[Senate Hearing 112-575]
[From the U.S. Government Publishing Office]
S. Hrg. 112-575
ELECTRICAL OUTAGES
=======================================================================
HEARING
before the
COMMITTEE ON
ENERGY AND NATURAL RESOURCES
UNITED STATES SENATE
ONE HUNDRED TWELFTH CONGRESS
SECOND SESSION
TO
RECEIVE TESTIMONY ON WEATHER RELATED ELECTRICAL OUTAGES
__________
APRIL 26, 2012
Printed for the use of the
Committee on Energy and Natural Resources
----------
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COMMITTEE ON ENERGY AND NATURAL RESOURCES
JEFF BINGAMAN, New Mexico, Chairman
RON WYDEN, Oregon LISA MURKOWSKI, Alaska
TIM JOHNSON, South Dakota JOHN BARRASSO, Wyoming
MARY L. LANDRIEU, Louisiana JAMES E. RISCH, Idaho
MARIA CANTWELL, Washington MIKE LEE, Utah
BERNARD SANDERS, Vermont RAND PAUL, Kentucky
DEBBIE STABENOW, Michigan DANIEL COATS, Indiana
MARK UDALL, Colorado ROB PORTMAN, Ohio
JEANNE SHAHEEN, New Hampshire JOHN HOEVEN, North Dakota
AL FRANKEN, Minnesota DEAN HELLER, Nevada
JOE MANCHIN, III, West Virginia BOB CORKER, Tennessee
CHRISTOPHER A. COONS, Delaware
Robert M. Simon, Staff Director
Sam E. Fowler, Chief Counsel
McKie Campbell, Republican Staff Director
Karen K. Billups, Republican Chief Counsel
C O N T E N T S
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STATEMENTS
Page
Bay, Norman C., Director, Office of Enforcement, Federal Energy
Regulatory Commission.......................................... 21
Bilda, John, General Manager, Norwich Public Utilities, Norwich,
CT............................................................. 29
Bingaman, Hon. Jeff, U.S. Senator From New Mexico................ 1
Blumenthal, Hon. Richard, U.S. Senator From Connecticut.......... 3
Getz, Thomas B., Former Chairman, New Hampshire Public Utilities
Commission, Concord, NH........................................ 23
Hoffman, Patricia, Assistant Secretary, Office of Electricity
Delivery and Energy Reliability, Department of Energy.......... 8
Murkowski, Hon. Lisa, U.S. Senator From Alaska................... 2
Shaheen, Hon. Jeanne, U.S. Senator From New Hampshire............ 7
APPENDIX
Responses to additional questions................................ 41
ELECTRICAL OUTAGES
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THURSDAY, APRIL 26, 2012
U.S. Senate,
Committee on Energy and Natural Resources,
Washington, DC.
The committee met, pursuant to notice, at 9:54 a.m. in room
SD-366, Dirksen Senate Office Building, Hon. Jeff Bingaman,
chairman, presiding.
OPENING STATEMENT OF HON. JEFF BINGAMAN, U.S. SENATOR FROM NEW
MEXICO
The Chairman. First let me indicateSenator Shaheen and
Senator Blumenthal have both spoken to me repeatedly about the
importance of this hearing. They're much of the impetus for us
having this hearing. I thank them for that.
In late October 2011 an early snowstorm dropped as much as
3 feet of snow on East Coast States resulting in widespread
power outages. Only a month before that Hurricane Irene had
done extensive damage to electricity systems in the same
region. Today's hearing is going to look at these and other
weather related events in order to inform the committee as to
whether actions are necessary to improve preparation for and
response to such events.
We'll hear from the Department of Energy which has a
significant role in gathering and communicating data during and
after electrical emergencies.
We will hear from FERC, who is conducting an investigation
along with NERC on the outages that resulted from the October
snowstorm in New England.
We'll also hear from those who were on the ground in New
Hampshire and Connecticut during the event and the ones that
preceded it.
Weather related outages are often almost entirely
distribution level events. That does not mean, however, that we
at the Federal level have no concern over these kinds of events
or no role in helping to prepare for them or respond to them.
We know that there have been many other weather related
electricity system emergencies over the last few years.
Tornadoes caused damage in Texas, Alabama and the Midwest.
Hurricanes along the Atlantic and Gulf Coast, storm related
damage in Washington State in the Northwest. All of these have
cost lives and property and economic loss.
It seems to me these kinds of events happen more frequently
than they did in years past. But it is difficult to be sure of
that since increases in reported outages may be caused by
actual outages or may be caused by increased reporting.
I'll be interested to hear how the reporting systems for
these events work, and whether or not they can be improved.
I also look forward to the recommendations of the witnesses
for ways to improve our communication and response systems to
these emergencies.
Let me call on Senator Murkowski for any comments she has
before we hear from our witnesses.
STATEMENT OF HON. LISA MURKOWSKI, U.S. SENATOR
FROM ALASKA
Senator Murkowski. Thank you, Mr. Chairman.
As you mentioned we're scheduled to hear testimony on grid
reliability in light of the power outages that we saw in New
England last October after a historic event there. Alaska has
had its share of historic weather. We beat all of our snow
records certainly in Anchorage and in many communities in South
Central.
The National Guard was called out to help uncover or dig
out the community of Cordova. They got 18 feet in the course of
a couple weeks there. I think they ended the winter at 25 feet
of snow. So it's been a long, tough winter. The good news for
us is that it's melting.
But we are here to talk about what role we may have in
dealing with power outages when we have these weather events.
It does appear that many of New England's weather related
problems last fall were at the local level. I am, perhaps, a
little concerned that we may be blurring the lines between our
proper Federal role in overseeing the bulk power system and the
historic State role in maintaining the distribution system.
I do understand that FERC working with NERC has an ongoing
inquiry into the New England situation. There's a final report
that's expected just about 4 weeks from now. Possibly we would
have been better served with this hearing had we waited until
that report was finalized because we could have seen what that
Federal nexus is for a full committee hearing. But we would
also have had the benefit of our grid regular's findings and
recommendations.
But we're here this morning. We must thoroughly examine our
responses to storm caused outages so that we can plan better
and prepare for the next emergency because we know that there's
going to be another storm that comes our way that will drag
down the power lines.
New England got hit with a record storm only 2 months after
Hurricane Irene. The Northeast got knocked again this week with
a late spring snow. The problem that we face is whether we're
talking hurricane, blizzard, tornado, whatever the act of God
may be, we can't know for sure the extent and the challenges
until it actually hits us.
But in working to ensure the reliability of our Nation's
grid there are some challenges that we can't foresee and for
which we can take preventative action. I've spent considerable
time this Congress asking both FERC and EPA to balance electric
reliability needs with the suite of new Federal rules
regulating power plant emissions. I'm now working on safety
valve legislation so that the cumulative effect of these
Federal regs does not threaten electric reliability.
Today I'm hopeful, Mr. Chairman, we will have enough
members before the committee to consider the two FERC nominees,
Commissioner Norris and Mr. Clark. If they are approved by the
full Senate I expect both Commissioners to uphold FERC's
electricity reliability mandate, especially if another agency's
regulations could adversely impact our Nation's grid.
Commissioner Norris has told us that he has, ``encouraged
EPA to consider the cumulative impact of their regulations.''
But unfortunately I don't think that that's good enough. Only 2
weeks ago the President established a national interagency task
force on shale gas development to ensure the Federal
regulations are well coordinated and are not duplicative. I
don't think that we need an executive order to get our agencies
to work together. But perhaps we need one to maintain
electricity reliability.
At the very least, I do hope that FERC will immediately
convene another technical conference to gather evidence
regarding the cumulative impact of EPA's new power plant regs.
So I look forward to the testimony that we will receive
today and hope that we can learn from those who have gathered.
Thank you.
The Chairman. Thank you.
As I indicated, both Senator Shaheen and Senator Blumenthal
urged that we have this hearing and I know Senator Blumenthal
would like to introduce one of our witnesses from Connecticut
and Senator Shaheen introduce one of our witnesses from New
Hampshire.
Why don't you go right ahead, Senator Blumenthal and make
any statement you'd like to make.
STATEMENT OF HON. RICHARD BLUMENTHAL, U.S. SENATOR FROM
CONNECTICUT
Senator Blumenthal. Thank you. Thank you very much, Mr.
Chairman. I want to thank you personally for having this
hearing.
I know that your leadership was instrumental and thank
Senator Murkowski as well. But particularly Senator Shaheen,
who has been a partner in this effort and who has been
extraordinarily attuned to the challenges that her State of New
Hampshire faced in the wake of these very unusual storms. I
want to say at the very beginning that there are lessons here
that can be learned by States across the country and I believe,
strongly, by the Federal Government.
I have two recommendations in particular that come from the
experience of the Connecticut Norwich Public Utilities which is
represented here today by John Bilda and will be a witness
before you. He will tell you about the Norwich Utility story
which is a success story. That's why there are lessons to be
learned from it.
While more than 800,000 consumers around the State of
Connecticut after each of these two storms, Irene and then the
October snow storm, suffered without power for days on end.
Norwich restored power to 98 percent of their customers within
48 hours of Hurricane Irene. So I'm really delighted that Mr.
Bilda, who has a strong background in public utilities will be
here today to talk a little bit about his first hand experience
with restoring power in the wake of these catastrophic storms.
I have two recommendations.
I'm urging the committee to review the neutral assistance
group process or shareholder owned utilities and enact measures
ensuring that every State has ready access to an adequate
number of line crews following a disaster. Part of this process
is to prepare for the unexpected. The catastrophic
eventualities that follow a hurricane or other natural disaster
in terms of outages and a proper mutual assistance group
procedure where line crews come from other States and are
available in States that need them, I think, is absolutely
essential.
Then second, I'm urging that the Federal Energy Regulatory
Commission provide clear direction and incentives for utilities
to establish microgrids which is really part of smart grid
strategy. Microgrids that will help ensure that at least a
portion of the town or city has some electricity during the
next big storm.
After each of these storms, Mr. Chairman, I toured the
State, day after day. What I found was senior citizens and
families in shelters. There were more than 50 shelters in the
small State of Connecticut.
There were people who went to hospitals in the wake of
these storms because they had no power at home. They needed the
power in hospitals simply to run their oxygen supplying
equipment, if they needed it or other essential medical
equipment. In the wake of each of these storms there were real
life threatening emergencies that existed because power was out
in whole cities across swats of regions. Microgrids are really
a very, very important step toward ensuring that there is power
in at least part of towns to provide essential services.
I want to be very blunt. We received strong aid eventually
from mutual assistance groups after each of these storms. But
it took time.
That's why the process needs to be strengthened so that
there are some guarantees and some specific arrangements as the
Norwich Public Utilities was able to do through its reaching
out and establishing those relationships. Through the
organization that actually Mr. Bilda heads which is a regional
group in the New England area. That kind of mutual aid was very
important to the work that he did.
On the issue of microgrids there is a real need for FERC to
clarify and affirm that these microgrids are consistent with
tariffs. I know this statement sounds highly bureaucratize and
perhaps it is. But the fact of the matter is that our regional
operating system has been as much an impediment to these
microgrids by failing to clarify that they are consistent with
the tariffs. It needs strong direction from the Federal Energy
Regulatory Commission. I think that smart grids, microgrids
that operate within a confined and discreet area are really
part of our energy future.
I would close simply by saying that we need policies that
encourage self managed, vertically integrated designs that
realize the investments that are being made right now.
Northeast Public Utilities or I should say more correctly the
CMEEC, which is the organization that it is a part of, has
invested $40 million in the microgrid in its area. The benefits
can be realized only if ISO New England cooperates and
clarifies and affirms that it is consistent with tariffs and
FERC's direction is absolutely necessary to pursue that end.
These issues have much broader ramifications. We will be
considering cyber security measures in the U.S. Senate,
hopefully at some point this spring. One of the reasons for
considering the cyber threats is the threat to our grids. One
of the ways to make sure that we are protected is to make these
microgrids serve parts of cities, parts of towns, regions that
will offer even greater security if any of our grids, the major
grids, are threatened and if outages occur.
So I think that there are many broader ramifications to the
outages that we suffered during these storms.
Again, I want to thank you, Mr. Chairman, for having this
hearing.
Thank Senator Shaheen for her leadership.
Thank you very much, Senator Murkowski, for being so
receptive. I realize that the storms in Connecticut may seem
tame to what you go through in Alaska. We can learn a lot from
you as well. So thank you very much.
[The prepared statement of Senator Blumenthal follows:]
Prepared Statement of Hon. Richard Blumenthal, U.S. Senator From
Connecticut
Chairman Bingaman, Ranking Member Murkowski and members of the
Committee, thank you for agreeing to hold today's hearing on weather
related electrical outages. I appreciate the opportunity to say a few
words about the impact two storms had on my home state of Connecticut
with respect to grid reliability.
Based on the experiences of Connecticut's Norwich Public Utilities
that you will hear later this morning and my personal experiences
traveling the state of Connecticut listening to constituents and first
responders tell me about the apparent failures of the existing Mutual
Assistance Group process for shareholder owned utilities, I urge the
Committee to:
review the MAG system and enact measures ensuring that every
state has ready access to adequate numbers of line crews during
a disaster;
urge the Federal Energy Regulatory Commission (FERC) to
provide clear direction and incentives for utilities to
establish micro grids, thus ensuring at least a portion of a
town or city has some electricity during the next big storm.
You will hear today from John Bilda, General Manager of Norwich
Public Utilities, a municipally owned utility located in Norwich,
Connecticut. The federal government can learn a lot from Connecticut's
municipally owned utilities in the state which restored power to 98
percent of their customers within 48 hours of Hurricane Irene.
I've asked John Bilda to be here today because his utility served
as a model for the rest of the state during Hurricane Irene and an
October snow storm. In the days leading up to these unprecedented
storms, and in the hours during and immediately after, John and his
team were executing emergency response plans that had been years in the
making. As a result, Norwich was literally a beacon of light in a sea
of darkness in Eastern Connecticut. There are reports of residents from
neighboring towns driving to friends' homes and businesses in Norwich
because it was the only town to restore power. I visited Norwich
personally, and received a briefing from John and his staff. They're an
impressive group. How were they able to do this you ask? I'll let John
tell his story but I'm incredibly proud to that John is with us today.
A specific concern of mine during both storms involved these
cooperative utility Mutual Assistance Groups or MAGs. MAG programs
exist to support utilities in contracting for additional line and
repair crews when in house manpower proved insufficient in the wake of
a major outage. By providing an informal and ad-hoc network of regional
utility-to-utility cooperatives, these groups typically function well
in delivering the necessary crews in the aftermath of major storms.
However, neither of these storms were typical, and I saw firsthand the
shortcomings on the part of the MAG system that contributed to the
incredibly and inexcusable slow pace of recovery in many parts of the
state hit hardest by the storms.
Not only did the system prove hopelessly inadequate in providing
the necessary crews to fully implement the required restoration effort,
the system itself remained opaque to many local and state leaders--an
information deficit which further impaired nonutility clean-up and
safety efforts. The failure of the MAG system, as experienced in
Connecticut during the last two major storms, is of vital concern not
only to my state but other states that may encounter similar system
shortcomings.
The federal government should also explore methods to encourage the
development of micro-grids and other policies that allow important
sections of towns to generate their own electricity even when
transmission lines are down. While individual buildings may have
generators, micro-grids would allow for a more efficient use of
electricity generation facilities while increasing redundancy of power
and reliability.
We must ask, what can be done on a federal level to better prepare?
Surely this won't be the last Hurricane Irene or the last time we face
a massive snowstorm. Disaster dollar levels hit record amounts in 2011
resulting from extreme weather events all around the country. We must
review the mutual aid systems and suggest improvements to
communications and allocation of resources so there is an adequate
response from all electric utilities, whether in Connecticut or
elsewhere.
On August 26, 2011, in preparation for Hurricane Irene which would
go on to devastate much of the Northeast approximately two days later,
the state of Connecticut's Governor requested a pre-landfall emergency
declaration from President Obama. All seven members of the Connecticut
Congressional delegation supported this request which was immediately
granted allowing for direct federal assistance to supplement state and
local resources to prepare for what we knew was ahead. With the pre-
land fall emergency declaration granted, the state's exemplary
emergency management personnel went to work mobilizing their teams,
their equipment and their supplies around the state in order to meet
critical emergency protection requirements before landfall. The hard
working men and women of the state's Department of Emergency
Management/Homeland Security, in strong coordination with local
emergency management personnel should be commended for their swift
action, quick thinking and commitment to the people of Connecticut. I
would also add that the Administration was very cooperative in
assisting state officials and the state's Congressional delegation in
preparation for Hurricane Irene.
With ample warnings and a State of Emergency declared by the
Governor, Irene tore through Connecticut on August 28, 2011. And with
strong winds and rains totaling more than eight inches in many parts of
the state, the unprecedented storm left almost 800,000 customers
without power in Connecticut alone. In East Haven, twenty homes were
completely destroyed. The Wilbur Cross/Merritt Parkway, a major artery
bisecting the state was closed from the New York State line to
Interstate 91 in Meriden due to debris from the storm. The heavy rain
and strong winds submerged a Bridgeport power substation and downed
power lines from Stamford to Groton and from New Haven to Simsbury.
At its peak, power was out to between 81 percent and 100 percent of
customers for the state's largest electric utility. Five days after the
storm struck, 172,000 customers in Connecticut were still without
power; and a full seven days after the storm passed wasn't much better
with more than 100,000 customers still without power. Yes, the storm
was massive but we can, and we must do better.
The power outages had, and still do have, significant ramifications
for the small businesses forced to close for days, for the elderly who
depend on electricity not only for their comfort but for their medical
devices that require power and for anyone who was forced to live in
darkness for days.
Let me share with you a line from a letter I received from Suzette
McKenzie Willard of Bridgeport, the owner of a home based childcare
business. ``Dear Senator Blumenthal, as I sit down this morning to
write you this letter, we still have no electricity; it is Friday,
September 2nd, 2011, six full days since Hurricane Irene moved over our
state''. She goes on to say, ``. . .the lack of electricity has
significantly affected my ability to operate my business. . .I was
forced to close the business for several days, thus losing vital
income''. Ms. Willard is not alone in sharing those feelings. Again, we
can and we must do better.
