[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]
KEEPING THE LIGHTS ON: STRATEGIES FOR GRID
RESILIENCE AND RELIABILITY
=======================================================================
HEARING
BEFORE THE
SELECT COMMITTEE ON THE
CLIMATE CRISIS
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTEENTH CONGRESS
SECOND SESSION
__________
HEARING HELD
FEBRUARY 15, 2022
__________
Serial No. 117-14
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
www.govinfo.gov
Printed for the use of the Select Committee on the Climate Crisis
__________
U.S. GOVERNMENT PUBLISHING OFFICE
47-483 WASHINGTON : 2022
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SELECT COMMITTEE ON THE CLIMATE CRISIS
One Hundred Seventeenth Congress
KATHY CASTOR, Florida, Chair
SUZANNE BONAMICI, Oregon GARRET GRAVES, Louisiana,
JULIA BROWNLEY, California Ranking Member
JARED HUFFMAN, California GARY PALMER, Alabama
A. DONALD McEACHIN, Virginia BUDDY CARTER, Georgia
MIKE LEVIN, California CAROL MILLER, West Virginia
SEAN CASTEN, Illinois KELLY ARMSTRONG, North Dakota
JOE NEGUSE, Colorado DAN CRENSHAW, Texas
VERONICA ESCOBAR, Texas ANTHONY GONZALEZ, Ohio
------
Ana Unruh Cohen, Majority Staff Director
Sarah Jorgenson, Minority Staff Director
climatecrisis.house.gov
C O N T E N T S
----------
STATEMENTS OF MEMBERS OF CONGRESS
Page
Hon. Kathy Castor, a Representative in Congress from the State of
Florida, and Chair, Select Committee on the Climate Crisis:
Opening Statement............................................ 1
Prepared Statement........................................... 3
Hon. Garrett Graves, a Representative in Congress from the State
of Louisiana, and Ranking Member, Select Committee on the
Climate Crisis:
Opening Statement............................................ 4
Hon. Veronica Escobar, a Representative in Congress from the
State of Texas, and Member, Select Committee on the Climate
Crisis
Prepared Statement........................................... 6
WITNESSES
The Honorable Nancy Sutley, Senior Assistant General Manager of
External and Regulatory Affairs, and Chief Sustainability
Officer, Los Angeles Department of Water and Power
Oral Statement............................................... 8
Prepared Statement........................................... 9
Dr. Karen Wayland, Chief Executive Officer, GridWise Alliance
Oral Statement............................................... 12
Prepared Statement........................................... 14
Mark Mills, Senior Fellow, Manhattan Institute
Oral Statement............................................... 31
Prepared Statement........................................... 33
Katherine Hamilton, Chair, 38 North Solutions; and Chair, Global
Future Council on Clean Electrification, World Economic Forum
Oral Statement............................................... 35
Prepared Statement........................................... 37
SUBMISSIONS FOR THE RECORD
Report from Stanford University, Assessment of the Diablo Canyon
Nuclear Plant for Zero-Carbon Electricity, Desalination, and
Hydrogen Production, submitted for the record by Mr. Gonzalez.. 46
Report from U.S. Energy Information Administration (EIA), Oil-
fired generators helped meet electric demand in New England
this January, submitted for the record by Mr. Graves........... 68
Report from Princeton University, Net-Zero America: Potential
Pathways, Infrastructure, and Impacts, Final report, submitted
for the record by Mr. Graves................................... 68
Report from Grid Strategies, The One-Year Anniversary of Winter
Storm Uri: Lessons Learned and the Continued Need for Large-
Scale Transmission, submitted for the record by Ms. Castor..... 68
Report from Grid Strategies, American Council on Renewable Energy
(ACORE), and the Macro Grid Initiative, Transmission Makes the
Power System Resilient to Extreme Weather, submitted for the
record by Ms. Castor........................................... 68
Report from Environment America Research & Policy Center and the
Frontier Group, Rooftop Solar and the 2021 Texas Power Crisis:
Exploring Small-Scale Solar's Potential to Improve Grid
Resilience During a Deep Freeze Event, submitted for the record
by Ms. Castor.................................................. 68
APPENDIX
Questions for the Record from Hon. Kathy Castor to Hon. Nancy
Sutley......................................................... 69
Questions for the Record from Hon. Garret Graves to Hon. Nancy
Sutley......................................................... 74
Questions for the Record from Hon. Veronica Escobar to Hon. Nancy
Sutley......................................................... 75
Questions for the Record from Hon. Kathy Castor to Karen Wayland. 76
Questions for the Record from Hon. Veronica Escobar to Karen
Wayland........................................................ 79
Questions for the Record from Hon. Garret Graves to Mark Mills... 80
Questions for the Record from Hon. Kathy Castor to Katherine
Hamilton....................................................... 81
Questions for the Record from Hon. Garret Graves to Katherine
Hamilton....................................................... 87
KEEPING THE LIGHTS ON:
STRATEGIES FOR GRID RESILIENCE AND RELIABILITY
----------
TUESDAY, FEBRUARY 15, 2022
House of Representatives,
Select Committee on the Climate Crisis,
Washington, DC.
The committee met, pursuant to call, at 2:30 p.m., via
Zoom, Hon. Kathy Castor [chairwoman of the committee]
presiding.
Present: Representatives Castor, Bonamici, Brownley,
Huffman, McEachin, Levin, Casten, Neguse, Graves, Palmer,
Carter, Miller, Armstrong, Crenshaw, and Gonzalez.
Ms. Castor. The committee will come to order.
Welcome, everyone, to the ``Keeping the Lights on:
Strategies for Grid Resilience and Reliability'' hearing.
Without objection, the chair is authorized to declare a
recess of the committee at any time.
As a reminder, members participating in a hearing remotely
should be visible on camera throughout the hearing. As with in-
person meetings, members are responsible for controlling their
own microphones. Members can be muted by staff only to avoid
inadvertent background noise.
And, as a reminder, statements, documents, or motions
must be submitted to the electronic repository at
[email protected].
Finally, members or witnesses experiencing any technical
problems should inform the committee staff immediately.
And I want to thank you all for joining our remote hearing
of the Select Committee on the Climate Crisis. Today, we will
review how the bipartisan infrastructure law's policies and
investments will help improve grid resilience and consider what
additional climate and clean energy investments are needed to
help strengthen America's electrical grid.
I will now recognize myself for 5 minutes for an opening
statement.
As the climate crisis continues to threaten our
communities, we cannot remain stuck in the past. The key to
solving the climate crisis is electrifying our economy now, and
the key to electrifying our economy is a strong and reliable
grid, with all of the incredible innovations that were not even
envisioned 20 years ago.
Strengthening the grid today increases the chances that we
can keep the lights on tomorrow after extreme weather hits. A
strong grid also will help us drive down the costs of
disasters, avoid disruptions, and allow businesses to bounce
back faster. And it can reduce the cost of energy year-round,
as more Americans power their homes and cars with affordable
clean energy made in the USA.
Strengthening the grid is also about saving lives. Just
last summer, at least one in three Americans experienced a
climate-fueled disaster, and in many cases the consequences
were deadly. We all remember the destructive winter storm only
1 year ago that knocked out electricity in much of Texas and in
other areas across the Southeast, leaving millions without
power. Nearly 250 people died in the aftermath, and too many
families were left without drinking water, without food or
shelter, and stuck with astronomical energy bills.
And it is not just winter storms; the climate crisis is
making wildfires, hurricanes, and heat waves more frequent. In
2018, California experienced the costliest and most destructive
wildfire in its history. The Camp Fire destroyed more than
18,000 buildings and killed 85 people. It was a devastating
reminder of how aging transmission equipment, coupled with
climate fueled drought, exposed communities to unexpected
risks.
And it was a devastating example of how climate change is
expanding the number of harmful scenarios we need to prepare
for, making it more challenging to safeguard the places we call
home.
And that is why today we are focusing on how we strengthen
the grid and lower costs for the American people. I am proud
that President Biden's bipartisan infrastructure law made
historic investments on this front, including $5 billion for
grid hardening, another $5 billion to spur technologies that
will improve grid reliability and resilience.
The infrastructure law also included $2.5 billion to help
build new transmission lines, as well as $3 billion devoted to
enhancing grid flexibility. And it made investments to help
address the growing threat of wildfires, including $5 billion
to bury power lines and build microgrids and more than $3
billion for hazardous fuel reduction, controlled burning, and
community defense.
The innovative advances in grid-enhancing technologies are
remarkable, and we must deploy them at a wide scale to benefit
all Americans and help them save on their electric bills.
All of these investments provide a great foundation to
strengthen our grid, but we cannot stop there. We need
additional strategies to keep the climate crisis from getting
worse and to unleash an economy powered by our own abundant and
affordable renewable energy.
That includes enacting new tax credits for transmission and
storage. It includes expanding tax credits for clean energy and
electric vehicles. And it means investing in the Greenhouse Gas
Reduction Fund, which will help us deploy resilient distributed
energy equitably to communities across America.
Those are the things the House sent to the Senate in our
Build Back Better Act, and we look forward to the Senate
getting these critical investments across the finish line.
Before I introduce our witnesses, I also want to set the
record straight. In the United States of America, we do not
need to choose between energy that is affordable, reliable, or
clean. It is not an either/or situation. We can have all three.
We don't need to pick between lower costs or a reliable
electric grid or clean air for our kids. Clean energy gives us
the chance to have it all.
That is why the Biden administration and Democrats in
Congress are taking steps to meet these challenges head-on.
That includes work to develop a national strategy on critical
minerals and recycling, which will help us secure the
components that we need to expand clean energy nationwide. And
it means doubling down on innovative tools, whether it is
harnessing the advances in Artificial Intelligence or expanding
the use of buildings to grid, and vehicles, to grid
technologies.
That is what is great about innovation in America and our
can-do spirit. Our aging electric grid needs major upgrades and
expansion, and it is time to integrate the lower-cost clean
technologies into the power system, to invest in adaptation and
resilience, and to solve the climate crisis.
With that, I am happy to recognize the Ranking Member.
Mr. Graves, you are recognized for 5 minutes for an opening
statement.
[The statement of Ms. Castor follows:]
Opening Statement of Chair Kathy Castor
Hearing on ``Keeping the Lights On:
Strategies for Grid Resilience and Reliability''
Select Committee on the Climate Crisis
February 15, 2022
As prepared for delivery
As the climate crisis continues to threaten our communities, we
cannot remain stuck in the past. The key to solving the climate crisis
is electrifying our economy now--and the key to electrifying our
economy is a strong and reliable grid with the incredible innovations
that were not even envisioned twenty years ago. Strengthening the grid
today increases the chances that we can keep the lights on tomorrow
after extreme weather hits. A strong grid also will help drive down the
costs of disasters, avoid disruptions, and allow businesses to bounce
back faster. And it can reduce the costs of energy year-round, as more
Americans power their homes and cars with affordable, clean electricity
made in the USA.
Strengthening the grid is also about saving lives. Just last
summer, at least one in three Americans experienced a climate
disaster--and in many cases, the consequences were deadly. We all
remember the destructive winter storm only one year ago that knocked
out electricity in much of Texas and other areas across the Southeast,
leaving millions without power. Nearly 250 people died in the
aftermath--and too many families were left without drinking water,
without food or shelter, or stuck with astronomical energy bills.
And it's not just winter storms; the climate crisis is making
wildfires, hurricanes, and heat waves more frequent. In 2018,
California experienced the costliest and most destructive wildfire in
its history. The Camp Fire destroyed more than 18,000 buildings and
killed 85 people. It was a devastating reminder of how aging
transmission equipment, coupled with climate-fueled drought, expose
communities to unexpected risks. And it was a devastating example of
how climate change is expanding the number of harmful scenarios we need
to prepare for, making it more challenging to safeguard the places we
call home.
That's why today we're focusing on ways to strengthen the grid and
lower costs for the American people. I'm proud that President Biden's
bipartisan infrastructure law made historic investments on this front--
including $5 billion for grid hardening and another $5 billion to spur
technologies that will improve grid reliability and resilience. The
Infrastructure Law included $2.5 billion to help build new transmission
lines, as well as $3 billion devoted to enhancing grid flexibility. And
it made investments to help address the growing threat of wildfires,
including $5 billion for burying power lines and building microgrids,
and more than $3 billion for hazardous fuel reduction, controlled
burning, and community defense resources. The innovative advances in
grid-enhancing technologies are remarkable. And we must deploy them at
a wide scale to benefit all Americans and help them save on electric
bills.
All of these investments provide a great foundation to strengthen
our grid. But we cannot stop there. We need additional strategies to
keep the climate crisis from getting worse--and to unleash an economy
powered by our own abundant and affordable renewable energy. That
includes enacting new tax credits for transmission and storage. It
includes expanding tax credits for clean energy and electric vehicles.
And it means investing in the Greenhouse Gas Reduction Fund, which will
help us deploy resilient distributed energy equitably to communities
across the country. Those are all things that the House sent to the
Senate in our Build Back Better Act. And we look forward to the Senate
getting these critical investments past the finish line.
Before we introduce our witnesses, I want to set the record
straight: in the United States of America, we don't need to choose
between energy that's affordable, reliable, or clean. It's not an
either/or situation. We can have all three. We don't need to pick
between lower costs, a reliable electric grid, or clean air for our
kids. Clean energy gives us the chance to have it all. That's why the
Biden Administration and Democrats in Congress are taking steps to meet
these challenges head on. That includes work to develop a national
strategy on critical minerals and recycling, which will help us secure
the components we need to expand clean energy nationwide. And it means
doubling down on innovative tools, whether it's harnessing advances in
Artificial Intelligence, or expanding the use of buildings-to-grid and
vehicles-to-grid technologies.
That's what is great about innovation in America and our ``can do''
spirit. Our aging electric grid needs major upgrades and expansion.
It's time to integrate lower-cost clean technologies into the power
system, to invest in adaptation and resilience, and to solve the
climate crisis.
Mr. Graves. Thank you, Madam Chair. Thank you.
And I want to thank the witnesses for joining us today.
Madam Chair, we certainly share the objective--and I think
I speak for all members of the committee that we share the
objective--of moving in a direction of improved access to
energy, improved affordability to energy, and lower emissions
from energy. I think we also agree that our energy needs to be
sourced or supplied within the United States.
We have had witnesses come and testify before this
committee and we have read expert reports that have found by
some measure that we are going to have to triple--we are going
to have to triple--investment in our electrical grid to meet
growing demand.
And it is not just about investment in transmission,
investment in the grid; it is investment in generation capacity
as well.
Unfortunately, what we have seen over the last several
months is we have seen energy policies that have not resulted
in those outcomes. As a matter of fact, we have seen energy
prices, depending on the type of energy and the area, increase
anywhere from 24 to 54 percent. We have seen one in every five
Americans say they can't even afford to pay their energy bill
in full each month. This is forcing more Americans into energy
poverty. We have seen one of the highest rates of emissions
increases last year that we have seen in recent history. And so
we are not achieving these objectives of energy affordability,
energy access, or lower emissions.
And I think it is important that we look, for example, at
my good friend Mr. Huffman's state of California and others as
examples of where we can extract lessons learned.
We have seen examples where the State of California is
choosing to shut down nuclear power plants and then the next
day sending a letter asking for waivers on Clean Air Act
emissions so they can emit more because they are going to go
from a carbon-free generation capacity into using coal and
natural gas.
We have seen a state with the least reliable grid in
America--and this is the state that is leaning farthest forward
in regard to trying to implement a climate strategy and forcing
markets in directions of renewable energy where markets clearly
aren't capable of sustaining them.
We see a state that is the most dependent state on
importing energy, including, as we recently discussed last
week, the state that is responsible for 50 percent of the
energy coming out of the Amazon rainforest in Ecuador.
I mean, these are things that simply don't make sense.
Maybe we can go over to the Northeast--sorry, Mr. Huffman,
I am going to pivot now--go over to the Northeast--I know you
are going to get me back, but--go over to the Northeast, where
we have seen repeatedly where in New England they have had to
bring in liquefied natural gas from Russia to meet the energy
demands.
It is amazing. There was a recent EIA report that says that
``although oil-fired generators are infrequently used in New
England, they play an important role in meeting electricity
demand in the region during times of high demand and limited
supply of alternative fuel sources such as natural gas.''
It goes on to say that ``cold weather and constraints on
natural gas pipelines to New England can sometimes limit the
availability of natural gas delivered to power plants during
winter months. These constraints can increase the price of
natural gas in the region.''
Madam Chair, if we simply applied the electricity rates of
my home state of Louisiana to the State of California, you
would see a reduction in rates of almost 51 percent--51
percent. I am sure that the citizens of California would
welcome that type of reduction.
We can't sit here and have rational discussions or move in
the direction of rational policy where we are saying the same
thing--energy access improvements, energy affordability
improvements, lower emissions--whenever the facts that are
being--or the words that are being thrown out there don't match
the facts. The reality is, California has had some of the worst
emissions growth in America.
We need to be learning from California, learning from New
England, and even learning from the U.K., where they went and
leaned too hard on wind energy, had a year without much wind,
and saw spikes in natural gas prices in that country that is
causing the lack of affordability and the lack of access.
Madam Chair, the Biden administration has said energy
demand is going to increase 50 percent between now and 2050,
and, depending on developing or nondeveloping countries, you
are going to see an increase in natural gas demand alone
anywhere from 31 to 80 percent increase.
We need to have a strategy in the United States to meet
these demands to ensure that our citizens aren't forced into
energy poverty as a result of these policies that lack
evidence, that are actually ignoring evidence to the contrary.
And a perfect example is the Biden administration choosing
to shut down the Twin Metals mine that is projected to serve
approximately 70 percent of the rare-earth and critical mineral
needs in the United States. They just--they don't match
reality.
So, Madam Chair, I look forward to hearing from some of our
witnesses today and I look forward to being able to ask
questions, but making sure that we are heading down a path that
is actually logical and based on the evidence that has been
presented to us.
I yield back.
Ms. Castor. And, without objection, members who wish to
enter an opening statement into the record have--everyone has 5
business days to do so.
[The information follows:]
Statement for the Record
Rep. Veronica Escobar
Hearing on ``Keeping the Lights On:
Strategies for Grid Resilience and Reliability''
Select Committee on the Climate Crisis
February 15, 2022
Thank you, Madam Chair, and thank you to our witnesses. I represent
the safe and secure border city of El Paso, Texas. Last year's Texas
winter storm stemmed from extreme weather and the lack of electric grid
investments like winterization of energy infrastructure. Those planning
failures caused millions of Texans to lose power, and many lives were
unfortunately lost. However, my district was not affected by Winter
Storm Uri due to El Paso being part of the Western power grid.
Throughout the years our local electric utility company has made
winterization investments to ensure El Pasoan's do not suffer from
major power outages.
I would like to include as part of the record a February 2022 New
York Times guest essay by University of Texas Professor Michael Webber
titled `When Will Texas Emerge from the Dark?' which explains that El
Paso survived the Texas Freeze much better than many other parts of the
state because of its investments in winterization of its equipment and
its connection to the Western grid (https://www.nytimes.com/2022/02/15/
opinion/texas-electricity-grid.html?smid=tw-share).
I join many of my colleagues who are local Texas elected officials in
urging the state of Texas to expand interconnections to the Eastern and
Western Grids.
Ms. Castor. Now I would like to welcome our witnesses. We
will hear from leading industry experts regarding how the
bipartisan infrastructure law and additional clean energy
investments can help us increase the resilience of our nation's
grid, the whole grid infrastructure, especially as we move
towards the clean energy economy.
First, I will recognize Congresswoman Brownley to introduce
Nancy Sutley.
Ms. Brownley. Thank you, Madam Chair, for this honor. I
appreciate it very much.
It is a pleasure to introduce Ms. Nancy Sutley, who
currently serves as the Senior Assistant General Manager of
External and Regulatory Affairs and the Chief Sustainability
Officer for the Los Angeles Department of Water and Power.
In her role, Ms. Sutley oversees conservation, regulatory,
and sustainability efforts for the largest municipal utility in
the United States, serving 4 million residents. Not a better
witness for us today.
I have known Ms. Sutley for many years, and our work
together dates back to my time in the California State
Assembly, when Ms. Sutley served as a board member for the
Metropolitan Water District of Southern California and as
Deputy Mayor of the City of Los Angeles for Energy and
Environment.
Our work together continued when Ms. Sutley was appointed
to lead President Obama's Council on Environmental Quality.
Under her leadership, CEQ played a central role in shepherding
the Obama administration's signature environmental projects,
and she was one of the chief architects of President Obama's
Climate Action Plan.
Ms. Sutley has dedicated her career to public service and
environmental protection and has long been recognized for her
work as a climate leader as she has advocated for strong
climate policies aimed at improving conservation, environmental
regulation, decarbonization goals of the energy sector, and so
much more.
Ms. Sutley is a forward-thinking leader in government and
has extensive experience bringing together stakeholders from
all sectors to shift to a more sustainable future.
Thank you, Nancy, for being here today to speak about your
work. I look forward to hearing from you.
And I yield back, Madam Chair.
Ms. Castor. Thank you, Rep. Brownley.
And welcome, Ms. Sutley.
Next, Dr. Karen Wayland is the Chief Executive Officer of
GridWise Alliance. She is an expert in energy and environmental
policy and leads a diverse group of stakeholders supporting
grid modernization.
During the Obama administration, Dr. Wayland oversaw the
development of strategies for working with state and local
governments at the Department of Energy. Dr. Wayland also
previously served as Senior Advisor for Domestic Energy Policy
to the Deputy Secretary of Energy.
Mr. Mark Mills is the Senior Fellow at the Manhattan
Institute, Faculty Fellow at the McCormick School of
Engineering and Applied Science, and Co-Director at the
Institute of Manufacturing Science and Innovation at
Northwestern University.
He is a former experimental physicist and engineer and
provided science and technology policy counsel to private-
sector firms, the Department of Energy, and the U.S. research
laboratories. Mr. Mills previously served in the White House
Science Office under President Reagan.
And Ms. Katherine Hamilton is the Chair of 38 North
Solutions and Chair of the Global Future Council on Clean
Electrification at the World Economic Forum. She provides
public policy and business development services to clean energy
companies and organizations.
Ms. Hamilton is an international clean energy policy expert
and led several councils of the World Economic Forum. She
previously led buildings research at the National Renewable
Energy Laboratory and designed grids for Virginia Power.
Without objection, the witnesses' written statements will
be made part of the record.
With that, Ms. Sutley, you are now recognized. You are
first up to give a 5-minute presentation of your testimony.
Welcome.
