Im sure senator murkowski will be here shortly. As some people noah 7. 9 magnitude earthquake hit off the coast of alaska with northwest warnings issuesed for activities that were expected the warning for the tsunami waves have been recalled and no doubt im sure the senator is dealing with lots of things related to that. I want to thank our witnesses, chairman mcintyre and mr. Walker for being here and the staff people that are here and blade we are back in operation. So we look forward from hearing all of the witnesses on the subject of the reliability of the grid and its performance. Last year, secretary perry and the staff viewed the liability of the fuel mix and i was relieved when i saw the staff report in august which i thought was balanced. It carefully distinguished between reliability and resilience and introducing Renewable Resources rgs synthetic i inertia and frequency response and resilience metrics needed to be developed. Unfortunately, secretary perifiled the report as a proposal, i was alarmed. Ignoring the conclusion of the staff. To prop up the administration favored kinds of energy getting out paced in the marketplace. Many problems with the proposal, never defined resilience, picked a single tribute and elevated above all other factors. Promised full recovery for coal and some states that chaes to follow a market model years ago and hit consumers of billions of dollars added costs to multiple independent assessments. Bailing out coal plants just isnt bad policy but breathe taking raid on the consumers pocketbooks. The secretary proposal could nearly double the cost of wholesale energy in the nations largest trek tr largest electricity market. I think the commission wisely reviewed the federal power acts in reasonable standard for electricity rates and found that the secretary havent met the burden and proving the current rules are unjust and unreasonable. Consumers couldnt ask for a better defense. Coal interest and the lobbying department, it has never been most important for them to maintain i understand. I hope the secretarys proposal hasnt givenen resilience a bad name. Hurricanes in florida and texas versus puerto rico shows that resilience effects the lives and quality and deserves more attention. Im pleased that we have Allison Clements testifying today along with our other witnesses. Serves on the committee that wrote a report on Grid Resilience and i would like to submit it for the record. It has a series of concrete recommendation to congress and the department of energy that i hope we can explore. Thank you for all the witnesses for being here and calling this hearing. Thank you senator cantwell and my apologies to my witness members and committee members, we had a busy morning in alaska, i appreciate more than every, like the earthquake and tsunami Early Warning systems. It is important they are there and operating now that the government is back to order. Last week i outlined the busy agenda that well have this here and maintaining our focus on legislation nomination and oversight is a critical part of the roll. Agencies under the jurgs diction, today is an opportunity to engage whether policy is helping or hindering improvements in performance. While it may not be up to alaska standards, the cold snow and ice along the eastern snow board was notable over the holidays and into the new year. The worst occurred in the shoulders and we didnt reach the extremes felt in the 2014 polar vortex we did experience a so called bomb cyclone event. I understand that it is a cyclone storm system in which the Pressure Drops in a short period of time. Apparently these happen often off the northeast coast but this one was a record breaker with a largest Pressure Drop in a 24 hour period since 1976. As such, it presented a kind of informative stressed test for the lek tri power system. I often say that federal law and policy enable energy to be affordable, clean, diverse and secure. With this hearing we return to a subject ive been following since 2010 about how changes in the nations electric grid and the mix of primary electricity sources are stressing system reliability and what federal changes are necessary to address those changes. The secretary of energy and the recent order focused on the same issues. In 2014 following the polar vor text we held a similar hearing. I said then we needed to redouble a properly scaled and continuously improving approach to grid reliability and security. Im pleased to see that today testimony shows theres many Lessons Learned from that extreme weather event. There seems to be improved coordination between the electric and gas systems. Reformed market rules and improved business practices. And thats all good news. That the bad news is we have not addressed the difficult and fund men talt challenges for electric and gas instra structure. Gas pipeline remains too constrained. Broader policy changes are not sufficiently taking into account increasing risks that in future years system operators may have to turn to intentional Service Interruptions known as load she hadding or black outs to manage certain peak periods. One of the witnesses will speak about the situation in new england which in some respects can serve as challenges in other parts of our nation. We must ensure that the nations natural gas supply is a boom to the economy, can be reliablely delivered to a changing marketplace at the same time its not clear what the reliability and Economic Impacts will be of a grid who has primary electricity resources are less diverse over time as nuclear and call units continue to retire. Meeting these challenges will strengthen competition for the benefit of Energy Customers should be a shared priority. Promoting competition is a policy that enjoyed wide bipartisan support for more than two decades. We will hear from leaders of the two agencies and heads of three regulated