Regulatory commission. Its just under an hour. Come to order. Good morning, and welcome. We find ourselves this morning with a bit of challenge. On the house floor. Votes may start within five minutes. Multiple roll call votes. Maybe up to one and a half hours voting on the house floor. In the interest of time, i had the great Opening Statement written by my texas constituent, i will not give it. But ask to put that in the record. Without objection, so ordered. Speakers put your statement in the record. For the record, moving forward we are three witnesses here. We have mr. , miss hofman. You have five minutes for Opening Statement. The head of ferk. You have five minutes. Thank you, mr. Chairman. Ranking member rush. Members for the opportunity to be here today. Before i begin my remarks i want to briefly reflect on the passing of senator. Who passed away yesterday. Former chairman of the energy committee. A leader in the space and he will be remembered. Id like to start by taking a moment to acknowledge all those impacted by Hurricane Harvey and irma. The loss of life and widespread devastation rocked by the storms has been heartbreaking to see. I know i speak on behalf of those in the room and for americans across the country when i say our thoughts and prayers are with those affected at this time. We know the road ahead will not be easy. We will be with you every step of the way. It was good to see congress act swiftly to begin providing resources that are needed to those relying on it. We at the federal Energy Regulatory commission are ready to do our part as well. Its times like these that also remind us how important the reliability and resilience si of the electric grid is in the daytoday lives. Rebuilding from the storms is going to take time. I have been inspired by the way the brave men and women of the Utility Industry have already stepped forward to help. Crews from all over the country are assisting in this effort. In addition, ferk and narc issued a a joint statement to provide assistance and wont be penalized for restoring service. Extension on filing deadlines so people and companies could focus on whats most important. Recovery. And finally in response to the loss of refineries due to the storm, the commission issued an emergency pipeline waiver to accelerate the delivery of much needed fuel and help ensure continued flow of gasoline to the northeast. We will continue to keep all those effected in our prayers. As they work to rebuild homes and lives. While this is a transformation period for the electric power industry. Developments not threaten the robustness or security of electric grid. We support the grid in several ways. Congress and entrusted with the responsibility to improve and enforce mandatory reliability in 2005. To develop and propose new or modified reliability standards. These standards include physical and Cyber Security standards. Much of this is covered in my written testimony. So in the interest of time, i am going to speed ahead and say that reliable and resilient grid requires the development of needed Energy Infrastructure. Ferk supports that development. To authorize the construction of Certain Energy infrastructure such as interstate Natural Gas Pipelines and hydro power generation. While the lack of a for ferk is now addressing the backlog and will continue to make steady progress in the coming weeks and months. Im proud to report that since the restoration of the, we have put out 62 orders and will continue to to do that. Certainly efforts in all the areas covered in my written testimony, will continue to involve cross sector inner agency and Public Private coordination. Working with federal partner, state leagues, and other stake holders. Ensure the reliability and of the electric grid. Ip committed to working with the subcommittee to continue the efforts and i would like to reiterate my appreciation for holding this critical hearing. Thank you the opportunity to be with you today. I apologize for the abbreviated remarks and ill be happy to answer questions you have. The chair calls upon miss hofman. Acting secretary of the office of electricity at the department of energy. You have five minutes, maam. Chairman, vice chairman, i appreciate the opportunity to discuss with you electric reliability issues in a rapidly transforming industry. U. S. Electric sector is in the middle of sweeping changes. I see little reason to expect this process will slow down or that well reach new equilibrium any time soon. To understand the process and manage it. So that our nation electric infrastructure maintains reliable, affordable and resilient. Before i discuss any further details i would like to echo the comments by chairman. And our thought ands prayers are there for those affected. Our Organization Also provides Energy Related expertise to fe ma. And the add. We have been actively engaged in the response, recovery and rebuilding efforts from Hurricane Harvey and irma. The actions of the departments have taken is in support of a whole government of response to the disasters. And includes deploying 26 people to federal, state Emergency Operation centers. Regional and National Response coordination centers. We have authorized up to 5. 