STATEMENTS OF THE HONORABLE NANCY SUTLEY, SENIOR ASSISTANT
GENERAL MANAGER OF EXTERNAL AND REGULATORY AFFAIRS AND CHIEF
SUSTAINABILITY OFFICER FOR THE LOS ANGELES DEPARTMENT OF WATER
AND POWER; KAREN WAYLAND, PH.D., CHIEF EXECUTIVE OFFICER OF
GRIDWISE ALLIANCE; MARK MILLS, SENIOR FELLOW AT THE MANHATTAN
INSTITUTE, FACULTY FELLOW AT THE MCCORMICK SCHOOL OF
ENGINEERING AND APPLIED SCIENCE, AND CO-DIRECTOR OF THE
INSTITUTE ON MANUFACTURING SCIENCE AND INNOVATION AT
NORTHWESTERN UNIVERSITY; AND KATHERINE HAMILTON, CHAIR OF 38
NORTH SOLUTIONS AND CHAIR OF THE GLOBAL FUTURE COUNCIL ON CLEAN
ELECTRIFICATION AT THE WORLD ECONOMIC FORUM
STATEMENT OF THE HONORABLE NANCY SUTLEY
Ms. Sutley. Thank you very much.
And, first of all, thank you, Representative Brownley, for
that kind introduction and for all that you do for the people
of California and the United States.
Chair Castor and Ranking Member Graves and members of the
committee, I am very honored to be here with you today.
As you have heard, Los Angeles Department of Water and
Power is the nation's largest municipally owned utility. We
serve the 4 million residents of Los Angeles, its businesses
and visitors, including some of those who were in town for some
big football game over the weekend. For more than 100 years,
LADWP has provided the city of Los Angeles with reliable water
and power service in a cost-effective and environmentally
responsible manner.
LADWP's power system is vertically integrated with our own
transmission and distribution system in a diverse mix of energy
generation resources. Today's hearing topic is very important.
A reliable and resilient electric grid is essential for a
strong and vibrant Los Angeles, and we have a strong track
record and invest significantly in our power infrastructure.
However, the impacts of climate change can affect the
reliability of our grid. Los Angeles lives with the ever
present threat of longer wildfire seasons, more extreme heat,
and prolonged droughts.
The men and women of LADWP work every day to ensure our
grid is reliable, resilient, and affordable. And even during a
heat wave, we have enough electrical capacity to meet the
highest demands. But sustained high temperatures strain
electrical cables and distributing stations, and when it
doesn't cool down at night during a heat wave, high nighttime
temperatures further tax equipment.
Our wildfire mitigation efforts include system-hardening,
vegetation management, operation protocols, and maintenance
programs. But wildfires can potentially put power lines out of
service for days or weeks.
To support Los Angeles's decarbonization goals, LADWP is
transforming its electric grid to 100-percent clean energy.
And, over the decades, we have expanded renewable energy and
replaced coal with clean energy; upgraded our transmission;
invested in energy storage, rooftop solar, energy-efficiency
measures; and supported electrification. And, as a result, we
have cut our greenhouse gas emissions by more than half from
our 1990 levels. And we have kept our power rates competitive.
They are generally lower than other cities in California.
To understand the pathways to 100 percent clean energy for
LADWP, the National Renewable Energy Laboratory completed its
``LA100'' study in March of 2021. And this study showed
multiple pathways to achieve a 100 percent renewable energy
grid while prioritizing reliability, equity, and affordable
rates. And, in fact, it found that it was feasible to get there
by 2035.
The 2035 carbon-free scenario increases renewable energy,
energy storage, and anticipates more rooftop solar, energy
efficiency, and demand management, investments in transmission
and distribution infrastructure, and firm generation using a
renewable fuel, such as green hydrogen.
We are making investments in clean energy. Some recent
examples: The Red Cloud Wind Project in New Mexico began
commercial operation in December of 2021. We are launching a
new program to assist apartment dwellers to save energy and
money. And the IPP Renewed Project will replace coal with green
hydrogen, first as a mix with natural gas and then 100-percent
green hydrogen.
Now, there are a number of things that the Federal
Government can do to help us meet these goals.
Federal funding can leverage our investments and can
accelerate technology development and deployment of low- or
zero-carbon energy resources. An example: We are part of a
cooperative called HyDeal which is trying to reduce the cost of
green hydrogen. Money in the bipartisan infrastructure law
around hydrogen and the hydrogen hubs at DOE can really help
accelerate that goal.
The Federal Government can support the expansion of the
nation's transmission grid. We see a need for transmission
investment, including increasing local transmission capacity.
Federal investment in electric vehicle charging
infrastructure will help meet the needs of the growing electric
vehicle market, but we also know from the ``LA100'' study that
high levels of electrification can help mitigate rate impacts.
Federal policies and investments to reduce wildfire risk
can help us remain reliable and resilient.
Finally, tax credits have helped to spur the clean energy
industry. Policies could allow tax-exempt utilities like LADWP
to benefit directly from those renewable and clean energy tax
incentives.
Thank you for inviting me today to share these thoughts,
and I am happy to answer any questions. Thank you.
[The statement of Ms. Sutley follows:]
Statement of Nancy Sutley
Senior Assistant General Manager of External and Regulatory Affairs
Chief Sustainability Officer
Los Angeles Department of Water and Power
Before the House Select Committee on the Climate Crisis
Hearing on ``Keeping the Lights On: Strategies for Grid
Resilience and Reliability''
February 15, 2022
Chair Castor, Ranking Member Graves and Members of the Committee: I
am Nancy Sutley, Senior Assistant General Manager of External and
Regulatory Affairs and Chief Sustainability Officer at the Los Angeles
Department of Water and Power. I am grateful for this opportunity to
appear before you at this important hearing, ``Keeping the Lights On:
Strategies for Grid Resilience and Reliability.''
The Los Angeles Department of Water and Power (LADWP) is the
nation's largest municipally-owned utility, with 10,454 megawatts of
electric capacity and serving an average of 435 million gallons of
water per day to the more than 4 million residents of Los Angeles,
California, its businesses and visitors. For more than 100 years, LADWP
has provided the City of Los Angeles with reliable water and power
service in a cost-effective and environmentally responsible manner.
With a workforce of more than 11,000 employees, LADWP is guided by a
five-member Board of Water and Power Commissioners, appointed by the
Mayor of Los Angeles and confirmed by the Los Angeles City Council.
LADWP's power system is a vertically integrated power generation,
transmission and distribution system that spans five Western states and
delivers electricity to more than 1.5 million residential and business
customers. In Fiscal Year 2019-2020, we supplied more than 21,130
gigawatt hours (GWh) to our customers--businesses, industry and
government agencies consumed about 62 percent of the electricity, while
residents constituted 90 percent of total customers. LADWP's generation
capacity is made up of a diverse mix of energy resources, including 37
percent renewable energy (solar, wind and geothermal) in 2020. LADWP
also has about 4000 miles of overhead transmission circuits and over
100 miles of underground transmission circuits and, as its own
balancing authority, operates its own transmission grid.
Today's topic of strategies for grid resilience and reliability is
incredibly important to LADWP and Los Angeles. A reliable and resilient
electric grid is essential for a strong and vibrant Los Angeles.
LADWP's power reliability continues to beat national norms for both
interruption frequency and duration indices, which are reported by most
U.S. electric utilities. Through the Power System Reliability Program,
we continue to invest significantly in our power infrastructure,
replacing aging electrical equipment and upgrading undersized ones.
Impacts of a changing climate affect the reliability and resilience
of LADWP's electric grid. As Los Angeles Mayor Eric Garcetti said when
he appeared before this committee last summer, ``we now live with the
ever-present threat of longer wildfire seasons; with more days of
extreme heat; with prolonged drought conditions''. For example, in July
2018, Los Angeles experienced record-breaking heat, not only in the
typically hotter San Fernando Valley, but temperatures in downtown Los
Angeles reached 108 degrees. And in the summer of 2020, California
experienced its worst heat wave in more than a decade. During that
time, LADWP was able to provide surplus power to the California
Independent System Operator to support the electrical grid in other
parts of California. LADWP has had enough electrical generating
capacity to meet its needs on the highest demand days, the Power Supply
Reliability Program investments have strengthened the grid, and power
system crews work around the clock to keep the power on but sustained
heat waves drive soaring demand for electricity and strain on
electrical cables and distributing stations. That can lead to power
outages. When it does not cool down at night during a heatwave, higher
nighttime temperatures can further tax equipment and potentially cause
more or longer outages.
Los Angeles' grid is also threatened by more frequent and intense
wildfires. Wildfires pose a significant threat to public safety--
directly and also because of their impact on the electrical grid. Over
the past several years, California has experienced its largest fire
seasons on record and the fire danger is magnified by higher
temperatures, high winds, drier conditions and drought. Wildfire can
damage the electrical grid--potentially putting power lines out of
service for days or weeks. For example, in 2019, the Saddleridge Fire
burned in an area with three major transmission corridors that bring
electricity into the Los Angeles basin, reducing power imports.
Fortunately, temperatures were cool, electrical demand was low but
LADWP came within 135 megawatts (MW) of shedding load. Like other
California electric utilities, LADWP prepares and implements a wildfire
mitigation plan which includes system hardening, vegetation management,
operating protocols and maintenance programs.
While we work every day to ensure our electricity grid is reliable,
resilient and affordable, LADWP is transforming its electric grid to
100 percent clean energy to support the City of Los Angeles'
decarbonization goals. LADWP's strategy--to expand renewable energy,
replace coal with clean energy, transform local generation, upgrade
transmission, develop energy storage systems, invest in distributed
energy resources like rooftop and other local solar, help our customers
use electricity more efficiently and support the electrification of
vehicles and buildings--is dramatically reducing our greenhouse gas
emissions. By the end of 2019, LADWP reduced its greenhouse gas
emissions from electricity generation by approximately 56 percent below
our 1990 levels, all while maintaining power rates that are
competitive, and generally lower than in other cities in California.
Through the remainder of this decade, Los Angeles' goals include
providing an energy mix that is 80 percent renewable and 97 percent
carbon--free resources by 2030 on the way to a 100 percent clean energy
grid.
To understand the pathways to 100 percent clean energy for LADWP,
the National Renewable Energy Laboratory completed its LADWP's 100
Percent Renewables (LA100) Study in March 2021. https://www.nrel.gov/
analysis/los-angeles-100-percent-renewable-study.html This in-depth and
sophisticated analysis studied various scenarios to achieve a 100
percent renewable energy grid while prioritizing reliability, equity
and affordable rates for our customers. NREL's LA100 study showed
multiple paths for LADWP to achieve a 100 percent renewable and carbon-
free grid and by as early as 2035. Following the release of the LA100
Study, Los Angeles Mayor Garcetti and the City Council committed LADWP
to achieve 100 percent carbon free energy by 2035. LADWP's zero carbon
grid will also enable deep decarbonization and reduction in air
pollution, including nitrogen oxides and fine particulate emissions
coming from other sectors of the economy through electrification of
end-uses such as transportation and buildings, improving the health of
Angelenos.
This 2035 carbon-free scenario includes significant rapid increase
in the deployment of renewable and zero--carbon resources and shows
that wind and solar resources, enabled with energy storage, are
fundamental to providing the majority of energy required to meet future
load. There is a need to accelerate the construction of new
transmission lines and investments in the distribution grid to support
the growth in renewable energy and meet increases in energy demand.
Customers will play an important role through equitably increasing
rooftop solar, energy efficiency and demand management and through the
electrification of transportation and buildings. In the Los Angeles
basin, firm generation, using renewably derived fuels such as green
hydrogen that can come on-line quickly but is likely to be used
infrequently, will help maintain electric system reliability.
While we continue to develop the steps to meet the 100 percent
carbon free power supply target by 2035, projects that support these
goals are moving forward. For example, in December 2021, the Red Cloud
Wind project in New Mexico went into service, increasing renewable
energy by 6 percent for 2022. We are also launching the Comprehensive
Multifamily Retrofit program for deep energy savings for residents
living in multifamily units. We are moving forward with a number of
needed transmission and distribution grid infrastructure upgrades in
the Los Angeles basin. We are also partnering with the Los Angeles
Department of Recreation and Parks on a grid resiliency project at the
Green Meadows Recreation Center in South Los Angeles, providing solar
panels, energy storage and electric vehicle chargers in a disadvantaged
community.
Other key projects currently underway include transforming the
Intermountain Power Project in Utah, the last remaining coal plant in
LADWP's energy portfolio. With our partners in the Intermountain Power
Agency, we are building a new state-of-the art combined-cycle
generating system that will use green hydrogen as a fuel source. ``IPP
Renewed'' will be capable of operating with a blend of natural gas and
30 percent green hydrogen when it starts operation in 2025 and 100
percent green hydrogen in the decades to come. It will also feature a
seasonal renewable energy storage system using salt caverns for storage
of green hydrogen and will utilize the existing high-voltage
transmission line to carry renewable energy to the Los Angeles basin.
We are committed to achieving these decarbonization goals in an
affordable, equitable and reliable way. There are a number of things
that the federal government can do to help us in our efforts towards a
reliable, resilient and clean grid in Los Angeles. First, federal
funding can help leverage our investments towards a clean energy grid.
Federal investments aimed at carbon reduction can accelerate technology
development, deployment and help utilities like LADWP and others
decarbonize at scale equitably. For example, LADWP is participating in
HyDeal LA, a cooperative effort aimed at delivering green hydrogen at
$1.50/kg by 2030. Other types of federal support, including the
Department of Energy Loan Program Office loan authority can help bring
innovative projects to market.
Furthermore, the federal government can accelerate renewable energy
deployment by supporting the expansion of the nation's transmission
grid. LADWP is a large transmission infrastructure owner, with
transmission assets that span five western states. We see the need for
additional transmission investment, including increasing local
transmission capacity to integrate renewables and maintain resiliency.
We also know from the LA100 study that high levels of electrification
will provide additional electricity sales that will help mitigate rate
impacts. Federal investment in electric vehicle charging infrastructure
could help us realize those benefits in addition to meeting the needs
of the growing electric vehicle market.
Other federal policies can help utilities remain reliable and
resilient by supporting efforts to reduce wildfire risk. LADWP has
water and power infrastructure that goes through National Forests and
Bureau of Land Management lands and we work closely with those agencies
to ensure continued and safe operation of those important assets.
Federal renewable and clean energy tax credits incentivize the
deployment of those technologies. However, as a public agency, LADWP
cannot access those directly. The value of the tax credits may be
reflected in, for example, the price in a power purchase agreement but
not in projects we may build or own ourselves. Policies that would
allow tax-exempt utilities like LADWP to benefit directly from those
energy tax incentives can make them fairer and more effective.
Thank you for inviting me to share some thoughts about the critical
issue of grid resilience and reliability.
Ms. Castor. Thank you, Ms. Sutley.
Next, Dr. Wayland, you are recognized for 5 minutes.
STATEMENT OF KAREN WAYLAND, PH.D.
Dr. Wayland. Thank you. Good afternoon, Chair Castor,
Ranking Member Graves, and members of the committee. Thank you
for convening this important discussion on the resilience and
reliability of the nation's electric grid.
My name is Karen Wayland. I am the CEO of GridWise
Alliance. Our members are industry stakeholders focused on
accelerating innovation to deliver a secure, reliable,
resilient, and affordable grid and support decarbonization of
the U.S. economy.
GridWise members include utilities of all sizes and
business models--regional transmission operators, grid
equipment manufacturers and tech companies, research
institutes, and others. For our members, especially our
utilities, the resilience, reliability, and affordability of
electricity is of paramount importance, and all are committed
to a low-carbon power supply.
Let me start by saying that every utility in every state
faces resilience challenges, from severe storms to drought,
earthquakes, sea level rise, and geomagnetic pulses, each
requiring different risk management practices. And cyber and
physical attacks are a constant, increasing, and evolving
threat to the electricity system.
GridWise member Hitachi Energy notes that ``our grid is
evolving to be more interconnected and operating closer to its
limits, making the ability to ride through disruptive events
like extreme weather more important than focusing just on
avoiding disruption entirely.''
They note, ``Power systems should be able to fall back on
locally available sources in case the transmission grid is not
available. Even if local generation capacity is insufficient to
cover local load completely, supplying critical
infrastructures, such as water supply, hospitals, or
telecommunication networks, would be essential at the
minimum.''
GridWise convened members representing over 40 percent of
the U.S. electric customers to discuss grid resilience a few
years ago in the face of large-scale disruptive events. Our
report includes lessons from our members' real-world
experience.
First, grid modernization technologies can prevent outages
and decrease projected impacts.
Second, distributed generation technologies can enhance the
resilience of the grid.
Third, information and communications technology
infrastructures should be more resilient, reliable, and secure.
And then, fourth, emergency response planning processes can
result in better deployment and coordination of human and grid
equipment resources.
I would like to give you some examples of GridWise members'
work to enhance grid resilience.
First, let's start off with Chair Castor, a utility in her
state, FPL, Florida Power and Light. Following devastating
hurricanes in 2004 and 2005, FPL invested significantly in grid
hardening and preparedness and has since become a leader in the
industry on resilience.
The 2017 Hurricane Irma was a stronger storm than Wilma in
2005, but, as a result of their investments, average customer
outages were 60 percent less and days to full power restoration
for all customers went from 18 days to 10 days. The faster
restoration had broad societal and economic benefits, but the
investments in resilience also had day to day reliability
benefits.
Portland General Electric will mitigate wildfires, severe
storm events, and growing load by adding weather stations and
wildfire cameras, underground and high-voltage lines, adding
smart protective relays, storage, and rebuilding substations,
upgrading transmission lines, and creating resilience zones
that will serve residents during potential outages during
winter storms and wildfire season when power shutoffs may be
necessary to prevent a catastrophic wildfire event. PGE's
distribution automation investments alone have prevented
millions of customer outage minutes since 2018.
The February 2021 freeze led Bandera Electric Cooperative
in Texas to focus on behind-the-meter residential resources
like solar storage, HVAC systems, pools, and other distributed
energy resources as critical to grid resilience. BEC's new
platform, Apolloware, now collects real time-data to provide
visibility at the grid edge.
For example, during the freeze event, home power use was
500 percent higher and HVAC demand 620 percent higher than
normal, but energy use varied by a factor of 21 times, meaning
that some homes were more cold-sensitive and used more energy
relative to other homes.
Apolloware also provided insights into how appliances
behind the meter were using electricity and allowed BEC to
notify customers to stop charging storage units to save energy.
In a filing to the Public Utility Commission of Texas,
BEC's CEO concluded that ``having behind the meter visibility
would help ERCOT with better grid planning and, more
importantly, better understanding of how to minimize blackouts
through the development of an intelligent demand response
program based on fleet-wide monitoring control of HVAC, water
heaters, pool pump devices,'' and others.
Further, ``we have the technology to operate an intelligent
grid down to the appliance level, but we need energy-efficiency
programs and demand response programs tied to market pricing to
keep the loss of power voluntary. If these programs had been in
place last February, [the CEO believes] . . . that voluntary
load reductions would have been adequate to keep the grid from
rolling blackouts on a statewide basis.''
The $11 billion in the bipartisan infrastructure law for
resilience funding will allow utilities around the country to
accelerate their resilience projects. GridWise Alliance thanks
the committee for the opportunity to provide insights on the
resilience of the nation's electricity system.
Thank you.
[The statement of Dr. Wayland follows:]
Testimony of
Karen G. Wayland, Ph.D.
Chief Executive Officer
GridWise Alliance
U.S. House of Representatives Select Committee on the Climate Crisis
``Keeping the Lights On: Strategies for Grid Resilience and
Reliability''
February 15, 2022
Good afternoon, Chair Castor, Ranking Member Graves, and other
members of the Select Committee. Thank you for the opportunity to
appear before you today to participate in this important hearing on the
resilience and reliability of the nation's electricity grid.
My name is Karen Wayland, and I am the CEO of GridWise Alliance.
The GridWise Alliance leads a diverse membership of electricity
industry stakeholders focused on accelerating innovation that delivers
a secure, reliable, resilient, and affordable grid to support
decarbonization of the U.S. economy. GridWise is unique in its focus on
the electric grid's broader ecosystem, advocating the value of
integrating technologies that modernize and transform the grid. We
drive impactful change through our diverse membership of utilities,
manufacturers, grid operators and researchers united in a common belief
that the electric grid is the critical enabling infrastructure of a
decarbonized economy.
The GridWise membership includes investor-owned utilities,
municipal utilities, rural cooperative utilities, regional transmission
operators, grid equipment manufacturers and technology companies,
vendors, national laboratory and research institutions, and others.
GridWise has been convening member companies that have been leading the
transformation of the electricity industry since our founding in 2003.
For our utility members, the resilience, reliability, and affordability
of electricity is of paramount importance, and all are committed to a
low-carbon power supply.
Threats to the Nation's Electricity System
The massive Texas power failure in February 2021 and wildfires in
California have focused public attention on the electric grid \1\ and
emphasized the growing dependence of all sectors of the economy on
reliable electricity. The Texas blackout exposed some market and
regulatory issues unique to that state, and the scale of economic loss
is related to the size of the nation's largest state over which those
losses are projected, but increasingly severe weather threatens power
grids across the country. There were a record 22 weather events in 2020
in which the costs of damage exceeded $1 billion,\2\ and the last two
decades have seen a 67% increase in major power outages from weather
events (Texas ranks second behind Michigan in the number of major
outages).\3\ Five of the worst wildfires in US history occurred in the
last four years.\4\ The utility industry is also under increasing
threats of disruption from cyberattacks from both state-actors, like
Russia and non-state actors. And because our critical infrastructure
systems are increasingly interdependent, power outages can lead to
cascading failures that affect other systems like water treatment (as
happened in Texas last month) or gasoline dispensing (as happened in
New York following Superstorm Sandy).
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\1\ GridWise Alliance uses the term ``electricity system'' to
encompass the entire network of generation, transmission, distribution
and consumer/end users of electricity, and ``electric grid'' to refer
to the transmission and distribution system. Here, we use ``electric
grid'' as it has been used in the popular press.
\2\ National Oceanic and Atmospheric Administration. ``Billion
Dollar Climate and Weather Disasters: Time Series.'' https://
www.ncdc.noaa.gov/billions/time-series, accessed March 22, 2021.
\3\ Climate Central. ``Power OFF: Extreme Weather and Power
Outages.'' https://medialibrary.climatecentral.org/resources/power-
outages, accessed March 22, 2021.
\4\ New York Times. ``These Changes Are Needed Amid Worsening
Wildfires, Experts Say.'' https://www.nytimes.com/2020/09/10/climate/
wildfires-climate-policy.html, accessed March 22, 2021.
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We should use the Texas and California blackouts as drivers for
conversations about enhancing grid resilience, but we should not lose
sight of the ranges of threats that could disrupt power supply at the
local, regional, or national level, or even globally, each requiring
different risk management practices.