As I traveled the state in the days and weeks following Irene
meeting with state officials, first responders, mayors, residents and
small business owners, I heard loud and clear the tremendous impact
electric outages had on everyone. The loss of electricity for
approximately 800,000 customers after the storm, and the more than
100,000 customers still without power a full week later, left many
wondering how this could happen even. ``How could this be'', my
constituents would ask.
But two months later, it happened again. On October 29, 2011, a
severe winter storm again wreaked havoc on the state, and much of the
Northeast. The storm dumped up to twenty inches of snow in some parts
of Connecticut. Reports indicated that wind gusts as high as 38MPH
added to the ferocity of the storm. The snow stuck to all objects,
especially trees, which had not yet lost their leaves, and power lines.
The weight of the wet snow, combined with soil still soaked from Irene,
resulted in hundreds of thousands of trees being uprooted or losing
limbs, devastating much of the electrical grid and blocking roads. At
the highpoint, over 880,000 customers were without electrical power and
power remained out in many areas for over a week. Complete restoration
of power from this crippling storm took over ten days. These power
outages and road blockages led to the closing of 480 schools in 95
districts and a week later, 19 school districts were still closed. The
State also suffered damage to fuel stations and communications
capabilities, at one point, over 35% of Connecticut cellular telephone
sites down.
On October 31, 2011, President Obama issued an emergency
declaration covering the entire State--all eight Connecticut counties.
Officials opened over 58 shelters and 118 warming centers. Even ten
days after the storm, 12 shelters and 46 warming centers remained open
due to continued power outages.
And once again, I was back on the road visiting some of the hardest
hit areas including Simsbury, West Hartford, Seymour and Ridgefield.
The stories I heard were devastating. The residents I spoke with and
the business owners I met were once again forced to wonder, but how
could this be? I was asked, ``how were we not better prepared'' for a
storm of this magnitude and with ample levels of warning. I again
applaud the state's emergency management personnel. They were
prepared--as always--for this type of disaster. But many of the state's
shareholder owner utilities were not.
Thank you again for having me here today. These are important
issues to discuss and I'm grateful for the opportunity to share
Connecticut's experiences during Hurricane Irene and the late-October
2011 snowstorm.
The Chairman. Thank you.
Senator Shaheen, why don't you go right ahead and introduce
whoever you'd like at this point and make any statement you'd
like.
STATEMENT OF HON. JEANNE SHAHEEN, U.S. SENATOR FROM NEW
HAMPSHIRE
Senator Shaheen. Thank you very much, Chairman Bingaman. I
would like to echo Senator Blumenthal in thanking both you and
Ranking Member Murkowski for convening the hearing today. As
Senator Blumenthal said we started talking about our concern
with what's happening with the reliability of our country's
electricity grid after several weather related events last
year, Hurricane Irene and then of course, the October snow
storm that left about two million customers throughout New
England without power, 315,000 of those in New Hampshire.
Looking at the news on a regular basis, it doesn't take too
long to figure out that it's, at least in my recollection, it
seems like we're experiencing more frequent catastrophic
weather related events. I think, Mr. Chairman, that you were
going to be showing this chart from the Office of Electricity
Delivery and Energy Reliability from the Department of Energy
that really charts the increased weather disturbances since
2000. They're significant with a significant impact on
customers.
So given what appears to be happening my concern and I know
it's shared by Senator Blumenthal and by everybody on this
committee, is that we look at ways in which we can encourage
whether it's through better standards or through incentivizing
innovation for new developments in protecting our electricity
grid that we really need to look at how we can address these
outages. Because it's no longer a situation where we think
well, once in every 5 or 10 years we're going to get a
significant weather event that's going to require being without
power for a while. This has become a much more frequent
occurrence and one in which, I think, we really need to look at
how we can better prepare to respond to this.
Now I'm really pleased that on our second panel this
morning we have someone from New Hampshire who has spent most
of the last 10 years chairing the Public Utilities Commission
in New Hampshire. Tom Getz was Chairman of the PUC in New
Hampshire from 2001 until 2011. He recently stepped down.
I'm pleased to say that I appointed him to that position as
Governor. He was reappointed again in 2007 by another Governor.
So clearly it shows the excellent job that he did in that
capacity. Before that he served as the Executive Director of
our State's Public Utilities Commission.
I think he has a number of accomplishments. But one of them
that I really wanted to point out this morning is that during
his time as Chair of New Hampshire's Public Utilities
Commission, one of the things that he did was manage an effort
to create the New England State's
Committee on Electricity which is a regional committee
approved by FERC to focus on resource adequacy and transmission
planning. I think based on his experience he has a lot of
expertise to share with us this morning.
So I look forward to his testimony and am delighted that he
is here.
Thank you, Mr. Chairman.
The Chairman. Thank you very much.
We have as our first panel Ms. Patricia Hoffman, who is the
Assistant Secretary for the Office of Electricity Delivery and
Energy Reliability at the Department of Energy.
Please give us your views as to what we need to know on
this subject. Then we'll have some questions.
STATEMENT OF PATRICIA HOFFMAN, ASSISTANT SECRETARY, OFFICE OF
ELECTRICITY DELIVERY AND ENERGY RELIABILITY, DEPARTMENT OF
ENERGY
Ms. Hoffman. Good morning, Mr. Chairman and members of the
committee. Thank you for the opportunity to appear before you
today to discuss the Department of Energy's roles and
responsibility during weather related electrical outages. DOE
plays a vital role coordinating with other Federal agencies in
the energy sector to prepare for and recover from such outages.
With the increase of severe weather including the recent
tornadoes in Texas and the Midwest and the approach of the 2012
hurricane season, this discussion is especially timely and
important.
At the Office of Electricity Delivery and Energy
Reliability our mission is to lead national efforts to
modernize the electric grid, enhance the security and
reliability of our Nation's energy infrastructure and
facilitate recovery from disruptions to the energy supply. As a
sector specific agency for energy under the Department of
Homeland Security National Infrastructure Protection Plan our
office works closely with Federal, State and local governments
and industry to protect against and mitigate threats to the
energy infrastructure whether they're caused by natural
disasters, deliberate attack or human error.
DOE is also the lead agency for Emergency Support Function
12, also known as ESF12 for Energy, when activated by the
Federal Energy Management Agency, FEMA, under the Disaster
Relief and Emergency Assistance Act. In the event of an
emergency we provide situational awareness. We coordinate
response among Federal, State and local agencies and help
facilitate restoration of energy systems.
When we are activated we have a team of responders who
specialize in energy infrastructure and can be quickly
activated and deployed to the event's location. These
responders provide situational awareness, facilitate clear and
consistent communication with other deployed responders and
provide subject matter expertise to help with restoration and
identify where the Federal Government can possibly engage in
restoration efforts. We maintain constant communication with
our Federal partners including FEMA, the Department of Homeland
Security, Transportation, Defense, EPA, as well as State
agencies and energy companies affected by the event.
Providing timely, accurate and situational assessments play
a crucial role in helping other government agencies in industry
prepare for and recover from power outages caused by these
events. Reporting also allows the public to remain informed of
the situation and plan accordingly.
During a major energy outage the situation typically
changes very rapidly and information can often become
conflicting and incomplete. As the storm moves through an area
the number of customers without power can jump quickly.
Following a storm as utility crews restore power outage numbers
can change hourly as repairs are made.
With Hurricane Irene, for example, customer outages
fluctuated dramatically over a 9-day period. Eighty percent of
the customers in the Northeast were restored within 3 days.
During outage events energy companies focus on their
specific service territories. States and local governments
focus on their specific jurisdictions. Our situations reports
are a definitive source for obtaining a broad, clear
perspective on outage locations, scope, potential duration,
looking at the entire affected region. These reports provide
responders with sound information to determine where Federal
resources should be applied to facilitate faster recovery and
restoration.
DOE is keenly aware that the energy sector owns and
operates a vast majority over our Nation's assets.
Communication channels that we maintain with our private
partners have been and continue to be invaluable when major
outages occur. OE works closely on an ongoing basis with owners
and operators of the energy infrastructure to communicate
clearly and frequently about power outages and collaborating
with them as they prepare for energy emergencies by conducting
workshops, tabletop exercise and provide resources for energy
assurance planning.
We also work closely with industry groups such as the
Edison Electric Institute on the importance of their members to
provide timely, accurate and consistent data during recovery
and restoration periods.
I would also like to briefly highlight the findings from
our assessment from our recent improvements made by the energy
sector. Our 2010 report entitled, ``Hardening and Resiliency:
U.S. Energy Industry Response to Recent Hurricane Seasons,?
notes actions that industry has taken to harden their energy
systems including replacing wooden poles with concrete or
steel, strengthening pole with guide wires, elevating
substations and control rooms, improving supply logistics.
Companies have also deployed sophisticated sensors such as
Phasor measurement units to evaluate the health of their
systems and advance meters for outage management systems as
well as other advanced technologies.
Integration of these smart grid technologies can reduce
restoration times by detecting the location and the extent of
damage and isolating the problem to keep the grid operating
during an emergency.
Reporting timely, accurate and actionable information
during emergencies is critical to helping Federal, State and
local government agencies as well as the energy sector and
Americans everywhere be more aware of the rapid evolving impact
of severe weather events on the energy infrastructure and most
importantly of all, remain safe.
This concludes my statement. Thank you, Mr. Chairman for
your time. I look forward to answering any questions you and
your colleagues may have.
[The prepared statement of Ms. Hoffman follows:]
Prepared Statement of Patricia Hoffman, Assistant Secretary, Office of
Electricity Delivery and Energy Reliability, Department of Energy
Chairman Bingaman, Ranking Member Murkowski, thank you for the
opportunity to appear before you today to discuss the Department of
Energy's (DOE) role in managing weather related electrical outages. DOE
plays a vital role, in coordination other Federal agencies and industry
to prepare for and recover from such electric power outages. Given the
recent increase of severe weather incidents, including the recent
tornadoes in Texas and the Midwest, and the approach of the 2012
hurricane season, this discussion is especially timely and important.
doe's role, responsibilities and authorities
The mission of the Office of Electricity Delivery and Energy
Reliability (OE) is to lead national efforts to modernize the electric
grid, enhance the security and reliability of the Nation's energy
infrastructure, and facilitate recovery from disruptions to the energy
supply. As the Sectorspecific Agency for Energy, under the Department
of Homeland Security's National Infrastructure Protection Plan (NIPP),
the DOE's Office of Electricity Delivery and Energy Reliability is
responsible for collaborating with Federal, State and local
governments, and the private sector to protect against and mitigate
threats on the energy infrastructure, be they natural disasters,
deliberate attacks, or human error. OE performs the functions required
under DOE's authorities and Presidential Policy Directive (PPD)--8,
National Preparedness, which is aimed at strengthening the security and
resilience of the United States through systematic preparation for the
threats that pose the greatest risk to the security of the Nation,
including acts of terrorism, cyber attacks, pandemics, and catastrophic
natural disasters. In addition, DOE is the lead agency for the National
Response Framework's Emergency Support Function 12 (ESF-12), Energy,
when activated by the Federal Emergency Management Agency (FEMA), under
the Robert T. Stafford Disaster Relief and Emergency Assistance Act.
In the event of an emergency, OE stands up its Emergency Response
Center and has a team of responders that specialize in energy
infrastructure who can be quickly activated and deployed to the
location of an event. OE personnel then coordinate with deployed
personnel, other DOE offices, and Federal, State and local agencies in
responding to the emergency. OE provides situational awareness and
facilitates the restoration of energy systems. In addition, OE may
provide technical expertise to utility companies, conduct field
assessments, and assist government and private-sector stakeholders to
overcome challenges in restoring the energy system.
reporting on energy emergency situations
Reporting on emergency events plays a crucial role in helping other
government agencies and industry prepare for and recover from energy
outages resulting from these events. Reporting also allows the public
to remain informed of the situation and plan accordingly.
OE takes great care in providing timely, accurate reports and
situational assessments. When a major energy outage occurs, there is
often a surge of information. Because the situation changes rapidly
during these events, there are sometimes conflicting outage reports and
incomplete information on damage status. In such cases, we must review
and sift through large amounts of data and information to make certain
that reported information is relevant, trustworthy, and accurate.
Through years of working closely with our Federal, State, local,
and private partners in response to energy emergencies, OE has
established proven procedures for evaluating and reporting outage data
and situational assessments. OE maintains a team of trained staff at
our DOE headquarters and field offices, which are prepared to assist in
situational assessment, response, and reporting for any event.
Procedures have been established for data collection, quality control,
and reporting. These procedures are implemented for sudden events
including unexpected severe weather (e.g., tornadoes, earthquakes,
floods) as well as events such as hurricanes where we have the
opportunity to pre-position staff and develop a timeline for data
collection and reporting.
OE personnel use a standardized process for data collection,
assessment, quality control, and reporting. The process is documented
and repeatable and uses data sources that are fully referenced. As a
result, we are able to provide high quality reports quickly and
efficiently.
OE obtains data from a number of resources. Data on electrical
outages are received through the OE-417 Form, ``The Electric Emergency
Incident and Disturbance Report,'' which provides timely information to
DOE when utilities experience electrical incidents. We also collect
information on damage to the infrastructure directly from energy
companies such as utilities whenever possible. Many energy companies,
including larger utility companies, now provide real-time outage
information on their websites. We also use an in-house software tool
which allows us to monitor the Nation's energy infrastructure in near
real-time and create geospatial maps of the Nation's energy assets and
systems that combine data from numerous sources into a single
geographic information system (GIS). This system is known as the
Environment for Analysis of Geo-Located Energy Information (EAGLE-I).
We also gather data and information from trained ESF-12 staff that
have been deployed to the field, to FEMA, and to other locations during
emergency events. These ESF-12 responders provide situational
assessments and facilitate clear and consistent communication with
other deployed responders. They also help to provide subject matter
expertise to aid in restoration activities and identify where the
Federal government can engage in restoration efforts if and when
appropriate.
OE reviews all of the collected information, determines what
information is relevant and appropriate to report, and evaluates the
quality of the data source, and the date and time it was generated. If
we identify discrepancies, we resolve them by investigating the
discrepancy and determining which information is correct and current.
OE provides a situational assessment that includes State-by-State
outage totals, the number and percent of customers without power, the
scope of the damage within each State, utility restoration efforts,
when restoration is expected to occur, whether any critical assets have
been damaged, what response measures are being reported by ESF-12
teams, and what is being implemented by the energy companies. This
information is then compiled into Situation Reports that are time-
stamped and include references to all data sources. The Situation
Reports are then made available to the public online (http://
www.oe.netl.doe.gov/emergency_sit_rpt.aspx). The Situation Reports
provide a snapshot of a given point in time, and are shared with
Federal agencies responsible for making critical emergency response
decisions. OE considers these reports as the Federal Government's
official report on the scope of the damage and status of restoration at
a specific point in time. These situational assessments facilitate
decision making surrounding Federal response efforts and provide a much
needed national perspective to State and local government as well as
the private sector.
We recognize that actual outage numbers can change moment-to-moment
during a given weather event. As a storm system moves through an area,
the number of customers without power can change rapidly. Following a
storm, as utility crews work to restore power, outage numbers will
continue to change hour-to-hour as repairs are made. Figure 1* below is
an example of customer power outages reported during Hurricane Irene
and shows the rate of restoration over a nine-day period. As seen in
the Figure, the majority of customers had their power restored within 3
days.
---------------------------------------------------------------------------
* Figure has been retained in committee files.
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Situation Reports provide a common frame of reference on the
severity, scope, and location of the impact. These situation
assessments combined with our subject matter experts support decision
making on when and if there is an appropriate role for Federal
involvement in the restoration process. For example, the Situation
Reports are used by FEMA and the U.S. Army Corp of Engineers to help
determine where supplies of water, ice, food and generators should be
delivered.
Because the energy sector focuses on their specific service
territories during outage events, and States and local governments
focus on their specific jurisdictions, OE's Situation Reports are a
definitive source for obtaining a nationwide perspective on the outage,
looking at the entire affected region and energy infrastructure as a
system. The Situation Reports are considered a ``one-stop'' shop for
energy infrastructure information.
Because OE understands the energy infrastructure, we are often
called upon to help evaluate if requests for temporary waivers of
certain regulations are warranted. The most frequent types of requests
are to temporarily suspend Clean Air Act fuel requirements, use of
foreign flagged vessels under the Jones Act, and to allow the
interconnection of one utility to another under Section 202(c) and (d)
of the Federal Power Act. We work closely with and provide the
necessary due diligence to assist Federal agencies with evaluations of
the severity and duration of the event and work with them to determine
if waiver requests are justified.
DOE staff maintain constant communication with our Federal partners
such as the Department of Homeland Security, including FEMA; Department
of Transportation; Department of Defense; and the Environmental
Protection Agency; State agencies in the affected area; and the energy
companies impacted by the event.
OE provides a common frame of reference on the location, scope and
potential duration of an event. This common frame of reference is
critical for determining appropriate response measures. It enables us
to communicate the presence of any critical infrastructure assets so
they can be established as a priority in the restoration effort. It
also gives those leading the response efforts sound information to
determine where the application of Federal resources can facilitate a
faster restoration.
ongoing efforts
DOE is very aware that the private sector owns and operates the
vast majority of our Nation's energy assets. OE works closely with the
owners and operators of the energy infrastructure, as well as State and
local governments. Throughout the year, OE collaborates with these
organizations to prepare for energy emergencies resulting from both
weather-related and manmade emergencies. OE conducts workshops and
tabletop exercises, provides resources and support for energy assurance
planning, and facilitates relationship building across these
organizations. The communications channels that these activities have
fostered have proven to be invaluable when major outages occur.
We regularly evaluate our procedures to identify opportunities for
improvement. On an ongoing basis, OE gathers information from public
sources such as media outlets and creates a summary of public
information about current energy issues. To help stakeholders stay
current on energy infrastructure events, OE publishes the Energy
Assurance Daily (EAD) to report on developments affecting energy
systems, flows, and markets. The EAD is available to the public online
(http://www.oe.netl.doe.gov/ead.aspx).
