Transcripts For CSPAN3 Senate Hearing On Electric Grid Reliability 20210311

opening statement and then i'll turn it over to senator barrasso for his and then hopefully one more ready to roll. i was highly impressed with mr. turk at our hearing last week. he clearly has a firm grasp on the wide-range of issues facing the department of energy. he will bring a wealth of experience and he started his career working in the senate for our former colleague kent conrad who speaks very highly of him and then worked on the senate judiciary committee for senator biden. he held a series of national security and foreign affairs jobs in the house and state department and at the national security council. he spent two years as deputy assistant secretary in the department of energy and he has spent four years in senior positions at the international agency including the last 14 months as dr. brawl's deputy. quite simply, mr. turk has spent the last 20 years spent the jobs given him the practical experience in energy, national security and management that he will need to help secretary grantholm lead the department of energy. i believe his performance at our hearing last week shows he has the knowledge and ability to serve in this important position in an unbias way. he is well qualified for the job and i do support his nomination. let me recommend senator barrasso to make his nomination at this time. >> thank you, senator chairman. today our committee will vote on the nomination of david turk and if confirmed play a critical role in our nation's energy agenda and leading the department. his experience in energy policy, i believe, is extensive, he served in leadership positions at the international energy agency and the national security council. during his nomination hearing he said he was dedicated to all types of american energy and the need to keep america energy dominant. stated that he wanted to work with our committee to support the expansion of carbon capture technologies, nuclear power and critical minerals. i especially appreciated his commitment to carbon capture utilization and sequesteration technologies and co2 pipelines to move that captured carbon. during his hearing he said, quote, huge opportunities if we can work together and really go to scale. i agree. republicans and democrats work together last congress to pass the use it act, bipartisan legislation to support carbon capture technologies, including air capture and the construction of co2 pipelines. at the integrated test center outside of gillette, wyoming, groundbreaking research is already taking place on carbon captured technologies. these are the types of efforts that the biden administration should be embracing and fully support. mr. turk is also response toov the committee's written questions for the record. this is not the case with every one of president biden's nominees so far. if confirmed mr. turk must prioritize policies that take advantage of the economic and security benefits by an abundant oil, natural gas and coal resources that we have. so far the biden administration has declared war on american energy and implemented policies that have thrown energy workers out of work. coal, oil and natural gas are not going away. we're going to continue to rely on these abundened and affordable resources for decades to come. that's a fact. we need to promote every kind of american energy and the jobs they support. the biden administration has told oil, natural gas and coal workers that they can get new jobs as solar panel technicians. if these jobs exist, the biden administration would be asking these workers to take an enormous cut in pay. according to "houston chronicle" the president of the state's largest labor union has said, quote, someone working in a refinery leaving to go install solar panels are probably going to take a 75% pay cut. it's unacceptable. if confirmed as deputy secretary of energy, mr. turk must prioritize policy focused on maintaining america's energy dominance including u.s. production of oil, natural gas and coal. the biden policies have taken a sledge hammer to western state economies and already having real impacts on the lives and livelihood of my home state of wyoming. america needs an overall strategy that involves coal, oil, natural gas, nuclear power and renewables. mr. turk to me demonstrated that he understood that reality during his nomination hearing. i will hold him and the biden administration accountable to the commits he made to support carbon power. mr. chairman, i will support his nomination. >> thank you, senator barrasso. do we have any other members that would like to make a statement and be heard? please do so because we're waiting on one more member before we vote. any members wishing to -- i can't believe it. with that opening statements on -- >> should we vote? >>. >> okay. okay. i'm encouraging all of our senators who usually have something to say to say something. >> mr. chairman. mr. chairman. >> i knew we would have a taker. >> we so appreciate you and the ranking member filling, having a hearing to fill these important posts. while we have made progress at the handford df law site the next, this current slate of directories at doe will have a big role on moving us forward on cleanup. so, i encourage any of my colleagues who want to delve more into that or visit, i am inviting you and the ranking member to come to the tricities. we already invited the secretary and the nominee before us. this is just such a big responsibility for the united states. really, really, you know, in the $2 billion a year range. and i know it's hard for people to imagine, but we called on this part of the country to do their job during world war ii -- >> you ought to explain because you have the history on this to some of the newer members about answering what role it played and what we left them with. >> obviously, my colleague from new mexico can also talk about the role they played and other colleagues could talk about the the point is now we're also left with the cleanup responsibilities and why that exists within the state of washington, it is not the state of washington's responsibility. the state of washington does a good job in the tri-party agreement trying to hold us all accountable on meeting certain milestones so we can't get it cleaned up. so, i also appreciate the secretary yesterday made further announcements at the lab about battery and storage capacity research that the national labs are doing there. so, they're playing their part. we have to get the cleanup done and move on to the other challenges that we face. i very much appreciate this nominee's commit during the q&a about making sure they live up to those milestones and as i said, a complex problem that people oftentimes think there is a better way to do it or do it on the cheap. there just isn't. we have to -- we made great progress on the facility now we have to get it operational. so, i hope that anybody who wants to come and visit there, i encourage you to do so. there is i think with my colleague from new mexico we did create a national historic park between the three locations in the united states to tell the story and i think we have more work to do on that, as well. do more work with doe and our national park system to make those sites more accessible to the public, which is a challenge because it's a security area as well as something we want the public to have access to. so, mr. chairman, i'm hoping that we found another member or that they're on their way. >> if not, we have senator daines to help us through this. >> always here to help you in the time of need. rare that you need to plead with senators to say something. >> i never thought i'd see the day. >> it's true. i just want to let the committee know and let you know, mr. chairman, i plan on supporting mr. turk's nomination. i found the interaction i had with him refreshing, pragmatic. he definitely has demonstrated the knowledge and willingness to work on both sides of the aisle. and this hearing that we're going to be going into next, mr. chairman, will demonstrate why we need mr. turk's pragimatism as we look at senator barrasso sedan energy portfolio moving forward. i used to be an operations guy before i got involved in public service and understanding what it means to have to meet peak capacity and peak load requirements. as one engineer once told me said if you think about a family of three and trying to develop a capacity plan for how many beds they need, some might say well you only need one because on average you sleep eight hours a night. but the reality is it's all about the peak load not about averages. and as we just saw what happened in the recent cold snap in a place like montana. happens every winter where the wind stops blowing and the temperatures plummet and if it weren't for the fact that we had an all above energy portfolio, we would have had rolling brown outs or blackouts in places like montana. we got close. see the same thing happen in the summertime when high pressure systems move in and demand goes way up and wind stops blowing and consequently you have to have a diverse portfolio to meet peak demand. so, bottom line is i really appreciated what he said about critical minerals, about carbon capture. how we could work together here to work on reducing emissions, as well as ensuring we have reliable and affordable energy. i'll plan to support mr. turk and thanks for the time to speak, mr. chairman. >> senator hirono. >> i just thought since we had extra time. i just want to say i want to thank you for holding this hearing because i think it will be very instructive. one of the things that hasn't been particularly well covered is that during the freeze up in texas that natural gas production actually fell by 45%. so a little more complicated than just a diverse portfolio. there's a lot of water in natural gas in the permian basin. when you don't winterize things, it literally freezes up. so, we saw and, you know, natural gas just could not in texas fill the gap. because of the freeze ups. and, so, irrespective of what happened in the first few days with regard to electricity generation, there are a lot of lessons to be learned about winterizing all of our infrastructure, about planning for the incredibly extreme weather events that we're now experiencing on a regular basis and why having gone through this in 2011, we went through the same thing just weeks ago. so, i very much appreciate you calling this hearing and i'm looking forward to getting into some of those details a little more deeply than maybe tucker carlson. >> we have a great panel coming up i think you're going to enjoy. senator kelly. >> thank you, mr. chairman. i listened closely to mr. turk and, you know, looked at his record, particularly about climate change and renewable energy. i come from a prior life where part of my, you know, job we lived at a place on the international space station that is powered exclusively by renewable energy, solar power. i also happen to come from a state that has a rather large and growing solar power industry. and it's critical to our economy. and, you know, when i think back to my first space flight and i remember flying over south america and looking down at the amazon and what you notice is this big, long copper color river going through the jungle. and fast forward about ten years later and i'm on my fourth space flight and you look down over the same part of the planet, what do you note sns its arenot? it's not the river. it is deforestation. we put a lot of carbon in the atmosphere and we continue to do that. i think we have gone from 250 million parts per million preindustrial revolution to 415 or so and today i think those numbers are kind of close. what that means for our state, if we continue on the business as usual plan in the year 2100 or so we'll have twice as many days in phoenix over 100 degrees. it's a big, big change. obvious we have to do something about it. one of the solutions, it's not everything, but it's solar. we've got supply chain issues that we have to address to continue to grow our solar industry in the state and across the country. those supply chain issues often extend to issues with foreign governments. sometimes our adversaries. so, we have to sort that out. there's rare earth minerals that we need access to to grow this industry. there's also trade issues. and tariffs and so it's a complicated thing but we do know that it works. and renewable energy and moving to more renewable and, you know, less carbon based energy is helpful. but it's not the entire solution. we've seen this this past summer in arizona. that we need surge