Transcripts For CSPAN3 Hurricane Infrastructure Recovery Government Officials Panel 20171114

Subcommittee on energy will now come to order. And the chair will recognize himself for an opening statement. So this years atlantic Hurricane Season was unprecedented. Four named storms in close succession slammed into the gulf, puerto rico and the u. S. Virgin islands. The hurricanes caused catastrophic damage and Energy Supply disruptions across the country. While texas and florida are further down the road to recovery, a humanitarian crisis is unfolding in puerto rico. A number of colleagues from this committee have been down there. And the u. S. Virgin islands where the majority of folks still remain without power for more than a month after Hurricane Maria made landfall. Todays hearing will review the Emergency Response and Energy Recovery efforts in the wake of those storms. It will help us begin to understand what went right and what went wrong. What lessons can be learned and how we as policy makers can identify gaps so that, when the next hurricane hits, we will be better prepared. As a result of Hurricane Harvey, more than 275,000 customers lost power in texas in severe flooding also affected the supply and delivery of transportation fuels, compounding response challenges and Energy Impacts across the gulf. Hurricane irma left more than 1 million customers without power in puerto rico and across the Virgin Islands and more than 6 million customers in florida and another million in georgia and South Carolina also lost power. Then two weeks after irma, Hurricane Maria delivered the knockout punch, wiping out the entire grid of puerto rico and the Virgin Islands. At peak, more than 3. 5 million folks were without power. As with most disasters, Energy Restoration is performed by federal, state, and local authorities who provide vital resources, infrastructure support, and logistical support. And coordination. And by industry which provides the expertise in man power to restore Energy Supply and services. As we witnessed nightly in the news. Recovery on the islands has been painfully difficult and slow. Questions are mounting regarding the role of the Puerto Rico Electric Power Authority and its initial reluctance to request mutual aid from mainland Electricity Companies that were standing by ready to assist immediately after the storm. And rather than request mutual assistance as texas and florida did, in the preceding storms, prepa took unusual steps to award a contract to a virtually unknown company, which it then canceled. The deals that prepa signed immediately following the storm are now the subject of an investigation by this committee as they should be. Today were going to hear from two Witness Panels which will provide perspective from the state level, the federal level and the industry responder level. As weve seen in recent weeks across the areas affected by the storms, each disaster creates its own set of problems. Todays witnesses can help us understand the factors that contribute to these problems and what we will do ensure more Effective Response Going Forward. They will also help us understand the challenges that they face as they move energy and product in the aftermath of devastating storms and while weve seen alarming devastation, we have also seen some aspects of the response go right. To this point, by most accounts, department of Energy Support functions have gone well. D. O. E. s coordination of regulatory assistance or waivers during the disasters has gone well. Their informational assistance has been consistent and helpful to government and industry alike. And well hear this morning about the Strategic Petroleum reserve, which during harvey, served to to provide Emergency Petroleum swaps to make up for the temporary loss of supply and keep prices at the pump somewhat stable. Well also receive an important update on the various restoration efforts to bring power back to the folks of puerto rico and the Virgin Islands. It will be particularly helpful to understand what have been the barriers to a more rapid recovery, what we are learning about coordination of Emergency Response and restoration on these territories, and what is needed more from us, the congress. How can we apply these lessons Going Forward. This hearing should help us answer some of those critical questions, and i yield now to the Ranking Member of the subcommittee, my friend, gentleman from illinois, mr. Rush. Thank you, mr. Chairman for holding this important hearing. Examining the 2017 hurricane 2017 rather Hurricane Season and the Emergency Response and Energy Infrastructure Recovery Efforts surrounding these emergencies. Mr. Chairman, i hope this will not be a one and done hearing. This years historic and devastating Hurricane Season, there remain many critical and related issues that must be addressed. While i appreciate having witnesses here to discuss the gao report that we requested last year, the fact of the matter, mr. Chairman is that as we speak, there are still many millions of american citizens living without electricity and many are facing life and death conditions for over a month now as the hurricanes harvey and irma and maria shattered their lives and devastated their livelihoods. Mr. Chairman, it is my hope that this hearing will shed light on what additional steps need to be taken quickly to restore power while also assuring those residents in puerto rico and the u. S. Virgin island specifically and their government and that we will provide the same exact same effort and the exact same attention to helping them as we will for any other american citizen. Mr. Chairman, as you know, more than six weeks after Hurricane Maria initially made landfall, nearly 70 of puerto rico and 80 of the u. S. Virgin islands still, mr. Chairman, still dont have the power needs for everyday basic services such as lighting their homes, treating drinking water, preserving food and medicine or even making emergency calls among other critical problems that are so necessary for normal and daily activities. While attention must be focused, mr. Chairman, on providing essential resources to protect the safety of individuals, over the long term we must also help to rebuild the energy, infrastructure in a way that makes us stronger and more resilient against extreme weather conditions. Mr. Chairman, hurricanes irma and maria exposed the vulnerability of puerto rico and u. S. Virgin islands grids to extreme weather while some communities expected to remain without power for even months on end. And a Study Released last week concluded that the outages caused by Hurricane Maria resulted in 1. 25 million hours of electricity to households in puerto rico and the u. S. Virgin islands. Mr. Chairman, making this minute the nations largest blackout that was ever recorded. We can find no event in recorded u. S. History where there were as many people without power for as long as it has incurred over the past month in puerto rico and the u. S. Virgin islands the report is stating. Mr. Chairman, i look forward to engaging todays distinguished panel on the promise that it has been made. Additional steps that must be taken to immediately get the power back on as well as ways to rebuild more resilient and sustainable infrastructure and that is less vulnerable to an extreme condition that we have witnessed and that we certainly will witness in the future. Thank you, mr. Chairman. I yield back the balance of my time. The chair now calls upon the chair of the full committee mr. Walden for five minutes. I thank the gentleman and acknowledge his uniform today. 2017 Hurricane Season has been among the worst in recent memory. Four major storms have wreaked havoc all over our gulf coast more recently in puerto rico and the virgin island. While fuel supplies and electricity have been restored on the mainland a humanitarian crisis continued to unfold in puerto rico and the u. S. Virgin islands. I think you hear that from both sides of the aisle here. This is a real, real serious situation we all care deeply about. As we often do following Natural Disasters, its not uncommon to see stories in the news about heroics and acts of personal sacrifice and great kindness. We trust that our policymakers can put aside their differences to do whats in the best interest of the country. Weve already passed initial supplemental Disaster Relief funding, this congress, but we understand that much more is needed and we will continue to work with the administration and our colleagues to that our fellow citizens can get the Additional Resources they need to recover and to rebuild. In this committee we roll up our sleeves and we search for solutions to the various challenges that present themselves after a major disaster. We want to make sure that the agencies under our jurisdiction are well prepared and that you all are responding appropriately both now and that we learned from lessons of bad incidents and are ready and even better prepared for the next storm or the next disaster. If youre lacking certain authorities, let us know. We want to know about these things so we can help fix them. Were all in it together. We want to be practical and we want to be forward thinking. How can we help ensure the relevant federal response is well coordinated with state, local, and industry responders . How do we ensure decisions are made to guarantee taxpayer funding provide benefits for those in need. If we need to rebuild, what can because of this committees Broad Committee over Public Health, the supply and delivery of energy, we will be gathering facts, perspectives and Lessons Learned. We have heard from witnesses on an oversight and investigation subcommittee hearing about hhss Public Health preparedness and responses to the hurricanes. Well soon examine the response to environmental hazards and telecommunications as well. Today were focusing on Emergency Response and Energy Infrastructure recovery. Both for fuel supply and the electric grid. This year weve already been confronted with several different challenging situations. Historic flooding in houston. Possibly the greatest evacuation in floridas history. Energy crisis in puerto rico and the u. S. Virgin islands that could leave millions without power or estimated months to come. We may take for granted how lucky we are that we can flip a switch and the lights come on. For our citizens in puerto rico and the u. S. Virgin islands, however, almost every aspect of their lives has been deeply disrupted. Hospitals without external generators cannot serve their patients. Getting that power restored is critical. Water Treatment Plants without power threaten the health of individuals that rely on them for safe water. And those who live in remote areas that do not have access to fuel are cut off even from the most basic of necessities. The Witness Panel today will provide important perspectives about the state of current fuel and electric supply Recovery Efforts. What worked, what could be done better under urgent circumstances, the hurricanes and what may be considered in the future. I expect this will be an excellent hearing for us to identify vulnerabilities and assess what is needed to better prepare and respond to future storms and disasters. With that i want to thank you for being here today. I appreciate the testimony that youve already submitted. Thanks for the good work you and your teams are doing out there. We really want to learn from you and be even better prepared when the next disaster hits. With that, unless anybody else on our side seeks the remaining minute, i would yield back. I might ask a question of the vice chair of the committee. Are you intending to wear that jersey on the house floor when we take the picture of the full house this afternoon . Chairman, that is not an issue. I tried to wear this about three weeks ago and i was banned, so this will not be in the picture. Just curious. Then well always be able to find you forever in that picture. Mr. Chairman, i yield back the balance of my time. Gentleman yields back. Recognize the Ranking Member of the full committee mr. Pallone from new jersey for an opening statement. Thank you, mr. Chairman. For convening todays hearing, reviewing the disastrous 2017 Hurricane Season which has wreaked havoc on many parts of our country. I am grateful to former senator of puerto rico and mr. Rhymer of the Virgin Islands for coming here today but i am disappointed the committee did not receive a response to its out reach on the Puerto Rico Electric Power Authority. I have serious concerns on how prep also how they have managed or more accurately mismanaged the grid in puerto rico over the years. Now today we are focusing on the Energy Infrastructure Recovery Efforts and i must say that accounts from the areas affected by these storms paint a dire situation that completely contradicts the often rosy stories that comes from the white house. The truth is taken together they are currently experiencing the largest blackout in American History and that nightmare for our fellow citizens is far from over. The central question for us today should be why is it taking so long to restore power in islands and who is actually in charge of the effort to restore power to puerto rico. No one person or entity seems to be in charge. I want answering and so do many of my colleagues on both sides of the aisle. Im also troubled by the maze of contracts with Numerous Companies for overlapping missions of patchwork that is failing to turn the lights back in puerto rico. And that needs to change now. Im deeply concerned by the terms of the contract prep assigned with whitefish which went so far as to bar prepa from holding the companies liable for delayed completion of grid repair work or letting the government audit their work. The governor has since taken steps to have the whitefish contract canceled, but we need to learn more about how these contracts are being awarded and whether the bidding process is truly competitive. Thats why chairman walden and upton and Ranking Members have rushed and requested documents and a briefing from whitefish so we can learn more about how that trouble materialized. It had no involvement in the development of this contract. My question is why not . The federal government should be engaged in the contracting process for which he was taxpayers will ultimately foot the bill. The federal government needs to step up and take charge to expedite power restoration efforts. Missions like this are why we have a strong federal government. The Trump Administration needs to be doing more. If