When I was at the U.S. Department of Energy (DOE), my policy team
commissioned a report titled ``Resilience of the U.S. Electricity
System: A Multi-Hazard Perspective'' \5\ as part of the second
installment of the Quadrennial Energy Review.\6\ The report identified
a range of threats to the electricity sector that grid owners and
operators, and federal, state, and local regulators and policy makers
must consider while planning for and investing in grid resilience
(Table 1). These threats range from extreme weather (hurricanes,
floods, winter storms) to geological (earthquakes and geomagnetic
pulses) to human-caused (cyber and physical attacks), with likelihood
of occurrence varying from extremely low but with high impact to very
likely with low- to-high impact. Similarly, the risks differ across the
components of the electricity system. Planning for grid resilience
requires risk management strategies for the range of hazards and
probabilities that could impact grid infrastructure.
---------------------------------------------------------------------------
\5\ Argonne National Laboratory, Brookhaven National Laboratory,
Los Alamos National Laboratory, Oak Ridge National Laboratory, Pacific
Northwest National Laboratory, and Sandia National Laboratories.
``Resilience of the U.S. Electricity System: A Multi-Hazard
Perspective.'' https://www.energy.gov/policy/downloads/resilience-us-
electricity-system-multi-hazard-
perspective, accessed March 22, 2021.
\6\ U.S. Department of Energy. ``Quadrennial Energy Review--
Transforming the Nation's Electricity System: Second Installment of the
Quadrennial Energy Review.'' https://
www.energy.gov/sites/prod/files/2017/02/f34/
Quadrennial%20Energy%20Review--
Second%20Installment%20%28Full%20Report%29.pdf, accessed March 22,
2021.
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Table 1. Detailed Integrated Assessment of Risk and Resilience in the
Electricity Sector.
Source: ``Resilience of the U.S. Electricity System: A Multi-Hazard
Perspective
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Caption: Assessment of risk and status of risk management practice are
based on information in Section 4, published literature, and expert
judgement (for statistically unknown threats). Table cells represent a
qualitative assessment of risk by electric system component and threat.
Some threats are divided into low or high intensity threats. Estimates
of individual subcomponents of risk are presented for each system
component and threat: probability refers to the frequency or likelihood
of a threat occurring; vulnerabilty refers to the sensitivity of a
system component to harm or damage; impact refers tothe potential
severity of damage in terms of financial costs, affected coustomers,
and/or health and safety. This table forms the basis for Table 7 in
Section 5.2.
Achieving Resilience
The North American Electric Reliability Corporation (NERC), the
organization that sets standards for the reliability of the nation's
bulk power system, defines reliability as the ability ``to meet the
electricity needs of end-use customers even when unexpected equipment
failures or other factors reduce the amount of available electricity.''
\7\ Reliability metrics capture the frequency (System Average
Interruption Frequency Index, or SAIFI) and duration (System Average
Interruption Duration Index, or SAIDI) of power outages. These metrics
are inadequate to describe the ability of the electricity system to
withstand disruptions, minimize the consequences of disruptions that do
occur, and quickly recover from those disruptions, which are the
defining characteristics of system resilience. A resilient electricity
system can also adapt through post-incident learning that feeds into
planning and future response.
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\7\ North American Electricity Reliability Corporation.
``Frequently Asked Questions.'' https://www.nerc.com/AboutNERC/
Documents/NERC%20FAQs%20AUG13.pdf, accessed March 22, 2021.
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Enhancing the resilience of the electricity grid is a multi-pronged
approach encompassing planning, operations, and technology. The
``Resilience of the U.S. Electricity System: A Multi-Hazard
Perspective'' \8\ report identified three facets of building
resilience:
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\8\ Argonne National Laboratory, Brookhaven National Laboratory,
Los Alamos National Laboratory, Oak Ridge National Laboratory, Pacific
Northwest National Laboratory, and Sandia National Laboratories.
``Resilience of the U.S. Electricity System: A Multi-Hazard
Perspective.'' https://www.energy.gov/policy/downloads/resilience-us-
electricity-system-multi-hazard-
perspective, accessed March 22, 2021.
Resourcefulness: in practice this could be applied to
the power transmission and distribution system by implementing
a constant monitoring and optimized dispatching and/or load
shedding to respond to anomalies. For example, if a critical
transmission line is lost, power might still be delivered by
temporarily overloading parallel/alternative routes and
monitoring conductor temperature and time of overload
conditions.
Redundancy: over-engineering critical systems to be
able to function, at least at a reduced level, in critical
conditions.
Restoration: coordination and integration among
stakeholders of restoration efforts, plans optimized for a
variety of scenarios to avoid the need of improvising a
solution during critical conditions. Sharing best practices
among different organizations (from local to global,
nationwide) and practicing simulated emergencies should be
mandated and coordinated at the national level. This sharing
should include mutual assistance programs and their resources
(personnel, equipment, parts) during the restoration phase.
Electric utilities have a range of resilience options depending
on the threats and hazards facing the region and specific
infrastructure. Table 2 presents a list of options that
utilities are pursuing to enhance system resilience with the
goal of protecting the system, reducing the impact and areal
extent of any damage, and accelerating restoration time.\9\
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\9\ Argonne National Laboratory. ``Front-Line Resilience
Perspectives: The Electric Grid.'' https://www.osti.gov/biblio/1344876,
accessed March 22, 2021.
Utilities have a suite of options to enhance resilience of grid
infrastructure (Table 2). Grid resilience measures aim to prevent
disruptions to power supplies and reduce the severity of impacts and
time to recovery in the event of power loss. Hardening of critical
infrastructure for resilience may include undergrounding of some power
lines, upgrading poles and towers to withstand high winds, and
elevating substations above projected flood levels. Trees are the
leading cause of power outages,\10\ so utility vegetation management
programs reduce flammable materials near power lines and remove trees
at risk of falling. Utilities conduct practice drills and exercises
throughout the year to prepare for disaster response. In the days
leading up to an event, utilities will pre-stage crews and equipment in
advance of events and may have plans to deenergize some facilities to
prevent damage. Mutual assistance agreements with neighboring utilities
help speed restoration efforts by deploying emergency response crews to
disaster areas. But hardening and disaster planning alone are not
sufficient to improve resilience.
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\10\ T&D World. ``Plan for Better Vegetation Management in 2019.''
https://www.tdworld.com/vegetation-management/article/20971840/plan-
for-better-vegetation-management-in-2019, accessed March 22, 2021.
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New grid technologies that improve situational awareness and
control of grid equipment can improve the reliability and resilience of
the electricity system. Sensors can alert grid operators to localized
disruptions, allowing more targeted response by line crews, and
automated grid equipment can automatically sense and response to
conditions in the field, including rerouting power around downed lines
and self-healing damage. Remote sensing technologies allow utilities to
obtain data from drones or NASA images to more effectively manage power
line vegetation or assess damage. Advanced meter infrastructure (AMI),
or ``smart meters,'' help grid operators identify local outages and
prioritize response crews and verify when power is restored, both
reducing the time of outages and the cost of response by reducing
``truck rolls'' or repair visits.
GridWise member Siemens Energy describes some of its new
technologies that utility and power generation customers are deploying
to improve resilience:
Mobile Resiliency Flexible Extra High Voltage Large
Power Transformers: different from the traditional solutions in
the industry, these Siemens Energy units can be deployed and
energized extremely quickly (in benchmark times and much
quicker than standard in the industry), are extremely flexible
(can be used in a variety of configurations and voltage levels)
and have large power (MVA) ratings to be used in large
substations and power plants. While several utilities in the US
have purchased these units to store in their equipment yards,
Siemens Energy also operates a leasing program in which a
Resiliency Generator Step Up (GSU) Large Power Transformer is
owned by Siemens Energy in the US and leased to customers
during contingency situations until they are able to source a
permanent replacement transformer.\11\ Note: that transformer
is currently deployed at a power plant and other utilities have
requested Siemens Energy deliver it to their sites as soon as
it is again available.
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\11\ https://financialpost.com/pmn/press-releases-pmn/business-
wire-news-releases-pmn/siemens-energy-installs-worlds-first-leased-
rapid-response-transformers-allowing-a-large-generating-
facility-to-return-to-
service#:˜:text=Siemens%20Energy%20is%20leasing%20the,
their%20existing%2C%20conventional%20GSU%20transformer.
---------------------------------------------------------------------------
Mobile Substations: A mobile substation can act as a
stand-by emergency grid restoration solution. It can be
mobilized and set up within a couple of hours in the event of a
grid failure, hence reducing the technical and financial impact
of power outage.
Table 2. Electric Utility Resilience Enhancement Options.
Source: Argonne National Laboratory, Front-Line Resilience
Perspectives: The Electric Grid (ANL/GSS-16-2).
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Mobile SVC (STATCOM): Siemens Energy developed a
flexible, mobile substation for GridWise member Dominion Energy
(Virginia) to help keep the grid stable to allow sufficient
time to plan for renewables on its system. The substation
technology also responds to any faults on the network within
milliseconds.\12\ Dominion notes that ``The mobile STATCOM
gives utilities the flexibility to develop short-term plans
while successfully constructing a long-term solution. The
ability to reduce outage contingencies and improve economic
opportunity were the driving force.'' \13\
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\12\ https://www.smart-energy.com/regional-news/north-america/
dominion-energy-to-utilise-
mobile-svc-statcom-tech/
#:˜:text=US%20utility%20Dominion%20Energy%20will,fast%20
and%20controlled%20reactive%20power.
\13\ https://www.tdworld.com/digital-innovations/statcom/article/
21132983/dominion-energy-
develops-mobile-statcom
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UPFC+ (Unified Power Flow Controller): UPFC+ is used
to effectively manage the transmission system and provide the
stability and resilience through an extremely fast response
with both series and parallel compensation to keep lines within
the n-1 criterion and the electricity flowing. The UPFC can
balance load flow in the AC grid, rapidly bypass overloaded
line sections, provide reactive power and dynamic voltage
control. It provides reactive power compensation, voltage
control and active power load flow control in one unit.
Modern utility communication networks are critical for grid
resilience. Modern networks improve operational speed and visibility
for grid operators, and customer-facing communication channels provide
information to customers on estimated time of power restoration as well
as safety information and recommendations in the event of extended
outages. Whether new utility applications provide grid situational
awareness, automatically de-energize broken power lines before they hit
the ground and start a wildfire, or coordinate small, distributed
microgrids into a single virtual power plant, their operation will
require utility private broadband networks--both wireless and wired.
For example, Anterix, a GridWise member, recently announced the
publication of a joint White Paper with Schweitzer Engineering Labs
detailing the successful testing of a wildfire mitigation solution that
when deployed as part of a wireless broadband network, can de-energize
a falling power line before it hits the ground, removing its ability to
spark a wildfire.
As decarbonization efforts lead to increased reliance upon
distributed renewable energy resources and vastly greater
electrification, the reliable, resilient, efficient and safe operation
of the grid will be of growing importance in major sectors of the
economy, from manufacturing to transportation. Utilities' broadband
communications networks are a foundational element supporting
decarbonization goals--they enable the smart grid capabilities
utilities will rely on to reduce their greenhouse gas emissions. In the
last year alone, a number of GridWise members have investigated,
supported, or pursued the deployment of private wireless networks.
Distributed generation technologies such as microgrids and mobile
generators can enhance the resilience of electric infrastructure
serving critical loads, such as hospitals, water treatment facilities,
and emergency shelters. Microgrids incorporate a generating source like
a generator or solar panels with storage and energy management systems
and can be ``islanded'' from the grid during power disruptions to
provide back-up power. Mobile generators can provide temporary power to
critical facilities, and utilities should identify locations where
generators can be easily connected to the grid during emergency
planning processes. Rooftop solar and storage systems can provide
backup power to homes during short outages. Aggregated distributed
energy resources can contribute power to meet load during extreme heat
or cold events and mitigate disruptions associated with distribution or
transmission line failure or loss of generation units.
GridWise member Hitachi Energy notes that our power systems are
evolving to be more interconnected and operating closer to their
limits, making the ability to ride through critical disruptive events
like extreme weather more important than focusing instead on avoiding
disruptions entirely: ``Power systems should be able to fall back in a
mode using locally available sources in case the transmission grid is
not available. Even if local generation capacity is insufficient to
cover local load completely, supply critical infrastructures, such as
water supply, hospitals or telecommunications networks, would be
essential as the minimum.'' \14\ (Figure 1)
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\14\ https://www.hitachienergy.com/us/en/news/perspectives/2020/07/
flexibility-and-resilience-our-aces-in-extraordinary-times
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Figure 1. Increasing resilience by ability to fall back on local
supply (Source: Hitachi Energy)
GridWise Alliance Member Investments in Grid Resilience
As noted above, the U.S. economy is increasingly dependent on
electric power and this dependence is likely only to grow in coming
years with growing electrification of the transportation, building and
industrial sectors. The growing interdependency of lifeline systems and
the electricity system increases the risk of a ``cascading effect''
during extreme events. As extreme weather events increase in frequency
and strength, grid owners and operators are taking deliberate measures
to ensure the system's reliability and flexibility support the Nation's
needs. Utilities around the country are developing investment plans to
deploy grid modernization technologies that can significantly enhance
electric system reliability and resilience and prevent these cascading
events. Several GridWise member utilities provided examples of their
resilience investments to share with the Committee.
FPL (Florida)
The 2004 and 2005 hurricane seasons were one of the most
extraordinary and challenging seasons on record for FPL and its
customers. In 2004 alone, there were 15 storms and six major
hurricanes. FPL was impacted by seven storms in its service territory,
that resulted in significant customer outages and requiring
extraordinary efforts to rebuild and restore the electric
infrastructure which compelled FPL to re-examine and evaluate its
infrastructure and policies.
Since 2006, FPL has been implementing Florida Public Service
Commission-approved programs to strengthen its transmission and
distribution (``T&D'') infrastructure (See Figure 2). These programs
include multiple storm hardening and storm preparedness programs, such
as feeder hardening, replacing wood transmission structures, vegetation
management, and pole inspections. As demonstrated by recent storm
events, these ongoing storm hardening and storm preparedness programs
have resulted in FPL's T&D electrical grid becoming more storm
resilient, experiencing less infrastructure damage and reduced
restoration times, as compared to non-hardened facilities.
Specifically, Table 3 highlights the significant reduction in
restoration times due to hardening the grid from Hurricane Wilma in
2005, and Hurricane Irma in 2017. Despite Hurricane Irma being a
stronger storm, the average customer outage during Irma was over 60%
less than Hurricane Wilma. FPL's hardened feeders have performed over
40% better than non-hardened feeders on day-to-day reliability not just
storm events. The faster restoration during storm events results in
positive economic impact to communities with customers getting back to
normal operations sooner. FPL is an industry leader in the electric
grid resiliency space and has shared best practices and strategies with
other utilities across states.
These programs have also provided significant improvements in day-
to-day reliability. When old conductors, equipment and connectors are
replaced as part of feeder hardening, the system becomes more efficient
and therefore improves line losses resulting in a positive economic and
environmental benefits.
Additionally, as FPL President and CEO Eric Silagy stated late last
year regarding climate change: ``Florida is a rapidly growing state on
the front lines of climate change and our customers deserve bold,
decisive, long-term actions as we continue building a more resilient
and sustainable energy future all of us can depend on, including future
generations.''
FPL Key Storm Hardening Initiatives
Feeder Hardening:
Feeders (main distribution lines) are the backbone and therefore a
critical component of FPL's overhead distribution system. Since 2006,
FPL has been hardening its distribution feeders to meet Extreme Wind
Loading (EWL) as defined by NESC rule 250.C to existing and new
feeders. This allows poles to withstand wind gusts in upward of 145 mph
in many parts of our service area. The design loading impact to meet
EWL usually requires some combination of stronger poles and shorter
span lengths (distance between poles) to reduce the wind loading
imposed on the conductors and cables.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Figure 2. FPL investments in grid resilience.
Table 3. Improvement in restoration times from Hurricane Wilma to
Hurricane Irma due to grid hardening.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
FPL's design strategy considered a philosophy of Prevention (EWL)/
Mitigation (minimizing damage) and Restoration (improving the
efficiency of restoration in the event of failure). FPL implemented a
system-wide Design Guidelines containing criteria which will apply EWL
to the design and construction of all new overhead facilities, major
planned work, relocation projects, as well as daily work activities.
These guidelines primarily are associated with changes in pole class,
pole type and desired span lengths. FPL began its efforts by hardening
feeders serving Critical Infrastructure Facilities (CIF) such as
hospitals, 911 Centers, special needs shelters, water treatment plants,
police, and fire stations. In addition, FPL targeted feeders that
served community needs such as gas stations, pharmacies, and grocery
stores to help bring the community back to normalcy after a major storm
event. FPL hardened over 125 highway crossings, that could otherwise
impede traffic flow of support and emergency vehicles after a major
storm and over 300 ``01'' switches (first pole out of a substation with
a feeder switch). As of year-end 2021, nearly 2/3\rd\ or 64% of FPL's
feeders are either hardened or placed underground.
Distribution Pole Inspection:
FPL inspects all its distribution poles on an 8-year cycle or
roughly 1/8\th\ of its distribution poles annually. Inspections include
a visual inspection, sound and bore, excavation and treatment where
applicable. Strength calculations are also performed on wood poles to
determine compliance with NESC requirements. The poles that are not
suitable for continued service are designated for replacement or
remediation.
Transmission Pole Inspection and Hardening:
FPL inspects its transmission circuits, substations, and other
equipment on a six-year cycle. All of FPL's transmission structures are
visually inspected from the ground each year. FPL performs climbing or
bucket truck inspections on all wood transmission structures on a six-
year cycle and all steel and concrete structures on a ten-year cycle.
Inspections for wood structures include an overall assessment of the
condition of the structures, as well as other pole/structure components
including the foundation, all attachments, insulators, guys, cross-
braces, cross-arms, and bolts. If a wood transmission structure does
not pass visual inspection, it is designated for replacement with a
concrete or steel transmission structure. Ninety-nine percent of
transmission structures are now concrete or steel with the plan to
reach one hundred percent by 2022. One hundred percent of ceramic post
insulators on square concrete poles were replaced, to avoid cascading
events. FPL has started a multiyear program for strategically
converting overhead river crossings to underground.
Undergrounding:
To promote undergrounding, FPL provides cost credits towards
applicable local government sponsored overhead to underground
conversions. Over 63,000 customers have been converted as part of this
initiative.
Vegetation:
FPL's has a systemwide three-year average trim cycle for
distribution feeders and six-year average for lateral circuits (fused
tap lines). FPL's transmission system is inspected annually to prevent
vegetation-related outages.
Substation Storm Surge/Flood Mitigation Program:
FPL installed flood resistant substation doors and hardened windows
and louvers, as well as flood monitoring systems both inside the relay
vault and outside for situational awareness. FPL also developed a
process to deploy an AquaDam System to help protect against flooding.
Storm Secure Underground Program (SSUP): Lateral Undergrounding
In 2018, FPL began the SSUP pilot which targets certain overhead
laterals that were impacted by recent storms and that have a history of
vegetation-related outages and other reliability issues for conversion
from overhead to underground. Objectives of the pilot include
determining the most cost-effective ways to underground lateral
(neighborhood) power lines and testing different design and
construction methods. FPL has completed approximately six hundred SSUP
projects through the end of 2021, with another six hundred more planned
in 2022.
Smart Grid:
In addition to making FPL's electrical system more resilient, the
utility has installed several self-healing smart switches that help
during storm events and reduce the time it takes to restore power.
Those include more than 7,000 Automated Feeder Switches (AFS), more
than 95,000 Automated Lateral Switches (ALS), more than 40,000
Automated Transformer Switches (ATS) and approximately 40,000
Intelligent Sensors. Since 2011, over ten million customer
interruptions have been avoided because of smart grid devices.
Portland General Electric (Oregon)
Wildfire Mitigation:
PGE has developed plans to help mitigate increasing risk of
wildfires in our service territory due to climate change. Mitigation
activities include installing a network of weather stations and
wildfire cameras to increase our situational awareness and respond to
potential wildfire incidents in a more timely manner. System hardening
projects include targeted undergrounding of high voltage infrastructure
and/or reconductoring overhead lines in high risk fire zones with
covered (insulated) conductors. Other mitigations include installing
smart faulted circuit indicators, intelligent reclosers, and deploying
smart protective relays and settings to limit the arc energy during a
system fault and hence lowering the potential of starting a fire. These
targeted system upgrades are over the next 10 years with an investment
of $80-$100 million/year.
Benefit calculations for resiliency have not yet been developed,
however we expect significant reductions in Customer Minutes
Interrupted (CMI) in the areas that are transitioned to underground or
covered conductors.
Mt Hood Reliability:
Due to increasing wildfire risk and impacts from more severe storm
events, PGE is developing plans to increase reliability and resiliency
along our transmission and distribution system that serves customers
along the Mt Hood corridor. Included in this project is undergrounding
our 57kV transmission system that is the energy source for the mountain
and serves the City of Portland's Bull Run water and hydro generation
facilities. The Bull Run reservoirs are the main water source to nearly
1 million residents in the Willamette valley and is located in the
heavily treed forest on Mt Hood. The project aims to increase the
resiliency of this water supply system and reduce the risk of a
devastating wildfire in the protected area. Also included is developing
a resiliency zone in the Welches downtown area that will serve
residents during potential outages during winter storms and during
wildfire season where a Public Safety Power Shutoff (PSPS) may be
necessary to prevent a catastrophic wildfire event. This total project
is expected to take 10 years to complete at an estimated cost of $400-
$600 million dollars.
Willamette Valley Resiliency:
Due to increasing impacts from more severe storms, increasing load
growth in the Willamette Valley, and aging assets, PGE is developing
plans to increase reliability and resiliency on the transmission and
distribution system in the Willamette Valley Area. Included in this
project is the rebuild of six substations and the addition of two new
transmission sources. As part of the rebuilds, five substations and
their associated transmission lines are upgraded from 57 kV to 115 kV.
To increase reliability and resiliency on the transmission and
distributions systems, the upgraded substations are converted from
simple bus to ring bus configurations, aging substation assets are
replaced, direct buried feeders are replaced, and transmission lines
are upgraded. This total project is expected to take 7 years at an
estimated cost of $240 million dollars.
Energy Storage Microgrids:
PGE has developed two energy storage microgrids in our service
territory to offer community resiliency benefits. Both projects
leverage partnerships with customer investments in new solar resources
paired up with utility investment in energy storage and microgrid
controls. These projects were implemented with a PGE capital investment
of $2.5 million.
Distribution Automation:
PGE has been implementing a Distribution Automation (DA) program
for several years. This program installs intelligent devices on the
distribution system to automatically switch around faulted sections of
the system in order to restore customers quickly. PGE has spent at
least $13 million since 2018 on its DA program, benefiting 134,000
customers. PGE deployed SCADA-integrated G&W Viper ST reclosers,
Sentient MM3 and ZMI smart line monitors, S&C TripSaver II reclosers
and SEL-751 feeder breaker protective relays. PGE estimates the
TripSaver reclosers have prevented over 3 million customer outage
minutes since 2019 and the G&W Viper ST reclosers prevented over 8
million customer outage minutes since 2018.