capacity. we have that now but we also need to be able to reduce demand at times. our utilities have had some success with this. as i've spoken to this ceos of our major utilities in arizona, they've been able to dial down the demand with connected thermostats. in one case i was told 30,000 homes at one time where the utility could reduce the demand from 30,000, basically turn off the air conditioning in 30,000 homes just temporarily. so, there are solutions. the supply chain issues are critical for the state of arizona. and critical to expanding solar power across our state. and then cost is another issue. we've got to address that, as well. i would say right now where we have, you know, tax credits and we've extended these tax credits, it's also, it's often a challenging economic decision for a family to make if they're going to decide to put solar panels on their roof or even for small business owners. got to make this a little bit more attractive. thank you, mr. chairman. >> thank you, senator. we're going to go ahead and move to our opening statements on our hearing. we have senators coming and we'll take a vote when they appear. turning now to our hearing let me begin by saying that i thank, i think we can all agree that reliable, affordable energy critical for businesses and residential to thrive. a marvel of engineering and the envy of the world. ongoing and increasing changes in the generation mix and outside forces like cyberthreats and weather events that test the grid also highlight the importance of a resilient grid. this topic is querly within the jurisdiction of this committee and it's critical that we state and local governments and grid operators around the country be two steps ahead in planning for these changes. and threats. and how to ensure that we strike the right balance between resilience, reliability and affordability. at the top of everyone's mind is the recent winter storm that brought siberian weather to much of the country and west virginia was not spared. we had over 100,000 people that lost power. mostly due to downed distribution lines and poles because of the ice. of course, the impact on texas has gotten the most publicity. with 4.4 million texans without power for days resulting in billions of damages and billions more in sky high energy bills and tragically dozens of deaths. i understand the texas legislature has held several hearings and working to get to the bottom of why the texas grid was so unprepared to weather the storm. and the texas grid operator has provided us with a written statement. i have the written statement here which i'm going to ask unanimous consent to enter into the record and i encourage all of our members if you get a chance to read it. do i have any opposition? if not, so be we enter it. let me be clear today's hearing is not a referendum on texas. we have seen the impact of extreme weather events to our electric grid across the country whether that be the 2014 polar vortex, the extreme heat in california last summer or the extreme cold around the country last month. we need to incorporate all the lessons learned from those events into our future planning. particularly as we can expect, both our energy mix and weather patterns to be different in the next decade than they were in the last decade. as part of that future planning, we need to take into account the need for diverse fuel mix with a broad array of emissions, reducing technologies and include an honest assessment of where our weak spots are and where we need to invest to balancing the cost of reliability and the resilience with affordability. i have said time and time again that we need to address climate change and we have to do it through innovation, not elimination. and as a staunch proponent of an all the above energy policy, i want to emphasize that we need to be thinking about all of our fuel sources. we've got to use all these resources we have in the cleanest way possible. but we need to be eyes wide open that none of them are 100% immune to weather disruptions. whether that be freezing wind, turbines, freezing wind turbines, disruptions to our natural gas and delivery systems or frozen coal stockpiles all which we saw happen just last month. that may take investment in weatherization and infrastructure which, of course, comes with a price tag. and lead me back to affordability. reliable, resilient power does us no good if families and businesses can't afford it on a daily basis. and while we typically think about this in terms of the cost of a kilowatt hour, we cannot deny the incredible cost associated with major disruptions. by the time, by that i mean not only the potential loss of life, but also the price tag that comes with scarcity and rebuilding or repairing infrastructure both energy and otherwise. although not labeled as such those costs are passed along to all of us whether through utility and service bills or through our taxes. we truly can't sacrifice reliability, resiliency or affordability when it comes to our electricity if we want to continue to thrive. it's incredibly important that we strike the right balance between all of these attributes as we look to the future. there isn't one answer to that equation, but you sure know when you've gotten it wrong. i look forward to hearing from our panel of witnesses about exactly what happened in recent grid outages, events, what lessons we should learn from them and what we should all be thinking about moving forward to strike the right balance. so, i want to welcome our panel but right now quarm so we're going to go to our vote and senator barrasso and his opening statement. so, if there are no members wishing to be heard further, the question is on reporting favorably the nomination of david m. turk to be deputy secretary of energy with the recommendations and nomination be confirmed. the clerk will call the role. >> mr. manchin. >> aye. >> mr. sanders. >> aye by proxy. >> mr. heinrich. mr. king. >> aye. >> ms. cortez mato. >> aye by proxy. >> mr. hickenlooper. >> mr. barrasso. >> aye. >> mr. daines. >> aye. >> ms. murkowski. >> aye by proxy. >> mr. lankford. >> mr. cassidy. >> aye by proxy. >> mrs. hyde-smith. >> aye by proxy. >> mr. marshall. >> aye. >> on this vote, the aye are 20s and the noes are zero. >> the nomination is favorably reported. this concludes the business meeting and will now turn to our hearing this morning. let me just finish up by welcoming our panel and then senator barrasso wll give his opening statement. i want to thank all of you for taking the time to be here and bringing your expertise to our panel. we'll have mr. jim robb president of north american electric reliability corporation. and mr. gabriel and pat wood iii ceo of hunt energy network and mr. michael shellenberger founder of environmental progress and mr. manu athana and president and ceo of pjm interconnection. i want to thank you for being in person and i look forward to your expert analysis. i will now turn to senator barrasso for his statement. >> thank you for calling this important hearing. we all agree that affordable, reliable and resilient electric service is essential for every american. electricity is needed for virtually all aspects of our lives. that's why i have been a strong advocate for generating electricity from a diverse set of resources including coal, uranium, natural gas, hydropower, wind and solar. it's also why i've been especially supportive of energy resources capable of generating electricity at all times of the day and night. what is known as base load capacity. and it is why we need to be realistic about the limitations of energy resources such as wind and solar that can't generate electricity all the time. increasingly, the national discussion on electricity has centered around a single metric. how much greenhouse gas does a source of electricity produce? the discussion has failed to pay sufficient attention to the questions of reliability, resiliency and affordability. during last month's cold snap, cold played a critical role in maintaining power in oklahoma and other states. in addition, nuclear power by one standard outperformed all other energy sources in texas and hydropower was essential to keeping the lights on in western states. we must ensure that our grids can provide electricity at all times and at prices that american families and businesses can afford. the american public deserves to know what policies and measures are necessary to ensure that that happens. public also deserves to know what policies and measures make that objective much more difficult to achieve. today's hearing should help address these important issues. electric systems in this country are among the best in the world and they are always evolving. the men and women who built and operate them are tremendously capable. these professionals must work today with the grids we have today and not with the grids that we wish we had in 15 or 25 years. the blackouts that we witnessed in california in 2019 and 2020, as well as the blackouts across the central part of the country last month are unacceptable. what's also unacceptable are proposals that would make blackouts more likely or more devastating for the american people. for example, president biden has pledged to, quote, achieve a carbon pollution-free power sector by 2035. this is the goal no state, not even california, has set for itself. president biden has also pledged to cut, quote, the carbon footprint of our national building stock in half by 2035. and to quote ensure 100% of new sales for light and medium duty vehicles will be zero emissions. in other words, president biden wants to saddle our electric grids with the additional burdens of powering our transportation fleet and heating buildings currently served by natural gas or oil. as bloomberg new finance report stated last month, the transition to electric heating and transport drives up electricity demand while tremendous growth of wind and solar strain the grid. so, president biden's proposals could concentrate our nation's vulnerabilities to cyberattacks on the grid. rather than learn from the blackouts in california and the blackouts last month, some in congress are doubling down. last week house democrats introduced a bill to require that the country's power sector be 80% carbon free in less than ten years and 100% carbon free by 2035. well, like president biden's plan, the legislation would also push additional burdens on america's electric grids through the electroification of buildings and vehicles that would otherwise rely on oil or natural gas. we should pursue ways to generate electricity that produces less greenhouse gas emissions. we must not do so at the expense of the reliability resiliency or affordability of electric services. that means supporting the continuation and expansion of electricity generation from nuclear power, from hydropower, natural gas and for coal. thank you, mr. chairman. >> thank you, senator. >> mr. chairman. before we start, i'm just curious, i notice there is no one from on our list of witnesses today. i am just wondering why that is. >> not for lack of inviting them, i'm not sure anybody is left. >> they chose not to be here today. >> they needed to remain available to the direct regulators, which is the texas legislature and they've been in total statements with them and we're working on that. but i think you're going to enjoy this panel and we have an experienced person, mr. robb, who knows it inside and out. we're looking forward to hearing from him. let's get started now with our panel and we'll start with mr. robb president of north american electric reliability corporation. >> good morning, chairman, senator barrasso, thank you for having me at this timely hearing. texas and the middle south states we are committed to quickly getting to the facts as to what happened and communicating other implied actions to policymakers and industry. there are three major trends which are fundamentally transforming the system and challenging our paradigms. first, the system is decarbonizing rapidly and this evolution is altering the characteristics of the grid. policies, economics and market designs are resulting in significant retirement. new investment is increasingly focused on creating carbon-free with production profiles and in this resource mix natural gas fire generation is becoming ever more critical. both for bulk energy to serve load and balancing energy to support the integration of these variable resources. second, the grid is becoming more distributed. the improved economics of solar is a key example. these smaller scale resources deployed on both the bulk electric as well