we cant get the power turned back on soon, more people are going to die. This is a humanitarian crisis and our government owes it to the citizens in these territories to do everything we can to fix it. While restoring power is urgent, its also be rebuilt with more modern Energy Technology focused on increased resiliency, Energy Efficiency and renewable energy. Replacing the old grid as it stood before the storm will cost taxpayers more money and do nothing to make electricity in puerto rico more reliable or affordable. So as Congress Prepares the next merge spending bill, we must make changes to current law to enable the rebuilding to consider in a way that lays the groundwork for constructing a modern lick tris tee grid. We must consider ways for turning around puerto ricos situation including alternative to prepa for overseeing the rebuilding of the grid and all ideas from privatization which im not really a fan of but from privatization to the creation of a new federal Power Marketing administration. All these have to be up for discussion. Whatever road we go down must have buy in from the puerto rican people and the government. I dont know if anybody wants my minute that i still have. If not, mr. Chairman, ill yield back. Gentleman yields back. At this point were ready for the testimony. Thank you in advance or thank you for sending your testimony in advance. It will be made part of the record. We would like each of you to take no more than five minutes to summarize your testimony, and at that point when thats complete, well be asking questions. So were joined first by patricia hoffman, Principle Deputy assistant secretary for the office of electricity, delivery and energy, reliability at the department of energy. Welcome. Thank you. Chairman upton, Ranking Member rush, and distinguished members of the subcommittee, i appreciate the opportunity today to discuss Energy Security and Emergency Response issues related to the 2017 Hurricane Season. The mission of the office of electricity delivery and Energy Reliability is to develop innovative, cuttingedge solutions to ensure our nations Energy Infrastructure remains reliable, affordable and resilient. In order to fulfill this mission, the department of energy leverages the technical capabilities of National Laboratories and partnerships with the key private sector stakeholders to focus on Early Stage Research and transformative projects. Our organization is also the lead for providing energyrelated expertise to the federal Energy Management agency, also known as fema, our inner Agency Partners and administration as part of the department of energys Emergency Response activities. Oe serves as the lead organization for Emergency Support function 12, under the National Response framework, and as the sectorspecific agency for energy. As the lead for esf12, d. O. E. Is responsible for providing information and analysis about Energy Disruptions and to assist and facilitating the restoration of damaged infrastructure. During hurricanes harvey, irma, maria, nate, we have worked with industry and the federal, state, territorial and local partners to facilitate response and recovery. Overall, d. O. E. Has received 18 Mission Assignments and has deployed more than 110 personnel to the response efforts. Each of these storms have presented unique challenges to the energy sector. With respect to Hurricane Harvey, we saw peak electricity outages of about 300,000 customers in texas and louisiana. While offshore and Onshore Crude Oil and natural gas productions were disrupted by the storm, the greatest impacts were to the midstream and downstream oil and refining sectors. At its peak, more than 4 Million Barrels per day of Refining Capacity representing more than 20 of the u. S. Refining capacity was offline. It took several weeks for floodwaters to recede, but the refining systems in texas and louisiana have resumed normal operations. In addition, flooding closed two key injection points along the colonial pipeline, forcing the system to operate intermittently at reduced rates for several weeks before normal service was resumed. Hurricane irma, the second category 4 hurricane to make landfall in the United States this year, cost approximately 8 million electric customer outages from the caribbean to the southeastern United States. At irmas peak on september 11th, there were approximately 7. 8 million customer outages in florida. Three days later, on september 14th, power had been restored to approximately 5 million customers. 64 of those customers and five days later, restoration was at 98 . D. O. E. Is also playing a significant role in supporting the restoration Recovery Efforts in the u. S. Virgin islands and puerto rico from Hurricane Maria. In puerto rico, the u. S. Army corps does have the primary role in Emergency Restoration and rebuilding the infrastructure. But d. O. E. Has deployed personnel and equipment from the western power Area Administration to provide mutual assistance through a Mission Assignment from fema, and is working to facilitate additional mutual assistance with industry. Days after bruce walker was confirmed as the department of energys new assistant secretary for the office of electricity, delivery and Energy Reliability, he was on the ground in puerto rico, assisting other d. O. E. Personnel in coordination with the governor, prepa, fema and the army corps of engineers. Recently the governor and prepa have requested additional line workers and equipment necessary for the restoration of power. Secretary perry and our d. O. E. Team look forward to a thoughtful conversation focused on our response and Recovery Efforts for this Hurricane Season. And to focus on reliability, affordability and resilience of the electricity system. From hurricanes, as well as other extreme weather events. Id like to take a moment and thank the utility workers for their time and their efforts in responding to the Hurricane Season. Like any event, there is always some hard Lessons Learned and we look forward to improving our efforts. So thank you, and i look forward to your questions. Thank you very much. Next were joined by Ray Alexander to the director of Contingency Operations for the corps of engineers. Welcome. Chairman upton, Ranking Member rush and members of the subcommittee, my name is Ray Alexander, director of Contingency Operations for the u. S. Army corps of engineers. Thank you for the opportunity to testify today. The corps conducts Emergency Response activities under two basic authorities. The stafford act and public law 8499. Under the stafford act, we support fema. Under the National Response framework as the lead federal agency for Emergency Support function 3. Public works and engineering. Esf3 provides temporary emergency power, roofing and housing, debris management, infrastructure assessment and critical public facility restoration. Under public law 8499, we prepare for disasters through planning, coordination and training with local, state and federal partners. We assist state and local entities to implement advanced measures that prevent or reduce storm event damages. We repair damage to authorized federal projects and work with state municipalities to rehabilitate and restore eligible, nonfederal flood infrastructure to prestorm conditions. When disasters occur, core team and resources are mobilized across the command to assist local offices with their response to the event. As part of this mission, the corps has more than 50 specially trained teams supported by emergency contracts that perform the wide range of support missions i just described. These contracts are preawarded and can be quickly activated to execute many of these missions. This year, the corps has supported femaled, federal Response Operations and mults develop events including hurricanes harvey, irma and maria. Fema directed 37 Mission Assignments to the corps for Hurricane Harvey. Currently the corps has 195 employees deployed. The corps assisted in temporary emergency power and continues to support the state of texas with the development and implementation of a temporary Housing Project management plan. Debris teams led by subject Matter Experts continue providing state and municipalities with Technical Assistance to define requirements and monitor debris removal and disposal operations in 15 counties. Fema directed 81 Mission Assignments to the corps for hurricanes irma and maria. Currently, the corps has over 1,500 personnel deployed. As of this morning, the corps has completed over 1,000 assessments and over 500 temporary generator installations in the caribbean. This includes 250 assessments and 150 installations in the u. S. Virgin islands and over 750 assessments and 400 installations in puerto rico. Under fema authority, we are assisting puerto rico with the operation and maintenance of critical nonfederal generators across the island, as well. The corps has completed over 14,000 temporary roofing installations in florida, is on track to complete that mission by 4 november. We have also completed over 7,000 temporary roofing installations in the caribbean. Including over 2,500 in the u. S. Virgin islands and 4,700 in puerto rico. Roofing requirements have been extensive. Requiring additional material and construction support. Which initially slowed progress. We have adjusted, we have added additional capacity, and were seeing daily improvements. Corps debris subject Matter Experts provided Technical Assistance to counties across florida and georgia in response to Hurricane Irma and continue to provide oversight to five regions within the Florida Department of emergency management. The corps is working to remove an estimated 1 million cubic yards of debris in the u. S. Virgin islands and over 6 million cubic yards in puerto rico. The corps worked closely with u. S. Coast guard and the National Oceanic and Atmospheric Administration and local authorities to open harbors and navigation channels across all affected areas, critical to restoring commerce and the flow of commodities and essential equipment to reach affected communities. The corps worked closely with officials in texas and florida to manage local Flood Control reservoirs during a period of unprecedented rainfall. In puerto rico, core, dam and levee teams inspected dams with the Puerto Rico Electric Power Authority to stabilize the dam. Additionally, the corps cleared existing outflow conduits and placed emergency pumps to further reduce water levels in the dam and restore flow to a critical Treatment Plant that supports the needs of over 30,000 people. On september 30th, the corps received a fema Mission Assignment under stafford act authority to assist in conducting emergency repairs to the power grid itself. We are partnering with prepa, we have established a Senior Executive led task force to oversee work and provide Technical Assistance. The department of energy has embedded experts in our team and continues to assist in our efforts. Within two weeks of receiving this Mission Assignment, we awarded contracts for largescale temporary Power Generation to stabilize the grid in san juan and for additional line repair assets that will assist ongoing efforts by prepa. The corps remains fully committed and capable of executing other civil works activities across the nation, despite our heavy involvement in these ongoing response and recovery operations. We also remain ready and poised to assist in future events, should they occur. This concludes my testimony, and i look forward to answering any questions you may have. Thank you. Thank you very much. Next is deeann walker, the chair of the Public Utility Commission for texas. Youve got to be a happy woman today, as well. With the astros. Thank you very much for your invitation to appear here today. My name is dee ann walker. Im the chairman of the Public Utility Commission of texas. I have happily held that seat since september 20th, so im new to this. I believe i have a unique perspective on restoration from hurricanes. The state Operations Center in texas creates a what they call a tiger team of utility personnel that is located within the state Operations Center to help with restoration, to coordinate with federal state officials throughout an event. I have now served three hurricanes in the state Operations Center. Hurricane rita and hurricane ike. I was actually representing a utility in the state Operations Center during Hurricane Harvey. I was working for governor abbott, and was down in the state Operations Center working with the utilities to restore service. We believe that the electric industry and the infrastructure in texas fared very well during Hurricane Harvey, compared to past hurricanes. As has been stated, we had under 350,000 at any one time. We had more than that, but the utilities were continually restoring service during that time. The longest we had any customers out was for two weeks, and that was in the rockport area, which was the direct hit of the eye of Hurricane Harvey. So it took the brunt of it. During a storm, the puc, as i said, works with state, federal and local agencies to restore power. I wanted to focus the rest of my time on what we are taking as action items to better prepare for a new hurricane. Due to the amount of flooding that we had, some cities and towns, areas, received 60 inches of rain throughout Hurricane Harvey. Many substations in our area flooded for the First Time Ever. So we are looking at and we moved in for the First Time Ever mobile substations to help serve those customers. Were looking at whether or not its prudent for the state as a whole all of the utilities to get together and purchase these mobile substations to have on hand in such an event. Were also working with the utilities to elevate those substations when they rebuild them. So that we are taking care of hardening the system in the process of rebuilding. Ive also asked the state to look at whether or not we can better utilize utilities within texas to send equipment and personnel. We were drawing people from all over the United States under mutual assistance crews, which we greatly appreciate. But i would like us to look and see if we can rely on the texans that we have. Sps and the panhandle in el paso and far west texas never were called on to help. And obviously, they were closer than a lot of places. We have been working through the process with fema for how to entire connect their temporary housing so that we could have one seamless process for all utilities to implement. We are trying to do on the fly. I would like us to further address that