Bandera Electric Cooperative (Texas)
In February 2021, the ERCOT power grid collapsed, reflecting
failures on several different levels. As a transmission-owning electric
utility, Bandera Electric Cooperative (BEC) was forced into ``rolling
black-outs'' to save the grid from complete collapse. Prior to the
ERCOT-mandated outages, Bandera had over 1500 outage events between Feb
12-14, 2021. The lessons BEC learned from the February 2021 event was
the need to understand what was going at the edge of the grid and
behind- the-meter residential solar, energy storage, HVAC systems, and
other distributed energy resources.
Having visibility into what is happening at the edge of the grid is
critical to grid resilience. BEC developed an energy analytic platform
called Apolloware that greatly improved grid resilience in 2022.
Apolloware Control Module (ACM) installs on residential and commercial
buildings where it monitors various appliance, solar panel power and
inverter, and electric service circuits, providing granular real-time
data on behind-the-meter energy consumption and generation. The ACM
transmits this data to a secure Apolloware cloud using the local
internet connection. Homeowners and authorized users can view this data
from any device through the Apolloware mobile app or website. In
February 2021, Bandera had over 400 service locations with Apolloware
with another 200 units planned for deployment by the end of 2021.
Apolloware allowed BEC to analyze energy use at the appliance level
after the 2021 freeze event and published the results in a paper
entitled, ``What was happening inside Texas homes during the February
2021 freeze?'' \15\ In this paper and a submission to the Public
Utility Commission of Texas (PUCT, Docket 52373), BEC described the
impact of energy efficiency on grid reliability and affordability.
Average home power draw was almost 500% higher and average HVAC power
demand 620% higher during the period of February 11-20 compared to
February 1, 2021. However, the kWh/sqft of homes monitored by
Apolloware varied by a factor of 21, meaning some homes were more cold-
sensitive and used more energy the colder the outside temperatures
relative to other homes. Apolloware also allowed BEC to gain insights
into what appliances behind the meter were using electricity (Figure
3). BEC discovered that during the freeze event, home batteries were
still being charged, so the utility was able to notify customers to
stop charging to save energy.
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\15\ https://www.ideasmiths.net/wp-
content/uploads/2022/02/BEC_TX_FREEZE_HOMES_APW_20220212_v2.pdf
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Figure 3. Average demand on 2-15-2021, by major end use within
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residential homes, as measured by Bandera Electric Cooperative.
While the weather in Texas on Feb 3-6 of 2022 was not as severe as
2021, Bandera experienced only 10 outages and was able to utilize
energy analytics to provide better transparency of real time energy
usage to its customers. In its submission to the PUCT in November 2021,
BEC concluded that ``Having granular individual data tied to
substation, feeder and phase is an important aspect of understanding
energy use tied to weather. . . Having behind the meter visibility and
transparency would help ERCOT with better grid planning and more
importantly better understanding of how to minimize black-outs through
the development of an intelligent demand response program based on
fleet wide monitoring and control of HVAC, Water Heaters and Pool pump
devices ties to wholesale market prices. If this type of program had
been in place during Winter Storm Uri the impacts would have been
minimal. With the right pricing signals (utilities) could incentivize
voluntary load reductions thereby avoiding MANDATORY rolling
blackouts.''
BEC's CEO, William Hetherington, concluded in the PUCT filing, ``We
have the technology to operate an intelligent grid down to the
appliance level, but we need energy efficiency programs and
individualized demand response programs that tie directly to market
pricing to keep the loss of power voluntary. If these programs had been
in place last February, I believe that Voluntary load reductions would
have been adequate to keep the grid for rolling blackouts on a
statewide basis.''
Exelon (Multiple states)
Preparing for the impacts of climate change across all its
jurisdictions, Exelon is investing to modernize its transmission and
distribution grids to make them stronger and more resilient. Efforts
include replacing poles to meet higher wind speeds, undergrounding
select lines and expanding capacity to increase redundancies to meet
critical load.
In New Jersey, as part of our broader strategic effort to better
serve its customers and modernize the energy grid, Exelon (Atlantic
City Electric) launched the Atlantic-to-Ocean Counties Reliability
Project, which includes rebuilding 15.1 miles of critical transmission
line using stronger utility poles and modern equipment between Port
Republic and Tuckerton. This transmission line serves more than 22,000
customers in the eastern portion of our service area in South Jersey
and is critical to customer reliability in Atlantic, Burlington and
Ocean counties. Construction began in 2020 and will be completed by
Summer 2022.
In the District of Columbia, the DC Power Line Undergrounding
initiative (DC PLUG) is a $500 million multi-year Pepco partnership and
engagement with the District of Columbia government to strategically
underground lines to secure the most vulnerable distribution power
lines in the face of increasingly severe weather. In 2020, Pepco
energized the first completed feeder, located in Ward 3, and initiated
new projects in Wards 7 and 8. This initiative is expected to improve
resiliency against major storms and to improve reliability by an
estimated 95% on selected feeders.
ComEd in Illinois is the first utility in the U.S. to permanently
install superconductor cable technology at a substation in Chicago's
Irving Park neighborhood. Superconductor technology can support 200
times the current of standard copper wire, and allows electricity to be
rerouted, creating a backup system that keeps electricity flowing in
the event of a major power grid interruption.
Grid Resilience in the Infrastructure Investments and Jobs Act
The bipartisan Infrastructure Investment and Jobs Act (IIJA) passed
by Congress in 2021 includes significant investments to make the grid
smarter, more secure and more resilient. Federal funding for grid
modernization will leverage private capital, accelerate grid
modernization plans, and help de-risk state public utility commission
decisions.
GridWise Alliance developed a set of investment priorities, ``Grid
Investments for Economic Recovery,'' \16\ for an infrastructure
package. The policy framework included recommendations for over $50
billion in funding for programs across the federal government to deploy
technologies that would increase grid flexibility, improve the
integration of buildings and vehicles with the grid, address
cybersecurity threats, create a domestic supply chain for critical grid
equipment, modernize utility communication networks and help address
the digital divide, and provide workforce training for digital, high
tech grid jobs. The GridWise investment recommendations also include
over $18 billion for mission critical public infrastructure resilience
and emergency preparedness. Our recommendations also include funding
for wildfire detection technologies.
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\16\ GridWise Alliance. ``Policy Framework for Grid Investments for
Economic Recovery.'' https://gridwise.org/wp-content/uploads/2021/01/
Policy-Framework-for-Stimulus-Investments-in-Grid-Modernization-FINAL-
1.5.21-002.pdf, accessed March 22, 2021.
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The IIJA includes significant funding as recommended in the
GridWise policy framework to defray the costs of resiliency, smart grid
flexibility, cybersecurity and other emergency preparedness
investments. Federal funding will leverage billions of dollars in
private capital total for grid-integrated resiliency infrastructure.
According to the 2020 U.S. Energy and Employment Report
(USEER),\17\ energy jobs grew faster in 2019 than job growth as a
whole, and the transmission, storage, and distribution sector, which
employed over 700,000 people, was projected to grow 3.5% in 2020. This
growth can be restored or accelerated by federal investment. Smart grid
funding of $8 billion in the 2009 recovery bill created 80,000 jobs and
accelerated the deployment of new technologies. The overall 2009 clean
energy investments, including renewable generation, advanced vehicles,
transit, equipment manufacturing, and job training, resulted in at
least 720,000 new jobs.\18\ The grid investments in IIJA will create
significant jobs over the five years of funding and spur economic
growth.
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\17\ National Association of State Energy Officials and Energy
Futures Initiative. ``U.S. Energy and Employment Jobs Report.'' https:/
/www.usenergyjobs.org/, accessed March 22, 2021.
\18\ White House Archives. ``Impact of the American Recovery and
Reinvestment Act on the Clean Energy Transformation.'' https://
obamawhitehouse.archives.gov/blog/2010/04/21/impact-american-recovery-
and-reinvestment-act-clean-energy-transformation, accessed March 22,
2021.
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GridWise Alliance Grid Resilience Workshop Outcomes
With support from DOE, the GridWise Alliance brought together
experts from utilities and grid equipment manufacturers and vendors for
a workshop to develop recommendations for improving grid reliability
and resilience in the face of very large-scale events (VLSE) like the
Texas freeze of 2021, Superstorm Sandy in 2012, and the California
wildfires of 2012 and 2020. The 20 utilities participating in the
workshop represented over 40% of the nation's electric customers. The
workshop resulted in a set of key recommendations detailed in
``Improving Electric Grid Reliability and Resilience: Lessons Learned
from Superstorm Sandy and Other Extreme Events.'' \19\ Those
recommendations are relevant for today's hearing about grid resilience,
implementation of IIJA, and further actions Congress can take to
improve grid resilience and reliability.
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\19\ GridWise Alliance. ``Improving Grid Reliability and
Resilience: Lessons Learned from Superstorm Sandy and Other Extreme
Events.'' https://gridwise.org/superstorm-sandy-report/, accessed March
22, 2021.
GRIDWISE LESSON LEARNED: GRID MODERNIZATION TECHNOLOGIES CAN PREVENT
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OUTAGES AND DECREASE PROJECTED IMPACTS
State and federal policy makers and electric utilities must
accelerate the integration of existing grid modernization technologies
to enhance grid resilience, reliability, safety, and security. Smart
grid technologies can monitor and protect against disruption, optimize
performance, and self-heal automatically. Improved situational
awareness and control of grid equipment significantly enhance a
utility's ability to reduce the impact of VLSEs and speed restoration
efforts.
GRIDWISE LESSON LEARNED: DISTRIBUTED GENERATION TECHNOLOGIES SUCH AS
MICROGRIDS AND MOBILE GENERATORS CAN ENHANCE THE RESILIENCE OF ELECTRIC
INFRASTRUCTURE SERVING CRITICAL LOADS
A diversified and integrated grid can enhance resilience, with
distributed energy resources able to provide back-up power to
individual customers and flexibility for grid operations. Microgrids-
distributed electric generation resources incorporating storage, load
control, and energy management systems-are able to operate
independently of the grid, although in normal operating conditions,
they are integrated with the grid. On the customer side, distributed
energy resources (DERs) like electric vehicles, rooftop solar, and
storage can provide resilience to individual buildings; when DERs can
be integrated with the grid and aggregated, they can provide services
(e.g. power, voltage support, frequency regulation) that grid operators
can harness to balance the grid during extreme events.
Microgrids
GridWise Alliance supports the expanded deployment of microgrids to
provide power to critical infrastructure and isolated communities.
Technical assistance should include identifying policy and regulatory
issues that inhibit the management of microgrids and DERs during
emergencies. Congress should ensure that as DOE implements its
resilience grant programs that it engages stakeholders to explore
potential solutions to regulatory and policy barriers associated with
multi-customer microgrids. Some issues raised by GridWise resilience
workshop participants include:
Backup generators can run out of fuel; how will fuel
supplies be obtained and ensured?
Backup generators can be rendered inoperable due to
flooding; are there ways in which to protect these assets from
flooding?
Renewable energy (e.g., rooftop solar) still requires
an operational grid to supply local loads; how can the system
supply these loads without grid power?
Multi-customer microgrids have diverse operating
requirements; who balances supply and demand on multi-customer
microgrids?
Some states prohibit third party sales of
electricity; how will that affect the viability of multi-
customer microgrids?
Microgrids are becoming more prevalent; will
utilities be allowed to own and/or manage microgrids?
Regarding ways in which to integrate and tie multi-
customer microgrids to the utility grid: what new rules, if
any, are needed?
Distributed Energy Resources (DERs)
GridWise Alliance supports the expansion of DER deployment to meet
resilience and climate goals and to meet changing customer
expectations. To maximize the full value and potential of DERs for
resilience and other goals, grid operators need a more flexible and
agile grid architecture.\20\ Advanced control and monitoring systems
that can dynamically respond to system changes will enable safe and
reliable power restoration and support safe dispatch of DERs during
VLSEs. GridWise recommends pairing investments to scale deployment of
DERs on the customer side with investments in grid modernization to
achieve continued power quality and reliability at the distribution
level through the optimization and aggregation of local DERs.
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\20\ GridWise Alliance. ``In an Accelerated Energy Transition, Can
U.S. Utilities Fast-Track Transformation?'' https://gridwise.org/wp-
content/uploads/2019/12/Perspectives-on-a-Future-
Distribution-System.pdf, accessed March 22, 2021.
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Congress should ensure that DOE funding for resilience and grid
flexibility can be used to continue the deployment of Advanced Metering
Infrastructure (AMI, or ``smart meters'') and smart inverters.
Smart meters significantly contribute to grid
resilience by providing grid operators with granular
information about the location of power outages and
verification that power has been restored. Utilities use this
information to prioritize dispatching repair crews and in
communicating with customers, which reduces restoration costs
and total outage time. Customers also experience benefits,
including less lost productivity, food spoilage, and
inconvenience, and reduced public health and safety
hazards.\21\ GridWise resilience workshop participants
estimated that integrating AMI meters with restoration
processes shaved 2-3 days off the time it would have taken to
completely restore power after Superstorm Sandy, a 10-15%
improvement in the speed of restoration.
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\21\ U.S. Department of Energy. ``Smart Grid Investments Improve
Grid Reliability,
Resilience, and Storm Recovery.'' https://www.energy.gov/sites/prod/
files/2014/12/f19/SG-ImprovesRestoration-Nov2014.pdf, accessed March
22, 2021.
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Smart inverters provide grid support functions, such
as voltage regulation, frequency support and ride through
capabilities.\22\ In the event of a power disruption, a rooftop
solar system will automatically shut off to prevent electricity
to flow onto the power lines and potentially electrocute line
workers. Smart inverters may include a circuit to allow
customers to power their homes without sending electricity to
the grid. Solar-battery combinations also allow customers to
island their systems from the grid during power outages but
have the added resilience benefit of providing power when the
sun is not shining.
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\22\ Interstate Renewable Energy Council. ``Smart Inverters.''
https://irecusa.org/regulatory-
reform/smart-inverters/, accessed March 22, 2021.
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Buildings and Energy Efficiency
Buildings consume 76% of electricity generated in the United
States.\23\ IIJA includes significant funding for weatherization and
energy efficiency improvements for federal, residential, and commercial
buildings through updated building codes, funding for building
retrofits, state energy grants, and other policy levers. Improving the
efficiency of the nation's building stock will enhance resilience to
energy disruptions in addition to saving energy. Well-insulated
buildings reduce heating and cooling load during periods of high
electricity demand associated with extreme weather and keep occupants
more comfortable during power outages. Focusing resources for
weatherization on underserved and low-income communities is critical to
ensure that those populations do not suffer disproportionately during
energy disruptions. IIJA funding will result in the weatherization and
retrofitting of millions of public and private buildings across the
country.
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\23\ U.S. Department of Energy. ``Quadrennial Technology Review,
Chapter 5: Increasing
Efficiency of Building Systems and Technologies.''
https://www.energy.gov/sites/prod/files/2017/03/f34/qtr-2015-
chapter5.pdf, accessed March 22, 2021.
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Congress should ensure that any programs to retrofit buildings
encourages the installation of grid-connected Energy Management Systems
(EMS) in addition to insulation and energy efficient windows and
appliances, where possible. Grid-integrated buildings can be
significant assets to the grid through load shifting, demand response,
and aggregation of distributed generation. According to the National
Association of State Energy Officials (NASEO), greater optimization of
the significant energy demand and supply functions that buildings
offer--on an automated basis--has far-reaching electricity policy and
regulatory implications. The benefits include lower costs, enhanced
resilience, reduced peak loads, enhanced energy efficiency and better
integration of distributed energy resources.\24\
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\24\ National Association of State Energy Officials. ``Grid-
interactive Efficient Buildings: State Briefing Paper.'' https://
naseo.org/data/sites/1/documents/publications/v3-Final-Updated-GEB-Doc-
10-30.pdf, accessed March 22, 2021.
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Funding should facilitate aggregation and management of building
loads through grid-connected Energy Management Systems (EMS) and smart
equipment/appliances within the building, and Advanced Meter
Infrastructure (AMI) at the grid-building interface. Though not the
subject of today's hearing, electric vehicles (EV's) can also provide
power and essential reliability services to the grid, and policies
designed to increase deployment of EVs (Title IV) should also encourage
vehicle-to-grid integration capabilities.
GRIDWISE LESSON LEARNED: INFORMATION AND COMMUNICATIONS TECHNOLOGY
(ICT) INFRASTRUCTURES SHOULD BE MORE RESILIENT, RELIABLE AND SECURE
Utilities' investments in operational fiber and wireless broadband
communications network are essential for a modern grid, as noted
previously. The legacy communications networks utilities have used for
decades to monitor and control the state of the grid and stay in
contact with utility workers and customers are inadequate for
integrating new grid and customer technologies, which are driving
increased communications traffic. These include ``demand response
systems, advanced metering infrastructure (AMI), distributed grid
operations, grid automation, operational systems for managing power
generation, outages and flows, two-way communications for consumer
energy efficiency initiatives, transmission interconnectivity, and
network security monitoring and reporting.'' \25\ Utility communication
systems can include fiber networks and private wireless networks must
be integrated with legacy communications networks.
---------------------------------------------------------------------------
\25\ Power Grid International. ``Challenges, Solutions in Utility
Communications Networks.'' https://www.power-grid.com/smart-grid/
challenges-solutions-in-utility-communications-
networks/#gref, accessed March 22, 2021.
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The broadband provisions in IIJA recognize that modern
communications networks can also be leveraged to provide middle mile
broadband and last mile internet service for end-use consumers. A
modern, digital communications network is therefore the backbone of a
modern grid and can provide significant resilience benefits, but it
will have to be more reliable than other grid infrastructure in order
to support a resilient grid that can monitor and react quickly to
disruptions.
GRIDWISE LESSON LEARNED: ENHANCED EMERGENCY RESPONSE PLANNING PROCESSES
CAN RESULT IN BETTER DEPLOYMENT AND COORDINATION OF HUMAN AND OTHER
RESOURCES
Electric utilities, in conjunction with the appropriate federal and
state agencies, continually develop predictive restoration plans at a
regional level. These plans can be informed by enhanced weather and
damage forecasting and advances in situational awareness and should use
real-time validations to continually refine and update such plans.
Mutual assistance agreements with neighboring utilities help speed
restoration efforts by deploying emergency response crews to disaster
areas. In the days leading up to an event, utilities will pre-stage
crews and equipment in advance of events and may have plans to
deenergize some facilities to prevent damage. Congress has raised
specific concerns about the vulnerabilities of large power transformers
(LPTs) given the growing threats to transformers and the long lead time
in replacing them and required DOE to submit a plan to Congress for the
establishment of a strategic transformer reserve.\26\ The utility
industry has a number of initiatives to create spare transformer
reserves and stockpile parts and related equipment. The House of
Representatives recently passed the COMPETES Act, which includes
language to create a Strategic Transformer Reserve.
---------------------------------------------------------------------------
\26\ U.S. Department of Energy. ``Strategic Transformer Reserve:
Report to Congress.'' https://www.energy.gov/sites/prod/files/2017/04/
f34/Strategic%20Transformer%20Reserve%20Report%20-%20FINAL.pdf,
accessed March 22, 2021.
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Planning for the response and restoration of energy disruptions is
not the sole purview of the energy sector. VLSEs often affect multiple
interdependent infrastructures (e.g., ICT and water) and several states
and/or regions. Thus, planning for an event of this magnitude must
involve coordination and collaboration at the federal, regional, state,
and local levels, and between the public and private sectors, to
address the breadth and inter-related nature of these potential
impacts. Such efforts also must integrate people, technologies, and
processes to maximize preparedness. State and federal emergency
management offices should conduct annual joint simulations, drills, and
related ``pre-event'' scenario planning efforts at the local, state,
and regional levels to test their plans and strengthen their ability to
collectively respond to VLSEs.
In 2009, DOE provided $38 million in funding to states to update
their energy assurance plans, and in 2010 provided $8 million for 43
cities to do the same.\27\ (The funds came through the Infrastructure
Security and Emergency Response division, or ISER, within the Office of
Electricity; ISER is now within the Office of Cybersecurity, Energy
Security, and Emergency Response, or CESER.) DOE also provided funding
and technical assistance for a series of exercises to test the updated
energy assurance plans. Energy assurance plans identify key public and
private points of contact for the energy sector and emergency response
units, formulate roles and responsibilities, lay out legal parameters,
and identify critical infrastructure and potential hazards to each, as
well as outline mitigation measures. Ideally these plans should be
updated at least annually, but the reality is that most states and
municipalities do not. In 2017, 12 states updated their energy
assurance plans with some form of DOE assistance, and the National
Association of State Energy Officials provided some technical
assistance to three states in the process of updating their plans.\28\
IIJA builds on this history with additional funding for state emergency
planning.
---------------------------------------------------------------------------
\27\ U.S. Department of Energy. ``Recovery Act: Local Energy
Assurance Planning Initiatives.'' https://www.energy.gov/ceser/
recovery-act-local-energy-assurance-planning-initiatives, accessed
March 22, 2021.
\28\ U.S. Department of Energy. ``State, Local, Tribal and
Territorial Energy Assurance:
2017 Year in Review.'' https://www.energy.gov/sites/default/files/2018/
03/f50/SLTT%20
Energy%20Assurance%202017%20Year%20in%20Review.pdf, accessed March 22,
2021.
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CONCLUSION
GridWise Alliance thanks the Committee for the opportunity to
discuss critical issues surrounding grid resilience and reliability. As
Congress considers Build Back Better or other legislation related to
the grid, we urge you to consider additional grid funding as
recommended in the GridWise Alliance policy framework for grid
investments.
GRIDWISE RECOMMENDATIONS
Increase funding for Smart Grid Investment Grant Program
at DOE to enhance grid flexibility: $10 billion
To balance electricity supply and demand, the grid must have system
flexibility. Grid technologies like controls, sensors, storage, data
analytics, advanced communications networks, and software-as-service
can provide flexibility by improving visibility of the system for grid
operators, helping to quickly rebalance system stability, and
facilitating the integration and aggregation of distributed energy
resources, including electric vehicles, to serve as assets to grid
operations. Utilities' investments in operational fiber and wireless
broadband communications network are essential for a modern grid.
Utility communication systems can include fiber networks and private
wireless networks that could also be leveraged to provide middle mile
broadband and last mile internet service for end-use consumers.