as distribution systems and in many cases hide behind the meter. third, the system is becoming increasingly digatized through smart meters and digital control systems. these investments greatly enhance the awareness and efficiency of grid operators but at the same time, it heightens our exposure to cybersecurity risk. extreme weather, as we recently experienced this past month, stresses this emerging electric system in new and different ways. our reliability assessments are one important way we evaluate the importance of the grid, identify reliable trends and anticipate challenges and a techniccal platform. with growing experience with just in time resources, we're developing more advanced way to study supply risk. three regions of the country particularly exposed to these dynamics. california, texas and new england. last august, a massive heat wave across the west caused an energy supply shortage in california in the early evening. solar energy was ramping down and the grid operator was unable to import power as planned due to high demand throughout the west. it was forced to cut power to approximately 800,000 customers. among the lessons learned from this event are, one, the critical need for ramping resources to balance load and, second, the need for improved ways to estimate resource availability when the system is under stress. in new england, cold weather exacerbates its dependence on limited pipeline capacity and a handful of critical fuel assets. in early january cold snap in 2018 led to natural gas shortages and fuel oil was burned to preserve reliability. had that cold snap not abated when it did, the fuel/oil inventory would eventually be exhausted and iso new england would have needed to shed load. it was a classic near-miss event. insufficient and inadequate weatherization of texas and the middle south states has been a growing concern for us since 2012. after a cold weather event caused load shedding for three million customers in 2011, we developed a winter preparation guideline to focus industry on best practices and started conducting significant outreach on winter preparedness. follow additional extremes and load shedding in that region in 201, we concluded these events could not be treated as rare and a mandatory approach was warranted. mandatory weatherization requirements into our reliability standards. in addition to these weatherization initiatives, i would like to leave the committee with four main points to consider. first, more investment in transmission and natural gas infrastructure is required to approve the resiliency of the electric grid, increased utility wind and solar will require new transmission to get power to load centers. next, the regulatory structure and oversight of natural gas supply for the purposes of electric generation needs to be rethought. the natural gas system was not built and operated with electric reliability first in mind. policy action and legislation will likely be needed to assure reliable fuel supply for electric generation as the critical balancing resource natural gas is the fuel that keeps the lights on. third, the electric and natural gas systems must be better prepared for extreme weather conditions which are frankly becoming more routine. regulatory and market structures need to support this planning to ensure reliability. and, finally, investment in energy storage or alternative technologies needs to be supported to have a viable alternative to natural gas for balancing various resources. a technology deployed cost effectively and at massive scale with adequate duration to deal with supply disruption lasting for days instead of hours is required. thank you, again, for the opportunity to be here today. >> thank you, sir. now we're going to have mr. mark gabriel administrator and ceo of western area power administration. i think we have him by video. mr. gabriel. >> a federal power marketing administration responsible for selling and delivering wholesale power from 57 hydroelectric dams to about 700 utilities, military bases, native american tribes, national laboratories and 15 central and western states. spends 1.3 million square miles and 17,236 mile transmission system one of the largest in the united states, is an integral part to the power grid in the west that ensures reliable electricity for more than 40 million americans. a mentor once told me early in my career that electrons follow laws of physics and really only one of these can be amended. wapa system experiences 99.9% uptown and possesses the most reliable grid in the world thanks to our industry overseen by industry and government regulatory agencies. and a common commitment to keeping the lights on all while competitive grid keeps costs as affordable as possible. we also operate a system like vehicle accidents, routine maintenance and emergency situations and safely returning power to citizens. however, when the system is pushed beyond its limits due to extreme weather such as winter storm or the august 2020 heat wave in california, we experienced the consequences of operating and maintaining a competitive grid focused mainly on low cost. on february 15th and 16th, rolling blackouts across much of its territory to protect the grid and the communities that rely on it from damaging and prolonged outages. at wapa 21 customers experienced outages for an average of 55 minutes and up to two hours. fortunately, wapa and the army corps of engineers sent 27,150 mega watt hours of additional hydropower between february 15th and 18th, enough to power nearly 800,000 homes. in the august 2020 heat wave wapa did not lose power but between august 14th and 15th, wapa and the bureau supplied 5,400 mega watt hours of hydropower to california to limit the effects of the energy emergency without impacting our customers. in both cases and in texas, the markets worked according to the design. the grid did not collapse, load shedding and conservation helped, all available resources were generating and the prices increased when the megawatts were scarce. however, this also showed the system's weaknesses. first, every former generation can be disrupted by extreme temperatures. second, a competitive market can discourage long-term capital investment and reliability and resiliency measures and, finally, cost move in both directions in competitive markets and electricity will flow often at times at practical prices. wapa prepares for price fluctuations as well as drought by maintaining a financial reserve at the treasury carefully coordinated with our customers and this is really aimed at avoiding rate shock. increasingly severe weather disasters are straining the grid. including wapa's 2018 car fire. we are responding to more destructive ice storms, snow storms and high-wind events. we've deployed personnel, equipment and materials to restore power after hurricanes, typhoons and volcanoes. looking forward, we anticipate investing $1.3 billion in our system over the next decade to ensure reliability. reliability being the confidence that the lights will turn on when we need them. resilience is the ability to prevent and withstand and recover from disruptive threats and events. ideally, we'd invest more in resilience, emphasizing defense critical infrastructure, artificial intelligence, hardening facilities, redundant services, black star capabilities, replacing wood with steel and increasing the movement of energy between the eastern and western grids through the seven interties. intugrating ai and advance technology solutions into grid operations can improve real-time situational awareness including knowing what is losing power when the electricity is proactively cut to protect the grid, a shortfall today. today's market structure in some ways disincents haves utilities from necessary resilience and modernizing investments. in conclusion, gas and oil markets are driving out inefficient generating units and financial liquidity and expanding the sale of electricity. however the real question is whether electricity to a lesser extent natural gas are logical commodities to participate in open markets. trading electrons has greater responsibility. thank you, mr. chairman. i'd be pleased to answer any questions that you or the committee may have. >> thank you, mr. gabriel. now we'll have the honorable pat wood. pat? >> thank you. thank you, chairman manchin. there you go. >> all right, sorry about that. it's been a few years since i've been here and i don't remember how to do it. senator heinrich. i'm the b team. since you all have saw me last and 16 years ago as i testified on the energy policy act of 2005 as chairman of ferc in support of the nerc's formalization and the formal role that nerc and ferc would have over the continental u.s., i have been involved in a lot of things that bear on what we talk about today, so i'm happy to share any perspective with the committee during any questions. i have been a wind developer and chairman of a company that had coal and gas operations throughout the country, dynegy. sun power and remained on that board, which is one of the top three solar companies in the united states. also on the board of quanta services which is the largest utility construction firm building telecom natural gas and importantly power lines. we are a joint venture operator with a canadian utility of puerto rico grid. that handover will happen this summer. so, i get to talk about resilience and the people in puerto rico a hearing in a full case of their own. today i'm ceo of the hunt energy network. we're building storage batteries and small batteries at the distribution level around the state of texas. i think the role of energy storage in the future is going to be one that will be just no where to go but up. as we bring on intermittent resources, i understand the members' concerns and live through them, as well. with intermittent resources, variable resources that we have to do something to firm those up. storage is that golden bullet that as a regulator i didn't have 15, 20 years ago when we were talking about market issues from california to new england. but storage is just beginning. it's got to scale up, but it's pretty interesting place to be. so, i don't speak for any of those companies, but, yet, i'm informed by my experience with all of them and i do think that the years that have happened, particularly these last three or four across the country that i personally lived through a drought, two hurricane hits in houston, this weather event in texas last week or last month, the presidents' day freeze that went to 254 counties of the state with a winter weather warning which we never had statewide. it tells me the world is changing and the modeling that we have done cannot just look in the rear view mirror and say how we're going to avoid the next pothole that we just ran through but has to be much more creative and much more imaginative about the world that we see coming. it is the role of government, even for a people like me and right of government to marshal the resources and pull the right people and visions together so that we do think about infrastructure in a new way. one of those ways that certainly came up was the events in my home state last month. i think at the end of the day our legislature is deeply involved in that as we speak. chairman of public of the utility commission working through the financial issues. but the operational issues which mr. robb and the nerc and ferc will include will include familiar ones and new ones. the failure of power plants to perform, which in figure three of my testimony might be a good place to look. that it really was across all energy resources. some did better than others, but all, in fact, were impacted below what we had expected them to be. failures in the natural gas system which feeds about half our power in texas. failures on that system to perform. the interplay between the two, which was pointed out in the nerc's 2011 report continues to be a large issue. commercial issues, market rule implementations, again scenario planning. the public communication issues were big issues for our legislature last month that the lack of -- we know more about when amber alerts go out about somebody that got kidnapped in the state of texas than we knew about a shellacking that was coming that would affect 4.5 million people. so, that was a significant impact. and then, finally, the one that was most customer impacting was the management of the outages by our local utilities. that was a significant shortfall that is being remeied as we speak because it could happen again as soon as this summer. we always have to be ready. we have to be vigilant, but most of