In an effort to continue improving communication and sharing of
information, DOE works with industry groups such as the Edison Electric
Institute, to emphasize the importance of providing timely, accurate,
and consistent data by their members companies that is crucial during
recovery and restoration periods. OE encourages industry to use
terminology that is understandable to the response community and to the
general public. We also stress the importance of company websites in
providing continually updated information on those customers without
power, locations and restoration times. I would also like to highlight
the follow-up that OE has done with private sector companies to
ascertain the improvements they have made over the past several years,
particularly since the 2005 and 2008 hurricane seasons. An OE report
titled ``Hardening and Resiliency: U.S. Energy Industry Response to
Recent Hurricane Seasons,''\1\ notes that industry has undertaken
numerous actions to harden their energy systems by replacing wooden
poles with concrete or steel, strengthening poles with guy wires,
elevating substations and control rooms, and improving their vegetation
management practices and supply logistics.
---------------------------------------------------------------------------
\1\ The report, ``Hardening and Resiliency: U.S. Energy Industry
Response to Recent Hurricane Seasons'' is available at http://
www.oe.netl.doe.gov/docs/HR-Report-final-081710.pdf
---------------------------------------------------------------------------
In addition, companies have taken innovative approaches to deploy
sensors such as Phasor Measurement Units to determine the health of
their systems. Companies are also making investments by installing
composite poles, using infrared thermography to scan and identify
problems on their transmission lines, and integrating smart grid
technology.
Advanced smart grid technologies can reduce restoration time
significantly. For example, the Electric Power Board (EPB) of
Chattanooga, a Recovery Act Smart Grid Investment Grant recipient, is
installing automated feeder switches, fiber communications, and sensor
equipment for distribution circuits that can be used to detect faults
and automatically switch to reroute power and restore other customers.
In April 2011, severe storms caused power outages for three-fourths of
EPB customers--129,000 residences and businesses. Smart grid
technologies installed earlier helped EPB reduce outage time
significantly by clearly identifying the location and extent of the
damage. EPB was also able to avoid sending repair crews out 250 times.
In September of 2011, another storm knocked out power to 59,000 homes
and businesses. EPB determined that its smart grid technologies, in
that situation, prevented an additional 25,000 customers from losing
power.
In April 2011, Alabama suffered significant tornado damage.
Southern Company, a Recovery Act Smart Grid Investment Grant recipient
that has invested in smart grid technologies that improve outage
communication and provide restoration notification during storms, had
more than 412,000 customers without power as a result of the severe
weather. Between Monday, April 27 and Wednesday, April 29, Alabama
Power (a subsidiary of Southern) was able to restore power to over
200,000 of its customers. By the following Monday, May 1, 95 percent of
the affected customers had had their power restored. Two days later, on
Wednesday, May 3, restoration was nearly complete at 99.9 percent.
conclusion
Reporting accurate, timely, and actionable information during
emergencies is critical to helping Federal, State and local government
agencies, the private sector, and the general public be more aware of
impacts to the energy infrastructure and helping to minimize the impact
of hazards.
As we move into the summer months, this year's hurricane season and
beyond, we remain vigilant and focused on our vital roles and
responsibilities in reporting quickly and accurately on energy outages,
working with our partners on response and restoration efforts, and
keeping the American public informed. Although we hope the recent
forecast for a light 2012 hurricane season is an accurate one, we are
prepared for this year's events and whatever they may bring.
This concludes my statement, Mr. Chairman. I look forward to
answering any questions that you and your colleagues may have. Thank
you.
The Chairman. OK. Let me start by asking a few questions.
We've got a chart that I think we were going to distribute
around to folks called, ``Major Electric Power Disruptions.''
Have you looked at that chart?
Ms. Hoffman. I need to see.
The Chairman. OK. She's bringing it to you there.
Do members of the committee have copies?
Why don't you give them to folks here so everyone has got a
copy?
At any rate the clear conclusion from this is stated right
below the chart itself. It says, ``Large scale electricity
disruptions in the United States and Southern Canada have
increased significantly since the early 1990s even as changes
in electric power generation have been modest.''
Do you agree with that conclusion?
Do you folks keep track of this kind of thing yourself in
your office in the Department?
Is this something that is valid from your perspective?
Ms. Hoffman. We do keep track of the different weather
events and the impact of those weather events across the United
States. Whether they're increasing significantly I don't have
our data to give you that information today. Looking at this is
the NERC information with respect to outages that you've
presented here.
But there has been stronger storms. There has been stronger
tornadoes. There has been stronger snow storms.
So there is some, you know, some at least indication that
there are some stronger events occurring in the United States.
The Chairman. Perhaps you could take this chart and review
it after the hearing and see if there's anything in here that
is questionable or misleading. If so, advise us of that or if
you have better information we'd be anxious to see it.
Ms. Hoffman. OK.
The Chairman. Another issue is on reporting, particularly
reporting of distribution level disturbances. The MIT Energy
Initiative issued a study last December on the future of the
electric grid. In that study they recommended the IEEE standard
reporting metric for distribution level disturbances. They said
that that should be followed uniformly throughout the industry.
It is not today.
Do you agree with that recommendation and do you have
authority or the ability to try to see that that's implemented?
Ms. Hoffman. So let me start off. If I understand the
standard it's the IEEE 1355 standard which looks at the
duration and frequency of outages in the United States. It's an
index of system average interruption frequency.
So it takes a look at the frequency, the number of
customers interrupted as well as the duration. Then it makes it
an index by dividing by the total customers in a service
territory. What the IEEE standard did was it took that and
broke it into two categories, major events and day to day
events.
So that is a standard that is looking at trying to really
pull together how do we start doing some correlations with
outage events and day to day events. So the reporting of that
should be looked at as a standard across the industry for
reporting. It is perceived that there is inconsistent reporting
mechanisms at this moment in time.
If we are going to move forward in correlating and looking
at the impact as well as future investments that may be needed,
we do need a standardized form to collect them.
The Chairman. Is there any action you can take in your
position to implement this recommendation and see to it that
these distribution level disturbances are uniformly reported?
Ms. Hoffman. We can use the information that is collected
as following IEEE standard as one mechanism of making use of
that information. We do not have enforcement mechanism nor do
we have any requirements of enforcing that.
The Chairman. OK. Alright.
Senator Murkowski.
Senator Murkowski. Thank you, Mr. Chairman.
Ms. Hoffman, thank you for your comments here this morning.
This is an interesting chart that the Chairman has shared. I'm
curious about that.
But I think we recognize that while we can have some pretty
massive outages that are caused by weather and random weather
patterns, we've also got the consequences of policy decisions.
Those deliberate decisions that are made here in Washington. I
have expressed a great deal of concern about this cumulative
impact on reliability from this slew of EPA regulations that
we're seeing that are coming out that impact and affect the
energy industry that I don't believe are being adequately
examined and considered.
Now, last year DOE did do an analysis of resource adequacy.
But it was actually Dr. Majumdar who testified. He said that
the report actually came from the Office of Policy and
International Affairs in producing the report, not your office
which is the Office of Electric Deliverability and Reliability.
It's further my understanding that not only did DOE fail to
consider the entire suite of the new pending EPA regs that were
forthcoming on the power sector, but they also did not consult
with either the FERC or the NERC in that analysis.
So a couple questions to you along this line this morning.
First of all, why wouldn't it be the Office of Electricity
Deliverability and Reliability that would head up this type of
a review?
Ms. Hoffman. The report was done from the Policy Office
because the Policy Office was looking at the impact of any
policy recommendations or policy statements on the
administration. Our office tends to look at, I will say,
emergency related events, energy events on the system. We do
the modeling and the analytics with respect to emergency
events.
That's been our mission and our focus and looking at what
is the technology to improve the energy infrastructure. Any
potential impacts from weather or emergency events? Then how do
we facilitate the recovery from those events.
hat's been the focus and the mission of our organization.
Senator Murkowski. So you are suggesting that you look at
those or intermittent or random impacts to the power generation
as opposed to what policy impacts may come from other agencies?
I'm just trying to understand the difference here.
Ms. Hoffman. We work within our department to look at
policy events, but we do not have the lead responsibility from
the policy in the Department of Energy.
Senator Murkowski. So do you have any idea why FERC or NERC
would not be considered in an analysis of what you're doing
with a focus on the impact of regulations coming out of other
agencies on the electricity sector and the reliability of that
sector?
Ms. Hoffman. I don't have the information to answer that.
Senator Murkowski. Let me ask in another way then. Would
your office, as the one that is tasked to look at the specifics
of electricity deliverability and reliability, would you
consider conducting an assessment of the cumulative impact of
the regulations that are coming primarily out of EPA on the
Nation's grid?
Is that something that you would consider doing?
Ms. Hoffman. We would consider doing or participating in
any study or event that would be conducted either from the
policy office, FERC, NERC or other agencies to the impact of
reliability. Yes.
Senator Murkowski. So you're saying you would participate,
but you wouldn't take the lead?
Ms. Hoffman. If Congress requests us to take the lead and
do the action we will be glad to take that.
Senator Murkowski. But the concern that I have and I
continue to raise is that this seeming inability to assess the
cumulative impact of our regulations on the reliability aspect
of the electricity sector is something that I think is
extraordinarily important. Whether we're talking weather or
whether we're talking policy, we need to know and understand
that we've got a system that is in one piece.
I want to move very quickly. I mentioned, and it's public
knowledge, that I've been working on safety valve legislation
as it relates to our electricity reliability and the processes
that we're dealing with.
One of the underlying problems that we have with the
reliability is clearly transmission congestion, our inability
to build out the transmission at an adequate pace. I believe
you made a statement last week in a briefing to staff that
generation can be built in 3 to 5 years. But if we're lucky
it's about 10 years for the transmission lines.
Under the Utility MACT rule which requires compliance by
2015, it does allow for an additional year or perhaps two
depending on some circumstances. I don't view that as an
adequate safety valve.
So the question that I have for you this morning is this:
Given this 10-year timeframe that you have indicated, is what
we're facing as we try to build out transmission lines, doesn't
a 3-year or even a 4-year or a 5-year window for compliance
seem problematic given what we're dealing with with the
timeframes that are involved here?
Ms. Hoffman. Thank you for your question.
I think what's going to end up having to be looked at is
the case by case examples. There is flexibility in the system
for extensions, for a fourth year extension. I believe a fifth
year extension.
But the timelines are going to have to and any concern that
a customer may or an owner/operator may have with respect to
meeting those timelines, I think should be brought to EPA
immediately. Be very transparent in the type of solutions that
are being looked at and their timelines requested.
So that is probably going to be dealt with on a State-by-
State basis, specifically with EPA.
Senator Murkowski. So if you had to identify what you would
consider to be a reasonable amount of time, you're saying that
it's more on a case by case basis as opposed to 3 years or four
years. Four years is reasonable.
Ms. Hoffman. I think it depends on the detail of the
project and how far the project is along, what requirements are
still necessary at the project. So I'm not going to do an
average statement. I think that it's best to look at the
projects specifically and address that project's need with the
proper agencies involved.
Senator Murkowski. Mr. Chairman, I am well over my time. I
apologize for that. I also apologize I have an Appropriations
markup that began at 10:30. So I'm going to have to excuse
myself.
I do wish that I was here for the other witnesses because I
know that they have some interesting things to bring up as
well.
So thank you, Ms. Hoffman.
The Chairman. Thank you.
Senator Shaheen.
Senator Shaheen. Thank you, Mr. Chairman.
Ms. Hoffman, I was a little confused by your response on
the charts that Chairman Bingaman passed around. Because he
quoted the commentary based on at the bottom of the chart that
says, Major Electric Power Disruptions. That's attributed to
the North American Electric Reliability Corporation or NERC and
to EIA.
But the chart on the other side which I referenced earlier
I have sourced as being your Office of Electricity Delivery and
Energy Reliability. Is that your understanding?
Ms. Hoffman. Yes. I just had not seen these charts before
right now. So I apologize. I'm looking at this for the first
time.
Senator Shaheen. OK.
Certainly I understand that these are only a period of
about 10 years. But just looking at the data reflected in these
charts it certainly looks like the number of weather related
disturbances has increased pretty dramatically as have the
number of households affected by those. Would you agree?
Ms. Hoffman. It does look like that. But I will also say
that prior to recently we did not have the outage management
systems, the systems in place that can more accurately record
some of the impacts to consumers. So it may be in the earlier
years there may be some variances because of reporting that
they didn't have the systems in place.
So I can only look at it without the data.
Senator Shaheen. Sure, that's only a snapshot.
Ms. Hoffman. Yes.
Senator Shaheen. I understand.
Talking about the concern for data collection and the need
for standardized data collection are you comfortable that that
standardized system of data collection is currently in place
now?
Ms. Hoffman. I think we're heading in the right direction.
Where we ultimately need to go is several layered type concept
where utilities are first and foremost providing data to their
consumers via the website and any text messaging and
communications that are available. Because consumers need that
actual information for safety of their customers so some of
that entails the number of customers that are out.
I think it is very important for customers to understand
the extent of damage to the system. So whether you're talking
damage to the transmission system verses damage to the
distribution system because that will give a better
appreciation of the time for restoration. So that is at the
utility level that must occur first and foremost.
Then from a State, regional, national perspective we need
to be able to roll those numbers up to make sure that we get a
regional perspective. Once again, I would go with the same
philosophy.
The number of customers that are out.
The extent of damage to the transmission distribution to
substation.
The extent of flooding.
Then the estimated timelines, if available, for
restoration.
So everybody has a situational awareness especially
customers that may need additional support or may need to go to
a different facility if the timeline is going to be longer than
expected.
Senator Shaheen. Is there a way to have the information
reflect other potential issues with if it's transmission? I
assume, at least my experience in New Hampshire, has been that
most of our outages have not been the result of generation
being down, but the result of transmission or distribution
issues.
Is there a way to reflect whether those lines are aged,
aging lines? That that's the cause of the outage in addition to
the weather emergency so that they don't have the same kind
of--you talked about the report on the industry response to
hurricane season and some of the updated technology that is now
being used. Is there a way to reflect that kind of information
also in that data? Does it do that now?
Ms. Hoffman. It's a fantastic question. I think we're
heading in that direction. That's what we need to continue to
work toward is have a better understanding of assets and asset
management health and age so that we actually can see if
there's a correlation to say a feeder system, a part of the
country where there may be more emphasis.
The risks may be more. There may be more of a risk to a
future hurricane or event of that part of the system going
down. So that we actually can look at predictive measures or
measures that we can take in advance of a system knowing that
maybe there's been a lot of stress in this region of the
country, especially when you've had back to back storms.
When you've had back to back storms you've put an added
stress on whether it's poles, trees. Then having another storm
follow so closely after that can make certain elements weaker.
So I think what it will allow us to do is to actually start
saying, OK, how do we really want to take a harder look at
investments and risk for different parts of the system whether
it's putting guide wires, looking at reinforcing the poles,
looking at strategies. Then be able to evaluate the cost impact
and the impact to consumers.
Senator Shaheen. I'm out of time. But Mr. Chairman, if I
could follow up just on the question that you raised. That is
who should be the entity that actually describes and prescribes
those kinds of standards and data collection?
Should it be FERC? Should it be NERC for us in the
Northeast? Should it be the Department of Energy?
Ms. Hoffman. The standard process, I mean, it's an IEEE
standard. I think the standards there's various standard
setting organizations that are very well placed and structured
to developing the standards in the United States.
Senator Shaheen. Maybe I wasn't clear.
What I should have said is who should enforce those
standards?
Ms. Hoffman. I think the enforcement of the standards is
going to depend on who has jurisdiction. So from a State
regulatory point of view it's going to be the State Utility
Commissioners and the State Regulatory bodies. From the Federal
perspective it will be FERC and NERC.
Senator Shaheen. Thank you.
The Chairman. Senator Cantwell.
Senator Cantwell. Thank you, Mr. Chairman. Thank you for
holding this hearing. Certainly, you know, while you're talking
about a lot of Northeast outages, the Northwest has had quite a
few outages, too.
As you know, over the past few years they seem to have
multiplied. In January, we had nearly 300,000 customers across
the Puget Sound region that were impacted. We're talking about
outages lasting for many days. In fact I had one constituent
who wrote me and said, ``As we stretch into the fifth day of
power outages with temperatures dropping into the 20s in the
evenings I know this is the first major outage that most of the
rest of the people have experienced so far this year. But it's
the worst. So my power has gone out over 5 times in the last 30
days usually out for 24 hours.''
So these are people who have been impacted many times. I'm
certainly a big fan of what we've instituted, a new Doppler
radar system that's state-of-the-art technology and now the
rest of the Nation is implementing.
It's giving us more predictability. We need to do a lot
more as we were talking about during last week's hearing on
just the rise in sea level. We need to have a more weather
ready Nation.
There are lots of things we can do to make sure that we
have the information from a scientific perspective about what
the impacts are going to be. Then how to actually plan for
them. But you've got to have the information first. Then local
governments, law enforcement, responders, everybody can develop
the plan.
But in this case, over the last decade, we have seen a huge
increase in these outages due to extreme weather events. Some
estimates show a strong investment in the grid--in smart grid
and distributed generation, in back up generation and things--
that would help us basically diversify and build redundancy.
Some people think that building that future system would cost
somewhere between $17 and $24 billion a year over the next 20
years.
If you look at what that might actually reduce in estimated
outages that are costing us somewhere over $40 billion per
year.
So how do you look at this issue from an investment
perspective? I look at some of those numbers and say, geez, a
10-year investment in modernizing the grid. Getting distributed
generation and getting some of these other investments in
place, would pay back over a short time period, the cost that
it is taking us to deal with all these outages, to say nothing
of the impacts that they're having on consumers.
Ms. Hoffman. It's a very good point. With respect to the
economic impact there is significant economic impact to the
country during these events. I know that NOAA estimated that
Hurricane Katrina was 105, let me check out my units right now,
$105 billion in economic damage.
So it is how do we look at financing investments in the
infrastructure over time to minimize the impact to the economy
and also minimize any sort of impact from these events. So what
we--what I would look at is a continued, steady improvement in
our infrastructure. Acknowledging if we have better data and
information than we actually can fine tune where the technology
improvements can get the biggest benefit or the biggest impact,
the biggest bang for the buck.