If Congress creates significant new incentives for electric
vehicles and charging infrastructure in Build Back Better, it must make
commensurate investments in grid modernization to ensure the grid can
serve as a platform for transportation electrification. Utilities will
need to accommodate significantly increased load as well as provide
customers with the tools to manage their charging, granular metering to
generate billing to create rate plans and tariffs that reflect EV,
upgraded communications and IT networks. Without parallel investments
in grid modernization, utilities will face new challenges to grid
reliability and stability at the local level driven by the forecasted
electrification of fleets and residential vehicles. Also, rural
cooperatives are less prepared for this type of engagement because
historically EV adoption has been concentrated in urban and suburban
neighborhoods where range anxiety is less of a concern.
Increase funding for DOE cybersecurity programs: $1.5
billion
Cyberattacks are one of the most significant threats to the
security of the grid. DOE funds platforms that can monitor attacks and
share information across the utility industry and can also provide
funding for the deployment of technologies that can prevent
cyberattacks from damaging grid equipment. Unlike cyber funding from
other federal agencies, DOE programs are designed to support utility
cybersecurity efforts. Even with federal funding for monitoring
platforms and technology, protecting the grid from cyberattacks is
hampered by the lack of qualified cyber professionals. The current
cybersecurity workforce shortage in the United States alone is
projected to be 498,480.\29\
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\29\ https://www.cpomagazine.com/cyber-security/cybersecurity-
workforce-shortage-continues-
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to-grow/
$250 million to DOE Cybersecurity for Energy Delivery
Systems (CEDS) for cybersecurity workforce development
$250 million to DOE CEDS for cyber assessments and
cyber threat monitoring for small and medium utilities
$1 billion to DOE CESER for cybersecurity technology
deployment
Include the 48(c) manufacturing tax incentive: $8 billion
The Section 48C Advanced Manufacturing Tax Credit in ARRA
originally provided a 30 percent investment tax credit to 183 domestic
clean energy manufacturing facilities valued at $2.3 billion and was
extended to provide an additional $150 million in 2013. The tax credit
helped build a U.S. manufacturing capacity and supported significant
growth in U.S. exports. Qualifying manufactured clean energy products
must include advanced grid technologies.
Ms. Castor. Thank you very much.
Next, Mr. Mills, you are recognized for 5 minutes.
STATEMENT OF MARK MILLS
Mr. Mills. Thank you, Chairman Castor and Ranking Member
Graves, for the opportunity to testify.
As you accurately pointed out in your introductory remarks
and everyone knows, electricity infrastructures are, of course,
critical to modern societies. And citizens and businesses
expect and even take for granted that our grids will operate
reliably and affordably.
So it is relevant to note some differences between
America's grids today compared to a couple of decades ago.
Overall grid reliability has actually been degrading even as
the average consumer electricity costs have risen. The latter
is up about, on average, 50 percent since the year 2000. And,
of course, today, one big difference is that a significant
share, almost 12 percent, of the nation's electricity is now
supplied by solar and wind.
The fact is, wind and solar technologies are far cheaper
and more useful than any time in history and, thus, have a
substantial role in the nation's energy mix. But the critical
issue now is how much nondispatchable wind and solar capacity
can be added without further degrading grid reliability,
because those two sources dominate current plans and proposals
to expand energy supplies.
Grid reliability so far has been achieved by using power
plants that can be dispatched when needed, at the time needed
to meet expected peaks and unexpected peaks and for when
outages occur from machine failures or from weather.
Going forward, there are three key realities relevant to
grid reliability that emerge I would like to point out from the
physics of energy systems that depend on batteries, the sun,
and wind.
First, obviously, sunlight and wind vary, and quite
radically, and are impossible to dispatch at will. The central
issue isn't the daily or hourly variability that people talk
about but seasonal variabilities. While the amount of sunlight
or wind can be 50 percent less in off seasons, far more
challenging are the days-long droughts, or so-called droughts,
if you like, of wind when there is no wind or no sun at all.
Such episodes are surprisingly common, even if inherently
unpredictable in terms of precisely when they occur, but they
do occur. The adage that it is always sunny or windy somewhere
in the country is simply not true over decade time periods.
One solution to this reality would be to copy the German
model, which has built essentially two grids--one using solar
and wind, the other keeping conventional generation. That is a
big reason German households, by the way, pay about 300 percent
more for electricity than in America. But, as Europe discovered
recently, when the inevitable wind droughts happen, the dual-
grid option exposes consumers to radical energy price spikes.
In fact, the dual-grid model creates those price spikes.
The other option, of course, is to use grid-scale
batteries. These require extra generating capacity, again,
roughly double, to both meet peak demand when the sun and wind
are available and have surplus to simultaneously store in the
batteries.
Which brings us to the second physics reality: Storing
electricity is extremely difficult at grid scales. Some
analysts propose that 12 hours of national backup would enable
a nearly all solar/wind grid to keep America's lights on 99.97
percent of the time. However, that statistically and
meteorologically means about a half day of no power anywhere in
the country every few years or so. And the 12 hours of
batteries would cost about a trillion dollars to build.
As for claims that batteries will get cheaper, last year
the historical trend in battery price declines saw a dramatic
slowdown, down just 6 percent. And prices are now forecast to
rise this year. The reason is that mineral commodities make up
60 to 70 percent of the cost to build batteries. And, going
forward, commodity inflation is likely to continue.
Which brings me to my third and last point anchored to the
physics of energy: Batteries are very materials-intensive ways
to store large amounts of energy. About 50 tons of batteries
are needed to hold the amount of energy contained in 1 ton of
oil, and then roughly 25,000 tons of materials have to be mined
and processed to obtain the minerals needed to fabricate those
50 tons of batteries.
The IEA, among others, has studied the implications of
this, and they have pointed out that these energy transition
goals based on batteries, wind, and solar will require a 400 to
4,000 percent increase in the mining of a range of critical
minerals--far more than all the global mines now produce or any
plans for expansion.
Finally, it bears noting that China is the single largest
source--by most accounts, nearly half--of all the critical
materials for making batteries, as well as solar modules by the
way. The United States is a minor player.
And aside from the geopolitical and trade considerations,
it would require a World War II level of construction effort to
build the quantities of wind, solar, and battery systems needed
to replace America's conventional power plants by, say, 2040.
The latter couldn't happen unless we cleared away regulatory
delays, something else that is not now being proposed anywhere.
Thank you.
[The statement of Mr. Mills follows:]
Testimony of
Mark P. Mills
Senior Fellow, Manhattan Institute
Before
U.S. House Select Committee on the Climate Crisis
``Keeping the Lights On: Strategies for Grid Resilience and
Reliability''
February 15, 2022
Good afternoon. Thank you for the opportunity to testify. I'm a
Senior Fellow at the Manhattan Institute where I focus on science,
technology, and energy issues. I am also a Faculty Fellow at the
McCormick School of Engineering at Northwestern University where my
focus is on supply chain systems and future manufacturing technologies.
And, for the record, I'm a strategic partner in a venture fund focused
on software in energy markets.
The focus of this hearing comes at an important time. Electricity
systems are the most important infrastructures of a modern society. We
use the euphemism of ``keeping the lights on'' because everyone knows
that it's about far more than that. It's about water pumps and gasoline
pumps as well as EV charging stations, and it's about both home
furnaces and steel furnaces, refrigerators for vaccines hospitals and
food in homes, and, critically, it's about the internet and Cloud
networks that businesses of all kinds and sizes, not just citizens,
increasingly depend on. The long-run electrification of society has
been underway for over a century. and it is far from over.
Ensuring grid reliability and resilience requires dealing with the
challenges of meeting both expected and unexpected peaks in demand that
are a normal feature of society, while using electricity-producing
machines that are episodically unavailable. Thus, the key issue for
planners is in ensuring that power is always available to be
``dispatched'' when needed, and for the length of time needed. Today,
the eight major grids that supply America have, collectively, hundreds
of thousands of megawatts of `excess' conventional generation--i.e.,
more than is needed most of the time--that can be dispatched when
needed to fill gaps created by outages from machine failures or
weather, or to meet unexpected peaks.
There are three important differences between America's grids today
and in earlier decades. First, as EIA data shows and may in fact
understate, overall grid reliability has been degrading; put inversely,
outages have been increasing. Second, the average retail cost of
electricity has been increasing for two decades, up 50% since the year
2000, after earlier declining for several decades. And third, there is
now a significant share, almost 12%, of the primary electricity supply
that cannot be dispatched when needed; that is of course the supply
from wind and solar.
Setting aside state and federal policies intended to induce or
require greater use of solar and wind, the fact is those technologies
are now far cheaper and more useful than at any time in history and
thus can now have a substantial role in the nation's energy mix. The
key issue going forward is in how reliability--in particular
dispatchability--can be maintained at prices consumers are willing to
pay as more solar and wind systems are added.
Since sunlight and wind are, by definition, impossible to dispatch
at will, the obvious critical issue is in how to fill gaps of
unavailability. There are only two ways to do so: maintain or build
additional conventional, dispatchable back-up capacity, or built lots
of electricity storage. The amount and costs of the latter is almost
entirely determined by the nature of nature.
The central challenge isn't so much the oft-noted diurnal
variability of sunlight and wind. Rather, it's with two other features
of nature. One is the seasonal variability of the wind and sun. The
overfall amount of either can be 50%, or more, less in the off season,
depending on geography. The other is the regular occurrence of days-
long ``droughts'' of no wind or sun. Such multi-day weather events can
be continent-wide (as Europe recently experienced). Meteorological
history shows that while such episodes are inherently unpredictable in
terms of exactly when they occur, it is entirely predictable that they
will occur, and frequently, over the decades that grid equipment is
built to operate. The adage that it's always sunny or windy somewhere
in the country is simply not true over decadal periods. That reality,
by the way, novates the benefit of building more transmission lines to
use solar or wind installations elsewhere as backup.
Thus far, the primary means to ensure grid reliability as the
solar/wind share rises could be called the German solution, which is,
in effect, to build two grids; one based on solar and wind, and the
other with conventional generation to serve, in effect, as the backup.
The expense of such a solution is not born by the builders of the solar
and wind machines, but by ratepayers. That approach is one reason that
the average German residential customer pays about 300% more for
electricity than the average in America. However, as Europe has
discovered during this past winter when an (inevitable) extended wind
drought happened, the dual-grid option exposed consumers to radical
fuel price spikes arising from the reality of supply chains. Converting
a grid's fuel supply for conventional generation from long-term
baseload contracts to episodically buying huge quantities, not only
exposes consumers to huge price spikes, it creates those spikes.
The other option increasingly discussed, and even mandated in some
states, is the use of grid-scale batteries. It's relevant to note that
using solar and wind as a primary source of electricity--which some
propose--means that grids will requires at least twice today's
installed generating capacity. Far more than the normal peak generation
would be needed to supply both peak demand when sunlight and wind are
available, and to have surplus to simultaneous store in batteries. Such
costs are typically not included in the calculus of aspirations for
greater use of solar/wind on grids.
One can estimate the quantity of batteries required to, say,
provide an average of 12 hours of backup for the nation. That's a
quantity some analysts propose would be sufficient to allow an all
solar/wind grid to keep America's lights on 99.97% of the time. That
sounds good except that, statistically, mean on average, there'd be a
few hours of zero power every year, or as a practical matter, nearly a
half-day of no power, anywhere, every few years or so.
Nonetheless the nation is on track to build far more grid-scale
batteries. And to be clear, those will be very useful for many short-
term outages and other grid management and stability issues. But when
it comes to using batteries to fill the solar/wind droughts that are
inevitable, the 12-hour storage target for the nation would require
spending over $1 trillion to build enough batteries. Even then, as the
meteorological record shows, there will be frequent episodes in the
foreseeable future when the entire nation would be lights-out if there
isn't enough conventional generation available. For comparison, about
$100 billion in capital--one tenth as much as the battery solution--is
associated with the ``excess'' capacity on today's grid to ensure the
lights are always on.
As for claims that batteries will soon become far cheaper; last
year saw a dramatic slowdown in the decadal trend of battery price
declines. Average lithium battery prices were down just 6% in 2021 and
are forecast to rise this year. The reason is found in the fact that
mineral commodities account for 60 to 70% of the cost to build a
battery. Going forward, mineral commodity inflation will be fueled by
the unprecedented increases in mineral demands to build energy systems.
The International Energy Agency, amongst others, has documented the
magnitude of minerals that will be needed to accommodate massive
increases in battery production for grids and, simultaneously, for
electric cars. Combined with aspirations for greater use of solar and
wind technologies--which also require far more minerals than
conventional generation--the IEA estimates the world needs a 400% to
4,000% increase in mining of a range of critical energy minerals in the
coming decade or two. Such an unprecedented increase in global mining
is not now underway, nor planned--nor I might add, particularly
encouraged by most policies.
Such surprising materials demand comes from physics realities.
Batteries are an extremely challenging and expensive way to store large
quantities of energy. It requires about 50 tons of batteries to hold
the amount of energy contained in one ton of oil. And storing a ton of
the later is very easy and cheap. Obtaining the minerals needed to
fabricate the 50 tons of batteries requires mining and processing
roughly 25 thousand tons of materials. This kind of disparity really
adds up at grid scales.
Building enough grid-scale batteries for 12 hours of storage for
the U.S. grid--never mind other grids in the world--would entail mining
a quantity of materials equal to that needed to fabricate 100 centuries
worth of batteries for all the world's billions of smartphones. This
calculation doesn't count the minerals needed for the expanded use of
electric cars, or the ``energy minerals'' needed to build the wind and
solar machines.
Of course, it's reasonable to expect that different and even
superior chemical concoctions will be discovered for future batteries.
But it takes many years, even decades to make progress from discovery
to industrial scales. For the usefully foreseeable future, and
certainly in the timeframes contemplated in many policies, the
technologies that exist today are what will be used to build systems.
It bears noting the geopolitical implications of all these energy
minerals. China is not only the primary supplier of the world's
polysilicon for solar modules, but it is also the single largest
source--by most accounts nearly half--of most of the critical materials
needed to build batteries. The United States is a minor player. The
rush to build battery assembly plants here in America is the equivalent
of building cars here but importing all the gasoline.
Finally, building batteries, solar and wind machines at grid-scale
is not fundamentally different than building anything else at such
scales. All of it always entails massive uses of materials,
construction equipment, time, capital and, critically, regulatory
clearances and permits.
Building and installing enough hardware to replace all of America's
conventional gas- and coal-fueled electric power plants by, say, 2040
would require a continuous grid construction program several hundred
percent greater than occurred during any single peak year of grid
construction over the past half-century. Such an endeavor would be,
quite literally, an industrial effort comparable to a World War II
level of mobilization. And it wouldn't be possible without clearing
away regulatory delays, something that is not now being proposed
anywhere.
Our increasingly digital economy, which everyone recognizes is ever
more important to fueling economic growth, will require both more
electricity and especially more reliability. While there is clearly a
role on modern grids, and one greater than today, for solar, wind and
battery systems, caution is in order when it comes ensuring the
reliability of society's most critical infrastructure.
Ms. Castor. Thank you.
And, Ms. Hamilton, you are recognized for 5 minutes.
STATEMENT OF KATHERINE HAMILTON
Ms. Hamilton. Thank you. Good afternoon. Thank you to Chair
Castor, Ranking Member Graves, and the entire Select Committee
for inviting me to testify.
I will explore what makes our grid and communities more
resilient and how resilience has been partially incentivized in
the Bipartisan Infrastructure Investment and Jobs Act but will
be even further enhanced by final passage of the Build Back
Better Act.
First, to briefly differentiate between reliability and
resilience, since they are often used interchangeably,
reliability is the characteristic of being there all the time--
24/7, 365 days a year. Resilience is the ability to recover
quickly from interruption.
Our electric grid has been designed for reliability: power
plants, transmission lines, distribution systems that are
available and operating all the time. And yet that system is
becoming less reliable.
The drop in reliability can be tracked to weather related
climate events--wildfires, ice storms, unprecedented flooding,
extreme heat and cold--that have been increasing in frequency
and level of damage.
Resilience and reliability are now linked inextricably and
must be considered together.
In response to that need, utilities have been investing
billions of dollars on equipment, technology, and updated
systems to help withstand these extreme conditions. They have
expanded vegetation management, line clearance, inspections,
and system hardening and undergrounding.
And yet we have even more sophisticated technologies and
applications at our disposal which are not being deployed at
scale: transmission ties between regions, grid-enhancing
technologies that allow for more visibility on those lines, and
distributed energy resources which are all well-suited to
providing resilience. Demand response and other customer-sited
resources can provide crucial resilience services and be
amplified through digitization. Nearly all of these technology
solutions and applications are available today.
While the U.S. excels at technology innovation, policy is
the crucial link and is foundational to filling gaps, crossing
``valleys of death,'' scaling technologies, catalyzing
industries, and sending market signals to the private sector
that can then put to use that innovation.
The infrastructure bill makes available significant funding
for grid modernization, energy storage, and transmission, which
are strong underpinnings for the clean energy transition and
increased resilience of the grid. But it will be essential to
pass in the Senate what the House passed in the Build Back
Better Act, which complements the infrastructure bill's direct
funding with market mechanisms to spur private sector certainty
and investment in resilience.
A report from last month estimated that the cost of climate
change in the U.S. could reach $14.5 trillion by 2070. As a
recent Boston Globe headline read, ``Compared with climate
inaction, Build Back Better is downright cheap.''
In the Build Back Better bill is the Greenhouse Gas
Reduction Fund, which would be seeded by the government but sit
outside as a nonprofit to provide creative finance solutions
for zero-carbon technologies.
State level green banks, which are structured on the state
level in the same way that a national fund would be set up, are
already financing critical energy infrastructure to ensure grid
resilience and support those most vulnerable to power outages.
They are financing microgrids for local governments, clean
backup power for affordable housing communities, and directly
hardening structures against damaging weather caused by climate
change.
Rebates for electrification are part of Build Back Better
and are a pathway to engaging customers and providing access to
clean and safe technologies for low- and middle-income
communities. If electrification is planned and deployed
correctly, reliability and resilience should increase.
One of the most important market tools is in the tax code.
Access to tax credits will drive down the cost of energy
storage of all types, opening up new markets in dozens of
states and lowering the costs in states that already have
storage targets.
The tax credit inclusion of interconnection costs will help
smaller community solar projects penciled out for neighborhoods
where rooftops are not always suited to solar or where
consumers do not own their own homes.
The tax credit for microgrids will allow critical community
services to operate when the grid goes down.
The tax credit for transmission would increase resilience
in the supply side of the grid, spurring nearly $40 billion in
private sector investment in inter-regional transmission and
mitigating losses, such as those in the February 2021 polar
vortex.
Other programs include the Department of Energy's loan
program that will open up to additional sectors, like aviation
and maritime, that can scale the clean energy transition in
other parts of our economy.
But, of course, if we truly want to mitigate the climate
crisis and deploy technologies that will be both reliable and
resilient, we need to not only execute well on the
infrastructure bill and pass the Build Back Better Act, but we
need targeted appropriations funding, regulatory signals
through the Environmental Protection Agency, market structures
through the Federal Energy Regulatory Commission.
In truth, all agencies in our government can take some
responsibility within their missions for leading our nation to
a safer, cleaner, more secure future from our climate crisis.
And with our Federal Government aligned with the private
sector's recognition that swift action must be taken on
climate, there is far greater hope that we can reduce the
impacts of this crisis on our nation.
Thank you for the opportunity to present this testimony,
and I look forward to your questions.
[The statement of Ms. Hamilton follows:]
Testimony
of
Katherine Hamilton
before the
House of Representatives
Select Committee on the Climate Crisis
February 15, 2022
Good morning. My name is Katherine Hamilton. I am the Chair of the
firm 38 North Solutions and serve as Chair of the World Economic
Forum's Global Future Council on Clean Electrification. Thank you to
Chair Castor, Ranking Member Graves, and the entire Select Committee
for inviting me to testify before you today regarding clean energy
resilience and reliability in the United States. I started my career
designing grids at a utility for a decade and thus understand how our
electric grid works and that both investment in that infrastructure as
well as openness to technology innovation and customer engagement are
necessary for the transition to a clean, resilient, and reliable grid.
This testimony explores what will make our grid and communities more
resilient and how resilience has been partially incentivized in the
Infrastructure Investment and Jobs Act and will be even further
enhanced by final passage of the Build Back Better Act.
I. Reliability and Resilience.
First, I would like to differentiate between reliability and
resilience since they are often used interchangeably but are different
in important ways. Reliability is the characteristic of being there all
the time, 24/7, 365 days a year. Resilience, on the other hand, is the
ability to recover quickly from interruption. Our electric grid has
been designed for reliability--power plants, transmission lines, and
distribution systems that are available and operating at all times--and
yet, that system is becoming less reliable, leading to a downgrading of
utilities by Fitch Ratings.\1\ This drop in reliability can be tracked
to weather-related climate events-wildfires, ice storms, unprecedented
flooding, extreme heat and cold--that have been inexorably increasing
in frequency and damage as a result of greenhouse gas emissions.
Throughout the U.S. this physical risk from lack of resilience is
compounded by the economic toll on our communities. Lawrence Berkeley
National Laboratory studied the cost of these disasters--not just to
the grid, but to the economy--and found that if the Bay Area in
California lost power for 1-2 weeks, as much as $1-2 billion of
economic output from downstream, non-utility activities would be lost
in the region.\2\ Importantly, resilience and reliability are now
linked and must be considered together. And even more importantly,
technology solutions exist today to address both while also reducing
greenhouse gases that have led to the need for that resilience.
---------------------------------------------------------------------------
\1\ Bloomberg article here: https://www.bloomberg.com/news/
articles/2021-11-08/u-s-power-grid-becoming-less-reliable-due-to-
extreme-weather
\2\ Lawrence Berkeley National Laboratory paper, page 24:
https://eta-publications.lbl.gov/sites/default/files/
hybrid_paper_final_22feb2021.pdf
---------------------------------------------------------------------------
II. Technology Solutions.
In response to the need for more resilience, utilities have been
examining their ability to ensure grid safety and climate resilience,
with many investing billions of dollars on equipment, technology, and
updated systems to help withstand extreme conditions. These
comprehensive risk management programs include expanded vegetation
management, line clearance, and system inspections as well as system
hardening and undergrounding. When I led the GridWise Alliance, I
testified before the Senate about the importance of smart grid
technologies to economic growth and significant funding was deployed in
the American Recovery and Reinvestment Act for technologies that could
increase visibility on the electric grid. The co-benefit of this
funding was that, thanks to smart grid technologies, today it would not
take a year to determine that a branch falling on an electric line in
Cleveland could bring down the entire Northeast grid.\3\ A decade
later, we have even more sophisticated technologies and applications at
our disposal and yet many of those are not being deployed at scale. For
example, transmission tie lines between regions can allow for seamless
flow of electrons between areas that have power available and those
that are experiencing outages. Had there been ties from Texas to other
states or even between states like Alabama, Louisiana, Mississippi, and
Arkansas, the recovery time from Winter Storm Uri could have been
significantly reduced. When Hurricane Ida hit Louisiana in August of
2021, the lack of appropriate investment in transmission hardening and
distributed resource solutions became even starker with widespread
outages impacting over a million people and lasting for weeks.\4\
Digital awareness combined with grid enhancing technologies could play
an important role in grid resilience strategies by continuously
monitoring overhead lines to ensure they are within safe operating
limits and alerting operators when there are anomalies which pose risks
to grid reliability or public safety.
