Transcripts For CSPAN3 Weather And The Electric Power System 20180129

Test test test test test captioning performed by vitac not only the operational aspects but what is needed from a market standpoint since they run the markets in respect to footprints as well. What is needed in a market sense to ensure that resources that are indeed contributing resilience benefits to our grid are properly compensated. Following up on that, both for mr. Van wheelie and mr. Ot ter, to weigh in as well. Data shows that new england was heavily reliant on baseload coal and Nuclear Generation during the recent cold snap. The data shows at the peak of the cold snap, coal fire generation accounted for 7 of dispatched capacity despite being 2. 6 of installed capacity in the region. Really called upon to perform. Additionally, Nuclear Generation accounted for 23 of dispatched capacity, despite only being 12 of the installed capacity. So isnt it fair to conclude when your region needed power the most, it was the reliable coal and Nuclear Power plants that were necessary to keep the lights on . Well, i think coal and oil definitely coal and nuclear definitely contributed. The prospect for coal in new england is limited. The two coal fire power stations left on the system, one of which will retire fairly soon, we have four nuclear reactors, one of which will retire soon. And you know, what was surprising to us was 35 of the energy was coming from oil burn in the region and many of those oil units are 40 years old. I think the issue for us in new england, we have definitely transitioning to a different power system as the region strives to decarbonize. We have to reduce the amount of fossil fuel burnt in the region. The question is whats the game plan looking forward in terms of to do so reliably. And the idea behind the study is to demonstrate the consequences of doing nothing in the first instance, which we think are severe and to layout policy makers the various paths forward. Were looking forward to engaging a conversation on how best to or chess straight that transaction. Would you like to add anything about pgms experience . Yes, sir. Certainly from pgms experience, we have a bigger proportion of total resource mix being coal and nuclear. Decent the recent cold weather event, more than half of the total supply was coal and nuclear. Certainly let me be clear, we couldnt survive without gas and couldnt survive without coal and nuclear. We need them all in the moment. I think the key, what were focused on, the key is each brings reliability characteristics and each online when we needed them. The point is in my opening comments, the pricing doesnt always reflect that. When they sell the energy forward, the fact they were on for reliability during the cold weather isnt reflected in the forward price. Thats unfair and puts them at the disadvantage and we need to fix it. Really, this debate over there are certain coal plants that are old and dont run much and didnt run during this period. Those need to retire. The ones online running in every day we need to keep them and thats the reality. Are there specific actions you might recommend for take to ensure that baseload coal and Nuclear Generation resources are paid for the value that they bring to the grid . Yes, certainly weve discussed that with ferc and the chairman as part of in new docket. It focuses on the Energy Price Formation we just discussed in saying we need to take a hard look at that, ferc already looked at the fast start pricing fen nom ma im describing wont reflect that. We need to look at the pricing related to these types of events where its not resources that are flexible moving around. Its the ones online and serving customers that we need to address. Thank you, madam chairman. Thank you, senator smith . Thank you, madam chair for organizing this very important hearing and i very much appreciated reading your testimony though im sorry i missed your comments here today. Its ap pro pro because minnesota is digging out from a major snow event. In minnesota that means a lot of snow, not a little bit of snow. So it is uppermost on my mind about the impact of dangerous weather events on sort of the resilience of the whole community. So i really appreciate how important this is to all come together. Last week, we heard from the committee dr. Boreoel about wind and solar is going to be the lowest coast new generation around the world within the next ten hours and Energy Storage costs are dropping as well. I would be very interested in hearing from this panel about how you think these changes will affect the grid, the reliability and the resilience of the grid and it seems to me that diversifying would contribute to that. But id be very interested to know what your perspectives are on this, really anybody. Ill jump in briefly first, senator. Ill say again, welcome to washington. We newable generation is already clearly in the column of Success Story and gets better every year. And it is contributing reliably to the satisfaction of our nations electricity needs today and i expect that trend to continue. It performs well during harsh weather as we heard, including improved performance of wind resources in cold weather conditions. That said, its still the case that it presents operational challenges in that the wind isnt always blowing and sun isnt always shining. That prevents realities to it. I think Energy Storage, your question referenced also, will be will be something that will advance the ball significantly towards addressing that. Its not so much today at least in my view compensation issue but we need the technology to take the next step. The picture of that sitd of the industry is good already and improving. Thank you for the comment. I would note the diversity you speak to does in fact add to the capability to provide resilient power. I think in particular the integration of the renewables provides strategic use of those resources to meet certain demands and certain requirements and certain areas that they really can add a tremendous level of capability. That being said, storage as i noted in my confirmation hearing, i consider the holy grail of the electric system. And that being said it is one of the top five goals in my Dec Department to focus on moving grid mega watt scale storage forward to integrate that as a resource and help enable the integration of renewables and other resources to be key parts of our resilient grid. Maybe i could followup with mrs. Clem enlt ents on this. What role do you see understand efficiency and you have talked some about demand response play in resilience ye. In minnesota we had success winterizing homes to take some of the pressure off the grid. Id be interested in hearing your thoughts on that. Thanks for the question. Energy efficiency is the most underrated resource we have, its the cheapest by far. We have been talking about it for a long time. It is not as exciting as new but the potential is still high. A Different National academy suggests on the magnitude 25 to 30 reductions are available still. In the states that have pursued as a policy matter, all Cost Effective Energy Efficiency, they are ticking down decreases in total demand at the level of 3 a year. Together with other resources, pr produced 12,000 imagine mega wa Power Resources and power you dont need in certain instances, are really exciting. I think three things about distributor Energy Resources in addition to bringing down the numbers of megawatts, they provide the flexibility to integrate the high