    [House Hearing, 115 Congress]
    [From the U.S. Government Publishing Office]

     THE 2017 HURRICANE SEASON: A REVIEW OF EMERGENCY RESPONSE AND ENERGY
                        INFRASTRUCTURE RECOVERY EFFORTS

    =======================================================================

                                    HEARING

                                   BEFORE THE

                             SUBCOMMITTEE ON ENERGY

                                     OF THE

                        COMMITTEE ON ENERGY AND COMMERCE
                            HOUSE OF REPRESENTATIVES

                         ONE HUNDRED FIFTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                NOVEMBER 2, 2017

                                   __________

                               Serial No. 115-72

     [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

          Printed for the use of the Committee on Energy and Commerce
                            energycommerce.house.gov

                                  __________

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                        COMMITTEE ON ENERGY AND COMMERCE

                              GREG WALDEN, Oregon
                                     Chairman

    JOE BARTON, Texas                    FRANK PALLONE, Jr., New Jersey
      Vice Chairman                        Ranking Member
    FRED UPTON, Michigan                 BOBBY L. RUSH, Illinois
    JOHN SHIMKUS, Illinois               ANNA G. ESHOO, California
    MICHAEL C. BURGESS, Texas            ELIOT L. ENGEL, New York
    MARSHA BLACKBURN, Tennessee          GENE GREEN, Texas
    STEVE SCALISE, Louisiana             DIANA DeGETTE, Colorado
    ROBERT E. LATTA, Ohio                MICHAEL F. DOYLE, Pennsylvania
    CATHY McMORRIS RODGERS, Washington   JANICE D. SCHAKOWSKY, Illinois
    GREGG HARPER, Mississippi            G.K. BUTTERFIELD, North Carolina
    LEONARD LANCE, New Jersey            DORIS O. MATSUI, California
    BRETT GUTHRIE, Kentucky              KATHY CASTOR, Florida
    PETE OLSON, Texas                    JOHN P. SARBANES, Maryland
    DAVID B. McKINLEY, West Virginia     JERRY McNERNEY, California
    ADAM KINZINGER, Illinois             PETER WELCH, Vermont
    H. MORGAN GRIFFITH, Virginia         BEN RAY LUJAN, New Mexico
    GUS M. BILIRAKIS, Florida            PAUL TONKO, New York
    BILL JOHNSON, Ohio                   YVETTE D. CLARKE, New York
    BILLY LONG, Missouri                 DAVID LOEBSACK, Iowa
    LARRY BUCSHON, Indiana               KURT SCHRADER, Oregon
    BILL FLORES, Texas                   JOSEPH P. KENNEDY, III,
    SUSAN W. BROOKS, Indiana             Massachusetts
    MARKWAYNE MULLIN, Oklahoma           TONY CARDENAS, California
    RICHARD HUDSON, North Carolina       RAUL RUIZ, California
    CHRIS COLLINS, New York              SCOTT H. PETERS, California
    KEVIN CRAMER, North Dakota           DEBBIE DINGELL, Michigan
    TIM WALBERG, Michigan
    MIMI WALTERS, California
    RYAN A. COSTELLO, Pennsylvania
    EARL L. ``BUDDY'' CARTER, Georgia
    JEFF DUNCAN, South Carolina

                                     7_____

                             Subcommittee on Energy

                              FRED UPTON, Michigan
                                     Chairman
    PETE OLSON, Texas                    BOBBY L. RUSH, Illinois
      Vice Chairman                        Ranking Member
    JOE BARTON, Texas                    JERRY McNERNEY, California
    JOHN SHIMKUS, Illinois               SCOTT H. PETERS, California
    ROBERT E. LATTA, Ohio                GENE GREEN, Texas
    GREGG HARPER, Mississippi            MICHAEL F. DOYLE, Pennsylvania
    DAVID B. McKINLEY, West Virginia     KATHY CASTOR, Florida
    ADAM KINZINGER, Illinois             JOHN P. SARBANES, Maryland
    H. MORGAN GRIFFITH, Virginia         PETER WELCH, Vermont
    BILL JOHNSON, Ohio                   PAUL TONKO, New York
    BILLY LONG, Missouri                 DAVID LOEBSACK, Iowa
    LARRY BUCSHON, Indiana               KURT SCHRADER, Oregon
    BILL FLORES, Texas                   JOSEPH P. KENNEDY, III,
    MARKWAYNE MULLIN, Oklahoma               Massachusetts
    RICHARD HUDSON, North Carolina       G.K. BUTTERFIELD, North Carolina
    KEVIN CRAMER, North Dakota           FRANK PALLONE, Jr., New Jersey (ex
    TIM WALBERG, Michigan                    officio)
    GREG WALDEN, Oregon (ex officio)

                                      (ii)

                                 C O N T E N T S

                                  ----------
                                                                       Page
    Hon. Fred Upton, a Representative in Congress from the State of
      Michigan, opening statement....................................     2
        Prepared statement...........................................     3
    Hon. Bobby L. Rush, a Representative in Congress from the State
      of Illinois, opening statement.................................     4
    Hon. Greg Walden, a Representative in Congress from the State of
      Oregon, opening statement......................................     5
        Prepared statement...........................................     6
    Hon. Frank Pallone, Jr., a Representative in Congress from the
      State of New Jersey, opening statement.........................     8
        Prepared statement...........................................     9

                                   Witnesses

    Patricia Hoffman, Principal Assistant Secretary, Office of
      Electricity Delivery and Energy Reliability, Department of
      Energy.........................................................    10
        Prepared statement...........................................    13
        Answers to submitted questions...............................   233
    Ray Alexander, Director of Contingency Operations, Army Corps of
      Engineers......................................................    17
        Prepared statement...........................................    19
        Answers to submitted questions...............................   244
    DeAnn T. Walker, Chairman, Public Utility Commission of Texas....    23
        Prepared statement...........................................    25
    Robert F. Corbin, Deputy Assistant Secretary, Office of Petroleum
      Reserves, Department of Energy.................................    37
        Prepared statement...........................................    39
        Answers to submitted questions...............................   251
    Frank Rusco, Director, Natural Resources and Environment,
      Government Accountability Office...............................    45
        Prepared statement...........................................    47
    Thomas A. Fanning, President and Chief Executive Officer,
      Southern Company, on Behalf of the Electricity Subsector
      Coordinating Council...........................................   101
        Prepared statement...........................................   103
        Answers to submitted questions...............................   255
    Julio A. Rhymer, Sr., Executive Director and Chief Executive
      Officer, Virgin Islands Water & Power Authority................   114
        Prepared statement...........................................   116
    Chet Thompson, President and Chief Executive Officer, American
      Fuel & Petrochemical Manufacturers.............................   125
        Prepared statement...........................................   127
    Max E. McBrayer, Jr., Chief Supply Officer and Chief Financial
      Officer, RaceTrac Petroleum, Inc., on Behalf of the National
      Association of Convenience Stores and the Society of
      Independent Gasoline Marketers of America......................   144
        Prepared statement...........................................   146
    Ramon-Luis Nieves, Attorney at Law, Former Member, Senate of
      Puerto Rico....................................................   155
        Prepared statement...........................................   157
    Catherine B. Kennedy, Vice President, National Nurses United.....   170
        Prepared statement...........................................   172

                               Submitted Material

    Letter of November 3, 2017, from Eugene Dacus, Director, Office
      of Congressional Affairs, Nuclear Regulatory Commission, to Mr.
      Upton, submitted by Mr. Olson \1\
    Letter of October 31, 2017, from Ricardo L. Ramos Rodriguez,
      Chief Executive Officer, Puerto Rico Electric Power Authority,
      to American Public Power Association and Edison Electric
      Institute, submitted by Mr. Olson..............................   213
    Letter of November 1, 2017, from Susan N. Kelly, President and
      Chief Executive Officer, American Public Power Association, to
      Mr. Upton and Mr. Rush, submitted by Mr. Olson.................   215
    Letter of October 31, 2017, from Sue Kelly, President and Chief
      Executive Officer, American Public Power Association, and Tom
      Kuhn, President, Edison Electric Institute, to Ricardo L. Ramos
      Rodriguez, Chief Executive Officer, Puerto Rico Electric Power
      Authority, submitted by Mr. Olson..............................   219
    Letter of November 1, 2017, from Stephen J. Ubl, President and
      Chief Executive Officer, PhRMA, to Mr. Upton and Mr. Rush,
      submitted by Mr. Olson.........................................   220
    Statement of Energy Information Administration, Department of
      Energy, by John J. Conti, Acting Administrator, with
      supplemental material, November 2, 2017, submitted by Mr. Olson
      \2\
    Letter of November 2, 2017, from Scott Whitaker, President and
      Chief Executive Officer, AdvaMed, to Mr. Upton and Mr. Rush,
      submitted by Mr. Olson.........................................   223
    Letter of November 2, 2017, from Scott Gottlieb, Commissioner of
      Food and Drugs, Food and Drug Administration, to Committee and
      Subcommittee Leadership, submitted by Mr. Olson................   224
    Statement of the GridWise Alliance, November 2, 2017, submitted
      by Mr. Olson...................................................   226
    Letter of October 31, 2017, from Judith Enck, Former EPA Region 2
      Regional Administrator, and Ramon Cruz, Former Commissioner,
      Puerto Rico Energy Commission, to Hon. Lisa Murkowski, Chair,
      and Hon. Maria Cantwell, Ranking Member, Senate Committee on
      Energy and Natural Resources, submitted by Mr. Olson...........   230

    ----------
    \1\ The information has been retained in committee files and also
      is available at  http://docs.house.gov/meetings/IF/IF03/
      20171102/106573/HHRG-115-IF03-20171102-SD010.pdf.
    \2\ The information has been retained in committee files and also
      is available at  http://docs.house.gov/meetings/IF/IF03/
      20171102/106573/HHRG-115-IF03-20171102-SD003.pdf.

     THE 2017 HURRICANE SEASON: A REVIEW OF EMERGENCY RESPONSE AND ENERGY
                        INFRASTRUCTURE RECOVERY EFFORTS

                                  ----------

                           THURSDAY, NOVEMBER 2, 2017

                      House of Representatives,
                                Subcommittee on Energy,
                              Committee on Energy and Commerce,
                                                        Washington, DC.
         The subcommittee met, pursuant to call, at 10:34 a.m., in
    room 2123, Rayburn House Office Building, Hon. Fred Upton
    (chairman of the subcommittee) presiding.
        Members present: Representatives Upton, Olson, Shimkus,
    Latta, Harper, McKinley, Kinzinger, Griffith, Johnson, Long,
    Bucshon, Flores, Mullin, Hudson, Walberg, Walden (ex officio),
    Rush, McNerney, Green, Doyle, Castor, Sarbanes, Welch, Tonko,
    Loebsack, Schrader, Kennedy, Butterfield, and Pallone (ex
    officio).
        Also present: Representative Bilirakis.
        Staff present: Ray Baum, Staff Director; Mike Bloomquist,
    Deputy Staff Director; Adam Buckalew, Professional Staff
    Member, Health; Allie Bury, Legislative Clerk, Energy/
    Environment; Karen Christian, General Counsel; Kelly Collins,
    Staff Assistant; Zack Dareshori, Staff Assistant; Wyatt
    Ellertson, Professional Staff Member, Energy and Environment;
    Adam Fromm, Director of Outreach and Coalitions; Jordan
    Haverly, Policy Coordinator, Environment; A.T. Johnston, Senior
    Policy Advisor, Energy; Mary Martin, Chief Counsel, Energy and
    Environment; Alex Miller, Video Production Aide and Press
    Assistant; Brandon Mooney, Deputy Chief Counsel, Energy; Mark
    Ratner, Policy Coordinator; Annelise Rickert, Counsel, Energy;
    Dan Schneider, Press Secretary; Peter Spencer, Senior
    Professional Staff Member, Energy; Jason Stanek, Senior
    Counsel, Energy; Madeline Vey, Policy Coordinator, Digital
    Commerce and Consumer Protection; Hamlin Wade, Special Advisor
    for External Affairs; Everett Winnick, Director of Information
    Technology; Andrew Zach, Senior Professional Staff Member,
    Environment; Priscilla Barbour, Minority Energy Fellow; Jeff
    Carroll, Minority Staff Director; Rick Kessler, Minority Senior
    Advisor and Staff Director, Energy and Environment; John
    Marshall, Minority Policy Coordinator; Jon Monger, Minority
    Counsel; Alexander Ratner, Minority Policy Analyst; Tim
    Robinson, Minority Chief Counsel; Tuley Wright, Minority Energy
    and Environment Policy Advisor; C.J. Young, Minority Press
    Secretary; and Catherine Zander, Minority Environment Fellow.
        Mr. Upton. The Subcommittee on Energy will now come to
    order.
        And the Chair will recognize himself for an opening
    statement.

       OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN
                  CONGRESS FROM THE STATE OF MICHIGAN

        So, this year's Atlantic hurricane season was
    unprecedented. Four named storms in close succession slammed
    into the Gulf, Puerto Rico, and the U.S. Virgin Islands. These
    hurricanes caused catastrophic damage and energy supply
    disruptions across the country. While Texas and Florida are
    further down the road to recovery, a humanitarian crisis is
    unfolding in Puerto Rico--a number of colleagues from this
    committee have been down there--and the U.S. Virgin Islands,
    where the majority of folks still remain without power for more
    than a month after Hurricane Maria made landfall.
        Today's hearing will review the emergency response and
    energy recovery efforts in the wake of those storms. It will
    help us begin to understand what went right and what went
    wrong, what lessons can be learned, and how we, as
    policymakers, can identify gaps, so that when the next
    hurricane hits, we will be better prepared.
        As a result of Hurricane Harvey, more than 275,000
    customers lost power in Texas, and severe flooding also
    affected the supply and delivery of transportation fuels,
    compounding response challenges and energy impacts across the
    Gulf. Hurricane Irma left more than a million customers without
    power across Puerto Rico and the Virgin Islands. More than 6
    million customers in Florida and another million in Georgia and
    South Carolina also lost power. Then, two weeks after Irma,
    Hurricane Maria delivered the knockout punch, wiping out the
    entire grid on Puerto Rico and the Virgin Islands. At peak,
    more than 3\1/2\ million folks were without power.
        As with most disasters, energy restoration is performed by
    Federal, State, and local authorities, who provide vital
    resources, infrastructure support, and logistical coordination,
    and by industry, which provides the expertise and manpower to
    restore energy supply and services.
        As we have witnessed nightly in the news, recovery on the
    islands has been painfully difficult and slow. Questions are
    mounting regarding the role of the Puerto Rico Electric Power
    Authority, PREPA, and its initial reluctance to request mutual
    aid from mainland electricity companies that were standing by
    ready to assist immediately after the storm. Rather than
    request mutual assistance, as Texas and Florida did in the
    preceding storms, PREPA took the unusual step to award a
    contract to a virtually unknown company which it then canceled.
    The deals that PREPA signed immediately following the storm are
    now the subject of an investigation by this committee, as they
    should be.
        Today we are going to hear from two witness panels which
    will provide perspective from the Federal level, the State
    level, and the industry responder level. As we have seen in
    recent weeks across the areas affected by the storms, each
    disaster creates its own set of problems. Today's witnesses can
    help us understand the factors that contribute to these
    problems and what we may do to ensure a more effective response
    going forward.
        It will also help us understand the challenges that they
    face as they move energy and product in the aftermath of
    devastating storms. While we have seen alarming devastation, we
    have also seen some aspects of the response go right. At this
    point, by most accounts, the Department of Energy's support
    functions have gone well. DOE's coordination of regulatory
    assistance, or waivers, during the disasters has gone well.
    Their informational assistance has been consistent and helpful
    to Government and industry alike.
        We will hear this morning about the Strategic Petroleum
    Reserve, which during Harvey served to provide emergency
    petroleum swaps to make up for the temporary loss of supply and
    keep prices at the pump somewhat stable.
        We will also receive an important update on the various
    restoration efforts to bring power back to the folks of Puerto
    Rico and the Virgin Islands. It will be particularly helpful to
    understand what have been the barriers to a more rapid
    recovery, what we are learning about coordination of emergency
    response and restoration on these Territories, and what is
    needed more from us, the Congress. How can we apply these
    lessons going forward? This hearing should help us answer some
    of those critical questions.
        [The prepared statement of Mr. Upton follows:]

                     Prepared statement of Hon. Fred Upton

        This year's Atlantic hurricane season was unprecedented--
    four named storms in close succession slammed into the Gulf
    Coast, Puerto Rico and the U.S. Virgin Islands. These
    hurricanes caused catastrophic damage and energy supply
    disruptions across the Nation. While Texas and Florida are
    further down the road to recovery, a humanitarian crisis is
    unfolding in Puerto Rico and the U.S. Virgin Islands, where the
    majority of people still remain without power more than a month
    after Hurricane Maria made landfall.
        Today's hearing will review the emergency response and
    energy recovery efforts in the wake of these storms. It will
    help us begin to understand what went right and what went
    wrong. What lessons can be learned, and how we as policy makers
    can identify gaps, so that when the next hurricane hits, we are
    better prepared.
        As a result of Hurricane Harvey, more than 275,000
    customers lost power in Texas, and severe flooding also
    affected the supply and delivery of transportation fuels-
    compounding response challenges and energy impacts across the
    Gulf Coast. Hurricane Irma, left more than 1 million customers
    without power across Puerto Rico and the Virgin Islands. More
    than 6 million customers in Florida and another 1 million in
    Georgia and South Carolina also lost power. Then, just two
    weeks after Irma, Hurricane Maria delivered the knockout punch,
    wiping out the entire grid on Puerto Rico and the Virgin
    Islands. At peak, more than 3.5 million people were without
    power.
        As with most disasters, energy restoration is performed by
    Federal, State, and local authorities, who provide vital
    resources, infrastructure support, and logistical coordination,
    and by industry, which provides the expertise and manpower to
    restore energy supplies and services.
        As we've witnessed nightly in the news, recovery on the
    islands has been painfully difficult and slow. Questions are
    mounting regarding the role of the Puerto Rico Electric Power
    Authority (PREPA) and its initial reluctance to request
    ``mutual aid'' from mainland electricity companies that were
    standing-by ready to assist immediately after the storm. Rather
    than request mutual assistance as Texas and Florida did in the
    preceding storms, PREPA took the unusual step to award a
    contract to a virtually unknown company which it then canceled.
    The deals that PREPA signed immediately following the storm are
    now the subject of an investigation by this committee.
        Today, we will hear from two witness panels, which will
    provide perspective from the Federal level, the State level,
    and the industry responder level. As we've seen in recent weeks
    across the areas affected by the storms, each disaster creates
    its own set of problems. Today's witnesses can help us
    understand the factors that contribute to these problems and
    what we may do to ensure a more effective response going
    forward. They will also help us understand the challenges they
    face as they move energy and product in the aftermath of
    devastating storms. While we've seen alarming devastation, we
    have seen some aspects of the response go right. To this point,
    by most accounts, Department of Energy support functions have
    gone well. DOE's coordination of regulatory assistance (or
    ``waivers'') during the disasters has gone well. Their
    informational assistance has been consistent and helpful to
    Government and industry alike.
        We'll hear this morning about the Strategic Petroleum
    Reserve, which during Harvey served to provide emergency
    petroleum swaps to make up for the temporary loss of supply.
    We'll also receive an important update on the various
    restoration efforts to bring power back to the people of Puerto
    Rico and the Virgin Islands. It will be particularly helpful to
    understand what have been the barriers to a more rapid
    recovery. What are we learning about coordination of emergency
    response and restoration on these Territories? What more is
    needed from Congress? How can we apply these lessons going
    forward?
        This hearing should help us begin to answer these critical
    questions.

        Mr. Upton. And I yield now to the ranking member of the
    subcommittee, my friend, the gentleman from Illinois, Mr. Rush.

     OPENING STATEMENT OF HON. BOBBY L. RUSH, A REPRESENTATIVE IN
                  CONGRESS FROM THE STATE OF ILLINOIS

        Mr. Rush. I want to thank you, Mr. Chairman, for holding
    this important hearing, examining the 2017 hurricane season and
    the emergency response and energy infrastructure recovery
    efforts surrounding these emergencies.
        Mr. Chairman, I hope this will not be a ``one and done''
    hearing. Folks know in this year's historic and devastating
    hurricane season that there are many, many critical
    interrelated issues that must be addressed.
        While I appreciate having witnesses here to discuss the GAO
    report that we requested last year, the fact of the matter, Mr.
    Chairman, is that, as we speak, there are still many millions
    of American citizens living without electricity, and many are
    facing dire life-and-death conditions. It is over a month now
    that Hurricanes Harvey and Irma and Maria shattered their lives
    and devastated their livelihoods.
        Mr. Chairman, it is my hope that this hearing will shed
    light on what additional steps need to be taken quickly to
    restore power while also assuring those residents in Puerto
    Rico and the U.S. Virgin Islands specifically that their
    Government has not forgotten about them and that we will
    provide the exact same effort and the exact same attention to
    helping them as we would for any other American citizen.
        Mr. Chairman, as you know, more than six weeks after
    Hurricane Maria initially made landfall, nearly 70 percent of
    Puerto Rico and 80 percent of the U.S. Virgin Islands still,
    Mr. Chairman, still lack the power needed for basic everyday
    services, such as lighting their homes, treating drinking
    water, preserving food and medicine, or even making emergency
    calls, among other critical functions that are so necessary to
    normal and daily activities.
        While immediate attention must be focused, Mr. Chairman, on
    providing essential resources to protect the safety of
    individuals and help them cope in maintaining their lives, over
    the long term we must also help to rebuild the energy
    infrastructure in a way that makes it stronger and more
    resilient against extreme weather conditions.
        Mr. Chairman, Hurricanes Irma and Maria exposed the
    vulnerability of the Puerto Rico and U.S. Virgin Islands
    electric grids to extreme weather, while some communities
    expected to remain without power for even months on end. In
    fact, a study released last week by the Rhodium Group concluded
    that the outages caused by Hurricane Maria resulted in 1.25
    billion hours of electricity-supply disruption to households in
    Puerto Rico and the U.S. Virgin Islands, Mr. Chairman, making
    this sole event the Nation's largest blackout that was ever
    recorded. ``We can find no event in recorded U.S. history where
    there were as many people without power for as long as has
    occurred over the past month in Puerto Rico and the U.S. Virgin
    Islands,'' the report stated.
        Mr. Chairman, I look forward to engaging today's
    distinguished panel on the progress that has been made, the
    additional steps that must be taken to immediately get the
    power back on, as well as the ways that we build more resilient
    and sustainable infrastructure that is less vulnerable to an
    extreme weather condition that we have witnessed and that we
    certainly will witness in the future.
        Thank you, Mr. Chairman. I yield back the balance of my
    time.
        Mr. Olson [presiding]. The gentleman yields back.
        The Chair now calls upon the chairman of the full
    committee, Mr. Walden, for 5 minutes.

      OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN
                   CONGRESS FROM THE STATE OF OREGON

        Mr. Walden. I thank the gentleman and acknowledge his
    uniform today.
        The 2017 hurricane season has been among the worst in
    recent memory. Four major storms have wreaked havoc all over
    our Gulf Coast and, more recently, in Puerto Rico and the
    Virgin Islands. While fuel supplies and electricity have been
    restored on the mainland, a humanitarian crisis continues to
    unfold in Puerto Rico and the U.S. Virgin Islands, and I think
    you hear that from both sides of the aisle here. This is a
    real, real serious situation we all care deeply about.
        As we often do following natural disasters, it is not
    uncommon to see stories in the news about heroics and acts of
    personal sacrifice and great kindness. We trust that our
    policymakers can put aside their differences to do what is in
    the best interest of the country. We have already passed
    initial supplemental disaster relief funding this Congress, but
    we understand that much more is needed, and we will continue to
    work with the administration and our colleagues, so that our
    fellow citizens can get the additional resources they need to
    recover and to rebuild.
        In this committee we roll up our sleeves and we search for
    solutions to the various challenges that present themselves
    after a major disaster. We want to make sure that the agencies
    under our jurisdiction are well-prepared and that you all are
    responding appropriately, both now and that we learn from
    lessons of bad incidents and are ready and even better prepared
    for the next storm or the next disaster.
        If you are lacking certain authorities, let us know. We
    would like to expedite recovery. We want to know about these
    things, so that we can help fix them. We are all in this
    together.
        We want to be practical and we want to be forward-thinking.
    How can we help ensure the relevant Federal response is well-
    coordinated with State, local, and industry responders? How do
    we ensure decisions are made to guarantee taxpayer funding
    provides the maximum benefit for those in need and that
    taxpayers aren't ripped off? If we need to rebuild, what can we
    do to make our infrastructure more resilient?
        Because of this committee's broad jurisdiction over public
    health, emergency telecommunications, and the supply and
    delivery of energy, we will be gathering facts, perspectives,
    and lessons learned. We have already heard from witnesses on
    our Oversight and Investigations Subcommittee hearing about
    HHS's public health preparedness for and responses to the
    hurricanes. We will soon examine the disaster response related
    to environmental hazards and telecommunications as well.
        But today we are focusing on emergency response and energy
    infrastructure recovery, both for fuel supply and the electric
    grid. This year we have already been confronted with several
    different challenging situations: historic flooding in Houston,
    possibly the greatest evacuation in Florida's history, an
    energy crisis in Puerto Rico and the U.S. Virgin Islands that
    could leave millions without power for estimated months to
    come.
        We may take for granted how lucky we are that we can flip a
    switch and the lights come on. For our citizens in Puerto Rico
    and the U.S. Virgin Islands, however, almost every aspect of
    their lives has been deeply disrupted. Hospitals without
    external generators cannot serve their patients. Getting that
    power restored is critical. Water treatment plants without
    power threaten the health of individuals that rely on them for
    safe water. And those who live in remote areas that do not have
    access to fuel are cut off even from the most basic of
    necessities.
        The witness panel today will provide important perspectives
    about the state of current fuel and electric supply recovery
    efforts, what worked, what could be done better under urgent
    circumstances of the hurricanes, and what may be considered in
    the future. I expect this will be an excellent hearing for us
    to identify vulnerabilities and assess what is needed to better
    prepare and respond to future storms and disasters.
        And with that, I want to thank you for being here today. I
    appreciate the testimony which you have already submitted that
    I have, and thanks for the good work you and your teams are
    doing out there. We really want to learn from you and be even
    better prepared when the next disaster hits.
        So, with that, Mr. Chairman, unless anybody else on our
    side seeks the remaining minute, I would yield back.
        [The prepared statement of Mr. Walden follows:]

                     Prepared statement of Hon. Greg Walden

        Let me welcome Secretary Perry to his first appearance
    before the Energy and Commerce Committee. I understand that
    yesterday DOE held a ceremony to celebrate its 40 years as a
    cabinet agency. A lot has changed in this country and in the
    world since Congress created the department--especially in the
    national security and energy security space, where DOE provides
    critical functions for the country.
        While the domestic and international energy posture is
    substantially different from what it was in the 1970s, I do not
    believe the importance of DOE's role serving the national and
    public interest has diminished.
        This past August, Secretary Perry joined me at an energy
    roundtable with local officials and energy leaders at the
    McNary Dam, on the Columbia River in Umatilla County, Oregon,
    which produces power for the Bonneville Power Administration.
    Of course, Secretary Perry could not leave Umatilla County
    without a famous Hermiston watermelon--the best in the world. I
    believe Secretary Perry also left with a greater appreciation
    of the tremendous, zero-carbon-emitting power resource we have
    that's helping grow the economy in Oregon and throughout the
    Northwest.
        The next day, I had the pleasure of accompanying Secretary
    Perry to DOE's Pacific Northwest National Laboratory and then
    to the Hanford Site, just up the Columbia River from my Oregon
    district.
        A couple of observations from that visit are pertinent for
    today: First, it was evident that abundant energy was critical
    to the historical success of Hanford's industrial operations,
    which built nuclear reactors and produced the plutonium vital
    to winning World War II and later maintaining the Nation's
    nuclear deterrent program.
        Second, Hanford's success, and subsequent cleanup
    operations, led to advances in engineering practices, research
    and development programs, and scientific activities necessary
    for the site's safe and secure operations. These advances led
    to the development of a world-class national laboratory. Today,
    the Pacific Northwest National Laboratory, in collaboration and
    partnership with DOE's 16 other national laboratories, provide
    scientific and technical breakthroughs to meet our national
    security and energy security needs-from securing our electric
    grid to advancing storage technologies.
        As we examine the DOE management and mission priorities
    today, we should keep in mind the benefits of the
    interconnected nature of the department's missions. But these
    missions across DOE's enterprise can be expensive and difficult
    to manage. And so, it is the responsibility of the secretary
    and the Congress to ensure the department is appropriately
    aligned to perform these missions in a cost-effective manner,
    and to the maximum benefit of the taxpayer.
        As Chairman Upton has indicated, the energy threats today
    are not the same as the threats of the 1970s, but they remain
    significant. This committee will work in the coming months and
    through this Congress to ensure the department's organization
    and missions are aligned with the energy security challenges of
    today.
        At my direction, Vice Chairman Barton has already started
    to facilitate, in coordination with the Energy Subcommittee,
    work to ensure DOE resources are focused on the core missions
    of nuclear and energy security, environmental remediation, and
    mission-enabling science and R&D programs. At the same time,
    the committee will be examining expired DOE authorizations-many
    of which expired over a decade ago, to ensure more fully
    appropriate program alignment.
        I look forward to your testimony, Secretary Perry, it will
    be helpful to both these efforts. I'd also like for you to
    address the recent questions that have arisen regarding your
    travel expenditures. In closing, I look forward to working
    closely with DOE and my colleagues as we ensure the agency is
    positioned appropriately for the energy security challenges
    that lie ahead.

        Mr. Upton [presiding]. I just might ask a question of the
    vice chair of the committee. Are you intending to wear that
    jersey on the House floor when we take the picture of the full
    House this afternoon?
        Mr. Olson. Mr. Chairman, that is not an issue. I tried to
    wear this about three weeks, and it was banned. So, this will
    not be in the picture----
        Mr. Upton. All right.
        Mr. Olson [continuing]. Much to your disappointment, I can
    tell.
        Mr. Upton. I just was curious because, then, we would
    always be able to find you forever, right, in that picture?
        [Laughter.]
        Mr. Walden. Now, Mr. Chairman, I yield back the balance of
    my time.
        Mr. Upton. Yes, the gentleman yields back.
        I recognize the ranking member of the full committee, Mr.
    Pallone from New Jersey, for an opening statement.

    OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE
                IN CONGRESS FROM THE STATE OF NEW JERSEY

        Mr. Pallone. Thank you, Mr. Chairman, for convening today's
    hearing reviewing the disastrous 2017 hurricane season, which
    has wreaked havoc on many parts of our country.
        And I am grateful to former Senator Nieves of Puerto Rico
    and Mr. Rhymer of the Virgin Islands for coming here today. I
    guess they are on the second panel.
        But I am disappointed that the committee did not even
    receive a response to its outreach to the Puerto Rico Electric
    Power Authority, or PREPA. I have serious concerns not only
    about how PREPA has overseen the effort to restore power in
    Puerto Rico, but also, more broadly, on how PREPA has managed
    or, more accurately, mismanaged the grid in Puerto Rico over
    the years.
        Now, today we are focusing on the energy infrastructure
    recovery efforts. I must say that accounts from the areas
    affected by these storms paint a dire situation that completely
    contradicts the often rosy stories that come from the White
    House. The truth is that, taken together, Puerto Rico and the
    Virgin Islands are currently experiencing the largest blackout
    in American history, and this nightmare for our fellow citizens
    is far from over.
        The central question for us today should be, why is it
    taking so long to restore power in Puerto Rico and the Virgin
    Islands, and who is actually in charge of the effort to restore
    power to Puerto Rico? No one person or entity seems to be in
    charge, and it is fostering a chaotic and ineffective effort to
    restore power on the island. And I want answers, and so do many
    of my colleagues on both sides of the aisle.
        I am also troubled by the maze of contracts with numerous
    companies for overlapping missions, a patchwork that is failing
    to turn the lights back on in Puerto Rico. And that needs to
    change now. I am deeply concerned by the terms of the contract
    PREPA signed with Whitefish and Cobra Acquisitions, which went
    so far as to bar PREPA from holding the companies liable for
    delayed completion of grid repair work or letting the
    Government audit their work. Now, Governor Rossello has since
    taken steps to have the Whitefish contract canceled, but we
    need to learn more about how these contracts are being awarded
    and whether the bidding process is truly competitive. That is
    why Chairmen Walden and Upton and Ranking Members Rush,
    DeGette, and I have requested documents and a briefing from
    Whitefish, so we can learn more about how that troubling
    agreement materialized.
        Additionally, FEMA issued a statement that said it had no
    involvement in the development of this contract. Well, my
    question is, why not? The Federal Government should be engaged
    in the contracting process of large-scale rebuilding contracts
    for which U.S. taxpayers will ultimately foot the bill. The
    Federal Government needs to step up and take charge to expedite
    power restoration efforts. Missions like this are why we have a
    strong Federal Government. And simply put, the Trump
    administration needs to be doing more. If we can't get the
    power turned back on soon, more people are going to die. This
    is a humanitarian crisis, and our Government owes it to the
    citizens in these Territories to do everything it can to fix
    it.
        And while restoring power quickly is the most urgent
    concern, it is also crucial that the grid in Puerto Rico and
    the U.S. Virgin Islands be rebuilt with more modern energy
    technology focused on increased resiliency, energy efficiency,
    and renewable energy. Replacing the old grid as it stood before
    the storm will cost taxpayers more money and do nothing to make
    electricity in Puerto Rico more reliable or affordable.
        So, as Congress prepares the next emergency spending bill,
    we must make changes to the current law to enable the
    rebuilding to occur in a way that lays the groundwork for
    constructing a modern electricity grid in the Territories.
    Failing to invest wisely in Puerto Rico now will only cost all
    taxpayers more down the road. And we must consider innovative
    ways for turning around Puerto Rico's situation, including
    alternatives to PREPA for overseeing the rebuilding and
    operation of the grid, and all ideas, from privatization--which
    I am not really a fan of--but from privatization to creation of
    a new Federal Power Marketing Administration. All these things
    have to be up for discussion. And whatever road we go down must
    have buy-in from the Puerto Rican people and the Government.
        I don't know if anybody wants my minute that I still have.
    If not, Mr. Chairman, I will yield back.
        [The prepared statement of Mr. Pallone follows:]

                 Prepared statement of Hon. Frank Pallone, Jr.

        Mr. Chairman, thank you, for convening today's hearing
    reviewing the disastrous 2017 hurricane season, which has
    wreaked havoc on many parts of our country. I am grateful to
    former Senator Nieves of Puerto Rico and Mr. Rymer of the
    Virgin Islands for coming here today, but disappointed that the
    committee did not even receive a response to its outreach to
    the Puerto Rico Electric Power Authority (PREPA). I have
    serious concerns not only about how PREPA has overseen the
    effort to restore power in Puerto Rico, but also more broadly
    on how PREPA has managed--or more accurately, mismanaged--the
    grid in Puerto Rico over the years.
        Today we are focusing on the energy infrastructure recovery
    efforts, and I must say that accounts from the areas affected
    by these storms paint a dire situation that completely
    contradicts the often rosy stories that come from the White
    House. The truth is that, taken together, Puerto Rico and the
    Virgin Islands are currently experiencing the largest blackout
    in American history. And, this nightmare for our fellow
    citizens is far from over.
        The central questions for us today should be: why it is
    taking so long to restore power in Puerto Rico and the Virgin
    Islands, and who is actually in charge of the effort to restore
    power to Puerto Rico? No one person or entity seems to be in
    charge, and it is fostering a chaotic and ineffective effort to
    restore power on the island. I want answers and so do many of
    my colleagues on both sides of the aisle.
        I am also troubled by the maze of contracts with numerous
    companies for overlapping missions-a patchwork that is failing
    to turn the lights back on in Puerto Rico. It needs to change
    now. I am deeply concerned by the terms of the contracts PREPA
    signed with Whitefish and Cobra Acquisitions, which went so far
    as to bar PREPA from holding the companies liable for delayed
    completion of grid repair work or letting the Government audit
    their work.
        Governor Rossell cents has since taken steps to have the
    Whitefish contract canceled, but we need to learn more about
    how these contracts are being awarded and whether the bidding
    process is truly competitive. That's why Chairmen Walden and
    Upton, and Ranking Members Rush, DeGette and I have requested
    documents and a briefing from Whitefish so we can learn more
    about how that troubling agreement materialized.
        Additionally, FEMA issued a statement that said it had no
    involvement in the development of this contract. My question
    is: why not? The Federal Government should be engaged in the
    contracting process of large scale rebuilding contracts for
    which U.S. taxpayers will ultimately foot the bill. The Federal
    Government needs to step up and take charge to expedite power
    restoration efforts.
        Missions like this are why we have a strong Federal
    Government--simply put, the Trump administration needs to be
    doing more. If we can't get the power turned back on soon, more
    people are going to die. This is a humanitarian crisis, and our
    Government owes it to the citizens in these Territories to do
    everything it can to fix it.
        While restoring power quickly is the most urgent concern,
    it is also crucial that the grid in Puerto Rico and the U.S.
    Virgin Islands be rebuilt with more modern energy technologies
    focused on increased resiliency, energy efficiency and
    renewable energy. Replacing the old grid as it stood before the
    storm will cost taxpayers more money and do nothing to make
    electricity in Puerto Rico more reliable or affordable.
        As Congress prepares the next emergency spending bill, we
    must make changes to current law to enable the rebuilding to
    occur in a way that lays the groundwork for constructing a
    modern electricity grid in the Territories. Failing to invest
    wisely in Puerto Rico now will only cost all taxpayers more
    down the road. And, we must consider innovative ways for
    turning around Puerto Rico's situation, including alternatives
    to PREPA for overseeing the rebuilding and operation of the
    grid. All ideas, from privatization to creation of a new
    Federal power marketing administration must be up for
    discussion. And, whatever road we go down, we must have buy-in
    from the Puerto Rican people and Government.
        Thank you. I look forward to hearing from our witnesses
    today.

        Mr. Upton. The gentleman yields back.
        At this point we are ready for the testimony. Thank you in
    advance or thank you for sending your testimony in advance. It
    will be made part of the record. We would like each of you to
    take no more than 5 minutes to summarize your testimony. At
    that point, when that is completed, we will be asking
    questions.
        We are joined first by Patricia Hoffman, the Acting
    Undersecretary for Science and Energy, Principal Deputy
    Assistant Secretary for the Office of Electricity Delivery and
    Energy Reliability, at the Department of Energy. Welcome. Thank
    you.

      STATEMENTS OF PATRICIA HOFFMAN, PRINCIPAL DEPUTY ASSISTANT
         SECRETARY, OFFICE OF ELECTRICITY DELIVERY AND ENERGY
     RELIABILITY, DEPARTMENT OF ENERGY; RAY ALEXANDER, DIRECTOR OF
       CONTINGENCY OPERATIONS, ARMY CORPS OF ENGINEERS; DEANN T.
    WALKER, CHAIRMAN, PUBLIC UTILITY COMMISSION OF TEXAS; ROBERT F.
        CORBIN, DEPUTY ASSISTANT SECRETARY, OFFICE OF PETROLEUM
      RESERVES, DEPARTMENT OF ENERGY; AND FRANK RUSCO, DIRECTOR,
     NATURAL RESOURCES AND ENVIRONMENT, GOVERNMENT ACCOUNTABILITY
                                 OFFICE

                     STATEMENT OF PATRICIA HOFFMAN

        Ms. Hoffman. Chairman Upton, Ranking Member Rush, and
    distinguished members of the subcommittee, I appreciate the
    opportunity today to discuss energy security and emergency
    response issues related to the 2017 hurricane season.
        The mission of the Office of Electricity Delivery and
    Energy Reliability is to develop innovative, cutting-edge
    solutions to ensure our Nation's energy infrastructure remains
    reliable, affordable, and resilient. In order to fulfill this
    mission, the Department of Energy leverages the technical
    capabilities of National Laboratories and partnerships with the
    key private sector stakeholders to focus on early-stage
    research and transformative projects.
        Our organization is also the lead for providing energy-
    related expertise to the Federal Energy Management Agency, also
    known as FEMA, our interagency partners, and the
    administration, as part of the Department of Energy's emergency
    response activities. DOE serves as the lead organization for
    Emergency Support Function 12 under the National Response
    Framework and as the sector-specific agency for energy. As the
    lead for ESF-12, DOE is responsible for providing information
    and analysis about energy disruptions and to assist in
    facilitating the restoration of damaged energy infrastructure.
        During Hurricanes Harvey, Irma, Maria, Nate, we have worked
    with industry and the Federal, State, Territorial, and local
    partners to facilitate response and recovery. Overall, DOE has
    received 18 mission assignments and has deployed more than 110
    personnel to the response efforts. Each of these storms has
    presented unique challenges to the energy sector.
        With respect to Hurricane Harvey, we saw peak electricity
    outages of about 300,000 customers in Texas and Louisiana.
    While offshore and onshore, crude oil and natural gas
    productions were disrupted by the storm, the greatest impacts
    were to the midstream and downstream oil and refining sectors.
    At its peak, more than 4 million barrels per day of refining
    capacity, representing more than 20 percent of the U.S.
    refining capacity, was offline. It took several weeks for
    floodwaters to recede, but the refining systems in Texas and
    Louisiana have resumed normal operations. In addition, flooding
    closed two key injection points along the Colonial Pipeline,
    forcing the system to operate intermittently at reduced rates
    for several weeks before normal service was resumed.
        Hurricane Irma, the second category 4 hurricane to make
    landfall in the United States this year, caused approximately 8
    million electric customer outages from the Caribbean to the
    southeastern United States. At Irma's peak on September 11th,
    there were approximately 7.8 million customer outages in
    Florida. Three days later, on September 14th, power had
    restored to approximately 5 million customers, 64 percent of
    those customers. And five days later, restoration was at 98
    percent.
        DOE is also playing a significant role in supporting the
    restoration and recovery efforts in the U.S. Virgin Islands and
    Puerto Rico from Hurricane Maria. In Puerto Rico, the U.S. Army
    Corps does have the primary role in emergency restoration and
    rebuilding the infrastructure, but DOE has deployed personnel
    and equipment from the Western Power Area Administration to
    provide mutual assistance through a mission assignment from
    FEMA and is working to facilitate additional mutual assistance
    with industry.
        Days after Bruce Walker was confirmed as the Department of
    Energy's new Assistant Secretary for the Office of Electricity
    Delivery and Energy Reliability, he was on the ground in Puerto
    Rico assisting other DOE personnel in coordination with the
    Governor, PREPA, FEMA, and the Army Corps of Engineers.
    Recently, the Governor and PREPA have requested additional line
    workers and equipment necessary for the restoration of power.
        Secretary Perry and our DOE team look forward to a
    thoughtful conversation focused on our response and recovery
    efforts for this hurricane season, and a focus on reliability,
    affordability, and resilience of the electricity system from
    hurricanes as well as other extreme weather events.
        I would like to take a moment and thank the hard utility
    workers for their time and their efforts in responding to the
    hurricane season. But, like any event, there is always some
    hard lessons learned, and we look forward to improving our
    efforts.
        So, thank you, and I look forward to your questions.
        [The prepared statement of Ms. Hoffman follows:]

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Upton. Thank you very much.
        Next, we're joined by Ray Alexander, the Director of
    Contingency Operations for the Corps of Engineers.
        Welcome.

                       STATEMENT OF RAY ALEXANDER

        Mr. Alexander. Chairman Upton, Ranking Member Rush, and
    members of the subcommittee, my name is Ray Alexander, Director
    of Contingency Operations, the U.S. Army Corps of Engineers.
    Thank you for the opportunity to testify today.
        The Corps conducts emergency response activities under two
    basic authorities, the Stafford Act and Public Law 84-99. Under
    the Stafford Act, we support FEMA under the National Response
    Framework as the lead Federal agency for Emergency Support
    Function 3, public works and engineering. ESF-3 provides
    temporary emergency power, roofing, and housing, debris
    management, infrastructure assessment, and critical public
    facility restoration.
        Under Public Law 84-99, we prepare for disasters through
    planning, coordination, and training with local, State, and
    Federal partners. We assist State and local entities to
    implement advanced measures that prevent or reduce storm event
    damages. We repair damage to authorized Federal projects and
    work with States and municipalities to rehabilitate and restore
    eligible non-Federal flood infrastructure to prestorm
    conditions.
        When disasters occur, Corps teams and resources are
    mobilized from across the command to assist local offices with
    their response to the event. As part of this mission, the Corps
    has more than 50 specially-trained teams supported by emergency
    contracts that perform the wide range of support missions I
    just described. These contracts are preawarded and can be
    quickly activated to execute many of these missions.
        This year the Corps has supported FEMA-led Federal response
    and recovery operations in multiple events, including
    Hurricanes Harvey, Irma, and Maria. FEMA directed 37 mission
    assignments to the Corps for Hurricane Harvey. Currently, the
    Corps has 195 employees deployed. The Corps assisted in
    temporary emergency power and continues to support the State of
    Texas in the development and implementation of a temporary
    housing project management plan. Debris teams led by subject
    matter experts continue to provide States and municipalities
    the technical assistance to define requirements and monitor
    debris removal and disposal operations in 15 counties.
        FEMA directed 81 mission assignments to the Corps for
    Hurricanes Irma and Maria. Currently, the Corps has over 1500
    personnel deployed. As of this morning, the Corps has completed
    over 1,000 assessments and over 500 temporary generator
    installations in the Caribbean. This includes 250 assessments
    and 150 installations in the U.S. Virgin Islands and over 750
    assessments and 400 installations in Puerto Rico. Under FEMA
    authority, we are assisting Puerto Rico with the operation and
    maintenance of critical non-Federal generators across the
    island as well.
        The Corps has completed over 14,000 temporary roofing
    installations in Florida and is on track to complete that
    mission by 4 November. We have also completed over 7,000
    temporary roofing installations in the Caribbean, including
    over 2500 in the U.S. Virgin Islands and 4700 in Puerto Rico.
    Roofing requirements have been extensive, requiring additional
    material and construction support, which initially slowed
    progress. We have adjusted. We have added additional capacity,
    and we are seeing daily improvements.
        Corps debris subject matter experts provided technical
    assistance to counties across Florida and Georgia in response
    to Hurricane Irma, and continue to provide oversight to five
    regions within the Florida Department of Emergency Management.
    The Corps is working to remove an estimated 1 million cubic
    yards of debris in the U.S. Virgin Islands and over 6 million
    cubic yards in Puerto Rico.
        The Corps works closely with the U.S. Coast Guard and the
    National Oceanic and Atmospheric Administration and local
    authorities to open harbors and navigation channels across all
    affected areas, critical to restoring commerce and the flow of
    commodities, and essential equipment to reach affected
    communities.
        The Corps worked closely with officials of Texas and
    Florida to manage local flood control reservoirs during a
    period of unprecedented rainfall. In Puerto Rico, Corps dam and
    levee teams inspected 17 priority dams and worked closely with
    the Puerto Rico Electrical Power Authority, PREPA, to stabilize
    a spillway feature, the Guajataca Dam. Additionally, the Corps
    cleared existing outflow conduits and placed emergency pumps to
    further reduce water levels in the dam, and restored flow to a
    critical treatment plant that supports the needs of over 30,000
    people.
        On September 30th, the Corps received a FEMA mission
    assignment under Stafford Act authority to assist PREPA in
    conducting emergency repairs to the power grid itself. We are
    partnering with PREPA. We have established a general officer
    and senior-executive-led task force to oversee work and provide
    technical assistance.
        The Department of Energy has embedded experts in our team
    and continues to assist in our efforts. Within two weeks of
    receiving this mission assignment, we awarded contracts for
    large-scale temporary power generation to stabilize the grid in
    San Juan and for additional line repair assets that will assist
    ongoing efforts by PREPA.
        The Corps remains fully committed and capable of executing
    other Civil Works activities across the Nation, despite our
    heavy involvement in these ongoing response and recovery
    operations. We also remain ready and poised to assist in future
    events, should they occur.
        This concludes my testimony, and I look forward to
    answering any questions you may have. Thank you.
        [The prepared statement of Mr. Alexander follows:]

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Upton. Thank you very much.
        Next is DeAnn Walker, the Chair of the Public Utility
    Commission for Texas. You have got to be a happy woman today as
    well with the Astros.

                      STATEMENT OF DEANN T. WALKER

        Ms. Walker. Yes. Thank you very much for your invitation to
    appear here today.
        My name is DeAnn Walker. I am the chairman of the Public
    Utility Commission of Texas. I have happily held that seat
    since September 20th. So, I am new to this.
        I believe I have a unique perspective on restoration from
    hurricanes. The State Operations Center in Texas creates what
    they call a Tiger Team of utility personnel that is located
    within the State Operations Center to help with restoration, to
    coordinate with Federal/State officials throughout an event. I
    have now served three hurricanes in the State Operations
    Center. Hurricane Rita and Hurricane Ike, I was actually
    representing a utility in the State Operations Center. During
    Hurricane Harvey, I was working for Governor Abbott and was
    down in the State Operations Center working with the utilities
    to restore service.
        We believe that the electric industry and the
    infrastructure in Texas fared very well during Hurricane Harvey
    compared to past hurricanes. As has been stated, we had under
    350,000 at any one time. We had more than that, but the
    utilities were continually restoring service during that time.
    The longest we had any customers out was for two weeks, and
    that was in the Rockport area, which was the direct hit of the
    eye of Hurricane Harvey. So, it took the brunt of it. During a
    storm, the PUC, as I said, works with State, Federal, and local
    agencies to restore power.
        I wanted to focus the rest of my time on what we are taking
    as action items to better prepare for a new hurricane. Due to
    the amount of flooding that we had, some cities and towns,
    areas received 60 inches of rain throughout Hurricane Harvey.
    Many substations in our area flooded for the first time ever.
    So, we are looking at, and we moved in for the first time ever,
    mobile substations to help serve those customers. We are
    looking at whether or not it is prudent for the State as a
    whole, all of the utilities to get together and purchase these
    mobile substations to have on hand in such an event. We are
    also working with the utilities to elevate those substations
    when they rebuild them, so that we are taking care of hardening
    the system in the process of rebuilding.
        I have also asked the State to look at whether or not we
    can better utilize utilities within Texas to send equipment and
    personnel. We were drawing people from all over the United
    States under mutual assistance crews, which we greatly
    appreciate, but I would like us to look and see if we can rely
    on the Texans that we have. SPS in the Panhandle and El Paso in
    far west Texas never were called on to help, and obviously,
    they were closer than a lot of places.
        We have been working through the process with FEMA for how
    to interconnect their temporary housing, so that we could have
    one seamless process for all utilities to implement. We are
    trying to do that on the fly. I would like us to further
    address that process in the meantime before the next storm hits
    us.
        We also learned that not every utility is reporting outages
    consistently. In Texas we require that all utilities report
    outages to us and to DOE on a county- and ZIP-code-wide basis,
    but there is not consistency between the utilities on how that
    was being done. For instance, some of the flooded substations,
    once they had a plan to bring in the mobile substation, they
    took those outages and moved them to planned outages. So, they
    were no longer showing up as being impacted by the hurricane. I
    don't think that is an accurate representation. So, I have
    asked to look at that.
        There are many other things that we have started looking at
    to correct and to, hopefully, do better. I am running out of
    time. I wanted to, again, thank you for your time today.
        [The prepared statement of Ms. Walker follows:]

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Upton. Thank you.
        Next, we are joined by Robert Corbin, Deputy Assistant
    Secretary for the Office of Petroleum Reserves, the U.S.
    Department of Energy.