---------------------------------------------------------------------------
\3\ See article:
https://www.cleveland19.com/2020/08/14/years-later-blackout-that-
impacted-million-people/
\4\ https://www.reuters.com/business/environment/why-hurricane-ida-
crippled-new-orleans-power-grid-2021-09-04/
---------------------------------------------------------------------------
Distributed energy resources are particularly well suited to
providing resilience. In the U.S., experience in storms and other
weather-related events has proven out that demand response and other
consumer-sited resources can provide crucial resilience services \5\
and research has only confirmed the importance of customer-side
solutions to keeping grids operating during extreme temperature
events.\6\ During Winter Storm Uri, extreme cold increased demand for
electricity by 8% while causing generation and transmission resources
to become inoperable. Blake Shaffer, a professor of economics and
public policy at the University of Calgary, told Marketplace Morning
Report that, after Uri, so much of the conversation was about the
supply side. ``Our research sheds light on demand,'' Schaffer noted.
``The sensitivity of demand to cold temperatures has risen a lot.
Utilities and regulators need to consider demand when planning for
future power system needs.'' \7\ As far back as Hurricane Sandy,
microgrid technology in New York and New Jersey enabled university
campus facilities to continue operation in the face of massive power
outages.\8\ During heat waves in California, hundreds of energy storage
facilities at office buildings in San Francisco were called to operate
collectively as a ``virtual power plant,'' reducing demand on an over-
taxed grid. During the solar eclipse in 2017, over 750,000 programmable
thermostats were lowered by their consumers to reduce demand by 700 MW
as solar systems across the country were displaced in the temporary
darkness.\9\ Those thermostats alone provided as much grid service as
seven gas peaker plants, often the most inefficient and emitting
resources. All of these technology solutions and applications are
available today and often simply need investment gaps filled or market
signals put into place to make the grid more resilient, leading us to a
discussion of federal policy.
---------------------------------------------------------------------------
\5\ Multiple FERC filings from Advanced Energy Management discuss
examples of resilience, one such example: https://aem-alliance.org/
aema-files-reply-comments-in-resilience-proceeding/
\6\ https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3980881
\7\ https://www.marketplace.org/shows/marketplace-morning-report/
lessons-learned-from-the-power-outages-in-texas/
\8\ Article on Princeton's microgrid can be found here:
https://www.princeton.edu/news/2014/10/23/two-years-after-hurricane-
sandy-recognition-
princetons-microgrid-still-surges
\9\ See blog from Nest thermostats:
https://www.smartnest.io/solar-eclipse-meet-the-nest-thermostat/
---------------------------------------------------------------------------
III. Policy Solutions.
While the U.S. excels in technology innovation, public policy is
foundational to filling gaps, crossing ``valleys of death,'' scaling
technologies, catalyzing industries, and sending market signals to the
private sector that will then put to use that innovation. The
bipartisan Infrastructure Investment and Jobs Act (``infrastructure
bill'') makes available significant funding for grid modernization,
energy storage, and resilience. These grants will provide a strong
underpinning for the clean energy transition and increase resilience of
the grid. Last month the Administration launched the Building a Better
Grid initiative which will execute on this legislation. As highlighted
in this initiative, formula grants, competitive grants, and competitive
awards would focus on enhancing grid resilience by upgrading
transmission infrastructure. Investments in transmission infrastructure
include increasing the capacity of existing lines, using advanced
technologies to minimize transmission losses and maximize the value of
existing lines, and building new long-distance, high voltage
transmission lines. There is new funding for the deployment of
technologies to enhance grid flexibility in the Smart Grid Investment
Grant Program, which specifically calls out advanced transmission
technologies and their ability to integrate renewable resources and
create real-time situational awareness as a means of providing a more
resilient grid. Other programs in the infrastructure bill that are
important for resilience are electric vehicle charging infrastructure,
energy efficiency, and appliance electrification, all of which allow
for real-time management of customer load as a flexible grid resource.
In addition to the infrastructure bill, however, it will be crucial
to pass in the Senate what the House passed in the climate portion of
the Build Back Better Act (``BBB''). While the infrastructure bill will
provide direct funding for innovative projects and manufacturing, the
complementary BBB offers market mechanisms to spur private sector
investment in resilient technologies and applications. The cost of
damage from natural disasters in 2021 was $145 billion; \10\ Hurricane
Ida alone cost $75 billion.\11\ A Deloitte report from last month
estimated that the cost of climate change could cost the U.S. $14.5
trillion by 2070.\12\ As a recent Boston Globe headline read:
``Compared with climate inaction, Build Back Better is downright
cheap.'' \13\ \14\
---------------------------------------------------------------------------
\10\ https://www.ncdc.noaa.gov/billions/summary-stats/US/2021
\11\ https://www.ncdc.noaa.gov/billions/
\12\ https://www2.deloitte.com/us/en/pages/about-deloitte/articles/
press-releases/deloitte-report-
inaction-on-climate-change-could-cost-the-us-economy-trillions-by-
2070.html
\13\ https://www.bostonglobe.com/2021/12/21/science/compared-with-
climate-inaction-build-back-better-is-downright-cheap/?p1=StaffPage
\14\
These findings were summarized in an Evergreen Action article: https://
www.evergreenaction.com/blog/why-we-cant-afford-not-to-pass-the-
climate-investments-in-build-back-better
---------------------------------------------------------------------------
One program that was passed several times in the House, including
in the Build Back Better Act, is the Greenhouse Gas Reduction Fund,
originally passed as the Clean Energy and Sustainability Accelerator.
This non-profit entity would be seeded by the government but sit
outside the government to provide creative investing solutions to scale
zero carbon technology deployment. Many state-level green banks, which
are structured on a state level the way a national level entity would
be set up, are already financing critical energy infrastructure to
ensure grid resilience and support those most vulnerable to power
outages. This investment includes financing microgrids for local
governments, and clean back-up power for affordable housing
communities. In other cases, investments are made to directly harden
structures against damaging weather caused by climate change. For
example, the Solar and Energy Loan Fund in Florida provides financing
not just for solar panels and efficiency measures, but also for roof
hardening to make the home more resilient to hurricanes. This, in turn,
lowers the home's insurance costs, with the savings used to pay back
the loan.\15\ Senate passage of this bill would enable investments such
as these to be made in states and communities across the U.S. through
the Greenhouse Gas Reduction Fund.
---------------------------------------------------------------------------
\15\ https://solarenergyloanfund.org/loan/wind-resilience/
---------------------------------------------------------------------------
Rebates for electrification are part of the BBB and are essential
to engaging customers and providing access to clean and safe electric
technologies for low- and middle-income communities. If electrification
is planned and deployed correctly, reliability and resilience should
increase, not decrease. In fact, in a study released by the American
Council for an Energy Efficient Economy,\16\ the analysis showed an
increase in reliability as a result of a combination of energy
efficiency and electrification (which included heat pumps at a minimum,
but in some cases heat pump water heaters, induction stoves, and
electric vehicles).\17\
---------------------------------------------------------------------------
\16\ https://www.aceee.org/sites/default/files/pdfs/
programs_to_electrify_space_heating_brief_final_6-23-20.pdf
\17\ See testimony at FERC: https://
www.ferc.gov/media/panel-1-katherine-hamilton-world-economic-forum
---------------------------------------------------------------------------
One of the most important market tools in the BBB is tax credits.
Access to the Investment Tax Credit will be important to driving down
the cost of energy storage of all types, opening up new markets in
dozens of states and offsetting the cost of deployment in states like
California, New York, Massachusetts, New Jersey, and Virginia that have
robust energy storage targets in place. The investment tax credit
inclusion of interconnection costs will enable smaller community solar
projects to be cost-effectively deployed in neighborhoods where
rooftops are not always suited to solar or where consumers do not own
their homes. Opening the tax credit to microgrids will also directly
impact resilience. Communities throughout the country are already
installing microgrids to provide backup services in case of outage.
Some examples include a microgrid at the Sonoma Valley Unified School
District that will achieve bring more solar online, participate in
wholesale markets, and charge electric school buses; \18\ an Oakmont,
California 1800 acre senior community of 3,204 homes, 24 businesses and
a fire station, that has experienced nine public safety power shutoffs
in the last four years has been approved to build a microgrid; \19\ and
the city of Gonzales in Salinas Valley has planned a $70 million
microgrid to provide a business park with round-the-clock reliable
power at cheaper than utility rates. \20\ Projects like these and many
more would benefit from this tax credit.
---------------------------------------------------------------------------
\18\ https://microgridknowledge.com/front-of-meter-microgrid-
sonoma/
\19\ https://microgridknowledge.com/oakmont-california-seniors-
community-microgrid/
\20\ https://www.greentechmedia.com/articles/read/california-town-
tests-new-model-for-microgrids-as-a-service
---------------------------------------------------------------------------
Opening the tax code to transmission would increase resilience on
the supply side of the grid by incentivizing transmission technology
deployment. Significant losses incurred during the Polar Vortex in
February 2021--which claimed 246 lives \21\ and caused $130 billion in
damage in one week--could have been mitigated or avoided had there been
more transmission ties to neighboring regions. A technology that would
benefit from this credit is advanced high voltage direct current
(``HVDC'') technology, which strengthens reliability by controlling
power dispatch, avoiding cascading outages and improving power quality
by quickly adjusting voltage, frequency, and reactive power. Some
developers are designing underground cable projects that can further
protect them from extreme weather events, including storms, as well as
flooding given the water impervious nature of the cable.
---------------------------------------------------------------------------
\21\ https://www.texastribune.org/2022/01/02/texas-winter-storm-
final-death-toll-246/amp/
---------------------------------------------------------------------------
Other programs included in the BBB are the Department of Energy's
loan program that will open up to additional sectors--such as aviation
and maritime--to scale the clean energy transition in other parts of
our economy. Funding for state and local governments and tribes will
enable communities across the country to accelerate deployment of
energy efficiency and electrification technologies. Many other programs
are included in the BBB that will send those market signals to the
private sector.
IV. Conclusion.
Of course, if we truly want to mitigate the climate crisis and
deploy technologies that will be both reliable and resilient, we need
to not only execute well on the infrastructure bill and pass the BBB
Act, but we also need targeted Appropriations funding, regulatory
signals through the Environmental Protection Agency, and market
structures through the Federal Energy Regulatory Commission. In truth,
all agencies in our government can take some responsibility within
their missions for leading our nation to a safer, cleaner, more secure
future from our climate crisis. With our federal government aligned
with the private sector's recognition that swift action must be taken
on climate, there is far greater hope that we can reduce the impacts of
this crisis on our nation. Thank you for the opportunity to present
this testimony; I look forward to your questions.
Ms. Castor. Well, thanks to all of our witnesses for your
informative and insightful testimony.
I will recognize myself for the first 5 minutes for
questions and start with a focus back on the bipartisan
infrastructure law, the Infrastructure Investment and Jobs Act.
And I think what policymakers--what we were thinking about
as we moved forward with the grid resilience piece is some win-
win-win propositions. When you are strengthening the grid, you
are making it more resilient to these climate fueled disasters,
these more frequent and intense weather events; we want to
lower the cost for consumers; we want to create jobs, good
American jobs--when you are talking about the grid, these are
all American jobs--and then reduce greenhouse gas pollution.
So, now, the DOE, the Department of Energy, will begin
rolling out a lot of these moneys in partnership with
communities and the private sector and other municipally owned
like Ms. Sutley runs.
Ms. Hamilton, do you think we can do all of this and stay
on the track for affordability and reliability and resilience?
Do you agree that they are not mutually exclusive?
Ms. Hamilton. Yes. Thank you for the question. They are
absolutely not mutually exclusive. I absolutely agree with
that.
One thing we do have to think about, though--and Mr. Graves
mentioned this in his opening statement too--is that we do have
to, like, plan for this. We have to think about, what are all
the pieces of this that are going to work together, be the
least-cost options, and keep prices down for customers?
So you look at the supply side and how many clean energy
technologies are available on that side--from solar and wind
certainly, but also hydropower, nuclear, geothermal.
And then you look at the demand side, which is all the
customers, right? So doing demand response, energy efficiency--
which is the cheapest form of energy--and rooftop solar,
battery storage, all these technologies on the demand side that
the customer can bring.
And then the connective tissue. So you think about energy
storage, you think about transmission and all the technologies
that enhance transmission to work better, and then all the
distribution technologies as well. All of these can be
intertwined and allowed to work in real time using
digitization.
So I think it is absolutely possible to do it all. And we
have the technologies today. And I will tell you, I work with
dozens of companies that want to invest and come and work with
the government, partner with the government, to make sure that
we can do this and transition.
Ms. Castor. Well, thank you.
And, Ms. Sutley, your utility, one of the largest
municipally owned in the country, you have set a 100 percent
clean energy goal by 2035.
How are you going to ensure that consumers are protected
and yet you build in clean energy resources over time? What is
your plan?
Ms. Sutley. Thank you, Chair Castor, for the question.
Well, we absolutely take it as our responsibility to ensure
that this transition happens in a way that protects our
customers, and we work very hard to make sure that that is
happening.
We worked with the National Renewable Energy Laboratory to
analyze scenarios that would get us to 100 percent clean
energy. And it was really informed by a stakeholder group of
businesses and community leaders and members of the community
who helped us to kind of focus on the priorities for the kinds
of investments that will help Los Angeles meet its goals and
continue to flourish.
And sort of as a follow on, we started a process around
equity strategies to make sure that all communities in Los
Angeles see the benefit of this transformation.
But I would say that, you know, we have been meeting our
financial targets. We have been, you know, managing our rates
to try to protect our consumers. We also offer a lot of
programs that help our customers save energy and save money
while helping us to manage the grid better.
And one of the things that we found in the ``LA100'' study
was that the electrification of transportation and of buildings
can really help to manage costs by expanding the sales of
electricity in helping us to manage costs.
So this is first and foremost in our minds, to make sure
that we do this in a way that protects Los Angeles's economy,
creates jobs, and serves all of our communities.
Ms. Castor. Great.
Okay. Next, we will go to Mrs. Miller.
You are recognized for 5 minutes.
Mrs. Miller. Thank you, Chair Castor and Ranking Member
Graves.
And thank you to all the witnesses for being here today.
Grid resilience is one of the most important aspects of our
national energy strategy. And, luckily, the United States has
recently proven that it does not need to depend upon
adversarial regimes to provide power to our constituents, due
to the boom in American produced energy over the last several
decades.
Under President Trump, America became a net energy exporter
for the first time in a generation, selling our crude oil,
natural gas, and coal all over the world, while providing
everything we needed here at home.
Unfortunately, this progress is under siege by radical
activists who are pressuring the Biden administration to shut
down American energy jobs and leave behind production focused
communities.
Look no further than President Biden nominating Sarah Bloom
Raskin to serve as Vice Chair for Supervision at the Board of
Governors of the Federal Reserve System. Ms. Raskin is an anti-
American energy activist whose vision for the Federal Reserve
is to block or discourage traditional energy companies from
accessing capital markets in the American banking system.
Without the ability to finance costly upgrades, traditional
energy companies will not be able to employ the future of
carbon capture technology, leaving millions of Americans
without jobs and the rest of our country reliant on either
foreign imports from Russia and the Middle East or untested
renewable energy that will never be able to supply the power
that Americans have become accustomed to--all the while, still
relying on China to source most renewable technologies.
We need smart policies to protect American energy producing
communities and tackle the real problem: cutting carbon
emissions. This won't be done by the Federal Government picking
winners and losers but, instead, through an all-of-the-above
energy strategy where we use American ingenuity and effective
government incentives, not decades-long subsidies and reliance
on foreign competitors.
Mr. Mills, in your testimony, you mentioned how essential
it is for our energy infrastructure to be able to meet both
expected and unexpected peaks in demand. Could you expand on
what the scale of such an effort would look like for our
country to fully rely on wind and solar technology?
Mr. Mills. Thank you, Congresswoman Miller. It is an
interesting problem, the scale problem.
I think everyone agrees the grid is critical and needs to
be reliable. The scale of America's grids--and there is not one
grid, as everyone knows--is really daunting to think in terms
of supplying electricity from storage of any form, in terms of
storing electricity directly.
If one were to calculate the quantity of minerals needed to
produce enough batteries for the 12 hours I mentioned--and 12
hours is a typical number offered for grid-scale storage for
the United States. And, today, just as a calibration point, the
country has about 1 minute's worth of grid-scale electricity in
grid-scale batteries stored at any given time. So we are, you
know, many thousandths of a percent away from getting to 12
hours.
To get there would require mining more minerals that are
now mined for all other purposes in the world for those
batteries. There simply aren't enough mines yet. It doesn't
mean we couldn't build the mines somewhere, but no one is
proposing, really, to build the mines here.
Congress has ordered and administrations have looked at
critical mineral dependencies now for roughly 60 years. This is
not a new subject. The United States is 100 percent dependent
on 17 minerals; imports more than half of another two dozen
minerals. We are hostile to mineral expansion, mineral
processing, and the related manufacturing in the United States.
It is just a fact of the nature of the business for decades.
It is sort of naive to think that we are going to expand
that kind of industry without radically increasing imports. In
effect, building battery assembly plants here, bridge storage
or for cars, is equivalent of building cars here and importing
100 percent of the gasoline.
You know, critical energy minerals are at the heart of the
challenge that the IEA has pointed out. I am not the first to
point this out. And it is a challenge that is not being taken
up. And, in fact, the IEA's latest paper, buried on about page
20 of its sort of victory lap on the expansion of wind, solar,
and electric cars in the last year, points out that the world
is not now--no country is now expanding its mineral production
capability.
Those that do have it, of course, as I mentioned, is China,
the biggest processors; Africa; South America. My homeland,
Canada, produces lots of minerals and is probably happy to
produce more. But nobody is planning the scales needed.
Mrs. Miller. Thank you.
You also mentioned the expansion of grid----
Ms. Castor. I am sorry--I am sorry, Mrs. Miller. Your time
has expired.
Mrs. Miller. Thank you.
Ms. Castor. And I would also like to ask members to please
refrain--I know we don't share all of the same views, but I
would ask that we not make any personal attacks on any
individual, especially if they are not a party to our hearing
today.
And, next, we will go to Rep. Bonamici.
You are recognized for 5 minutes.
Ms. Bonamici. Thank you, Madam Chair and Ranking Member
Graves and our witnesses.
And thank you, Madam Chair, for noting that. I thought the
comment was unnecessarily confrontational. We are here to have
a debate about policy, not personal attacks.
So I am here in the Pacific Northwest, and we are no
stranger to extreme weather and natural disasters that stress
our energy grid. And, last summer, we had unprecedented heat
waves sweep across Oregon, causing extreme precautions,
including shutting down Portland's streetcars and light rail
system to prevent equipment from melting.
Portland General Electric--and thank you for the shout out,
Dr. Wayland--PGE relied on a demand response program that
helped prevent a worst-case scenario. It is a program that
compensates consumers and businesses for shifting energy used
during peak demand. PGE estimates that this program saved about
62 megawatts of power during the June 2021 heat wave, and that
was enough to power 25,000 homes.
So, Dr. Wayland, what are some of the policy changes
inhibiting utilities around the country from implementing their
demand response programs or increasing consumer participation?
Dr. Wayland. That is a great question. When I was at the
Department of Energy, I looked at the demand response capacity
around the country, and it is quite significant, the amount of
energy--even if you just look at large customers, not at ways
that we can encourage smaller residential customers to be
involved in demand response programs. And the delta between the
demand response capacity and the actual contracts that we had
was pretty large. And then the delta between the contracts that
we had and what was actually delivered when called upon was
also pretty large.
So I think that there are a number of both regulatory
pricing structures that--signals that can be sent, but also
encouraging customers to join these programs and also
encouraging third-party aggregators to go out looking for those
customers.
And I think what you will see with FERC Order 2222 is a
growth in the aggregators who are going out and looking for
those distributed energy resources, whether they are going to
bundle them into the wholesale market for power or for demand
response programs.
So there is a number of things that can be done there with
demand response.
And I do think that what we will see increasingly is the
smaller customers becoming part of demand response programs as
a result of--and these would be active load management
programs--but as a result of smart appliances and smart
thermostats and ways that residential customers can participate
and benefit and earn money from participating in these
programs, but do it in a way that they don't have to think
about it, where it is really automated.
And, again, that only happens if we have a very smart grid
that allows communication with these customers.
Ms. Bonamici. Exactly.
Dr. Wayland. So the flexibility funding, the Smart Grid
Investment Grant flexibility funding, and the broadband
funding--and, of course, broadband is going to be the backbone
of a smart grid in the future, whether it is wireless or
fiber--and the funding in the bipartisan infrastructure law
will actually help support demand response programs.
Ms. Bonamici. Terrific. Thank you so much.
So, this year, coal will account for about 85 percent of
electric generation capacity retirements, while solar and wind
are projected to account for about 63 percent of new capacity.
Investing in the bulk power system has been and will continue
to be critical to a resilient grid, especially as polluting
baseload generation is taken off line and replaced by renewable
resources.
So I wanted to ask you, Ms. Hamilton: In your testimony,
you mentioned the importance of building inter-regional
transmission lines. How would ratepayers benefit from
transmission build out? And how does the Build Back Better Act
help us with this goal?
And thank you for pointing out in your written testimony
and your oral testimony the Boston Globe article that said,
compared with climate inaction, Build Back Better is downright
cheap.
So will you please talk about how ratepayers would benefit
from that transmission build out and how Build Back Better
would help?
Ms. Hamilton. Yeah, absolutely. Thank you so much for that
question.
So there was a recently released Grid Strategies report
that says, for every $1 invested in transmission, customers see
$3 in benefits. And that is because it keeps the prices down
for customers. You are able to move electricity from places
that have a lot of resource to places that have a lot of load.
And you can do that in real time with a lot of different
technologies that are available today.
So, for example, you look at what we have in our nation
today, and a lot of our systems are very isolated from other
systems. Right now, there is no connection, a seam, between
MISO in the Midwest and PJM, which has an enormous amount of
load. So, like, let's build a transmission tie there to move
all of that great wind out of Iowa into Chicago that is going
to need it, especially with their new goals.
And so what we need to do--and when you look at Texas and
the lack of ties that they had during the polar vortex, how
difficult that was for them to manage the system. Whereas in
MISO, across Louisiana, Mississippi, Alabama, Indiana, there
were more transmission ties. They were able to import 15 times
more power than Texas was, simply because they had transmission
ties.