penetrations of this lowest Cost Renewable Energy potential that you describe. And they can provide the flexibility. And finally, they are a great resilience yens resource if you think about the storage during hurricane sandy, when microgrids were able to island themselves and provide power at hospitals and fire stations, thats a real opportunity on the resilience side. I think the potential is tremendous and thats where we should start. Senator decap toe. Thank you, madam chair and the panel. This is of very interest to me being the other senator from West Virginia and coal obviously important part of our not just our economy but as senator manchin said proud of the history of Energy Production weve had in our state. We also have the Marcellus Shale Development which is exciting. Just a quick question, mr. Ott, mr. Van wheelie, did i get it right . He mentioned how many retiring nuclear and coal plants will be in his area. What is that figure for pjm until 2020 . We have one nuclear station, 620 Megawatt Nuclear station scheduled to retire coming up before 2020. As far as coal plants, weve expressed like 20,000 megawatts previously for the next few years, probably in the 4,000 range of announced. There could be more. Which is 17 different units, thats what i have here . That realm. But again, they havent some of them have not formally announced and some have formally announced. There are some having concerns financially, but as far as formally announcing it, its less than that. At peak load during the cold snap, natural gas generators provided only 48 of what you had predicted i think it was going to present in coal overtook that. Could you talk about that a little bit . Certainly in pjm, we saw the coal during the recent cold snap, more Coal Production than normal. I think it was an economic displacement. Gas prices went up and gas units dispatched down and coal came on at the higher level. Certainly we saw more Coal Production, coal fired production if you will than we normally would in that cold snap. And could you help me too maybe the chairman can help with this. The pricing of natural gas, prices spiked up to an all time high during this time, maybe 60 times their normal price. Do you know that chairman . I dont know if it was an all time high. I know with did experience significant price increases and you know, as i mentioned earlier, thats the kind of thing that can in a broad sense be helpful. Its important that we have market signals that reflect shortages, including in this case short term spikes in demand, send proper signals to both providers of the resource and consumers. Do you want to put more the prices got up into the 100 range. If you look when the pipes are could be strained in the 2 to 3 range. That gets me to another issue weve talked around but certainly in the new england area, the accessibility to natural gas and the permitting with pipelines, were were having difficulty even a state of West Virginia sometimes permitting our pipelines. The chairwoman can speak about this as well. You know, new england doesnt seem to have the appetite to permit the pipelines so i read in the Financial Times that says that gas from russia, arctic will warm homes in boston. And theres lng coming from russia. We have a Natural Resource in my home state and region that would love to be selling our natural gas in this country and into the northeast. How do you respond to that . Theres no customer prepared to sign the longterm contract to have the pipelines built. The second issue once you have a customer, then you have to confront the siding issue, both in new england and new york. You would have to overcome those two obstacles. I think the decision from a policy point of view for the region do Regional Policy makers wants to relieve those constraints or work around them. If you work around the constraints, then you either have to turn to alternate fuels like oil or lng and in that sense the jones act doesnt make sense because were importing lng from far away places and exporting a few hundred miles south of us. With the russia lng that has come in. They already a customer purchasing this because the supplies got so low during the bomb cyclone . The dynamic is when the lng inventory drops below certain levels, customers in the gas markets, local distribution companies, for example, will start calling for spot gas supplies. You get contracting happening in the world market for lng. Interesting from another perspective, while thats occurring, the russian gas coming here, we have to cargo vessels going with lng to southern ports, louisiana, into europe to help them meet their challenge. If were looking at an overall system here from cost from emissions and all kinds of things, it doesnt seem to make a whole lot of sense. It doesnt make a lot of sense to me either. No. Thank you. Our job is to make sense of all of this. Lets go to senator king. I hate to follow the a admonition to make sense. It makes it difficult. I remember meeting with you in 2013 about this very issue. And first madam chair, i love this panel, we should take them with us everywhere. You all have done a really good job of illustrating a lot of issues in a brief time. I do want to promote something for the audience and anybody interested in these issues and it is an app called iso to go, produced by iso and it gives you moment to moment prices all over new england, where the demand curve by the way, mr. Vanwhelie, the demand is exceeding the forecast at this moment by half a mega watt. You may want to call your office when we finish here. It gives where the resources are, renewable gas and coal and nuclear. Very, very useful. Thank you for this. Its incredibly helpful. I want to put some visuals, i learn visually to what weve been talking about here today the red line is the marcellus shale cost in the region, in pennsylvania, going back to the beginning of december the blue is the cost to new england. Its a delivery problem and thats what weve been talking about today. The infrastructure, does anybody want to build a 2 or 3 billion pipeline to deal with this if its not going to be necessary the rest of the year. Thats where we get into tradeoffs and building the infrastructure. I want to indicate how they interrelate. The other piece, the relationship between what we saw, Natural Gas Prices and electricity, an absolute almost entire straightforward correlation as you see and this goes back this goes back 15 years, hurricanes hit the gulf, and gas goes up and electricity in new england goes up, same thing over the winter 2014, the polar vortex, up 32 megawatt hour recently. These things are all interrelated. One of my favorite comments was from a friend in mine in maine who said there is rarely a silver bullet. Theres often silver buckshot and thats what were talking about here. A multiplicity of resources and the miss clemens, you talked about efficiency. The cheapest kill lo watt hour the is one you never use. We have efficiency opportunities and renewables and demand response. Weve got storage. Weve got infrastructure. Weve got rate structure, mr. Mcintyre. Weve got rate structure which will influence how we usz power, i realize im making a speech. If you can find a question in here, youre welcome to it. Mr. Van whelie, talk about how we deal with this. Lets make it specific. Do we build a pipeline or do more storage . I think its going to come down to what policy makers decide to do. Theres two parallel tracks in terms of the conversation. The one track were be in the lead on, how do