all, we have to be creative. >> thank you, mr. wood. now we're going to have mr. michael shellenberger founder and president of environmental progress. >> thank you, good morning, senator manchin and senator barrasso. academy of science warned that our electricity grids were becoming increasingly complex and increasingly completion and vulnerable because of the increased use of energy sources. while they all failed to perform as anticipated, some performed better than others. they were 79%, 55%, and 14% respectively. experts today agree that weather dependent energy sources made the grid more vulnerable to weather. there was a lack of energy supply to the state's closure of nuclear and national gas plants and the overestimation of what they could contribute. it increased from 2011 to 2020. the impacts on affordability were serious. our cost of electricity rose eight times more than the rest of the united states. now californians pay 50% more than the national average. economists found that electricity customers in 29 states paid $125 billion more on electricity than they would have in the absence of renewable energy mandates. what makes the electricity reliable and affordable is the generation with the fewest necessary wires and storage. the basic picture is that a simpler grid is a more reliable and resilient and affordable electricity. they require 300 to 400 times more land than nuclear plants or gas plants. if the u.s. tried to generate all of our energy with renewables we would have to increase the land fro 0.5% to 25%. for example, a federal judge last year blocked a transmission line at the behest of complaintants. most of the stores last for hours, not months or seasons. we saw the impact in germany this year. germany's renewables produced just two thirds of what they produced last year despite a 4% increase in solar panel and turbine capacity because of annual variability of wind and sun. germany has only been able to manage the seasonal fluctuations by maintains a diverse fleet of coal, natural gas, and nuclear power plants. they spend half as much that produces one tenth of the carbon emissions because france's grid is nuclear and germany is fazing out nuclear. the proposal for energy in the united states relies on a ten-fold increase in the power of existing hydro electric dams. but it is just 1% of that. california has a major network of dams, but we have not converted them into batteries because you need just the kind of dams and reservoirs. it is a very expensive kind of retrofit. california had to curtail electricity coming from our solar farms and pay arizona to take excess electricity on sunny days. the u.s. has reduced it's greenhouse gas emissions more than any other nation in history. but now emissions prices and resiliency risk rising if the u.s. closes the nuclear react reactor is in illinois and other states. texas lost one of their four nuclear reactors it returned to service at 36 hours hoping to end the power cuts. meanwhile others operated normally. the senate can play a constructive role by takes tax now to prevent the closure of nuclear plans that proved essential for the affordability of supply as well as, i might add, the sustainability of our energy mix. thank you very much. >> thank you, and now we have the president and ceo of interconnection. >> thank you, good morning, chairman, ranking member, members of the committee. i'm manu, and i'm the ceo of pjm if is a pleasure to be here with you today and participating in this hearing and sharing my perspectives of reliability, resilience, and affordability. pjm is a grid operator based in valley forge pennsylvania. and we started in 1927. we have grown over time to serve 65 million people that live in 13 states and the district of columbia. we serve one-fifth of the nation's population. i wanted to start today by saying the reliability of the system is our organizations driving purpose. watching the human impact of the recent impacts in texas has been a sobering reminder of the importance of that purpose. i can tell you that i personally feel the weight of the responsibility that we as pjm and our members have to keep the power flowing every day. i wanted to really cover four points in my opening remarks today. first that the grid is strong and it performed well including during the recent winter storm where we were able to keep the power flowing and export record amounts of electricity. resilience is krital. they're going to be things that happen that we didn't anticipate. we have had a pandemic plan in 2006 yet so much about this event has been unexpected. we have had to learn, we had to adapt. we took significant steps to control the grid including a third control grids. our pandemic response is one demonstration of how seriously we take resilience. the third point that i want to share with you today is not with standing the first two points on reliability and on resilience. we have studied and responded to extreme events including the 2011 southwest blackouts and the 2014 polar vortex that hit our system. and while we don't have all of the facts yet about the recent event, there is three questions that we believe. it is an incentive based approach, and we're asking if we need to implement new standards for high impact and low probability events. whether or not they're caused by climate change or otherwise. second is do we need circuit breakers for the pricing. and do we need inputs to power generation like natural gas making sure they're protected. next the regeneration through this transition. today they have many interconnections here. of this 92% is solar, battery, or a hybrid. and renewables while their intermittent can consider a great amount. however, we must ensure that our markets support an adequate supply of dispatchable back up generation well into the future if we're going to keep our grid reliable. thank you for your focus on these issues and i look forward to your questions. >> thank you, i will start the questioning now. mr. wood you have a very unique opinion. seeming to avoid federal oversight and how the inability to import power that made it worse last month. who is so bad about the frc oversight? >> is true, i have been, i have been on both sides of the river and i have tried to be the voice of calm for both sides. there are some unique attributes of texas and particularly in the power market that when i went from that role to the one at frc i would have lost. that i didn't have. for example as we were setting up our power market we ordered the utilities to become part of rto. you tillties still have that option and to use that power president not in a great way to under mine the market and i would love for that o to not have been an issue. >> since you have seen both up close and personal, what is the objection? what is frc overreaching causing higher prices or less competitiveness? or what is the objection that texas does not want to be vol availability. they said they wanted it for competition, and four years later for retail competitive market. we were able to plan our transmission grid and pay for it. we were able to connect our plants. so we didn't have to negotiate that with or states or negotiate that with the federal government. it was just an easier thing to do. and i wish for that for the whole nation in a we had a unified vision. we have to look to the congress through that. >> as you know my home state is in pjm service area. 100,000 of my constituents were without power. in west virginia it was because of downed power lines and polls for the most part. you mentioned in your testimony some of the lessons learned from the 2014 polar vortex. do you believe the lessons learned were implemented in a way that lessenned the potential impact? what are some of the lessons learned from last month that you would prevent next time? >> yeah, senator, thank you for the question. i do believe the lessons from 2011 and 2014 were learned and implemented. we implemented winterization lists. we implemented under performance suspect, and we implemented more gas to power coordination. as a result in 2014 forced outages lost 20% of our fleet. that number was less than 10%. so there has been significant improvements since 2014 as a result of lessons learned. there is a high price cap that is intended to incentivize generators. several of the fwrit operators work to pay generators to make more power plants available years into the future. these are two approaches to balancing reliability and afford about. can you shear if the high price cat approach, where power prices shot up to $9,000 per megawatt hour was for days. is a high price cap a reasonable way to incentivize generators to be ready? >> i appreciate that question. i'm not a market design expert so i can't comment on whether or not it was appropriate or not. i think in any way you look at it it did not adequately incent generation to be online? >> what do you think is the best way to line up sufficient capacity. >> it needs to be rewarded there a market mechanism or through a regulatory proceeding. >> you have a lower price cap coupled with the market, can you explain that approach and what the tradeoffs are? >> absolutely. we took that approach because we have a multi-state juris dix and we wanted to make sure that we had capacity available for years into the future. and the three-year figure is selected because that is roughly the amount of time it would have taken to build up that ct. i think the under lying explanation is more complex. i think it is easy to think if only texas had a capacity market this would not have happened, a higher reserve margin, perhaps, but it is important to note going into this winter that it is a 43%. it was not a shortage of capacity, it was the cold weather for which the capacity was not prepared. we are very focused on continuing to be prepared. >> the administrator, the ceo of the power administration and in that role the territory you serve includes california and parts of texas. do you think we should divert from a diverse set of resources including those that can produce electricity at all times of day day or night. >> yes, i do. >> would the blackouts have been avoided if california installed more solar panels? >> i do not believe that would be the case. you need diversity of generating resources. >> so the blackouts last month, would they have been avoided if these states had installed, say, more wind turbines. >> i think a diverse portfolio is needed for all of these. it is really foundational. >> would the impact of the blackouts that we witness'd in texas, oklahoma, kansas, and elsewhere have been worse if no one had access to natural gas? >> again, not operating on the grid in texas, but certainly making sure we have diverse portfolios. certainly at this day and age are part of that. >> and across the middle of the country last month, would they have been even worse if everyone, including emergency responders had to rely exclusively on electricity to power their vehicles? >> again we have to make sure we have sufficient supply and generation. it is crucial to have a real diverse portfolio. >> thank you for making the trip coming here all of the way. you have written that california's big bet on renewables is directly responsible for the blackouts and the prices. >> sure, there was a study published that made a point that it was made very dramatically in the conference last ought where they specifically pointed to the closure of a nuclear power plant which was about 200 mega watts of power and the natural gas plants that resulted in the shortage of energy. >> you have written, and you said, some have long pointed to batteries as the way to integrate unreliable renewables on to the grid, but with you say batteries are not up to the task today. and for renewables to work, batteries would have to store power for weeks and months. >> sure, we have one of the alarmest battery installations in the world and it provides power for 16,000 californiaen for about four hours. the cost is prohibitively high. most advocates no longer think that leadership yum batteries will be an important form of storage beyond managing minutes or hours. but the reason that germany was able to prevent similar power out ans is they maintains a coal, natural gas, and nuclear fleet for when the sun is not shining and the wind is not blowing. >> you made the following observation. you said they continued to identify three areas of concern. california, text, and new england. while recent events attracted natural attention, new england is another region that you said is identified as particularly vulnerable to cold weather. you mentioned the limited