So what we really need to do is actually continue to
collect the data and build the analytical capabilities so we
can start developing those correlations and prioritize the
investment in our infrastructure. So we can look at where do we
get the most value from composite poles, from guide wires, from
distributed generation and looking at mircrogrids. Where has
the intensity of storms been increasing and look at should we
be building the same and using the same technologies after a
hurricane or should we be looking to place improved
technologies on the system.
Right now when we rebuild it is the same technology that's
being put back on the system to the extent that the costs are
equal. So it is an investment strategy that has to go hand in
hand with the developing of rate structures and rates at the
distribution level.
Senator Cantwell. But do you think that that number
analysis, like a 10-year time period for payback is--do you
think that's realistic, doable? Do you think it could be done
sooner? What do you think?
I hear what you're saying. You want to do it smartly. You
want to invest in the right technology. You want to see what
matters.
But I feel like because of that the reason why you're here
today and we're having this hearing is because a lot of people
are frustrated that not enough is happening at the State and
local levels. So we want to see more action. We'd love your
agency to play a more leadership role, but you're talking about
doing this incremental analysis.
I think what we have to get down to is some analogy, at
least to maybe like weatherization and the investment we make
in weatherization and the time period for payback. We have to
start basically putting out there what we think, how quickly
the investment will pay dividends to us. I think if we do, then
we'll get much more aggressive results at the local level in
pushing people to make these investments for us.
Ms. Hoffman. I agree with your point. The discussion is how
fast should we invest and at what level can the consumer, the
economy, tolerate with respect to that investment. The money
that's required is significant. So how can, how should we plan
for the investments that are required and manage those funding,
difficult funding situations?
Senator Cantwell. I think from our State's perspective
we've had two of these--what someone would call 100-year events
back to back--doing devastating economic damage to the State.
Now you start talking about all sorts of businesses and
industries that are impacted. You look at the tornado that may
have hit the Boeing facility in the Midwest. As you know, these
are all issues of, if we are seeing more severe weather, how
are we going to best prepare for it.
I think a grid that's much more reliable and resilient is
going to be a key part of that. So I thank the Chairman for
this hearing.
The Chairman. Thank you very much for your testimony.
Unless there's additional questions why don't we go ahead to
panel two? We'll dismiss you and thank you very much.
Ms. Hoffman. Thank you, Mr. Chairman.
The Chairman. If you do have any reaction to this chart
that we gave to you we'd be anxious to hear that in the coming
days.
Ms. Hoffman. We'd be glad to be able to provide you a
response.
The Chairman. Alright. Thank you very much.
Let me call forward the second panel.
It's made up of Mr. Norman Bay, who is the Director of the
Office of Enforcement of the Federal Energy Regulatory
Commission. Let me just say since we've had very effusive
introductions of the other two members of the panel. I want to
say some effusive things about Mr. Bay.
He is a distinguished former U.S. attorney in the State of
New Mexico and a former professor at the University of New
Mexico Law School and does a tremendous job at every position
he fills. We're glad to have him here. So Mr. Bay is our first
witness in this panel.
Mr. Thomas Getz, who was previously introduced as the
former chair of the New Hampshire Public Utilities Commission
in Concord.
Mr. John Bilda is the General Manager with Norwich Public
Utilities in Norwich, Connecticut.
Thank you all for being here.
Mr. Bay, go right ahead.
Yes, I think that's probably OK if the light is on. OK.
Why don't each of you take about 5 minutes. Make the main
points you think we need to understand. We will include your
full statement in the record.
Go right ahead.
Yeah, I think that would be best if you could just
summarize it. Let's be sure the recorder has got it the way she
wants it there.
Go ahead, please.
STATEMENT OF NORMAN BAY, DIRECTOR, OFFICE OF ENFORCEMENT,
FEDERAL ENERGY REGULATORY COMMISSION
Mr. Bay. OK.
So we have engaged in a joint study with NERC looking into
the October 29th through 30th, 2011 snowstorm in the
Northeastern United States. We're about a month away from
issuing our report. I think it's important to note, as the
committee has recognized, that most of the customer outages
around 95 percent were caused by damage to distribution
facilities, the lines that deliver electricity to individual
homes and businesses and that are regulated by the States
rather than FERC.
Numerous affected States therefore have launched their own
inquiries into the event. I commend their efforts. Although
primarily a distribution level event the storm also caused
transmission line and substation outages approximately 70
transmission lines, a number of which are BPS or bulk power
system elements, subject to FERC approved mandatory reliability
standards, experienced sustained outages. That simply means an
outage of more than 10 minutes in duration.
FERC and NERC launched their joint study to determine the
causes of the transmission in BPS facility outages and to
recommend steps that utilities could take to improve their
performance in maintaining grid reliability during a future
large snowstorm or other similar weather event.
So we've gathered a lot of data. We've done a number of
interviews. We have worked with the State and public utility
commissions in affected States.
We've done some outreach to them. We have done site visits.
We're moving closer toward finalizing our report.
Before we finalize it, of course, we'll be doing more
outreach to the State PUCs to get their feedback and their
input. We'll be doing some outreach to trade associations as
well.
While it's premature to discuss our findings and
recommendations at this time, I would like to note the key
issues that we're analyzing.
First, we're analyzing the effects of the storm on the
specific transmission lines and substations that experienced
outages. Which lines and substations were forced out of
service. For what reasons and how long it took to restore those
facilities.
Second, we are analyzing how these outages affected the BPS
as a whole. How the BPS performed during and immediately after
the storm.
Third, we are analyzing the affect of these facility
outages on customers. We have already concluded that most of
the customer outages were caused by distribution system damage.
Fourth, we are analyzing the role that compliance or lack
of compliance with FERC approved, mandatory reliability
standards, particularly the Transmission Vegetation and
Management Reliability Standard, FAC003-1, played in the
transmission outages.
Finally, in light of what we have learned we are
considering making several recommendations on how utilities can
improve vegetation management and other practices to reduce
transmission outages during snowstorms and similar weather
events. Although the effects of the transmission and substation
outages on the BPS and on customers were mild compared to the
serious distribution system outages, there is room for
improvement in these areas.
So in conclusion I want to thank the committee again for
this opportunity to testify today on FERC's study of the
October 2011 snowstorm's effects on transmission and BPS
facilities. We look forward to providing the committee and
affected State governments a copy of the report when it is
completed.
[The prepared statement of Mr. Bay follows:]
Prepared Statement of Norman Bay, Director, Office of Enforcement,
Federal Energy Regulatory Commission
Mr. Chairman, Ranking Member Murkowski, and members of the
Committee: Thank you for inviting me to testify today. My name is
Norman Bay. I am the Director of the Office of Enforcement of the
Federal Energy Regulatory Commission (FERC or the Commission). I appear
before you as a staff witness, and the views I present are not
necessarily those of the Commission or any individual Commissioner. My
testimony addresses FERC's inquiry into the effects of the October 29-
30, 2011 snowstorm in the Northeastern United States on transmission
and Bulk Power System (BPS) facilities. Commission staff is conducting
this inquiry jointly with the North American Electric Reliability
Corporation (NERC). The inquiry team has made substantial progress, but
we are still about a month away from finalizing our report, so I am
unable to share specific findings and recommendations at this time. I
am, however, happy to discuss with you the nature of our inquiry and to
speak generally about some of the key issues the inquiry team is
analyzing.
The Committee is well aware of the severe nature of the October
snowstorm and its harmful effects throughout the Northeast. To briefly
summarize, the snowstorm dropped record amounts of heavy, wet snow
across the Northeast when trees had not yet lost their leaves. These
circumstances caused large numbers of trees to fall on distribution and
transmission lines, resulting in widespread power outages. More than
three million customers from Pennsylvania to Maine lost power, tens of
thousands for more than a week. The storm caused significant economic
impact in the affected states.
Most of these customer outages--around ninety-five percent--were
caused by damage to distribution facilities, the lines that deliver
electricity to individual homes and business and that are regulated by
the states rather than FERC. Numerous affected states, therefore, have
launched their own inquiries into the event, and I commend their
efforts. Although primarily a distribution-level event, the storm also
caused transmission line and substation outages. Approximately seventy
transmission lines (a number of which are BPS elements subject to FERC-
approved mandatory Reliability Standards) experienced sustained
outages. FERC and NERC launched their joint inquiry to (1) determine
the causes of these transmission and BPS facility outages and (2)
recommend steps utilities could take to improve their performance in
maintaining grid reliability during a future large snowstorm or other
similar weather events.
FERC and NERC have gathered a significant amount of data, primarily
from the utilities responsible for maintaining the transmission lines
that experienced outages. We conducted site visits to view affected
transmission lines in Connecticut, Massachusetts, and New Hampshire. We
met with key executives of Northeast Utilities, whose subsidiaries had
the most transmission line outages. We have also talked with staff from
the relevant state commissions, and we will be presenting state
commission staff with our preliminary findings and recommendations
before finalizing the report.
While it is premature to discuss our findings and recommendations
at this time, I would like to note the key issues we are analyzing.
First, we are analyzing the effects of the storm on the specific
transmission lines and substations that experienced outages--which
lines and substations were forced out of service, for what reasons, and
how long it took to restore those facilities. Second, we are analyzing
how these outages affected the BPS as a whole--how the BPS performed
during and immediately after the storm. Third, we are analyzing the
effect of these facility outages on customers; as noted, we have
already concluded that most of the customer outages were caused by
distribution system damage. Fourth, we are analyzing the role that
compliance (or lack of compliance) with FERC-approved mandatory
Reliability Standards, particularly the Transmission Vegetation
Management Reliability Standard (FAC-003-1), played in the transmission
outages. Finally, in light of what we have learned, we are considering
making several recommendations on how utilities can improve vegetation
management and other practices to reduce transmission outages during
snowstorms and similar weather events. Although the effects of the
transmission and substation outages on the BPS, and on customers, were
mild compared to the serious distribution system outages, there is room
for improvement in these areas.
In conclusion, I want to thank the Committee again for this
opportunity to testify today on FERC's inquiry into the October 2011
snowstorm's effects on transmission and BPS facilities. We look forward
to providing the Committee, and affected state governments, a copy of
the inquiry report when it is completed.
The Chairman. Thank you very much.
Mr. Getz, go right ahead.
STATEMENT OF THOMAS B. GETZ, FORMER CHAIR, NEW HAMPSHIRE,
PUBLIC UTILITIES COMMISSION, CONCORD, NH
Mr. Getz. Thank you, Mr. Chairman. I'm very pleased to be
here this morning and have the opportunity to discuss New
Hampshire's experience with weather related electrical outages.
I want to thank Senator Shaheen for her kind introduction.
I'll highlight some points from my written testimony.
First, for New Hampshire the defining event in terms of
weather related electrical outages was the December 2008 ice
storm. At that time 430,000 customers out of 690,000 business
and residential customers, that's nearly two-thirds of all
customers, were affected. Outages lasted up to 14 days. There
were over 100, or there were over 1,000 field crews in the
responding to that storm at its peak. There were $150 million
in reported damages from that storm.
Now that storm affected more than 4 times as many customers
as any previous outage in State history. The previous high
point had been approximately 100,000 customers during a
snowstorm in 1996. But since December 2008 there have been 3
additional extreme weather events.
In February 2010, a wind storm with gusts in excess of 60
miles per hour over a wide swath of Southern New Hampshire
caused outages to 360,000 customers. Restoration from that
event took 6 days.
In August 2011, Tropical Storm Irene moved up the East
Coast, as you well know. From a New Hampshire perspective the
storm lessened in intensity as it moved northward and veered
off its originally anticipated course. But nevertheless 160,000
customers lost power from that event. Restoration took 4 days.
Most recently, of course, in October 2011 with the
Nor'easter, more than 300,000 customers in New Hampshire
suffered outages. The restoration took 6 days.
Now the 4 events are distinguishable in terms of the cause.
But the results were the same in that ice, wind, wet snow, all
brought trees and branches in the contact with power lines
causing widespread outages.
Now the obvious question from customers and from the public
was an issue that we focused on in our After Action Review of
2008 were the electric utilities doing everything they should
be doing in terms of paying sufficient attention to vegetative
management? Now the issue of vegetative management is not a new
one, as the committee well knows. The Northeast blackout from
August 2003 that resulted in 50 million people losing power in
the U.S. and Canada prompted Congress to pass the, as part of
the Energy Policy Act of 2005, refinements to the way that the
Federal Energy Regulatory Commission and NERC handled
reliability standards.
At that time reliability standards made mandatory and
enforceable. Once NERC was authorized as the electric
reliability organization for the United States they submitted
102 proposed reliability standards including a Transmission
Vegetation Management Program that they've recently updated in
a filing to FERC that was made in 2011. It's designed to
minimize encroachment from vegetation located adjacent to
rights of way.
Just as Congress conducted a reappraisal in the aftermath
of the blackout in August 2003 states, took a look at their
policies with respect to vegetation management. In New
Hampshire we approved new reliability enhancement programs that
increase funding and annual spent by electric distribution
utilities on tree trimming and encouraged shorter trim cycles,
larger trim zones.
I would also like to note that I think it's important to
observe in this context that the nature of preparedness was
affected greatly by the events of 9/11. After 9/11 I think
working relationships among utilities and commissions and State
emergency management agencies was heightened. In New Hampshire
then Governor Shaheen created an Advisory Council on Emergency
Preparedness and Security which advises the Governor on issues
involving State ability to respond to natural and human caused
disasters.
PUC personnel, myself included, were trained in incident
command system, part of Homeland Security's approach to
national incident management system. It is in that role that
the PUC intersected with the U.S. Department of Energy's Office
of Electricity Delivery and Energy Reliability described by
Assistant Secretary Hoffman.
Nevertheless the ice storm with its unprecedented scope and
intensity greatly strained capacity of utilities to respond and
revealed a number of system processes. The ice storm after
action review that we conducted focused on a number of issues.
I see my time is close to out.
So let me just summarize that we concluded that the tree
trimming was not an issue creating to the number of outages at
that time. That utilities were following established protocols.
That the protocols themselves were appropriate.
But I wanted to make 3 general observations before I close.
One is a public expectations of utility and government
action are understandably high in this regard because it
involves fundamental issues of public health and safety.
I'd also like to say that extreme weather events are
affecting large numbers of customers and coincident with what
Senator Blumenthal mentioned, I think there's an emerging issue
of competition for resources, especially when you see large
events moving up the coast absorbing resources as they move. I
think I have not seen a real problem as of yet because the
utilities have worked together for a long time. But it's an
issue that could bear some regional and perhaps some national
attention.
The third thing and last is that the interconnected grid is
a complex structure with overlapping jurisdiction from a number
of entities. I'd like to say that I was very encouraged by
Director Bay's comments in his written testimony which I had a
chance to go through. It seems that they're taking all the
appropriate steps in terms of process in taking a look at the
transmission system as opposed to the distribution system.
So with that, I'd be happy to answer any questions I could.
[The prepared statement of Mr. Getz follows:]
Prepared Statement of Thomas B. Getz, Former Chair, New Hampshire,
Public Utilities Commission, Concord, NH
From October 11, 2001 until February 1, 2012, I served as Chairman
of the New Hampshire Public Utilities Commission. In that role, I had
the responsibility to ensure that public utilities provided safe and
adequate service at just and reasonable prices.
My focus this morning is on my experience in New Hampshire during
the past several years with electrical outages from four separate
extreme weather events, each of which far surpassed any previous storm
in state history in terms of the number of customers who experienced
electrical outages. I am hopeful that New Hampshire's experience with
these events will prove useful to your consideration of weather related
electrical outages.
In December 2008, approximately 430,000 customers, nearly two-
thirds of New Hampshire's 690,000 residential and business electric
customers, were without power, some for as long as 14 days, as the
result of an unprecedented ice storm that affected 211 of the state's
256 municipalities and land grants. The effects of the ice storm were
concentrated in the southern part of the state and also heavily
impacted northern Massachusetts. The '08 Ice Storm, which saw up to an
inch of ice accumulation on power lines and tree limbs, caused in
excess of $150 million in reported damages. Storm recovery was highly
labor intensive, with over 1,000 field crews working during peak
restoration hours, due to the sheer number of downed lines and broken
poles and the resulting need to rebuild entire sections of some
distribution lines.
In February 2010, a wind storm with gusts in excess of 60 mph over
a wide swath concentrated in the more densely populated southern
portion of New Hampshire caused outages to 360,000 customers.
Restoration took six days, much less than experienced during the '08
Ice Storm, largely because the damage was more sporadic and did not
require rebuilding of lines.
In August 2011, Tropical Storm Irene moved up the east coast
affecting 12 states, the District of Columbia and three Canadian
provinces, leaving about 7 million customers without power. The storm
diminished somewhat in intensity as it moved northward towards New
Hampshire and veered from the originally anticipated course.
Nonetheless, 160,000 customers lost power and torrential downpours
caused flooding in the northern and western parts of the state.
Restoration took four days, involved in excess of 800 crews and was
aided in part by favorable summer weather conditions.
In October 2011, an early season snowstorm, or Nor'easter, dropped
more than two feet of wet, heavy snow on trees still in full foliage.
As a result, more than 300,000 customers in New Hampshire and
approximately 2 million customers in New England suffered electrical
outages. Restoration took six days and involved nearly 1,000 crews.
Prior to these four very different events, the single largest
outage in New Hampshire occurred during a snow storm in December 1996,
affecting roughly 100,000 customers. While the four events were
distinguishable in terms of meteorological causation, the results were
the same in that ice, wind and wet snow all brought trees and branches
into contact with power lines, causing widespread outages. The obvious
question in such instances, the one asked by customers and public
officials, and the one that was a primary focus of the New Hampshire
Public Utilities Commission's After Action Review of the '08 Ice Storm
is: Are the electric utilities paying sufficient attention to
vegetation management?
The issue of electric utility vegetation management is not a new
one as the Committee knows. On August 14, 2003, a tree in northern Ohio
made contact with a high voltage transmission line causing the line to
trip off and triggering a cascading event that affected 50 million
people in the U.S. and Canada. In response, Congress passed the Energy
Policy Act of 2005, which authorized the Federal Energy Regulatory
Commission to create an electric reliability organization (ERO) and
provided that reliability standards would be mandatory and enforceable.