we make sure the constraint is appropriately priced in the market. Because to chairman mcintyres point and unless we price that constraint, were not going to get through a liability we seek. We learned some things over the past few weeks that make us think weve still got work to do. I think the separate and parallel discussion is how to relief these constraints, to mrs. Clemens points, Energy Efficiency is one tool in the tool box. Ms. Clemens you may have missed it, we take into account the efforts the states are making and the New England States lead the nation now in terms of Energy Efficiency. But i think the evolution is occurring faster than what the states are doing with regard to the efficiency investments and my fear really is that the retirements will happen more quickly than these investments will be made. And the other thing i look at. One of the problems i see here is that gas is the cheapest capital cost. And yet youre taking the price risk and thats one of the tradeoffs but the way the system is working now, everyone is looking for low rates next year and year after and we dont have long term 15year power purchase agreements that will support the Capital Investment necessary for some of the other options. Yes, i think the the demand for the fuel is the issue. Well stuck with this problem for a long time because if you think about where the region is going in the long run, we want to take carbon out of transportation and heating, which means were going to drive the demand for wholesale electricity up in the region. Over time well have less unitization of the pipeline, but when you need it, youll need it in a big way. You can offset that through electric storage but our issue is seasonal storage. I think the region needs to work through the various possibilities and understand what the cost benefit trade again, youre talking about grid level storage but its hard to justify the cost if you only need it two weeks of the year, correct . Grid level storage in terms of todays technologies are not very useful in a multiday, multiweek event. Thank you senator. Senator daines. Thank you, Ranking Member cantwell, seems like each winter and summer when energy demands peak, were reminded of the importance of reliable and reenergy. From the northern states, we expect terms like polar vortex and bomb cyclones. In montana we call that january but thats the way it goes. The importance of keeping the supply on hand to keep the lights on and infrastructure necessary to support that system and this winter has been no different, this hearing is timely as my office kicking off Planning Efforts for our energy summit, we do this every couple of years. It will be in billings in may. Weve invited ferc chairman Kevin Mcintyre to attend and secretary perry and others and hope to have important conversations related to Energy Infrastructure and the jobs energy creates in our states. We hope they can both attend. As youve probably heard me say more than you want to, one critical piece of our Energy Infrastructure in montana is a coal strip power plant. Supports about 750 direct jobs. Generates enough power for about 1. 7 million homes and businesses across montana and the Pacific Northwest through heavy handed regulations, litigation and some state policies, the future of this plant is actually at risk. I was out there a couple of years ago on a visit thats memorable to me. They were taking boilers down for maintenance, it was july. I walked in and they were scrambling. The plant manager had been up since early morning, middle of the night, in july and whats the problem . Heres the problem. He said, we have tremendous balance d Energy Portfolio in montana, were developing renewables and great hydroresources and wind resources. But this High Pressure system moved into the northwest and when High Pressure systems move in, what happens . Temperature goes up and the wind stops blowing. And because they had coal strip down one of the major units down for boiler maintenance, we were struggling to keep up with baseload at that moment because the wind stopped blowing. And we referral to wind as intermet tent power and its not a critique of that renewable source of energy but we still have to solve the storage issue with wind to make it a more reliable part of our Energy Portfolio. I just came back from taiwan last year when it was september, if you remember what happened in taiwan, in august, they lost electricity to about half of the homes across taiwan. It was a major outage. And why . Because they were too aggressively Going Forward on eliminating Nuclear Energy from the balance portfolio. They had a plant ready to go back in 2014 and battling some of the regulatory issues to get it up and running. With the peak load, a hot day in august, they lost their baseload. I understand that while a lot of coal fire generation is retired in recent years, new england had to rely on existing coal and oil fire generation for this winter event. As more States Energy mixes are changing towards a more Renewable Generation due to policies and so forth, we must find ways to keep a diverse all of the above energy mix in the nation especially during the peak times of load. Mr. Walker, in your experience, how important is it to keep a diverse Energy Portfolio at all times but especially during peak load . Thank you for the question. I believe its extremely important. And its not only during peak load. I think its throughout the year. You know, importantly, the diversity of the load provides the opportunity for us to build resiliency into the modmodel. With the threats we have today with Cyber Security and they are emerging and evolving and increasing and the impact of these could be very significant in the country, so as we look at the portfolio of generation sources that we have, the diversity component is extremely important. And as we work with the rtos and ferc to evaluate the proposal set forth by ferc. Those are things we will identify and look at. I mentioned earlier on page 86, the doct theres a diagram th illustrates the different capabilities of just different generation sources, things that provide for the basehood, the essential Reliability Services of each of the different types of generators. So as you look at this its like an opentymization equation. When you look at the different variables and what the underlying goal is, which is to provide a safe reliable and resilient grid, its about optimizing, as well as the underlying systems that tie in to get and achieve the reliability and resilience we need too. Last comment and i know im out of time. My training was in engineering. When i tell the quick little story about engineers, its not meant to be disparaging but i was in a debate about capacity, running operations for Procter Gamble and the variation in demand and need to have capacity to cover spikes and we believe it needed to be over here and engineers were off in the ivory tower during calculations. Thankfully we had a Senior Executive that was listening and stepped back. First of all, i always err on the operational folks because they deal with reality. Number two, if an engineer were to design the amount of beds needed for a family of three, in terms of capacity, they would say you only need one bed for a family of three because on average everybody sleeps eight hours a day. Its something to think about as we relate to peak capacity. Thank you. Thank you, senator daines, senator hooin rich. Senator daines can get away with that because hes an engineer. I am too. Its a curse