pipeline capacity. in light of the problems, should we discourage the destruction of new natural gas pipelines. >> thank you for that question. we strongly believe that more natural gas structure needs to be a strong policy focus. need needs more gas capacity to be resilient to the winter. >> finally i have an article from green tech media titled "california's shift from natural gas to solar is playing a role in rolling blackouts." the california grid operator is saying that the situation that we're in could have been avoided. it goes on to say that the california grid operator told regulators for years that there is inadequate power when the solar generation regarding power. >> thank you. >> thank you mr. chairman. >> thank you, mr. chairman. thank you for holding this important hearing. i'm definitely for a smarter, cleaner, more secure and resilient grid. i think that takes a level of investment. we had a couple big studies recently talk about an mit study and a university of california study that an expanse could achieve a higher, cleaner grid and help reduce wholesale costs. could you give me an assessment on whether or not modernization of our grid is an investment that we should be soaking and do you think the private sector will make those investments or is there federal cost share here, and do you think that is in the tens of millions, hundreds of billions, how would you characterize that investment that we would take? >> so i'm asking do you believe we need that investment? at what level? and what's the mix. the mix of federal and private. >> that is a great question. we do need the backbone. if there is any part of the vision from the president and from many in the industry, it's going to -- we're going to need it to be enabled by a stouter transmission grid that will move the resources from where they are to where the people are. i think that is probably a nine figure number. it's a lot of money, but social security overtime, and when you spend money on transmission, you save more than you spend on getting low cost power into your power system. >> so i will go next. this country has remarkable natural resources all around the country. they're not always near where people live, where the power needs to go, and this concept of a national transmission grid is worthy of consideration. we have not considered the impacts of it. i would concur with your assessment for the cost of it. i think the factor that the committee needs to be aware of is that it is not the need for transmission or the desire to fund transmission, but the ability to cite transmission. >> certainly. >> and i'm happy to comment as well, senator. i think the industry has done a pretty good job investing in traditional transmission. what we also have to look at and understand is how can we use the existing transmission system differently? there are seven ties that are perfect impacts of 1980s together that could clear i will be upgrades and done within a two to four year time frame. so we have some immediate time frame them, and permitting takes time, funding is important, but there is a challenge with getting people to i agree to the optics. it rooers long term agreements, the agreements -- folks are hesitant to get into that. it is to incentiize folks. >> thank you, i'm going to skip mr. gabriel because i know what he thinks. i think i know what you have been up to. i want to point out that texas, i understand that 96% of the projects in the ercot pipeline are wind or solar. with texas being an ultimate free market, it tells me something. but i would like to talk about where did the money go in texas? mr. wood you and i spoke a lot about the money, but i want to understand because according to wash dog firms, they overcharged users $16 billion that left them at the grid emergency stander longer than necessary. are you familiar with this analysis? >> i am familiar with the analysis. i think that the conclusions quantified it as if every megawatt hour was sold at $9,000, but of course the showbiz done by contract. i think a number of customers were exempt from that. >> that's what i'm worried about, that the consumer here like in the wernlt energy market, do you think they should be reimbursed? >> the legislature is having a hearing on it today. i would have agreed with the indent market monitor? >> do you think are there any enron traders involved in the second and california markets that are employed at ercot now? >> i will have to check, i'm not aware of any. we saw what happened here in the aftermath, and i think we need better tools to protect consumers and businesses from these kinds of spikes in rates. i fought against our state having to pay 3,000 times the rate in contracts that were fraudulently manipulated. we passed laws here. you said it best, it should not be tolerated in these kinds of emergencies, thank you chairman. >> thank you, now we have senator danes. >> thank you, the basketball northwest including montana will fate a shortage to meet peak load conditions. there is a real threat that in peak conditions we could face the same conditions. it's my understanding that montana distributers are worried about generation resources to meet peak demand and the problem will only get worse if they continue to cut down coal, other base load and flexible generation throughout the rebeyond. i respect the comments earlier. in montana it was not because of natch yal gas freezing up. we could have had some serious issues here. and in monday we have a great balance with hydro and coal providing base load. if the biden administration moves blindly to shut down all fossil fuel generation that balance will be threatened and reliability concern becomes a stark reality. how does a rapid move away from traditional base load without new equally flexibility stable generation affect the grid. >> thank you, if you're building additional transmission, the assumption would be that you're bringing power from somewhere else. similarly in california, more transmission lines is not going to help us. there is no substitute for base load power. if we lose those plants we will see more and more episodes. >> so with montana, base load, generation, it is creating a scarcity of resources to meet peak demand? and what happened regionally can affect monday communities. so it can't just be the focus of any one state, what can we do to ensure balance? it is missing in this dialogue, it's balance and reliability throughout multistate markets. >> you're raising the right concern, i think. and that is up to the senators to understand how these relate to both state and local. i point out that the rising complexity itself is a significant problem. 2012, 2017, and just recently last month they pointed to complexity overwhelming the regulators. when i read the other witness statements i was struck by the solution is to add more complexity to the system and that becomes troubling i think when no one seems to understand the system and problems emerge counter to what experts had been predicting. >> as you know having spent years there, they providing power. how would a question to affect base load energy. >> thank you, it is obviously not widely in support of dams for all of the reasons you said. we have to consider in the united states that 90% of the 3,000 dams have power capabilities to them. i think it is a valuable discussion to make sure we think about increasing hydro power because it is carbon free and it can help bolster a grid in times of great stress. >> i remember i was struck when it came to congress and hydro was not classified as a renewable source of energy. we finally got that changed, but zero carbon emissions, that is about as renewable as you can get. instead of moving to shut down coal and natural gas we should be focusing on innovation. throughout the united states the question is how can we use technology to keep and grow jobs in rural monday and at the same time protect base-lode power and ensure a reliable grid. >> thank you, this is clearly an issue that matters. we have built these projects and we become frustrated when they don't work out right away. i think we need more patience than that. certainly in the case of carbon capture and storage and in nuclear. i think we build these projects and we're disappointed when they don't come to fruition. and i had to that when we think about our nuclear plants, because it is so important for national security, we need be considered federal action to protect those plans that are currently not being valued for their contribution or reliability and resiliency. and a different restructured energy market. >> thank you, mr. chairman. >> thank you, senator. we have senator heinrick. >> i heard some interesting things today, one is that coal is baseload generation. it now sits well below 50%. so the average offshore wind capacity factor is higher in europe than the u.s. coal capacity factor. if you look at lazard or any independent analysis of what wholesale costs are for various different generations, and you have solar at three to four cents per kilowatt, and then you have coal or nuclear. and you understand the market pressures and why we're being asked to subsidize nuclear power. so moving from that, i want to start with you and i will begin just by thanking you for the work to clean up the mess that enron gave us. but i ask what policies you think would be wise to accelerate the deployment of the storage that you mentioned on the grid in texas and nation nagly. >> i think a diversity of the supply chain, we're definite on china and a few other countries for the current technologies, there are a lot of things other lithium ions, but that's what is in all of the ev's, but the cost up stream, if there could be north american spliets for that, the policies make it as easy to interconnect the battery as we have made it for gas plants. it is not easy learning to get these done one by one. i think we have that box checked. >> so it is important? >> yes. >> so i'm going to skip over the pricing issue. but i think it is pretty obviously that one of the channels is i want to put aside for just a moment the desire by texas, by ercot not to have direct ferc oversight, but would it have been helpful for texas to be able to import power from the east or the west in this episode? i noticed that el paso did not have the same rolling blackouts. >> we have some gates in the wall -- >> you have dc connections, but not direct connections. >> that's right. >> and there are proposals to put more of the dc ties in both east and west. a few gigawatts would have helped, but would not have helped much on the shortfall. >> what was the single largest generation short fall? >> our largest supplier on a normal day was gas, so dropping at the supply level and the power plant level, that is the interesting thing to figure out. how much was related to the lack of winterization that we should have figured out. and it had to do with the supply system and the upstream issues all of the way to the power plant i'm curious we talked about a need for that. and while other countries have started to utilize those things in order to often times make an electron take the longer way around to better effectively use our existing grid, we have not done a lot of that in the u.s. what role could that play in the future? >> i think that is a great question. and storage is a transmission asset with the help of a d.o.e. grant. and the purpose of all of this is a squeeze more capacity. it is hard to determine. so you're going to see the technologies on our system, you're seeing them already, but you will see them in the larger deployment. in this recent cold snap, coal was about 21% of the jep ration. nuclear was 26% of the generation. so just from a fuel diversity perspective it is important to make sure we can hold on whether or not that is batteries or something else. >> thank you, chairman, i apologize for running over. >> thank you, mr. chairman. we recently asked the secretary to give me his thoughts in regards to the important of the technology. i would like to submit that letter for the record. and just a few excerpts from it, the technology lab's study following the polar vortex and found that in each instance it was used to meet the increase in demand whether it was produced by nuclear, coal, or natural gas. it shows the important of maintaining generation from sources at risk of closure. also, the various grid operators fail to recognize the value of base load electricity generation and that is why they should adequately price the resiliency in regards to the capacity and it is available to all when it is needed most. that is again from the letter