                     STATEMENT OF ROBERT F. CORBIN

        Mr. Corbin. Chairman Upton, Ranking Member Rush, and
    distinguished members of the subcommittee, it is an honor to
    appear before you today to discuss the Strategic Petroleum
    Reserve.
        The Strategic Petroleum Reserve, or SPR, was established
    under the authority of the Energy Policy and Conservation Act
    in December 1975. At that time U.S. oil production was in
    decline, oil price and allocation controls separated the U.S.
    oil market from the rest of the world, and the global commodity
    market for oil as we know it now did not exist.
        Today the global oil market has changed the environment in
    which the SPR operates. Although domestic oil production has
    increased dramatically in recent years, the global oil market
    is the largest commodity market in the world, making U.S.
    consumers subject to global commodity price fluctuations.
    Regardless of U.S. oil import levels, a severe global oil
    supply disruption today would impact domestic petroleum product
    prices.
        In the event of a serious interNational oil supply
    disruption, offsetting disrupted supplies with SPR crude oil in
    concert with other countries that hold strategic oil stocks can
    help reduce an increase in interNational oil prices and the
    resulting adverse economic impacts that could otherwise occur.
        The SPR maintains and operates four major oil storage
    sites, two in Texas and two in Louisiana. The SPR's current
    crude oil inventory is approximately 670 million barrels stored
    in 60 underground salt caverns with a design capacity of 713.5
    million barrels. The SPR is designed to provide the capability
    to draw down and deliver crude oil from the storage sites to
    designated distribution points, a design drawdown rate of 4.415
    million barrels per day. The SPR can physically begin to draw
    down crude oil in as little as two days of notification, and
    taking into account the time required to meet sales
    requirements and draw down and deliver crude oil within 13 days
    of a presidential finding. SPR operating costs are less than 25
    cents per barrel of design capacity per year, the lowest
    reported cost among oil stock-holding Nations.
        As a member of the InterNational Energy Agency, or IEA, the
    U.S. has two primary oil stock-holding obligations. As a net
    oil importer, the U.S. must maintain oil stock-holding
    inventories equal to at least 90 days of net petroleum imports.
    As of June 30th, 2017, the U.S. held 149 days of net petroleum
    imports.
        The U.S. must also be able to contribute a proportionate
    share to an IEA collective action in response to an oil supply
    disruption, based on its percentage share of IEA oil
    consumption. As of June 30th, 2017, the U.S. must contribute
    43.2 percent of all barrels released during any IEA collective
    action.
        As global oil trade increases, the potential role of the
    SPR to help mitigate global supply disruptions expands,
    regardless of the level of U.S. net oil imports. Without the
    ability to replace disrupted oil supplies in the global market,
    global oil prices could increase significantly and the U.S. and
    global economy could be harmed.
        SPR infrastructure has performed capability to ensure the
    SPR has been able to respond to every emergency release
    situation presented throughout its history. However, SPR
    facilities are aging. A significant amount of infrastructure
    components are at or beyond their design life, and equipment
    will be further stressed due to nine consecutive years of
    congressionally mandated crude oil sales.
        Congress, recognizing the need to modernize SPR
    infrastructure, included provisions in the Bipartisan Budget
    Act of 2015 to address this concern by authorizing the drawdown
    and sale of up to $2 billion worth of SPR crude oil over a 4-
    year period to carry out an SPR modernization program. In
    response, the SPR has initiated a major capital asset
    acquisition project to modernize aging SPR infrastructure for
    systems upgrades and equipment replacement to ensure the SPR
    can meet mission requirements for the next several decades.
        Hurricane Harvey severely impacted U.S. Gulf Coast crude
    oil infrastructure, closing refineries, ports, and supply
    pipelines. Many impacted refiners were operable following the
    passage of Harvey, but in some cases were unable to secure
    crude oil feedstock to recommence or continue operations,
    resulting in multiple requests for emergency exchanges of SPR
    crude oil. After assessing prevailing supply conditions and
    consulting with other Federal agencies regarding the status of
    crude oil infrastructure, the SPR received approval from the
    Secretary of Energy to execute six emergency exchange
    agreements. First deliveries of crude oil were provided on
    August 30th, just two days after the initial request was
    received. Deliveries to the remaining companies also commenced
    within days after those requests were received and continued
    until deliveries totaling 5 million barrels were completed on
    September 28th. These emergency exchanges helped alleviate the
    loss of crude oil supply, allowing the affected refiners to
    begin and/or continue operations that otherwise would have been
    halted due to the impacts of Hurricane Harvey.
        This concludes my statement. Thank you for the opportunity
    to speak with you today about the SPR, and I look forward to
    answering any of your questions.
        [The prepared statement of Mr. Corbin follows:]

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Upton. Thank you very much.
        Lastly, on the first panel we are joined by Frank Rusco,
    Director of the Natural Resources and Environment from the GAO.
    Welcome.