process. In the meantime, before the next storm hits us. We also learned that not every utility is reporting outages consistently. In texas, we require that all utilities report outages to us and to d. O. E. On a county and zip codewide basis. But there is not consistency between the utilities on how that was being done. For instance, some of the flooded mobiles or some of the flooded substations, once they had a plan to bring in the mobile substation, they took those outages and moved them to planned outages. So they were no longer showing up as being impacted by the hurricane. I dont think thats an accurate representation, so ive asked to look at that. There are many other things that weve started looking at to correct and to hopefully do better. Im running out of time. I wanted to again thank you for your time today. Thank you. Next robert corbin, from the office of petroleum reserves, u. S. Department of energy. Chairman upton, Ranking Member rush and distinguished members of the subcommittee, it is an honor to appear before you today to discuss this Strategic Petroleum reserve. The Strategic Petroleum reserve or spr was established under the authority of the Energy Policy and conservation act in december 1975. At that time, u. S. Oil production was in decline, oil price and allocation controls separated the u. S. Oil market from the rest of the world, and a global commodity market for oil, as we know it now, did not exist. Today the Global Oil Market has changed the environment in which the spr operates. Although Domestic Oil Production has increased dramatically in recent years, its the largest Oil Commodity market in the world, making u. S. Consumers receiving price fluctuations. Thank you. Next robert corbin, from the office of petroleum reserves, u. S. Department of energy. Chairman upton, Ranking Member rush and distinguished members of the subcommittee, it is an honor to appear before you today to discuss this Strategic Petroleum reserve. The Strategic Petroleum reserve or spr was established under the authority of the Energy Policy and conservation act in december 1975. At that time, u. S. Oil production was in decline, oil price and allocation controls separated the u. S. Oil market from the rest of the world, and a global commodity market for oil, as we know it now, did not exist. Today the Global Oil Market has changed the environment in which the spr operates. Although Domestic Oil Production has increased dramatically in recent years, its the largest Oil Commodity market in the world, making u. S. Consumers receiving price fluctuations. A severe Global Oil Supply disruption today would impact domestic Petroleum Product prices. In the event of a Serious International Oil Supply Disruption, offsetting disrupted supplies with spr crude oil in concert with other countries that hold Strategic Oil stocks, can help reduce and increase an International Prices and the resulting adverse impacts that could otherwise occur. The spr maintains and operates four major oil storage sites. Two in texas and two in louisiana. The sprs current crude Oil Inventory is 670 Million Barrels, stored at 60 underground salt caverns with a design capacity of 5 Million Barrels. The spr is designed to provide the capability to draw down and deliver crude oil from this storage site to designated distribution points and a design drawdown rate of 4. 415 Million Barrels per day. The spr can physically begin to draw down crude oil in as little as two days of notification, and taking the time into account to meet sales requirements can draw down and deliver crude oil within 13 days of president ial finding. Spr operating costs are less than 25 cents per barrel design capacity per year, the lowest among Stock Holding nations. As a member of the International Energy agency or iea, the u. S. Has two primary Oil Stockholding obligations. The u. S. Must maintain Oil Stockholding inventories equal to at least 90 days of Net Petroleum imports. As of june 30th, 2017, the u. S. Held 149 days of Net Petroleum imports. The u. S. Must be able to contribute a proportionate share to an iea collective action in response to an Oil Supply Disruption based on its percentage share of iea oil consumption. As of june 30th, 2017, u. S. Must contribute 43. 2 of all barrels released during any iea collective action. As Global Oil Trade increases, the potential role of the spr to help mitigate Global Supply disruptions expands, regardless of the level of u. S. Net oil imports. Without the ability to replace disrupted oil supplies, Global Oil Prices could increase significantly and the u. S. And Global Economy could be harmed. Spr infrastructure has performed capably to ensure we are able to respond to every emergency release situation presented throughout its history. However, spr facilities are aging. A significant amount of infrastructure components are at or beyond their design life, and equipment will be further stressed due to nine consecutive years of crude oil sales. Congress recognizing the need to modernize spr infrastructure included provisions in the bipartisan budget act of 2015 to address this concern by authorizing the drawdown sale of up to 2 billion of spr crude oil over a fouryear period to carry out an spr Modernization Program. In response, the spr has initiated a major Capital Asset acquisition project to modernize aging spr infrastructure through systems upgrades and equipment replacement to ensure the spr can meet Mission Requirements for the next several decades. Hurricane harvey severely impacted u. S. Gulf coast crude oil infrastructure, closing refineries, ports and supply pipelines. Many impacted refineries were operable following the passage of harvey but were unable to secure crude oil stock to continue operations, resulting in multiple requests for Emergency Exchanges of spr crude oil. After assessing prevailing supply conditions and consulting with other federal agencies regarding the status of crude oil infrastructure, the spr received approval to execute six Emergency Exchange agreements. The first deliver res were provided on august 30th, two days after the initial request was received. Deliveries to the remaining companies also commenced within days after those requests were received, and continued until deliveries totalling 5 Million Barrels were completed on september 28th. These Emergency Exchanges helped alleviate the loss of crude oil supply, allowing the affected refiners to begin or continue operations that otherwise would have been halted due to the impacts of Hurricane Harvey. This concludes my statement. I thank you for the opportunity to speak with you today, and i look forward to answering any questions. Thank you very much. Lastly, on the first panel, frank rusco. Welcome. Chairman upton, Ranking Member rush and members of the subcommittee, thank you for the opportunity to discuss our past and ongoing work on Energy Resilience and particularly the effectiveness of the Strategic Petroleum reserve. In responding to domestic Petroleum Supply disruptions caused by extreme weather and other events. The spr was created at a time when Global Oil Supply was dominated by opec and oil markets were characterized by longterm contracts with fixed prices. At that time, a Global Oil Supply disruption as occurred during the Arab Oil Embargo had the effect of physical oil shortages, and in the United States and elsewhere, long lines at the gas pump. It made sense at the time for the spr to be comprised of crude oil, centrally held in cheap salt dome storage in louisiana and texas, near the nations largest refining centers. Today, Global Oil Markets are robust, and prices change to meet supply and demand so that physical shortages and long lines are less of an issue. In addition, the use of the spr has been primarily in response to domestic supply disruptions. Particularly those caused by extreme weather events. Rather than Global Supply shortages. My remarks will focus on how well the spr is able to respond to these domestic supply disruptions. The spr has been partially successful in responding to domestic supply disruptions in instances when gulf coast refineries and pipelines are operational, but crude oil supplies to these refineries have been disrupted. Today, Global Oil Markets are robust, and prices change to meet supply and demand so that physical shortages and long lines are less of an issue. In addition, the use of the spr has been primarily in response to domestic supply disruptions. Particularly those caused by extreme weather events. Rather than Global Supply shortages. Can not provide needed petroleum pru products to florida and other regions. For example, in 2014, d. O. E. Identified five regions. These include the west coast, which is vulnerable to earthquakes and tsunamis. Parts of six midwestern states vulnerable to earthquakes. A number of states vulnerable to extreme cold weather. And the entire coast from texas up to massachusetts that is vulnerable to hurricanes. With the exception of the small gasoline reserves held in the northeast, there are no other Petroleum Product reserves held in the spr in any of these vulnerable regions. Further, while d. O. E. Has recognized these vulnerabilities and conducted some studies of alternatives to the current composition and configuration of Strategic Reserves, it has not completed these studies. As a result, d. O. E. Cannot determine the efficacy of creating regional Petroleum Product reserves. In contrast to how the spr is configured, most other countries with Strategic Reserves have chosen to hold significant quantities of Petroleum Products in addition to crude oil, and some have chosen to spread these reserves out across their countries to be closer to centers of demand. For example, germany chooses to hold about 55 of its strategic stocks as Petroleum Products. France spreads its reserves across seven geographic zones that enable it to distribute Petroleum Products to Distribution Networks all over the country. The United States has benefited from european strategic stocks of Petroleum Products during past hurricane damage to gulf coast refining and production infrastructure. For example, in response to Hurricane Katrina in 2005, as prices of gasoline rose across the United States, shipments of gasoline from europe began arriving on the east coast within days. This mitigated the economic effects of the hurricane caused refinery and Oil Production shutdowns. As d. O. E. Undertakes a Modernization Program of its existing systems, this committee and others have requested that we undertake an evaluation of the spr, its size, composition, location of reserves and options for improving its effectiveness. We will report our findings in the next few months. Thank you. This concludes my oral remarks. Ill be happy to answer any questions you may have. Well, thank you all. At this point, well move to questions from the dais. Mr. Alexander, you said in your testimony that you the corps overseas is overseeing the work thats done by prepa. In puerto rico. Id like to ask the question, how has that gone . Because this subcommittee has tried to contact prepa, both by email and phone. Theyre not answering. There is no heartbeat that were getting back. So how has that oversight gone . Well, sir, perhaps i misstated. We have a task force, again, general officers, overseeing our mission to restore the grid as assigned by fema. What were doing with prepa, we are working in coordination and collaboration with them so that we can have welldefined, focused areas of operation. So were not working, you know, in each others area, and we ensure that there are no gaps. We are fully working with prepa. Were not working for prepa, but we are working for fema in coordination with prepa. The oversight of the corps Mission Assignment we believe is going well. Again, we were assigned this mission on 30 september. Within 18 days, we were able to award three major contracts. One for temporary Power Generation, a 230 megawatt power plant to put vicinity the palla saco are power plant in san juan and restore the power grid around san juan. Those generators have arrived, thief been installed, and we have an additional load on the grid in the greater san juan area as of several days ago. The other two contracts focused on line repair, transmission distribution line repair. Larger contract, 240 million contract. They have boots on the ground today. Theyre conducting assessments. They are starting to have crews arriving, and i believe, as i said in my testimony, we are ramping up quickly, about 620 by the end of this weekend. And that number will double by mid november. And then we also have a Company Named power secure. They are fully engaged, and they too have assessment teams on the ground. Their equipment is actually en route by sea now on a Ready Reserve vessel that should arrive on 3 november. Did the did the corps have any advance knowledge or working with prepa prior to the contract that they established with white fish and cobra . Were you aware of that contract before it was signed . No, sir, we were not. We were engaged in our temporary Power Mission under the stafford act. And we have been working that since the 6th of september. The news that prepa had independently, you know, committed in a contract to another company, we were not consulted. We were not aware. You indicated in your written testimony that the temporary housing plan includes establishing this is as it relates to texas 20,000 travel trailers and 4,000 mobile housing units. I presume that most of those are for folks that were actually displaced. Homeowners or families that were displaced. Do you know what that number is for puerto rico . If its 20,000 for texas . Do you know what the number would be for puerto rico . No, i do not, sir. Ms. Hoffman, i met with a number of medical pharmaceutical medical device companies, many with very large operations in puerto rico. They have you know, we are all aware of the critical need to get those facilities back online. Its a Public Health priority, because its so critical for patients to ensure that their products that are being manufactured there dont go into a shortage. How are you incorporating medical manufacturing approach to restore the grid in puerto rico . So thank you. Critical infrastructure, critical loads on an electric system is very important. Utilities and our conversation with the utilities with the fema and the interAgency Partners. We discuss what are some of those Priority Restoration efforts in helping helping with the communications so that we understand where some of those needs are, and where some of the activities should be with respect to restoration processes. And so those coordinations occur with fema, and with the local utilities and the territory itself. Okay. My time has expired. I recognize the Ranking Member of the subcommittee, mr. Rush, for five minutes. I want to thank you, mr. Chairman. Im really kind of curious not kind of very curious, about your new army corps of engineers. Information about the contract. The army corps of engineers were unaware of this contract. Is that correct . Yes, sir. The governor says he was unaware of this contract. Sir, i understood you to say the governor of puerto rico has stated publicly that hes unaware of this contract. The governor of puerto rico said he was unaware . Right. Sir, im not privy to that. I do not know. Are you aware that this contract is being cancelled, or has been cancelled . Sir, i understand that the governor has given the direction to terminate that contract. White fish and other contractors are theyre completing the last task they have been assigned so theyre still working on the island. Do you have any information about who executed that contract . No, i do not. Do you trust the prepa . Do you trust them . Sir, i have no reason not to. Again, were working in collaboration with them on restoring the power. Do you have any estimate in terms of how much additional dollars the cancellation of this contract will cost the American People . No, i do not. Secretary hoffman, the Economic Consulting firm who concluded that maria cost 1. 