme events they are going to get hit again. Thanks for the question. Absolutely. Just as of yesterday, 32 of customers remained without power comes of it as all of october, november, december and most of january now. The government also announced they are considering privatizing the utility that might help in and of itself with creditworthiness and bringing in the expertise that can really provide that Innovative New model grade, but anything that the congress can do to provide those incentives to help get that solar and energy stored online in puerto rico is critical and will precipitate a model that for the National Academy recommendations can serve as a best practice that can then be shared with other states and regions in the continental u. S. Thank you. I look forward to working with members of the committee. Thank you madam chair. I have two questions for each of you and it really to the bomb cyclone but certainly the capacity and reliability one goes back to a question senator dean was getting at and that is essentially how do we make sure we have enough base load power for those type of events so we are ready for them, so how do we make sure we have the base load power and number two, how are we going to build the transmission in the pipelines to make sure that we have an adequate Distribution System fax we are running into the incredible difficulties building any type of pipeline, legal or tax and also the same kind of problem with transmission comes effectually whether you are a fan of traditional Renewable Energy, we are running into the problem of building enough infrastructure, and i can cite examples to you including most recently the Dakota Access pipeline i industry that moves half a Million Barrels of oil a day to east coast refineries that need us and if they dont get it from us they get it from saudi arabia and i would rather they did from north dakota. So if you each take a swing at it how do we make sure we have enough and how are we going to get people to support building this transition we need to have the reliability we wont . Do you want to lead the effort here . Thank you for the question. As the base load was pointed out, it is a term that means Different Things to different people these days. I think of it as the big largescale power plants that are designed to kind of run 24 7 and then its changing as Technology Changes and the economics of the market change. How do we ensure we have enough of that . We ensure we have the right market structures in place to compensate those resources appropriately. Second, the difficulty of getting sufficient new Energy Infrastructure built. I fully share that concern. It is a problem. We have to look at ways to mend and improve our permitting process so we can get over some of these obstacles. With regards to the base load, one of the things i learned early on is we are not very creative, so we need things for exactly what they do, and baseload is exactly the bottom of the economic stack and for what was going to meet the base requirements of the load and i think that as the chair man recognized, i think recognizing them from a market standpoint and placing a value on things like central Reliability Services as part of the economics will help drive that and i think also recognizing and taking a different perspective from the resiliency standpoint, there are values that will not be captured in the economic component that have value to the economic and National Security of the United States and i think those in conjunction and the work that we do needs to be integrated together to help drive the investment and then once weve identified those components that are both valuable to the market from an economic standpoint to drive costs down and valuable primate physical and Cyber Security perspective to ensure the National Security, the blue and is together to work through the processes. Video he works with the states and local components of the United States to work through these issues and i think with the proper data and analysis and evaluation that really identifies the right locations we will work through the process and get them in. I like your pin. Thank you. Can you pronounce your last name for me. Near a fuel diversity in critical to the operation of the power system. We are in the middle of a significant transformation of the system and having the fuel diversity is what is going to allow us to have the reliable operation. I tend to move away from terms like baseload into the different generation provides different attributes and has different risks attached to it so the policymakers need to consider what is the appropriate mix that is going to give you the best riskbased outcome for operating system in a local area but what is important to us as we move to this new environment where we are more and are thinking about renewables as a part of the mix is the stability of the power system behind it in order for the renewables to be attractive to people because to the extent that there is no wind or sun you are drawing power from the grid and so having the grid operating reliably as critical to the success being inserted into the system and we need to consider carefully what are the attributes of different generations provide the stability and system information of the generation portfolios i am not much of an expert on the transition sightings but i will say listening to the testimony here today, it seems obvious if you were going to move particularly in the case of guest generation if you are going to move to more as being part of whether it is a pitch to a more renewablesbased system or simply part of the basic power structure, youre going to need more capacity. We are hearing that in the testimony today so providing incentives to get better capacity for gas seems to be a fairly important consideration for policymakers Going Forward. I would echo the description as an operating characteristic and as we move forward we are going to move away from that particular. However, the number of megawatts provided is important and we have lots of power across the Country Planning reserve margins are very strong and so in general how do we have enough. So going to the infrastructure piece. This is an opportunity to have real bipartisan Work Together on a welldesigned policy to build up transmission lines to support the movement of wind from the windy places and son from the sunny places. The development has to be upheld in the environmental protections but it can be done while. But you cant take ten years to build a transmission lines were pipelines it doesnt do any good if it isnt in the right place when you need it. I believe weve given the time. Especially for the baseload resource that is the reliability characteristics and making sure they are appropriately compensated as the chairman indicated and certainly we have a track record in the capacity markets fothat