                        STATEMENT OF FRANK RUSCO

        Mr. Rusco. Chairman Upton, Ranking Member Rush, and members
    of the subcommittee, thank you for the opportunity to discuss
    our past and ongoing work on energy resilience and particularly
    the effectiveness of the Strategic Petroleum Reserve in
    responding to domestic petroleum supply disruptions caused by
    extreme weather and other events.
        The SPR was created at a time when global oil supply was
    dominated by OPEC and oil markets were characterized by long-
    term contracts with fixed prices. At that time a global oil
    supply disruption, as occurred during the Arab oil embargo, had
    the effect of physical oil shortages and in the United States
    and elsewhere long lines at the gas pump. It made sense at the
    time for the SPR to be comprised of crude oil centrally held in
    cheap salt dome storage in Louisiana and Texas, near the
    Nation's largest refining centers.
        Today global oil markets are robust, and prices change to
    accommodate supply and demand, so that physical shortages and
    long lines are less of an issue. In addition, the use of the
    SPR has been primarily in response to domestic supply
    disruptions, particularly those caused by extreme weather
    events, rather than global supply shortages. My remarks will
    focus on how well the SPR is able to respond to these domestic
    supply disruptions.
        The SPR has been partially successful in responding to
    domestic supply disruptions in instances when Gulf Coast
    refineries and pipelines are operational but crude oil supplies
    to these refineries have been disrupted. For example, this year
    following Hurricane Harvey the SPR was able to supply several
    refineries with crude oil by pipeline while shipping ports were
    closed.
        However, the SPR has been less effective in responding to
    reductions in petroleum products in the rest of the country, as
    has occurred multiple times when hurricanes have shut down
    refineries or shut down power to other petroleum
    infrastructure. In this latter cases, including following
    Hurricane Harvey when as much as 34 percent of the Gulf Coast
    refining capacity was shut in, the real supply problem was
    gasoline, diesel, and jet fuel, and the SPR has only a small
    reserve of gasoline in the Northeast and no other petroleum
    product reserves. As a result, the SPR cannot provide needed
    petroleum products to Florida, the Eastern Seaboard, and other
    regions typically supplied by Gulf Coast refiners.
        DOE has recognize the desirability of having regional
    reserves of petroleum products. For example, in 2014, DOE
    identified five regions that are vulnerable to petroleum
    product supply disruptions. These include the West Coast, which
    is vulnerable to earthquakes and tsunamis, parts of six
    Midwestern States vulnerable to earthquakes, a number of States
    vulnerable to extreme cold weather, and the entire coast from
    Texas up to Massachusetts that is vulnerable to hurricanes.
        With the exception of the small gasoline reserves held in
    the Northeast, there are no other petroleum product reserves
    held by the SPR in any of these vulnerable regions. Further,
    while DOE has recognized these vulnerabilities and conducted
    some studies of alternatives to the current composition and
    configuration of strategic reserves, it has not completed these
    studies. As a result, DOE cannot determine the efficacy of
    creating regional petroleum product reserves.
        In contrast to how the SPR is configured, most other
    countries with strategic reserves have chosen to hold
    significant quantities of petroleum products in addition to
    crude oil, and some have chosen to spread these reserves out
    across their countries to be closer to centers of demand. For
    example, Germany chooses to hold about 55 percent of its
    strategic stocks as petroleum products. France spreads its
    reserves across seven geographic zones that enable it to
    distribute petroleum products to distribution networks all over
    the country.
        The United States has benefitted from European strategic
    stocks of petroleum products during past hurricane damage to
    Gulf Coast refining and production infrastructure. For example,
    in response to Hurricane Katrina in 2005, as prices of gasoline
    rose across the United States, shipments of gasoline from
    Europe began arriving on the East Coast within days. This
    mitigated the economic effects of the hurricane-caused refinery
    and oil production shutdowns.
        As DOE undertakes a modernization program of its existing
    systems, this committee and others have requested that we
    undertake an evaluation of the SPR, its size, composition,
    location of reserves, and options for improving its
    effectiveness. We will report our findings in the next few
    months.
        Thank you. This concludes my oral remarks. I will be happy
    to answer any questions you may have.
        [The prepared statement of Mr. Rusco follows:]
        [
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Upton. Well, thank you all. At this point we will move
    to questions from the dais.
        Mr. Alexander, you said in your testimony that the Corps is
    overseeing the work that is done by PREPA in Puerto Rico. I
    would like to ask the question, how has that gone? Because this
    subcommittee has tried to contact PREPA both by email and
    phone. They are not answering. There is no heartbeat that we
    are getting back. So, how has that oversight gone?
        Mr. Alexander. Sir, perhaps I misstated. We have a task
    force--again, general officer, senior-executive-led--that is
    overseeing our mission to restore the grid, as assigned by
    FEMA. What we are doing with PREPA, though, is we are working
    in coordination and collaboration with them, so that we can
    have well-defined, focused areas of operation. So, we are not
    working in each other's area and we ensure that there are no
    gaps. We are only working with PREPA; we are not working for
    PREPA, but we are working in coordination with PREPA.
        The oversight of the Corps' mission assignment we believe
    is going well. Again, we were assigned this mission on 30
    September. Within 18 days, we were able to award three major
    contracts, one for temporary power generation, two 30-megawatt
    power plants to be put in the vicinity of the Palo Seco Power
    Plant near San Juan, and restore the power grid around San
    Juan. Those generators have arrived. They have been installed,
    and we have additional load on the grid in the greater San Juan
    area as of several days ago.
        The other two contracts focused on line repair,
    transmission distribution/line repair. A larger contract to
    Fluor, a $240 million contract. They have boots on the ground
    today. They are conducting assessments. They are starting to
    have crews arriving. I believe, as I said in my testimony, we
    are ramping up quickly, 620 by the end of this weekend, and
    that number will double by mid-November.
        And then, we also have a company named PowerSecure. They
    are fully engaged and will be--they, too, have assessment teams
    on the ground. Their equipment is actually en route by sea now
    on a MARAD, Ready Reserve Fleet vessel that should arrive at
    Ponce port on 3 November.
        Mr. Upton. Did the Corps have any advance knowledge of
    working with PREPA prior to the contract that they established
    with Whitefish and Cobra? Were you aware of that contract
    before it was signed?
        Mr. Alexander. No, sir, we were not. We were engaged in our
    temporary power mission under the Stafford Act, and we have
    been working that since the 6th of September. The news that
    PREPA had independently committed in a contract to another
    company, we were not consulted; we were not aware.
        Mr. Upton. You indicated in your written testimony that the
    temporary housing plan includes establishing--this is as it
    relates to Texas--20,000 travel trailers and 4,000 mobile
    housing units. I presume that most of those are for folks that
    were actually displaced, homeowners or families that were
    displaced. Do you know what that number is for Puerto Rico?
    It's 20,000 for Texas. Do you know what the number would be for
    Puerto Rico?
        Mr. Alexander. No, I do not, sir.
        Mr. Upton. Ms. Hoffman, I have met with a number of
    pharmaceutical/medical device companies, many with very large
    operations in Puerto Rico. We are all aware of the critical
    need to get those facilities back online. It is a public health
    priority because it is so critical for patients to ensure that
    their products that are being manufactured there don't go into
    a shortage. How are you incorporating medical manufacturing in
    an approach to restore the grid in Puerto Rico?
        Ms. Hoffman. So, thank you.
        Critical infrastructure, critical loads on an electric
    system is very important, utilities. In our conversation with
    the utilities, with FEMA and the interagency partners, we
    discussed what are some of those priority restoration efforts
    and helping with the communications, so that we understand
    where some of those needs are and where some of the activities
    should be with respect to restoration processes. So, those
    coordinations occur with FEMA and with the local utilities in
    the Territory itself.
        Mr. Upton. OK. Thank you. My time has expired.
        I recognize the ranking member of the subcommittee, Mr.
    Rush, for 5 minutes.
        Mr. Rush. I want to thank you, Mr. Chairman.
        Mr. Alexander, I am kind of curious, not ``kind'', I am
    very curious about your Army Corps of Engineers' lack of
    information about this Whitefish contract. You, the Army Corps
    of Engineers, were unaware of this contract, is that correct?
        Mr. Alexander. Yes, sir.
        Mr. Rush. The Governor says he was unaware of this
    contract.
        Mr. Alexander. I'm sorry, sir, did you say----
        Mr. Rush. The Governor of Puerto Rico has stated publicly
    that he was unaware of this contract.
        Mr. Alexander. The Governor of Puerto Rico said he was
    unaware?
        Mr. Rush. Right.
        Mr. Alexander. Sir, I am not privy to that. I do not know.
        Mr. Rush. Are you aware that this contract is being
    canceled or has been canceled?
        Mr. Alexander. Sir, I understand that the Governor has
    given the direction to terminate that contract. Whitefish and
    other contractors, they are completing the task, the last task
    they have been assigned. So, they are still working on the
    island.
        Mr. Rush. Do you have any information about who executed
    that contract?
        Mr. Alexander. No, I do not.
        Mr. Rush. Do you trust PREPA? Do you trust them?
        Mr. Alexander. Sir, I have no reason not to. Again, we are
    working in collaboration with them on restoring the power.
        Mr. Rush. Do you have any estimate in terms of how much
    additional dollars the cancellation of this contract will cost
    the American people?
        Mr. Alexander. No, I do not.
        Mr. Rush. All right. Secretary Hoffman, the economic
    consulting firm Rhodium Group concluded that Maria cost 1.25
    billion hours of electricity supply disruption to households,
    which they say is the longest disruption in recorded history.
    Do you concur with their finding?
        Ms. Hoffman. I will have to look at the information, but it
    is a significant duration for outage for Puerto Rico.
        Mr. Rush. And what is the best estimate on when power will
    be fully restored to both the U.S. Virgin Islands and Puerto
    Rico?
        Ms. Hoffman. So, that is information that the Governor as
    well as PREPA is looking at, as well as partnerships with the
    Army Corps of Engineers, on the supplies that are needed, the
    resources that are required for restoring power. Some initial
    indications are that for, I would say 50 percent--I believe the
    Army Corps has estimated that 50 percent of the island will be
    restored by the end of December, and that the significant
    portion of the restoration will occur later on.
        Mr. Rush. Mr. Alexander, can you give us some insight on
    your opinions about the timeline, the estimated timeline? There
    might be some others on the panel that might also have some
    idea about the estimated timeline for Puerto Rico and, also,
    the U.S. Virgin Islands.
        Mr. Alexander. Sir, as for Puerto Rico, we estimated 30
    percent of the prestorm load on the grid would be restored by
    30 October. We did achieve that metric on time before the 30th.
    I believe we are up over 31, 32 percent today. Our estimate is
    50 percent prestorm load restored by 30 November. And then, as
    we go on into the new year, we are estimating 75 percent by 31
    January.
        Mr. Rush. Anyone else want to add?
        [No response.]
        All right. Mr. Alexander, is the Corps currently involved
    in discussions with PREPA, or any other Government entity in
    Puerto Rico, to ensure that when the grid is repaired, it will
    meet construction--it will be a way to account some of the
    lessons learned from this ongoing catastrophe for the American
    taxpayers' dollars are not being wasted?
        Mr. Alexander. Sir, we are focused on executing the mission
    we have been assigned, which is the restoration of the grid to
    prestorm conditions, the load, and we are coordinating with
    PREPA as we do that. We actually, though, are working with the
    Department of Energy on what a more resilient grid might look
    like, as they lead the effort to develop recommendations and
    cost estimates. But, for now, we are executing our mission
    under the Stafford Act, which does not allow for any permanent
    construction or enhancement of the existing grid.
        Mr. Rush. I yield back, Mr. Chairman.
        Mr. Upton. The Chair will recognize the vice chair of the
    subcommittee, the gentleman from Houston, Texas, Mr. Olson.
        Mr. Olson. I thank the Chair.
        And welcome to all five witnesses. A special pony up to the
    new chairwoman of the PUC of Texas, Ms. DeAnn Walker. My
    daughter Kate is a junior at SMU, your alma mater, and she
    loves it.
        My first two questions are for you, Mr. Alexander, one
    about Harvey and one about Irma. First of all, Harvey. As you
    know, sir, I live in Fort Bend County, Texas. When Fort Bend
    floods, it floods. We have had four major floods in the past 3
    years. Our drainage district works hard 24/7, 365, to make sure
    our drainage ditches are maintained. After the first major
    flood in 2015, the Army Corps told our drainage district they
    need a Section 404 permit under the Clean Water Act to maintain
    the ditches. The maintenance of a drainage ditch is supposed to
    be exempt from the permitting process under Section 404. But
    the Corps disputed the exemption and referred the district to
    the EPA. The EPA agreed it is maintenance work and the county
    should be good to go. But here we are, 2 years and four floods
    later, with Fort Bend County still unable to fix this critical
    problem. And now, Harvey has made a bad problem much, much
    worse.
        These repairs can't wait. Texas and Fort Bend need to
    rebuild after Hurricane Harvey. Things are being made worse
    with erosion and piles of silt. We don't need red tape at the
    Corps hindering the maintenance project that should be exempt
    under Section 404(f)(1)(C) of the Clean Water Act.
        My question is, will you guarantee me that your office will
    work with my staff and local Fort Bend County officials, under
    Judge Bob Hebert, to get this fixed ASAP, so Texans can protect
    their livelihoods?
        Mr. Alexander. Sir, thank you. I acknowledge your concerns.
    I am generally aware of this issue in Fort Bend. While I do not
    have all the specific details here with me today, I can assure
    you and can guarantee you that the Corps remains committed to
    working with our partners and your office to resolve this
    issue.
        Mr. Olson. Great. ASAP, please.
        The next question about Hurricane Irma that follows up on
    comments and questions from my colleague from Illinois, Mr.
    Rush. Sir, have you ever talked to someone on the ground in
    PREPA? Have you, yourself, talked to someone on the ground
    PREPA about the situation in Puerto Rico?
        Mr. Alexander. No, sir, I have not.
        Mr. Olson. Wow, have not. OK.
        The second round of questions is for you, Ms. Walker. First
    of all, I want to thank you for your service to our State. I
    appreciate your work in guiding us through Harvey. And I know
    Drew Vincentchild at the PUC. You have been our PUC Chair for
    41 rather intense days, I do believe. And as you know, for a
    city like Houston, I want you to talk about how Harvey as being
    a storm event with heavy rain as opposed to wind and storm
    surge, and how does that change the impacts you have to
    address? And what was the biggest surprise you had to recovery?
    Can we help with that surprise to mitigate that, either DC or
    NGOs? How can we address your concerns/surprises after
    Hurricane Harvey with our grid there in Fort Bend County,
    Texas?
        Ms. Walker. Well, as you noted, wind damage is very
    different than flooding damage, and Houston did have the
    flooding damage during this hurricane. The biggest surprise was
    the amount of rain. There was substations such as Memorial
    substation that took on water that had never taken on water in
    the 50 years that it had been there. And so, we were having to
    come up during the storm with ways to address all of the
    flooding, moving crews. Frankly, they were using aquatic
    equipment that they had never used before to get to things
    because of the flooding.
        Houston, also, downtown experienced heavy flooding. I
    believe I heard that 83 of the downtown buildings lost power,
    and I think some still are without power. Luckily the medical
    center did not. We have reinforced the medical center time and
    time again since Hurricane Allison. It wasn't a hurricane, but
    since Allison.
        And so, I am not sure of anything that you all can pass
    here that would help us. We continue to learn from each storm.
    Each storm is different. Hurricane Ike was a wind event. It
    took, out of 2.2 million, it took out 2 million. It was a much
    different storm.
        Mr. Olson. Again, being a Member who lives in the area, I
    have to thank you so much because, when Harvey hit my house
    twice in two days, we never ever, ever lost power. So, thank
    you for that.
        I yield back.
        Ms. Walker. Thank you.
        Mr. Upton. The Chair recognizes the ranking member of the
    full committee, Mr. Pallone.
        Mr. Pallone. Thank you, Mr. Chairman.
        Obviously, in addressing the panel, I have to say it,
    express my concern that the Federal response so far is nowhere
    near where it needs to be. Reports indicate nearly 70 percent
    of Americans on the island are without electricity. The New
    York Times recently described the situation of Puerto Rico,
    quote, ``like going back in time''. Most of my questions are of
    Mr. Alexander and the Corps.
        Mr. Alexander, who is in charge of the effort to restore
    power in Puerto Rico and the Virgin Islands? Is it the Army
    Corps or another agency?
        Mr. Alexander. Sir, again, our mission assignment from FEMA
    is to restore the grid to prestorm condition in coordination/
    collaboration with PREPA.
        Mr. Pallone. That is fine. I just wanted to get----
        Mr. Alexander. OK.
        Mr. Pallone. You answered my question.
        Is there a strategic plan for these Federal restoration
    efforts?
        Mr. Alexander. Sir, if you look at strategic beyond the
    prestorm restoration, that is being looked at by Energy and
    other departments and the interagency----
        Mr. Pallone. So, the DOE is more responsible for a long-
    term plan, is that what you are saying?
        Mr. Alexander. For full, permanent grid restoration
    enhancement, yes, sir.
        Mr. Pallone. And you are more involved in trying to get
    things up and going?
        Mr. Alexander. Sir, we are involved in trying to restore
    the grid in different sectors as expeditiously as possible with
    concentration initially on San Juan and, then, out to seven
    larger municipalities on the island, and then, finally,
    preparing and transitioning to PREPA for permanent service.
         Mr. Pallone. All right. Now how many companies--yes, I
    understand the Corps has several contracts with private
    companies for restoration work--how many companies has the
    Corps contracted with to perform the grid-rebuilding work in
    Puerto Rico?
        Mr. Alexander. Sir, we have contracted with three
    companies.
        Mr. Pallone. And will the Army Corps provide the committee
    with copies of those contracts, so that we can get an
    understanding of their scope? Would you be willing to do that
    through the chairman?
        Mr. Alexander. Sir, I will have to speak to our contracting
    authority and see what is permissible because it is
    acquisition-sensitive material.
        Mr. Pallone. All right. If you can, we would appreciate it.
    I know I am acting through the chairman in asking you for it.
        We have heard varying reports as to how long it will take
    to restore power to the citizens of Puerto Rico. By some
    accounts, it will be many more months until power is fully
    restored. So, Mr. Alexander, when did the Army Corps receive
    its mission to repair Puerto Rico's grid from FEMA?
        Mr. Alexander. On 30 September.
        Mr. Pallone. And Hurricane Maria made landfall in Puerto
    Rico on September 20th. Do you know why it took FEMA 10 days to
    give the Army Corps its mission?
        Mr. Alexander. Sir, we were not involved in deliberation.
    We were executing our temporary emergency power at that time.
        Mr. Pallone. All right. Just on that issue, does the Army
    Corps mission assignment provide--well, I guess you did answer
    that. You basically said, if I understood, that the short-term
    repairs in San Juan and these other areas is under your
    jurisdiction, but the long-term and fully reconstruction of a
    more efficient and resilient grid, that would be more DOE,
    correct?
        Mr. Alexander. Yes, sir.
        Mr. Pallone. All right. So, then, let me turn to Ms.
    Hoffman, to the DOE witness. If the Army Corps is not
    responsible for making long-term improvements, is the DOE
    taking the lead on this effort?
        Ms. Hoffman. So, the Department of Energy is looking at
    strategies for long-term improvements with respect to
    strengthening the grid. So, ideas such as energy storage,
    microgrids or minigrids, options for rerouting power, better
    situational awareness, all those activities are activities that
    we are looking at. But, once again, the actual financing and
    implementation is the responsibility of the utilities or the
    governance structure that will be decided for Puerto Rico.
        Mr. Pallone. But you stated in your testimony that DOE is
    leveraging the National Labs to develop long-term solutions to
    improve resiliency. What is the status of that effort?
        Ms. Hoffman. So, the National laboratories, we have been in
    active discussion with the Grid Modernization Lab Consortium in
    looking at areas such as planning activities, situational
    awareness, looking at analysis-type activities, as well as
    hardening activities. What this is going to have to be done as
    is mirrored up with the existing rebuilding process and looking
    at how some of the innovative solutions can be married in and
    built upon the existing rebuilding. So, that is going to take
    time and it is going to have to run in close coordination. So,
    we have seven technical experts in Puerto Rico working with the
    Army Corps to understand the timing and the extent of where
    their activities are going and opportunities for the future.
        Mr. Pallone. All right. Thank you so much.
        Thank you, Mr. Chairman.
        Mr. Upton. The Chair will recognize the gentleman from
    Illinois, Mr. Shimkus.
        Mr. Shimkus. Thank you, Mr. Chairman.
        I want to try to go to three different directions real
    quick. But, Mr. Alexander, I am a former military officer.
    Someone has to be in charge. So, I think it is very troubling
    that we have you all there trying to restore the grid and you
    are not in consultation with PREPA. The basic question is, if
    you are going to call and yell at someone to get the job done,
    does anyone know who we are going to call? Mr. Alexander?
        Mr. Alexander. Sir, my job is really----
        Mr. Shimkus. Yes, you have been very good at trying to
    answer this tactfully. But who do we call?
        Mr. Alexander. FEMA.
        Mr. Shimkus. We call FEMA?
        Mr. Alexander. FEMA.
        Mr. Shimkus. OK. Do we get our answer?
        Mr. Alexander. It is the authority we are operating under.
        And I will say this: from our Chief of Engineers to our
    South Atlantic Division commanding general, and to a number of
    colonels that are on the ground in Puerto Rico, they
    collaborate and meet with PREPA on a daily basis.
        Mr. Shimkus. OK. Thanks. So, I think we probably should
    have FEMA here. That is who we should have had, FEMA, as far of
    this committee hearing. So, maybe we will do that as a
    followup.
        Because, obviously, we all know the history behind PREPA
    and the bankruptcy and their questionable practices and their
    ability even to provide power before the storm.
        Does anyone know why it took--and Puerto Rico is separate
    because it is an island; it is far away; it is hard. Other
    States usually have, with the utilities have mutual assistance
    agreements. And you will see folks flow. Does anyone know if
    PREPA had a mutual assistance agreement with any stateside
    utility? Does anyone know that?
        Ms. Hoffman. It is my understanding that PREPA had not
    asked for mutual assistance agreements. Early on in the storm
    they just did ask for it.
        Mr. Shimkus. Yes, I have been told it took five weeks,
    PREPA took five weeks to ask anybody for help.
        Ms. Hoffman. Yes, a letter was submitted two days ago, I
    believe, for mutual assistance. But, generally, the industry is
    very forward-leaning in discussing with the utilities and
    activating mutual assistance----
        Mr. Shimkus. Well, we see it all the time.
        Ms. Hoffman. Yes.
        Mr. Shimkus. I mean, the trucks are on the road, whether
    there is an ice storm, whether there is in my neck of the woods
    a tornado, whether it is hurricanes. I have members of my
    congregation who are utility workers, and they are gone. That
    is a disappointing statement.
        I also wanted to put on the record, I think we wanted the
    Nuclear Regulatory Commission to submit a letter for this
    hearing because the hurricanes did come through some of our
    locations where we have nuclear power plants, and we think that
    would help build the record of the resiliency, baseload power,
    the importance of that. And I would ask that, if we finally get
    a letter from the NRC, Mr. Chairman, that we are allowed to
    submit that for the record.\1\
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        \1\ The information has been retained in committee files and also
    is available at  http://docs.house.gov/meetings/IF/IF03/20171102/
    106573/HHRG-115-IF03-20171102-SD010.pdf.
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        And the last point, I really want to go to Mr. Rusco and
    maybe Mr. Corbin. The crude oil world has changed significantly
    since the establishment of the SPRO. I have been here a long
    time, 20 years, and I think one thing is for sure: we have
    always bought high and sold low. Is that a safe statement in
    the history of the SPRO, in the purchase of crude oil? Mr.
    Rusco, do you want to answer that?
        Mr. Rusco. I think that, just by the nature of when it was
    established, you know, it was established after a crisis.
    Usually, when DOE has had authority to expand, it is----
        Mr. Shimkus. Quickly.
        Mr. Rusco [continuing]. After a crisis. And so, it has been
    at higher prices.
        Mr. Shimkus. So, we have a history of buying high and
    selling low?
        Mr. Rusco. At least buying high.
        Mr. Shimkus. And your testimony talked about refined
    products. In the world really now the need is for immediate
    refined product, not base crude oil. In the old days when we
    were worried about deploying forces to Europe and sea lanes
    being closed, and importation of crude oil, a SPRO made sense.
    Am I right, based upon your testimony today, that you are
    saying maybe regional systems--well, actually, regional systems
    which DOE was supposed to analyze, and that there would be more
    focus on refined product?
        Mr. Rusco. I think that it is fair to say that most other
    countries that have strategic reserves have chosen to do that,
    for the reasons that you state, yes.
        Mr. Shimkus. Thank you. I hope my colleagues will follow up
    on some of those questions. I have run out of time. I yield
    back.
        Mr. Upton. The Chair recognizes the gentleman from
    California, Mr. McNerney.
        Mr. McNerney. Well, I thank the chairman, and I thank the
    witnesses this morning.
        Mr. Alexander, you mentioned prevention as a part of the
    mission. Within the Stafford Act framework, can the electric
    structure of Puerto Rico be rebuilt to improve grid resilience
    and using sustainable technology?
        Mr. Alexander. Sir, the Stafford Act allows us to restore
    the grid to prestorm conditions, meeting U.S. Code, electrical
    code, in order to satisfy life, health, safety requirements.
    Some have interpreted that to mean we are making a more
    resilient or betterment on the system, but that is not the
    case.
        Mr. McNerney. OK. Ms. Hoffman, has there been a credible
    estimate of the cost difference between rebuilding a system
    that is resilient and just rebuilding the old system to look
    like it did before?
        Ms. Hoffman. There has not been a complete cost estimate,
    taking into consideration the amount of work that has been done
    and that is being planned to be accomplished from the Army
    Corps of Engineers. So, there has been discussion around
    different advanced solutions, but that needs to be baselined
    with the work and the building planout. So, that needs to be
    evaluated still.
        Mr. McNerney. So, it could be that building a system that
    is resilient and sustainable wouldn't cost much more than just
    rebuilding the old system up to code?
        Ms. Hoffman. I think the analysis has to be completed.
        Mr. McNerney. OK. Thank you.
        The Office of Electricity has worked on a State Energy Risk
    Assessment Initiative that helps States understand the risks to
    their infrastructure. Did the Virgin Islands and Puerto Rico
    have a risk profile before the hurricanes?
        Ms. Hoffman. I would have to go back and look into that. I
    am not sure whether they did do a risk profile with the State
    assessments.
        Mr. McNerney. Thank you.
        Mr. Stafford, is it true that the National Science
    Foundation facility at the radiotelescope has an infrastructure
    that supported FEMA operations subsequent to the hurricane?
        Mr. Shimkus. You said ``Stafford''.
        Mr. McNerney. Oh, Mr. Alexander? Excuse me. Thank you, my
    colleague from Illinois.
        Go ahead.
        Mr. Alexander. Sir, now that I know it was me you were
    talking to, could I ask you, please, to repeat the question?
        Mr. McNerney. Sure. Is it true that the National Science
    Foundation facility radiotelescope infrastructure survived well
    enough to serve as a FEMA operations center?
        Mr. Alexander. Sir, I am not aware of that.
        Mr. McNerney. OK. I was going to ask you what
    differentiated that facility that survived from facilities that
    did not survive. Does anyone have a clue to that question?
        Mr. Alexander. I do not.
        Mr. McNerney. No?
        Ms. Walker, you highlighted the inconsistencies in tracking
    outages in the system. Would better tracking of outages be
    beneficial? Or how would it be beneficial?
        Ms. Walker. It helps us determine where to deploy services,
    such as, we call them pods, but water, food, whether or not
    outages are going to be restored quicker, and we know how many
    in the area have outages. We are able to, then, deploy the
    needs for that community better with that knowledge; also,
    working with the Corps of Engineers on deploying temporary
    generators. It just helps us to understand where to deploy for
    those needs.
        Mr. McNerney. Do you have the authority to require
    utilities to report outages?
        Ms. Walker. Yes, we do.
        Mr. McNerney. Is that authority a State authority or is it
    a Federal authority?
        Ms. Walker. It is a State.
        Mr. McNerney. Thank you.
        Ms. Hoffman, how does the DOE go about helping utilities
    prioritize which lines, substations, and so on, should be put
    online first?
        Ms. Hoffman. So, thank you very much for the question.
        The utilities have a restoration plan as they look at their
    outage management system. They look at prioritization for
    transmission lines to get the most customers on as soon as
    possible and, then, work down into the distribution system. But
    they first must do damage assessments and assess really the
    extent of the damage on the system, and accelerating that
    damage assessment really helps a utility outline the
    restoration process.
        What the Federal Government does is look at where the
    critical infrastructure is and are there any special needs with
    respect to storing large loads or storing critical
    infrastructure, whether it be telecommunication facilities,
    hospitals. And so, that is an ongoing discussion. But it gets
    melded with a utility's restoration plan and the utility's
    commitment with respect to how they are doing the restoration.
        Mr. McNerney. I yield.
        Mr. Upton. The Chair recognizes the gentleman from Ohio,
    Mr. Latta, for 5 minutes.
        Mr. Latta. Well, thanks very much, Mr. Chairman, and for
    calling this hearing today. And thanks to our witnesses for
    being here.
        Ms. Hoffman, if I could ask you my first question, you
    noted that one of the reasons for the rapid electrical recovery
    in Florida was the nearly $3 billion in grid resiliency
    improvements since 2006. Could you elaborate as to what those
    improvements were, and will DOE be working with Florida going
    forward to identify additional hardening practices?
        Ms. Hoffman. So, thank you, sir, for the question.
        The investments by Florida really have stimulated from
    activities that looked at, first, situational awareness, so
    looking at advance meter and infrastructure to provide the
    situational awareness that we have been talking about. Because,
    once you have that awareness, you can do an outage management
    system. You can actually look at how you can advance and
    preposition crews for a restoration process. It also has
    allowed for advanced switching to be able to minimize the
    amount of customers without power; versus taking down a whole
    feeder system, you can really isolate damage on a system and
    look at restoration opportunities.
        Other things that the utilities have done is hardening
    their infrastructure by looking at stronger poles, looking at
    concrete poles, steel poles, versus your traditional wooden
    poles. But all these capabilities are pulled together with an
    advanced kind of communications and control system, but a
    situational awareness system that can help with the restoration
    process.
        Mr. Latta. OK. You are talking about the different types of
    poles. Are there other things that they were doing on
    hardening, did you say?
        Ms. Hoffman. So, with respect to substations--and this
    would probably go more for Sandy, but also looking at hardening
    substations and being able to----
        Mr. Latta. And how do they go about hardening the
    substations?
        Ms. Hoffman. Pardon?
        Mr. Latta. How do they go about hardening the substations?
        Ms. Hoffman. So, when hardening the substations, you really
    look at increased capabilities with respect to duration, being
    able to support prevention of damage from wind, but also from
    flooding. So, it goes back to supporting infrastructure, so
    that you don't see the flooding damage that can occur.
        Mr. Latta. OK. Thank you.
        Ms. Walker, if I could turn to you, can you elaborate on
    working with the Federal agencies after Hurricane Harvey? And
    could you see any improvements that need to be made between
    Federal, State, local, industry, all working together out
    there? Or what is your view as to what happened, and is there
    anything that can be improved on?
        Ms. Walker. I think there are improvements that we can
    make. My view is that the time to make those is before the next
    storm. I found myself in the State Operations Center addressing
    issues that I think are better to try to handle after the storm
    and get ready for the next one. Some have to do with the
    interconnection for the FEMA temporary housing. Some had to
    do----
        Mr. Latta. Could you elaborate on that, on the temporary
    housing, because I know I've seen different press reports on
    that, but would you elaborate on the temporary housing of FEMA?
        Ms. Walker. Once they bring in temporary housing, it is not
    set, usually, right at the meter that the house is on. So, the
    utilities have to set a new pole. There are processes in Texas
    for each utility, and my guess is throughout the country for
    each utility, on how those processes are to interconnect the
    new customer, a new facility.
        And we would like to streamline that for all utilities in
    Texas. We had five major utilities impacted by Harvey and,
    then, multiple coops and municipalities. And so, we are hoping
    to have one process for FEMA to have to go through, instead of
    multiple different processes. So, that is an example.
        Mr. Latta. OK. Any other examples you can think of that
    would be how to improve things out there?
         Ms. Walker. We understood, or I understood, during
    Hurricane Harvey that there were issues, chokepoints, as they
    were called during Hurricane Ike, related to the processes,
    inspection processes, for cities to get homes reconnected once
    they are rebuilt, once they are remodeled. And so, I think that
    is something we can address going forward, how those
    inspections are done, who does them, to make sure we have
    enough people on the ground.
        It was during recovery. It is not, to me, the time to try
    to be addressing things like that. And I just think that that
    is something we can look at going forward.
        Mr. Latta. OK. Well, thank you very much, Mr. Chairman. My
    time is just about expired, and I yield back.
        Mr. Olson [presiding]. The gentleman yields back.
        The Chair now calls upon the gentleman from Pennsylvania,
    Mr. Doyle, for 5 minutes.
        Mr. Doyle. Thank you, Mr. Chairman.
        Ms. Hoffman, welcome back to our committee. It is always
    nice to have another Penn-Stater here at the committee.
        Let me ask you, in your testimony you explained DOE's role
    in restoration and recovery efforts in those areas affected by
    recent hurricanes. A DOE piece from 2015 published in Power &
    Energy Magazine that is still on your energy.gov site explained
    that, and I quote, ``Both the frequency and intensity of these
    disaster events have been trending higher in recent years, with
    7 of the 10 costliest storms in U.S. history occurring in the
    last 10 years. These weather disaster events represent one of
    the most significant threats posed by climate change.'' Now
    that was published in 2015. And since that time, we have
    witnessed the most extreme month of hurricanes that has ever
    been recorded earlier this year.
        So, I want to ask you, how is the Department of Energy
    responding to this increasing threat of climate change and
    extreme weather events?
        Ms. Hoffman. So, the Department of Energy is looking at all
    hazards, including extreme weather, as we look at investment
    opportunities or research opportunities for advancing our
    electric grid. And so, a lot of our research focuses on
    advanced technologies, energy storage capabilities, advanced
    minigrids or microgrids, as they are called. We are looking at
    advanced capabilities that the utility industry can build and
    invest in for hardening and improving the infrastructure.
        Mr. Doyle. Yes, I mean, exactly. In fact, that article goes
    on to detail the SmartGrid R&D Program which is designed to
    improve grid resilience and, also, modernizing the grid through
    the adaptation and integration of advanced technologies.
        So, in your testimony you explain your recommendation for
    the rebuild as being formed in consultation with the National
    Labs. And a presentation from my NREL earlier this year
    explained the importance of distributed generation, calling it
    ``a large factor in developing resiliency with clean energy
    technologies and solutions''.
        So, my question is, is the Department, in making
    recommendations to those that are helping rebuild the grid in
    Puerto Rico, which will essentially be a brand-new system, are
    you urging deployment of distributed systems and renewables?
        Ms. Hoffman. So, distributed generation, combined heat and
    power, which is probably the most efficient form of distributed
    generation, is an option that should be considered in any sort
    of restoration improvement process. But one of the things that
    we are going to have to think about moving forward is how are
    we going to repair systems if another emergency happens. As you
    look at Puerto Rico, which had, I believe, over 8,000 solar
    panels there, what is the process in which the Department of
    Energy and the restoration activities in the next event, how
    are we going to orchestrate the repair of those systems?
        As you look at an efficient restoration process, there is
    an advantage to restoring the core electric grid. So,
    microgrids might a good balance between the two of looking at
    siting generation closer to load, but I think it has to be an
    individual evaluation with respect to the state of the system
    and the opportunities from that point of view.
        Mr. Doyle. Thank you.
        Let me just ask anybody on the panel, does anyone have a
    comment regarding FEMA's resistence to authorizing
    reconstruction aid? My understanding is this makes local
    governments and local utilities ineligible for long-term
    grants. And I am also concerned, because Puerto Rico is only
    eligible for emergency services, that these contracts don't end
    up following Federal procurement rules and we end up with
    situations like Whitefish Energy. Has any of your agencies
    weighed in on this topic? Is there an expected timeline for
    action on this? Anyone?
        [No response.]
        I mean, FEMA authorized in 10 days in Houston, in Texas,
    and I believe in a couple of weeks in the Virgin Islands. But,
    yet, still, for some reason, this hasn't been fully authorized.
    They claim they are working on it; they are close to it. Could
    anyone explain what this holdup is and why it has taken so
    long?
        [No response.]
        I think you are right when someone said we should have had
    FEMA up here. FEMA should be sitting on this panel, too,
    because it seems like a lot of the questions we have need to be
    answered by them.
        Well, let me ask it. Do any panelists have suggestions for
    any highly beneficial action we could take to help expedite the
    rebuilding efforts in a prudent, sustainable manner? Can you
    give any suggestions to this committee on what we should be
    doing that we are not doing right now?
        Ms. Hoffman. Sir, if I may add some comments?
        Mr. Doyle. I am glad to see Penn State stepping up to the
    plate here and at least answering a question.
        [Laughter.]
        Ms. Hoffman. As we look forward to investing in resilience,
    I know it is something that the Administrator of FEMA is
    looking at, as well as the Department. It is, how do we build
    in resilience and how do we think about that upfront investment
    ahead of a disaster, and looking at what funds are available,
    to really think about investing for resilience?
        Mr. Doyle. The idea that our citizens are going to go
    another three months without electricity is just
    unconscionable, I think.
        I yield back.
        Mr. Olson. The gentleman yields back.
        The Chair now calls upon the gentleman from Ohio, Mr.
    Johnson, for 5 minutes.
        Mr. Johnson. Thank you, Mr. Chairman.
        I appreciate the opportunity to ask of this panel. A very,
    very important hearing that we are having today because we saw
    the effects of the hurricanes and how the destruction that
    occurred during and afterwards, how that affected not only the
    areas that were hit, but other regions of the country as well,
    since so much of our energy resources reside there on the Gulf
    Coast.
        So, Mr. Corbin, how much does the Northeast Gasoline Supply
    Reserve cost on an annual basis? Let's get that question out of
    the way first.
        Mr. Corbin. Thank you for the question, Mr. Johnson.
        For the Northeast Gasoline Supply Reserve, the average
    storage contracts, which are for leased commercial storage for
    the product, are approximately $19.60 per barrel per year. And
    when you include overhead costs, to include quality assurance
    and administration of your IT/sales platform, in the event you
    have to release the gasoline, it comes to a little over $20 per
    barrel per year, sir.
        Mr. Johnson. OK. So, is the higher per-barrel cost of
    storing gasoline versus crude oil a good use of taxpayer
    dollars, do you think?
        Mr. Corbin. That is really not for me to decide, whether
    that is a good use of the taxpayer dollars.
        Mr. Johnson. But you have got an opinion?
        Mr. Corbin. I will say, Mr. Johnson, that in terms of the
    cost of storage for refined products, the United States has,
    out of 14 countries that participated in benchmarking studies
    that are stock-holding countries, the U.S. has by far the
    highest cost for gasoline storage out of the 14 countries.
        Mr. Johnson. OK. All right.
        Also, Mr. Corbin, continuing on, the SPR is almost entirely
    located in the Gulf Coast region of the United States, limiting
    its ability to respond to disruptions in other parts of the
    country, particularly if we were to have a repeat of what we
    saw recently. For example, the West Coast has relatively few
    pipelines that are connected to the SPR, meaning that some
    petroleum products must be shipped by truck, barge, or other
    domestic methods or by tankers even from foreign countries.
    These modes of transport, obviously, are slower and more costly
    and limit the usefulness of the Strategic Petroleum Reserve.
    So, how would expanding, in your opinion, how would expanding
    the number of SPR locations across the country enhance the
    effectiveness of the SPR?
        Mr. Corbin. First, I would just like to make a correction
    to your statement, sir. There are no pipelines that directly
    connect the SPR to the West Coast of the United States.
        The SPR, as I mentioned in my testimony, our crude oil is
    stored in underground salt caverns in two sites in Texas, two
    in Louisiana. Salt cavern storage is very inexpensive. We have
    the lowest operating cost of any stock-holding country in the
    world for our crude oil. There are no salt domes along the West
    Coast of the United States. There are some outside of the
    immediate Gulf Coast area, but they are not significant. So,
    crude oil storage would be problematic on the West Coast.
        Mr. Johnson. So, you are basically saying--I don't mean
    just the West Coast; I mean other regions of the country as
    well. I mean, the question centered on the West Coast. So, you
    are saying, in your opinion, developing other storage areas for
    the SPR around the country in different regions would be
    problematic?
        Mr. Corbin. For crude oil storage. Now, in discussions that
    were mentioned by Mr. Shimkus earlier, and talked about refined
    product storage, the U.S. Government currently has two refined
    products reserves, the Northeast Gasoline Supply Reserve and
    the Northeast Home Heating Oil Reserve. They are both very
    small, 1 million barrels apiece. They are intended to meet
    regional supply disruptions.
        There are challenges associated with product reserves,
    regardless of the model that is used. Both of the product
    reserves that are currently in existence, they are,
    essentially, Government-owned refined product in leased
    commercial storage facilities. In any product reserve with that
    model, there is an initial refined product acquisition cost
    associated with it. In studies that we did in PADD 5, which is
    the West Coast, and in the Southeast U.S., my staff found that
    there is little to no spare commercial storage capacity. And as
    I mentioned previously, the leased commercial storage costs are
    high.
        Mr. Johnson. OK. All right.
        Mr. Chairman, I yield back.
        Mr. Olson. The gentleman yields back.
        The Chair now calls upon the gentlelady from Florida, Ms.
    Castor, for 5 minutes.
        Ms. Castor. Thank you, Mr. Chairman. And I want to thank
    Chairman Upton and Ranking Member Rush, and the professional
    staff, for bringing this hearing to be. And thanks to all of
    our witnesses.
        There is a very serious tension that the Congress has to
    address as soon as possible. On the one hand, we need to
    restore power in Puerto Rico and the U.S. Virgin Islands as
    quickly as possible, but, on the other hand, Congress has an
    overarching responsibility to protect the taxpayer from future
    losses by building a more resilient, modern, distributed grid
    with better technology, technology, by the way, that has
    largely been funded by the taxpayers that we see in our
    National Laboratories that is used by utilities and businesses
    all across the country.
        Senator Ramon Luis Nieves, who is in the audience and is
    going to testify on the next panel, is a former chairman of the
    Puerto Rican Senate Committee on Energy. He says the current
    grid is obsolete, the grid before the storm, before the
    hurricanes. He said in his testimony, ``Appropriating taxpayer
    money just to repair an old 20th century grid would be a waste
    of resources.'' In fact, Ken Buell, the Director of Emergency
    Response and Recovery with the U.S. Department of Energy,
    stated that, ``We really should think in terms of rebuilding at
    this point, not just repairing the old grid.''
        The problem that we have all got to grapple with is PREPA
    is largely in debt. They do not have the wherewithal now to
    take the lead on this. They have governance problems. Gosh,
    what else do we have to know after this Whitefish contract
    controversy? I think we have a very significant responsibility
    to protect the taxpayers here.
        A few weeks ago, there was a congressional briefing
    provided by the Department of Homeland Security, FEMA, and the
    U.S. Army Corps of Engineers was there. They also relayed that
    they only have the authority now to go in and make repairs, and
    not do the kind of rebuilding of a modern grid that needs to
    happen.
        In fact, Mr. Alexander, in your testimony you say that your
    mission right now is to repair the power system to its prestorm
    condition, is that correct?
        Mr. Alexander. Yes, ma'am.
        Ms. Castor. Ms. Hoffman, what kind of direction do you need
    from the Congress to begin to go beyond a planning stage and do
    something that your very own Director of Emergency Response and
    Recovery has said needs to be done? And do you agree that you
    need that authority to go beyond repairing?
        Ms. Hoffman. So, I think there has to be an ability for the
    Department of Energy to work closely with PREPA in planning and
    actively engaging and discussing what some of those advanced
    technologies solutions are. So, the forum has to be codified,
    so that there can be active engagement and discussion of what
    are the opportunities. I know that PREPA has their own plans
    and their own activities, but how do we really take the
    advancements and provide that?
        Ms. Castor. So, you think, yes, it would be helpful for
    Congress to provide additional clarity, so that you can move
    forward to do what, on a bipartisan basis, what experts have
    advised that needs to be done in Puerto Rico?
        Ms. Hoffman. Yes.
        Ms. Castor. And the Virgin Islands? OK.
        Ms. Hoffman. Yes.
        Ms. Castor. We have got to do this with a sense of urgency,
    though. Mr. Alexander, how do we do this? As you keep going on
    to repair, what kind of advice, what kind of clarity do you
    need from the Congress in maybe the next emergency aid package,
    maybe in something that would allow you to go beyond just
    repairing the old, obsolete grid and moving forward on
    something that would protect the taxpayers?
        Mr. Alexander. So, while we recognize that the prestorm
    grid was not in good condition, the current authorities under
    the Stafford Act, and the mission assigned from FEMA, limits us
    to restoring to prestorm condition, meaning U.S. Code. I think
    this is, ultimately, a policy decision. Do we need to relook at
    the Stafford Act? As written, it was----
        Ms. Castor. And Colleagues, let me--thank you very much--in
    previous emergency aid packages for Superstorm Sandy and for
    Katrina, it has been the Congress that has been able to go
    beyond the Stafford Act that limits the Government to just
    going and repairing what was, and building in, instead, a new
    resiliency, whether it is in housing or defense installations
    and things like that, those previous emergency aid package. We
    have never had a blackout and destruction of an electric grid
    the scale of this ever before in the country, and that is why
    this is something new this committee needs to work on together
    with our colleagues in the Senate and, hopefully, with DOE, as
    they have expressed they are already doing some of this
    planning. But, to put this into action, it is going to be our
    responsibility to actually pass that authorization in the next
    emergency aid package or before.
        And I yield back my time.
        Mr. Olson. My friend's time has expired.
        The Chair now calls upon the gentleman from the
    Commonwealth of Virginia, Mr. Griffith, for 5 minutes.
        Mr. Griffith. Thank you very much, Mr. Chairman. I
    appreciate it,
        Ms. Hoffman, during a hearing before this committee,
    Secretary Perry mentioned that microgrids could be a solution
    to quickly restore electricity after future natural disasters.
    I am also interested in how microgrid technology could be used
    to provide power to rural and rural mountainous areas of the
    country. Do you believe Puerto Rico could benefit from
    microgrids and, if so, how?
        Ms. Hoffman. So, thank you very much for the question.
        Microgrids provide an opportunity to bring generation
    closer to the load and be able to manage supply and demand on a
    more local basis. In Puerto Rico you have the generation on one
    side of the island and, of course, the load on the other side
    of the island. So, ultimately, you really would like to be able
    to create a minigrid or a microgrid. It would be able to
    balance that in a different form. But that does require
    generation, and it does require load management and advanced
    communications and controls to be able to manage that on a more
    localized basis. So, you look at things such as energy storage
    and other generation that can be meshed very well with a local
    distribution system.
        Mr. Griffith. Now would you see that as exclusive of the
    current type of system or would you see it as an ancillary
    except in times of disaster?
        Ms. Hoffman. So, ideally, I would love to think about how
    you build off of the existing system and capitalize on the
    existing investment, where it is electrically feasible. And
    then, once again, that requires close coordination with the
    existing infrastructure. Whenever utilities look at isolation
    or separation of the grid and look at microgrids, they are
    looking at utilizing the existing assets and being able to
    build upon those assets with new technology and new
    capabilities.
        Mr. Griffith. And if you are suddenly cut off, as we have
    seen in Puerto Rico, from your supply of either electricity or
    the fuel to produce that electricity, doesn't that require that
    the microgrid also have some kind of a fuel source that it can
    tap into in cases of emergency?
        Ms. Hoffman. Absolutely. You need a fuel source. You need
    redundancy. You need to be able to ensure reliability of the
    microgrid. Whether it is a utility-owned or a private-sector-
    owned, you have to have that redundancy and capability for your
    customers.
        Mr. Griffith. I appreciate that.
        What are the current limitations associated with the
    microgrid technology, if any?
        Ms. Hoffman. So, some of the current limitations are really
    looking at microgrid controllers to be able to have an ability
    from a standards form to be able to look at control of the
    microgrid, looking at cybersecurity. Regardless of who owns the
    electric grid and how the electric grid is developed, you have
    to be secure. You also have to have the capability to
    dynamically manage supply and demand. So, looking at some of
    the advanced control solutions and things along those lines, as
    well as the generation technology.
        Mr. Griffith. Now let me ask you this: can you envision
    that a microgrid might be as small as, say, just a power source
    that would handle a hospital and its needs or a factor and its
    needs for short periods of time, as a part of the system as a
    whole, but, then, also, in times of emergency be able to take
    care of those needs where we have seen problems in Puerto Rico
    and other places?
        Ms. Hoffman. So, absolutely. We have seen microgrids at
    university campuses, at hospitals. So, it can be as small as
    one wants to define a microgrid, but also can be larger from a
    minigrid point of view, if you want to support multiple
    services in a locality.
        Mr. Griffith. And I would assume that, based on what we
    have already discussed, that if you had, if for some reason in
    the natural disaster your fuel source was damaged, but the rest
    of the equipment was still good, that it would be easier to
    drop in the fuel, for the Federal Government to come in after
    the disaster and drop in the fuel than it would if you drop in
    a whole new system, isn't that correct?
        Ms. Hoffman. I think that has to be evaluated on a system
    basis, to be fair.
        Mr. Griffith. OK.
        Ms. Hoffman. I mean, you are bringing in a lot of fuel, and
    it kind of comes down to what really is it required for a cost-
    effective restoration. What we are talking about is getting the
    power back on for as many customers as possible as efficiently
    and as effectively as possible. And so, in some cases that may
    be putting in, re-establishing a grid system and a grid
    network. In other cases in a localized community that is very
    far and isolated, it may be putting onsite generation there and
    creating a minigrid in the near term until lines and power can
    be restored from a main grid point of view.
        Mr. Griffith. And I appreciate that. Of course, in my neck
    of the woods where we have a lot of coal and some natural gas,
    but a lot of coal, we think that might be an answer for us, and
    maybe for others, to have that fuel source available and have
    the big microgrid ready to go.
        With that, Mr. Chairman, I appreciate it very much and
    yield back.
        Mr. Olson. The gentleman yields back.
        The Chair now calls upon the gentleman from Iowa, Mr.
    Loebsack, for 5 minutes.
        Mr. Loebsack. Thank you, Mr. Chair.
        Thanks to the panel today for your excellent testimony, and
    we have had a lot of great questions.
        I guess I want to join in with everyone else in expressing
    the fact that I was heartbroken by the devastation of these
    most recent storms. I think it is unfortunate that we are
    probably going to see a lot more of this down the road. So, we
    are going to be faced with these issues, I think, across the
    country.
        And many of us represent districts that have already been
    affected over the years by this kind of devastation. I
    represented Cedar Rapids, Iowa, for 6 years. Back in 2008, we
    had the Flood of the Century or the flood of whatever number of
    centuries, and the river crested at 31 feet, 9 feet over the
    previous record. There was $2.5 billion damage done immediately
    in Cedar Rapids, the economic loss of probably the same. And
    they have been through a lot, like a lot of communities around
    this country, and just most recently what we have seen in
    Puerto Rico and Texas and Florida.
        I do want to, I guess, address my concerns more to Mr.
    Alexander than anybody with respect to the Corps. You know, the
    Corps I know ranks the projects, and we are going to have a lot
    of projects coming up, what we have seen recently, projects for
    reconstruction, for flood mitigation. I run the benefit/cost
    ratio, and it has to be at least 1-to-1, as you know.
        Cedar Rapids was 1.2-to-1. We authorized the project to go
    forward in 2014, but we haven't seen any movement on it in
    terms of funding. And this is going to happen in these other
    instances, too. We are going to have a lot of challenges, sort
    of where to prioritize, where to put the money.
        But I have a lot of concerns with this benefit/cost ratio.
    It seems awfully bureaucratic to the folks who are living in
    these communities when they want to prevent floods in the
    future. Can you address that issue and give us any hope at all
    that, not just Cedar Rapids, Iowa, but these communities that
    are going to be faced with flood mitigation down the road might
    get some relief and actually see some projects built?
        Mr. Alexander. Sir, I am familiar with benefit/cost ratios
    and prioritizing and racking and stacking of projects, and the
    needs are many, but the budget is limited. But my focus is on
    contingency operations. And so, to adequately address your
    question, I would have to refer to our Civil Works personnel.
    So, I could have my staff coordinate with them.
        Mr. Loebsack. Yes, I suspected that might be the case, but
    I am going to go ahead and submit a question on the last. Then,
    if you can get us an answer from the relevant person at the
    Corps, that would be great. Again, I just want to bring up this
    issue more than anything else, because going forward this is
    going to cost, as we know, billions of dollars for
    reconstruction in these communities. And a lot of them are
    going to face the same questions that Cedar Rapids faced since
    2008, and a lot of other communities around the country, and it
    is something that we are going to have to pay close attention
    to and we are going to have to resolve that issue, because
    folks are going to be depending upon those reconstruction funds
    to make sure that they can go forward with their communities.
        So, thanks to all of you.
        And thank you, Mr. Chairman. With that, I will yield back.
        Mr. Olson. The gentleman yields back.
        The Chair now calls upon the patient gentleman from West
    Virginia, Mr. McKinley, for 5 minutes.
        Mr. McKinley. Very patient, very patient. Thank you, Mr.
    Chairman.
        Mr. Olson. Very patient.
        Mr. McKinley. Mr. Chairman, given the aftermath and all the
    discussion here we have had about the natural disasters we have
    had in Florida, Texas, Louisiana, Puerto Rico, I really want to
    applaud the Department of Energy's efforts to refocus the
    narrative and the discussion about reliability and resiliency,
    because really it underscored how serious that problem is if we
    don't address it. So, thank you for what you are doing, and for
    Secretary Perry, for focusing on that, because I think that
    could have some impact.
        But my question, a little along the same line, has to do
    with the petrochemical industry in the Houston and Louisiana,
    all of the Gulf Coast, where we were so hard hit when that
    Category 4 hit there that it wiped out or shut down 17--I think
    there are 23 crackers down in that area--17 of them were shut
    down. One of them is still out. Sixty percent of our production
    of polyethylene and propylene were lost for a period of time.
    It showed how vulnerable we are in that area.
        And I know that, in contact with folks that have reached
    our office, because of that slowdown, because of the lack of
    cracker facilities to be able to provide the ethylene and
    propylene around the country, companies all across America that
    use their plastic resins are slowing down as a result. One
    company, particularly, in my district was working seven days a
    week. It is now down to five because it can't get the plastics.
        So, this thing is serious about it. What we have done, or
    what I think DOE maybe has an interest--and I would like to
    hear more from you--is that, rather than taking a page from the
    Strategic Petroleum Reserve of having it all in one location,
    what if we were to locate an ethane storage up in the northern
    Appalachian area, right where the Marcellus and the Utica shale
    formations are located, so that we could have a secondary
    supply, a secondary source, to be able to provide that, the
    petrochemical supplies of material for around the country?
        Do you have a thought about that from DOE's position, here
    they may be on having a secondary? It is not replacing Houston
    by any stretch. It is just having something that is in another
    location, so it is not vulnerable to the weather.
        Ms. Hoffman. So, Congressman, you bring up an important
    issue. It is location, location, location. Diversity is very
    important. And as we look at any sort of, whether it is fuel
    product, chemical product, having and thinking about having
    flexibility in where that product is developed also looks at
    our security and resilience for the Nation. So, I understand
    that in the Appalachian area there is a lot of natural gas
    resources and a byproduct of natural gas and the ability is
    ethane. And so, I know that the Secretary had a roundtable
    discussion and is looking at the opportunity. But it brings up
    the important point that we need to think about diversity and I
    wanted to say ``generation diversity,'' but product diversity
    in the United States.
        Mr. McKinley. Following up on that is that, during last
    year's appropriation process, our office had introduced an
    amendment to the appropriation bill to see that a study was
    undertaken to confirm whether or not there was an interest or
    possibility and potential for having it in the Marcellus and
    the Utica shale formations. That has been since, I think it was
    May. Do you have a sense? Can you give me a status on how far
    along, if it has been undertaken yet, to make a determination
    of the feasibility of locating a secondary ethane storage?
        Ms. Hoffman. So, I understand the Department is undertaking
    a study in this area, and it is my understanding that this
    study will be completed in 2018.
         Mr. McKinley. Do you have an idea when in 2018? In
    December or is that going to be in September or October?
        Ms. Hoffman. I don't have that.
        Mr. McKinley. OK.
        Ms. Hoffman. I will get back to you on that answer.
        Mr. McKinley. If you could back to me, I would appreciate
    it.
        And I yield back. Thank you.
        Mr. Olson. The gentleman yields back.
        The Chair now calls upon the gentleman from the Bay State,
    the Bay Line State--I'm sorry--the Old Line State, Mr.
    Sarbanes, for 5 minutes. I apologize.
        Mr. Sarbanes. All those names work.
        Thanks to the panel.
        I wanted to ask you, Mr. Alexander, to step back in terms
    of the Corps' relationship to these disasters that have been
    occurring with more frequency, and give me a sense of how much
    the Corps' mission and effort and sort of the deployment of its
    various projects has changed over the last few years in either
    response to the disasters that we are seeing, these natural
    disasters, or in anticipation that the frequency of them is
    going to increase. Is that an analysis that is happening? Can
    you cite some trends in terms of the Corps' projects around
    this, the kind of requests that come in that are related to
    resiliency and adaptation, and so forth, in addition to just
    efforts to respond to things that happen? So, if you could give
    that kind of 30,000-foot perspective, that would be helpful.
        Mr. Alexander. Thank you, sir.
        First, every year following a storm season, we do an after-
    action review and we identify lessons learned, and we work to
    develop and establish best practices, so that we can improve
    ourselves and train accordingly. How can we work with State and
    local governments to help them prevent and work toward
    mitigation of a disaster?
        We are always looking at how we can improve our critical
    infrastructure. We have an aging infrastructure, as you know.
    So, that is a separate issue. We acknowledge that
    infrastructure needs to be resilient in order to withstand
    storms such as this, flooding on the Mississippi, tornadoes out
    in the Midwest. We are looking, as we move forward and develop
    and study projects and future projects, we are looking at ways
    to ensure that a greater degree of resilience is incorporated
    in those designs.
        Mr. Sarbanes. Are you seeing an increase? Is there a marked
    increase or at least something measurable in the kinds of
    proposals that are coming into the Corps that relate to these
    extreme weather events, either responding to something that has
    happened or projects that are anticipating increased exposure
    from these events? And has the Corps' kind of scoring system
    for projects been adjusted in any way relative to what has been
    happening with these kinds of disasters and weather events?
        Mr. Alexander. I am not in a position to adequately address
    your question. I can say, I mean, we do every year; we have
    requests for additional flood damage mitigation projects. How
    can we increase the resilience in levee systems and support and
    mitigate flooding in low-lying areas, flood plains, things of
    that nature?
        Mr. Sarbanes. I would appreciate it, if it were possible,
    to go back to the Corps, and maybe after the analysis following
    this hurricane season has been completed, to see if you could
    give us some information about trends over the last few years
    in terms of the number of projects that fall into that kind of
    a basket and, as I said, whether the Corps is putting that
    analysis and thinking into a strategic plan for the Corps going
    forward that may lead to creating different sets of priorities
    for project based on some of these issues. So, if that is
    something, certainly getting that analysis--I assume we can get
    some report on the analysis that is done on an annual basis--
    that would be helpful, but, then, any additional perspective
    you can bring on those kinds of trends would be helpful.
        Mr. Alexander. Yes, sir, we will.
        Mr. Sarbanes. Thanks. I yield back.
        Mr. Olson. The gentleman yields back.
        The Chair now calls upon the gentleman from Missouri, Mr.
    Long, for 5 minutes. Welcome back, Billy.
        Mr. Long. Thank you, Mr. Chairman.
        And, Ms. Hoffman, 10 or so years ago, my hometown of
    Springfield, Missouri, we received a devastating ice storm
    where there were folks out of power for 10, 12 days, two weeks,
    whatever, and the utility companies came in from all over to
    help us in that situation. I know the recent situation in
    Florida, from the Washington, DC, area here in Maryland,
    Virginia, and Springfield, Missouri, again sent crews down to
    Florida to help in that situation. So, I know what it is like
    whenever people--neighbors helping neighbors, so to speak.
        You note in your testimony that mutual assistance provided
    by electric companies, public utilities, and electric
    cooperatives across the country played an important role in
    restoring power so quickly in Florida. Could you discuss the
    logistics of bringing in as many as 60,000 workers from across
    the country to quickly assess and restore, or assess
    restoration locations, and how this effort is being coordinated
    by industry?
        Ms. Hoffman. So, thank you very much for the question. And
    I think it is an impressive network, and the aggressive posture
    that the utility industry has had, as well as the lessons
    learned from Katrina and past events, that the utilities have
    really taken it upon themselves to have a leadership position
    in developing a mutual assistance network. This is a network
    where utilities talk among each other, request mutual
    assistance, and it is organized to provide mutual assistance to
    utilities that request it. And this is across the United
    States. There is different coordination and different entities
    that are responsible for a mutual assistance request in
    different areas of the country.
        The utilities that provide mutual assistance, they talk
    about the management structure; they talk about laydown
    procedures with respect to equipment and equipment necessary.
    And there is a huge coordination with respect to supplies and
    the availability of resources.
        Mr. Long. OK. What role do State or Federal emergency
    operations officials have in monitoring the use of mutual
    assistance and to ensure that it is applied to the most
    critical areas?
        Ms. Hoffman. So, this is real interesting, and I thank you
    for bringing up the point. What we deal with is, first and
    foremost, the utilities are in a leadership position, as they
    should be, for providing response and recovery. The Federal
    agency and the Federal Government and the Department of Energy,
    what we do is help understand when is it outside the ability of
    a utility to be able to manage their response and recovery
    efforts, and what are the resources that are required, the gaps
    that are needed in providing support. So, whether it is
    transportation issues, access issues. And so, that is the
    activities that the Department of Energy and the Federal
    Government help with. And that is whether it is hours of
    service waivers, whether it is weight restriction waivers,
    whether it is understanding if there is a priority, whether it
    is a heavy load like a chemical facility or a pharmaceutical or
    a hospital, what some of those restoration needs are.
        Mr. Long. Speaking of the Federal Government, what does the
    Federal Government do to remove regulatory roadblocks to
    recovery and repair efforts, and are there areas that we can
    improve in those?
        Ms. Hoffman. So, the efforts that the Federal Government
    does and looks at are from a waiver point of view. So, looking
    at access to any sort of damaged area, to making sure that the
    utilities--I guess where I would go with this answer is I will
    be very pointed here. It is that utilities nowadays are very
    much seen as emergency responders. Typically, that has been the
    health and the safety side of things. But now, as you look at
    critical infrastructure and as you look at the needs moving
    forward, telecommunications and electricity are primary for
    providing an effective restoration process and life and safety.
    And so, access for utilities in a damaged infrastructure
    environment, being able to be forward-leaning in getting
    utility resources there, are absolutely critical as we move
    forward. And it is going to be more critical as we look at
    onsite generation and being able to restore power.
        Mr. Long. OK. Thank you.
        And will the Department of Energy be working with the
    States and Territories impacted by these recent hurricanes to
    assess grid resiliency efforts and identify ways to improve
    grid resiliency?
        Ms. Hoffman. Yes.
        Mr. Long. OK. I wish we had time today for an EMP
    discussion with all of you, but perhaps another day. It seems
    like our time is taken up today with talking about the Astros
    all the time.
        Mr. Chairman, I yield back.
        Ms. Hoffman. I look forward to future conversations on
    that.
        Mr. Olson. The conversation is a problem, my friend, about
    the Astros? Is that a big problem?
        The gentleman yields back.
        The Chair now calls upon the gentleman from New York 20,
    including the State capital of Albany, Mr. Tonko, for 5
    minutes.
        Mr. Tonko. Thank you, Mr. Chair.
        While we hear about restoration working along in some of
    our States, many of our fellow Americans in Puerto Rico and the
    United States Virgin Islands remain in the middle of the most
    serious blackout in United States history. Restoring services
    is absolutely critical, but we also need to acknowledge the
    risks of this happening again and the need to support the
    development of a more resilient grid moving forward.
        Over the last decade, extreme weather and fire events have
    cost the Federal Government well over $350 billion, according
    to the Office of Management and Budget. A GAO report last week
    estimated that these costs will likely rise in the future, due
    to the effects of climate change. This is not a choice between
    pay now or pay later. It is a pay now by supporting research,
    hardening infrastructure, and making meaningful investments to
    adapt to and mitigate climate change, or pay now in
    multibillion-dollar emergency spending packages. The fiscally
    sensible approach is to acknowledge the risk posed by extreme
    weather and to make the necessary investments that will
    mitigate it.
        We just passed the 5-year anniversary of Superstorm Sandy
    hitting the Northeast. We have seen a lot of effort in New York
    to build a more resilient grid, but the experience of Sandy
    shows that rebuilding takes time. And it is clear that lessons
    learned from one disaster can make future response and recovery
    more effective. We have been learning from Sandy. We are
    learning from Harvey, from Irma, and from Maria, and the
    learning will continue until we address some of the
    preventative measures.
        So, Ms. Hoffman, your testimony mentioned that Florida
    Power & Light has made major investments since 2006 to build a
    more storm-resilient grid. Similar work has been done in New
    York State in regard to Sandy. How can a smarter, modernized
    grid be more resilient?
        Ms. Hoffman. So, thank you, Congressman, for the question.
        A smarter grid allows for advanced communications and
    controls. It allows for rerouting power. It allows for an
    accelerated situational awareness.
        So, let's first talk situational awareness and the ability
    to have smart meters and you are able to have better visibility
    into your system, be able to isolate damage, be able to reroute
    power. And so, having that ability allows you to be forward-
    leaning on placement of resources, to have a very effective
    restoration process, well-planned, well-distributed with
    respect to priorities and how a restoration process can be
    done.
        With respect to being able to reroute power, you can really
    look at isolating customers and being able to make sure that
    you can restore most of, a large number of customers quickly,
    as well as prevent damage to additional customers
    unnecessarily.
        Mr. Tonko. Thank you.
        And, Ms. Walker, can you explain how grid modernization
    efforts in Texas, advanced meters, and others, aided in a more
    rapid recovery there?
        Ms. Walker. Yes, sir. Thank you for the question.
        The advanced meter systems that we have--we have them
    through most of the ERCOT region--were very helpful. It
    notified the utilities of when those customers were out. So,
    they knew where those customers were located. It also helped,
    as Ms. Hoffman said, in rerouting and knowing where they needed
    to send their crews, and being able to reroute electricity to
    serve people in a more timely fashion. So, we found that it was
    very helpful to have the advanced meter systems and the new
    technologies.
        Mr. Tonko. Thank you.
         And DOE's quadrennial energy review heavily focused on
    critical infrastructure interdependencies. I am particularly
    concerned by the harrowing statistics of Puerto Ricans without
    access to safe drinking water. Water, telecommunications,
    hospital, and public safety infrastructure are dependent on
    electricity.
        So, Ms. Hoffman, is a more resilient grid system, perhaps
    one that includes microgrids, distributed generation, and
    storage, important for supporting rapid response and recovery
    in regard to and in interaction with these other critical
    infrastructure needs?
        Ms. Hoffman. So, thank you, Congressman.
        Using a microgrid in a smart fashion around critical
    infrastructure is absolutely important. As you look at
    telecommunications, as you look at water and wastewater
    treatment plants, it is really how do we harden those areas to
    allow for them to either sustain or be able to recover quickly.
    And having generation closer to these critical loads, through
    the form of a microgrid, is absolutely important. I know that
    ConEd and areas in New York are also looking at how do they
    harden their infrastructure.
        And I do want to say I appreciate NIPA and their efforts in
    going down to Puerto Rico as well and supporting the recovery
    efforts.
        Mr. Tonko. Thank you.
        Has there been any interaction with EPA and DOE in regard
    to this interdependency on infrastructure?
        Ms. Hoffman. Sorry, you said EPA?
        Mr. Tonko. Yes. Any efforts with drinking water, DOE, and
    the infrastructure, the electric utility?
        Ms. Hoffman. Thank you very much. I understand.
        Through the Electric Sector Coordinating Council and
    through our responsibility as a sector-specific agency, we have
    had coordination discussions with the telecommunication sectors
    and some of the other critical infrastructure sectors to think
    about how do we really move forward from a restoration process,
    from a hardening process, from an advanced technology process,
    from a coordination process, and moving forward and
    strengthening our economy.
        Mr. Tonko. Thank you so much.
        Mr. Chair, I yield back. And congratulations.
        Mr. Olson. Thank you. The gentleman's time has expired.
        The Chair now calls upon the gentleman from Florida, Mr.
    Bilirakis, for 5 minutes.
        Mr. Bilirakis. Thank you, Mr. Chairman. Thanks for allowing
    me to sit on the committee.
        And then, also, I want to congratulate you on the Astros'
    victory. They are a model. They really accomplished quite a bit
    this year, and I like the way they rebuilt their team.
        So, anyway, can I have an extra 2 minutes because of that?
        Mr. Olson. As long as you want to talk like that, you can
    have 10 minutes.
        [Laughter.]
        Mr. Bilirakis. All right, but I am going to root for
    another team next year. You know that.
        But, in any case, I wanted to talk about--Ms. Walker, if I
    can ask you a couple of questions? I understand that there is a
    site prioritization when utilities are being restored and in
    the midst of a response resources are often spread thin. If
    there are two hospitals--this is a question--if there are two
    hospitals in a given area, how do utilities determine which
    facility is responded to first?
        Ms. Walker. Well, in Texas the hospitals by statute are
    required to have backup generation. So, they do have that
    requirement. I am not sure how they are decided which one they
    respond to first. I know that for CenterPoint Energy during
    Hurricane Ike that that was the first areas that the company
    went to, was to the hospitals. So that all of the personnel
    were trying to restore service to those. So, I am not for sure
    and I would have to look into how they would decide between
    two.
        Mr. Bilirakis. Thank you.
        What role do utility companies play in crafting a State's
    disaster response plan and determining which sites are
    prioritized?
        Ms. Walker. They have complete power to come up with their
    plan on how to restore power. The Commission does have levels
    that we ask them to look at, which are the critical structures
    such as hospitals. By statute, they also have to respond to
    nursing homes. We clearly have them respond to refineries and
    things in the ship channel. So, there is a tier, but the
    utilities are responsible for setting their own priorities.
        Mr. Bilirakis. Thank you.
        How much flexibility does a utility company have in
    determining which sites are restored first?
        Ms. Walker. They have a lot in Texas. They do work, and
    Texas recovery is at the local level, so they do work also with
    their counties and their cities to make those determinations.
    But the utilities in Texas have a significant amount of
    determination on how they restore power.
        Mr. Bilirakis. Thank you.
        The next question to the panel, what challenges still exist
    for Florida and what are your post-storm recommendations? What
    DOE resources are available to the communities like mine
    impacted by Irma? Who would like to being first?
        Ms. Hoffman. I will start. Florida had a very effective
    restoration process. They had the arrangements from a mutual
    assistance point of view. They looked at, and their investments
    in the infrastructure have helped with, hardening their
    systems. Their advanced control and metering has advanced their
    capabilities. At this stage in the game, Florida really looked
    at their codes and standards from a perspective of a Category 3
    hurricane. As we are looking at Category 4 hurricanes and
    additional hurricanes, I think now it comes down to, what are
    some of the additional new capabilities to mitigate a Category
    4 and higher-level hurricanes that they are going to have to
    consider?
        I think from a fuel distribution point of view, that was
    the one area of looking at distributing fuel. Gasoline was a
    challenge in Florida, but I think it was also partly that the
    necessary evacuation that occurred had a run-on on gasoline
    stations. And so, it looks at, they did advance by having
    generation hookup. So, from an electrical point of view, they
    advanced capabilities there. But if I had one area, it is
    probably look at the distribution network with respect to
    gasoline.
        Mr. Bilirakis. The fuel issue, yes, definitely. We were
    very fortunate in the Tampa Bay area, I think as you know, to
    dodge the Category 3 or 4, but God forbid we have one.
        So, anyone else want to comment? I don't have much time. I
    know I asked for an additional couple, but I was just kidding.
    But does anyone else want to comment on that? Any suggestions?
        [No response.]
        That is great input. I really appreciate that.
        Thank you very much, Mr. Chairman. I yield back.
        Mr. Olson. The gentleman is always welcome here. He yields
    back.
        The Chair now calls upon the man who is working very hard
    for a bipartisan agreement to allow me to wear this jersey on
    the House floor later today, Gene Green from Houston, Texas, 5
    minutes.
        [Laughter.]
        Mr. Green. I thank my colleague and neighbor for yielding
    to me.
        For our colleague from Florida, I know there were some
    problems with gasoline supplies there, and maybe you can tell
    me, does Florida import all your gasoline and diesel? I didn't
    know if you had any refineries in Florida. OK. Well, that is OK
    because we want to keep selling you the stuff we produce in
    Texas and Louisiana.
        But, anyway, being a native Houstonian and going through
    lots of storms and hurricanes over the years, Harvey was
    probably the toughest, even compared to Hurricane Carla who hit
    us in 1960, 1961. But every 8 years we have a tropical storm or
    a hurricane. In 2008, we had Hurricane Ike, which damaged our
    infrastructure because it was a wind storm, the storm surge,
    but the wind. By the time Harvey got to Harris County, it was
    mostly rain. And our biggest problem was typically so much rain
    that it overflowed a lot of our sanitary sewer systems in the
    west side of Houston, and even Houston facilities and our
    smaller cities and how that did.
        But, somewhere along the way when we have these thousand-
    year storms that are happening so often, and the average
    rainfall in Houston is 49 inches a year and you get 52 inches
    in five days, I don't know how we can deal with it. We just
    have to dig more reservoirs, spend more money to contain that
    water, because water is a precious commodity and we need to do
    it, instead of letting it go into the Gulf of Mexico.
        This is the first storm that I have had where I have had
    fatalities in our district. We lost eight people in our
    district. Two of them were breadwinners in their family,
    because they thought they could go through this high water in
    an underpass.
        But the sad one was that we lost a family of six in our
    district on Greens Bayou, northeast Houston. The bayou, we have
    been working on it for decades to build detention ponds
    upstream, but the family turned off into the bayou, literally,
    because they thought it was the road. And it was widely
    publicized the family was missing, but we didn't find them
    until after the water went down down in Greens Bayou, northeast
    Harris County.
        But, as far as for the utilities, we didn't have that big a
    problem. But, as we are sitting here, we will get another
    hurricane or a tropical storm. And so, that is what I am
    concerned about.
        It is important we try to learn from these lessons of these
    storms. We are in the middle now of building back houses,
    shops, and communities, but we know we have to do better on the
    flood infrastructure, both working with the Corps of Engineers
    and in Harris County. We have a Harris County Flood Control
    District. We tax ourselves to keep from flooding in Harris
    County, so we can partner with the Corps. But it is essential
    that we fund the Corps of Engineers, FEMA, and other related
    agencies in our next supplemental.
        I am concerned about Puerto Rico because their electric
    grid was in pretty bad shape even before. And some of us were
    talking on the Energy Subcommittee a week ago about this may
    give us the opportunity for the United States to actually
    provide an electric system in Puerto Rico, because I understand
    they are still burning fuel oil.
        Again, coming from Texas, we can put all the windmills up
    and all the solar, which you can't get wind and solar. We would
    be glad to have an LNG export/import facility there, because,
    one, it would be much cleaner than fuel oil. It would probably
    be cheaper, too, because the price of natural gas is relatively
    cheap.
        I would just like to ask--like I said, I have driven around
    Puerto Rico, but I don't live there and I don't represent it,
    but I know they need help in getting literally the whole grid
    back up. Is that something that we could look at through the
    Department of Energy to see if we could redo the grid in Puerto
    Rico to where it would be brought up to what we would consider
    standards?
        Ms. Hoffman. I think it is an opportunity to look at all
    technologies and different solutions for investment in Puerto
    Rico, and looking at how we can harden the system. But
    everything should be on the table of what advancements can be
    done with respect to their energy infrastructure. Forty-seven
    percent of Puerto Rico electricity comes from petroleum, 34
    percent from natural gas, 17 percent from coal, and 2 percent
    of renewable energy. And so, there is a lot of opportunities to
    think about the generation mix as well as the location of
    generation, and the use of the transmission and distribution
    system, as well as demand/response and customer engagement.
        Mr. Green. Yes. Well, I know in Texas we have had success
    with the wind power, not only in west Texas, but south Texas,
    and it gives us that type of opportunity to have a different
    fuel supply, although it is hard today to heat with low-price
    natural gas. That is why some of our coal plants are problems.
        Ms. Walker, in your testimony you said that the PUCT's
    initial assessment of the Texas utilities is that they did an
    outstanding job of responding to the storm. And I know over the
    years we have had partnerships with other States and other
    communities, that we will send our utility workers up there
    when they have a problem. When there are ice storms in Dallas,
    we will take care of that. But I don't remember seeing that
    much in the Houston or southeast Texas area.
        Ms. Walker. Mutual assistance?
        Mr. Green. Yes.
        Ms. Walker. There probably wasn't that much because the
    damage was very different and the cause of the outages was very
    different. Usually, the mutual assistance comes in to repair
    wind damage, the poles going own, the wires going down. Houston
    and Beaumont was flooding. And so, most of that was due to the
    substations being out. And so, once we were able to get these
    mobile substations in or the waters recede and get those
    substations back up and running, we were able to restore the
    customers.
        The outages in those areas really weren't very long-
    lasting. They were more like a thunderstorm. And Houston and
    CenterPoint Energy and Entergy were continually restoring
    customers. And so, their numbers were very low on an ongoing
    basis, although they ultimately restored a lot of people.
        Mr. Green. And that is why it worries me, because here in
    Puerto Rico I think they are still only about 30 percent of the
    power that has been restored. So, it is really a case that we
    need to work on.
        So, thank you, Mr. Chairman. I yield back.
        Mr. Olson. The gentleman's time has expired.
        Seeing no members seeking to ask questions, the Chair wants
    to thank our five witnesses. Thank you, thank you, thank you
    for coming here today.
        I remind our witnesses that every member can submit
    questions for the record for 10 days. Once you get that, you
    have 10 days to respond.
        Mr. Rush. Mr. Chairman, I request, I would like to make a
    statement.
        Mr. Olson. Yes, sir, you have a minute, Bobby.
        Mr. Rush. A minute? Thank you, Mr. Chairman.
        Mr. Chairman, I must say, with all due respect, as we
    conclude this panel and are getting ready and prepare to
    introduce the next panel, with all due respect, Mr. Chairman, I
    simply smell a rat here. I really smell a rat.
        PREPA's lack of response to this subcommittee's efforts to
    invite them to attend and provide witness testimony to this
    subcommittee is most disgusting and extremely disrespectful.
    Mr. Chairman, that said, I strongly request that we use our
    subpoena authority to demand that PREPA come to this
    subcommittee and disclose to Members of Congress who are
    members of the subcommittee what were the facts involved in its
    awarding this $300 million contract, which I call the sweetest
    of sweetheart deals, to repair and reconstruct Puerto Rico's
    electrical infrastructure.
        And I also believe, Mr. Chairman, that as has been stated
    by Members of both sides during this panel, that FEMA should
    also be invited to be at the same witness table. Mr. Chairman,
    we ought to get to the bottom of this, and we have got to know
    what happened, when did it happen, and who is responsible for
    this absurd sweetheart deal that is going to result in numerous
    people paying an extraordinary additional amount of millions of
    dollars because of the delay in the withdrawal of this
    contract.
        So, I really request that we use our subpoena authority to
    make sure that PREPA stop disrespecting the United States
    Congress.
        Thank you. I yield back.
        Mr. Olson. And, my friend, I share your concerns. It sounds
    kind of odd, what happened there, but I will talk to the chair
    for the subcommittee, Mr. Upton, and the full committee, Mr.
    Walden, about the subpoena issue.
        But, right now, a point of personal privilege before the
    first panel leaves, and this is maybe at the risk of offending
    Ms. Castor. But, Commissioner Walker, I hope you are going to
    SMU Saturday, joining my daughter and my wife to watch SMU beat
    the tar out of Central Florida.
        [Laughter.]
        The panel is dismissed.
        OK. Second panel, are you all ready? And just like before,
    we will start out with opening statements from all of the
    panelists, followed by questions from members.
        And I recognize Thomas Fanning. Tom is the President and
    CEO of Southern Company. He is here on behalf of the
    Electricity Subsector Coordinating Council.
        Tom, you have 5 minutes for an opening statement.