from former secretary dan which i just doctored into the record and i would like to thank him for that response and that letter. do you agree that base load coal and nuclear are essential to grid reliability for extreme weather events? >> we don't have authority over resource selection or fuel type. diversity resources, brought up many times, is a great thing for reliability. i think until there is an alternative they will continue to play an important role in the reliability and security of our electric dprid. >> how do we incentivize that? to give us that ability on the grid? >> again, i think that is up to local state policy that effect as resource selection and or market incentives and market competitive states to sna ur that those characteristics are appropriately rewarded and the technology continues to be developed to provide alternatives or to make those rurss resources more combatble. >> what are they doing to insure that we have a base load generated and a mix for weather events to that we have the reliability that we need as well as affordability on the grid at all times? >> so we do not get involved in market rule determination or some of the questions that you raised there, but they're subject to reliability standards. they require them to produce contingency plans for all sorts of unanticipated events and be prepared to take appropriate action to preserve the reliability of the system. >> you referenced the importance of the fuel diversity especially in extreme weather conditions? >> right, but just one minor thing i would say that coal is no longer base load on our system. the only true baseload is nuclear which is run 95% of the time, but we do need a diversity of resources. >> do you agree that generational assets that can provide elect tris tis in all weather events should be fairly compensated? >> i absolutely do. >> and then how can we make sure that we provide them and that we accurately provide them. >> i think that is the challenge. that means we have to specify that firmness and dispatchability is a resource that we're willing to pay for. different markets can do that in different ways. but at the end of the day, i was one who sat in the dark for a few days, and i can vouch for the fact that i want every kilowatt, regardless of how it is generated, to be on the grid. if we're not paying enough we have to figure out how to do it. >> and if we don't we will repeat what happened, correct? >> we will and certainly weatherization issues are important for the existing facilities that we have. i'm not willing to give up that we don't have a good portfolio. i think texas had 100 gigawatts of name plate capacity. i want to make sure that we cover both. >> right. thank you all for your time. >> thank you, mr. chairman, i thank all of the panelists. mr. rob, according to the associated press about 80 people died as a result of the winter storms last month. and as you described there was power outages, and they were recommended today weatherize their systems, would those recommendations followed? >> we will know when we complete our inquiry. the recommendations in that report were not subject to audit and compliance monitoring from our agency. so i don't really know the answers for what actions were actually taken, but we will find out as we work through our inquiry. >> considering the massiveness of the failure in texas, i think that they probably did not follow your recommendations very well. they had new cold weather requirements through enhancements to existing mandatory standard. how do you adoption of those standards would have affected the response to the february storm? >> there is no doubt they would have helped. i think one of the things that we don't yet know, that we will uncover, is whether or not the power plants were weatherized adequately, and whether or not they would have delivered fuel to those plants. that's a major open issue and one that we want to get to the bottom of. >> considering that we have this kind of massive power outage in 2011, and now in 2021, do you expect these kinds of weather conditions to be returning, and we need to make sure that we plan for them because we have literally hundreds of thousands of people without power for days on end and that is simply unacceptable. >> there is no question in my mind that the electrical system and the natural gas system need to plan for more events as opposed to treating them as one off events. >> so just a yes or no, do the other panelists agree that these are conditions that will occur more frequently and not just once in 1,000 year occurrences. does anyone agree with that? >> i do not, as i said in my opening statement the impact on 4.5 million people is pretty arresting. it is not something we need to do every ten years. as you know hawaii has six different power grids. they can't share power with each other, and theres have been several projects about how micro grids could help communities maintain power for critical services while the larger electric grid is shut down due to storms or possibly cyber attacks. scribe how texas should consider creating smaller circuits to allow grid operators to conduct more targeted outages in the event of another extreme weather event. do you think there is benefits to micro grids? and what more do regulators need to do to encourage they're use. >> you're right on, senator. i'm doing that for my day job. we're putting small batteries at the distribution level. and enabling those things to happen. there is a lot more technology that is part of the open system that we have in texas. it was intended to bring that sort of innovation in. but microgrids are a big part of the future. they would have been a real asset for us as they are for you in the islands. and i think the future is nowhere but up for the micro grids. >> i hope that texas will follow that kind of assessment and recommendation because my understanding of texas is that basically the power there is competitive, free marketplace model, and i think there is some commodities like electricity that is so basic i think we will continue that debate, we want it to stay on. >> i have several questions to go through here. but i'm tracking through the biden team that they have announced that they want the i assume it requires some transmission lines and connecting those people with more renewables. would you make that same number of assumptions that we will need that? >> yes, and we will have to upgrade some of what we have. >> i notice for what you're dealing with we pulled through -- i love the name of this the trans west express transmission project. i love express in there. it looks like it started in 2007 and still has not commenced construction yet based on permitting, studies, right of ways, surveys, is that correct? >> thae is correct, i have only been here since 2013. someone has to agree for the lines to be built so there can be transmission agreements and that has been the hang up through far. >> so this conversation about quickly doing renewable power and send it all over the country and get it done begs how are you going to get those transmission lines, this one started in 2007 and it is still not close to being completed. let me ask you some serious questions. you had a very intriguing line where you talked about complexity. but what i heard from you was just because we can do that doesn't mean it is the right way to do it. there seems to be a lot of work on yes, this could be done, but it makes it so complicated that it drives up the cost as you talked about before. what is a more -- if you clean the slate, what is a clean, straightforward way to provide clean energy for the united states? less complex? >> thank you, yes, i think there is a lot of folks in the sector that are good engineers and when they're asked the question of whether or not they could do something they answer truthfully and they say yes, but they don't finish the sentence. all of that additional complexity brings challenges to resiliency, affordability, and reliability. that is very well established that the more complex the system is the more expensive it is. i interviewed the lead author of the national academy of sciences. they were fluent about this issue. and we know that larger plants are more efficient. so you want a grid with the least number of power plants that you need and the least amount of associated wires, transmission, and storage. every time you put energy into storage and take it back out it is a significant amount. so i think that this kind of head-long pursuit into more complexity, transmission, and storage you have to ask if that is really the best for the american people. >> interesting insight. i want to ask you about natural gas. if it is working, not working, it is interesting to me if i look at the power pull where i live in, i had four hours with no power a couple weeks ago when it was kind of chilly at night. so for all of us that looked at not only reliability but resiliency, natural gas as been in this conversation. when i talk to folks in natural gas they say it is a unique challenge. they're approaching a tipping point. it is quick to turn on, but when you're not asked for much for a long time and then you ask for a lot in a short period of time in a cold weather event it's like we can't turn it on that much that quickly. if we're 40, 50, 60% renewables, and you have a small portfolio of gas, and the wind stops blowing, it's not sunny, and that it's not just realistic because what is upstream is not able to turn on that fast. is that a realistic conversation? >> i think that is the conversation that needs to take place. natural gas plants are the most flexibility that we have in the system to accommodate the variability that we see with large amounts of variable resources, and it's a real challenge to provide that capacity that quickly. it's not designed to do that. but that's what the electric energy needs. legislatures will have to tackle how do we create a con instruct for natural gas to be able to serve the very unique needs of the electric system for which it is not required to do. >> and that will require storage and other things that we talked about for increased storage capacity that can off set that as well. it is really interesting conversations. the natural gas does, they use home heating oil, and that is always a fascinating conversation. >> senator widen? >> mr. chairman, thank you for holding this very important hearing. i kind of start with this discussion by saying your grandfather's power lines are not what they were. and we have to have a modern system of power lines to gale with today's weather events. this morning i introduced legislation to begin the modernization of america's power infrastructure so that we can deal with these horrendous weather events. we had massive power outages. i was spending days in a dark payment and members of congress after a few days can get up and get on with their lives, but we had a lot of residents that were hurting before this happened and now they're in even worse shape. so this is a huge matter of public safety as well. it is also a jobs issue b with a climate issue, and my legislation creates incentive for the private sector to step up and put in place those more modern systems so that we can deal with today's black outs and wild fires, and it means everything from utility poles, powerlines under ground, cleaning brush and trees. so my question is for mr. wood. as you heard me say, grandfather power lines okay for grandfather weather. not fit for today. so i introduced legislation to update the system. we make available funds for agencies like power marketing, bonnville utilities, to install some of the changes that i'm ta underground powerlines and strengthening overhead lines and installing equipment to monitor the grid during the serious weather. what do you think of something like this, and what kind of additional funding do you think would be necessary to harden the power grid, especially in rural areas? >> nice to see you again, senator wyden. i cannot emphasize enough how important the robustness of an infrastructure at both the local distribution level and up at the transmission level is for the future. the impact of severe changes in the weather that we've all lived through. and actually i was so busy with our own outages in texas, i wasn't aware of what you all had gone through in oregon. that was quite substantial. i think that the hardening of the infrastructure has a cost, and that is always from a regulatory mindset the tussle that we have to do with the larger utilities, it's easier to recover that cost over a large area. and i've been a big fan of