sometimes a blessing. I want to talk about the term baseload power, we maer more of it today than 10 or 15 years ago and i find that fascinating. I grew up in a utility family, my dad was a lineman and manager later. Those were the days when coal and nuclear and hydrowere the only games in town. But i bring that up because i think baseload often times today is more of a political term than an engineering term. And it tends to come up often times at times when its sort of code for trying to subsidize generation, that is no longer competitive in the marketplace. I would point out that when those coal fired generators go down, they are providing and often times, thats unplanned maintenance and not unusual, they are providing zero baseload megawatts to the grid. We need to find ways today to think about our grid and meet supply and demand together and know what the weather is going to be tomorrow and the next day so that we can match those things up from whatever generation sources were using. I want to go to mr. Walker first. You satisfied something to senator manchin and i want to i dont want to misquote you. I want to understand if i understood you correctly. That inherently, coal at a coal generating station is less exposed to the threats of physical or cyber threat to the grid than say oil and gas pipelines. And the reason why i bring that up, because from my perspective, once you use that coal to generate, you have to get it to the customer. You have to do that over transmission lines and then distribution lines and it seems to me that all of these infrastructures are equally exposed to those threats. You have the same systems at sub stations and relating to transmission and distribution on the electric grid that you would use in pipelines, you have the same physical threats to both of those distribution networks. So i dont i dont see the difference in terms of exposure in terms of critical infrastructure, am i missing something. Its a fair question. What you heard me say and what you reiterated is that what i do believe. And from and the perspective that were taking and im taking right now is focused on protecting Critical National infrastructure and you know, as ferc deals consider the marketplace and we focus on the capability that provides that safety and stability in the grid. If i have a stockpile of coal at a location for sufficient period of time, im not placing at risk the infrastructure as if it were natural gas. If we take what if that coal is too frozen or wet to actually burn . Those are possibilities that were realized during the polar vortex. I think through much of the work that was done after the polar vortex, provisions have been placed in at the utilities and the generation plants that utilize things like coal to prevent through weatherization techniques and things like that. When i think of the polar vortex or this latest bomb cyclone, if im getting that term correct the unsung hero that i think about that gets very little attention is actually demand response. And so id be curious from the folks at pjm and iso new england, you know, how important is demand response at this point in these sorts of events and has a market been fully implemented . And are there federal policies in place that assure that demand response is allowed to compete as effectively as possible in these kinds of events. So, a market has been fully developed for demand response. We think of demand resources broadly in new england and two categories, the one is passive demand resources like Energy Efficiency and thats very well developed in new england because of the state programs supporting that investment. And the active demand response, which is active reduction during system events and so forth, we have lower penetration in new england but the market exists. I think the issue has been the economics. Its not competitive in the market relative to some of the other resources. If you give me a minute, i wanted to reinforce Something Else you said as well. Theres a policy conundrum with respect to the discussion between field diversity and fuel security. I think the policy conundrum is the term fuel diversity is at odds with the idea of a competitive whole sale market because it implies a Central Planning or kes strags of the different resources on the system. The markets, what youre trying to do is create a competitive con instruct with the most resources to reduce the reliability service. You dont hear us using fuel diversity. We use the term fuel security. Senator cassidy. Thank you. Gentlemen, im going to refer to some testimony we actually had in june of 2016 from a fellow jonathan perez, the director of air policy Environmental Defense fund. And it was a very good hearing last time, which ill now kind of raise questions from that. Mr. Mcintyre, seeing theres a price spike in fuel cost, lng was imported, spot price going far higher in the northeast, this gentlemen last year said that there was actually a lot of unused capacity in our northeast Pipeline System and that ferc was working to add flexibility to the schedule and to better use that capacity. Do you agree its an assertion from two years ago, i guess, year and a half ago . Do you agree with that assertion and ferc adds to Work Flexibility in terms of delivering of gas. I know we have worked on reforms in the market structures and practices in schedules in the interrelationship between natural gas pipe lines which we regulate and electric transmission, which of course is critical to gain the power that was generated to where its consumed. I think he was speaking of the gas and said at times only 54 of the capacity was used in the polar vortex, the event to which he was referring. Im asking, is that still an issue or has that been addressed specifically . Well, we do have as you heard i think most i had to step out, im sorry if i missed something. Mr. Vanwhelie presented the situation in new england, where indeed we have ongoing longterm challenges in transportation infrastructure. That related to lack of efficient use of current capacity and im sure its not either or or due to lack of capacity, sir . In new england its lack of capacity at this point. This gentleman made the point, very provocative, if you look at the lack of capacity, it was only like two weeks out of the year in which there was alack of capacity. And at this point cheaper to pay prices two weeks out of the year as opposed to the infrastructure for remaining 50 weeks of the year. Any thoughts about that . It depends on ones view of the cost and benefits of roll being blackouts for example. Theres a point beyond which well supply the supply and demand by taking demand off the system. Thats the trade off. One could look at it and say its not worth making an investment in a Pipeline Infrastructure because we only use it a month a year, the incremental capacity. But you have to weigh that against the other consequences as well. What our study attempts to do, show were very close to the edge in new england and we need to find a way of relieving this constraint one way or another. Either through investment in the Pipeline Infrastructure or continued investment in other sources of energy to take the pressure off the pipeline or reducing demand on the system. Those are the three avenues available. They have different implications with regard to cost. Importation of lng would not be adequate for those two to four weeks a year in which you are truly constrained. Well become much more dependent than than imports of lng. Market monitor raised