    STATEMENTS OF THOMAS A. FANNING, PRESIDENT AND CHIEF EXECUTIVE
        OFFICER, SOUTHERN COMPANY, ON BEHALF OF THE ELECTRICITY
    SUBSECTOR COORDINATING COUNCIL; JULIO A. RHYMER, SR., EXECUTIVE
     DIRECTOR AND CHIEF EXECUTIVE OFFICER, VIRGIN ISLANDS WATER &
     POWER AUTHORITY; CHET THOMPSON, PRESIDENT AND CHIEF EXECUTIVE
     OFFICER, AMERICAN FUEL & PETROCHEMICAL MANUFACTURERS; MAX E.
        MCBRAYER, JR., CHIEF SUPPLY OFFICER AND CHIEF FINANCIAL
     OFFICER, RACETRAC PETROLEUM, INC., ON BEHALF OF THE NATIONAL
         ASSOCIATION OF CONVENIENCE STORES AND THE SOCIETY OF
     INDEPENDENT GASOLINE MARKETERS OF AMERICA; RAMON-LUIS NIEVES,
      ATTORNEY AT LAW, FORMER MEMBER, SENATE OF PUERTO RICO; AND
      CATHERINE B. KENNEDY, VICE PRESIDENT, NATIONAL NURSES UNITED