3 Million Barrels o oil for exchange from the reserve. We have supported state and regional fuel waivers under the jurisdiction of epa and hosted coordination calls with deo and Emergency Response personnel. And state energy offices. Secretary noted on numerous occasions, america is blessed to have the Incredible Energy system and resources we have today. The millions of dedicated men and women who work in the electric industry and are providing response activity to restore power to move fuel and repair infrastructure. Is doing a tremendous job and should be recognized for their dedication and service. Over the last several months doe explored numerous issues central to protecting the long term reliability and resilience of the grid. We are seeking to inform policy makers of the facts and friends in the sector. And provide a common focal point of discussion for all affected stake holders. In addition we do research at our National Laboratory within our industry partner. We have focussed on new technology for operating, planning and monitor skpg protecting the grid. The department announced on tuesday up to 50 million to National Laboratory led teams. Focussed on resilience and Cyber Security. In order to keep my comments short i just want to say in conclusion, secretary and our team look forward to a thoughtful conversation focussed on reliability, affordability, and resilience in the electric system. The implications are profound and we have one electric grid. We are more dependent on it than ever for economic well being and national security. The grid must function and function well. In that it must meeber of competing technical and economic requirements. For me managing this change means we must think about the grid wholistically and a single set of policies. We must monitor the characteristics and performance. We need to develop a more systemic way of looking ahead. And we must manage change with new processes and practices for collaboration. That requires coordination between the federal and private s sector partners. We call upon the president and ce, of the north American Electric reliability corporation. You have five minutes, sir. Thank you. Thank you for conducting this hearing as we face a period of rapid change in the electricity industry. Driven by natural gas, public policy, advances in technology, Market Forces and customer preferences. This transition is altering our understanding of power and how generating resources are dispatched. As the electric reliability organize is focussed on the emerging challenges presented by the rapidly changing resource mission. With appropriate policy, careful planning and strong actions, im confident the Electricity Sector will continue to accommodate changes and enhance reliability and resilience. Even with the changes already under way the power system remains highly reliable and resilience. Shows improved performance each year. This record demonstrates the strong commitment to reliability by all stake holders. Reliability requires constant vigilance more now than ever. Let me take a moment to describe the role in risk before they become bigger problems. Each year we conduct a long term reliability assessment that looks at the relinlt of a system ten years out. We conduct a report that looks at the grid performance over the previous year. We conduct special assessments focussed on challenges, such as the integration of renewable and distributed Energy Resource and the increase reliance on natural Gas Infrastructure. Wi analyze system events such as the unexpected loss of power from solar forum in california during the blue cut fire in august of 2016. Over the past six years, the 50 largest events in impacting the grid were caused by Severe Weather. Leading to focus on resilience Going Forward. We were able to provide risk informed rejss to improve reliability. Id like to turn to how the changing resource mix will effect reliability. The grid is inner connected and depends on the right beginnings of resources and trance mission. Its important to maintain a continuous supply of services in the right location on the system. Just a few examples these include inertia, frequency response, voltage control, stability and changes in demand and have historically provided these essential Reliability Services. When the units retire. New resources coming onto the system must replace the essential Reliability Services that are lost. As more resources move behind the meter, its increaseingly important for system operator to have visibility into the resources. As pour supply becomes dependent on natural gas, must ensure this in time fuel is as reliable and secure as the power plants that need to fuel to operate. Many issues and rejss identify are reflected in doe staff report on electricity market and stable. The study agrees on the need to main ta essential reliability service. Promote resilience and clab rat with canada and mexico on reliability. More specifically id tlik highlight several recommendations of my own. Review the economic and market factors driving base Load Generation into early retirement. And provide tangible incentive for maintaining a deverse mix. Markets should value and price capacity, essential Reliability Services, and enhance resilience through fuel diversity. Policy makers should evaluate alternatives for ensures adequate capacity of Gas Pipelines and storage. To meet electricity production needs during extreme conditions and ensure Gas Infrastructure is as secure from cyber and physical security threats as the grid that it supplies. Markets should incent and as needed require all resources including demand response ensure the resources will perform in normal and extreme conditions. Policy makers should seek alternatives to streamline permitting of transmission. To address the challenges and benefits of a diverse resource mix, industry stake holders and policy makers must understand and plan for the risk of our rapidly changing resource fleet. Network plays a critical role. I