entities with quasisigh regulatory responsibilities, the corporation or nerk and the two regional transmission pjm and iso new england and the members of the academy of science engineering and medicine. I welcome each of you to the committee this morning and look forward to your testimony. I would ask that you try to limit your testimony this morning to about five minutes. Your full statements will be included as part of the record. This morning were joined by the honorable Kevin Mcintyre, the chairman, this is the first time you have appeared before the committee in your capacity as chairman, we welcome you. The honorable bruce walker, as the assistant of the office of electricity, delivery and energy reliebt at the usdoe. Good to see you. Mr. Charles, ber ra december koe, the independent rerm president and we welcome you. Allison clements, the president of good rid llc. We thank you. Mr. Andrew ott is the president and ceo of Pjm Interconnection llc and mr. Gordon van weally, the president and ceo of iso new england. Chairman mcintyre if you would begin with your comments this morning. Yes, senator. Chairman and members of the committee. Thank you for the opportunity to appear before you to discuss the performance of the electric system during the recent weather events. M im honored to serve as chairman. Concerning the reliability of the power system in this country. We are still receiving and reviewing the data related to the performance of the bulk power system during the cold weather event that has taken place over the past month. Based on what we know to date, it appears that not with standing stress and several regions overall, the bulk power system performed well amidst challenging circumstances. Looking forward, we must learn from this experience and remain vigilant with respect to challenges with the reliability and resilience of the power system. The performance, now known as the polar vortex did provide useful confect for understanding the performance of the bulk power system under the more recent winter events of the past month. During the 2014 polar vortex most of the u. S. Experienced cold weather. The challenges by these conditions and high electric demand compounded by unplanned generator shut downs of various fuel types. These combined circumstances tested grid reliability and Power Supplies and contributed to high electricity prices. Drawing on that experience, we took numerous actions as you have referenced to address reliability and resource performance issues. For example, the commission directed regional transmission organizations and independent system operators or rtos and to report on fuel eninsurance issues and the Commission Revised the regular lags to enhance coordination between the natural glass and electric industries. In the light of increasing use as fuel for electric generation. For certain regions, the commission improved capacity market reforms that are intented to increase financial incentives for improved resource performance and to penalize nonperformance or poor performance. The Commission Approved temporary winter reliability programs in new england. Turning to the winter event of the past month, it is useful to consider the impact of the recent weather events on the provision of service and the associated cost of that service. Importantly, there were no significant customer out ages that results from the generators or transmission lines. While no specific reliability problems during this recent cold weather event, wholesale Energy Prices were high reflecting stress on the system. Accurately reflecting fuel cost can be beneficial sending important signal that is drive operations for utilities and consumers. We recognize that higher prices are ultimately born by retail customers so the commission is attentive to the potential for behavior that takes advantage of extreme weather advance. Just as the commission and hto and, sos drew lessons from the vortex in 2014 and had us better prepared, we will kpan the recent events and seek to learn from them. Id like to emphasize a few points that the commission made on the issue of resilience more generally. On january 8th the commission respond to the proposed rule on grid reliability and resilience pricing submitted to the commission by the secretary of energy and we initiated a new proceeding to further explore resilience issues. As we stated in our order, we appreciate the secretary reinforcing the importance of the resilience of the bulk power system as a issue that warrants further attention and prompt attention. The goals of our new proceeding are first, to develop a common understanding among the commission and industry and others as to what resilience or the bulk power system means and requires. Second, to understand how each rto and iso assesses resilience within the geographic footprint and third to use this information to evaluate whether action is appropriate at this time. Commission directed each rco and iso to commit 60 days within the order specific information regarding the resilience of the bulk power system with the regions and we invited other interested entities to reapply within 30 days. We expect to review the material and decide whether it is warrant to address resilience. In the january 8th order, the commission recognized that the concept of resilience necessarily involves issues that extend beyond our commissions jurisdiction such as Distribution System reliability and mornization. For that reason we encourage rtos and isos to engage with state regulators and other stake holders to address resilience at the distribution level and broadly. I assure you that reliability and the resilience of the bulk power system will remain a property of the ferk i look forward to answering your questions. Thank you, chairman mcintyre. Secretary walker, welcome. Thank you. Distinguished members of the committee, thank you for