Like to hear from you a little bit about what he think we ought to be doing in terms of reliability and price spikes. You are quoted as having said, im also concerned about the price, but the absolute magnitude of the price and the variability. Nbcs price spikes of the symptom that protecting the liability is causing this issue. Can you elaborate . Is that an accurate quote . You never know. The quote was in that context, somebody had said we are mainly here to worry about reliability, not price. I made the comment, well, they are closely related. When you see the extraordinary price spike as we saw in some regions of the country in january and february, that means the grid operator is doing very unusual things to keep the lights on. That ultimately goes into customers pocketbooks. We need to say, why is that happening . What can we learn from it . We are in the middle of probably one of the biggest changes we have ever seen, particularly the increased reliance on natural gas to generate electricity. And what we looked at very much in the tech Conference Last Week was how we can get the rules right to make sure that number one we have the infrastructure in place so that the pipelines and theyre so that the constraints dont cause the gas prices to spike up. Secondly, the market rule, sometimes very become a specific rules are written in a way to allow people to buy their gas at a more economic time of the day to avoid some of the spikes miss on this winter. We actually trying to change the timing of the electorate markets to make that happen. But more fundamentally of one of the things i have been leading is a look at the capacity market these are the things, ford markets three years or five years out to see what capacity is needed on the system. We have to make sure that the rules are written so that we are properly rewarding the facilities that are very stressed by the shortterm gas prices. Seeing a lot of retirement which could ultimately be detrimental to reliability. We are taking a very focused look at what it means to survive in the market to make sure that the market price is right. A very geeky answer, but that is very much what the tech conference was about. What can we learn and get the rules right next year . I think its an answer that goes to a lot of the important issues. One thing you did discuss is the impact of federal regulation systems. I think that is also not kiki but important to reading your testimony you said that should help understand the implications of individual regulations. There in fact might be interested particularly and reliability. You mentioned you had worked with the epa on the finalized standards and that they should follow the development of the epa, Greenhouse Gas emissions rules. Let me just ask you, as you know, epa is currently working a lot of rulemaking. That would include it affects the utility sector certainly. The 316b cooling water intake will, the house on, the particulate matter to and have fools. So let me ask you this. With regard to those regulations what is being done to help epa understand how these rules collectively might impact liability . We have tried to be a source of reliability. A lot of our workers been focused because that has such a short time lines. But my colleague right behind me and the next panel, and i cochaired a forum that matt. We have had meetings on 316b, coal ash, and a lot of the focus is on Greenhouse Gas. I think that has rules are developed we need to become mentors in the draft stage such as in the Greenhouse Gas rules that are coming out june 2nd. Make sure that those rules are achievable while reliability can be preserved. And then if you look at the Greenhouse Gas rule, it could potentially make changes for the markets and infrastructure, make sure we are doing well we need to do to support reliability as those rules come and. So commenting and looking to make sure the infrastructure is keeping out. I hope on the front end you will do not just commenting but analysis as to what the impact is. Its kind of like the costbenefit analysis. This is certainly a cost. Reliability is a cost. The talk about the price spikes. Did not talk about potential for browns which is also there. We have gone through a tough winter admittedly, but we really stress the system. Now were looking at a hot summer. At a paw were in need your input on the frontend to give them commons but also to be sure these regulations are not going to make it even more difficult for us to have reliability with all the issues, and the historic right to live models states in connection with utilities were responsible for insuring the construction and maintenance is adequate. Who is in charge now . Could you think is responsible . Well, the state still play the critical in deciding where the generation goes. A lot of that generation. In that twothirds of the country including ohio better in competitive markets we are relying on the competitive markets to as san the investment signal to make sure that the generation is getting paid said it will stay on line if needed. So they have a big role to play. Now were in a major investment cycle and we need to make sure that they draw the investment we need. I know my time is up. Really get into this issue for the next panel. I do think this reliability issue is critical and look forward to following a. Senator. Thank you, madam chairman. My colleague who has just spoken i wrote to you both last month urging you having a hearing on the greater reliability and stability. What you to know how pleased i am that you did this in such an expedited manner. Thank you. Its extremely important. There are two fields that keep the lights on, just to that keep the lights on 247365. Gas will get into that position. Theyre not there yet, but they will get there. Fees two phase alone fills provide almost 60 percent of our this country demands. And without the space low fuels are great cant function. We know that. We cannot keep the lights on. I am having a difficult situation, you can imagine my side of the aisle. I just want the facts to come out which is why i asked for this today. Now what you all on the front line, basically depending on can we have electricity keep the lights on. It turned nominated. Airconditioner need. Whenever it may be. With what we have come to right now, you know, coal still is 30 percent of our power, our national max. As you are thinking about the fact that nearly 20 percent is being retired, 20 percent is being retired. And the fact that epa proposed informants standard, effectively the construction of any new coal plants. So then you start looking and reliability, had a we maintain, keep it running. Thats why im asking this of ministers and the look at how we keep the lights on some peoples lives will not be in danger. Kohl is in the only base load fuel. In the current Market Conditions on likely that we are going to build any new kits. Yet we may need to replace as many as 100 Nuclear Units by 2050. Major liability crisis. 