25 billion hours of electricity supplied to households which they say is the most the longest disruption in recorded history. And do you concur with their finding . I have to look at ill look at the information, but it is a significant duration for outage for puerto rico. And what is your best estimate on when power will be fully restored to both u. S. Virgin islands and puerto rico . So that is information that the governor, as well as the prepa is looking at, as well as partnerships with the army corps of engineers on the supplies that are needed, the resources that are required for restoring power. Some initial indications are that for id say 50 , i believe, from the army corps, has estimated that 50 of the island will be restored by the end of december, and the significant portion of the restoration will occur later on. Can you give us some insight on your opinions about the time line . Smaigt estimating timeline . There might be some others on the panel that might also have some idea about the estimated time line for puerto rico and also u. S. Virgin islands. Sir, as for puerto rico, we estimated 30 of the prestorm load on the grid would be restored by 30 october. We did achieve that metric on time before the 30th. I believe were up over 31, 32 today. Our estimate is 50 prestorm load restored by 30 november. And then as we go on into the new year, were estimating 75 by 31 january. Anyone else want to add . All right. Ms. Alexander, is the corps discussions with prepa or any Government Entity in puerto rico to ensure that when the grid is repaired, it would be constructed in a way that takes into account some of the Lessons Learned from this allon catastrophe so the american taxpayer dollars are not being wasted . Sir, we are focused on executing the mission weve been assigned, which is the restoration of the grid to prestorm conditions. The load. And we are coordinating with prepa as we do that. We actually are working with the department of energy on what a more resilient grid might look like as they lay the effort to develop recommendations and cost estimates. But for now were executing our mission under the stafford act which does not allow for any permanent construction or enhancement of the existing grid. You may the chair recognizes the vice chair of the subcommittee, the gentleman from houston, texas. Mr. Olson. I thank the chair. And welcome to all five witnesses. A special pony up to new chairwoman of the puc of texas, ms. Diane walker. My daughter kate is a junior from your alma mater, and she loves it. My first two questions are for you, mr. Alexander. What about harvey, what about irma . First of all, harvey. As you know, sir, i live in ft. Bend county, texas. When ft. Bend floods, it floods. Weve had four major floods in the past three years. Our drainage district works hard 24 7, 365, to make sure our Drainage Ditches are maintained. After the first major flood in 2015, the army corps told our drainage district, they need a section 404 permit under the clean water act to maintain the ditches. The maintenance of a Drainage Ditch is supposed to be exempt. The process under section 404. But the corps disputed referred to the epa. The epa agreed, its maintenance work, and the county should be good to go. But here we are. Two years and four floods later, with ft. Bend county still unable to fix this critical problem. And now harvey has made a bad problem much, much worse. These repairs cant wait. Texas and ft. Bend need to rebuild after Hurricane Harvey. Things are being made worse with erosion and piles of silt. We dont need red tape at the core, hindering maintenance project that should be exempt under section 404 fic of the clean water act. Will you guarantee me your office will work with my staff and county officials under judge bob aber to get this fixed asap to texas can protect their livelihoods . Sir, thank you. I acknowledge your concerns. Im generally aware of this issue in ft. Bend. And while i do not have all of the specific details here with me today, i can assure you, can guarantee you, the corps remains committed to working with our partners and your office to resolve this issue. Great. Asap. Please. Next question is about Hurricane Irma. Follows up on comments, questions from my colleague from illinois, mr. Rush. Sir, have you ever talked to someone on the ground in prepa . Have you yourself talked to someone on the ground at prepa about the situation in puerto rico . No, sir, i have not. Wow. Have not. Okay. Second round of questions is for you, ms. Walker. First of all, i want to thank you to your service to our state. I appreciate your work in guiding us through harvey. And i know you did an excellent job at the puc. Youve been our puc chair for 41 rather intense days, i do believe. And i want you to talk about how harvey is being with heavy rain as opposed to wind and storm surge. And how has that changed the impacts you have to address with, and what was the Biggest Surprise you had in recovery. And can we help with that surprise . How can we address your concerns surprises after Hurricane Harvey with our grid there in ft. Bend county, texas . As you noted, wind damage is very different than flooding damage. And houston did have the flooding damage during this hurricane. The Biggest Surprise was the amount of rain. There were substations such as memorial substation, that took on water that had never taken on water in the 50 years it had been there. And so we were having to come up during the storm with ways to address all of the flooding. Moving crews. Frankly, they were using aquatic equipment that they had never used before to get to things, because of the flooding. Houston also downtown experienced heavy flooding. I believe i heard that 83 of the downtown buildings lost power, and i think some still are without power. Luckily the Medical Center did not. We have reinforced the Medical Center time and time again since hurricane allison. It wasnt a hurricane, but since allison so im not sure you can pass anything here that would help us. We have continued to learn from each storm. Each storm is different. Hurricane ike was a wind event. It took out out of 2. 2 million customers, took out 2 million. It was a much different storm. Again, being a member of the that lives in the area, i have to thank you so much. Because when harvey hit my house twice in two days, we have never, ever, ever lost power. So thank you for that. I yield back. Thank you. I recognize the Ranking Member of the full committee. Mr. Pallone. Thank you, mr. Chairman. Obviously, in addressing the panel, i have to say express my concern that the federal response so far is nowhere near where it needs to be. You know, reports indicate nearly 70 of americans on the island are without electricity. The New York Times recently described the situation in puerto rico, quote, like going back in time. Most of my questions are of mr. Alexander and the corps. Mr. Alexander, who is in charge of the effort to restore power in puerto rico and the Virgin Islands . Is it the army corps or another agency . Sir, again, our mission, assignment from fema, is to restore the grid to prestorm condition in coordination, collaboration, with prepa. Thats fine. I just wanted to get you know, you answered my question. Is there a Strategic Plan for these federal restoration efforts . Sir, the if you look at strategic beyond the prestorm restoration thats being looked at by interrogation and other departments in the inner agency. So the d. O. E. Is more responsible for a longterm plan, is that what you are saying . For full permanent grid restoration enhancement, yes, sir. And youre more involved in trying to get things up and going. We are involved in trying to restore the grid in different sectors as expeditiously as possible. Concentration initially on san juan and then out to seven larger municipalities on the island. And then finally preparing and transitioning to prepa for further service. How Many Companies i understand the core has several contracts with private companies for restoration work. How Many Companies has the core contracted with to do the grid rebuilding work in puerto rico . Sir, weve contracted with three companies. Will the army corps provide the committee with copies of those contracts so we can get an understanding of your scope . Would you be willing to do that . Sir, i have to talk to our contract chairman because its sensitive material. If you can. We heard varying reports how long it will take to restore power to the citizens of puerto rico, by some accounts it will be many more months until power is fully restored. Mr. Alexander, when did the army corps receive this mission to repair puerto ricos grid from fema . On 30 september. Do you know why it took so long to give the army corps their mission . You basically said the short term repairs in san juan and several areas under your jurisdiction, the long term and resilient would be more doe, correct . Yes, sir. Let me turn to mr. Hoffman, doe witness, miss hoffman, im sorry. If the army corps is not responsible for making long term improvements, is the doe taking the lead on this effort . So the department of energy is looking at strategies for longterm improvements with respect to strengthening the grid. So ideas such as Energy Storage, micro grids or mini grids, options for rerouting power better Situational Awareness. All those activities are activities that we are working at. But once again, the actual financing and implementation is the responsibility of the utilities or the governance structure that will be decided for puerto rico. But you stated in your testimony that doe is leveraging the National Labs to develop longterm solutions to improve resiliency. Whats the status of that effort . So the National Laboratories we have been in active discussion with the Grid Modernization Lab consortium, and looking at areas such as planning activities, Situational Awareness, looking at analysis type activities as well as hardening activities. What this is going to have to be done is married up with the existing rebuilding process and looking at how some of the Innovative Solutions can be married in and built upon the existing rebuilding, so thats going to take time and its going to have to run in close coordination. So we have seven technical experts in puerto rico working with the army corps to understand the timing and extent of where their activities are going and opportunities for the future. All right. Thank you so much. Mr. Shimpus. Thank you, mr. Chairman. Thank you, mr. Chairman. Im going to try to go in three different direction. Mr. Alexander, im a former military officer. Someone has to be in charge. So that i think its very troubling that we have you all there trying to restore the grid, and youre not in consultation with prepa. So, you know, the basic question is, if youre going to call and yell at someone to get the job done, does anyone know who were going to call . Mr. Alexander. Sir, my job is really here yeah, youve been very good at trying to answer this tactfully. But who do we call . Fema. We call fema. Fema. Okay. Did we get our answer . Thats the authority were operating under. I will say this. From our chief of engineers to our South Atlantic Division commanding general and a number of colonels on the ground in puerto rico, they collaborate and meet with prepa on a daily basis. Okay. So i think we probably should have fema here. Thats why we should have had fema as part of our committee hearing. So maybe well do that as a followup. Because obviously, you know, we all know the history behind prepa and the bankruptcy and their questionable practices and their ability even to provide power before the storm. Does anyone know why it took and puerto rico is separate because its an island. Its far away. Im not sure of other states usually have with the utilities, have mutual Assistance Agreements. And youll see folks flow. Does anyone know if prepa had mutual Assistance Agreement with any stateside utility . Anyone know that . It is my understanding that prepa had not asked for mutual Assistance Agreements early on in the storm. They just did ask for it. Yeah, ive been told it took five weeks prepa took five weeks to ask anybody for help. Yes, the letter was submitted, two days ago, i believe, for mutual assistance. But generally, the industry is very forward leaning in discussing with utilities and activating mutual Assistance Agreements. We see it all the time. The trucks are on the road, whether its an ice storm, whether in my neck of the woods, a tornado. Whether its hurricanes. And im sure i have members of my congregation who are utility workers and theyre gone. Thats a disappointing statement. The other i also wanted to put on the record, i think we wanted the Nuclear Regulatory commission to submit letter for the hearing because the hurricanes did come through, some of our locations where we have Nuclear Power plants, and we think that would help build the record of the resiliency base load power, the importance of