recovering transmission costs over the rtos or the larger areas. i know we don't have those in the west yet. but that's been a great way to pay for big transmission. the small utilities that don't have the ability to really internalize the broad costs just within their company. and so that is -- i understand that your bill attempts to address some of that through a cost-sharing mechanism. i think we can't leave rural america behind. i think we learned during covid we can't do it on broadband, but we have never been able to do it on electrification since we fixed that issue a century ago. and it's not the grandfather's lines, but we've got to keep it 21st century for all of america and starting with the rural aspects that you're talking about in your bill make a lot of sense to me. >> well, thank you. and we've appreciated your input over the years. and that's the whole point of the $10 billion matching grant program for organizations like power marketing administrations bonneville because there are going to be some costs associated with this. but to me, there are also huge costs if we do nothing. and we saw that all over the country, whether it's texas, whether it's oregon. we've seen it all over the country. same question for you, mr. gabriel. with respect to funding for the types of activities that i just outlined, do you think that'd be useful? is that something we can build on? >> absolutely. certainly any type of none reimbursable funding to help bolster the system. we already put $160 million or so every year in the system. of course the challenge as mr. wood said is most of wapa's customers are small municipal co-ops and rural folks. it's adding a significant burden to them would be a challenge. but any money that's available we want to add more sensors, we want to make sure that we are bolstering lines. and something as simple as switching from wood poles to steel is a huge expense but something that would clearly help grid resilience. >> well, thank you both. and we're going to want your counsel on this. with a lot of issues people are going to say can we afford it. i think when you look at the other side of the coin you can't afford not to do this. and i appreciate both of you. thanks for the time, mr. chairman. >> thank you. senator marshall? >> thank you, mr. chairman. good to be here today. thanks to all the witnesses. i want to focus on the financial aspect of this just for a second. i feel like i'm here with the weight of 3 million waking up to utility bills which are just through the roof. i feel like i have the weight of a hundred different municipalities who are buying natural gas on the spot market. municipalities who in three days' time spent more than they were planning on spending in the next five years. and the questions i'm going to ai've been asked dozens of times that i don't have an answer yet. so please don't take them personally. but somehow i got to get answers to figuring out what happened financially. certainly we saw in the spot market the rates went up at least multiple of ten, sometimes more than that. i understand what happened to the supply. i understand that the wind turbines froze, natural gas plants were affected. some of the coal was frozen together by snow, and all those things happening. but one thing that's been pointed out to me is as we saw this spike in the price of it go up and stay up for three days, it went down so quickly. if it was just supply/demand, mr. wood, how would you answer that? why would the price go down so quickly if there was truly a supply shortage? how did it go down quickly in three days, and if there was anything nefarious, where would you look? >> on gas or power? on the gas issue, clearly once constraints are overcome, well that's well heads come back online, you're right, that would generally be something that would be phased in. we went from 20 bcf coming out of texas down to about ten over that full week. so through the 15th through the 19th, monday through friday it went down. so you're talking about the price going back down to ten from 900. it was an issue, and we looked at the california energy crisis. it is always -- it's a very open and transparent market. scarcity pricing and market manipulation sometime are two sides of the same coin. it depends what a jury thinks about it. but when you've got a scarce supply of something, you want to charge for it. in texas, for example, i think probably in most of the states, our attorney general is pursuing actions now looking at gas and power trades. because it is illegal to price gouge in an emergency. >> so you brought up the term price gouging. who would have profited from this? would it have been on the markets, people that are playing the markets? was it the producer that owned the gas well? who profited in this scenario? >> whoever i think in general economics, whoever has a precious commodity at a time it's most precious. and so that could be the person who has it in storage, the person who's flowing it from a wellhead. whoever has title to that gas at that time, it could be anybody. it could be, you know, a land owner in the middle of kansas or oklahoma or texas that has royalties to the gas. so, it honestly depends on where you are at the moment and where the gas is, where the title to the gas is at that moment. >> how can we figure out who had it then? how can we follow the money? >> that took us years in the california -- >> are you convinced that we used all the storage up that we had? >> i do not have any data that tells me. >> does anybody know if we used all the storage up, the other witness? >> i do not. >> who can explain to me -- am i past my time? >> you got one minute. >> you know, i'm going to guess it's mr. wood. how could they investigate, if there was anything nefarious, what does that process look like? and i'm not saying there is. it's just hard for me to imagine just prices going up exponentially. and, again, i think of that -- my parents on a fixed income what's happening to their electric bill and their heating bill coming up right now as well. how would they investigate this? >> firk does have authority over markets in general in the interstate markets, of course interstate natural gas pipelines serve kansas, oklahoma, and parts of texas as well. we have an intra state that's separate. the commodities futures trading commission, they were certainly involved with us 20 years ago when we unpacked issues in the california crisis. the state attorneys general, as i mentioned the one in texas, is already investigating this issue. those three camps, firk, cftc, for the future. >> in your experience, that takes decades to go through -- >> in this digitized age, we have a lot more capability in 2021 than we did in 2001 to review trades in this matter or in any other matter much more expeditiously. >> thank you. i'm past my time. i yield back. >> thank you, senator. and now we have senator king. >> thank you, mr. chairman. i spend a good deal of my professional life in energy. i've developed hydro projects, biomass projects, wind projects, and energy efficiency. and i want to add the watch word of today's hearing seems to be diversity is good. i want to add another phrase, there is no free lunch in energy. everything has costs and benefits and they need to be carefully calculated and weighed as we're moving through. and of course one of the costs is contribution to co2 to climate change. a somewhat facetious question, but can you tell us unequivocally that wind turbans did not cause the problem in texas? >> they did not cause the problem. honestly, the only thing was gas and coal, everything could've helped solve it faster. wind was slow to get back. so was coal and so was gas. >> and i want to mention that the wind project i worked on in maine has been online in ten years and it's never been down because of the cold that i know of. it was a question of they not weatherizing their turbine. so there's nothing intrinsic in the wind power that can't survive cold weather. mr. robb, and i don't want to dwell on this. i think you said something important in your earliest testimony. i consider the gas pipeline infrastructure part of the grid. because of the use, the dependency, in new england it's 60% of our electric supply. and we've got to treat it that way. and we've got to be sure that it's regulated and protected. and i'm surprised in this hearing nobody's talked about cyber because after an immediate weather event, cyber is our next most dangerous problem, and i'm particularly worried about the gas pipeline system. so, mr. robb, i realize you don't have that in your jurisdiction, it's not even in firk's jurisdiction, but it seems to me we've got to remedy that. mr. robb, on cyber, do you pen test your utilities? do you do red teaming on your utilities cybersecurity? >> we do not, but the department of energy does. >> okay. i would urge you to do so, too. i don't think it would hurt to have multiple because the grid is probably one of the primary targets in terms of a catastrophic cyberattack. my friend from pjm, mr. asthana, what are we going to have to do in terms of modification to the grid to accommodate the growth of electric vehicles? obviously going to be an additional strain on the grid. most of it will probably come at night. but can you give me just a short answer of what you anticipate? >> yeah. it's a really thoughtful question, senator king. in terms of electric vehicles, part of the benefit of them is that the charging does come at night. and the grid is both built for peak load. so load is less at night. and some of this electric vehicle load will just sort of sit in under the existing grid. i do think they're going to have to be -- >> it would have the impact actually of lowering transmission and distribution costs for all consumers because you'd be using more kilowatt hours on the same infrastructure. is that correct? >> yeah. it might lower the unit cost. it won't lower the total cost. but i think the really exciting part of electric vehicles, and pjm did a study with the university of delaware on vehicles. we piloted vehicles provide regulation services off of their batteries. people were able to earn $100 a month in the pilot. so i think there's a lot of capability that will come to the grid that hopefully can add resilience through evs as well. >> great. thank you very much. i'm not going to spend a lot of time, i think i disagree with pretty much everything you've said. and i'd like to spend some time with you off line to discuss it. but you did a calculation which you announced of how much it costs to do renewals. you remember that, you said 116 billion or something like that. i'd like you to do that calculation again for this committee if all of that capacity and energy came from new nuclear power. i'd like to see that calculation. >> yeah. we did two calculations actually. we did calculation that found germany had spent the 580 billion on renewables. nuclear would not only have 100% zero emission -- >> nuclear is unbelievably expensive, multiples of anything else. so if you would please do that calculation of just take exactly the capacity and energy that you use for the renewables and pretend that instead of renewable it's would come from newly franchised nuclear plants and let's see what the comparison is. >> what gets misleading is when you're counting the electricity cost from a solar panel when the sun is shining and imagining that that's the cost you're paying for a solar-powered grid. all of the transmission and storage and all of the additional costs associated with having variable renewables are externalized onto the grid. >> did you include those in your calculation? >> we did. >> yeah. so nuclear -- this is a simple question. just take the number of megawatts and the production and calculate it if it were new nuclear and give me the number. >> sir, you didn't let me finish the answer. >> i don't want you to give me the answer now. i'm running out of time. i want you to give me an answer in writing. if you could do that, i'd appreciate it. >> and i just need you to specify what the question is. is it for the entire united states? >> you announced the calculation in your testimony that was some big number, 160 billion was the incremental cost of renewables for this amount of power for i don't know whether it was a year or five years. that was in your opening statement. i just want you to do the same calculation for the same amount of power as if it was generated by new nuclear plants. >> oh, i see. you mean the university of chicago study that found that renewables cost 125 billion across 29 states? >> yes. >> senator, i would be delighted