89 percent of the coal units that are slated to be closed. Just to keep up with the demand. Pjm. There being represented. There were sent this is a critical time. Even they can be straight. There were down anywhere from 50750 megawatts of of 140 plus thousand that are responsible. Another tool in the two walks. 10,000 megawatts of coalfired power. Youre going to be sure next year. So i just would like to know. And i will start with you, chairman, your view of this, pushing certain kinds of fuel or looking at basically the portfolio that utilities have . I do not think it is my job. It uses of generalized pride that allows different fuels to compete fairly. And so if there are preferences for certain kind of tools that was not a fair market. Let me ask. We will go through in the second round. Right now just explain as simply as possible this system, the way it works now. You have producers such as the p. M. For synergy. They are responsible for producing the energy that is needed that goes in through the transmission which is aware, the great. Then you have an arty as such as pgm who is response ability to make sure it is reliable and affordable and dependable. Him makes this is and what goes on and what the reimbursement rate would be . If you are saying that we think your portfolio is out of bounds and we dont think you can continue to give us what we need who makes that decision . I want another coalfired plant or want to get rid of that coalfired plant. One more gas generation. We need more renewals. I believe, you know, in West Virginia we are being blessed. We add all. Coal, gas. Were using all. They just like it. P. J. And as an analysis three years out and says, how many megawatts will we need to keep the system on . In a run an auction where resources been. I have so much coal, this, nuclear, some of the existing plants i will run at any cost. To make the decision on price . Amelie going to reimburse you on what a gas turbine will cost even though i know you need coal i cant do that. It makes that decision . What you are referring to is embedded in the auction rules. I would say p. J. Am, but those rules have been approved which is what we looking at the capacity markets correct in you overrule if you think theyre not having of their portfolios and have a good mix . If they say we want to do this, we try to balance all of that and make the decision. Adp or for synergy can come to you and say, listen, we are shutting down. We shut all the coal plants down because we could not get reimbursed. The prices are not working. They can come to us. Madam chairman, can i just asked , can anybody explain to me the price spike in the gouging and went on during his boulevard tax and what the people in West Virginia will get it with . I am hearing it is unbelievable. Theyre getting almost double bills, double the cost to the utilities. Can you give me a reason why . The simplest way to explain it is drying time where power was short because there was successive days of night and day unusual cold, generators to were reliant on gas and spend a lot of money to get emergency gas. Why, the biggest debate take advantage . Is the pricing structure so that we cant to the best of our knowledge of our analysis so far there was no market manipulation. It was actual supply and demand forces. Demand for gas versus how much there was which no one has longterm contracts for gas . Despite the price is every day . They dont do that would call. Some people have longterm contracts. The price spikes, if more people bid then there is gap. And that is what makes is not as more variable than a product. It we are putting all of our agencies eggs into that basket. So consumers in West Virginia and around the country will be held hostage. Is that fair . Well, in 2010 we predicted through an independent study that we updated that last year. At that time the epa kerning four gigabytes. Is that correct . There were off by a couple of thousand. Weve been working with the epa. Were still trying to get the message out that overdependence on fuel, gas is very volatile to pricing and is not as reliable. The other concern is that there is not any discussion in the Value Proposition of the Reliability Services provided by base load units of nuclear such as inertia, balancing, control. The more we move this out into distributed than non dispatched and not can centrally controlled resources the harder and harder it is going to be to manage reliability on the grade. That is what were seeing. Units that are allowed to operate whenever there would like to operate creating the price issues and not adding to reliability. Our role is to get that message out there. When youre saying it basically you can bring it on, turn and often on as far as the nobles, but you cannot turn off mix and you cannot turn of coal. Once it goes a just got to go. That is where the base comes. Senator. Im so sorry. That is okay. It has been really [laughter] and we have a second panel that will focus on this as well. We really yes. This is a warmup. We appreciate that line of questioning. As we close this panel and again, thank you. It is obvious that there are many more questions on subjects to talk about. We have a second panel that will add some light and eliminate the subject even more, but i want to put into the record, senator, that coal is a very significant base load. Gas is now almost 30 percent and nuclear as well. You know, it has shifted quite a bit over the last camino, 15 years. Some of it regulation, some of it marketdriven. We are going