capacitymarkets e been effective in targeting performance of resources and get was a Success Story and we can do some things in the market to address some of the concerns raised as far as infrastructure i do believe the planning processes have been successful getting the infrastructure bui built. As for as gas pipeline infrastructurthis gas pipelinein issue we do need to figure out a way to get the siting process moving. Its change from this battle between renewable and traditional to both have the commonality in this interest of getting approval for construction this infrastructure should be working together. I think the baseload is becoming an obsolete term because i think of it as what is producing energy for the minimum price. Weve come from a world where we have coal and nuclear and gas and renewables Going Forward so i think if i look at the problem i think weve got structures in place to ensure we have enough resources on the system. The structures in place with the oversight so we can get a transmission belt. I think the big regulatory gap is that when we restructure the markets 20 years ago we didnt understand the dependency that would be created. So then this leads to a situation where you have the incremental Pipeline Investments needed for the Gas Generation so i think that is something weve all struggled with for a while. I apologize for going over my time. You went well over but this is exactly what this Committee Hearing was designed to dig in into. Do you mean quantitatively or quantitative . Both. [laughter] these are questions that are very important and the answers on the record are equally important, so well done. I appreciate that as well. Thank you to the chairman as well. Mr. Mcintyre good to see you again. When yo you were worked for the committee for your nomination hearing, we briefly discussed integrating into the power grid and we actually have an energy bill of rights that allows consumers to generate the export and store Renewable Energy on their property. Do you believe there are additional actions that can allow access to these markets . There may well be, thank you for the question. Theres been work prior to my arrival and we have a record of materials that have been set up to address this very question that is part of the work that remains before the personally. Its something we will turn our attention to. They issued a proposed rule that would eliminate the barriers to the participation of Renewable Energy and the wholesale markets that is precisely the work we were referring to. Do you have a sense of how . I dont have a specific calendar in mind for it. You provide a number of key recommendations on how to increase resiliency but im curious if you have any recommendations for extreme heat in nevada it can get up to 115 degrees in the summer. I dont have the top of my head. One of your recommendations on how to enhance these efforts is to ensure that resiliency efforts focus on protecting vulnerable communities. If their abuse door, Critical Service like hospitals, police stations and shelters and food banks need support to be able to figure out there plan. Much of this is subject to state local jurisdiction. We recommend congress provide funding and support and best practices so that we can try it and support the local communities to figure it out and help share the information by region and across the country. Mr. Walker, i know my colleague from illinois talked about this and the devastation there and the work that is being done to modernize the electric grid. I saw longterm micro grid power installations, can you elaborate on the longterm plan . That is not a d0 a project. They on about 200 pieces of property in the island of puerto rico. The on the property only setback. So customers like Johnson Johnson and honeywell. We been working closely to give them Technical Expertise with regard to how to cite the microgrids in an effort to ensure better quality for these manufacturing customers. And to encourage them to stand the island and further expand the opportunities. Anything else that youre doing were working with stakeholders that put together plans and to instill them down into one. Whatever technical capabilities. Yesterday met with the Tech Committee that was put together by prep its accord made our efforts and walk through what the plan is moving forward. Thank you for your efforts. And all thats going on. We appreciate the opportunity we had when were over there. Obviously a great deal more to be done. I appreciate your ongoing efforts. Several members had commented about the quality of the witnesses weve had this morning in the discussion. One of the benefits of having the gavel heres that i get to stay for the full morning. It has been important and enlightening in certain areas is any hearing we have had. Thank you for for that. Most of you know we are beyond the discussion about baseload power and how we define it. I forget which of you referred to the policy conundrum between diversity versus security. Its easy to say we need to have this diverse portfolio. But if that doesnt give you the security of access, then you fail when it comes to your resiliency. You fail in terms of your ability to meet the expectation. Its important that as we talk about the serious challenges that we see. You have a grid that is evolving, changing, and aging. How we do a better job with the integration of it and we keep in mind the distinction between diversity and security. We need to recognize it has to be part of our issue. Several colleagues state that we can have a all of the supply we need. If we cant move it, it does not give get us anywhere. Alaska has extraordinary resources. A challenge has been moving it to the market. I appreciate what we have heard today. I have differed my questions to the end. I dont have the clock running with me. Let me begin with the chairman. I appreciate all your doing within the commission there. I dont know if it is fair to ask you your personal opinion but i will ask that. About what you believe the risk to the grid presented by the ongoing retirements that receive the nuclear, with coal of her purpose of conversation, if you have a scale of 1 10 with ten being the most severe risk to the grid, where do you put us . Thank you for the question. Quantification is tricky. Conceptually we are probably at a five. Thus of the basis of what we know today. Of the challenges that have presented itself i say that with the potential irreversibility of the situation it is a serious matter to the grid. Let alone an entire class. It is something more that it merits a five ranking. I will have a better informed personal opinion after we hear from what specific needs they see and concerns i have. Let me ask you about that. It really has kicked that to the rts and isos to define what the regard is to the resiliency. The root question is, are they the best organization