that. And i would ask if we finally get a letter, mr. Chairman, were allowed to submit that for the record. And the last point, i really want to go to mr. Rusco. And maybe mr. Corbin. Though the crude oil world has changed significantly since the establishment of this bill. And ive been here a long time, 20 years. I think one thing is for sure, we have always bought high and sold low. Is that a safe statement . In the history of the spro . In the purchase of crude hoyle . Mr. Rusco, you want to answer that . I think just by the nature of when it was established, you know, it was established after a crisis. And usually when d. O. E. Has had authority to expand its quickly. After a crisis, so it has been at higher prices. So we have a history of buying high and selling low. At least buying high. So, and your testimony talked about the world is really now, the need is for immediate refined product, not base crude oil. In the old days when we were worried about deploying forces to europe and sealanes being closed and importation of crude oil, a sproel made sense. Am i right, based upon your testimony today that youre saying maybe regional systems well, actually, regional systems which the doe was supposed to analyze, and that there would be more focus on refined product . I think that its fair to say that most other countries that have Strategic Reserves have chosen to do that for the reasons that you state. Thank you. I hope my colleagues will follow up on those questions. I have run out of time. I yield back. The gentleman from california, mr. Mcnerney. I thank the chairman, and i thank the witnesses this morning. Mr. Alexander, you mentioned prevention as a part of the mission. Within the stafford act framework, can the electric infrastructure of puerto rico be rebuilt to improve Grid Resilience and using Sustainable Technology . Sir, the stafford act allows us to restore the grid to prestorm conditions. Meeting u. S. Code, electrical code, in order to satisfy life, health, safety requirements. Some have interpreted that to mean we are making a more resilient or betterment on the system. But that is not the case. Okay. Ms. Hoffman, has there been a credible estimate of the cost difference between rebuilding a system thats resilient or just rebuilding the old system to look like it did before . There has not been a cost estimate taken in consideration. The amount of work that has been done, and that is being planned to be accomplished from the army corps of engineers. So there has been discussion around different advanced solutions. But that needs to be baselined with the work and building plan out. So that needs to be evaluated still. So it could be building a system thats both resilient and sustainable wouldnt cost much more than just rebuilding the old system, up to code. I think the analysis has to be completed. Okay, thank you. The office of electricity has worked on state Energy Risk Assessment initiative that helps states understand risks to their infrastructure. Did the Virgin Islands and puerto rico have a risk pool filed before the hurricanes . I would have to go back and look into that. Im not sure whether they did do a risk profile with the state assessments. Thank you. Mr. Stafford, is it true that the National Science Foundation Facility at the Radio Telescope has an infrastructure thats supported fema operations subsequent to the hurricane . You said stafford. Oh. Mr. Alexander, excuse me. Thank you, my colleague from illinois. Go ahead. Sir, now that i know it was me you were talking to, could i ask you to please repeat the question . Sure. Is it true that the National Science Foundation Facility Radio Telescope infrastructure survived well enough to survive as a fema Operations Center . Sir, im not aware of that. Okay. I was going to ask you what differentiated that facility that survived from facilities that did not survive. Does anyone have a clue to that question . I do not. No . Ms. Walker, you highlighted the inconsistencies in tracking outages in the system. Would better tracking of outages be beneficial . Or how would it be beneficial . It helps us determine where to deploy services, such as we call them pods. But water, food, whether or not outages are going to be restored quicker. And we know how many in the area have outages. We are able to then deploy the needs for that Community Better with that knowledge. Also working with the corps of engineers on deploying temporary generators. It just helps us to understand where to deploy for those needs. Do you have the authority to require utilities to report outages . Yes, we do. Is that authority a state authority or is it a federal authority . Its a state. Thank you. Ms. Hoffman, how does the d. O. E. Go about helping utilities prioritize which lines, substations and so on should be put back online first . So thank you very much for the question. Utilities have a restoration plan as they look at their outage management system. They look at prioritization for transmission lines to get the most customers on as soon as possible. And then work down into the distribution system. But they first must do Damage Assessments, and assess really the extent of the damage on the system and accelerating that Damage Assessment really helps a utility outline the restoration process. What the federal government does is look at where the Critical Infrastructure is, and is there any special needs with respect to storing large loads or storing Critical Infrastructure. Whether it be telecommunications facilities, hospitals. And so thats an ongoing discussion. But it gets melded with utilities restoration plan and the utilities commitment with respect to how theyre doing the restoration. I yield. The chair recognizes the gentleman from ohio, mr. Latta, for five minutes. Thank you, mr. Chairman, for calling this hearing today, and thanks to our witnesses for being here. Ms. Hoffman, if i could ask you my first question. You noted one of the reasons for the rapid electrical recovery in florida was the nearly 3 billion in grid resiliency improvements since 2006. Could you elaborate what those improvements were, and will doe be working with florida Going Forward to identify additional hardening practices . So, thank you, sir, for the question. The investments in florida have really stimulated activities that looked at first Situational Awareness, so looking at advanced metering infrastructure to provide the Situational Awareness that we have been talking about, because once you have that awareness, you can do an outage management system. You can actually look at how you can advance and preposition crews for restoration process. It also has allowed for advanced switching to minimize the amount of customers without power. You can minimize damage to the system and other things the utilities have done is hardening their infrastructure by looking at stronger poles, looking at concrete poles, steel poles versus your traditional wooden poles. But all of these capabilities are pulled together with an advanced kind of communications and control system and a Situational Awareness system that can help with the restoration process. Besides the youre talking about the different types of poles. Are there other things they were doing on hardening, did you say . So with respect to substations, looking at this would probably go more for sandy but also looking at hardening substations and being able to and how did it go about hardening the substations . Pardon . How do they go about hardening the substations . So in hardening the substations you really look at increased capabilities with respect to duration, being able to support prevention of damage from wind but also from flooding. So it goes back to being supporting infrastructure so that you dont see the flooding damage that can occur. Thank you. Ms. Walker, if i could turn to you. Can you elaborate on working with the federal agencies after Hurricane Harvey and could you see any improvements that need to be made between federal, state, local, industry, all working together out there or whats your view as to what happened and is there anything that can be improved on . I think there are improvements that we can make and in my view is that the time to make those are before the next storm. I found myself in the state Operation Center addressing issues that i think are better to try to handle after the storm and get ready for the next one. Some have to do with the interconnection for the fema temporary housing. Some are could you elaborate on that, on the temporary housing . Theres been different press reports on that. Would you elaborate on the temporary housing with fema . Once they bring in temporary housing, its not set usually right at the meter that the house is on so the utilities have to set a new pole. Theres processes in texas for each utility and my guess is throughout the country for each utility on how those processes are to interconnect the new customer, a new facility and we would like to streamline that for all utilities in texas. We had five major utilities impacted by harvey and then multiple coops and municipalities, so were hoping to have one process for fema to have to go through instead of multiple different processes. So thats an example. Okay. Any other examples you can think of that would be how to improve things out there . We understood or i understood during Hurricane Harvey that there were issues, choke points as they were called during hurricane ike related to the processes, inspection processes for cities to get homes reconnected once theyre rebuilt, once theyre remodeled and so i think thats something we can address Going Forward, how those inspections are done, who does them to make sure we have enough people on the ground. It was during recovery. Its not to me the time to try to be addressing things like that and i just think that thats something we can look at Going Forward. Thank you very much, mr. Chairman, and my time has just about expired. I yield back. The gentleman yields back. The chair now calls upon the gentleman from pennsylvania, mr. Doyle, for five minutes. Thank you, mr. Chairman. Ms. Hoffman, welcome back to our committee. Always nice to have another penn stater here at the committee. Let me ask you, in your testimony you explained does role in restoration and Recovery Efforts and those areas affected by recent hurricanes and a doe piece from 2015 published in power and Energy Magazine thats still on your energy. Gov site, explained, and i quote, both the frequency and intensity of these disaster events have been trending higher in recent years with seven of the ten costliest storms in u. S. History occurring in the last ten years. These weather disaster events represent one of the most significant threats posed by Climate Change. That was published in 2015 and since that time weve witnessed the most extreme month of hurricanes that has ever been recorded earlier this year. So i want to ask you hows the department of energy responding to this increasing threat of Climate Change and extreme weather events . So the department of energy is looking at all hazards including extreme weather as we look at investment opportunities, but Research Opportunities for advancing our electric grid and so a lot of our Research Focus on advanced technologies, Energy Storage capabilities, advanced mini grids or microgrids as theyre called. Were looking at advanced capabilities that the Utility Industry can build and invest in for hardening and improving the infrastructure. I mean, exactly. In fact, that article goes on to detail the smart grid r d program which is designed to improve Grid Resilience and also modernizing the grid through the adaption and integration of advanced technology. And so your testimony you explain your recommendation for the rebuild is being formed in consultation with the National Labs. And a presentation earlier this year explained the importance of distributed generation calling it a large factor in developing resiliency with Clean Energy Technologies and solutions. So my question is, is the department in making recommendation to those that are helping rebuild the grid in puerto rico, which will essentially be a brandnew system, are you urging deployment of distributed systems and renewables . So distributed generation, combined heat and power, which is probably the most efficient form of distributed generation, is an option that should be considered in any sort of restoration improvement process. But one of the things were going to have to think about moving forward is how were going to repair systems if another emergency happens and as you look at puerto rico, which had, i believe, over 8,000 solar panels there. What is the process in which the department of energy and the restoration activities in the next event, how are we going to orchestrate the repair of those systems . As you look an efficient restoration process, there is an advantage to restoring the Core Electric grid. So microgrids might be a good balance between the two if looking at sighting generation closer to load. It has to be an individual evaluation with respect to the state of the system and the opportunities from that point of view. Thank you. Let me just ask anybody on the panel, does anyone have comment regarding femas resistance to authorizing reconstruction aid . My understanding is this makes local governments and local utilities ineligible for longterm grants and im also concerned that because puerto rico is only available for only eligible for emergency services, that these contracts dont end up following federal procurement rules and we end up with situations like whitefish energy. Has any of your agencies weighed in on this topic . Is there an expected timeline for action on this . Anyone . I mean, fema authorized in ten days in houston, in texas, and i believe in a couple weeks in the Virgin Islands but yet theres still for some reason this hasnt been fully authorized. They claim theyre working on it. Theyre close to it. Can anyone explain what this hold up is and why its taking so long . I think youre right. When someone said we shouldve had fema up here. Fema should be sitting on this panel too because a lot of the questions we have need to be answered by them. Let me ask, any panelists have suggestions for any highly beneficial action we could take to help expedite the rebuilding efforts in a prudent, sustainable manner . Can you give any suggestions to this committee on what we should be doing that were not doing right now . Sir, if i may add some comments. Im glad to see penn state stepping up to the plate here in at least answering the question. As we look forward to investing in resilience, i know its something that the administrator of fema is looking at as well as the department is how do we build in resilience and how do we think about that upfront investment ahead of a disaster and look at what funds are available to really think about investing for resilience. The idea that our citizens are going to go another three months without electricity is just unconscionable i think. Yield back. Gentleman yields back. The chair now calls upon the gentleman from ohio, mr. Johnson for five minutes. Thank you, mr. Chairman. I appreciate the opportunity to ask of this panel very important hearing that were having today we saw the effects of the hurricanes and how the destruction that occurred during and afterwards, how that affected not only the areas that were hit but other regions of the country as well since so much of our Energy Resources reside there on the gulf coast. So mr. Corbin, how much does the northeast gasoline Supply Reserve cost on an annual basis . Lets get that question out of the way first. Thank you for the question, mr. Johnson. For the northeast gasoline Supply Reserve, the average storage contracts which are for leased commercial storage for the product are approximately 19. 