One outcome of that effort was the certification by the Federal Energy
Regulatory Commission (FERC) of the North American Electric Reliability
Corporation (NERC) in July 2006 as the ERO for the United States. Among
other things, NERC, as part of 102 proposed reliability standards filed
in 2006, adopted a Transmission Vegetation Management Program. More
recently, in December 2011, NERC filed a revised transmission
vegetation management standard with FERC designed to minimize
encroachment from vegetation located adjacent to rights-of-way.
Just as Congress conducted a reappraisal in the aftermath of the
August '03 blackout, individual states took a close look at the status
of vegetation management practices. As a result, in New Hampshire the
Public Utilities Commission (PUC) approved reliability enhancement
programs that increased the funds annually spent by electric
distribution utilities on tree trimming, and encouraged shorter trim
cycles and larger trim zones.
It is also worth observing in this context the impact of 9/11 on
the working relationships among electric utilities, public utilities
commissions and state emergency management agencies. In New Hampshire,
in response to 9/11 then-Governor Shaheen created an Advisory Council
on Emergency Preparedness and Security, which advises the Governor on
``issues involving the state's ability to respond to natural and human-
caused disasters, and the preparation and maintenance of a state
disaster plan.''
The PUC has been an integral member of the Advisory Council from
the outset, with a particular focus on critical infrastructure. PUC
personnel, including myself, were trained in the Incident Command
System, part of the U.S. Department of Homeland Security's National
Incident Management System, which takes an all-hazards approach to
natural or manmade disasters. In this role, the PUC intersects with the
U.S. Department of Energy's Office of Electricity Delivery and Energy
Reliability, which, through its Infrastructure Security and Energy
Restoration mission, is responsible for coordinating the protection of
critical energy assets and assisting state and local governments in
executing the Emergency Support Function 12 Energy (ESF-12) established
under the National Response Framework.
The PUC works closely with the state Division of Homeland Security
and Emergency Management (HSEM) during an extreme weather event because
of the critical nature of the electric system infrastructure to public
health and safety. Prior to the opening of the state Emergency
Operations Center (EOC), HSEM, PUC and electric utility personnel
monitor weather reports as a storm approaches and communicate among one
another in order to make preparations for response and recovery.
In an extreme weather event, the restoration of power is an end or
goal in itself and the means for accomplishing other subsidiary goals.
In the early hours of storm response, situational awareness is key to
informed decision making by utilities and government officials. For
example, it is necessary to identify the location and nature of
outages, and ascertain estimated times of restoration at least
preliminarily, and to coordinate closely so that state officials can,
among other things, identify whether hospitals and other critical
health and safety facilities are affected, and make decisions about
closing and opening roads, determining where to open shelters, and
determining whether to close schools.
The '08 Ice Storm After Action Review, which has served as a
template for state and utility management in terms of lessons learned
and corrective action, concentrated on a broader set of issues than
vegetation management. The review included emergency preparedness and
response, emergency planning, outage management systems, weather
forecasting, resource procurement, resource deployment, restoration
prioritization, and communications, as well as technical issues
relating to system protection and line construction and loading, and
the feasibility of overhead to underground conversion. At the time, the
'08 Ice Storm was viewed as a high impact, low frequency event. That
may still be regarded as an accurate assessment when narrowly limited
to icing situations but the practical reality is that three other high
impact events have occurred in the interim.
I think it is fair to say as a general matter from a New Hampshire
perspective that, through actual hands-on experience, both state and
local officials and utility management have become more adept at
planning for, responding to, and recovering from extreme weather events
that cause widespread electrical outages. As a specific matter, I offer
no opinions on the actions of New Hampshire's electric utilities during
the October '11 Snowstorm inasmuch as the PUC's after action review of
that event is still underway. I do, however, offer some observations
drawn both narrowly from the impact of the four extreme weather events
in New Hampshire and broadly from the impact of the most recent event
regionally.
First, public expectations of utility and government action are
high when it comes to electric service and all that such service
entails. New Hampshire is a heavily forested state so it is reasonable
to expect that extreme weather events will damage trees, which will in
turn damage power lines, especially distribution lines. Distribution
lines are most at risk because they tend to run along streets and roads
in close proximity to trees, which is a different case from higher
voltage transmission lines where wide rights-of-way are the norm. At
the same time, in addition to the traditional power-related amenities
of heat and light, the public is more interconnected and reliant on
electricity for connectivity for work, recreation and social
interaction than in years past. Coincident with this heightened
connectivity are heightened expectations. Electric utility customers
today are seeking information on a virtually real-time basis about the
cause of outages, the geographic extent of outages, the location of
crews assigned to repair outages, and the timing of restoration. Public
officials have corresponding expectations of utility management, as
well as the expectation that utilities will avail themselves of state-
of-the-art weather forecasting and modeling tools, outage management
systems, and communications media.
Second, extreme weather events affecting large numbers of customers
create a competition for resources, particularly in the form of line
crews and tree crews, which has the potential for negative
consequences. During the four recent events in New Hampshire, crews
were brought in from around the U.S. and Canada to assist in
restoration efforts. The various New Hampshire utilities relied on
mutual aid arrangements with other utilities, affiliated companies,
cooperative arrangements, and contracts with independent line and tree
crews. Utilities in New Hampshire and throughout the region have a long
history of working together and sharing crews. Extreme weather events
that cover a large geographic area and a long time frame, however, tend
to absorb resources quickly, making crew acquisition increasingly
challenging. Moreover, especially in the context of a storm that is
accurately forecasted and that follows a predictable path, the
incentive is growing for a utility to tie up resources early in order
to respond timely to its customer needs. Inasmuch as these weather
events cross state boundaries and often involve multi-state companies,
a regional approach among state regulators and policymakers to working
with utilities could go a long way to staving off potential negative
consequences.
Third, the interconnected electric grid is a complex structure that
crosses state boundaries and is subject to shared jurisdiction
involving state and federal agencies. Furthermore, utility ownership is
divided among public and private entities, the latter of which may
involve a number of affiliates and subsidiaries of larger multi-state
or multi-national corporations. As a general rule, state utility
commissions have jurisdiction over the distribution of electricity
while FERC has jurisdiction over the transmission of electricity. On a
related note, NERC has responsibility for the bulk power transmission
system and the New England Independent System Operator, Inc., a
regional transmission organization (RTO), operates the region's
transmission system on a daily basis, manages wholesale markets and
oversees regional planning. The jurisdictional boundaries between the
bodies and among the states, however, may not be bright lines and is
complicated by the reality that a number of utilities do business in
multiple jurisdictions.
As noted in the PUC's '08 Ice Storm After Action Review, while
technically the utility industry differentiates between two systems,
i.e., distribution and transmission, in practice there is a sub-
transmission system, which operates similarly to a transmission system
by delivering power to distribution substations. Sub-transmission
systems may operate at voltages associated with FERC regulation but in
New Hampshire the sub-transmission system, forming an important part of
the backbone system, operates primarily at 34.5kV, which is associated
with state regulation. Also, NERC authority with respect to the bulk
power system is not fully congruent with FERC jurisdiction. The
complexity of the system, the multiplicity of actors, and the
differentiation of regulatory roles both by geography and voltage level
raise the same challenges faced in the organizational design of every
large corporation or agency. Specifically, because of a natural
tendency toward subunit orientation resulting from specialized
jurisdictions, communications among the states and between the states
and FERC, NERC or the RTO can be challenging. When the respective
regulatory missions are incongruent, a variety of integrating
mechanisms, such as task forces or teams, can be used to ensure that
regulatory bodies are working together and not at cross-purposes.
In closing, I have been asked on more than one occasion whether the
high numbers of outages experienced in recent years in New Hampshire
were less a consequence of the particular storms or more the result of
a lack of tree trimming or proper pole and line maintenance by the
utilities. Based on the increased emphasis on vegetation management
since 2003, and the evidence collected as part of the extensive '08 Ice
Storm After Action Review, I am persuaded that the high numbers of
outages are linked to extreme weather and not to utility imprudence. I
have also been asked about the likelihood that such storms will
continue. Public Service Company of New Hampshire indicates that many
New England weather experts believe that the cluster of recent storms
is part of a pattern that could last several years. As a practical
regulator, it was my position that utilities should be prepared at all
times to respond to a variety of extreme weather events, which is why
budgets for storm response have been increased over time and mechanisms
have been approved to consider utility recovery of expenditures in
excess of budgeted amounts in appropriate circumstances.
Regulation often requires a balancing of competing policy
objectives, of exercising regulatory oversight but avoiding counter-
productive micro-management. Electric utilities have been highly
regulated entities for a century as an economic matter because they
historically operated as a natural monopoly and as a matter of public
health and safety because they were so affected with the public
interest by virtue of the fundamental and pervasive service that they
provide. Accordingly, it is proper to look closely at the performance
of utilities to determine whether they are acting prudently and to hold
them accountable to meeting reasonable standards. That is the course
the PUC has followed in New Hampshire with respect to weather related
electrical outages as exemplified by the After Action Review of the '08
Ice Storm and continued through subsequent extreme weather events. It
is also an appropriate course for FERC and NERC to follow with respect
to regional events that impact the electric transmission system.
The Chairman. Thank you very much.
Mr. Bilda, go right ahead, please.
STATEMENT OF JOHN BILDA, GENERAL MANAGER, NORWICH PUBLIC
UTILITIES, NORWICH, CT
Mr. Bilda. Good morning, Senators. Thank you for asking me
to summarize my written testimony before you here today.
My name is John Bilda, General Manager of Norwich Public
Utilities, a municipally owned natural gas, water, sewer and
electric utility serving Norwich, Connecticut and surrounding
communities. Norwich Public Utilities was established in 1904
by forward thinking city leaders, who believed that owning and
operating a municipal utility was in the community's best
interest. We are governed by a 5 member board of utility
commissioners appointed by the Norwich City Council, who are
responsible for ensuring the utility is acting in the best
interest of its consumers.
Our Board Chairman, James Sullivan, is also here with me
today in the audience.
I am here to discuss our experience with electric
restoration efforts following disaster events, specifically our
response to Tropical Storm Irene. We deal with diverse
emergencies and have an aggressive system in place to maximize
reliability including a routine tree trimming program. Our
system inspection program includes infrared inspections and
pole integrity examinations. We invest in new technology to
advance our ability to provide service.
We deployed 32 miles of high band width, fiber optic
communication lines that link the entire city communication
network including our ability to monitor and operate substation
connections with the transmission system. Since we own this
asset we don't have to rely on third party telecommunication
operators for this critical communication component.
We work with city departments and emergency first
responders to maximize resources, improve communications,
eliminate unnecessary redundancies and streamline processes.
We relocated and upgraded the city's Emergency Operations
Center to our Utilities Operations Center placing important
stakeholders in one location ensures consistent and effective
communication during emergencies.
Internally we have a positive working relationship with our
unionized work force. We negotiated changes in job descriptions
for our underground construction crews and cross trained them
to work as support staff for our electric line crews. We can
now double our restoration capacity, in house, by pairing line
crews with construction crews.
When a major disaster affects Norwich electric distribution
system we can expand our work force internally before relying
on outside mutual aid. Our employees live in our community.
Possess local and institutional knowledge of the system which
makes a marked difference in an emergency.
We are members of Northeast Public Power Association or
NEPPA, which supports our request for mutual aid when needed.
NEPPA has a mutual aid system where New England based, public
power systems support each other in times of need. As the
current President of NEPPA, I can tell you that although the
system works well, we are constantly looking at ways to improve
its effectiveness including further leveraging technology to
quickly and efficiently fulfill mutual aid requests.
The system works because of the good faith and mutual
understanding created over the years amongst public power
communities. In short all NEPPA members know that they are no
more than a few hours away from the assistance to restore power
to their community.
When the regional electric transmission lines go down or
are damaged no amount of crews can help us restore the power.
We receive our electricity through transmission lines
controlled by the independent system operator and transmission
owners. One strategy we initiated to keep the lights on in
Norwich when the transmission lights go down was to build a
microgrid.
In an emergency our microgrid can supply a significant
portion of normal power to our community. We want to expand
this system but are facing regulatory hurdles at ISO New
England that affect our ability to bring new assets online. I
understand FERC's Office of Enforcement has been asked to
review our scenario and issue their assessment on the use of
microgrids so our system can operate with regulatory certainty.
So in conclusion we proactively develop policies that
enable us to employ our own resources first to rapidly restore
power.
We can further expand our work force uses NEPPA's well
coordinated and effective public power mutual aid system.
Additionally we have taken steps to protect our community
from prolonged power outage due to situations outside of our
control.
As a public power system we value our men and women
employees and have a successful business model that places our
communities' needs first.
Again, thank you for allowing me to speak here with you
this morning.
[The prepared statement of Mr. Bilda follows:]
Prepared Statement of John Bilda, General Manager, Norwich Public
Utilities, Norwich, CT
Good morning Senators, thank you for asking me to testify before
you today. My name is John Bilda, and I am the General Manager of
Norwich Public Utilities, a municipally owned utility located in
Norwich, Connecticut. We are a four service utility company, providing
natural gas, water, sewer, and electricity to the people of Norwich and
the surrounding communities. Norwich Public Utilities was established
in 1904 by forward-thinking Norwich city leaders who believed that
owning and operating a municipal utility company was in the best
interest of the entire community. We are governed by a five member
Board of Utility Commissioners who are appointed by the Norwich City
Council. Our commissioners are responsible for ensuring the utility is
consistently acting in the best interests of our customers and the
community.
I am here today to discuss our experience with electric restoration
efforts following disaster events, specifically, our response to
Tropical Storm Irene in August of 2011. When Irene was making her way
up the east coast, all of New England was preparing for the worst.
However, we at Norwich Public Utilities had been preparing for this
type of event for many years. Because we are a four service utility
company, we regularly deal with diverse weather and non-weather related
emergencies. We plan for circumstances that cause service interruptions
to any or all of the utility services we provide. It is our job and
responsibility to ensure that when an event impacts our customers, we
act immediately and do what is necessary to control the situation and
restore services as soon as possible.
We have an aggressive system in place designed to maximize
reliability. Preventative system maintenance, a key component in our
operating budget, is designed to ensure operational reliability. We
understand a small investment in preventative maintenance will help
avoid larger expenses later during emergency situations. For example,
our vegetation management program is constant. In addition to routine
tree trimming throughout our service territory, through close community
ties with our customers, we respond to individual requests to examine
and remove trees and brush that interfere with power lines. We have a
very comprehensive system inspection program in place that includes
infrared inspections and pole integrity examinations. We invest in new
technology to advance our ability to provide service. Over the last
several years, we have been mapping our territory using advanced
Geographic Information System (GIS) technology. This allows us to
prioritize and respond to outages more efficiently.
Part of our planning also requires building relationships with
various entities that are crucial in aiding us in our mission. These
entities include employee bargaining units, other municipal
departments, first responders, city and local officials, and industry
peers. Most importantly, it is critical to build a solid relationship
among employees. From these relationships come a wide variety of
resources and a strong sense of collaboration.
We have worked with various city departments and emergency first
responders to develop a process to maximize inter-departmental
resources, improve communications, and operate efficiently by
eliminating unnecessary redundancies and streamline processes. We were
instrumental in relocating and upgrading the City of Norwich's outdated
Emergency Operations Center to our Utility Operations Center. By doing
this, we centralized all major stakeholders involved in emergency
response--fire, health, police, public works, etc.--and provided a
state-of-the-art GIS and outage management system, equipment, and
technical support needed to maintain the Operations Center during an
emergency situation. Placing important stakeholders in one location
ensured consistent and effective communication. Additionally, we
developed plans with public works staff and first responders to work in
cooperation with restoration crews. Rather than operating independently
of each other, first responders work seamlessly with us to ensure
safety while public works crews coordinate their efforts to open roads
in support of our crews' need to restore service.
We also deploy 32 miles of high bandwidth fiber optic communication
lines. These lines link the entire municipal communication network,
including our ability to monitor and operate our substation connection
with the transmission system. Since this is our asset, we do not need
to rely on a third party telecommunications operator for this critical
communication component.
Just as important as external relationships, we have developed a
positive and constructive working relationship with our internal,
unionized workforce. We currently have four crews of three electrical
line workers who maintain all of the electric distribution lines in
Norwich. Since we are a natural gas, water, and sewer company, we also
have four underground construction crews. Twelve years ago, we
negotiated with our construction unions to change the job descriptions
of our underground crews and cross-trained them to work as support
staff for our electric line crews. We can now effectively double our
restoration capacity by pairing two electric line crews with two
underground construction crew members in a supporting role, turning
four, three person crews into eight four, person crews. We have
regularly utilized this cross training model that has enabled our crews
to develop the capabilities and competencies necessary to work safely
and proficiently. When a major disaster affects Norwich's electric
distribution system, we are now able to expand our work force for
recovery efforts before relying on outside mutual aid crews. Our
employees are highly valued, dedicated, and very skilled. They live in
our community and possess local and institutional knowledge of the
system. They are aware of the needs of the citizens and businesses of
Norwich. That dedication and local knowledge makes a marked difference
in an emergency situation, just as it does in normal operations.
There are times, however, where we require mutual aid. Tropical
Storm Irene was one of those instances. We are fortunate to be a part
of the public power fraternity and members of the Northeast Public
Power Association or NEPPA, which supports our requests for mutual aid.
NEPPA is the regional association representing 79 not-for-profit,
consumer-owned electric utilities in the six New England states of
Massachusetts, New Hampshire, Vermont, Connecticut, Rhode Island and
Maine. NEPPA has established a mutual aid system where public power
systems throughout New England can support each other in times of need.
The system divides New England into four regions each with a mutual aid
coordinator. Each coordinator is responsible for organizing mutual aid
within their region as well as organizing their individual member
companies' response to other regions in need of assistance. During the
Storm Irene event, NEPPA reached out to the abundant and similarly
operated public power mutual aid programs in other regions and, within
24 hours, crews from North Carolina and Indiana were headed into
northern New England. As the current President of NEPPA, I can tell you
that even though this system works quite well, we are constantly
looking at ways of improving our effectiveness. We are working on a
project right now that will improve the system even more by leveraging
technology to fulfill mutual aid requests more quickly and efficiently.