the opportunity to discuss good resilience during the recent cold weather affecting the northeast United States. Just a month ago i testified secretary periand the administration remained supportive of the this restore ration. The topic of todays hearing is timely and the Energy Sector are Top Priorities of the secretary and a major focus of the department of energy. The first study was a staff report to the secretary and electricity market and reliability. The report examined the revolution of the wholesale electric marks and the effect on grid reliability and resilience and capacity markets compensating specific attributes, the connection between Regulatory Burden ens and the retirement of power plants. Born out of the recent severe vet across the nation. The last nefrl months have been demanding on the Energy Sector from an active Hurricane Season to the 2018 deep freeze, confronting challenges of the Energy Infrastructure in different ways. During the recent cold snap to early january, the knot eanorthw a record low temperatures. What was apparent is the continuery license on base low generation, without action that recognizes the essential Reliability Services provided by strategically diverse phied portfolio the grid integrity maintained by fuel sources and on site fuel cap ables. However, question is whether or not this diversity will be here tomorrow. Resilience for the electric infrastructure is more important as major parts of the economy is depending on it. At the same time we are in the early stages of large transformation with this process of change likely to continue many years. Keeping the lights on during this transformation will need collaboration amongst many parties. Doe is committed to work with ferk and regional rtos and iso to achieve this mission. With growing stress the integration of distributed Energy Resources, dynamic markets, increasing Cyber Security and physical threat anded advent of the things. Must be designed to ensure reliability and resilience over the next century. Today the marketplace focused on building and maintaining a system, is driving the design of the system. However, it is clear we need an indepth understanding of the resilience in order to know how to best modify existing market structures and or build new resiliency standards into the system. To that end i propose that doe under take a Detailed Analysis that intergrades a model of the on going resilient Planning Efforts at the local and regional efforts between canada and mexico. And fills gaps and horm nices inconsistencies and various efforts a the the same levels. I understand we dont have funds appropriated for such tasks, i believe that building this resiliency model should be the top priority for doe over the coming years. As does the leadership of the department of energy. To address challenges proposed by the event and the issues is critical for us to be proactive and cultivated in an ecosystem of resilience, network of producers, distributors, vendors and Public Partners acting together to repair respond and recover. Doe continues to partner with local governments, states and industries and other stake hoelters to quickly identify threats and develop indepth strategies and respond to disruption. Resilience is not one time but a habit. Not something that can be done 2448 hours before an event. Resilience is approaching the infrastructure with longterm planning in mind. In conclusion, today we are faced with various threats that continually become more frequent and impact full. The Energy System that provided services throughout the nation is prime targets, we need to build upon the reliable system we have today realize from the hard work of ferk and the rtos and isos to save the effects of the present and real threats. The concern is that Energy Markets driving the sources throughout the nation. Indeed, most of the investments are made to address economic das patch used within specific regions. This has a resulted in a significant reliance perhaps over reliance unless costly fuelled. In this case today, natural gas. The lack of a comprehensive integrated process to drive appropriate resilience, take into account Critical Infrastructure, essential l Reliability Services and affordability increases the risk of a come promiezed Energy Infrastructure and thus, the stewa security of this nation. Thank you and i look forward to your questions. Thank you assistant secretary i appreciate your words. Mr. Berardesco. Thank you. Members of the committee, thank you for holding todays hearing. Im the interim president and ceo. In addition to developing and enforcing mandatory reliability standards for bulk power system, were assessing reliability and monitor system operations including knew england and the mid atlantic. The monitoring of the power system and work with stake holders industry and government. The performance of the system during the recent extreme cold weather, how they foster the Continuous Learning environment to improve reliability and the recommendations based on the assessments. Severe weather among other things an opportunity to learn fromevents and improve reliability for the future. Stress on the system points to Reliability Risks that should be addressed. The Awareness Group is the eyes and ears on the system and an important part of the process. On a daily basis we monitor operations on the grid working with the regional entities reliability coordinators transmission operators and generators. In conjunction with the regional entities we analyze system disturbances, in turn this information shared with industry operators, ferk and doe. These activities provide daily visibility into the system and actionable information to improve reliability. During extreme weather events nerk operates on an elevated basis, we have calls with regional entities and affected areas and gather information from the reliabi