60 per barrel per year, and when you include overhead costs include Quality Assurance and administration of your i. T. Sales platform in the event you have to release the gasoline it comes to a little over 20 per barrel per year, sir. Okay. So is the higher per barrel cost of storing gasoline versus crude oil a good use of taxpayer dollars, do you think . Thats really not for me to decide whether thats a good use of taxpayer dollars. Youve got an opinion. I will say, mr. Johnson, that in terms of the cost of storage for Refined Products, the United States has out of 14 countries that participated in benchmarking studies that are Stock Holding countries, the u. S. Has by far the highest cost for gasoline storage out of the 14 countries. Okay. All right. Also, mr. Corbin, continuing on, the spr is almost entirely located in the Gulf Coast Region of the United States limiting its ability to respond to disruptions in other parts of the country, particularly if we were to have a repeat of what we saw recently. For example, the west coast has relatively few pipelines that are connected to the spr meaning that some Petroleum Products must be shipped by truck, barge or other domestic methods or by tankers, even, from foreign countries. These modes of transport, obviously, are slower and more costly and limit the usefulness of the Strategic Petroleum reserve. So how would expanding in your opinion, how would expanding the number of spr locations across the country enhance the effectiveness of the spr . First, i just like to make a correction to your statement, sir. There are no pipelines directly correcting the spr to the west coast of the United States. The spr as i mentioned in my testimony are crude oil is stored in underground salt caverns in two sites in texas and two in louisiana. Salt Cavern Storage is very inexpensive. We have the lowest operating cost of any Stock Holding country in the world for our crude oil. There are no salt domes along the west coast of the United States. There are some outside of the immediate gulf coast area but they are not theyre not significant. So crude oil storage would be problematic on the west coast. So youre basically saying i dont mean just the west coast, i mean other regions of the country as well. The question centered on the west coast. Youre saying in your opinion developing other storage areas for the spr around the country in different regions would be problematic . For crude oil storage. Now in discussions that were mentioned by mr. Shimkus earlier and talked about refined product storage, the u. S. Government currently has two Refined Products reserves, the northeast gasoline Supply Reserve and the northeast Home Heating Oil reserve. Theyre both very small. 1 Million Barrels apiece. They are intended to meet regional supply disruptions. There are challenges associated with products reserves regardless of the model used. Both of the product reserves that are currently in existence, they are essentially government owned refined product in leased commercial storage facilities. In any product reserve with that model, theres an initial refined product acquisition cost associated with it. In studies that we did in pad five which is the west coast and in the southeast u. S. , my staff found that there is little to no spare commercial storage capacity, and as i mentioned previously, the leased commercial storage costs are high. Okay. All right. Mr. Chairman, i yield back. The gentleman yields back. The chair now calls upon the gentle lady from florida. Ms. Castor, for five minutes. Thank you, mr. Chairman. And i want do thank chairman upton and Ranking Member rush and the professional staff for bringing this hearing to be. And thanks to all of our witnesses. There is a very serious tension that the congress has to address as soon as possible. On the one hand we need to restore power in puerto rico and the u. S. Virgin islands as quickly as possible. But on the other hand, congress has an overarching responsibility to protect the taxpayer from future losses by building a more resilient, modern distributed grid. With better technology, technology, by the way, that has largely been funded by the taxpayers that we see in our National Laboratories that is that is used by utilities and businesses all across the country. Senator ramon luis nevus, who is in the audience and is going to testify in the next panel, is a former chairman of the Puerto Rican Senate committee on energy, and he said the current grid is obsolete, the grid before the storm, before the hurricane. He said appropriating taxpayer money to just repair an old 20th century grid would be a waste of resources, and in fact, ken buell, the director of Emergency Response and recovery with the u. S. Department of energy stated we really should think in terms of rebuilding at this point, not just repairing the old grid. The problem that weve all got to grapple with is prepa is largely in debt. They do not have the wherewithal now to take the lead on this. They have governance problems. They have gosh, what else do we have to know after this whitefish contract controversy . I think we have a very significant responsibility to protect the taxpayers here. A few weeks ago there was a congressional briefing provided by the department of homeland security, fema, the u. S. Army corps of engineers was there and they also relayed that they only have the authority now to go in and make repairs and not do the kind of rebuilding of a modern grid that needs to happen. In fact, mr. Alexander in your testimony you say that your mission right now is to repair the power system to its prestorm condition, is that correct . Yes, maam. So what kind of ms. Hoffman, what kind of direction do you need from the congress to begin to go beyond a planning stage and do something that your very own director of Emergency Response and recovery has said needs to be done . And do you agree that you need that authority to go beyond repairing . So i think there has to be an ability for the department of energy to work closely with prepa in planning and actively engaging and discussing what some of those advance Technology Solutions are so the form has to be codified so that there can be active engagement and discussion of what are the opportunities. I know that prepa has their own plans and their own activities but how do we really take the advancements so you think it would be helpful for congress to provide additional clarity so that you can move forward to do what on a bipartisan basis, what experts have advised that needs to be done. Yes. And the Virgin Islands. Yes. Okay. Weve got to do this with a sense of urgency, mr. Alexander, how do we do this as you keep going on to repair, what kind of advice what kind of clarity do you need from the congress in maybe the next emergency a package that would be something that would allow you to go beyond just repairing the old obsolete grade and move forward on something that would protect the taxpayers . So while we recognize that the prestorm grid was not in good condition, the current authorities under the stafford act and the mission assigned for fema limits us to restoring to prestorm condition. I think this is ultimately a policy decision. Do we need to relook at the stafford act as written . Thank you very much. In previous emergency aid packages for Superstorm Sandy and katrina, its been the congress that has been able to go beyond the stafford act that limits the government to just going and repairing what was and building ip, instead, new resiliency, whether its in housing or defense installations and things like that. Those previous emergency aid packages, we have never had a blackout and destruction of an electrical grid the scale of this ever before in the country and thats why this is something new this committee needs to work on together with our colleagues in the senate and hopefully with doe, as theyve expressed theyre already doing some of this planning. To put this into action its going to be our responsibility to actually pass that authorization in the next emergency aid package or before, and i yield back my time. The chair now calls upon the gentlemen from the commonwealth of virginia, mr. Griffith for five minutes. Thank you very much, mr. Chairman. I appreciate it. Ms. Hoffman, during the hearing before this committee, secretary perry mentioned that microgrids could be a solution to quickly restore electricity after future Natural Disasters. Im also interested in how Microgrid Technology could be used to provide power to rural and rural mountainous areas of the country. Do you believe puerto rico could benefit from microgrids and if so, how . Thank you very much for the question. Microgrids give an opportunity to bring generation closer to the load and be able to manage supply and demand on a more local basis. And in puerto rico you have the generation on one side of the island and the load on the other side of the island. So ultimately you really would like to be able to create a mini grid or microgrid that would be able to balance that in a different form but that does require generation and it does require load management and advanced communications and controls to be able to manage that on a more localized basis. So you look at things such as Energy Storage and other generation that can be meshed very well with a local distribution system. Would you see that as exclusive of the current type of system or would you see it as ancillary except in times of disaster. Ideally i would love to think about how do you build off the existing system and capitalize on the existing investment, where it is electrically feasible and once again that requires close coordination with the existing infrastructure. Whenever utilities look at isolation or separation of the grid and look at microgrids, theyre looking at utilizing the existing assets and being able to build upon those assets with new technology and new capabilities. And if youre suddenly cut off from as weve seen in puerto rico from your supply of either electricity or the fuel to produce that electricity, doesnt that require that the microgrid also has a fuel source that it can tap into in cases of emergency . Absolutely. You need a fuel source. You need redundancy, you need to be able to insure reliability of the microgrid, whether its a utility owned or a private sector owned. You have to have that redundancy and capability for your customers. Appreciate that. What are the current limitations associated with the Microgrid Technology, if any . So some of the current limitations are really looking at microgrid controllers, to be able to have an ability from a standardized form, to be able to look at control of the microgrid. Looking at cyber security. Regardless of who owns the electric grid and how the electric grid is developed, you have to be secure. You also have to have the capability to dynamically manage supply and demand so looking at some of the advanced control solutions and things along those lines as well as generational technology. Now let me ask you this, can you envision that a microgrid might be as small as a power source that would handle a hospital and its needs or a factory and its needs for short periods of time as a part of the system as a whole but also in times of emergency be able to take care of those needs where weve seen problems in puerto rico and other places . So absolutely. Weve seen microgrids at universities campuses, at hospitals. It can be as small as one wants to define a microgrid but can be larger from a mini grid point of view if you want to support multiple services in a locality. I would assume that based on what weve already discussed that if you had a for some reason in a Natural Disaster, your fuel source was damaged but the rest of the equipment was still good, it would be easier the fuel than it would be to for the federal government to come in after and drop in the fuel than drop in a new system. Is that correct . I think that has to be evaluated on the system basis to be fair. Youre bringing in a lot of fuel in it comes to what really is it roired for a Cost Effective restoration. What were talking about is fwet getting the power back on for as many customers as possible. As efficiently and effectively as possible. And so in some cases that maybe putting in reestablishing a grade system and grid net work. In other cases in a hoe kal community thats very far and isolated it maybe putting on site generation and creating a grid. In the near term. Until lines sp power can be restored from a main grid point of view. I appreciate that. We have a lot of coal, natural gas and a lot of coal. That might be an answer for us and others to have the fuel source available. I appreciate it very much and yield back. The chair calls upon the gentlemen from iowa. For five minutes. Thanks to the panel today for your excellent testimony. A lot of graelt questions. I want to join in with everyone else and expressing the fact i was heartbroken by the devastation of the most recent storms. I think its unfortunate well see a lot more of this down the road. Woel be faced with the issues. Across the country and many represent districts that have been affected over the yores by this devastation. I represented cedar rapids, iowa for six years. Back in 2008 we had the flood of the century the flood of whatever number of centuries and the river crested at 31 feet. Nine feet over the previous record. 