It is important to note that this public power mutual aid system
works because of the good faith and mutual understanding created over
the years amongst public power communities. I have a personal
relationship with many of the general managers of the NEPPA member
utilities. We have sent our crews all over New England and the east
coast to respond in times of need. In short, all NEPPA members know
they are no more than a few short hours away from the assistance they
need to restore power to their community.
Even though Norwich Public Utilities does not own regional or
``bulk'' transmission lines, we are considered a part of the regional
or bulk power system, subjecting us to Section 215 of the Federal Power
Act. Section 215 created mandatory and enforceable federal reliability
standards for the bulk power system. The bulk power system is comprised
of transmission lines, power plants, and, in some cases, distribution
utilities. The bulk power system is under the regulatory jurisdiction
of the Federal Energy Regulatory Commission (``FERC.'') These standards
do not prevent blackouts, as storms cannot be prevented, but rather
they try to prevent unnecessary blackouts. They do this by empowering
the North American Electric Reliability Corporation, or NERC, to set
mandatory and enforceable standards for the bulk power system that can
result in fines of up to $1 million a day if they are not met. These
standards are approved by FERC. As the concept of a bulk power system
suggests, when regional electric transmission lines are damaged,
restoring power is often outside our control.
There is one emergency where no amount of crews can help us restore
power. That is when the regional electric transmission lines are
damaged. As an electric distribution company, we receive our
electricity through inter-and intra-state regional transmission lines
that are not under our control; but that of the independent system
operator and the transmission owners. In recent years, we proactively
initiated strategies to keep the lights on in Norwich, even when the
transmission lines serving our city go down.
As part of a larger, more comprehensive and integrated ``smart
grid'' strategy, our wholesale electric supplier, the Connecticut
Municipal Electric Energy Cooperative or CMEEC, constructed 16
distributed generation assets designed to provide 2.5 megawatts of
power each, based on our dispatch needs--which can be used during
emergencies. Norwich Public Utilities also owns a 20-megawatt
combustion turbine that is used to provide power during an emergency.
Collectively, all of our self-owned distributed generators can supply a
significant portion of normal load (i.e., demand) should the need arise
in an emergency (this is especially important considering the fact that
water treatment and wastewater treatment assets in our municipalities
cannot function without electricity.) With this effort, we have
achieved much of the ``micro grid'' and ``smart grid'' visions as
originally published in the Energy Independence and Security Act
(``EISA'') of 2007, and as adopted by FERC.
We are seeking to expand this system, but we are facing regulatory
hurdles at ISO-New England that are impacting our ability to bring new
assets online and to preserve the existing ones. All power in New
England is managed through ISO New England, which determines the terms,
conditions, and costs of power and related services in documents called
tariffs. The existing tariffs in place at ISO-New England are unclear
about whether and when the use of such ``micro grid'' and ``smart
grid'' designs are permitted. Distributed generation systems allow
utilities to manage load on both a demand and supply basis, and thus,
transmission costs on high-demand days, saving customers money when it
is needed most. However, ISO-New England's current policies limit or
discourage such self-managed, vertically integrated designs, making it
difficult and uncertain to realize the benefits for this investment. We
have requested FERC's Office of Enforcement to review our scenario and
to issue their assessment to ensure consistent federal policies
regarding the use of micro grids so that our system can operate with
regulatory certainty. Until this issue is resolved, our strategic
investment, made to actively manage customer load on a demand and
supply side basis consistent with EISA and FERC, save our customers
money, and ensure reliability in emergencies, will not be realized or
expanded. We maintain an active and positive working relationship with
the ISO-New England and FERC on these outstanding issues, and are
hopeful we will receive a positive assessment.
In conclusion, we have proactively developed policies that enable
us to rapidly expand our electric restoration crews employing our own
resources first. We can further expand our workforce by utilizing a
well-coordinated and effective mutual aid system through NEPPA and all
public power utilities throughout New England. Additionally, we have
taken steps to help protect our community from prolonged power outages
due to situations outside of our control. As a public power system, we
value our employees and have a successful business model that places
our community's needs first.
Again, thank you for allowing me to speak with you today.
The Chairman. Thank you all very much for your testimony.
Let me ask a few questions and then defer to Senator
Shaheen.
Let me ask you the same question I asked Ms. Hoffman about
this recommendation from the MIT Energy Initiative Study on the
future of the electric grid. They recommended there that the
IEEE standard reporting metric for distribution level
disturbances should be followed uniformly throughout the
industry.
I guess I'd be interested in any of you telling me whether
you agree with that recommendation. If it should be followed
uniformly throughout the industry how do we get that done?
Mr. Bilda. Those standards are the one that Norwich follows
and we submit that cooperatively to the State for reuse of work
comparing ourselves on the national level with those standards
right now. How that gets expanded across the Nation, something
that would put everyone on a level playing field.
The Chairman. Right. But my question is how should it get
expanded across the Nation? Should we have FERC doing this?
Should NERC do this?
Mr. Getz, you're an expert on these matters having been at
the State level. I know we love to keep our separate
jurisdictions when we talk about energy distribution and
transmission. But I think we need to find ways to keep those
separate jurisdictions from interfering with getting to the
right result. I'd be interested in your views as to how we
could do that.
Mr. Getz. I guess I'd say two things in that regard.
First of all uniformity across the States in a number of
areas including reporting like that is critical on a State
level, on a regional level and a national level. It seems to me
the most direct route to implementing a standard like that
would be through the NERC's Reliability Standards that they
would consider it and then submit to FERC.
The Chairman. Do you know if they are considering that?
Mr. Getz. I do not.
The Chairman. Mr. Bay, do you have any information on this?
Mr. Bay. I don't know whether NERC is considering that
specifically. But under the Federal Power Act, section 215,
FERC's jurisdiction and thus NERC's jurisdiction in turn, would
not extend to distribution. So I'm not sure presently that
either FERC or NERC would have the legal authority to require
the reporting or certain kinds of reporting with respect to
distribution related outages.
The Chairman. So Congress would have to change the law in
order for us to have any kind of authority to require uniform
reporting?
Mr. Bay. That would be my understanding. I would want to
consult with the Office of General Counsel, obviously, at FERC.
But as section 215 right now has a carve out with respect to
the mandatory reliability standards when it comes to
distribution. So the reliability standards do not apply to
distribution.
The Chairman. Let me ask also, Mr. Bilda, you obviously put
in place a whole series of best practices. I would characterize
them as in your utility which you're to be commended for. What
can be done at the Federal level to try to ensure that the same
kinds of best practices are implemented nationwide?
Mr. Bilda. In terms of the NERC standards a component of
the NERC standards require a culture of compliance. That's
something at least at the local level which makes the local
utilities or public power very successful because of the
culture of a small organization can be developed to meet those
culture of compliance.
Expanding that, you know, through NERC, through the rest of
the utilities, you know, may be a way in which, you know, some
of the responses where they may not have been as rapidly as
public power may be improved.
The Chairman. I guess on just as a follow up. I'm not real
clear on what concrete action that you described there. I think
expanding the culture of compliance is a good idea. I don't
have any problem with that.
I just don't know. Is there some concrete action that you
think ought to be taken by someone in either the FERC or NERC
or Congress or anybody else?
Mr. Bilda. I really can't speak to that right now. I can
speak to what works real well in Norwich.
The Chairman. OK.
Mr. Getz, did you have a comment on this or not?
Mr. Getz. Only to say that you do run into the issue that
Director Bay spoke to is when you've crossed over the line into
distribution level requirements that are currently outside the
scope of FERC jurisdiction. There would be some additional
action would have to be taken.
Other than that it's through voluntary organizations like
NARUC, regional organizations, that I've been a part of that
you can encourage some commonality and uniformity. But to go
beyond that would require perhaps some Congressional action of
some sort.
The Chairman. Senator Shaheen.
Senator Shaheen. Thank you.
I want to pursue this a little bit more because Mr. Bay you
pointed out that currently FERC does not have the authority to
regulate standards for distribution. The question that I have
is should it?
Mr. Bay. I think that's quintessentially the policy
decision that Congress will have to resolve because there is--
--
Senator Shaheen. Oh, very diplomatically put.
Mr. Bay. As Mr. Getz points out historically there has been
that divide between transmission, Senator Shaheen, and
distribution. So the question is, you know, if Congress wants
more data at the distribution level, you know, what if anything
should Congress do.
I should footnote my answer, my previous answer with one
remark and that is I don't know whether DOE has some separate
authority that allows it to collect that information and
whether there's something there that you could build upon. That
I don't know. So I'm only speaking on behalf of FERC.
Senator Shaheen. OK.
Tom, I'm going to call you Tom for purposes of the
questioning here. Should FERC have that responsibility or
should some entity have the authority to say these are
standards that should be followed with respect, not just to
transmission but also to distribution?
Mr. Getz. I certainly think there should be some
distinguish between reporting and actual standards, so
certainly to collect and report at a national level from
distribution level utilities makes a lot of sense. Whether
you're going to enforce the standards at the distribution level
I think there may be a legal issue involved in doing that. But
setting some minimum standards as a general matter makes a lot
of sense.
As a policy matter I think you'd have to, again with any of
these things, recognize to the extent that there might be
regional differences, an issue we've always faced at NARUC. But
requiring that some of these IEEE types of standards are
minimums for utilities across the country, I think, is a very
sound policy move.
Senator Shaheen. Mr. Bilda, recognizing that you have
incorporated a lot of, as you pointed out the IEEE standards
and are following some best practices that are commendable. How
do we get others? If we don't have some sort of enforcement
mechanism, some umbrella way to say to all distribution
companies this is what you have to do.
How do we get other companies to do the kinds of proactive
improvements that your company has taken on?
Mr. Bilda. I think in Norwich's case, you know, the
accountability lies right with the community for us to perform.
So I would expect as customers continue, you know, to
experience maybe prolonged outages that may, you know, drive
more accountability into some kind of standards cause the
accountability for our organization is held right at the local
level in terms of the standards and of the reliability of our
system.
Senator Shaheen. Sure. For a co-op I can understand how
that helps to drive policy. It's harder when you're dealing
with an investor owned utility and consumers have no choices
for where they're going to get their power.
So how does that play into decisions about how to ensure
reliability?
Any of you want to respond to that? I mean, as the former
chair of the Public Utilities Commission, how should Public
Utility Commissions look at that issue when it comes to
reliability? Is that a requirement that you can make for
companies within your regulatory authority?
Mr. Getz. Certainly a State commission can look at those
issues and either through an adjudication or a rulemaking
require that the regulated utilities take those kinds of
actions.
Senator Shaheen. How common is that?
Mr. Getz. In terms of the New Hampshire example after
December 8 ice storm for instance. We took a look at a whole
list of issues that came out of the storm in terms of, you
know, going down to the issue of trim zones and trim cycles and
how much is spent. So there are those opportunities. We took
some of those actions.
But I think from State to State there's usually an
initiating event like a major storm that prompts, kind of, a
follow up action.
Senator Shaheen. My time is up, Mr. Chairman.
The Chairman. Why don't you go ahead and complete any
additional questions you have? I don't have any more questions.
So, go ahead.
Senator Shaheen [presiding]. OK. Just to follow up on this
issue of data collection and reporting.
One of the things that we're considering or will be
considering soon in Congress is a cyber security bill. I don't
know if anybody heard the report on public radio this morning
talking about one of the systems in our country that is most at
risk for cyber attacks is our electric grid. We've been focused
primarily on weather this morning but clearly there is the
potential for a cyber attack to also take down an electric
grid.
Do you see that, I guess, Mr. Bay, I'll ask you this
question? Do you see that that issue should be treated
differently than weather related emergencies with respect to
requirements for data collection and reporting and best
practices or should we be treating everybody the same? Given
that, how do we resolve the issue of what happens at the
distribution level?
Mr. Bay. I think that's a good question. It's also a
difficult question as good questions often are.
The difficulty is that, again, our jurisdiction relates to
elements of the bulk power system. So if you're talking about
the local utility that serves retail customers we don't have
jurisdiction over them nor does NERC. So that the reliability
standards won't apply to them as well.
But clearly there is an issue there to the extent that
there is a concern that a cyber attack could be launched at a
local utility just as it could be launched at an element of the
bulk power system.
Senator Shaheen. Right. I assume that could happen in a
major metropolitan area in a way that would have a significant
impact on the country. Is that?
Mr. Bay. I would assume that that is possible. There are
many large utilities that suffer or not, that serve a retail
customers in large metropolitan areas.
Senator Shaheen. Yes, Tom, did you want to respond to that?
Mr. Getz. Yes, thank you. I read Richard Clark's book
several years ago and it kept me up at night about the cyber
war.
Senator Shaheen. Right.
Mr. Getz. I think in terms of requirements of utilities I
think in what we're talking about in terms of weather related
outages from a legal perspective we're looking at what's the
extent of the interstate commerce cause? What can the
jurisdiction be when you get down to the distribution level?
With terms to cyber security I think, you know, there may be a
broader entree from a legal perspective because it's ultimately
a national security issue.
I also have a concern, a practical concern, from the
State's level. It's an issue I had raised as a member of
NARUC's Critical Infrastructure Committee that small States,
especially, may not have the wherewithal to be really looking
at issues of cyber security and make sure that the utilities
are complying, are doing more than self certifying.
So to the extent that there is, can be, a Federal response,
a congressional response, so I think it's very important in the
area of cyber security.
Senator Shaheen. Thank you.
You talked about in your testimony finding after the
snowstorm in October of last year that the utilities had
complied with their requirements to trim vegetation in a way
that was appropriate. That there was nothing inappropriate
about their actions. So given that, are there other things that
they ought to be looking at to be more responsive in weather
related emergencies?
You mentioned, Mr. Bilda, cross training for your crews so
that they could work both line and construction. Are there
other technologies that we ought to be incentivizing our
utilities to use in a way that will make them more efficient in
responding in emergencies?
I'll ask you, Tom, if you would answer that first and then
maybe Mr. Bilda you could talk a little more about other
technologies that you're looking at that you think might be
able to allow you to better respond.
Mr. Getz. Yes, Senator.
First of all I'm going to reemphasize this point about
distribution lines and trees along distribution lines. It's a
very different situation from transmission lines that normally
have wide rights of way and the likelihood of fall-ins is
somewhat small. Distribution lines through neighborhoods
there's always that tension between the aesthetics of a lovely
neighborhood and reliability and how much tree trimming.
So there's always going to be that vulnerability to a lot
of outages from distribution levels from trees.
But having said that there are a number of things we
pointed out in 2008, the importance of state-of-the-art outage
management systems for utilities to have so that they can know
more clearly, more directly where the outages are. So then,
because there are some utilities, a number of them, who don't
really have below the transmission level, a really robust smart
grid type of approach to knowing where the outages are in
responding to them.
There's also a real need for better communications from
utilities to local emergency management directors to the
public. As, you know, there's a heightened expectations of the
public. They want virtually to know in a real time way, you
know, what's the cause of the outage? When is my power coming
back? So I think, you know, more focus on social media is a way
of communicating that to customers is a very important thing as
well.
Senator Shaheen. Mr. Bilda, are there other technologies
you're looking at?
Mr. Bilda. Yes, we actually have a GIS system, a Geographic
Information System, in place on our community that the utility,
our utility, operates on behalf of the city. That's linked
directly with our Outage Management System. In the event of
Storm Irene, when all this was working together in the city's
Emergency Operations Center, we could actually coordinate where
trees were down through public works and map all that and do
all the prioritization work from the office so that our crews
were dispatched as efficiently and effectively as possible.
Having said that, we are and a recipient of a DOE smart
grid grant, of which we're maybe about 60 percent complete in
the deployment of AIM metering which provides not only
information out to the customers, but a whole bunch of
information back into the utilities. We had some portion of
that integrated in with the GIS and the Outage Management
System where we were receiving meaningful and helpful
information in terms of determining what's going on in the
field without having to roll a truck.
Senator Shaheen. Wow.
Did I understand you to say that with respect to the
microgrid you have a proceeding that is pending before Mr.
Bay's office?
Mr. Bilda. Yes. There are, without traveling into too many
details, we have asked. I understand we have asked through
CMEEC, the Connecticut Municipal Electric Energy Cooperative,
for some maybe, clarity in terms of conforming with a tariff
that exists at ISO New England. So that, you know, our efforts
to dis-ploy distributed generation out in our community and
other municipal electric communities in the State of
Connecticut to not only reduce demand, capacity demand during
peak days and transmission demand during peak days, while at
the same time providing for an emergency backup when other
events occur.
Senator Shaheen. Just so that I am very clear on what
you're talking about. When you're talking about a microgrid
exactly what are you talking about?
Mr. Bilda. The deployment and dispatch of, in our case,
they're small, two and a half megawatt generators that we've
strategically located next to loads. That, you know, we can
operate these generators and meet the need of the load while
reducing the amount of energy that we take physically from the
grid or the transmission system.
So it's a very, very localized generation system that, you
know, the electrons physically flow just in the wires in the
city of Norwich.
Senator Shaheen. Where does the generation come from for
the distributed?
Mr. Bilda. It's from a, what they call a, RICE unit, a
Reciprocating Internal Combustion Engine, that runs on
environmentally high clean diesel with SCR emission equipment
installed on them.
Senator Shaheen. OK.
So, Mr. Bay, without going into the particulars of this
particular proceeding, can you talk about what the concerns are
with respect to allowing this kind of microgrid to be used
throughout the system?
Mr. Bay. I think the general concern, Senator Shaheen, that
CMEEC has is whether the use of that microgrid or the
distributed generation is perhaps inconsistent with the tariff
in place with ISO New England. Again, without getting into the
details, I can tell you that we are aware of this issue, that
we have been meeting with CMEEC and indeed have a meeting
scheduled with them in the next few days.
So we're having, I think, some productive discussions with
them.
Senator Shaheen. Good.
This is just a sort of a general question. But as Mr. Getz
and Mr. Bilda were talking about the recommendations for what
could be done to respond more quickly in emergency cases, they
talked about technology, the cross training. To what extent are
we seeing utilities adopting those kinds of new technologies?