to make that assessment or determination. What about the electricity Reliability Organizations. How do the others factor into this . We recognize they we dont own the grid. I understand why it moved forward as it did in rejecting get where youre trying to go with this assessment, but does it need to be broader than just the rts westman. It is broader. The most immediate and directed request was to report back in answering questions. We have invited broader stakeholder input. Weve initiated that outreach are ready. I do agree with your suggestion. I appreciate that. I feel its an important part of any analysis that might move forward. Assistant secretary walker, you spoke to the collaboration that needs to go on. You said it would take unprecedented collaboration to keep the lights on. Into that ends, with the resiliency model that you have indicated is the top priority have your your staff reached out to the reliability or security staff or been working with our tos on this . How youre going to do this . I do believe it doesnt will take a significant amount of collaboration. Verity spoken about this with regard to the model. Yesterday met with gordon at the end of the table my team has reached out and gone through looking toward integrating the work that the initiative will yield. We work regularly within doe. As well as through the Electricity Sector coordinating counselor. We have reached back with all the partners we have. But its bigger. Its worth the nexus to bring together oil and natural gas component. We have two separate coordinating councils were looking to bring together because of the dependency between oil and natural gas and electric system. We have laid out a schedule of those participants that we need to pull together to work with the art tos to ensure we have the best answer we can. Thats where this model comes from. Once we have the information and can take the components of the system which we ever to have starting to define some of the resiliency work that has been done in the United States that the department of defense. We started that initiative together components. Yesterday i met with the Security Organization to identify work thats been done at our power plants to be able to coordinate that and provide that information effectively as we progress it forward. We are very much in lockstep with moving forward. So important to National Security components we conduct tell it to the marketplace to solve the issues. That is good to know. This is exactly what we need. Skits and others reports and analysis. For not coordinating and learning from and other entities and what they have done or how they have advanced its not as valuable as we had hoped. There has been discussion about formation making sure that the value is in place. The quick question is, how prompts will work be when it says it will act promptly if it season need to take action. I raise this because for open up a price information docket before the polar vortex couple months since early 2014. That work hasnt been completed on price formation. Think would be important to know that given the reality of time it takes, when he saved furcal take prompt action does it mean its technical conferences and staff memos and white papers, what actually can be expected . I think we know often times this is complicated and lengthy. We also speak frequently about paralysis of analysis. In the situation of the review of ensuring reliability. I raise today years ago or longer since i have raise these concerns and we can see growing levels of retirement. I would hope that it recognizes we need to move beyond technical conferences and more white papers. We actually need to see that action. Its a valid question. And when i was in the private sector i shared those. In terms of january 8 the order on the Grid Resilience theres this calendar spelled out there 60 days first to get back, 30 days with stakeholder input. Women are commitment to prompt action. I cannot say how much time would be involved, it would depend on the quality of the information we get back which i expect to be very good. I have declared it to be a matter of priority. Those are not words we often utter. In the meantime, we have stated in the same order that should shortterm concerns arise within a given rto, we want to know about it immediately. We will not sit idly by if theres a legitimate concern regarding liability or resilience of the grid. I think it helps that you have been on the other side. So that you know not only of the need but have been one that has been in the situation where youre urging the action. That should help on the inside as well. Think given what members hardcover throughout, i have many questions when i started and we get good information before the committee. So many of the questions i had have been answered. I recognize that this is a challenging space and we see the challenges pronounced when we have weather events that push the Energy Status quo that we might get comfortable with. Its a reminder that we need to be vigilant in understanding the security, the reliability and resilience of our energy supply. I mentioned a few minutes ago that the hearing is probably been the most educational. It is right up there with the one we had several weeks back when we had the head of the iea here. The dr. Spoke about the Energy Trends internationally and he had four upheavals. I will not go through all of them. His fourth upheaval is what is happening with electricity and how that whole sectors being impacted. We have work to do. This is been an instructive and helpful hearing to all members. Thank you for the time. We stand adjourned. [inaudible] 517 cspan networks on 10 30 a. M. , the Senate Budget committee holds an Oversight Committee looking at the congressional budget office. The senate takes up the nomination of the next health and Human Services secretary. The Senate Transportation committee looks at Auto Industry innovations. At 12 20 p. M. The us Council Mayors start their winter meetings in washington. Next week on tuesday january 30 President Trump gives his first state of the Union Address to a joint session of congress. Sessions begin at 8 00 p. M. Fall by the state of the union at 9 00 p. M. We will take your calls in here reaction. Coverage of the state of the Union Address on cspan and available on the free radio app. This morning we took a look at some of the challenges facing the National Park system. Joining us now as trees of the National Park association. She serves as president and ceo. Good morning. It is your association represent . We been in existence for almost 100 years. We have 1. 2 million members and supporters. Our mission is to protect our parks. We have been at it from us a hundred years. One thing it does is when the topics of shutdown command what was it like for this time around. Compared to last shutdown. The last shutdown lasted for a