to do that and send it to you. >> thank you. and one other -- well, i think i'm out of time. i would like mr. gabriel, for the record, if you could give me an answer to whether you consider the grid instability problems a wires problem or a technology software problem. in other words, do we have to rebuild all the wires and towers, or do we have to modify the way the grid is managed? and i'm out of time. so if you could supply that for the record to the committee, i'd appreciate it. >> i'd be happy to do so. >> senator cortes. >> thank you for this conversation today. i so appreciate the chair and ranking member holding this hearing. let me just say from the outside, i also agree with my good colleague senator king on electric vehicles. there is potential there, we saw the benefits particularly in what happened in this winter storm, presidents' day in texas. i have a lot of legislation around this space. it is the future and we should not ignore it. but let me jump back to the issue of winterization and weatherization and what we were seeing in some of these winter storms and the infrastructure. so, mr. asthana, let me ask you this. in your written testimony you noted that pjm instituted incentives and penalties which prompted your power generators to winterize. and as a result you said you have seen improvements in generator performance in the face of extreme weather. so, in your opinion, would these necessary improvements have been made if pgm did not institute those incentives and penalties? >> senator masto, i can give you my opinion. it's impossible to know for sure. what we did was we did implement performance penalties after the 2014 -- and what we saw happened, and i believe that the penalties certainly helped it happen was that the forced outage rate went from 22% back in 2014 to less than 10% in this most recent winter event. there's certainly a significant improvement. and i think the performance penalties and the incentives have helped. . well, and thank you for that. because that's the question i have for the rest of the panel. is there a role for congress to play here to ensure that we are addressing the needed winterization and weatherization across the country? and if there is a role for congress, what's the most effective incentive to compel those needed investments? that's what i'm looking for. so, mr. robb, let me start with you. >> sure. >> do you have any ideas in what role congress could play? >> so i think with the existing authorities that we have, that congress has already given to firk, we can address the weatherization issue within the power generation sector. i think the area that congress should reflect on and potentially take action is to think about how that extends into the natural gas and fuel sectors. because having a great winterized plant with no fuel in front of it isn't very valuable. and that's where our authorities right now stop. and i think that's an important thing to work on. >> thank you. mr. gabriel, your thoughts. >> well, i couldn't agree more than with jim. natural gas is really the fuel that we use in these emergency situations. of course, running hydropower, we're fairly well winterized other than obviously there's times when the rivers freeze and we've got some challenges. but it's really, what do we need for backup fuel and that line of natural gas is absolutely critical. >> thank you. mr. wood? >> i would say, senator, that the texas example being of course the one i'm coming from, the legislature here, our legislature in austin has bills before it that would require weatherization for both the natural gas and the power industry. and i expect in light of what happened last month, those will be adopted, and they will be stout. and that's to me akin to the airline industry is you don't have standards and good ideas, you have roles or you don't say anything at all. and so this is the rules and it didn't work after 2011, so it'll work now because it'll be compulsory, and frp there be performance penalties. >> that's what i want to verify. i know mr. robb talked about there's an investigation underway right now with respect to what happened to texas at the end of the conclusion of that investigation, how can we be ensured that texas will take action, the appropriate action? and what i'm hearing from you is there will be penalties associated with their failure to take any appropriate action. >> yes, ma'am, unfortunately due to the short time frame of the texas legislature, i think the remedy will come before the analysis is through. but there is broad consensus that this weatherization issue, again, as the weather events become more extreme, if we don't do it now, we'll have to do it again in the future. so let's just do it now. and i think getting that authority clearly in the states and other states may already have this authority. i would probably check to make sure that states can't do it. if they can't do it, then the fed certainly should. but let the state closest to the people handle that problem. but obviously mine did not. so we got the message from our citizens last month to fix the problem. and bipartisan bills have been filed in that regard. >> thank you. my time is up. thank you, everyone. >> and our final senator to grill our panelist is going to be senator kelly. >> well, thank you, mr. chairman. a lot of the -- you know, when you're at the end of the line here, a lot of the questions you have have already been asked and answered. and i appreciate all of you for being here in person and virtually. i want to start with mr. gabriel. so, i want to expand a little bit on what senator cortes-masto was getting at and expand on how climate change is affecting water supplies and in the colorado basin. during last year's extreme heat wave in are. california, so we are going to transition to that. energy from the dam that could have been delivered to arizona customers was called upon to keep the california grid from completely collapsing. so, against the backdrop of some climate change, and we have increasing population growth in the state of arizona and in the colorado river basin in general, do you think hydropower is going to become a more valuable resource in years to come? and should wapa and its rate payers be compensated for supporting black starts when power grids in other areas go down? mr. gabriel? >> thanks for the question, senator kelly. wapa's customers are compensated in terms of sales. but hydropower is going to become more and more valuable as we add more and more renewables to the grid because of its base load characteristics. hydropower has got serious advantages in that we don't need electricity to make electricity, which is kind of a typical situation in many power plants. one of the real challenges though that we have is hydropower's not necessarily compensated for its black start capability. and of course that's the capability of rebuilding the grid should the lights go out. i think it's something that really needs to be dealt with over time. and i know it's sort of an embedded question in there. we always work to replace the power for our customers in arizona and other states by buying it on the market. but remember first and foremost, physics beats philosophy. so we want to keep the physics of the system alive and work diligently to make sure that we do whatever we can to keep the grid up and operating. >> what would it take to put that compensation in place? how would that work? >> well, i think there are several models that can be used in several of the markets hydropower is compensated for its black start and for its reliability and for its capacity, given the fact that we really don't have a market yet in much of the west, i think that's going to be one of the critical issues that has to be determined as the west decides what its future's going to do, what it's going to look like in market. >> mr. wood, i know we talked a lot about texas here already today. the weather event here recently curtailed about 40% of the gas that gets delivered to southwest gas, which has a service territory across southern arizona. during the event the price of gas for southwest gas went up from about 250, i think $2.50 for a decatherm to about$300. fortunately we have some pretty good storage in the state that allowed us to weather the storm in texas. but the effect on arizona customers might not be fully known, because the way southwest gas does their billing on a 12-month rolling average. i know we talked about this a little bit and we only have a little bit of time left. i understand that texans are hesitant to embrace federal energy regulation. but what assurances do arizona customers have that texas will move quickly to address the vulnerabilities to extreme weather? >> i wish i could be the one to guarantee we're going to do it, but there are elected people back home working on this issue today. it was an emergency item added by governor abbott immediately after the event last month. senator kelly, very strong bipartisan hearings on these issues last week. i think the bill is in markup pretty much the next seven days. >> so the texas legislature is in session right now. do you know when that session ends? >> memorial day. >> and then -- so if it doesn't get done before memorial day, it'll be another two years? >> or special session, which is possible that because of the energy issues being so important, those will perhaps if not resolved by the end of -- i think this is done before then though, senator. the dynamics are too intense. >> has governor abbott committed to a special session to get this done if it goes beyond memorial day? >> i have not heard that. i honestly think he expects it to be done before they even do the budget. >> okay. thank you. >> thank you, senator. i want to thank all the witnesses for being here with us this morning and for your insight and responsiveness to all of our questions on this extremely important topic. and it's truly timely. we appreciate very much the effort you made to be here. so members will have until 6:00 p.m. tomorrow to submit additional questions for the record. committee stands adjourned. you are watching c-span3, your unfiltered view of government. c-span3 was created by america's cable television companies. and today we're brought to you by these television companies who provide c-span3 to viewers as a public service. weeknights this month, we're featuring american history tv programs as a preview of what's available every weekend on c-span3. march is women's history month. and tonight we'll show programs from our history bookshelf series. to begin, sheila, press secretary for first lady nancy reagan from 1981 to 1985 recalls the personal and public life of mrs. reagan as described in her book "lady in red: an intimate portrait of nancy reagan." watch tonight beginning at 8:00 p.m. eastern, and enjoy american history tv every weekend on c-span3. president biden speaks to the nation in his first prime time address to mark the one-year anniversary of the coronavirus pandemic in the u.s. we'll have live coverage beginning at 8:00 p.m. eastern on c-span. you can also watch at c-span.org or listen with our free c-span radio app. with us next is amy walter. she is national editor of the cook political report and the piece that we're talking about in this segment is titled "volatility is the new informal." it feels like this is something we all new. but it's been a volatile couple of decades, not just years. >> we tend to think -- and, look, i'm of a certain age that i've been in washington now, it hurts a little bit to say how old i am, but i've been in washington for almost 30 years. so when i came to washington, politics had been, it's always been volatile. but there have been a certain level of stability there. democrats had controlled the house representatives for 40 years since 1950s democrats had uninterrupted control of the house. for much of that time, democrats had uninterrupted control of the senate. and republicans would win the white house with a brief interspersal there by democrats. while you could see members come and go, the stability there was something we kind of got used to. and after 1994 and actually i'd argue really since the turn of the 21st century, we've known nothing but volatility obviously in our own, you know, what's been happening outside of politics. 9/11, the financial crash in 2009, covid. and politics sort of followed suit. control of congress has flipped just in 20 years. the house has flipped three times, the senate four times just in 20 years. it took 40 years for the house to flip once. and i think what we're a

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