appreciate the opportunity to share our thoughts and expertise with you today. Thank you. Thank you. The chair calls upon the Ranking Member of the full committee. For five minutes. Mr. Chairman, ill submit any statement for the record. My understanding is that theyre going to be votes. And ill just submit it for the record. Unanimous consent. Without objection . So ordered. Thank you for your testimony. I will begin the question, answer portion of the hearing. Ill begin with the question. Recognize myself for five minutes. Hurricane harvey hit my home state twice. But we never lost power. In my home in sugar land. Some people are still without power in tkts texas, louisiana and florida. Because of hurricane irma. Without power, theres much greater damage. Mold, even death we saw in florida. My first question is for you mrs. Hofman. I know that deo has been busy assisting with Hurricane Harvey and irma recovery efforts. We applaud that. But can you talk a second about the programs doe has in place. Not only to recover but to also prepare for storm events in the future. Thank you very much for the question. The department has been actively engaged with utilities to the program. To look at advance technology that we have helped support the industry. Test out on the grid. Such as automated switching. Rerouting of power, the ability for utilities to do outage management. To really take a look at and be proactive in the response characteristic for identifying where the outages are. If you remember customers usually have to call the utility to let them know the power is out. The utilities have been able to automate a lot of the systems. In addition we have been working with the state and the region to exercise and understand the different. Each hurricane is different. The damage is significant. We have been helping the states reprepare for this. Thank you. Whats been the role of the escc. During hurricane preparation in response . The coordinating counsel has had a significant role. The focal point of coordination between the federal government and ceo. The leaders in the electric Utility Industry. This allows for continuity of message and activity. That were all on the same page on what the priorities are. And what the activities and the needs are by industry to the highest level of the federal government as well as industry in supporting a coordinated by importantly Effective Restoration process. Back home people say its working very well. Glad to hear. Final question is a few months ago we passed a bill, hr 3050 that helps improve planning. How does a plan help a state deal with extreme weather events like harvey, irma and more hurricanes . So Energy Assurance planning is an important activity that the state under take to really take a hard look at scenarios of potential events that impact the stay. Also look at how this effects. Energy resources. It allows us to look at contingency and thinks about how do we build in resilience. In partnership with the state. Thank you. My last question for you chairman chatter ji. In order to have a reliable electricity system, we must protect our grid from Cyber Security threat. For example, i understand you participate in the grid exexercises. How do the types of exercises make the electricity system more reliable . What elts are you doing in terms of Cyber Security. Thank you for the question. The commission and i myself take Cyber Security and protecting our grid Cyber Attacks very seriously. Ferk is focussed on ensuring reliability in the face of some of the cyber challenges that we have. We have an office of Energy Infrastructure security. That is trying to stay ahead of potential threats to the grid. And participate in some of the activities. Theres no question that threats to our system of Electricity Generation distribution whether from hurricanes or from Cyber Attacks are of the utmost concern of the commission. I will continue to work with you all and my colleagues to ensure the safety or our grid. Thank you. Thats all my questions. We call upon the gentleman from illinois. Mr. Rush for five minutes. Thank you. Ill go down the all three of you. The first question, in your professional opinion, do you anticipate that Climate Change will continue to play a significant role in threatening the nations Energy Infrastructure . Due to more frequently occurring superstorms, hurricanes, and other natural disasters, including heat waves, drought, fire and flood . Each one of you id like for you to respond. I think its important as we confront these storms, and the impacts they had on the grid that we ensure that as our grid transforms for the future that we ensure that we can bounce back from these types of events. And have a really reliable and resilient grid. As the vice chairman mentioned when the power goes out, people really suffer. I was on a call with secretary perry. He talked about the fact that after a couple of days, youre hot, tired. Youre wet sdp if you dont have power you get upset. Its important that in response to these weather challenges that we have a reliable and resilient grid. I think the role of the commission will be to look as we are in this transformation period. That we ensure that the reliability the world class second to none reliability that our country has enjoyed can be maintained Going Forward. Miss hofman. I would echo the comments. I believe its the duty and responsibility of the electric industry to be forward leaning and think about different scenarios and events that will happen. Build off the Knowledge Base of what we have experienced and look about how to build in resilience moving forw