Are there ways that we can incentivize this kind of
activity? If there are concerns about the regulation side, are
there ways that we can incentivize to help our utilities be
able to be more responsive in these kinds of emergencies
because, you know, while I appreciate what Ms. Hoffman said
about not having full data, it certainly appears that we're
going to be experiencing more and more of these kinds of events
and given the high public expectations we need to figure out
better, how to respond to them.
So I don't know, Mr. Bay, if you want to respond to that?
Mr. Bay. I'm a little bit out of my realm right now just
because I'm with the Office of Enforcement not with the Office
of Energy Policy and Innovation. We're in the Office of Energy
Market Regulation.
But I can tell you, Senator, that FERC actually has
different incentives in place for new technology. For example
there are transmission rate incentives. There are other
incentives that can be given for new forms of technology that
incent the utility through a higher rate of return to adopt and
to use those technologies.
I also know that in practice some of these innovations are
making a difference. For example, there's something known as a
phase angle regulators which are pars which are now being used
by a number of utilities. Those are very helpful for system
operators in terms of being aware of or having greater
situational awareness.
So things are happening as Mr. Bilda and Mr. Getz
indicated. I think those are positive developments.
Senator Shaheen. Thank you.
Tom or Mr. Bilda, do either of you want to respond?
Mr. Bilda. If I could add?
Senator Shaheen. Sure.
Mr. Bilda. If I could add to that though. If there isn't
some kind of incentive or some kind of subsidization or some
kind of value proposition in the ISO market or in some kind of
market, you know, the microgrids or the distributed generation
will not expand and flourish at all.
Senator Shaheen. Tom, I'll give you the final word here.
Mr. Getz. Thank you.
The incentives that we apply at the State level is we
doctor our investigations, bring the utilities in over the
years, you know, going back to the Northeast blackout. We
created these reliability enhancement programs, made it clear
that the utilities could recover their investments.
We made it clear that budgets could be increased and to the
extent that storms outside of what were expected might incur
costs. There's an opportunity for them to come back in. So at
this point it's almost on an annual basis that we're looking at
what happened the previous year.
What was spent? Where are the capital budgets? Where are
the O and M budgets?
You're seeing the utilities respond after storms and in
some respects leap frogging one another in different ways in
terms of their reporting systems, their outage management
systems. So at that level, I think, from New Hampshire's
perspective, I've been very encouraged.
Senator Shaheen. Good.
Thank you all very much for your testimony and for being
with us this morning. Obviously these are issues that we need
to continue to work on. But appreciate your insights.
At this time I'll close the hearing.
[Whereupon, at 11:30 a.m. the hearing was adjourned.]
APPENDIX
Responses to Additional Questions
----------
Responses of Patricia Hoffman to Questions From Senator Murkowski
Question 1. During the FERC's Technical Conference on November 30,
2011, there was testimony by The Honorable Betty Ann Kane of the Public
Service Commission of the District of Columbia and Ms. Debra Raggio,
Vice President, Government and Regulatory Affairs, Assistant General
Counsel, GenOn Energy, Inc., about the difficulties created by the
conflict between an environmental order or orders applicable to the
Potomac River Generating Station in Alexandria, VA and the need for
that station to provide service to a nearby substation and/or otherwise
to the electric system in and around Washington D.C. (See, e.g., FERC
Technical Conference Transcript 11-30-11 pp. 324, 325, 333-337).
Please provide a summary of your office's role, and that of the
Department of Energy more generally, in resolving that controversy.
Please also provide a timeline of Departmental attention to the issues
in that matter and detail the time that elapsed between the time when
the problem came to the attention of the Department and the time when
the controversy was resolved.
Answer. On August 24, 2005, in response to a decision by Mirant
Corporation to cease generation of electricity at its Potomac River
generating station, the District of Columbia Public Service Commission
(DCPSC) requested that the Secretary of Energy issue a Federal Power
Act (FPA) section 202(c) emergency order requiring the operation of the
generating station in order to ensure compliance with reliability
standards for the central D.C. area.
DOE has used section 202(c) to address various emergency
situations, such as orders issued to allow generators in ERCOT to sell
power to affected utilities in the aftermath of hurricanes Rita and
Ike. Those orders were issued in a matter of hours by the Department
acting upon it own motion without consultation with any other Federal
or state agencies, The Mirant situation was fundamentally different in
that the plant had ceased operation in response to a federally-
authorized State agency action concerning violations of Federal
environmental law, and there were no emergency events that presented an
immediate threat to continuity of electric service in D.C. DCPSC's
petition presented only a general claim that reliability was
compromised without particular evidence or analysis. Faced with that
situation, the Department conducted an independent reliability
analysis, and began a process of consulting with the U.S. Environmental
Protection Agency (EPA), and the Virginia Department of Environmental
Quality (DEQ) on the environmental issues. The Department's analysis
revealed that the real issue was not the immediate need for the plant's
generation, but for its potential availability in view of limited
additional transmission capacity to bring electricity into D.C. from
elsewhere.
Upon completion of analysis, the Secretary made a determination
that without the operation of the generating station there was a
reasonable possibility an outage would occur that would cause a
blackout in the central D.C. area. Therefore, on December 20, 2005, the
Department issued a Federal Power Act section 202(c) emergency order
requiring Mirant to operate the Potomac River generating station. The
process DOE undertook in response to the DCPSC's petition included
close collaboration and coordination with EPA, and the DEQ.
The order required Mirant to operate in a manner to reduce the risk
to reliability, but not with unnecessary exceedances of required air
quality standards. The expiration date on that order was October 1,
2006, but it was extended until February 1, 2007. On January 31, 2007,
DOE issued a new section 202(c) emergency order to Mirant with
substantially the same terms as the earlier order. That order expired
July 1, 2007, pursuant to its terms.
Set forth below is a timeline of relevant actions. Pertinent
documents are available online at http://energy.gov/oe/does-use-
federal-power-act-emergency-authority.
August 19, 2005--the DEQ issues a letter asking Mirant to
take immediate steps to ensure protection of human health and
the environment in the area surrounding the generating station,
up to and including potential shutdown of the facility.
August 24, 2005--Mirant shuts down all five generating units
at the generating station.
August 24, 2005--the DCPSC files an Emergency Petition and
Complaint with both the United States Department of Energy (DOE
or Department) and the Federal Energy Regulatory Commission
pursuant to the FPA.
August 2005 through December 2005--DOE conducts an
independent analysis of the electricity reliability situation
in D.C. and analyzes the generating station's role in ensuring
a sufficiently reliable supply of electricity to that area,
particularly given the lack of transmission capacity into D.C.
DOE's analysis is conducted by the Department's Oak Ridge
National Laboratory.
December 20, 2005--Order No. 202-05-3 is issued. It orders
Mirant to generate electricity at its Potomac River generating
station pursuant to the terms of the order.
January 18, 2006--DOE issues a notice of the emergency order
(published in the Federal Register on January 20, 2006, 71 FR
3279) in which it commits to preparing a Special Environmental
Analysis (SEA) pursuant to the Council on Environmental
Quality's Regulations Implementing the Procedural Requirements
of the National Environmental Policy Act of 1969 (NEPA), 40
C.F.R. 1506.11. The SEA is issued on November 22, 2006, with
comments due by January 8, 2007.
Order No. 202-05-3's original expiration date was October I,
2006. Because the transmission redundancy problems continue in
the absence of the completion of two new 230 kV lines in the
process of being constructed by Pepco (the DCPSC regulated
local utility), and because the SEA is not yet completed, two
short-term extensions of the emergency order are issued pending
consideration of the required SEA and review of comments
thereon. The first extension, Order No. 202-06-2, is issued on
September 28, 2006 with an expiration date of December l, 2006.
The second extension, Order No. 202-07-l, is issued on November
22, 2006, and with an expiration date of February l' 2007.
June 1, 2006--EPA issues an Administrative Compliance Order
(ACO) pursuant to Section 113(a)(l) of the Clean Air Act (the
``Act''), 42 U.S.C. Sec. 7413(a)(l). EPA's order requires that
the plant take steps to limit emissions while meeting the
requirements of DOE's order.
June 2, 2006--DOE issues a letter order to Mirant ordering
it to operate in accordance with the terms of the ACO.
January 31, 2007--Order No. 202-07-2 is issued. DOE
considered the environmental impacts of the Mirant order based
on the completed SEA and extended the emergency order until
July 1, 2007.
July 1, 2007--DOE order expires per its terms.
Question 2. Please identify the Departmental employees by position
who led the effort or otherwise spent more than 20 professional hours
attending to it.
Answer. Numerous DOE personnel were involved in various stages of
the Mirant emergency order process, from the initial consideration and
analysis through administration of the order. The personnel most
closely involved were appointees and career DOE officials from the
Office of Electricity Delivery and Energy Reliability and the Office of
the General Counsel. The Assistant Secretary for Electricity Delivery
and Energy Reliability and the General Counsel participated
substantially in the emergency order process.
Question 3. Please outline your recommendations for improvements to
the process undertaken in that case, and your recommendations for
expansion or reform of the Department's authority to strengthen and
streamline the Department's ability to protect electric reliability in
the face of conflicts such as were present in the Potomac River case
and similar issues or conflicts that may be present more generally in
light of recently-issued and pending EPA regulations that may affect
electric generating units.
Answer. DOE has used section 202(c) to address various emergency
situations, six times since DOE's creation in 1978, most of which did
not impact environmental laws. For example, in the aftermath of
hurricanes Rita and Ike emergency orders were issued to allow
generators in ERCOT to sell power to hurricane-affected electric
utilities. As provided under section 202(d) of the Federal Power Act,
operating pursuant to 202(c) orders provided the generators the ability
to sell outside of ERCOT, while protecting them from being subject to
FERC jurisdiction based on those emergency sales. Because of the
urgency of the situation, those orders were issued in a matter of hours
by the Department acting upon its own motion without consultation with
any other Federal or state agencies.
The Mirant situation in 2005 was fundamentally different in that
the plant had ceased operation in response to a State agency letter
concerning environmental violations. The D.C. Public Service Commission
petitioned DOE to issue an emergency order to maintain reliability, but
provided only a claim that reliability was compromised without any
evidence or analysis. Faced with that situation, the Department began
the process of consulting with the U.S Environmental Protection Agency
(EPA) and State of Virginia on the environmental issues, and conducting
a reliability analysis.
Thus the process DOE uses in issuing 202(c) emergency order can
vary considerably based on the factual situation and whether other
Federal or State laws are impacted. Flexibility is essential and the
Department is leery of developing a formal process that may expedite a
decision to issue an emergency order in a given instance, but prove an
unnecessary hindrance in another.
However, the Department can work to ensure it continues to have
fast and ready access to appropriate experienced staff, and as need be
expert consultants, that are able to understand and converse in the
various electricity generation, electricity transmission, electricity
reliability, and environmental areas of expertise that would be needed
in any future requests for use of DOE's emergency authority under sec.
202(c) of the Federal Power Act. This should include periodic meetings
with relevant staff at other Federal agencies, such as EPA, so that
agency staffs are familiar with each other and the legal authorities
that would be used.
Question 4. Please also outline to the extent now possible the
Department's plans for responding case-by-case to controversies of this
type that may arise as a consequence of the EPA MATS Rule, the Cross-
State Air Pollution Rule, the Clean Water Act 316 (b) Rule and any
other similar rule that may be relevant to the Department's analysis
and plans. In responding to the foregoing questions, please refer to
your answer to Senator Murkowski during the hearing concerning the
ability of the Department of Energy and/or EPA to respond case-by-case
to conflicts between the maintenance of electric reliability and
compliance with environmental rules applicable to generating units.
The cumulative effects of EPA regulations on electric reliability
have been a much-discussed topic in recent months. FERC convened a
Technical Conference, discussed above, to examine this issue.
Commissioner Norris testified before the Committee that he ``encouraged
EPA to consider the cumulative impact of their regulations.''
The DOE Office of Policy and International Affairs published a
report on this issue, Resource Adequacy Implications of Forthcoming EPA
Air Quality Regulations, on December 1, 2011. However, FERC and NERC
were not consulted. Moreover, the report assessed resource adequacy
only, not electric reliability, and only considered the impact of EPA's
Utility MACT rule and Cross State Air Pollution Rule (CSAPR). The
forthcoming Cooling Water Intake-316(b) Clean Water Act Rule and Green
House Gas New Source Performance Standards were not assessed.
Your office was consulted for this report, but did not take the
lead in producing it. In response to my question, ``why wouldn't it be
[OE] that would head up this type of a review?'' you stated the
following:
...Our office tends to look at, I will say, emergency-related
events, energy events on the system, and we do the modeling and
the analytics with respect to emergency events and that's been
our mission and our focus, in looking at what is the technology
to improve the energy infrastructure, what is the any potential
impacts [sic] from weather or emergency events, and then how do
we facilitate the recovery from those events. And that 's been
the focus and the mission of our organization.
Answer. Upon receiving a request for a Federal Power Act (FPA)
section 202(c) order, the Department investigates to determine if the
request does constitute an emergency under DOE's authority, including
verifying any claims about electricity reliability made in the request.
In cases where a generator's need to operate under a possible section
202(c) order may conflict with its ability to comply with an
environmental regulation it is subject to, the Department engages with
the EPA, as well as the relevant state environmental authorities, to
identify the terms and conditions to operate under a 202(c) order that
are necessary for the generator to address the emergency situation that
has been verified earlier while still complying with environmental
statutes. If the occasion should arise where it becomes necessary for
the Department to issue a 202(c) order before EPA can establish an
Administrative Compliance Order (ACO) with the generator, the
Department could issue a subsequent order amending the original order
to incorporate the operating and environmental mitigation conditions of
EPA's ACO.
Question 5. Does OE only assess electric reliability in response to
emergency events post hoc?
Answer. The Office of Electricity Delivery and Energy Reliability
(OE) assesses electric reliability on an as-needed basis with several
of its initiatives in accordance with its mission. Reliability analyses
are an important part of OE's work to achieve a reliable and secure
electric grid through planning, preparedness and analysis.
For nearly a decade, OE has been heavily engaged with the
electricity sector in efforts to ensure there is a more reliable and
secured electric grid as part of DOE's designation as the Sector-
Specific Agency (SSA) for the energy sector. The SSAs were created
under Homeland Security Presidential Directive 7 (HSPD-7) and were
tasked to enhance the protection and resilience of the Nation's
critical infrastructure, as well as with strengthening national
preparedness and ensuring timely response and rapid recovery of
critical infrastructure in the event of an attack, natural disaster, or
other emergency.
In its SSA role, OE engages with the electricity sector on numerous
issues, including the preparedness of the sector to address reliability
threats from geomagnetic disturbances. Additionally, OE designs and
facilitates regional energy assurance exercises to help state and local
participants evaluate their assurance plans. Participants at these
exercises included representatives from state energy offices, public
utility commissions, governor's offices, and the electric industry.
Working through these and similar activities, OE can assess reliability
of the grid and its related restoration capability prior to actual
emergencies.
In addition to working with states and other stakeholders on energy
assurance and preparedness initiatives, OE also provides technical
assistance to states, regions and other federal agencies. This
technical assistance includes request for reliability assessment
resources and general impact information due to new technologies,
regulatory changes and resource planning. Through this assistance, OE
helps facilitate the reliability assessments by states and regions and
can then leverage this information to address any potential reliability
emergencies identified at a regional or local level.
In its analytical role, OE also investigates the impact of new
technologies and the ability of the grid to adapt to such technologies,
e.g., variable generation, cycling of conventional generation. These
analyses provide insights into potential reliability issues that may
arise as new technologies are integrated into the electric system,
allowing OE to further investigate mitigating measures to avoid such
reliability issues, e.g., frequency response and other operational
controls.
Moreover, through its Presidential Permit and Export Authorization
Programs, OE considers the impacts on electric reliability of requested
permits for the construction, connection, operation and maintenance of
facilities for the transmission of electric energy at international
boundaries or the export of electricity to a foreign country,
respectively. Through these programs, OE assesses grid reliability to
ensure that there is no negative impact on the sufficiency of
electricity supply or an impediment to electric sector planning before
issuing export authorizations and Presidential permits to avoid
emergencies that might arise without such a preventative assessment.
Under the Energy Policy Act of 2005, DOE is required to generate a
triennial congestion study which evaluates the grid system and
identifies geographic areas where transmission congestion is inducing a
variety of possible adverse impacts, which may include reliability
problems. Development of the congestion studies has been assigned to
OE. OE examines many kinds of transmission-related studies and data
sets to identify geographic areas experiencing transmission congestion.
The findings of DOE's congestion studies, and public comments on such
studies, may lead to decisions by the Secretary to designate certain
geographic areas as National Interest Electric Transmission Corridors.
OE also currently facilitates broader interconnection-wide transmission
planning to address not only potential congestion issues, but also
generation, transmission, and resource needs to avoid future
reliability problems.
Yet another example is the implementation of the Department's
Federal Power Authority section 202(c) emergency authority. Should a
situation arise that may warrant a DOE emergency order under that
authority, OE may need to conduct a reliability assessment. If so, OE
works closely with the regional reliability coordinators that are part
of the North American Electric Reliability Corporation (NERC),
independent system operators (ISOs) and regional transmission operators
(RTOs), and local electric utilities as need be. Under the Federal
Energy Regulatory Commission's (FERC's) oversight, NERC has the
responsibility for monitoring and assessing bulk power electric grid
reliability and enforcing reliability standards. OE leverages the work
and expertise of these organizations, as only the nation's grid
operators and planners will have the detailed data needed to assess
electric grid reliability.
Question 6. Can OE effectively perform its mission without
prospectively assessing the reliability of the electric grids?
Answer. Assessing reliability requires access to large amounts of
specific data concerning a local or regional electric grid and its
operation. NERC conducts its reliability assessments through extensive
use of data taken on a ground-up basis by its utility industry members
and then rolled up through its regional reliability coordinators. Much
of the data is only known by the grid and generation operators
themselves, and can involve confidential business information. Not
being part of the utility industry with ready access to the data that
so often can be customized to a local situation, state and Federal
government agencies can only go so far in conducting their own
comprehensive reliability assessments and must therefore rely on
partnerships with NERC, the reliability regions, and grid operators
such as Regional Transmission Organizations (RTOs) and Independent
System Operators (ISOs). That is why OE works closely with the
appropriate reliability authorities to assess reliability on an as-
needed basis.