another question, two suppliers of energy into the region, one of which is in boston, the other in canada, pivotal supplies into the marketplace. Want you to expect very high prices for natural gas when we have these constraints and i think the policy tradeoff is do you want to pay these high prices on an episodic basis when it gets cold or do you want to soften those economics byinfras this gentlemans point, i dont mean to belabor, but its a critical question. The pipeline s so expensive, thats its cheaper to do the episodic high price than it is to do the infrastructure. Hes not here to make his point directly, but it sounds almost like youre disagreeing with that. I think that the region needs to work through those cost benefit tradeoffs. Okay. I yield back. Thank you. Thank you, senator. Senator duckworth . Thank you, chairman murkowski and convening this important conversation. My two engineering colleagues are not here but i wanted to remind them that multiple people are sharing the same bed in the United States navy its called hot racking and there are young sailors doing it right now in order to defend our nation. Lets say a quiet prayer for them of thanks for what they are willing to put up with to keep us safe. My question really talks a little bit goes back to the work that states have been doing for Renewable Energy. Illinois, my home state has made tremendous gains in this area and in addition to requiring 25 Renewable Energy by 2025, we also prioritize investment in jobs Training Programs that are focused on low income individuals to create thousands of clean energy jobs. And these investments will help make our grid more reliable and more resilient, not less. While also creating jobs. Ms. Clemens, in your opinion, how will illinoiss renewable policies impact the power system in the context of extreme weather events . Thank you, senator. I think the recent Illinois Energy act is one of the great examples of the smart way that states are leaning into this Energy Transition and saying we are going to use american ingener ingeneral unite to create Economic Opportunity and jobs from making the grid more resilient and reliable. By increasing the diversity of the resources on the system through increased wind and solar under the rps standard and increasing Energy Efficiency, it is increasing resource diversity at this point nationally, only about 7 of the resource mix is nonhydrorenewables. When you think about the characteristics, every kind of resource has a set of benefits and issues that weve just been talking about. So narrowing the conversation to just gas versus coal and lng versus new pipelines is an overly narrow view of the opportunities. The whole sale Energy Markets have done a good job of what theyve intended to do, which is to provide low cost reliable energy. As the mix changes and states like illinois take these exciting actions, the markets are going to have to start valuing things like resource flexibility that the illinois act is going to bring in through new distributed Energy Resources and thats exciting. When were talking about price formation in the markets, lets not forget that we cant under value the benefits that the renewable Energy Resources and distributed Energy Resources and Energy Efficiency are also bringing to the table. When they are overperforming and providing extra services to the grid, they should also be getting paid for those services. I think illinois along with minnesota and hawaii and new york and california are just real showing the way that other states can can look to as an example. Thank you. Can you speak a little bit to the coast of the renewables during extreme weather events and how did it compare to other fuels . In a marginal cost basis, the beauty of renewables the wind and sun are free. So they were able to help by wind specifically in the polar vortex and were still getting the information from the bomb cyclone, but the what they serve the role the winds in particular served was help to avoid price spikes or mitigate those natural gas marginal cost price spikes by overperforming at low marginal costs. Thank you. And in every tragedy, theres some opportunity and even though four months have passed since Hurricane Maria made landfall and clear evidence of the storm remain, the lack of electricity Running Water and reliability Communications Remain a central challenge to puerto rico and it struggles to return to semblance of life. Im committed to developing an advancing policy that would enable the island to remain operational during the next super storm. I would like to see in puerto rico some investments made so they are not put in the same place they were in before maria hit. Ms. Clements in your opinion will policies that help stimulate solar and batteries better position them for the next storm . We know with Global Warming and every extreme events, they are going to get hit again. Thanks for the question. Absolutely. I think just as of yesterday, 32 of puerto ricos customers remain without power. Thats all of october and november and december and now most of january. And the government also announced that they are considering privatizing utility. That might help in and of itself with credit worthiness of the offtakers in bringing in the expertise to provide that Innovative New model grid. But anything that congress can do to provide those incentives to help get that solar and get that Energy Storage online in puerto rico is critical and women facilitate a a model per the National Academy recommendations can serve as a best practice, which then can be shared with other states and regions within the continental u. S. Thank you. I look forward to working with members of this committee in securing legislation to help us achieve these goals. Thank you senator duckworth. Madam chairman, i have two questions for each of you relating to the bomb cyclone. The capacity and reliability, one goes back to question in the senator daines was getting at, how do we make sure we have enough base load power for those type of events so were ready for those type of events . Number two, how are we going to build the transmission and the pipe lines to make sure we have an adequate Distribution System . Were running into incredible difficulties building any type of pipeline for oil or gas and also were running into same kind of problems with transmission. Its actually whether youre a fan of traditional or renewable, were running into the problem ever building enough infrastructure. I can cite examples to you including most recently Dakota Access pipeline in our state which moves half a Million Barrels of oil a day to east coast refineries that need our light sweed crude. If they dont get it from us, they get it from saudi arabia, id rather they get it from north dakota. You can each take a swing at it. How do we make sure we have enough baseload power and how do we get people to support building this transmission we need to have the reliability we want . Chairman, mcintyre, you want to lead the effort here . Why not. Thank you, senator. Thank you for the question. As to baseload as was pointed out, its a term that means Different Things to different people these days. I think of it as the big large scale power plants intentionally designed to kind of run 24 7 essentially. And that is changing as Technology Changes and the economics of the market change. To answer your question, how do we ensure we have enough of it. We ensure we have the right market structures in place that compensate those resources. Compensate