                     STATEMENT OF THOMAS A. FANNING

        Mr. Fanning. Thank you. Thank you for inviting me to
    testify today.
        My name is Tom Fanning. I am the chairman, president, and
    CEO of Southern Company. I am also the immediate past chairman
    of the Edison Electric Institute, the association that
    represents all U.S. investor-owned electric companies. However,
    I am addressing you today in my role as one of three co-chairs
    of the Electricity Subsector Coordinating Council. We
    collaborate closely with our colleagues from public power
    utilities and rural electric cooperatives on the ESCC.
        I am pleased to address the subcommittee and to share the
    steps the electric power industry is taking to make energy
    infrastructure smarter and more resilient, allowing us to
    continue delivering affordable and reliable power.
        The 2017 hurricane season highlights the critical
    importance of cooperation and coordination among electric
    utility companies, the Government, and other key infrastructure
    industries to ensure fast, efficient recovery for customers.
        The electric sector faces constantly-evolving threats to
    the energy grid. The industry's risk mitigation strategy
    emphasizes a defense-in-depth approach. We focus on
    preparation, prevention, response, and recovery, with an
    emphasis on the isolation of and enhanced protections for
    critical assets.
        While this hearing is focused on storm response and
    recovery, it is important to note that our companies do not
    build the energy grid or our security responses to meet only
    one type of threat. We must prepare and plan for them all,
    whether manmade or natural, malicious or unintentional,
    relating to the cyber or physical security, or a combination of
    threats.
        Weather is an unavoidable part of our business. In the
    aftermath of such events, the industry works to identify gaps,
    compile lessons learned, and disseminate best practices. As an
    industry, we strive to be better today than we were yesterday
    and to be better tomorrow than we are today.
        Since Superstorm Sandy 5 years ago this week, the electric
    power industry has combined efforts across all segments of the
    industry and has worked with the Government partners to
    streamline restoration efforts and to improve preparation for
    and response to major threats that cause significant outages.
        The benefits of this coordination were visible over the
    past several months as the industry and Federal Government
    worked to prepare for and respond to the hurricanes. There is
    an understandable urge to compare storms, but the reality is
    that each storm is different. The common threads, however, are
    the need for resilient infrastructure, a plan for response and
    recovery, and the awesome nature of our industry's ability to
    respond to emergencies.
        Before I close, I would like to underscore the importance
    of the ESCC. During the most recent storms, the ESCC held daily
    coordination calls among impacted companies and Government
    officials to address critical operational issues such as
    identifying specialized equipment needs, removing temporary
    flight restrictions for both manned and unmanned aircraft to
    assist with aerial damage assessments, coordinating how
    industry could re-enter and access disaster areas, and
    coordinating response efforts with the oil and natural gas,
    telecommunications, transportation, and water and wastewater
    sectors.
        Energy Secretary Rick Perry was on every call and was
    frequently joined by other officials such as Homeland Security
    Acting Secretary Elaine Duke. These calls were essential to
    identify and address critical issues in the response and
    recovery efforts.
        The reliability and resiliency of the energy grid are of
    paramount importance. Our customers expect the lights to go on
    when they flip a switch. When the power goes out, our customers
    expect that it will be on soon.
        The electric power sector will continue to strive to meet
    those expectations through a multilayered strategy, to invest
    in smart energy infrastructure, continuous enhancement of our
    industry/Government partnership, and the grit of the amazing
    men and women who make the energy grid work day-in and day-out.
        The subcommittee is showing great leadership with its focus
    on preparedness, and we look forward to working with you on
    this critical topic.
        Thank you again for the opportunity to testify on behalf of
    the ESCC, and I look forward to your questions.
        [The prepared statement of Mr. Fanning follows:]

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Olson. Thank you, Mr. Fanning.
        And now, the Chair is glad to call upon Mr. Julio Rhymer,
    the Executive Director of the Virgin Islands Water & Power
    Authority, that suffered devastation from two hurricanes, Irma
    and Maria. A 5-minute opening statement, Mr. Rhymer. Thank you.

                   STATEMENT OF JULIO A. RHYMER, SR.

        Mr. Rhymer. Good evening, Mr. Chair, other honorable
    members of the Subcommittee on Energy.
        My name is Julio A. Rhymer, Sr. I am an Executive Director
    and Chief Executive Officer of the Virgin Islands Water & Power
    Authority.
        On behalf of the Governor of the Virgin Islands, the
    honorable Kenneth E. Mapp; the Virgin Island Delegate to
    Congress, Honorable Stacy Plaskett; the members of the 32nd
    Legislature of the Virgin Islands, and the Governing Board of
    WAPA, I thank you for the invitation to provide testimony on
    the energy challenges facing the U.S. Virgin Islands as a
    result of the passage of Hurricanes Irma and Maria.
        As you all are aware, in September of 2017, the Virgin
    Islands faced the phenomenon of two back-to-back Category 5
    hurricanes within two weeks. According to the Saffir-Simpson
    Wind Scale, a Category 5 hurricane has sustained winds of
    greater than 157 miles per hour. There were cases in Hurricane
    Irma that winds were sustained at above 190 miles an hour.
        WAPA's transmission and distribution facilities were, plain
    and simple, destroyed by the catastrophic winds of two
    hurricanes. Due to Hurricane Irma's impact on September 6th,
    2017, the St. Thomas, St. John, Water Island, and Hassel Island
    electrical transmission distribution system suffered
    significant damage. The St. Thomas system sustained damages of
    approximately 80 percent; St. John, approximately 90 percent;
    Water Island, 90 percent, and Hassel Island, 90 percent.
        Approximately two weeks later, on Tuesday, September 19th,
    2017, Hurricane Maria caused damage to almost 60 percent of the
    transmission and distribution system on St. Croix. The islands
    of St. Thomas, St. John, Water Island, and Hassel Island did
    not receive any significant damage from a result of Hurricane
    Maria.
        To date, the Authority has approximately 536 linemen and
    other related off-island personnel in the Territory, restoring
    WAPA's electrical infrastructure. With the assistance of FEMA,
    naval vessels and cruise ships have been brought in to provide
    sleeping quarters for the off-island crews, since many hotels
    and guesthouses throughout the Territory remain closed after
    sustaining major damages during these two hurricanes.
        By far, the biggest challenge that I would like to focus on
    today is funding the day-to-day operations and hardening of the
    system in the event of future storms. Without question, these
    hurricanes have decimated WAPA's finances. While we appreciate
    the assistance that has been, and will be, forthcoming to
    rebuild the systems that were damaged, one of our primary
    concerns as the Authority is the ability to meet prestorm
    expenses. Prior to hurricanes, the Authority's revenues were
    approximately $25.6 million per month. Since the hurricanes
    events, and since we are unable to provide electrical service
    and bill customers, revenues have dropped below $2 million per
    month.
        WAPA has reoccurring expenses such as payroll, insurance,
    plant operation and maintenance, debt service, and previously-
    executed contracts, and financing agreements it must pay. To
    address this dramatic shortfall, the Authority has sought,
    through the government of the Virgin Islands, a community
    disaster loan. Any support or assistance that you can offer in
    this regard is appreciated.
        One of the evident takeaways from the two Category 5
    hurricanes, and significant damages to this regional system
    Territorywide, is that there is an urgent need for WAPA to
    rebuild its transmission and distribution systems, but to
    harden it to a point where it is resilient to wind storms. WAPA
    believes it would significantly reduce its post-storm hurricane
    period by undergoing more of its critical infrastructure and by
    moving away from wooden poles and introducing composite poles
    on the major distribution circuits.
        WAPA must also address its grid, since it is too
    susceptible to damage from wind storms. WAPA had a proposed
    plan to construct a series of microgrids on each island. Each
    microgrid would be a localized group of electrical facilities
    that would either work in tandem with the generating facilities
    or an option for disconnection where they can stand alone. In
    the event the power and the main grid is interrupted for any
    reason, the microgrid would function as a small facility
    generating its own power at this point.
        Currently, you have in the works a microgrid on the island
    of St. Croix that is actually going to go out for bid, and that
    will provide, basically, power through solar and battery
    storage to our airport facilities, a waste treatment facility,
    a correctional facility, and, basically, a police station at
    this point. What we are actually attempting to do here, as a
    utility moving forward, is to harden our system, No. 1, and,
    basically, make it more resilient by having microgrids.
        I would like to thank you for the opportunity to appear
    before the Subcommittee on Energy. I am available to answer any
    question that you may have on this matter.
        [The prepared statement of Mr. Rhymer follows:]

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Olson. Thank you, Mr. Rhymer. And I heard what Irma
    didn't destroy, Maria drowned.
        Mr. Rhymer. Yes, it did.
        Mr. Olson. The Chair now calls upon Mr. Chet Thompson. Chet
    is the President and CEO of the American Fuels & Petrochemical
    Manufacturers.
        Mr. Thompson, you have 5 minutes for an opening statement.

                       STATEMENT OF CHET THOMPSON

        Mr. Thompson. Thank you, Mr. Vice Chairman, Ranking Member
    Rush, and members of the subcommittee. Thank you for having me
    here today.
        My name is Chet Thompson. I am the President and CEO of the
    American Fuel & Petrochemical Manufacturers. AFPM represents
    the refining and petrochemical industries. Our members
    represent 120 refineries, 140 petrochemical facilities. That
    represents 98 percent of U.S. production capacity. More than
    half of that capacity is located along the Gulf Coast.
        Hurricane Harvey impacted our facilities in the fuel supply
    chain very hard. Hurricane Irma impacted the fuel supply chain,
    but largely in Florida, while Nate's impact on our assets was
    rather minimal.
        But, more importantly, the combination of Hurricanes
    Harvey, Irma, and Maria were devastating to the people of the
    Gulf Coast, particularly those in Houston and the Beaumont
    area, Florida, and Puerto Rico. Many of those impacted are part
    of our extended oil and gas family. Our hearts and prayers
    continue to go out to those still struggling to recovery, and
    we stand by them and will help them any way we can.
        As a result of this personal impact on us, the subject of
    today's hearing is particularly important to our industry. So,
    I would like to limit my time this afternoon only to three key
    points of my written testimony.
        First, by and large, the U.S. refining and petrochemical
    industries weathered the storm fairly well and proved to be
    very resilient. This did not happen by accident. Rather, it was
    the result of lots of hard work and preparation, and with the
    help of an incredibly dedicated workforce and Federal, State,
    and local first responders. They are the true heroes coming out
    of these events.
        If you wanted to draw the storm up that could wreak the
    most havoc on our industry, Harvey was it. Harvey hit Corpus
    Christi as a Category 4 storm, moved right up the east coast,
    stalled largely over Houston, which is the epicenter of the
    refining and petrochemical industries. It dumped over 60 inches
    of rain in some locations and more than a trillion gallons of
    water across Texas and Louisiana.
        At its peak, Harvey knocked 24 of our refineries offline.
    That represents 25 percent of all U.S. refining capacity. It
    had a similar impact on our petrochemical members. It knocked
    60 percent of U.S. petrochemical capacity down. That is 80
    percent of the capacity found in the Gulf Region.
        Harvey also had a significant impact on the entire fuel
    supply chain. It shut down ports, pipelines, terminals, rail,
    and certainly gasoline stations. Our facilities couldn't get
    feed into their plants, and we certainly couldn't get products
    out.
        This had the potential to be catastrophic for the fuels and
    petrochemical supply chains, but in the end it wasn't. Just two
    weeks after Harvey made landfall, 20 of the 24 facilities that
    went down had restarted. And the petrochemical facilities made
    substantial progress during this period as well.
        Again, this was not by accident. Facilities were prepared
    for the storms. They had applied many of the lessons learned in
    the aftermaths of previous storms like Katrina and Rita. For
    example, our facilities developed more sophisticated
    preparedness plans, improved storm monitoring, hardened
    critical infrastructure, elevated pumps and generators,
    procured spare parts so we could be ready to move with recovery
    efforts after the storm. We upgraded our IT systems to help us
    locate employees and ensure that they had the assistance they
    needed. All of this made a difference. We came back online much
    faster than we did after prior storms.
        The second point I would like to make, the Federal and
    State response was significantly improved compared to previous
    storms. One of the lessons we have learned is that we have to
    better coordinate Federal, State, and local governments. So,
    over the last few years, we have been working hard in that
    regard, working closely with DOE and DHS to improve our
    relationships.
        The results during Harvey, in particular, were excellent.
    We were in constant contact before, during, and after the
    storms. The improved coordination was most evident in the quick
    review and approval of fuel waivers, unlike in prior storms,
    helping us get fuel to where it was needed quickly and
    efficiently. Our Federal and State partners, particularly
    Secretary Perry, Administrator Pruitt, Governors Abbott and
    Scott, deserve kudos for these improvements.
        If I had to identify the one area that could be improved,
    it would be better communication by our Government to consumers
    about the fuel supply chain and the challenges that often
    accompany events like hurricanes. For example, the Government
    could help us explain the timelines for bringing facilities
    back online and getting products back to the distributors and
    the marketers. And it could also help us discourage panic
    buying that always seems to accompany these types of events.
        Third and finally, as always, our companies will work with
    Federal and State authorities to identify and apply lessons
    learned. Although we did fare fairly well, no doubt there are
    going to be things we can learn and improve upon to make future
    responses even better. We would caution anyone to resort to any
    knee-jerk reactions or conclusions, particularly those based on
    a few isolated events, before full assessments are in.
        So, I know I am running out of time. I thank everyone for
    my time and the opportunity to speak today.
        And again, I would like to express our thanks and
    appreciation for our incredible workforce and our first
    responders. They certainly deserve our appreciation.
        So, thank you, and I am happy to answer any questions.
        [The prepared statement of Mr. Thompson follows:]

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Olson. Thank you, Mr. Thompson.
        The Chair now calls upon Mr. Max McBrayer. Max is the Chief
    Supply Officer for RaceTrac Petroleum, Incorporated.
        You have 5 minutes, sir.

                   STATEMENT OF MAX E. MCBRAYER, JR.

        Mr. McBrayer. Thank you. Mr. Vice Chairman, Mr. Ranking
    Member, and members of the subcommittee, thank you for the
    opportunity to testify today on the retail community's response
    efforts to 2017 hurricane season.
        My name is Max McBrayer. I am the Chief Supply Officer and
    the Chief Financial Officer of RaceTrac Petroleum, Inc. I am
    testifying today on behalf of the National Association of
    Convenience Stores and the Society of Independent Gasoline
    Marketers of America. RaceTrac is a family-owned business,
    headquartered in Atlanta, Georgia, operating more than 450
    convenience stores across 12 States and employing nearly 9,000
    team members.
        The 2017 hurricane season had a devastating effect on
    America's fuels infrastructure and markets. During Hurricane
    Harvey, flooding damaged more than a quarter of the U.S.
    refining capacity and shut down fuel pipelines. This put severe
    strain on the domestic fuel supply. Hurricane Irma led to an
    increased demand for fuel in Florida, further straining the
    fuels market and causing prices to rise sharply.
        Natural disasters directly and severely affect the retail
    fuels market. Margin on fuel sales range between 2 and 20
    cents, and retailers must constantly react to changes in supply
    and demand to ensure their prices remain competitive.
        During any severe weather event, wholesale fuel prices
    become more volatile as the market tries to assess and
    anticipate supply availability. When these unwelcome changes
    occur, retailers respond to meet their cost.
        Due to the infrastructure damage, compliant fuel
    inventories became strained, leading to escalating wholesale
    prices. Retail market prices generally reflect rapid increase
    in the wholesale prices. In this instance, fuel retailers made
    individual decisions on whether to increase prices and risk
    losing customers or potentially take losses by keeping prices
    low and not covering the increased wholesale cost.
        Despite the tough situations, the fuel market was supported
    by the actions of both the Federal Government and the State
    governments. The governments worked with us to deal with the
    issues before, during, and after the hurricanes.
        Communication and coordination initiatives were
    particularly important. For example, the Governors of Texas and
    Florida held conference calls with industry and Government
    stakeholders where they listened to concerns and rendered
    prompt assistance.
        In Florida specifically, the Governor's office waived
    certain restrictions for highways, helped ensure that ports
    prioritized fuel shipments, coordinated escorts for fuel trucks
    and ships, easing the movement of product to the retail fuel
    locations.
        At the Federal level, disaster response efforts spanned a
    number of agencies, which ultimately issued more than 30
    waivers to help deal with fuel supply issues. Of particular
    importance to RaceTrac was the waiving of hours-of-service
    limitations for drivers providing assistance to affected areas.
    These waivers were the difference between getting fuel to our
    customers in a reasonably affordable and timely manner and not
    being able to supply customers with the fuel they needed.
        In response to State petitions, Federal agencies also eased
    restrictions on the type of product that retailers could sell.
    For example, EPA temporarily waived certain reformulated
    gasoline requirements under the Clean Air Act.
        Despite the major disruptions to the fuel distribution
    system after the hurricanes, the impact on consumers and the
    economy was still less than what occurred with Hurricanes
    Katrina and Rita in 2005. This is because the Government worked
    with the private sector to respond appropriately.
        There are still important lessons to be learned, however.
    For instance, there is no good coordinated effort to make sure
    that consumers were informed of the status of fuel supplies via
    social media. As the hurricanes approached, we believe that
    much of the panic about fuel availability caused a significant
    and totally unnecessary pull on the available fuel supply. The
    panic lessened when information on the fuel supply was shared
    with the public. In addition, bottlenecking at ports and fuel
    terminals was a problem that the Government could have done
    more to alleviate.
        Finally, in the hurricanes' aftermath, truck drivers and
    other employees found it difficult to get to affected areas
    quickly. Anything that can be done to remove hurdles for fuel
    transportation would speed up recovery efforts in the wake of
    future hurricanes.
        RaceTrac believes the collaboration between the public and
    the private sectors was critical to the successful response
    efforts. We are proud to have been able to serve the
    communities that we operate in.
        And I thank you for the opportunity to provide this
    testimony.
        [The prepared statement of Mr. McBrayer follows:]

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Olson. Thank you, Mr. McBrayer.
        The Chair now calls upon the honorable Ramon Luis Nieves,
    who is now an attorney at law, was a former distinguished
    member of the Senate of Puerto Rico.
        You have 5 minutes for an opening statement, sir.