So transmission is incredibly important. And I think if we
look at transmission overlaid with our rail, with our highway
rights of way, there are plenty of ways to get transmission
built.
And if you look at what right now is in the infrastructure
bill, there are certainly programs that are going to be able to
incentivize that and allow us to be catalytic. So perhaps
funding one project will lead to not just that project being
built but really catalyze multiple projects after that by
sending the signal to the private sector that you can build
transmission now.
Ms. Bonamici. That is great. Thank you.
And my time has expired. I yield back. Thank you, Madam
Chair.
Ms. Castor. Thank you.
Next up, Rep. Gonzalez, you are recognized for 5 minutes.
Mr. Gonzalez. Thank you, Madam Chair.
And thank you to our witnesses.
I want to start by submitting for the record from Stanford
University, ``An Assessment of the Diablo Canyon Nuclear Plant
for Zero-Carbon Electricity, Desalination, and Hydrogen
Production,'' for the record.
Ms. Castor. Okay. Without objection, so ordered.
[The information follows:]
Submission for the Record
Representative Anthony Gonzalez
Select Committee on the Climate Crisis
February 15, 2022
ATTACHMENT: Aborn, J., Baik, E., Benson, S, et al. (2021 November).
Assessment of the Diablo Canyon Nuclear Plant for Zero-Carbon
Electricity, Desalination, and Hydrogen Production. Stanford
University.
This report is retained in the committee files and available at:
https://energy.stanford.edu/sites/g/files/sbiybj9971/f/
diablocanyonnuclearplant_report_11.02.21.pdf
Mr. Gonzalez. Thank you.
I want to first just cite something from there. We have
talked about the impact that Diablo Canyon could have on
California's energy. This report analyzed various scenarios and
concluded that keeping Diablo Canyon running would, quote,
``significantly reduce California's use of natural gas for
electricity'' and ``save $2.6 billion in costs to the state's
power system from 2025 to 2035.''
Additionally, if closed, a carbon-free electrical system in
California in 2045 would need 18 gigawatts of PV solar and 11
gigawatts of energy storage, and the additional capacity of
solar to replace Diablo Canyon would take up 90,000 acres of
land. By comparison, the footprint at Diablo Canyon is just 900
acres and only 140 acres for the plant itself.
So hopefully that provides some context for folks. I think
shutting down any nuclear plant in this country is insane, yet
it is something that people continue to do for some reason.
So, that being the case, we obviously disagree on policy,
but I do believe all of us here believe American families and
businesses deserve access to affordable, reliable, and
resilient energy. That is why I have been an advocate for
generating electricity from a diverse set of energy sources,
including nuclear. You all are probably sick of me saying that
at this point, but I just think it is a no-brainer.
Mr. Mills, in your testimony, you highlighted a case study
that I bring up quite frequently at this committee, and that is
Germany's high-priced transition to renewables.
In Germany, wind and solar make up roughly 20 percent of
the energy mix, and supply anywhere from a negligible amount to
roughly half of all demand during certain sunny and windy
hours. These large fluctuations require backup from other power
plants, typically coal- or gas-fired, or increased electricity
imports. And, as you noted in your testimony, all this
variability can cause serious disruptions in electricity flow
and, thus, dramatically raise consumers' prices without a
significant reduction in emissions.
Now, when I raise these concerns and specifically cite the
emissions and costs from Germany, one response I often hear is
that, because the U.S.'s geography and resources is
dramatically different than Germany's, there is no reason for
us to be concerned with the consequences of pursuing the exact
same policies. Some would suggest, hey, it is sunny in Arizona,
so that should work fine in northeast Ohio. I would argue that
is also kind of crazy.
Can you help us understand why it would be a mistake for
the U.S. to support and implement the same renewable energy
strategy as Germany?
Mr. Mills. Well, I encounter the same comments, Congressman
Gonzalez.
I think the answer, first of all, is that the European grid
does have a lot of interties there. It is a fairly integrated
set of grids among many countries. The geography of continental
Europe from its south to its north is very similar in terms of
the latitude and, therefore, solar insolance, very similar in
terms of wind. Some of the challenges there intercountry are
moderated much like we have here with our FERC.
So the reality is, in terms of the primary resources, wind
and sun, if that is where most of the expanded capacity is
focused, it is not very different, continental United States
and continental Europe.
And the other reality is, of course, that Germany has done
the experiment for us, as has England, where you provide
reliability by essentially building two grids. And even if the
two sources of electricity--broadly speaking, the hydrocarbon
traditional sources and the newer sources, wind and solar--were
the same price, you have, by definition, roughly doubled the
cost of the supply system.
And you increase costs because you need more interties. I
think we do and should have more interties, but you need more
of them. And then you have to underutilize the--we will call it
the old grid. Underutilized assets cost more per unit of energy
delivered and actually have operational structural cost
increases on grids when you start doing cycling of these
assets.
So they have done the experiment, and it does cost more. I
think people need to be honest about the fact it just costs
more, not less.
Mr. Gonzalez. Thank you.
And with my final 30 seconds, the suggestion that we can
just send solar power from places like Arizona all over the
country and that is somehow a solution to our grid challenges,
that is sort of silly, right?
Mr. Mills. Well, you can do it, but it costs a lot of money
and exposes the long transmission lines to precisely the
extreme weather events people are worried about. It is
expensive, and it doesn't guarantee it will have enough of the
physical resource available when required, for the exact
meteorological reasons I point out in my testimony.
Mr. Gonzalez. Thank you for your responses.
And I yield back.
Ms. Castor. And, next, we will go to Rep. Brownley.
You are recognized for 5 minutes.
Ms. Brownley. Thank you, Madam Chair. And thank you for
pulling us together for this important hearing. I appreciate it
very, very much.
Ms. Sutley, I was particularly interested in your--
particularly your written testimony, and in talking about green
hydrogen, and not only in terms of getting to your 2035 goal
but also in terms of, you know, reliability in and of itself.
So I am sort of curious, is the use of green hydrogen, is
there--obviously, to expand your renewable energy options in
your portfolio has got to be one reason, certainly. But I was
curious to know, is there something special around green
hydrogen when you were talking about reliability, other than
just its availability?
Ms. Sutley. Thank you.
When we looked at the--well, the ``LA100'' study looked at
what was necessary to get us to 100 percent renewable energy,
the National Renewable Energy Laboratory pointed out that we do
need dispatchable capacities, as Mr. Mills was mentioning. We
agree with that. But one way to provide that is with green
hydrogen.
We understand from the people involved in the technology
that, you know, a certain amount can be blended into a power
plant today and that, you know, the technology is evolving to
ensure that we can use 100 percent green hydrogen in a
combustion turbine in the future. And so that would provide
that dispatchable capacity.
The ``LA100'' study also pointed out that it would be
different than we use our natural gas power plants today in the
L.A. Basin, where they run much of the time, probably 30
percent of the time, to where we would be using that
dispatchable capacity infrequently, in times of very high
demand or where there was an interruption for some reason in
the grid where we couldn't import some of the renewable energy
that comes from outside of the Los Angeles Basin.
The other thing is, we were part of a consortium that is
retiring a coal plant in Utah and are looking at green hydrogen
and the ability to actually make it on site through
electrolysis and store it on site and potentially provide
seasonal storage of excess renewable so that that renewable
energy when it is available can be used to make the green
hydrogen, and then at that particular site we can store the
green hydrogen on site and use it when it is needed for the
grid.
Ms. Brownley. And I notice in your testimony, too, in terms
of storage of that, it is in salt caverns that Utah has, but
that has to be a cheap way, I would imagine, in terms of
storing energy?
Ms. Sutley. Well, it's--yeah, that may be some--there may
be some particular things about that site that are particularly
attractive but we also think a good opportunity to show how
this technology could work.
There are extensive salt caverns underneath this power
plant. There is water, there is gas lines, there is power lines
that bring renewable energy both into that area and then energy
from the plant into southern California. So it is sort of an
ideal place to do this kind of project.
Ms. Brownley. And when do you think you will get to 100
percent green hydrogen?
Ms. Sutley. Well, at that plant, the new turbines are
coming in in 2025, and they will be capable of burning about 30
percent hydrogen the day they are turned on. And over the next
decade or so, as it goes through its maintenance cycles, the
plan is to convert it probably in the mid-2030s to something
that can run on 100 percent green hydrogen.
Ms. Brownley. Great. Thank you so much.
And, Ms. Hamilton, I have about 30 seconds left, but, you
know, in your testimony, you really talked about microgrids,
and certainly they are very important when we are talking about
resiliency and reliability.
And I was particularly interested in--you gave a couple of
different examples, and one of those examples was the Sonoma
Valley Unified School District, in terms of what they are
doing. And I am a former school board member, and so I can't
get away from it too far.
But, you know, just in thinking about that and the
possibilities of microgrids being, you know, judiciously spread
across particularly the State of California, when we are
thinking about that, seems to be a great win-win opportunity.
And, actually, school districts could actually perhaps earn
some revenue in terms of education for their kids.
So do you agree with all of that and that assessment?
Ms. Hamilton. I do. Not only can they bring solar on line,
they can earn more money by participating in the wholesale
market, and they can charge electric school buses. And if you
have ever sat in the back of a school bus, you know it is
stinky, and electric school buses are really the way to go for
these school districts. And the microgrid supports all of
those.
Ms. Brownley. Thank you so much.
And, Madam Chair, I yield back.
Ms. Castor. Thank you.
Next up, Rep. Carter, you are recognized for 5 minutes.
Mr. Carter. Thank you, Madam Chair.
And thank all the witnesses for being here.
I will go ahead and get this out of the way. Georgia is the
number one forestry State in the nation, and I am very proud of
that.
Thank you, Ranking Member Graves, for bringing that to my
attention before I get started.
Mr. Mills, I wanted to direct some questions to you.
Look, we all agree--we all agree that we need to modernize
our grid. Everybody here; we disagree on how we do it, but we
all agree we need to modernize it. I don't think there is any
question about that.
We know that our economy is electrifying more and more,
and, as a result of that, we have to have both generating
capacity and grid capacity, and we have to increase that
significantly. And, again, I think everybody agrees with that.
You make that point, Mr. Mills, in your testimony, and I
appreciate that very much.
And I am not against using any particular or any specific
type of form of generation, whether it be wind, solar, or
whatever. I am an all-of-the-above type guy as far as the
energy goes. But the reliability and the resiliency are
extremely important to me, and also the affordability. You just
mentioned when we were talking about getting solar power from
Arizona, you know, the cost of the transmission lines.
Obviously, that is something that would deter us. I mean, that
makes sense to anybody. I think a third-grader could understand
that.
But you also mentioned in your testimony that, if we were
to primarily switch to solar and wind, that the battery storage
would--that is necessary for 12 hours, we would need to spend
almost a trillion dollars on batteries alone. Not to mention
how we make those batteries, the energy that it takes to make
those batteries, and what we do after they are no longer being
used. Those are things we should consider as well.
But the one thing that I am really concerned about, again,
is the reliability and the resiliency. And I wanted to ask you:
You understand just like all of us do what is going on right
now with rising energy costs. You have seen it; we have all
seen it. In light of that, what can we expect to happen to
electricity rates if we were to make such a transition as some
have described here--that is, to try to go totally to wind and
solar and do away with all the other sources?
Mr. Mills. Well, thank you, Congressman. I think we know
the answer because it is already happening in the United States
and around the world: electric rates are going up, not down.
And there is a one-to-one correlation in European nations
and in the United States, in U.S. regions. As more wind and
solar capacity is added per capita, electric rates are going
up.
And that is not a subsidy effect, in the sense the
subsidies should keep the rates down because the capital costs
are shifted from the ratepayers to taxpayers broadly. That is
where the subsidies come from.
So the fact electric rates are rising--in fact, in Xcel
service territory, they have gone from a few percent wind plus
solar to about, I think they are at 10 or 12 percent now, maybe
15, and the average costs of electricity for the average
homeowner has gone from $800 a year to $1,600 a year.
So, you know, they are following the path the commission
wants and that we all would like to have, more wind and solar,
but it costs more money--it has been costing more money. The
idea that it will get cheaper in the future is entirely
anchored on forecasts, not on experience.
What is actually happening is solar module prices have gone
up 50 percent in the last 2 years. Battery costs are forecast
to rise this year. Wind turbine costs have stopped--prices have
stopped going down, are going to rise slightly this year, all
because of the commodity inputs for them. Commodities account
for 60 to 70 percent of the cost of making solar panels, about
30 percent of the cost of making wind turbines. When commodity
prices escalate, it ripples through. It ripples through other
things too, for fertilizer, food----
Mr. Carter. Right. Right. And----
Mr. Mills. But that is the path that we are on.
Mr. Carter [continuing]. I have just got a minute left. And
you just answered my second question, and I appreciate that,
about the increasing cost. And, obviously, we all understand
that.
But how can we ensure that our transition--if we were to
transition too quickly, obviously we are going to bring into
light the reliability and the affordability. But how can we
transition significantly investing in the grid in a way that
doesn't necessarily put this undue pressure on electricity
rates and how we could reduce affordability?
Mr. Mills. Well, so I am sorry the answer is to go slower.
And no one likes that answer, because to get the cost down of
the technologies we would like, they are going to take a lot
longer to get cheap.
I would just mention quickly, hydrogen on a unit of energy
delivered basis is about 300 percent more expensive than
natural gas. There is no path to making hydrogen as cheap as
natural gas anywhere visible in any of the physics or physical
chemistry.
So it works; you can electrolyze water and make hydrogen.
It doesn't matter that you use solar panels to do that. It
produces very expensive energy. It is a solution. I like
hydrogen fuel cells personally. We can burn it in engines. It--
--
Mr. Carter. As do I.
Mr. Mills [continuing]. Is just very expensive.
Mr. Carter. Good.
I know I am out of time, and I will yield back, but thank
you, Mr. Mills, for making what I consider to be very important
points.
Look, we all want the same thing, but how we get there is I
think where we differ.
Ms. Castor. All right.
Next up is Rep. Huffman from the Redwood forests.
Mr. Huffman. Thank you, Madam Chair.
I wanted to show you a little bit about what California
really looks like. It is not this, you know, doom and gloom
place that some of my colleagues have been describing. In fact,
I am sitting here in my home powered 100 percent by renewable
energy right now, and the lights are still on and I think my
connection is still working.
It is amazing, this alchemy, this magic, we have been able
to achieve in California, contrary to all of the anti-renewable
doom and gloom we continue to hear from the other side, who for
some reason thinks that we have to go slow and we should not go
too fast in this transition to clean energy. Let's keep in
mind, we have a climate crisis out there, and there is an
enormous cost of making this transition too slowly. We should
talk about that cost as well.
But, look, I don't want Mr. Carter to be the only one to
brag about his state. We hear a lot about the beautiful State
of Georgia, Mr. Carter, but let me tell you a little about
California.
Right now, in real time, we have this wonderful website
that our grid operator, the California ISO, puts out there. You
can go to CAISO.com, and you can see that, right now, as I am
talking to you, we have a current demand of a little over
22,000 megawatts. Over 70 percent of that demand right now in
real time is being met by renewable energy. And somehow the
California economy, fifth-largest economy in the world, is
plugging right along.
Only about 9 percent of our energy in this moment is
imported, contrary to some of these claims about our extreme
dependence on imported energy. We have an increasing amount of
battery storage that is helping keep our grid working. None of
it is contributing to our load right now because the sun is
shining and the wind is blowing, and so we are charging those
batteries.
And, as we go forward, those batteries as well as our hydro
and our other assets, including geothermal, which is about 5.5
percent of our load right now as we speak, are going to keep
our grid balanced. And, in fact, the grid has never failed here
because we had too much renewables. This is a canard, this is a
myth that we continue to hear. In fact, I am not aware of any
grids failing anywhere because there were too much renewables.
I am aware of Tucker Carlson and Ted Cruz and Republicans
claiming that the Texas failure last year was because of too
much wind, but that just forced the fact checkers to totally
debunk that. The turbines kept working; the wind worked just
fine. It was, in fact, a deregulated grid that depended on some
really neglected fossil fuel infrastructure that brought all of
the reliability problems in Texas.
So we do a lot of debunking and fact checking when we try
to have a forward looking conversation in this committee, and I
needed to cover some of those bases, but I want to bring this
back to Nancy Sutley.
We are proud of the fact that LADWP is one of the nation's
largest utilities and you have set these great goals for 100
percent clean energy. How are you going to make this magic
alchemy happen without crashing your grid, as we have, you
know, heard all these warnings about too much renewables?
Ms. Sutley. Well, thank you, Mr. Huffman, for the question.
Well, I would say a couple of things.
First of all, we have this ``LA100'' study done for us by
the National Renewable Energy Laboratory that literally looked
at thousands of scenarios and modeled L.A.'s grid literally
down to the building level and came up with a number of
scenarios that would get us to 100 percent clean energy
reliably, affordably, and equitably, including by 2035. The
state's current goal is 2045 for a 100 percent clean energy
grid.
And then the second thing is that, you know, we have been
making these investments in renewable energy. We have brought
on line a number of new projects, including some of the
cheapest solar to date and cheapest wind to date. We have
invested in storage. We have sort of repurposed a hydro pump
storage project that was built in the 1980s to work alongside
the renewable energy to provide that, sort of, longer duration
storage. And we are investing in, sort of, management of the
grid. And we believe that even on, kind of, our current
investment path that we can get to about 80 percent renewables
by 2030 and 97-percent greenhouse gas free.
So looking at a diverse energy source--diverse clean energy
sources and continuing to invest in our grid to protect
reliability and to invest in electrification and energy
efficiency and demand management that help our customers help
us manage the grid. So----
Mr. Huffman. Thank you.
Ms. Sutley [continuing]. We believe this is all possible.
Thank you.
Mr. Huffman. I realize, Madam Chair, I am out of time. I
had another question I wanted to ask other witnesses about some
of the microgrids we have begun to deploy and the big grid/
little grid issue. If there is a second round, I will hang
around for that. But I am out of time, and I will yield back.
Ms. Castor. Thank you, Rep. Huffman.
Next, Rep. Palmer, you are recognized for 5 minutes.
Mr. Palmer. Thank you, Madam Chairman. And thank the
witnesses and Ranking Member Graves.
Mr. Mills, The New York Times put out an article last week,
couple weeks ago maybe, that showed where we would have to
locate solar farms and wind farms for generating the power that
the nation would need to run on, and a lot of that was in the
Midwest. Would that not create some major eminent domain
issues?
Mr. Mills. I am sorry, what kind of issues, Congressman? I
apologize.
Mr. Palmer. Eminent domain.
Mr. Mills. Oh. Yeah, I think--well, certainly, this
administration and previous ones have struggled with the
eminent domain challenges with building any large scale
facilities that take acres and acres or millions of acres.
Transmission line has failed serially to get clean hydro from
Canada down into New York City.
So the opposition to using large areas of land for wind and
solar is rising, but that is--you know, everyone is familiar
with the NIMBY challenge. It is not new. Yeah, I think it will
become more severe as we expand the use of wind and solar,
sure.
Mr. Palmer. Well, it already has with transmission lines,
and----
Mr. Mills. Certainly.
Mr. Palmer [continuing]. We are taking an enormous amount
of land to site these solar farms and these wind farms.
The other thing is--you are involved in engineering. I
worked for two international engineering companies. Just from
an engineering feasibility perspective, from my understanding
of engineering, it is not feasible to build this out in 13
years, by 2035.
Mr. Mills. Well, not at the national level it is not. There
is not enough construction capacity to do it. And as we push
the construction capacity hard, you get price escalation, you
get labor cost escalation, and materials escalation. And if I--
--
Mr. Palmer. There are shortages, as you have already
pointed out, particularly in rare earth elements. As you
pointed out, half of that is controlled by China. And I think
we get 80 percent of our rare earth element material from
China.
Mr. Mills. Right.
Mr. Palmer. But Finland--in one of the articles that you
wrote, you quoted the geological survey by the Finnish
Government about the capacity for providing the other
materials, I mean just basic materials. Could you comment on
that?
Mr. Mills. Certainly.
And just for the record, you know, I have worked for dozens
of utilities over the years. I have to--some of the most
impressive engineering anywhere on the planet is in American
utilities. They have kept the lights on, as the Congressman has
observed, and done so under duress many times, both from nature
and from human nature.
What the Finnish Geological Survey did was look at the
global plans--many countries are emulating what the United
States is talking about--to do a transition to using lots more
wind, solar, and batteries, and water electrolysis. We can
throw that in as well. And they calculated the existing
availability of known reserves of minerals--copper, nickel,
lithium, cobalt--not just the rare earths.
And their conclusion--and this is not an anti-renewable
energy conclusion. It is simply an analysis, the same that was
done by the Dutch Government at the Delft University. The world
doesn't have enough proved reserves, not just mines----
Mr. Palmer. Thank you.
Mr. Mills [continuing]. Of the minerals that are needed to
fabricate all the machines that are being contemplated right
now.
Mr. Palmer. And wouldn't it make more sense to utilize next
generation nuclear, which can utilize and recycle spent fuel
rods, instead of putting all of our eggs in this renewable
basket?
And it seems even dumber to me that the Biden
administration is rejecting or rescinding permitting for a
nickel and cobalt mine in Minnesota when we know you have to
have that to build these facilities.
Mr. Mills. Well----
Mr. Palmer. Does that make sense?
Mr. Mills [continuing]. Yeah, we need a lot more--I am a
nuclear bull. I think there is a tremendous opportunity for
more both small and large nuclear plants. I am also very
bullish on literally doubling the amount of solar/wind capacity
in America, more than tripling the battery capacities on grids.
This is going to happen. It is useful.
What I challenge is a future that is fully dependent on
that, because the data don't show that is possible. Nuclear has
a very important role in all this.
Mr. Palmer. Well, that is the point that I wanted to make.
And you look at what has happened in the U.K. and in Germany
and how much household utility costs have gone up, how it has
impacted the lives of particularly lower income people. It has
literally created energy poverty----
Mr. Mills. Right.
Mr. Palmer [continuing]. In Europe and the U.K., and it has
here to a certain extent as well.
With that, Madam Chairman, I yield back.
Ms. Castor. Great. Thanks, Rep. Palmer.
And, fortunately, in the bipartisan infrastructure law, we
were thinking ahead, and it includes some new policy direction
on pre-siting consultation to try to avoid any problems with--
and that includes siting backstop authority for DOE, because
there are issues when you are trying to plan interstate power
lines and transmission lines. And I hope somebody will ask our
experts to expand on that as well.
Next, we will go to Rep. McEachin.
You are recognized for 5 minutes.
Mr. McEachin. Thank you, Madam Chair. And, again, I want to
thank you for your marvelous leadership of this committee and
for having this hearing today.