them appropriately. Secondly, you raised the question the difficulty of getting sufficient new Energy Infrastructure built. I fully share that concern, its unquestionably a problem. We have to look at ways to mends and improve our permitting processes so we can get over some of these obstacles. Okay. Mr. Walker . Thank you, senator. With regard to the baseload, one of the things i learned early on, were not very creative. So we name things for exactly what they do. And baseload referred basically the bottom of the stack, the economic stack and for what was going to meet the base requirements of load. I think that as chairman recognized, i think recognizing them from a market standpoint and placing value on things like the central Reliability Services as part of the economics will help drive that. I think also in recognizing and taking a different perspective and look the at it from a resiliency standpoint, there are values that will not be captured in the economic component that have value to the economic and National Security of the United States. And i think those in conjunction with the work that ferc does, needs to be integrated together to help drive the investment. And then once weve identified those critical components that are both valuable to the market from an economic standpoint to drive costs done and valuable from a physical and Cyber Security perspective to ensure the National Security, we blend those together to help work through the processes. Doe works with the states and local components of the United States municipal governments to work through issues as does ferc. With the proper data and analysis and the evaluation that really identifies the right locations, well work through the process and get them in. I like your pin. Thank you. I got it from northcom. Good job. Glad to see youre wearing it. Charles, im not going to take a swing at your last name. So, nerc identified fuel diversity as being critical in the long run. Were in the middle of a significance transformation of our system. Having that fuel diversity is whats going to allow us to have the reliable operations and i tend to move away from terms like base load or other kinds of add jekt tifs and talk about different generation provides different attributes and different risks attached to it. So the policy makers need to consider whats the appropriate mix of that kind of generation thats going to give you the best risk based outcome for operating your system in a local area. Whats really important to us as we move to an environment where we are more and more thinking about renewables as part of our mix, is the stability of the bulk power system behind it. That system is critical in order tore renewables to in fact be attractive to people, to the extend there is no wind or no sun, youre drawing power from the grid. So having the grid operating reliably is critical to the success of renewables being inserted into our system. And we need to really consider carefully what are the attributes, different generations provide to that stability of that system. And making sure that everyone is fairly contributing to that stability of the system from each of the different generation portfolios. Im not much of an expert on transmission citing or incentives but i will say, its just listening to the testimony here today, it seems obvious to me if youre going to move particularly in the case of Gas Generation, if youre going to move to more Gas Generation as being part of whether its a bridge to a more renewable based system or simply part of the basic power structure, youre going to need more capacity. Its something were hearing in the testimony today. So providing some types of incentives that get better capacity for gas seems to me a fairly important consideration for policy makers Going Forward. Youve got to get support for citing it. Ms. Clements . Thank you. Id echo the description of baseload and that were going to as we move forward were able to move away from that particular characteristic as the primary goal. However, the sheer number of megawatts that resources provide on the system is important. Weve got lots of power. Across the Country Planning reserve margins are very strong. From in general how do we have enough, theres already lots there. Go to the infrastructure piece then. If you have the power, infrastr piece. This is a chance to Work Together on well designed policy to build out transmission lines. That has to uphold environmental protections and done carefully but can be done well. You have to build it. You cant take ten years to build a transmission line or a pipeline. You can have all kind of power but doesnt do any good if it is not in the place you need it. Thank you, i will be brief, given the time. Essentially, it is the reliability characteristics you look for, making sure theyre compensated as the kpachairman indicated. We have a track record in the capacity markets that those have been effective in targeting performance of resources. I think the polar vortex Lesson Learned was a Success Story. Certainly we can do things in the Energy Market to address things i raised. Rto Regional Planning process has been successful in getting infrastructure built. 20 billion of Transmission Investment in the past 15 years. As far as gas, Pipeline Infrastructure, i see that as an issue. We do need to figure out a way to get the siting process moving. And it changed from a battle between renewable to traditional, both have the commonality in the interest of getting approval for construction of this infrastructure. Should be working together. Agreed. Sir . I say baseload is rapidly becoming obsolete term because i think of baseload whats reducing energy with minimum price. I think that changed over the years. Come from a world with coal and nuclear and now gas and renewables Going Forward, so i think if i look at the problem, i think weve got to be sure we have enough resources, structures in place through the planning authorities that they have to make sure we get transmission built. Siting is a problem. The regulatory gap and structural problem is when we restructured markets, we didnt understand the dependency created on the gas system. We have a gas system where the Business Model is completely different than the restructured markets. That leads to a situation where you dont have a customer for incremental Pipeline Investments needed to serve Gas Generation. Thats a problem we will struggle with for awhile. Thats right. It is a problem. Madam chairman, thank you for your indulgence. Apologize for going over my time. Appreciate it. You went well over, but this is exactly what this Committee Hearing was designed to dig into is these questions. When you say well, you mean qualitatively on quantitatively . Both. It was good though. These are questions that i think are very important and the answers on the record equally important. Well done, sir. Senator cortez. I appreciate that as well, the comment and conversation were having today is so important. Thank you. Mr. Mcintyre, good to see you. When you were before the committee for your nomination hearing, we briefly discussed Renewable Energy and power grid. In nevada we have an energy bill of rights that allows consumers to generate, export, store Renewable Energy on their property. And mr. Mcintyre, do you believe there are additional actions that will can be taken to distribute energy resource, access to wholesale electricity markets . There may well be, senator. Thank you for the question. Theres already a lot of work