2. 5 billion damage done immediately in cedar cedar rapids Economic Loss of probably same. And they have been through a lot like a lot of communities around this country. Most recently in puerto rico and texas and florida. I want to address my concern more to mr. Alexander. With respect to the core. The core i know ranks the projects and well have a will the of projects coming up. Projects for reconstruction for flood mitigation and the benefit cost ratio has to be one to one. Cedar rapids was 1. 2 to one. Authorized the project go forward in 14. We havent seen any movement on it in terms of funding. This will happen in other instances too. Where to prioritize and put the money. I have a lot of concern with the benefit cost ratio. It seems awfully bureau cattic to the folk in the community to prevent floods in the future, can you address that issue and give us any hope at all that not just cedar rapids, iowa but the communities will be faced with flood mitigation down the road might get some reloaf and see projects built . I am familiar with the benefit cost ratio and prioritization. And the needs are many. But the budget is limited. My focus is on operations. And to adequately address the question i would have to refer personnel and have the staff coordinate with them. I suspected i might be the case. Ill go ahead and submit a question. If you can get a answer from the relevant person that would be great. I want to bring up this issue more than anything else. Because Going Forward this is going to cost billions of dollars for reconstruction. And the communities. And a lot of them face the same questions that cedar rapids faced in 2008. And a lot of communities. It is something that well have to pay close attention to and resolve the issue. Folks will be depending upon the funds to make sure they can go forward. Thanks mr. Chair. Ill yield back. The chair calls upon the patient gentleman from West Virginia for five minutes. Very patient. Very patient. Thank you. Given the after math and all the discussion here we have had about the Natural Disaster we have had in florida, texas and louisiana. Puerto rico. I really want to i plaud department of Energy Efforts to refocus the narrative and discussion about reliability and resilience. Because it really it under scored how serious that problem is. If we dont address it. So thank you for what youre doing and for secretary for focusing on that. That can have impact. My question along the same line, has to do with the pet row creme kal industry and the houston and louisiana all the gulf coast. We were so hard hit when the category 4 hit there. That it wiped out or shut down 17, there are 23 crackers in the area. 17 of them were shut down. One is still out. 60 of the production of poll lit lean and were lost for a period of time. It showed how vulnerable we are the in area. In contact with folks that have reached our office that because of that slow down because of the lack of cracker facilities to be able to provide the east lean and proep lean. Around the country, that Companies Across america to use your plastic resin are slowing downment as a result. One company particularly in my district was working 7 days a week. Now down to five. Because it cant get the plastics. So this thing is serious about. What we have done or what i think deo maybe has an interest id like to hear more is rather than taking a page from the stra teet ij reserve in one location. What if we were to locate it in storage in northern appalachian area. So we can have a secondary supply. A secondary source to be able to provide that for the pet row chemical supply material for around the country. Do you have a thought about that . From does position. Where they maybe on having a secondary its not replacing by any stretch. Just having something in another location. So its not vulnerable to weather. So congressman you bring up an important issue. Location, location, location. Diversity is very important. And as we look at any sort of whether its fuel product, chemical product, having and thinking about having flexibility and where that product is developed also looks at our security and resilience for the nation. So i understand that in the appalachian area theres a lot of natural gas resources. And by product of natural gas and the ability is e that i know. I know the secretary had a round table discussion and is looking at the opportunity. But brings it brings up the important point that we need to think about diversity. And generate but product diversity. In the United States. Following up on that is that during hast years appropriation process, we had our office introduced an amendment to the appropriation bill to see that a study was under taken to confirm whether or not there was an interest or possibility in potential for having it in the formation. Do you know what the stat thats been since may, do you have a status on how far along if it has been under taken yet to make a determination of the feasibility of locating it in a secondary storage . So i understand the department is under taking a study in the area. And it is my understanding that this study will be complete in 2018. Do you have an idea when in 2018 . December or september or october . I dont have that. Okay. I will get back to you. I appreciate it. I yield back. The chair calls upon the gentleman from the bay state. The old mine state. For five minutes. All those names work. Thanks to the panel. I want to ask you to step back in terms of the core relationship to the disasters that have been occurring with more frequency. And give me a sense of how much the cores mission and effort and sort of the deployment of its you know various projects has changed over the last few years. In either response to the disaster that were seeing. These Natural Disasters. Where an anticipation the frequency of them will increase. Is that an analysis thats happening . Can you cite some trends in terms of the cores projects around the kind of requests that come in that are related to resiliency and adaptation and so forth in addition to just efforts to respond to things that happen . If you could give that kind of 30,000 foot perspective that would be helpful. Thank you, sir. First, every year following a storm season we do an after action review. We identify Lessons Learned and we work to develop and establish best practices. So we can improve ourselves. Train accordingly. To work with state and local governments to help them prevent work toward mitigation of disaster. We are always looking at how we can improve our Critical Infrastructure. We have an ageing infrastructure. That is a separate ash. We acknowledge that infrastructure needs to be resilient in order to with stand storms such as this. Flooding on the mississippi. Tornados out in the midwest. We are looking as we move forward and develop and study projects and future projects. Were looking at ways to ensure that a greater degree of resilience is incorporated in the designs. Are you seeing an increase a marked increase or something measurable in the kinds of proposals that are coming in to the core that relate to these extreme weather events . Either responding to something thats happened or projects that are anticipating increased exposu exposure from these events . And is the core has the cores kind of scoring system for projects then adjusted in any way relative to whats been happening with these kinds of di saers and weather events. Im not in position to adequately address your question. I can say we do every year. We have requests to for additional flood damage the mitigation projects. How can we increase the resilience and levy systems. And you know support mitigate flooding in low lying areas. Floodplains and things of that nature. Id appreciate if it were possible to go back to the core and maybe after the analysis following this Hurricane Season, has been completed. To see if you could give us some information about trends over the last few years. In terms of the number of projects that fall in to that kind of a basket. And as i said whether the core is putting that analysis and thinking into a Strategic Plan for the core Going Forward. That may lead to creating different sets of priorities for projects based on some of these issues. If thats something certainly getting that analysis, i assume we can get some report on the analysis thats done on an annual basis that would be helpful. Any additional perspective you can bring on those kinds of trends would be helpful. Yes, sir, we will. I yield back. Chair calls upon the gentleman from missouri. Mr. Long for five minutes. Welcome back, billy. Thank you. Miss hofman ten or so years ago my hometown of missouri sifed a devastating ice storm. There were folking out of power for ten, 12 days. Two weeks, whatever. And the Utility Company came in from all over to help us in the situation. I know the recent situation in florida from the washington dc area here and maryland and virginia. Springfield, missouri again sent crews down to florida to help. And in that situation. I know what its like whenever people and neighbors help neighbors. So to speak. You note in the testimony that mutual assistance provided by electric companies, utilities and across the country played an Important Role in restoring power so quickly. In florida. Could you discuss the logistics of bringing in 60,000 workers from across the country are to quickly assess and restore or assess restoration locations and how this effort is being coordinated by industry . So thank you very much for the question. I think its an impressive net work. And the aggressive posture the Utility Industry has had in as well as the Lessons Learned from katrina and passed events that the utilities have taken upon themselves to have a leadership position. Developing a mutual assistance net work. This is a net work where utilities talk among each other and request assistance. Its organized to provide mutual assistance to utilities that request it. This is a across the United States theres different coordination and different entities that are responsible for mutual assistance requests. And different areas of the country. The utilities that provide mutual assistance talk about the Management Structure they talk about lay down procedures with respect to a equipment and equipment necessary. And theres a huge coordination with respect to supplies and the availability of resources. What role do state or federal Emergency Operations officials have in monitoring the use of mutual assistance and ensure that its applied to the most critical area . This is real interesting. I thank you for bringing up the point. What we deal with is first and foremost the yoults are in a leadership position as they should be for providing response and recovery. The federal agency and the federal government and department of energy what we do is help understand when is it outside the ability of a utility to be able to manage their response and recovery effort. What are the resources that require the gaps needed in providing support. Where it is transportation issues. Access issues. And so that is the activities that the department of energy and the federal government help with. That is whether its hours of service waivers, whether its weight restriction waivers. Whether its understanding if theres a priority whether its a heavy load like a chemical facility or pharmaceutical or hospital. What some of the restoration needs are. Speaking of the federal government. What does the federal government do to remove regulatory roadblocks to recovery and repair efforts and are their areas we can improve . So the efforts of the federal government does and looks at are from a waiver point of view. Access to any sort of damaged yaifr to making sure that the utilities i guess where i go with this answer is ill be very pointed here. Utilities now days are very much seen as emergency responders. Typically that has been the health and the safety side of things. Now as you look at Critical Infrastructure and as you look at the needs moving forward, telecommunication and electricity are primary for providing effective res ration process and life and safety. And so access for utilities and a damaged Infrastructure Environment being able to be forward leaning and getting utility resources there are absolutely critical. As we move forward. Its going to be more critical as we look at on site generation and being able to restore power. Okay. Thank you. Will the department of energy be working with the states and territories impacted by the recent hurricanes to assess Grid Resilience, efforts and identify ways to improve Grid Resilience . Yes. Okay. I wish we had a time today for emp discussion. With all of you. But perhaps another day. It seems like time is taken up today about talking about the astros. I look forward to future conversations. Is the conversation a problem about the astros . Is that a big problem . Chair calls upon the gentleman from new york. The State Capitol of albany. Thank you. We hear about rest raugs working along in some of the states. Many of the fellow americans in puerto rico and the United States Virgin Islands remain in a serious black out. Restoring services is critical. But we need to acknowledge the risk of this happening again and the need to support the development of a resilient grid moving forward. Extreme weather and fire events has cost the federal government well over 350 billion. According to to the office of management and budget. A report last week estimated the costs will likely rise in the future due to the effects of Climate Change. This is not a choice between pay now or pay later. Its a pay now by supporting research, infrastructure and making meaningful investments to adapt to and mitigate climate. Or pay now in emergency packages. Acknowledge the risk posed by extreme weather and make the necessary investments that will mitigate it. We just passed a five Year Anniversary of Superstorm Sandy. We have seen effort in new york to build a resilience grid. The experience of season di shows rebuilding takes time. Its clear Lessons Learned from one disaster make future response and recovery more effective. Were learning from harvey, irma and maria. Learning will continue. Until we address some of the preventive measures. So youre testimony mentioned that Florida Power and light is made Major Investments since 2006 to build a storm resilient grid. Some