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 EffectiveEnergy 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 e