thats been undertaken within the Commission Prior to my arrival. That is part of the work that remains before me and before the commission as well. Very important issue. And it is something that we are going to turn our attention to in due course. In late 2016 they issued a rule that eliminates barriers to participation in renewable and electric storage in the wholesale markets. Whats the status of that effort. Thats the work i was referring to. Is there a time frame or sense of how it is something that will be turning to in the coming months. Dont have a specific calendar month for it. Okay. Mr. Berardesco, you have recommendations how to increase resiliency for cold weather. Curious if you have things for extreme heat. Nevada can get to 115 degrees in the summer. I dont off top of my head. Thank you. Miss clements, one of your recommendations to ensure resilience efforts focus on protecting vulnerable communities. What exactly could be done to better protect vulnerable communities, can you elaborate more on that. Sure. First of all, remember that theres a lot of institutions involved in protecting communities in the event something very bad happens like a hurricane or drought or some other storm. Critical service is like hospitals and fire stations and police stations and shelters and food banks need support to figure out their plans for how to respond in emergencies. Remember, a lot of this subject to state and local jurisdiction. So what we recommend in National Academys report is that congress provide funding and support and field dissemination and best practices to try this, support local communities that have to figure this out and help share that information and socialize those best practices by region and across the country. Thank you. Mr. Walker. I know my colleague from illinois talked a little about this, puerto rico. And the devastation there. Am the work done to modernize the electric grid. I saw a report that notes that doe Long Term Plan for puerto rico is to begin with micro grid power installations. At three manufacturing sites on the island. Can you elaborate a little more on the Long Term Plan . Sure. That project actually is not a doe, printco own the property and lease it back. Back to customers. Like johnson and johnson, honeywell. We have been working with them staff and the puerto rican government to give Technical Expertise with regard to how to site micro grids at various locations to ensure better quality for customers and in effort to reduce energy costs to encourage them to stay on the island and further expand Employment Opportunities for people in puerto rico. Anything else long term to address energy needs . We are working with all of the stakeholders that put together plans and integrating them, distilling them into one so it is a better document and adding whatever technical capabilities weve got to do that. Just yesterday i met and my team met with the tac committee, Technical Advisory Committee put together to coordinate efforts and walk through what the plan is moving forward. Thank you. Thank you all. Thank you, senator. And assistant secretary walker, thank you for your efforts with puerto rico and all thats going on there. I appreciated the opportunity we had when we were there to have that followup conversation. Obviously great deal more to be done. Appreciate your ongoing efforts. Several members have commented about the quality of the witnesses that weve had this morning and the discussion. One of the benefits of holding the gavel here is i get to stay for the full morning. And it has been as important and enlightening as any hearing in a while. Thank you for that. I hear from most of you that we are beyond the discussion about baseload power and how we define it. I forget which of you referred to the policy conundrum between diversity versus security. And i think it is often easy to say we need to have diverse portfolio, but if the diversity doesnt give you the security of access to you fail when it comes to resiliency, you fail in terms of your ability to really meet the expectation there. So i think it is important about these very serious challenges we see as youve got a grid that is evolving, changing, aging. How we do a better job with integration of all this, keep in mind the distinction between diversity and security and recognize that that has to be part of the issue. Heard several colleagues state we can have all the supply we need, but if we cant move it testimony doesnt get us anywhere. Alaska is a poster child for that. We have extraordinary resources, but the challenge is moving that to the market. I appreciate so much of what we heard today, i deferred my questions holding until the end, i dont have the clock running with me, i dont want to keep you too long, i feel i can bat cleanup a bit. Let me begin with you, chairman, and i appreciate all you are doing there. I dont know if it is fair to ask your personal opinion but i will ask your personal opinion budget what you believe the risk to the gred presented by the ongoing retirements were seeing in nuclear, with coal retirements. If you have a scale, ten being the most severe risk to the grid, where do you put us . Thank you, madam chairman for the question. Quantification is an inherently tricky business and i feel so particular here but i can tell you conceptually that were probably clearly at a five. I say that on the basis just of what we know today of the resilience challenge that have presented themselves in prior weather events and other circumstances and i say that because of the potential irreversibility of the situation of unit retirements and individual unit retirement of a sizeable plant is a serious matter to the grid let alone an entire class, entire class of power plants, so its something that as of today id say merits a five ranking on your scale but i will have a better informed personal opinion after we have heard from the rtos and isos about what specific needs they see and concerns they have. Let me ask you about that because you the ferc has kicked that to the rtos and the isos to define what the concerns are with regards to resiliency. I guess the question is, are they the best are they the best organizations to make that assessment or that determination . What about the eros, the electricity reliability organizations, whether its nerc or various regional entities, what about d. O. E. . How do all the others factor in to the i think we recognize that the rtos and isos, they dont own the grid, you do have owners of the grid. I understand why ferc moved forward as you did in rejecting the nopra and i understand, i think where youre trying to go with gathering this assessment back, but does it need to be broader i guess is my question than just the rtos and the isos . Im happy to say it is broader. Okay. The most immediate and directed request was to the rtos and isos to report back in answering some specific questions to that. But we have invited broader Stakeholder Input. Im happy to say we particular have initiated that and had some Good Communications already with mr. Walkers organization and department and with mr. Berardescos organization. I would expect that to continue. So i do agree with your suggestion. I appreciate that and do feel that that is an important part of any analysis that might move forward. Assistant secretary walker, you spoke to just cooperation and collaboration that needs to go on. I think you said its going to take unprecedented cooperation and collaboration to keep the lights on or something to