                     STATEMENT OF RAMON-LUIS NIEVES

        Mr. Nieves. Thank you, Chairman Olson, Ranking Member Bobby
    Rush, members of the subcommittee.
        My name is Ramon-Luis Nieves. I had the privilege to serve
    the people of Puerto Rico as senator of San Juan and chairman
    of the Committee on Energy. I currently practice law in the
    State and Federal courts of Puerto Rico.
        I want to thank the subcommittee for this opportunity to
    discuss Puerto Rico's energy challenges. As a resident of San
    Juan, I have personally suffered the problems associated with
    the lack of electricity for more than 40 days. The currently
    energy crisis is destroying our economy and our way of life.
        Nobody denies the challenges of repairing the collapsed
    energy grid of Puerto Rico, but I submit to you that most of
    the challenges to turn the lights back on in Puerto Rico are
    neither natural nor geographic. They are manmade.
        The Puerto Rico Electric Power Authority, PREPA, was
    already a bankrupt, fragile, and useless entity before
    Hurricane Maria made landfall. The Power Authority's grid was
    obsolete, lacking adequate maintenance.
        The recent Whitefish debacle is exhibit A of the governance
    issues plaguing PREPA. As we evaluate energy options for Puerto
    Rico, we must be particularly alert about disaster contractors
    who may try to take advantage and profit off of our people's
    misery.
        But I didn't take two flights from San Juan to complain
    about PREPA. I come before you with proposals to help us
    transform Puerto Rico's energy model.
        Energy equals life. As most Puerto Ricans sadly understood
    after Hurricane Maria, the lack of a strong, resilient, and
    smart energy system has the potential of killing people and
    destroying the economy. The actual death toll not of Hurricane
    Maria, but of Hurricane PREPA has not been properly disclosed
    by the government of Puerto Rico.
        While working hard to turn the lights back on as soon as
    possible, policymakers must also think long term. A plan to
    transform Puerto Rico's energy model, supported by significant
    Federal support funding, is the right course of action.
        Technology and innovation are transforming the energy
    industry. Puerto Rico must break free from PREPA's centralized
    energy model. The people of Puerto Rico deserve an energy model
    whereby more and more customers are able to opt for distributed
    generation or go off the grid in their homes and business.
        Policymakers are agreeing with the idea of a new energy
    model based on several regional microgrids. Microgrids for key
    Government security and health installations, such as
    hospitals, will also help recovery efforts after future storms
    and hurricanes.
        The mandate to regulate microgrids is already in our law
    books. Act No. 133 from last year the last bill that I
    sponsored in the Senate, to include microgrids as a mandate.
    However, a Federal mandate to include microgrids in a new
    energy model for Puerto Rico will certainly help.
        PREPA has also pointed out that the Stafford Act restricts
    to rebuild the grid as it was. Perhaps you may be able to
    change that by amending Federal law.
        PREPA's old, and now collapsed, grid is not able to deal
    with the technical challenges of an energy model that embraces
    renewable power. However, as I have said, countless
    policymakers agree that just repairing the old, obsolete energy
    grid of Puerto Rico will be a colossal waste of taxpayer
    dollars. PREPA is broke. So, the Federal Government is the only
    entity able to finance this key project.
        Let's talk about PREPA's governance. The Whitefish scandal
    is a sad example of the shameful and incompetent governance
    that characterizes PREPA. PREPA awarded a no-bid $300 million
    contract to an unknown company with just two employees. The
    Government recently requested PREPA to cancel the contractual
    agreement, but 40 days after Hurricane Maria, and hundreds of
    deaths later, PREPA did what it should have done from the
    start, request the mutual aid offered by private and public
    electric companies. But where was PREPA's governing board?
    Nobody really knows, but I submit to you that this Whitefish
    business is very harmful to Puerto Rico's credibility.
        Very quickly, since my time is almost up, PREPA collapsed
    under its $9 million debt. Congress, the administration, and
    the oversight board must create a financial solution for
    PREPA's debt. Aggressive restructuring of the debt, combined
    with new Brady-type bonds and continued oversight over PREPA,
    could be a way to solve this monumental problem.
        And just to finish up, the most efficient way to transform
    the energy model of Puerto Rico is by giving the proper
    resources to Puerto Rico's independent energy commission. An
    independent and strong regulator is key for our recovery. In
    order to guarantee the Federal funds to build a new energy grid
    are properly used and allocated, I propose that the
    Revitalization Coordinator of Puerto Rico under PROMESA and the
    Puerto Rico Energy Commission be given sole authority over
    PREPA. PREPA shall cease to exist in its present form.
        Just to wrap up, thank you for the opportunity. The people
    of Puerto Rico urgently need to turn their lights back on, but
    we also demand the resources to create a new energy model for
    our island. Our lives depend on it.
        Thank you.
        [The prepared statement of Mr. Nieves follows:]

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Olson. Thank you, Senator Luis Nieves.
        We saved the best for last, ma'am. Our final opening
    statement is going to be from Ms. Cathy Kennedy, and she is the
    Vice President of the National Nurses United.
        Ma'am, you have 5 minutes for an opening statement.
    Welcome.

                   STATEMENT OF CATHERINE B. KENNEDY

        Ms. Catherine Kennedy. Vice Chairman Olson, Ranking Member
    Rush, and members of the subcommittee, good afternoon, and
    thank you for inviting National Nurses to take part in this
    hearing.
        My name is Catherine Kennedy of Carmichael, California, and
    I have been a registered nurse for 37 years. I currently serve
    as the Vice President of National Nurses United, which is the
    largest union of RNs in the country. I submit the testimony
    today on NNU's behalf.
        From October the 4th through the 18th, I served on a
    voluntary deployment to Puerto Rico with NNU's Registered Nurse
    Response Network to assist with Hurricane Maria's disaster
    relief. Fifty nurses deployed with R&R into Puerto Rico among
    300 skilled union members organized by AFL-CIO.
        NNU nurses very much appreciate your holding this hearing
    and providing us the opportunity to share our account of the
    public health crisis that we witnessed. NNU's full report on
    the conditions of Puerto Rico is attached to my written
    testimony.
        The lack of electricity is endangering people's lives and
    leading to preventable death and illness. I was the lead RN for
    the healthcare teams on the deployment. I helped to organize
    nurses into teams and, with a map of the island, we tracked the
    public health assessment of each community that we visited,
    evaluating whether people had access to food, water, and
    healthcare, their basic living conditions, and medical needs.
    Time and time again, we saw that lack of power exacerbated the
    disaster or created new ones.
        Basic medical services were down in many areas and not
    fully functioning in others. An acute public health crisis has
    developed. Without electricity, people with chronic illnesses,
    such as diabetes and hypertension, cannot refrigerate their
    medications. For example, in Loiza, nurses worked with elderly
    residents who had to put their insulin in bowls of tepid water,
    trying to keep this lifesaving medication cool enough to use.
        Pharmacies could not refrigerate their medications, either.
    They also cannot access computer systems which store
    prescription orders. Therefore, patients were scrambling to
    find doctors to write new prescriptions, so they can give them
    to the pharmacies. But many doctors' offices were closed,
    partly because the grid is still down and accessing reliable
    generators and fuel for them was nearly impossible.
        Pharmacies also cannot access insurance information. So,
    patients are being asked to pay full price for medications.
    Most people don't have cash, and if they had money in the bank,
    they can't access it because the ATMs and the banking process
    systems are also down.
        As long as the power grid is down, hospitals cannot
    function at full capacity. Generators are prone to failure, and
    fuel is hard to access. With generators, hospitals can't
    perform certain procedures or tests which use a large amount of
    energy. And at one hospital we know that they could not perform
    MRIs as long as they relied only on generators.
        Without reliable power, the problems of accessing food and
    water are amplified. The simple act of purchasing food and
    water, when it is available, is nearly impossible. Stores can't
    take credit cards, and ATMs don't work. Bank services that
    normally take minutes now take hours.
        The people of Puerto Rico are unable to refrigerate and
    cook their food. They must rely on canned and processed foods,
    which are high in sodium. Access to food in rural communities
    is especially difficult. As long as there is no power, people
    will be reliant on relief organizations to provide food and
    water for them.
        Electricity is also needed to run wastewater treatment
    plants and to restore the functioning of water utilities.
    Without clean running water, nurses have witnessed the
    beginnings of multiple outbreaks of waterborne diseases,
    including leptospirosis, an animal-borne bacterial disease that
    can be fatal if not treated in time.
        Then, there are problems accessing FEMA aid. People can't
    access FEMA's online notices and aid application. For those
    that are able to apply for aid, they are told that necessary
    followup communication will be sent either by text or email.
    People don't have power right now. They are not going to
    receive any followup for their FEMA applications.
        NNU urges Congress to use its oversight and appropriation
    authority to ensure that FEMA and other U.S. agencies respond
    to this crisis effectively. It is unacceptable that citizens of
    the richest country on earth have been denied necessary
    humanitarian aid and left to die. With a growing climate
    crisis, relief to Puerto Rico must come in the form of
    responsible measures that can build a sustainable energy
    future.
        Thank you again for giving NNU the time to share the
    stories of the people and places in Puerto Rico that we cannot
    and must not forget. Thank you.
        [The prepared statement of Ms. Kennedy follows:]