are work has been done in new york state. In regard to sandy. How can a smarter modernized grid be more resilient . So thank you for the question. A smarter grid allows advance communication and control. Rerouting power. Accelerated situation awareness. Lets talk Situational Awareness. In the ability to have smart meters and able to have better visibility spoo your system. Be able to isolate damage. Be able to reroute power. And so having that ability allows you to be forward leaning on placement of resources to have a Effective Restoration process. Well planned rk, well with respect to being able to reroute power you can really look at isolating customers and being able to make sure that you can restore the most large number of customers quickly. As well as prevent damage to additional customers. Unnecessarily. Thank you. Mr. Walker can you explain how great modernization efforts in texas, advance meters and other aided in a rapid recovery there. Yes, sir. Thank you for the question. The advance meter system that we have, we have through most of the region. Were very heful. It notified the customer the utilities of when the customers were out. They knew where the customers were located. It also helped us as she said, in rerouting and knowing where they needed to send their crew. And being able to reroute electricity to serve people in a more timely fashion. So we found it was very helpful to have the advance meter system. And the new technology. Thank you. Doe energy review, heavily focussed on Critical Infrastructure interdepend si. Im concerned about the puerto rico without access to the safe drinking water. Water. Hospital and Public Safety infrastructure are dependent on electricity. So is a more resilient grid system perhaps one that includes micro grids distributed generation and storage important for supporting Rapid Response and recovery at in regard to and interaction with these other Critical Infrastructure needs . So thank you. Using a micro grid in a Smart Fashion around Critical Infrastructure is absolutely important. As you look at telecommunication, as you look at water and treatment mants. It is really how do we harden the areas to allow for them to sustain or be able to recover quickly. And having generation closer to the critical loads through the form of a micro grid is absolutely important. I know that con ed and areas in new york are looking at how do they harden the infrastructure. I do want to say i appreciate the efforts in going down to puerto rico as well and supporting the Recovery Efforts. Has there been any interaction with epa and doe . In regards to this interdepend si on infrastructure . Epa . Any efforts with drinking water, doe, and the infrastructure that the electric utility. Thank you. I understand. Through the electric sector coordinating counsel and through the responsibility as a Sector Specific Agency we have had coordination discussions with the telecommunication sector and some of the other Critical Infrastructure sectors. To think about how do we really move forward from a restoration process from hardening process from advanced Technology Process from a coordination process. And moving forward and strengthening the economy. Thank you. I yield back. The chair now calls upon the gentleman from florida. For five minutes. Thank you. Thanks for allowing me to sit on the committee. And also i want to congratulate you on the astros victory. They are a model. They really accomplished quite a bit this year. And i like the way they rebuilt their team. Anyway. Can i have an extra two minutes because of that . As long as you want. Ten minutes. Ill refer another team next year. You know that. In any case, i want to talk about miss walker if i can ask a couple questions. I understand theres a site prioritization when utilities are being restored. In the middle of a response resources are often spread thin. If there are two hospitals in a given area, how do utilities determine which facility is responded to first . Well in texas we the hospitals by statute are required to have back up generation. So they do have that requirement. Im not sure how they are decided which they respond to first. I know that for Center Point Energy during hurricane ik. That that was the first areas that the company went to. Was to the hospitals. So that all of the personnel were trying to restore service to those. Im not for sure and i would have to look into how to decide between two. What role do Utility Companies play in crafting a state Disaster Response plan and determines which sites are prioritized . They have complete power to come up with their plan on how to restore power. We do have the commission does have levels that we ask them to look at. Which are the critical structures such as hospitals by statute. They also have to respond to nursing homes. We clearly have them respond to refineries and things in the ship channel. So there is a tier. Utilities are respondent for setting priorities. How much flexibility does a Utility Company have in determining which sites are restored first . They have a lot in texas. They do work in texas recovery is at the local level. So they work also with the counties and cities to make those determinations. But the utilities in texas have a significant amount of determination on how they restore power. Thaurng thank you. Next question to the panel. What challenges still exist for florida . And what are your post storm recommendations . What do doe resources what resources are available to the communities like mine impacted by irma . Ill start. Florida had a very Effective Restoration process. They had the arrangement from a mutual assistance point of view. They looked at and investments in the infrastructure has helped with hardening their system. The advance control and metering has advanced their capability. At this stage in the game, florida really looked at their codes and standards and from a perspective of a category 3 hurricane as were looking at category 4 and additional hurricane hs i think now comes down to what are some of the additional new capabilities to mitigate a category 4 and higher level hurricane. That theyre going to have to consider. I think from a fuel distribution point of view, that was the one area of looking at are distributing fuel, gattsoline w a challenge in florida. It was partly that the necessary evacuation that occurred had a run on on gasoline stations. And so it looks at they did advance by having generation hook up. So from our electrical point of view they advance capability there. If i had one area its probably look at the distribution net work with respect to gasoline. The fuel issue. Yeah. Definitely. We were very fortunate in tampa bay area to dodge the category 3 or 4. But god forbid we have one. So anyone else want to comment . I dont have much time. Does anyone else want to comment. Any suggestions . Thank you very much. Yild back. Gentleman is always welcome. The chair calls upon the man who working very hard for by partisan agreement to be allow me to wear the jersey on the house floor. From houston, texas. I thank youfy colleague and neighbor. Before my colleague from florida i knew there was some problems with gasoline sup mr. I there. And maybe you can tell me. Does florida have do you import gasoline and diesel . I didnt know if you have refineries in florida. Okay. Well, thats okay. We want to keep selling you the stuff we produce in texas and louisiana. Anyway. Being a native from houston and going through storms and hurricanes, harvey was probably the toughest. Even compared to hurricane car la who hit us in 1960. And i guess every 61 every eight years we have a Tropical Storm or hurricane. In 08 we had ike. Which damaged the infrastructure. It was a wind storm. The storm surge and the wind. But by the time harvey got to Harris County it was mostly rain. And our biggest problem is the typically the so much rain that it over flowed a lot of our sanitary suer systems. In the west side of houston. Even houston facilities in the smaller cities. And how that did. But somewhere along the way when we have the thousand year storms happening so often, and the average rainfall in houston is 49 inches a year. You get 52 within five days. I dont know how we can deal with it. We just have to dig more reservoirs and spend more money to contain that water. Water is a precious commodity. We need to do it instead of letting it go into the gulf of mexico. This is a first storm that i have had where i had fatalities in district. We lost eight people. Two of them were breadwinners in the family. Because they thought they could go through the high water and under pass. But the sad one was we lost a family of six. In our District Northeast of houston. We have been working on it for decades to build the retention ponds upstream. But the family turned off into the bayou. Because they thought it was the road. And it was widely publicized the family was missing. We didnt find them until after the water went down. So but as far as for the utilities, we didnt have that big of problem. And but as we sit here, we will get another hurricane. Or Tropical Storm. And so thats what im concerned about. Its important we take we try to learn from these lessons of the storms. Were in the middle of Building Back houses and shops and communities. And we know we have to do better on the flood infrastructure. Both working with core of engineers and we have a Flood Control district. We tax ourselves to keep from flooding. And Harris County. So we can partner with the core and but its essential that we fund a core of engineers, fe ma and related agencies. In the next supplemental. Im concerned about puerto rico because their grid was pretty bad shape even before. And some of us were talking on the Energy Subcommittee a week ago. This may give us the opportunity for the United States actually provide an electric system in puerto rico. I understand theyre burning fuel oil. Again coming from texas, we can put all the windmills up and solar. What you cant get we would be glad to have export import facility there. One it would be much cleenser than fuel. Cleaner than fuel. Probably cheaper too. The price of natural gas is cheap. Id like to ask if youre familiar. Driven around puerto rico but i dont live there. I know they need help in getting their the whole grid back up. Is that something that we can look at through the department of energy to see if we can redo the grid in puerto rico to where it would be brought up to consider standard . I think it is an opportunity to look at all technologies in Different Solutions for investment in puerto rico. And looking at how we can harden the system. Everything should be on the table. Of what advancements can be done with respect to the Energy Infrastructure. 47 of puerto rico electricity comes from petroleum. 34 from natural gas. And 17 from coal and 2 from renewable energy. Theres a will the of opportunity to think about the generation mix as well as the location of generation. And the use of the transmission and distribution. As well as demand response and customer engagement. I know in texas we have had success with the wind power. Not only west texas but south texas and gives us that type of opportunity to have a different fuel supply. Although its hard today to compete with low price natural gas. Thats why the coal plants are problems. Your testimony you said the initial assessment of the utility is the data out standing jb of responding to the storm. I know over the years we have had partnerships with other states and other communities. That well send our utility workers up there and when they have a problem. Ice storms in dallas theyll take care of that. I dont remember seeing that much in the houston our Southeast Texas area. Mutual assistance . Yeah. There probably wasnt that much. The damage was very different. And the cause of the outages was very different. Usually the mutual assistance comes into repair wind damage, the poles going down the wires going down. Houston and bow mont was flooding. So most of that was due to the substations being out. So once we were able to get these mobile substations in or the waters reseed and get those substations back up and running, we were able to restore the customers. The outages in those areas really werent very long lasting. They were more like a thunderstorm. And houston and Center Point Energy and were continuing to restore customers and so their numbers were very low on an ongoing basis. Although they restored a lot of pa people. That worries me. In puerto rico they are 30 of the power is being restored. Its really a case in we need to work on. Thank you. I yield back. Seeing no members seek to ask questions, the chair wants to thank the witnesses. Thank you for coming here today. Mind the witnesses that every member can submit questions for the record for ten days. Once you get that you have ten days to respond. Mr. Chairman, i request id like to make a statement. You have a minute. Thank you. I must say including this panel and with all due respect i simply smell a rat in here. I smell a rat. Lack of response to subcommittee effort to invite them to attend and provide witness testimony to the subcommittee is most disgusting and extremely disrespectful. I request that we use or authority to demand come to a subcommittee and expose to members of congress the members what were the facts involved in this the Million Dollar contract which i call the sweetest of sweetheart deals to repair and reconstruct puerto rico electrical infrastructure. I believe also be invited whom yet the same witness statement. Mr. Chairman, we have to get to the bottom of this. We have to know what happened, when it happened. And who was responsible. For this absurd sweetheart deal. The result and American People paying an extraordinary additional amount of millions of dollars. Because of the the delay in the of the contract. So i really request that we use our authority to make sure that proper start respecting the United States congress. I yield back. I share your concern. It sound kind of odd what happened there. But ill talk to the chair of the subcommittee. The full committee about this issue. Right now, this is maybe risk of offending miss caster. But commissioner walker, i hope you go into smu saturday join me daughter and my wife to watch smu beat the tar of central florida. Panel is dismissed. Okay second panel. Are you ready . Just like before start out with Opening Statements from all the panelist followed by questions of members. I recognize thomas. Hes here on behalf of the ec