That said, as the energy Sector-Specific Agency (SSA), OE engages
in preparedness activities with the electric sector as well as
implement its Presidential Permit and Export Authorization Programs.
Both functions involve certain types of reliability assessments.
Additionally, should a situation arise that may warrant use of its
Federal Power Authority section 202(c) emergency authority, OE would
conduct a reliability assessment as part of its consideration on
whether to take emergency action. OE also developed an in-house
Geographic Information System (GIS) software platform that allows OE to
monitor the Nation's electric infrastructure system in near-real time
as part of its emergency response responsibilities for the energy
sector.
Question 7. In light of the public call for assessment of
cumulative impacts of EPA rules, would you recommend to the Secretary
that your office conduct a study on the cumulative impact of these four
regulations-Utility MACT, Cross State Air Pollution Rule (CSAPR),
Cooling Water Intake 316(b) Clean Water Act Rule, and Green House Gas
New Source Performance Standards--on electric reliability?
Answer. Only two of the regulations have been finalized, and the
proposed status of the remaining rules makes assessing their impacts
challenging and the results only speculative at this time. When
sufficient details are known regarding the final version of the
regulations, a cumulative assessment of the corresponding potential
impacts may provide valuable insights regarding the range of
reliability impacts that may result. Many other organizations, i.e.,
RTOs/ISOs, policy research groups, and other government agencies, are
already conducting similar analyses. The Department is leveraging the
results of these studies to avoid duplicate efforts. Should such an
occasion arise where it becomes appropriate and necessary for the
Department to conduct its own cumulative assessment, OE would make a
recommendation to the Secretary accordingly.
Responses of Patricia Hoffman to Questions From Senator Barrasso
Question 1. On December 8, 2011, I asked Dr. Majumdar at his
confirmation hearing about the impact of the Environmental Protection
Agency's regulations on the reliability of the electric grid. In
response, Dr. Majumdar committed to me ``to put together a team ...to
help the utilities, and all the PUCs, and the stakeholders to make sure
that the grid remains reliable.'' Please update me on the progress of
this initiative.
Answer. Since Dr. Majumdar's testimony on December 8, 2011, an
internal DOE-wide team meets periodically to report on and coordinate
their individual efforts in monitoring grid reliability relating to the
EPA rules. Part of this effort includes technical assistance to help
utilities, state public utility commissions and other stakeholders in
their compliance efforts. At the Winter 2012 National Association of
Regulatory Utility Commissioners (NARUC) Meeting and the 2012 National
Electricity Forum, both in February, as well as on its website, the
Department announced the availability of such technical assistance.
Thus far, technical assistance has been provided to a few states, upon
their request.
In addition to technical assistance, the Department's efforts
include continued coordination with EPA and the Federal Energy
Regulatory Commission (FERC) as well as discussions with industry
groups, planners and reliability organizations. For example, in
February DOE, FERC, and EPA, with the nation's regional transmission
operators/independent system operators (RTOs/ISOs) met to hear both
what their plans are to monitor and address any possible reliability
impacts from generators in their region as they implement the EPA final
Mercury and Air Taxies (MATS) rule issued in December 2011, as well as
any early insight the RTOs/ISOs have on potential reliability problems
in their respective footprints. We are also, through publicly available
information, monitoring the announcement of power plant retirements and
the status of power plants expecting to retrofit.
Question 2. On March 20, 2012, Regina McCarthy, Assistant
Administrator for Air and Radiation at the Environmental Protection
Agency (EPA), testified before the Senate Subcommittee on Clean Air and
Nuclear Safety. Ms. McCarthy stated that EPA had not conducted an
assessment of the cumulative impact of all of EPA's regulations,
including proposed regulations that have not yet been made final. How
can the Department of Energy assess the impact of EPA's regulations on
the reliability of the electric grid if EPA has not conducted an
assessment of the cumulative impact of its regulations?
Answer. Assessing the electric grid reliability impacts of EPA's
recent suite of regulations-MATS, Cross State Air Pollution Rule
(CSAPR), Cooling Water Intake 316(b) Clean Water Act Rule, and Green
House Gas New Source Performance Standard-is challenging given the
current status of the regulations. Thus far, only two of the
regulations have been finalized. Any assessments of the remaining
rules, which have only been proposed, would yield results that are
speculative at this time. Many other organizations, i.e., RTOs/ISOs,
policy research groups, and government agencies, are already conducting
similar analyses. The Department is leveraging the results of these
studies to avoid duplicate efforts. Should such an occasion arise where
it becomes appropriate and necessary for the Department to conduct its
own cumulative assessment prior to the remaining rules becoming final,
the Department's results would offer potential boundaries for the range
of reliability impacts, rather than definitive impacts that would
result from the suite of regulations.
Question 3. As Assistant Secretary for Electricity Delivery and
Energy Reliability, do you believe EPA should conduct an assessment of
the cumulative impact of all of its power sector regulations, including
proposed regulations that have not yet been made final? If not, why
not?
Answer. As Assistant Secretary for the Department of Energy's
Office of Electricity Delivery & Energy Reliability, I cannot speak to
how EPA should assess its power sector regulations. However, it is the
Department's understanding that, as EPA proposes and finalizes
additional regulations, its administrative regulations require that
each proposed/finalized rule be considered in concert with all other
effective regulations.
Question 4. As Assistant Secretary for Electricity Delivery and
Energy Reliability, do you believe EPA should issue any additional
final rules affecting the power sector, including the pending coal ash
regulations, before an assessment of the cumulative impact of EPA's
regulations is completed? If so, why?
Answer. As Assistant Secretary for the Department of Energy's
Office of Electricity Delivery & Energy Reliability, I cannot speak to
how EPA should release its power sector regulations, in accordance with
its statutory directives.
______
Responses of Thomas B. Getz to Questions From Senator Murkowski
Question 1. Although FERC's report on the New England outages has
yet to be finalized, Mr. Bay from the Commission has testified that
approximately 95 percent of the customer outages were caused by damage
to the distribution facilities.
Do you agree with that assessment? If so, what is it that you're
asking the federal government to do? What steps has the State of New
Hampshire taken in response to the October snowstorm?
Answer. Based on my personal experience during the October 2011
Nor'Easter, Mr. Bay's assessment that around 95 percent of customer
outages were caused by damage to distribution facilities appears
reasonable insofar as it relates to New Hampshire. I am not in a
position to express an opinion on his assessment as it may apply to
other states in New England.
In my testimony to the Committee, I pointed out that the
interconnected electric grid is a complex structure that crosses state
boundaries and is subject to shared jurisdiction involving state and
federal agencies. I also expressed my view that the Federal Energy
Regulatory Commission and the North American Electric Reliability
Corporation, especially with respect to extreme weather events that
impact the electric transmission system, should work cooperatively with
the states, look closely at the performance of utilities to determine
whether they are acting prudently, and hold utilities accountable to
reasonable standards. I understand from Mr. Bay's testimony that FERC
and NERC have conducted a joint inquiry into the October 2011
Nor'Easter and are finalizing their report.
The State of New Hampshire is conducting an After Action Review of
the Nor'Easter and is expected to issue a report in June.
Question 2. NERC is incorporating risk-based assessments into all
its reliability standards in a system-wide transition.
What are utilities doing to apply risk-based assessments at the
distribution level?
Answer. In New Hampshire, for instance, the electric utilities
apply risk-based assessments at the distribution level as part of
vegetation management. Specifically, they identify for removal so-
called ``hazard trees'' that are adjacent to distribution lines but
outside of trim zones or rights-of-way and which, due to size, age, or
disease, pose a risk to a line.
Question 3. Do utilities have a tendency to undervalue risk outside
their own service territory?
Answer. I do not have sufficient information to offer an opinion on
this question as a general proposition.
Question 4. Should NARUC play a role in fostering cooperative risk
assessment?
Answer. NERC issued a white paper on April 20, 2012, entitled Risk-
Based Reliability Compliance Monitoring. Among other things, the paper
points out that as NERC has evolved ``greater emphasis has been placed
on incorporating risk-based concepts in all endeavors to more
efficiently utilize resources and focus on the significant risks of the
electrical sector.''
The white paper also quotes from NERC's Strategic Plan, approved in
February 2012, its vision:
``To be the trusted leadership that ensures and continuously
improves the reliability of the North American bulk power
system (BPS) by implementing relevant standards; promoting
effective collaboration, cooperation, and communication around
important risks to reliability; and utilizing expertise from
the industry to produce outcomes that improve reliability.''
NERC recognizes the critical importance of collaboration,
cooperation and communication, as well as the value of utilizing
outside expertise. Correspondingly, NARUC encourages its members to
``actively participate in the development of and casting of informed
votes on pertinent reliability standards applicable to the bulk
electric system.'' See, Resolution on Increased Public Utility
Commissions Participation in NERC' Standard Development Process,
Adopted July 27, 2005. As greater emphasis is placed on incorporating
risk-based concepts, NERC and NARUC should work together to ensure that
such concepts are applied appropriately.
______
Responses of Norman C. Bay to Questions From Senator Murkowski
Question 1. You noted that a full 95 percent of the problems appear
to have been at the local distribution level.
By what process does FERC decide to open an inquiry of this nature?
How do you work with NERC in this process? Would the Commission have
opened an inquiry absent Congressional interest?
Answer. Since February 2011, FERC and NERC staff have conducted
three ``inquiries,'' into (1) the February 2011 ``Cold Snap'' gas and
electric outages in Texas, New Mexico and other areas of the Southwest;
(2) the September 2011 blackout of San Diego and other areas in
southern California, Arizona and Baja California, Mexico; and (3) the
Northeast Storm Damage electric outages of October 2011. These
inquiries are factintensive examinations of complicated events. They
require large commitments of time and resources from staff of the
Commission, NERC and affected Regional Entities, as well as from the
registered entities and other companies and persons from which inquiry
staff has gotten information. FERC, NERC and the Regional Entities
cannot conduct an inquiry into each event, so we try to focus and use
our resources wisely. While no two events are the same, the Commission
and its staff consider the totality of circumstances, including the
following major factors in deciding whether to conduct inquiries:
a. The scope, seriousness, and magnitude of the event,
including the number of people affected, size of the impacted
area or number of States, duration of the outage, economic loss
and megawatts shed;
b. Whether timely dissemination of lessons learned from the
event could improve reliability of the bulk-power system and/or
the interstate natural gas pipeline network, and help prevent
future, similar events;
c. Whether the event affects entities subject to the
Commission's jurisdiction or raises jurisdictional questions
for the Commission;
d. Whether the event implicates emerging issues that affect
the Commission, such as the natural gas/electricity
interoperability issues raised by the February 2011 Cold Snap
event;
e. The level of interest of the public and elected officials
in the event;
f. Staff resources and skills needed to conduct the inquiry;
and
g. Whether federal expertise or leadership would be helpful.
The Commission and its staff have opened consultation with NERC and
applicable Regional Entity management and staff on whether an inquiry
was appropriate on the day of these events or very shortly thereafter.
These consultations continue on an ongoing basis from the establishment
of the scope of an inquiry through its conclusion. Staff from the
Commission and NERC have worked together cooperatively and fruitfully
in each of these inquiries, along with staff from the Regional
Entities, as appropriate.
Question 2. Given that you are still analyzing the role of FERC's
Vegetation Management Reliability Standard in this outage, please
comment on vegetation management generally. NERC has petitioned FERC to
accept new vegetation Management Reliability Standards, and that
petition is currently pending before FERC.
Answer. As noted above, proposed Reliability Standard FAC-003-2 is
pending before the Commission. As part of the Commission's rulemaking
process, the Commission expects to issue a Notice of Proposed
Rulemaking with a comment period to follow. After the comment period,
the Commission will issue a final rule.
Question 2a. What are the critical differences between the new and
old standards?
Answer. NERC states in its petition requesting approval of proposed
Reliability Standard FAC-003-2 that it has seven requirements compared
with the four requirements in the currently-effective Reliability
Standard FAC-003-1. According to NERC, the proposed Reliability
Standard ``improves reliability by maintaining a reliable electric
transmission system by using a defense-in-depth strategy to manage
vegetation located on transmission rights of way (``ROW'') and by
minimizing encroachments from vegetation located adjacent to the ROW,
thus preventing the risk of those vegetation-related outages that could
lead to Cascading.'' (NERC Petition at 1.) The NERC petition contains a
table identifying requirement-by-requirement differences between the
current and proposed Reliability Standards, which is reproduced
below.\1\
---------------------------------------------------------------------------
\1\ In the NERC table, the abbreviation ``TO'' refers to
Transmission Owners, ``ROW'' refers to rights of way, and the
parentheticals containing the letter ``R'' refer to requirement numbers
in the current and proposed Reliability Standards, respectively.
------------------------------------------------------------------------
Requirement in Existing FAC-003-1 Improvements in Proposed FAC-003-
Standard 2 Standard
------------------------------------------------------------------------
Requires a document that includes Requires documented vegetation
vegetation management objectives, management maintenance
approved procedures, and work strategies, procedures,
specifications. (R1) processes, or specifications
that will prevent encroachment
into the Minimum Vegetation
Clearance Distance (MVCD) (R3)
------------------------------------------------------------------------
Requires a document schedule for ROW Requires vegetation inspection of
vegetation inspections (R1.1) 100% of applicable transmission
lines at least once per calendar
year. (R6)
------------------------------------------------------------------------
Requires documentation of a Requires vegetation be managed
``Clearance 1'' value based on TO such that no encroachments into
assessment of situation and risk the MVCD (as established by the
(R1.2 and R1.2.1) Gallet Equation) occur,
regardless of whether or not
they result in a sustained
outage. (R3, parts 3.1 and 3.2)
------------------------------------------------------------------------
Requires documentation of a Requires vegetation be managed
``Clearance 2'' value based on IEEE such that no encroachments into
standard. (R1.2.2.1, and R1.2.2.2) the MVCD (as established by the
Gallet Equation) occur,
regardless of whether or not
they result in a sustained
outage. (R1 and R2)
------------------------------------------------------------------------
Requires documentation of mitigation Requires corrective action to be
measures to address locations on the taken in cases where a TO is
on the ROW where the TO is constrained from performing
restricted from attaining specified vegetation work. (R5)
clearances. (R1.4)
------------------------------------------------------------------------
Requires documentation of a process Requires TOs, without any
for communicating imminent threats intentional time delay, to
where vegetation conditions could notify the control center
lead to a transmission line outage. holding switching authority for
(R1.5) the associated applicable line
when the TO has confirmed the
existence of a vegetation
condition that is likely to
cause a Fault at any moment.
(R4)
------------------------------------------------------------------------
Requires the creation and Requires the TOs annual
implementation of an annual vegetation management plan be
begetation management plan, as well executed such that no vegetation
as a process for documenting and encroachments occur within the
tracking the execution of the plan. MVCD. (R7)
(R2)
------------------------------------------------------------------------
(NERC Petition at 4.)
The NERC petition also proposes to add definitions of ``Right-of-
Way (ROW),'' ``Vegetation mspection,'' and ``Minimum Vegetation
Clearance Distance (MVCD)'' to the NERC Glossary of Terms. The proposed
Reliability Standard eliminates the currentlyeffective requirement
concerning ``appropriate'' qualifications for personnel involved with
the design and implementation of Transmission Vegetation Management
Plans (TVMP), which is not reflected in the NERC table above.
Question 3. Had they been implemented last year, would CL&P been
subject to the new standards? How would the new standards have affected
vegetation management prior to this outage had they been applied?
Answer. Assuming proposed Reliability Standard FAC-003-2 was
implemented in 2011, FAC-003-2 would apply to CL&P because it is
registered with NERC as a ``Transmission Owner'' and proposed
Reliability Standard FAC-003-2 applies to Transmission Owners.
As discussed in response to the question above, proposed
Reliability Standard FAC-003-2 differs in a number of ways from the
currently-effective Reliability Standard FAC-003-1. The Commission is
still analyzing these differences and cannot determine at this time the
effects the proposed standard might have had if it had been applicable
prior to the outage. It is unlikely, however, that it would have made a
significant difference since most of the lines that were rendered
inoperable by the storm were distribution facilities that were not
subject to the current standard, and would not have been subject to the
proposed standard as well.
Question 4. Has your Vegetation Management Reliability Standard
been litigated? Do you see a nexus between litigation and increased
systemic risk?
Answer. No, we are not aware of any litigation involving
Reliability Standard FAC-003-1, the currently-effective Transmission
Vegetation Management Program Reliability Standard. The Commission
approved the currently-effective standard in 2007 in the Commission's
Order No. 693. Approval of Reliability Standard FAC-003-1 was not
challenged in federal court. NERC has submitted to the Commission a
number of Notices of Penalty involving alleged violations of
Reliability Standard FAC-003-1. However, these Notices of Penalty
involved negotiated settlements and no entity has petitioned for
Commission review of a Notice pertaining to FAC-003-1. While the
Commission has instituted a review of a single Notice involving a
violation of FAC-0031, the review relates to the penalty assessed for
the violations covered by the Notice, not whether a violation of FAC-
003-1 occurred.
As Reliability Standard FAC-003-1 has not been litigated, we cannot
say whether there is a nexus between litigation and increased systemic
risk.
______
Responses of John Bilda to Questions From Senator Murkowski
Question 1. Is Norwich Public Utilities subject to NERC's
Vegetation management standards? If not, is NPU subject to Connecticut
state standards? How do they contrast?
Answer. Norwich Public Utilities is registered with NERC (ID
#NCR07038) as a Distribution Provider and Load Serving Entity. There
are no NERC vegetation standards at the distribution level that apply
to Distribution Providers and Load Serving Entities. The State of
Connecticut Public Utility Regulating Authority (PURA) does not have
vegetation management standards for electric distribution systems.
Question 2. Why did some utilities handle the storm better and
restore power more quickly than others?
Answer. I can only comment on what worked well for Norwich Public
Utilities in terms of storm response and system damage restoration.
Norwich Public Utilities credits its performance to a flexible, cross
trained, highly valued workforce; very effective communication and
planning with the communities first responders, public works, and City
Government; and technology leveraging with geographic information
systems, outage management systems, and NPU owned fiber optic
communication system.