to look forward to drilling down more. Madam chairman, if i could have one quick thing on this. You know, i come from West Virginia. We have been a large coal producing state blessed with natural gas, fracking, really blessed with everything. Someone came to me in west region and the citizens of our state said listen, we have a new super fuel out and it is commercial hydrogen. We will be ready in three, four, five years. You know what, it will be tough, but we would adjust. We would adjust. Not here trying to push a product that you dont want. When we hear from people like you, weve got to have it and ive got an administration that is fighting the way they can to get rid of it, you have to have it but you dont want a you know you needed. Somebody has to put the facts out. And thank you very much because you have been a leader and we appreciate your lead. As we end this panel to my chairman, let me express to you in the strongest possible terms my opposition to the application filed for the midstream abandoning of the pipeline. And you cannot discuss this publicly, but i want to call this to your attention. The letter is in your file. Needs to be responded to. Again, this gets back to the whole issue of getting fuel to people when they needed to keep lights on. This is about pipelines and electricity generation, but it is an extremely important issue for both generators, middlemen and middle women and consumers. So thank you, and i am looking forward to following a. This second panel will come forward, we will start momentarily. [inaudible conversations] [inaudible conversations] ladies and gentlemen, if i could reconvene the meeting. Thank you. We have a large crowd. Thank you for quickly adjusting panels. We have six experts on this panel, and we only have about 30 or 35 minutes left to go. Now want to do this quickly, and im going to ask each of you to limit your remarks to four minutes if you can do it. I would really appreciate it because we want to leave time for at least one round of questions. First, representing for, perhaps from a different perspective. Were looking for to hearing that. Microclimate executive director of president of operations at pgm, senator mansion you will also give us some additional insight into the line of questioning that you have raised. Mr. Nicholas atkins, chairman and president and ceo of American Electric power, we thank you for being here. We also have mr. James hunter representing International Brotherhood of electrical workers. I am proud to have reunions here , what did you all do and a perspective they bring to this issue is very valuable. Misters that hill, president and chief operating officer of count by corporation. Thank you for being here. Finally cannot revert to, we thank you for your views from the Clean Energy Environmental Defense Fund for your perspective that you bring to this issue as well. If we can start with you, commissioner, and really we will all do well to four minutes of that we can have a very robust line of questioning. Thank you, chairman, ranking republican, members of the committee. Im a member of the federal Energy Regulatory commission since 2006. Thank you for holding the hearing on this important topic. We have gone through quite a winter, complete any reference pastry of the staff and out with particularly starting january january 5th. I think we need to ascend appreciation to the thousands of people look up the system running, mr. Hunters members, people who made decisions in a dispatch, they cant youre remarkably well in a system that was stressed. I have consistently said that we let the market decide which fuels of the winners based on economics and affordability, but it cannot be reliability neutral on this subject is too important. We have to maintain reliability. We went back and looked at the letter that senator murkowski room in 2011, and my response to my house testimony that year in which i call for a more formal process to analyze the potential liability implications of particularly environmental rules to my knowledge. That process has not yet occurred, but i continue to advocate for it. The reasons are as follows. A couple of unusually warm winters before this one and the system was stressed. In 53 weeks who will lose all those plants that now slated for closure. Plans to retrofit generally have a fourth year, sometimes with your. The fifth year is full of uncertainty. Some of the other panelists will relate to that. So as referenced earlier our region has different show mixes depending upon where you come from. Some areas more dependent on natural gas. We are seeing a lot of stress, particularly with prices, not only the cold plants, but also the nuclear. It should be kept in mind. Specifically the midwest is looking and some challenges in the summer 2016 where they project a reserve margin that will be a deficit. Now where the reserve margin has been moved upward solitude gigawatts it also depends on the fact that the assumption is that consumers will be using less electricity per year, and that is a pretty big assumption to make. We also have individualized situations. I reference one in my written testimony where the local area is going to be in a conundrum as to how they move forward without a coal plan. On this issue we have a variety of opinions. Executives who will say we can get through this without any problem and others that are concerned. My focus has been to try and keep the data. Which plans to retire when the mall where they are in the system, what they provide in terms of not just power but bolted support is very, very important. Some that has not been particularly effective in we are not exactly confident and a lot of the numbers. That has me very concerned going into the next two to three years. When need to do a better job in government working with the private sector, some time to file some kind of formalized process to analyze this. A lot of it will depend on the weather. We might make it through. If we have extreme weather and the summer or the winter the system will be streaming stressed. And it reliability is paramount. People safety and lives are at stake if we have extended extreme weather and if the system is not able to produce power. Thank you for the chance to testify. I look forward t