that effect. Thats correct. And to that end, then, with the with the resiliency model that you have indicated is a top priority for d. O. E. , have you or your staff, have you reached out to fercs reliability or security staff or been working with the rtos on this . Tell me how youre going to do sure, sure. Its a good question and i do believe that it does and will take a significant amount of collaboration, chairman mcintyre have already spoken about this with regard to the model. Yesterday i had the opportunity to meet with gordon down at the end of the table here with regard to the new england study. My team has already reached out and gone through looking toward integrating all of the work that fercs initiative will yield and so we work pretty regularly within d. O. E. With the isos and rtos as well as through the Electricity Sector coordinating council. We reached back throughout the United States and with nerc with all the partners that weve got there but in this case its even bigger than the electric side because its really where the nexus to bring together the oil and natural gas component. We have two separate coordinating councils which were looking to bring together under this rubric because of the inter dependency between oil, natural gas and the electric system. So weve already laid out a schedule of all of those participants that we need to pull together to work with ferc, nerc and the regional rtos in an effort to ensure we have the best answer we can and thats the essence of where this model comes from. Once weve got all of the information and we then can take the actual technical components of the system which we already have, weve already started gathering that and thats part of the reason i was out at northcom with my Team Last Week is starting to define some of the resiliency work thats already been done at the department of defense and with the army corps. So weve already started that initiative to gather all of the components that weve got around. Yesterday i met with d. O. E. Security organization to identify work thats been done for resilience at our Nuclear Power plants and through our nnsa groups, to be able to coordinate that and provide that information effectively to ferc as we express this forward. Were very much in lock step with this moving forward. It is so critically important to the National Security components that we address daytoday and obviously can dovetail very well into the marketplace to solve a lot of these issues. Good to know. This is exactly what we need. Its good to know that theres reports and analyses but if were not really coordinating and learning from other entities and what they have done or how they have advanced, its it is not as valuable as i think we would have hoped. Let me ask another question of you chairman mcintyre because theres been discussion about price formation and making sure that that value is in place. And i guess the quick question is, is how prompt will ferc be when it says that it will act promptly if it sees a need to take action and i i raise this because ferc opened up its price formation documents just after the polar vortex couple months into early 2014. That work still hasnt been completed on price formation, so i think what would be important to know is is given given the reality of time that it takes when with you say that ferc is going to take prompt action, does this mean that its technical conferences or staff memos and white papers, what actually can be expected and i think we we know that often times this is complicated and lengthy but we also speak frequently about this paralysis of analysis and the situation of this review, of ensuring reliability. I raised it eight years ago, maybe even longer now since i have raised these concerns and we continue to see growing levels of retirements, so i would hope that ferc recognizes that we need to move beyond technical conferences and more white papers, that we actually need to see that action, so can you speak to what yes, maam. Its a very valid question and certainly when i was in the private sector i shared you were pushing everybody along. As well. In terms of our january 8 order on our Grid Resilience initiative there was a certain calendar spelled out there, 60 days first for the rtos and isos to get back to us with our responses to our specific questions, 30 days for Stakeholder Input there after and then, yes, our commitment to prompt action thereafter. I cannot say now how much time will be involved in such prompt action because it will depend on the quality of the information which we get back which i expect to be very good in general, but its something where i have declared it and its a matter of priority for the commission. Those are not words we utter very often as a declared priority of the commission now to get this right and move with speed. I should say that in the meantime, we have stated as well in the very same order that should any shortterm concerns arise within a given rto or with a given utility, we want to know about it immediately. We will not sit idly by if theres some sort of legitimate concern regarding reliability or resilience of the grid. Well, i appreciate that. I think it helps that you have been on the other side and just very recently so that you know not only of the need but have been one that is been in the situation where youre urging the action, so i think that will help on the inside as well. I think i think given what members have covered throughout, i had many, many questions and i started and i think we got good information before the committee and so many of the questions that i had had have been answered but i recognize that this is this is a challenging space most certainly and we see the challenges pronounced when we have weather events that push the Energy Status quo that we might get pretty comfortable with and its a reminder that we need to be vigilant in understanding again the security, the reliability, the resilience of our energy supply. I mentioned just a few minutes ago that this hearing is probably been the most educational. Its right up there with the one that we had several weeks back when we had the head of the iea here who spoke about the Energy Trends internationally and he had four upheavals, i wont go through all of them but his fourth upheaval is what is happening with electricity and and how how that that whole sector is being impacted. We got a lot of work to do but this has been a very instructive and helpful hearing to all members, so i thank you for the time and with that we stand adjourned. The state of the Union Address. Live coverage starts at 2 30 p. M. Eastern here on cspan 3. This week on the communicators, and speak about the latest developments in artificial intelligence, robotics, 360 degree cameras, enhanced communications for self driving car. Watch the communicators tonight on cspan2. The president of the United States. Tuesday, presumptive will give his first state of the Union Address to a joint session of congress. Our coverage begins at 8 00 p. M. Eastern. Then the state of the union speech live at 9 00 p. M. Itll be followed by the state of the Union Address itself at 9 00 and following the speech will take your phone calls and also get reaction from members of congress. President trumps state of the Union Address tuesday live on cspan. Listen live on the free cspan radio app and on your phone, desktop or tablet at cspan. Org. Thursday, Senate Energy and Natural Resources committee had a field hearing at the 2018 washington auto show to