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Olson. Thank you, Mrs. Kennedy.
        And now is the fun time, questions from the Members. And
    the Chair will yield to himself for 5 minutes of questions.
        My first questions are for you, Mr. Thompson. First of all,
    I have to say congratulations. I mean, I was there for
    Hurricane Ike, Tropical Storm Allison. I was there for
    Hurricane Harvey. Most of our capacity was in that storm. You
    guys came roaring back. So, congratulations for getting that
    turned around so quickly.
        I have talked to a lot of people. You guys have gotten much
    better preparing for hurricanes or sort of natural disaster.
    Yes, we are going to take a hit; we know it. I have heard like
    with Katrina, Rita, and Ike, you all learned how to not fully
    shut down our refinery, but keep it warm, so to speak, not the
    complete shutdown, but keep it going where it is that risk of
    some sort of breach. But, once the storm clears, get that thing
    up like that.
        So, I just want you to talk about how you prepare a
    refinery that is directly in the path of a storm like Harvey to
    make sure to get that thing back online as quickly as possible.
        Mr. Thompson. Well, thank you for the question, and I
    address some of this in my opening remarks. Most of this, of
    our ability to weather the storms, one was our credible
    workforce. We literally had thousands of people that were
    riding out these facilities. When their own families and houses
    were in peril, they were helping keeping our facilities
    literally above water and ready to go.
        Also, lots of preparation. We have been working on storm
    for years, working with the National Petroleum Council, working
    with DOE and DHS. This was not something that we prepared for
    just a few weeks ago.
        We took all the lessons learned from prior storms and we
    put them in the action. We hardened our infrastructure. We
    elevated what we could elevate. We have much better storm-
    tracking capabilities now. So, we could identify exactly where
    the storm was going and identify when we had to bring the
    systems down.
        Safety is the No. 1 responsibility. So, our facilities will
    come down when safety demands it. And so, for those facilities
    where they realized that they weren't going to be hit as hard,
    they could remain warm and ready to go. Some of the facilities,
    indeed, had to come all the way down.
        So, I would just end by saying a lot of hard work, a lot of
    dedication. And again, we can't applaud our employees enough.
        Mr. Olson. And lessons learned, which I know it just goes
    with the territory. You will have some leaks, some chemical
    leaks, you know, whatever. For example, we have these big tanks
    that have floating tops. And the water got so high, almost 5
    feet of rain overcame the capability, and you had some small
    leaks.
        So, my question is, what are you all doing to prevent and
    respond to these spills before they happen? Because I know it
    is amazing what happened. I mean, it was such a stellar
    performance. But how do you make it even better going forward?
        Mr. Thompson. Well, I can assure that every company, those
    impacted and those that even weren't directly impacted are
    assessing how we responded to the storm, what went well, what
    didn't go well. We, as a trade association, bring our members
    together. We share information. And we will work to improve.
    Very storm, we learn from the prior one to get better.
        Mr. Olson. Thank you.
        A question for you, Mr. McBrayer. I mean, I was driving
    around pretty much for a week after Harvey hit and you could
    find gasoline. Some shops were shut down. My question is, was
    that because of power, because of lack of supply, lack of the
    gasoline, or lack of the employees being able to get to work
    because of all the floods? So, what was going on there?
    Because, again, you could find it, but some stations weren't up
    and running and, as you mentioned, there was some price gouging
    because of all sorts of rushes because people are panicking
    that there will be no gasoline.
        Mr. McBrayer. All of the things that you mentioned, Mr.
    Vice Chairman, are correct. Some of it is due to the fact that
    we rely upon the employees who are living in the affected area.
    And like any good employer, we are more concerned about their
    life at home and being sure that they are prepared to meet the
    needs of their family before they return to work.
        We do have some problems with the electrical supply.
    Getting generators into our stores, specifically, was quite
    challenging in the Houston area because of the amount of
    flooding in the roadways. There are some stores that just
    choose not to buy at the costs that tend to go up during these
    disasters.
        But most everyone is working hard because in our business
    we build 50-year assets. We are there for a long time. And so,
    our long-term mentality is to provide what our guests, our
    consumers, need, and to work hard to do that.
        It is a site-by-site issue as to what the problems are and
    what we may need to do. We have stores in the south Houston
    area with some water in tanks. We have had stores that were
    completely flooded out that are still yet to reopen. But you
    have to assess your assets one at a time and do things you can
    quickly in order to bring them back online.
        Mr. Olson. One further question, Mr. Fanning. You brought
    up UAVs, and that is a big deal, hard back home. A town called
    Missouri City had some levies, not so much oil production, but
    levies that may be breaching. They were fine, the UAVs, they
    could see it and, then, they were grounded. So, how about the
    role of UAVs in these disasters for oil and all the operations
    with the petrochemical industry? Because those things are
    working and, for some reason, they were shut down because there
    was some kind of danger. And that was just not right to do
    because of that breach; they may have prevented a breach
    because they saw it with the UAVs. So, any idea about oil and
    gas operations, refining, storage, whatever, that UAVs could
    help out?
        Mr. Fanning. Yes. Well, we don't impact oil and gas
    particularly. But, in response to any storm, there should be a
    comprehensive plan that is undertaken, really driven by the
    local authorities.
        I was listening to your prior panel. Very interesting, in
    that every utility works with--for example, in Georgia, they
    would work not only with the Federal agency FEMA, but with
    GEMA. Within that context, all critical infrastructure is
    evaluated with respect to the approaching threat. And
    therefore, we develop a set of priorities and, essentially, a
    response regime as to how to provide the best benefit going
    forward.
        I can't speak to Missouri or whatever the impact is there,
    but I would assume that they have taken those things into
    account.
        Mr. Olson. Thank you. I am aware of my time.
        The Chair now recognizes the gentleman from Illinois, the
    ranking member, Mr. Rush, for 5 minutes.
        Mr. Rush. I want to thank you, Mr. Chairman.
        Ms. Kennedy, your testimony has been very, very amazing
    testimony. I am amazed at the breadth of the tragedies that are
    occurring, even as we speak, in Puerto Rico. And I amazed at
    the lack of proper attention by those in our Government in
    determining their response to this American tragedy in Puerto
    Rico.
        There are some who are disputing the official death toll.
    Some say that, oh, 51 casualties due to the hurricane. But,
    yet, the Puerto Rican Department of Public Safety confirmed
    that over 900 bodies have been authorized for cremation since
    Hurricane Maria tore through their island on September the
    20th. And that 900 figure includes deaths related to lack of
    oxygen and other fatalities that appear to be due to the power
    outage. Yet, some say that those fatalities should just be
    considered natural deaths.
        Do you concur with this definition from your experiences?
    You have spent time there. Do you believe that the death toll
    from Hurricane Maria is actually 51 or is it closer to 900, or
    is it somewhere in between?
        Ms. Catherine Kennedy. Well, thank you for the question.
        We were there from October the 4th through the 18th. And as
    I said in my testimony, what the nurses saw was that, when you
    get outside of San Juan, that they were pretty much cut off
    from electricity, from communication, from anything. So, when
    you ask me what was the death toll, do I believe whether it is
    51 versus 911, or somewhere in between, personally, I think it
    is more of the higher.
        What we saw was people were desperate. We were considered
    almost the first ones that they even saw as it relates to food
    or water, or any kind of communication. And through word of
    mouth, they did say that the neighbor passed, whether it was
    through leptospirosis or natural causes--you mentioned the lack
    of electricity and without oxygen. So, yes, I think it is
    rather on the high side.
        Mr. Rush. Mr. Nieves, do you have any further insight into
    the actual number of fatalities and the reason for those
    fatalities?
        Mr. Nieves. Yes. Basically, I really agree with Ms.
    Kennedy. The official death toll of 59 up until now is very
    superficial and misleading. By personal experience, I have
    talked with dozens of family, friends, that have told me, ``Oh,
    my grandmother died. She passed because she didn't have
    electricity in her nursing home.'' A lot of elderly people that
    do not have electricity are simply dying.
        And so, how can you relate that to Hurricane Maria? It is
    very difficult because it didn't happen that day. But the death
    toll is, in my view, in the hundreds.
        Mr. Rush. So, even today, as we sit here in this committee
    room, there are people who are still dying in Puerto Rico
    simply because they have no electricity, even today?
        Mr. Nieves. Yes. As I said in my testimony, people are
    dying today not because of Hurricane Maria, but because of
    Hurricane PREPA, because they don't have electricity in their
    homes and care centers.
        Ms. Catherine Kennedy. I would agree. Without electricity,
    without power, you know, there are stories where patients
    actually go to San Juan when the electricity is up, and they
    take their nebulizers and plug them in, so that they can do the
    breathing treatments. Or they may sit in clinics where they
    have access to oxygen and use the oxygen there throughout the
    day, and then, they go home where there is no electricity and
    they are without oxygen, without anything.
        Mr. Rush. Thank you, Mr. Chairman. I yield back.
        Mr. Olson. The gentleman yields back.
        The Chair now calls upon the gentleman from Illinois, Mr.
    Shimkus, for 5 minutes.
        Mr. Shimkus. Thank you, Mr. Chairman.
        It is great to have you here. I want to direct some of my
    questions to Mr. Fanning.
        Mr. Fanning, if the electricity went out in Atlanta,
    Georgia, who would get called?
        Mr. Fanning. Initially, Paul Bowers, President of Georgia
    Power Company, but that is a pretty clear deal.
        You know what is interesting in these storms, we have,
    essentially, people that run the storm activity. They are fully
    empowered to work with whatever State, local, Federal
    government, to get the lights on as fast as we can. They have a
    clear sense of priority and they get the job done.
        Mr. Shimkus. Again, Puerto Rico is an island. It is very
    difficult, and I kind of wish the administration would have
    deployed the 82nd Airborne and just had a parachute jump into a
    lot of communities that don't have access. At least there would
    be a meal ration. And the military has even solar packs that
    they take in Afghanistan. If there was one thing I wish they
    would have done more than anything, it is really deployed.
        But you also heard in the first panel that the fact that
    there was no request for help until five weeks later. That is
    not normal. I mean, you represent the Electricity Subsector
    Coordinating Council.
        Mr. Fanning. That is right.
        Mr. Shimkus. Isn't that something that you all do as part
    of that?
        Mr. Fanning. Absolutely. In fact, I would argue, especially
    this year--the Electricity Subsector Coordinating Council was
    originally formed to focus on cyber and physical security. We
    have added to that, given the success we have demonstrated on
    those issues, this notion of storm response.
        Following Sandy, the electric utility industry reorganized
    what we call regional mutual assistance groups. And so now,
    under the kind of structure of the ESCC, we bring together,
    really for the first time, an enhanced collaboration, not only
    of investor-owned utility responses, but also collaboration/
    coordination with municipal utilities, cooperative utilities.
        We offer that up and we participate in a series of
    restoration activities, Federal Government, local, and with
    each other. And we do that, also, interdependent with the other
    kind of industries that you all were talking about in the last
    segment. And that is telecom, so important; water and sewer;
    health care.
        Believe it or not, we go beyond the notion of offering
    assistance just for the restoration of electrons. In Houston,
    particularly, my company got called on for two things that had
    nothing to do with electricity.
        One was for the humanitarian rescue effort. Within 20
    minutes of a phone call, we sent forward pilots and drones to
    help identify where survivors and other people may be.
        Secondly, through Alabama Power, we delivered machinery
    that was able to operate in very high water conditions that
    were used to help rescue people.
        Mr. Shimkus. Thank you.
        And PREPA, or the Puerto Rican Electric Power Authority,
    they are not involved in this group, are they?
        Mr. Fanning. So, PREPA works under the aegis of the
    American Public Power Association, which is, essentially, a
    municipal organization. We offered help, but PREPA, the State
    of Puerto Rico, for whatever reason, elected to pursue a
    different path, not pursue the mutual assistance rubric and
    really go through bilateral----
        Mr. Shimkus. Yes, and let me go to the elected
    representative, Mr. Nieves. When we look back now on lessons
    learned and how we want to move forward, would you agree that
    we probably should look at ways in which the whole community
    can be helpful and develop these memorandums of understanding
    where we can get joint use and quick response? That would be
    probably a pretty good lesson learned in this?
        Mr. Nieves. Well, the thing is, the fact is that the
    American Public Power Association, and I understand that at
    least the Electric Institute offered since day one mutual
    assistance to PREPA, but PREPA pursued another way. So, it is
    not a lack of an agreement, but it was a lack of will from
    PREPA's part. And then, we have the Whitefish situation.
        Mr. Shimkus. Yes, yes. And I am sure we are going to have
    time to continue to look at that. But, believing your
    testimony, which I do, that is, I would call that criminal
    negligence. And I am sorry for that.
        My time has expired, Mr. Chairman. I yield back.
        Mr. Olson. The gentleman yields back.
        The Chair now calls upon the gentlewoman from Florida 14,
    Ms. Castor, for 5 minutes.
        Ms. Castor. Thank you, Mr. Chairman.
        Thank you all very much for being here.
        The more we hear directly from folks like you that are in
    the U.S. Virgin Islands and Puerto Rica, the more disturbing it
    gets. I think you can sense the outrage building from this
    committee over the Puerto Rico Electric Power Authority.
        Mr. Nieves, are you surprised that PREPA did not respond to
    this committee and, in essence, refused to appear here?
        Mr. Nieves. I am sad to say that I am not surprised. When I
    used to Chair the Senate's Energy Committee, one of the things
    that we found is their total lack of transparency. So, to me, I
    assume this is a lack of respect for this committee that PREPA
    is not here on this group.
        Ms. Castor. And were you surprised to hear Mr. Alexander,
    who is the lead for the U.S. Army Corps of Engineers in
    repairing the grid in Puerto Rico, were you surprised to learn
    that he hasn't even been able to have a conversation with
    PREPA.
        Mr. Nieves. Sadly, I am not surprised.
        Ms. Castor. So, how do we justify taxpayer dollars now
    going to repair a grid in Puerto Rico, trying to work with
    PREPA after they refused to interact with the committee? They
    are not working with the Army Corps of Engineers. They are
    wasting taxpayer money through this Whitefish contract that has
    outraged so many people. And yet, the need is so great on the
    island. How do you recommend that we move forward? We are going
    to have to address the PREPA situation in law as soon as
    possible, I would assume.
        Mr. Nieves. Yes. First of all, we have to really understand
    and consider at the end of the day, given PREPA's governance
    problems, we need to think that people are dying. Our economy
    is dying. So, how do we work around that, or PREPA's lack of
    governance and transparency?
        My suggestion, and that I did in my testimony, is that
    since Congress already passed the PROMESA act, and the
    oversight board named a Revitalization Coordinator that has
    been appointed to take over PREPA, that Congress finds a way, a
    mandate, a specific mandate, that Federal taxpayer money to
    create a new energy grid be under the supervision of the
    Revitalization Coordinator of the board and the Puerto Rico
    Energy Commission, which is an independent, non-political,
    nonpartisan, and highly technical body. So, you can bypass
    PREPA and the government of Puerto Rico. So, that could be a
    way to get around it.
        Ms. Castor. And this has to be, we have to have a sense of
    urgency to do this, because they are talking about the next
    emergency bill maybe will be in December, hopefully. I mean,
    there is a lot of things on the agenda for Congress in
    December. But time is of the essence here.
        Mr. Nieves. Yes.
        Ms. Castor. And, Colleagues, we simply have to find a way
    to at least begin to plan to build in some resiliency, get the
    power on, but begin to lay the groundwork for a modern electric
    grid, and address the ineptitude of the Puerto Rico Electric
    Power Authority. Lives hang in the balance.
        We have the experts at our fingertips. We have the
    technology to do this. Does Congress have the capacity to act
    with a sense of urgency, knowing how our fellow citizens are
    suffering there? So, that is a challenge for us.
        So, I thank you all very much for being here.
        And I yield back my time.
        Mr. Olson. The gentlelady yields back.
        The Chair now calls upon the gentleman from Mississippi,
    Gregg Harper, for 5 minutes.
        Mr. Harper. Thank you, Mr. Chairman. Congratulations to the
    Astros.
        Mr. Olson. Thank you.
        Mr. Harper. And I know it was a great series.
        I want to thank each of you for being here. This is still
    something that just is stunning, the hurricanes we have had to
    deal with this season. And certainly what has happened in
    Puerto Rico has concerned us all.
        So, Mr. Fanning, I know you mentioned that it is more than
    just power or restoration of power. It is also telecom, water
    and sewer issues. Can you talk for a moment and tell us how
    utilities use their communications network to recovery and
    respond from hurricanes and other weather-related events, and
    how reliable do those communications networks need to be?
        Mr. Fanning. Yes. Thank you, Congressman, and thank you for
    your service to the great State of Mississippi.
        Mr. Harper. Thank you.
        Mr. Fanning. The best example of that is Katrina, as you
    well know. I think Katrina and the national story gets told
    around New Orleans in the breaching of the dam. The truth is,
    in Mississippi, when Katrina came through, every light was out
    around Mississippi Power.
        And when you went in to try to restore that activity, the
    streets were unrecognizable. You couldn't even use,
    essentially, GPS to find your way around. All of the telecom
    was out as well.
        We have to have an interconnected effort between telecom
    and electricity in order to most efficiently respond to these
    sorts of disasters. Southern Company, as a matter of its own
    resilient strategy, has our own dedicated telecom company
    called Souther Linc, in which we can bring in mobile cells on
    wheels, towers essentially, to set those things up.
        As I am working within the context of the ESCC as it
    relates to Puerto Rico, early on--and this is where the ESCC
    was not asked to help in a mutual assistance effort--but,
    still, we were working with different parts of the economy to
    try to bring help to that island.
        I called personally John Donovan. He is roughly the No. 2
    guy at AT&T, as I understand it. And also, at--hold on--at
    Verizon, Lowell McAdam, who is the CEO there, to link together
    our efforts in bringing help down there. And we assured each
    other that, between telecom and electricity, we would provide
    every level of support, whether it was even asked for or not,
    to try to get that situation rectified.
        Congressman, it is critical. If we are going to communicate
    with people in the field, if we are going to have people in the
    field without telecom, we need some way to kind of communicate
    to get the stuff back on. It is absolutely critical.
        Mr. Harper. So, you provided assistance in that area, even
    though it was not requested by PREPA?
        Mr. Fanning. That is right. And in fact, I will give great
    kudos to the folks at FEMA, whether it is Brock Long who has
    done a heck of a job. I was on the floor of FEMA during a
    weekend during this situation. Another guy that works in DHS,
    Chris Krebs; in the White House, Tom Bossert, all of these
    people have been champions in trying to aid the situation
    without a whole lot of encouragement.
        Mr. Harper. Got you.
        You know, Southern Company is right in the middle of what I
    guess we would call the hurricane belt. But Southern Company
    has a long and good track record of restoration after a
    hurricane, not only in your home service area, but helping your
    neighbors, certainly through the ESCC and others.
        Have you seen changes based on lessons after Katrina that
    you are using today to improve that?
        Mr. Fanning. Oh, sure. We have this mantra I had in my
    opening statement. We want to be today better than yesterday;
    tomorrow better than today. And no matter how good we think we
    are, we can always be better, me included.
        And we are accountable for always improving. When you think
    about some of the testimony, life-and-death matters that are at
    stake here, you know, it isn't just about electrons; it is
    about restoring hope to communities and people's ways of life.
        And so, we always work hard to think about what we can do
    better. I think the latest iteration, whether it is Harvey,
    whether it is Irma, the ESCC has demonstrated a much better
    capability of working across not only investor-owned utilities,
    munis, and coops, but also across cross-sector industries,
    telecom, finance----
        Mr. Harper. Right.
        Mr. Fanning [continuing]. Water, et cetera. And so, those
    are particularly good things.
        The other thing is this whole notion--and we have heard a
    lot about new technology being brought to bear. Good heavens,
    we deployed that in terms of resiliency as a strategic
    objective of America, whether it is cybersecurity, protection
    against terrorists from a physical standpoint, but also against
    natural disasters.
        Mr. Harper. Fine. Thank you, Mr. Fanning.
        My time has expired. I yield back, Mr. Chairman.
         Mr. Olson. The gentleman yields back.
        The Chair now calls upon the gentleman who made sure that
    Texans signed Justin Verlander to get us through the playoffs
    here, Gene Green, Texas 29.
        [Laughter.]
        Mr. Green. I wish I could claim, except going to a couple
    of the games. But thank you, Mr. Chairman.
        Mr. Thompson, you talk about how quickly refined production
    was back online after Harvey. And I would like to commend the
    job industry did in our district, because in east Harris County
    we have five refineries. I sat down and met with Lyondell
    refinery and, also, with Shell. And a lot of folks don't
    understand you just can't turn switches off and on and get them
    back up. But now the price of gas is going down because all
    those refineries are back up. I know in our area--and I assume
    over in Beaumont-Port Arthur also--I know a lot of my
    constituents worked around the clock to get that back up.
        One of the concerns I had, though, was the issue with the
    tanks. In east Harris County, we have the tanks that are--we
    keep building them because it is either holding crude or
    product or whatever. The engineering of them now is a floating
    roof. Because of the amount of water that hit the top of that,
    it actually turned that top over, and water went into whatever
    product was there. It could have been crude oil; it could have
    been refined products, and emissions from that, but also
    overflowing. Because when you get 52 inches of rain anywhere,
    you are going to have a problem.
        Has the industry looked at what we are going to do? I know,
    talking with the two companies, they said, we are going to have
    to look at it because how do we plan for 52 inches of rain. But
    see if engineering-wise there is a way we don't repeat that
    problem if we have another--well, not if; it is when we are
    going to have another storm because on the Texas Gulf Coast--I
    am a native Houstonian; we have lived through them, and we will
    get through this, too, but it is not pretty. But we need to
    learn from our mistakes if we have another 52-inch rain in
    those plants.
        Has there been talk about how, across from API--because,
    like I said, just talking with two companies, they said they
    had to look at it and see what is going on.
        Mr. Thompson. Thank you for the remarks.
        Yes, our industry, as I have said open remarks, we fared
    fairly well. We proved to be resilient. We weren't perfect by
    any stretch of the imagination. We were better prepared than we
    were in prior storms. We have installed a lot of floating
    roofs, which you know are better for the environment. In the
    normal States, emissions are much lower.
        But we weren't prepared for 60 inches of rain at times. And
    so, some tanks did have some failures. But the key is that was
    the exception and not the rule----
        Mr. Green. Yes.
        Mr. Thompson [continuing]. For sure. And I can assure you
    that this is already a No. 1 topic of conversation, about to
    prevent this going forward, and there will be lots of
    discussion. And I am sure there will be engineering to make
    sure these problems don't happen going forward, to the best we
    can.
        Mr. Green. OK. Can you talk a little bit about the
    difference in how quickly the refining sector came back up
    online, and the difficulty, how long it took for the
    petrochemical sector in Houston?
        Mr. Thompson. Yes. Well, certainly the refining industry
    came back online a little bit more quickly. A lot of that was
    from preparation. The petrochemical side, we knocked out, as
    you know, 60 percent of the national capacity, 80 percent in
    the Gulf. About 75 percent of that capacity has returned to the
    industry. Some of our facilities, they were under lots of water
    and it has taken a lot of time to get those facilities back up.
    Repairs have had to be made, and that just takes time. But we
    are well on our way. We think we have turned the corner and,
    hopefully, we will be back up to full capacity soon.
        Mr. Green. And I also know that you can tell that at the
    price at the pump because the prices went up 25-30 cents a
    gallon, but now it is back down, maybe not in Washington, but
    at least in southeast Texas it has gone back down to maybe a
    little higher than it was, but still it is not $2.49; it is
    $2.19 that you can get on the side of the road now.
        Mr. Thompson. And certainly we are getting back closer to
    prehurricane levels, but one thing I will point out is, since
    that time, the price of crude oil is certainly higher.
        Mr. Green. Yes.
        Mr. Thompson. And so, some of that is being reflected at
    the pump as well.
        Mr. Green. Yes.
        I yield back, Mr. Chairman. Thank you.
        Mr. Olson. The gentleman yields back.
        The chairman now calls upon the House's best birdwatcher,
    the man from the Commonwealth of West Virginia----
        Mr. Griffith. Virginia.
        Mr. Olson. I am sorry. Virginia. I am confused.
        [Laughter.]
        Mr. Griffith. You have been in the chair a long time.
        [Laughter.]
        I appreciate it.
        Mr. Olson. Five minutes, my friend.
        Mr. Griffith. Thank you very much.
        Mr. Fanning, Mr. Harper touched on this a minute or two
    ago, but making sure we have lines of communication up. The
    National Infrastructure Advisory Council, noting this absolute
    criticality that communications play in grid resilience,
    suggested that electric utilities may need some dedicated
    spectrum space. What do you think?
        Mr. Fanning. Well, listen, there is a number of solutions
    that go to that very important problem. Even to be provocative,
    in the circumstance of a national emergency, should you have
    dedicated internet access? There is a lot of things that you
    need to clear the way for.
        Let me just give great kudos. So many people today I think
    lose faith in Government and the institution and the people
    that run it, and all that. I can say without equivocation that,
    in response to these events, whether it is in the White House
    with Tom Bossert, whether it is Energy Secretary Perry, one of
    the things that we can do is to work with these folks. And
    these folks can clear the way to get the work done.
        So often, I think the question goes to who is in charge.
    You know who really knows how to get stuff done are the line
    crews and the supervisors and the people that have the boots on
    the ground to get this done. And when there are barriers, what
    we have got to do is work in this effective public/private
    partnership to get whatever barriers exist cleared away. The
    Government in this case has been fabulous during Harvey and
    Irma particularly.
        Mr. Griffith. I appreciate that, and thank you for your
    answer.
        Mr. Rhymer, I was very pleased, as I was listening to your
    testimony, to hear you talk about microgrids and what you all
    are planning on doing. I particularly like the way you
    described how you are going to have them interact with the full
    system, and then, if they need to be standalone--I thought that
    was very good and I appreciate it. I hope you all success in
    that, and I look forward to seeing it at some point when it is
    working, because I think that is helpful. Not just in the
    islands, but in mountains and other regions of the United
    States those kinds of concepts can be very, very helpful. So,
    thank you for that.
        Mr. Rhymer. Thank you.
        Mr. Griffith. Mr. Nieves--did I say that close to right?
    Thanks.
        I appreciated your stark comments. It seems that there have
    been a lot of problems with the electric utility in Puerto Rico
    for some time, based on your comments. I am just wondering, you
    know, the Federal Government is going to be asked to come in
    there and spend a lot of money. I understand that and think
    that is right. But, if we do so, are you willing--do you think
    that the Government there, particularly the electric utility,
    is going to be willing to introduce some of these novel
    concepts like microgrids, and working on ways to use Puerto
    Rico as a land of experiments where we can try different
    things? They won't all necessarily work, but things that we can
    do to try to make the grid better long time, and try out some
    of these new ideas that are out there that have been talked
    about for years, but we have never had an opportunity.
        And for all the tragedy that is taking place in Puerto
    Rico, for which I am very sorry and worry about figuring out
    what we can do, we may have the opportunity to do something
    better. Do you think that the utility company would be willing
    to embrace some of that?
        Mr. Nieves. Well, my proposal during testimony is that, if
    the Federal Government is going to step up and allocate
    considerable resources to not just repair the old grid, but to
    create a new grid, you cannot do that alone. You have to also
    establish a specific mandate in the law saying we are
    appropriating this ``X'' amount of dollars to build a new grid
    for Puerto Rico, but with these specifications.
        And I respectfully submit that macrogrids could work;
    regional microgrids for Puerto Rico could really work to create
    a strong, resilient system. That might as well be ordered by
    Federal law.
        Under Puerto Rico local law that I worked on last year when
    I was a senator, we authorized microgrids. And the Puerto Rico
    Energy Commission is right now working on an expedited
    regulation to put them in place. But I really submit that ``X''
    amount of dollars appropriated by our Federal Government have
    to be with a specific Federal mandate.
        Mr. Griffith. And I appreciate that and would agree that we
    are going to have to do some different things there. One of the
    things that I think might help is if we have the utility
    accountable to shareholders. I don't know how you would spin
    that off with the assets they have. But I noticed from your
    comments that one of the problems was that you had, while it
    was a semi-regulated monopoly, it was a nonprofit. And it is
    amazing, when you are trying to figure out ways to make
    yourself more efficient, you come across ways to make at least
    a little bit of profit, even if it is not required to be much
    profit. Anyway, it is a thought to think about, and I hoped
    that you would consider that as well.
        And my time is way over. So, I have to yield back. Thank
    you.
        Mr. Nieves. Thank you.
        Mr. Olson. The gentleman from the Commonwealth of Virginia
    yields back.
        The Chair now calls upon the gentleman from Amsterdam, New
    York, Mr. Tonko, for 5 minutes.
        [Laughter.]
        Mr. Tonko. Thank you, Mr. Chair.
        Mr. Rhymer, your testimony mentioned that the Water & Power
    Authority had used FEMA hazardous litigation grants to bury
    infrastructure underground, making it more resilient. When did
    you receive those grants?
        Mr. Rhymer. We received those grants approximately in 2010-
    2011.
        Mr. Tonko. OK.
        Mr. Rhymer. And we have underground a portion of St. Thomas
    and a portion of St. Croix. We are currently seeking additional
    hazardous litigation grants currently to underground St. John
    in the Cruz Bay area and additional parts of St. Thomas and St.
    Croix.
        Mr. Tonko. OK. And is there any other FEMA money you are
    asking to secure beyond that burying of cable? Anything with
    your microgrids? Are you requesting----
        Mr. Rhymer. Well, we are seeking to get litigation grants
    for the microgrid stuff, renewable energy stuff that actually
    adds to the microgrid. We are also looking to do some hardening
    of the system in terms of administration, in terms of the
    buildings. Like the line department building is completely
    destroyed. So, basically, we need to have that building be
    resilient.
        Mr. Tonko. Thank you.
        New York State and the utilities there benefitted greatly
    from mutual assistance in the aftermath of Superstorm Sandy.
    And now, it is our turn to be called upon. It is your turn to
    be called upon in making things better.
        Mr. Fanning, do you believe the utility industry's mutual
    assistance efforts work well?
        Mr. Fanning. Oh, they are outstanding.
        Mr. Tonko. I know islands present unique challenges to
    mobilizing workers and equipment, but can you think of specific
    reasons why mutual assistance would be resisted?
        Mr. Fanning. No.
        Mr. Tonko. OK. Mr. Nieves, you testified that Puerto Rico's
    grid had limitations certainly in the amount of renewable
    resources that could be integrated into its energy mix. What
    were the reasons for that?
        Mr. Nieves. Yes. According to a 2014 report that PREPA
    received, the grid, as it stood before Maria, could only
    integrate up to 580 megawatts of renewable power. Renewable
    power has certain technical issues that the grid that we had
    could not really tolerate without jeopardizing the system.
        Mr. Tonko. Is it a matter of better interconnect devices?
    There is technology already shelf-ready, I would believe, that
    might be able to help----
        Mr. Nieves. That is correct.
        Mr. Tonko [continuing]. Your situation?
        Mr. Nieves. Well, PREPA's grid was not a smart grid. It was
    not a grid that could really accommodate a system whereby
    customers are also generating power, renewable power, so they
    are not just passive customers of our energy model. So,
    according to that report from Siemens, PREPA's grid only can
    tolerate up to that amount of renewable power, which is really
    unacceptable, and a really small amount.
        Mr. Tonko. And, Ms. Kennedy, thank you for making it so
    clear that Puerto Ricans are still dealing with a life-and-
    death situation. Can you further explain the health impacts you
    have seen due to a lack of safe water in Puerto Rico?
        Ms. Catherine Kennedy. Sure. Like I said, we were there for
    about two weeks. One of the things that the nurses had to go
    out and do was really within the community to take a look at
    what kind of resources were available. Time and time again, it
    was the lack of clean running water.
        One of the things that the nurses saw was that people were
    very desperate. So, they were actually drinking from river
    water. Water that came down they would save from their roofs.
    As you know, with hurricane, you have rodents and, of course,
    bacteria. So, the prospect of leptospirosis was imminent. And
    clearly, there were people that were infected, but, again, if
    treated properly, then, I mean, it wouldn't be life
    threatening. But these were things that we saw for the last two
    weeks.
        Mr. Tonko. Right. I have also seen some photos shared with
    me by family members in my district. They cause grave concern.
        I believe--and I think Ms. Kennedy would agree--that we
    need to have a serious discussion about waiving cost-sharing
    requirements, especially for critical public health
    infrastructure such as our water systems. It is a public health
    and public safety situation.
        I would also express that Puerto Rico can learn a great
    deal from New York's REV Initiative. It was in response to the
    Superstorm Sandy situation. And that State, our State, my home
    State, has worked to understand changes in the traditional
    utility business model and how to plan for a more decentralized
    grid.
        My concern is that, if we build back to this failed system
    that you cite, it is a very troublesome investment made by any
    level of Government and the private sector, and we need to do
    better than that and encourage smart, flexible, and reliable
    grid for a cleaner and stronger energy future.
         And with that, I yield back. And congratulations on last
    night.
        Mr. Olson. Thank you, thank you, thank you.
        The gentleman yields back.
        The Chair now calls upon the gentleman from our neighbor to
    the north, Oklahoma, Mr. Mullin, for 5 minutes.
        Mr. Mullin. Chairman, you are in almost a giddy form today.
    I wonder why.
        [Laughter.]
        Mr. Olson. Guilty as charged.
        Mr. Mullin. The best thing is the third baseman for the
    Dodgers, I guess, can shave and cut his hair now, right?
        Hey, I appreciate you guys coming up here and informing
    Members of Congress. It is very important for us to have a
    working relationship in a situation like this.
        It has been a long day, and I appreciate your all's
    patience. But I feel like we are going to continue to learn
    from these lessons. What we don't want to do is get in the
    habit of repeating them.
        Mr. Fanning, if you don't mind, I would like to start with
    you. The physical work of the restoration I know falls mainly
    on industries, but what role does the Federal Government play
    in this?
        Mr. Fanning. Oh, they play an exceedingly important role.
    As I described earlier, when I think about the role of the
    ESCC, I describe it kind of in three levels. The first is to
    harmonize the efforts of the Federal Government. This is truly
    a public/private partnership, particularly in a super-regional
    kind of disaster where we absolutely----
        Mr. Mullin. When you talk about a private/private
    partnership----
        Mr. Fanning. Right.
        Mr. Mullin [continuing]. Does the partnership end when the
    Federal dollars are put in and, then, the utility companies
    reap the benefits of it? Or do the Federal dollars, since it is
    a partnership, get paid back?
        Mr. Fanning. Listen, the partnership exists whether there
    is a disaster or not.
        Mr. Mullin. Sure.
        Mr. Fanning. This is our, what we call, playbook.
        Mr. Mullin. Right.
        Mr. Fanning. This is our regime in which we respond to
    cyber, physical security, or natural disasters. And what it
    describes here is, frankly, not only the unity of effort, the
    ``what's'' of a restoration effort, but also the unity of
    message and the ``how's'' around a restoration effort. That has
    to be coordinated and harmonized between the Federal Government
    and not only electricity in this case, but, as we said before,
    the lifeline sectors. In cyberwarfare, it is going to be in the
    context of finance, telecom, electricity. Broadly, it would
    include transportation and water, and then, there are other
    priorities going from that.
        Don't ever forget the need to harmonize, also, State and
    local government efforts, the boots on the ground that
    ultimately will impact our ability to deliver.
        Mr. Mullin. So, when we are talking about a partnership,
    are we talking about just in financial support or, as you are
    describing, all the above from the logistics behind it, from
    the Federal Government stepping out and getting some of the red
    tape out, letting you guys go to work, getting some waivers in
    place?
        Mr. Fanning. Yes, Congressman, absolutely right. In fact,
    somebody else mentioned this National Infrastructure Advisory
    Council made a recommendation to the President to form
    something called a SICC, Strategic Infrastructure Coordinating
    Council, of electricity----
        Mr. Mullin. We have acronyms for everything around here.
        [Laughter.]
        Mr. Fanning. Yes. Yes, I know it.
        Electricity, finance, telecom. And what we will do is bring
    CEOs together, so me and others representing the electricity
    sector, finance, telecom, to put together a common set of
    regulatory permissions, legislative initiatives, harmonizing
    technology systems, information-sharing, and physical
    coordination. If we can get that done, that is an enormous
    activity.
        The other thing that I think we need to do is inform
    policymakers like you all. And that is why I applaud this
    effort. Because there is so much noise around these kinds of
    disasters or potential disasters, we have to take action before
    they get here. If all we are doing is reacting to the latest
    disaster----
        Mr. Mullin. Thank you.
        Mr. Fanning [continuing]. We are way behind the ball.
        Mr. Mullin. Yes.
        Mr. Fanning. We have got to pitch, not catch.
        Mr. Mullin. No, I agree with that. But look at that; wasn't
    that neat. You get a little zing in there for our chairman.
    Wow. That was thinking on your feet.
        [Laughter.]
        I agree with that. We would love to move to a point of
    being more proactive than reactive, and take the lessons
    learned. So, I actually applaud the idea of putting together
    that committee, so to say, where we can say, ``Hey, look, this
    is our lessons. These are what we need. These are the
    roadblocks that need to be dropped. This is why it happens.''
    And let's move forward, so we can react faster.
        Mr. Fanning. And, Congressman, I think it needs to be CEO-
    led. Eighty-seven percent of the critical infrastructure is
    owned by private industry.
        Mr. Mullin. Right.
        Mr. Fanning. We have to work together.
        Mr. Mullin. Mr. McBrayer, I have got just a short time
    here. The EPA issued several fuel waivers----
        Mr. McBrayer. Yes.
        Mr. Mullin [continuing]. Along the way for diesel and
    gasoline that maybe didn't meet the standards, but was able to
    get delivered. Was it effective? Was that helpful?
        Mr. McBrayer. I think it was effective and helpful at the
    time. I think one of the things we have to adjust to as it
    relates to getting fuel to folks who are your constituents, our
    consumers, is that, at least in the Southeast, we are
    transitioning from summer-grade gasoline to winter-grade
    gasoline on September 15th every year. Because of the nature of
    the two specifications, winter-grade gasoline is less costly
    than summer-grade gasoline. So, whether your inventory is in
    your store or whether you are a placeholder for inventory in a
    terminal, the financial incentive is to diminish the amount of
    supply that you have going into September 15 and 16 because you
    are going to take in many cases a 10-to-15-cent devaluation of
    that inventory, basically, at 12:01 a.m. on the 16th.
        One of the things I would ask from a Federal perspective is
    to take a look at that date. Is that really the only date that
    we can in the Southeast convert from the lower-RVP to the
    higher-RVP gasoline? Or is there a way to allow that date to
    move from time or time, or be fixed, so that folks like
    RaceTrac and other members of our association are not forced by
    the changing cost to diminish inventories in a time where
    hurricanes are more likely to occur?
        Mr. Mullin. Thank you. That is a great point.
        And, Mr. Chairman, thank you for entertaining a little bit
    more time there. I yield back.
        Mr. Olson. And seeing only Astros fans, but no further
    Members seeking to ask questions, I would like to thank all of
    our witnesses again for being here today.
        I have a unanimous consent and our nine documents for the
    record.
        No. 1 is the PREPA letter to EEI and APPA.
        No. 2 is an APPA letter to the Energy and Commerce
    subcommittee on mutual aid.
        No. 3 is an APPA and EEI letter to Mr. Ricardo L. Ramos
    Rodriguez.
        No. 4 is a letter from a farmer to the Energy and
    Commerce's Energy Subcommittee.
        No. 5 is the EIA supplemental testimony with
    attachments.\1\
    ---------------------------------------------------------------------------
        \1\ The information has been retained in committee files and also
    is available at  http://docs.house.gov/meetings/IF/IF03/20171102/
    106573/HHRG-115-IF03-20171102-SD003.pdf.
    ---------------------------------------------------------------------------
        No. 6, AdvaMed letter.
        No. 7, letter from the FDA.
        No. 8, GridWise Alliance document.
        No. 9, letter to Senators Murkowski and Cantwell from the
    former EPA official and Puerto Rico Energy Commissioner.
        Without objection, so ordered.
        [The information appears at the conclusion of the hearing.]
        Mr. Rush. Mr. Chairman, I want to restate or reiterate my
    request that PREPA be subpoenaed and that we have FEMA before
    this subcommittee in the near future.
        Mr. Olson. As I told my friend, I will carry that message
    to Chairman Upton and Chairman Walden.
        Pursuant to committee rules, I will remind members that
    they have 10 business days to submit additional questions for
    the record. As to the witnesses, submit their response in 10
    business days upon receipt of those questions.
        And one final comment, a point of personal privilege. You
    guys have, it looks like, 23\1/2\ hours to get to Houston for
    our big parade for our Astros.
        [Laughter.]
        Without objection, the subcommittee is adjourned.
        [Whereupon, at 2:31 p.m., the subcommittee was adjourned.]
        [Material submitted for inclusion in the record follows:]

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