The Congress--this Congress, at least--and the Biden
administration have taken steps through the bipartisan
infrastructure law to increase the reliability and resilience
of our grid in the face of extreme weather events and
significant risks that are posed to our nation's electric grid.
These investments are critical, and I look forward to the
continued work with my colleagues to implement these
investments and ensure continued efforts to make our grid more
resilient and reliable, including those included in the Select
Committee's Majority Staff Report.
Ms. Sutley, environmental justice communities are on the
front lines of the climate crisis. In your testimony, you
explained that moving to a zero carbon grid will help reduce
air pollution, including nitrogen oxides and fine particulate
matter. Can you explain how this process might play out?
Ms. Sutley. Thank you, Representative, for the question.
Yes, we have seen here in Los Angeles--we still have the
worst air quality in the nation. Smog and particulate matter
pollution affects many of our communities, particularly low-
income and disadvantaged communities. But most of it right now
is coming from the transportation sector. It is coming from the
cars on the road, the trucks and buses and the goods movement
coming out of the Ports of Los Angeles and Long Beach.
And so, as the grid gets cleaner and cleaner,
electrification of those transportation sources will help to
get rid of the largest sources of smog pollution and other
toxic air pollution that is affecting our communities.
So we believe that, even today, electric vehicles or other
electric equipment, today, even with the power mix on our grid,
is up to four times cleaner than the diesel or gasoline powered
vehicles that are on the road today. So we are able, as we
electrify, to address the major sources of air pollution that
are harming our communities.
Mr. McEachin. And let me ask you this question, ma'am, if I
can. You know, we are trying to invest to do the very important
work of grid resilience and grid reliability. As we do that,
how do we also advance the cause of environmental justice?
Ms. Sutley. Well, we are right now engaged in a community-
based and community-led effort around equity strategies as we
implement these policies and these programs to get us to 100
percent clean energy. We have really tried to make sure that
all of our communities are benefiting from these investments.
So, for example, you know, many residents in Los Angeles
are renters. They live in apartments and can't necessarily put
a solar panel on their roof. So we have created a shared solar
program where apartment dwellers can take advantage of solar
energy.
We are also investing in electric vehicle charging
infrastructure in disadvantaged communities. So, for example,
we have a customer service center in the Crenshaw neighborhood
of south Los Angeles where we have installed a number of
electric vehicle chargers that are available to the community.
And they are very popular and they are used all the time.
So I think what we are trying to do is really be deliberate
about addressing the needs of the community and taking the
input of the community to do that.
Mr. McEachin. Okay.
With an organization like yours, how can this Congress or
any Congress be a strong partner to help you in your efforts to
advance environmental justice? In other words, what else can we
do or what else should we be thinking about?
Ms. Sutley. Well, as I said, the biggest, sort of, bang for
the buck on that right now is to reduce the pollution coming
out of our transportation sector, and electrification really
offers a pathway to do that in a cost effective way.
And so the investments that the Congress made in the
bipartisan infrastructure law and contemplated in Build Back
Better, as well, will go a long way to building both the
charging network that will allow that large scale
electrification of transportation and also support the vehicles
being on the road today.
Mr. McEachin. Thank you. I think Los Angeles is lucky to
have you. Thank you for all your hard work.
And, Madam Chair, I yield back.
Ms. Sutley. Thank you.
Ms. Castor. Thank you, Rep. McEachin.
Next up, Rep. Armstrong, you are recognized for 5 minutes.
Mr. Armstrong. Thank you, Madam Chair.
And thank you, Mr. Mills, for talking a little bit about
the economics of hydrogen. Hydrogen is a great fuel source. The
problem is, you can't economically scale up the electrolysis
for green hydrogen without it being unbelievably expensive to
consumers under current technology.
And if you use gray hydrogen, you need to have natural gas
as a feedstock, which, while very effective, one, doesn't help
the carbon emissions as much and, two, it is pretty hard to
compete with natural gas when you are using natural gas as a
feedstock, regardless of the price of natural gas.
But the Majority's memo for this hearing highlights a
previous staff report that recommends backup storage as a means
to address instances when intermittent generation sources are
unavailable to provide electricity--essentially when the wind
doesn't blow and the sun doesn't shine. And we have seen this
argument before. Proponents of widespread renewable deployment
advocate that batteries are the answer when those sources are
completely offline. But this argument ignores the reality of
our technological, material, and production limitations.
And, Mr. Mills, when you have written on this topic, you
have often framed the scale of this problem using the world's
largest battery manufacturing facility, the Tesla Gigafactory
in Nevada. Using current levels of production, approximately
how long would it take to produce the number of batteries to
store 2 days' worth of U.S. electricity demand?
Mr. Mills. Well, the short answer is: centuries. Or, put
differently, you have to increase by a hundredfold the global
manufacturing capacity, which is not happening because it can't
happen.
Mr. Armstrong. Well, and your critics argue that, right,
with additional battery facilities----
Mr. Mills. Right.
Mr. Armstrong [continuing]. Will be built over the next
decade to add to this production. But it completely ignores the
reality of global supply chains and the availability of
essential materials like, I mean, lithium, cobalt, just to name
a few.
Mr. Mills. Well, that is correct. And I want to again go on
the record of pointing out that I am reflecting observations
about mineral supplies made by the U.N., by Geological Surveys
in European nations, by the EU itself, by the way, and by the
IEA's magnificently long and detailed report on the minerals
required they published last year to very little fanfare.
Mr. Armstrong. Well, and I say that a lot in this hearing
and others. And I think one of the fundamental things that I
get so frustrated with is, a lot of our policy seems to be
outsourcing our guilt. I mean, by your admissions, right, we
are going to have to increase lithium mining by at least 500
percent worldwide.
Mr. Mills. Right.
Mr. Armstrong. And, I mean, given the regulatory hostility
in the United States, do you think it is realistic that we can
onshore that production?
Mr. Mills. No. If the average time to open a new mine
anywhere in the world is 16 years, average, the United States
is far longer. Mines have been canceled recently. This
administration canceled the Minnesota copper/nickel mine just a
week and a half ago.
So, just as a practical matter, even if we were all
enthusiastic, as I am--I worked for a mining company in Canada
years ago. I am bullish on mining. I think we should open more
mines here. I think we should require more mining here as a
condition of more green energy machines being built here. I
think we should link them, personally. But it will take
decades, not a few years, to expand mining capacity, not only
here but globally.
Mr. Armstrong. Well, and I think we are seeing that in real
time right now, the impacts of global supply chain, with the
United States almost entirely dependent on what I would call
our strategic global adversaries for critical minerals.
I mean, palladium is an essential material used for
catalytic converters to clean auto emissions----
Mr. Mills. Correct.
Mr. Armstrong [continuing]. And Russia is currently the
largest producer of palladium. In fact, they produce more than
the next four countries combined.
And just in the real world, how this is working today, as
tensions on the Ukrainian border have increased over the last 2
months, so have palladium prices, simply due to the market
making assumptions about future access. With news this morning
that the Russian troops near Ukraine might be returning to
their bases, palladium slid 5 percent.
What happens when something beyond market forces limits the
availability or alters the price of these materials,
particularly when they are produced by our strategic
adversaries and we have no realistic way to onshore them?
Mr. Mills. Well, we have a realistic way to onshore a lot
more of it; it just takes time. That is why--I wasn't being
facetious about going slower. We can't build these things
faster. We have to recognize, not as a policy matter, that we
should slow down; I think we have to recognize the velocity
with which global-scale mining and manufacturing can expand to
our aspirations. We should expand them. I think we should try
to accelerate them. But I don't think they can go at the pace
people imagine.
America has plenty of minerals. The United States just
hasn't had the appetite to provide the right incentives to
expand mineral processing and mining. And both are required,
not just the mining, but the very difficult chemical processing
that happens after you dig up the rocks is something else that
we are not a very friendly nation to the expansion of those
kinds of industries.
Mr. Armstrong. And I agree with that. I mean, we have a lot
of lignite coal in North Dakota. We have a lot of people who
would do a really good job of getting that out of the ground.
It also happens to be pretty high in rare earth metals. But I--
and my dad used to tell me this when we were hunting when I was
a kid. He said, ``Slow is steady, and steady is fast.''
And, with that, I will yield back.
Ms. Castor. Okay. Thank you.
Next up, Rep. Levin, you are recognized for 5 minutes.
Mr. Levin. Well, thank you very much, Chair Castor.
I wanted to start off with what I believe has been a great
California success story, and that is the expansion of rooftop
solar in the State of California.
And, Ms. Sutley, it is good to see you. I will start with
you.
I think as you know, across California we now have 1.3
million Californians who have installed a total of about 10
gigawatts of rooftop and home-based solar.
And, in your testimony, you referenced how NREL recently
completed its ``LA100'' study, which examines various scenarios
for how Los Angeles can reach 100 percent carbon free energy by
2035. The study covers how L.A. alone has over 13 gigawatts of
solar rooftop potential, over half of which is the residential
sector.
Can you discuss the role that rooftop solar, coupled with
energy storage, needs to play for L.A. to meet its clean energy
and grid resilience goals?
Ms. Sutley. Thank you, Representative Levin. Nice to see
you. I appreciate the question.
Yeah, there is no question that rooftop solar will play an
important role in us meeting our clean energy goals. Los
Angeles is proud to be the number one solar city in the
country, and we have long supported our customers in embracing
rooftop solar through the California Solar Initiative and solar
incentive programs.
We have a feed in tariff program that really looks at, sort
of, a power purchase agreement with us, you know, to
incentivize solar on, for example, warehouse roofs--we have a
lot of those in Los Angeles--as well as recognizing, as I
mentioned, that 60 percent of our residents live in multifamily
dwellings, and so we have to design other kinds of solar
programs to ensure that folks can access the benefits of solar
energy through our shared solar program as well as the solar
rooftop leasing program to basically lease people's roofs for
solar that they might otherwise not be able to afford to put on
their own roof.
So it has been a very successful program, but I think it
recognizes, and the NREL study recognizes, that we need that
local generating capacity here in the Los Angeles Basin. We do
get a lot of our power imported. That has been going on now for
many decades. It used to be coal plants in Arizona and Nevada
and Utah, and now, increasingly, solar and wind coming from
other parts of California as well as from other Western states.
And we do have the transmission to support that.
But, really, for that, to maintain resilience and
reliability, we need local sources of generation, including
rooftop solar. And we are fortunate in Los Angeles we have, you
know, 350-plus days of sunshine a year, and it makes it an
ideal place to really make rooftop solar a critical part of our
energy future.
Mr. Levin. Fantastic. Thank you for that.
And I am glad that the California PUC has indefinitely
postponed its changes to net metering. Because I want to make
sure that, as we look at the Federal level to make investments
in clean energy, California continues to adopt policies that
really keep rooftop solar deployment growing rather than
undermining that growth.
Ms. Hamilton, I will turn to you. It is nice to see you. As
my colleagues have discussed, the bipartisan infrastructure law
included a lot of funding to modernize our grid and to advance
energy storage. In your testimony, you discussed how the
Investment Tax Credit included in the House Build Back Better
Act would help drive down the cost of energy storage and solar
and transmission.
I would also like to note the inclusion of direct pay
provisions. I have been advocating for that, really building on
something that Earl Blumenauer and I introduced, the Renewable
Energy Investment Act. Direct pay, I think, is particularly
important as we continue our economic recovery, since the
volatility driven by the pandemic has made it more challenging
to finance clean energy projects.
With the time I have left, could you elaborate on why this
is all critical, these tax policies are critical, in building
grid resilience?
Ms. Hamilton. Yeah, absolutely. Thank you so much for the
question, Mr. Levin.
The tax credits will send a signal to the private market.
And direct pay is incredibly important for those people who do
not have a tax burden. And so, as you are talking about rooftop
solar, there is a 10 percent bonus credit for rooftop solar for
people in low-income communities, and there is a 20 percent for
community solar for low income communities. That is incredibly
important. And direct pay will help those people who don't have
tax burdens to be able to take advantage of those kinds of
systems.
The other thing is, for energy storage, you know, there are
a lot of technologies other than batteries. There are long-
duration storage projects, including in Mr. Carter's State of
Georgia. Georgia Power is proposing in their Integrated
Resource Plan to install a long-duration storage battery that
will accommodate seasonal storage. That is the kind of project
that will also benefit from a tax credit.
And there are investors--and I have worked for a private
equity company before--who will say, this means we are ready to
invest and we are ready to move forward on these technologies.
So having the Tax Code signal that to the private sector is
really crucial.
Mr. Levin. Thank you.
I am out of time, but I thank you both for your leadership.
And I will yield back, Chair.
Ms. Castor. Thank you, Rep. Levin.
Next, Rep. Crenshaw, you are recognized for 5 minutes.
Welcome.
Mr. Crenshaw. Thank you, Madam Chair.
And thank you to the witnesses.
You know, I just want to address this notion that we should
sprint to what are inherently unreliable forms of weather
energy. And the narrative goes something like this: we have to
sprint there because there is a crisis and it is an emergency.
And I would challenge my colleagues to point out where in
the U.N. IPCC report it says there is a climate crisis. It does
say, there are costs. The costs are about 4 percent of global
GDP, and by the year 2100 that is 4 percent less than it
otherwise would be. That is not nothing, but it is pretty close
to nothing.
The recent statement by the New York Federal Reserve stated
very clearly, after researching this topic extensively, that
the costs of the proposed climate policies are far greater than
the costs of climate change itself.
So we don't want to debate climate change here, but we do
have to get at the actual facts and what the consensus, the
scientific consensus, dictated by the United Nations, actually
says. Because that informs our thinking moving forward. It
informs our solutions. And it actually tells us it is pretty
good news. You don't have to sprint to unreliable energy.
Let's take a look at Texas. Texas has 30 gigawatts of wind
capacity. That is enough to power the whole state. Now, the
thing is, when the weather gets really bad and it freezes--and,
by the way, it didn't just freeze in Texas; in surrounding
states, too, they also couldn't get power. So let's just--that
is to dispute the notion that if we were just connected to the
grid everything would be fine. That is not necessarily true.
But guess what? Wind didn't really work very well. It wasn't
windy. Some of the turbines froze.
So it was actually producing about 6 percent of the total
generation needed. That meant that coal, gas, nuclear had to
provide an outsized amount. The problem wasn't underinvestments
in that baseload energy. We have to accept that fact before we
move on.
And then we have to accept the next fact: Our goal is to
reduce carbon emissions, not just keep the oil in the ground.
It is to reduce the carbon emissions because, we agree, it does
have an effect on the climate in the long term.
So, Mr. Mills, I am going to ask you a set of very simple
questions, and please provide simple answers.
Does the grid become more stable or less stable when more
intermittent power sources are put into it?
Mr. Mills. Less stable, but harder to manage.
Mr. Crenshaw. It is certainly harder to manage.
Can solar or wind power the grid 100 percent of the time?
Mr. Mills. There is no scenario where that is reasonably
feasible at any price.
Mr. Crenshaw. But they say they can put batteries in place.
I mean, how many batteries would you need to do something like
that?
Mr. Mills. Can't build enough batteries. You could do other
things. There are other forms of storage. They are all
expensive. Pumped hydro is the cheapest, then compressed air.
All cost more money than storing oil in the ground, gas in the
ground, or piles of coal near a power plant, by factors of 10
to 100.
Mr. Crenshaw. Yeah. There are some interesting statistics
on how much batteries would be needed. I think that Tesla's
Gigafactory in Nevada can make 35 gigawatts of battery capacity
each year. That would be 46 years of production to make up what
Texas would have needed if we were on a 100 percent electrical
grid.
Here is another question. Does our current permitting
system even allow a wide-scale increase in building out things
like transmission lines that would be required for this all
solar/all wind kind of scenario?
Mr. Mills. No, it doesn't. I think we need to fix a lot of
things in the regulatory system, and NEPA itself is an
impediment to an awful lot of different structure expansion, as
everyone knows.
Mr. Crenshaw. Can you make the materials that go into wind
and solar without fossil fuels?
Mr. Mills. No. The world's capacity to make mined minerals
is dependent on oil, coal, and gas. The path to decarbonizing
that sector is even longer than the path to, quote,
``decarbonizing the grid.''
Mr. Crenshaw. And if America ceased all fossil fuel
production, where would we get the raw materials and chemicals
that go into everyday products--I mean, biomedical devices, our
computers, our phones, literally everything that we use?
Mr. Mills. Well, you are referring to the use of
hydrocarbons or oil for petrochemicals.
Mr. Crenshaw. Uh huh.
Mr. Mills. Well, you could, in theory, synthesize them from
biofuels. That is possible. That would require an expansion of
epic proportions that no one can imagine doing and at great
costs. Or you don't produce the stuff. You go back to using
wood, leather, you know, glass, instead of plastics.
Mr. Crenshaw. And, more importantly, if we don't produce
them, somebody is going to produce them. So, if countries with
poor environmental regulations produce these products----
Mr. Mills. Correct.
Mr. Crenshaw [continuing]. Do global emissions go up or do
they go down?
Mr. Mills. They go up. And they have been going up. In
fact, we already know that the IEA has pointed out that the
pursuit of greater mineral supplies for green energies is
leading to higher energy use per unit of mineral produced and
higher emissions. We are just exporting emissions.
Mr. Crenshaw. Well, I am out of time. We could do this all
day. Thank you, Mr. Mills.
Thank you, Madam Chairwoman. I yield back.
Ms. Castor. Rep. Casten, you are up next. You are
recognized for 5 minutes.
Mr. Casten. Thank you, Madam Chair.
I am sitting here listening, and I have to be honest, I am
just getting sad. We have real problems, the rest of the world
is dealing with problems, and we are just having this
conversation across party lines about fictions. If for the last
30 years one major political party had been screaming from the
rooftop that two plus two equals five, two plus two would still
equal four. And yet here we are.
So, you know, I am in this lonely position as an devout
free market environmentalist. And the reality--which I can't
believe I even have to say this--is, what the private sector
does is it finds a place to build low-cost stuff where they can
sell it at a higher price.
And it has been a tremendous success since we deregulated
our markets that the private sector did exactly that. It built
all this low cost generation. The days of coal fired power are
over because it is an economic dog. We don't have oil fired
peakers anymore to any significant degree in the system because
they are economic dogs. The simple cycle gas turbines are gone,
the steam side gas turbines. That has been wonderful for
consumers because it has all been squeezed out by stuff that is
both cleaner and cheaper.
But it does create real problems. And we should be working
on a bipartisan basis to break those real problems. Because we
now are at a point where 40 percent of the U.S. power grid is
being served--on a kilowatt hour basis, is being served by
sources that have effectively no marginal operating cost, about
half from renewables, half from nuclear. I am saying nuclear
has no marginal operating cost because the fuel is more like a
capital cost there. But it is creating this situation where
wholesale markets are basically broke in this country.
We have lots of zero marginal cost generation, 40 percent
of the whole market, that is a price taker, in a market that
was designed to clear where supply and demand balance out. And
so now we have markets that are going into negative prices for
long periods, where it is confusing structures.
And this is a fixable problem. And it is a wonderful
problem. We have caused huge value to flow to consumers. But
the value is not flowing to investors. We are seeing in places
like Illinois and Ohio where we have had political scandals
because people are trying to say, can we get taxpayers to bail
out the nuclear plants because ratepayers just aren't giving
enough money to pay for them?
And so my question--and I will start with you, Ms.
Hamilton, but I hope we have time for Ms. Sutley as well.
What kind of wholesale market reforms do we need to make
sure that in a grid that is increasingly dominated by very low
cost, sometimes zero-cost generation sources, we still have the
incentives in place that are necessary to build the generation
and the transmission to bring those to load?
Because our problem is not that power prices are too high;
it is that they are too low.
Ms. Hamilton. Thank you so much, Mr. Casten. And, unlike
you, I am happy, not sad, because I see so many solutions out
there, and I think it is completely doable. And I am also very
much about markets and about, you know, free enterprise and
making sure that you set up the right signals.
So the good news is FERC does have Order 2222, which is
starting to be implemented right now, to try to bring in
customer sited resources to actually be compensated for the
value that they bring to the grid.
I think, as you mentioned, internalizing externalities like
greenhouse gas emissions, like resilience, making sure that it
is valued and that that value is then passed along in the just
and reasonable rates and market products that FERC then
oversees.
So making sure that we actually set up all of those signals
is incredibly important. And FERC is the perfect agency to do
that because they build the record. They take evidence that is
real and that they get from all kinds of stakeholders, and then
they sift through the evidence, and they make decisions based
on what is right for the customer.
And I think we are in a really good place right now,
because I think we have those solutions. I think the private
sector wants to come to the table, and the private sector wants
nothing more than to deploy them and be compensated for what
they can build.
Mr. Casten. Well, I am delighted to hear you say that,
because, as you know, my Energy PRICE Act would actually direct
FERC to do exactly that.
Ms. Hamilton. Exactly.
Mr. Casten. Because they have got this issue: How are we
going to deploy the right generation to get the incentives?
Ms. Sutley, any comments you want to add to that?
Ms. Sutley. Yeah, just a couple of things.
First of all, because we are a California utility, we
actually do have to consider the price of carbon in our
dispatch order, as well as basically paying for the carbon that
is imbedded in any of our wholesale transactions. We are not
FERC jurisdictional for our wholesale transactions.
The second that I would mention is, while we are not a
member of the California ISO and we are not FERC
jurisdictional, we do participate in a couple of the markets
that have been established by the California ISO to address
exactly the problem that you have mentioned. So we are
participating in both the energy and balance market and the
energy day ahead market. So, when that low-cost renewable or
negative-price renewables are available, there is now a market
in the West to take advantage of that. And we are glad to be a
part of it.
Thank you.
Mr. Casten. Thank you.
And I see I am out of time. I yield back.
Ms. Castor. Thank you, Rep. Casten.
Next, Ranking Member Graves, you are recognized for 5
minutes.
Mr. Graves. Thank you, Madam Chair.
Mr. Casten, I think the concern is that folks have been out
there declaring two plus two equals five, then legislating on
the false narrative, which is even more concerning.
Mr. Mills, I wanted to ask you: Dan Brouillette, the former
Energy Secretary, made a comment. He said, ``America's energy
and economic security, and therefore its national security,
depends upon this vital flow of uninterrupted power. Modern
civilization rests on the foundation that a resilient and
secure electrical grid provides.''
But you recently wrote in an article, California Governor
Gavin Newsom issued emergency orders to procure more natural
gas-fired electricity capacity to avoid blackouts. And in a
possible sign of more such moves to come, earlier in the
summer, California's electric grid operator 'stole' electricity
that Arizona utilities had purchased that was in transit from
Oregon.''
Can you expand on that a little bit and just briefly
summarize what happened there?
Mr. Mills. I was----
Mr. Graves. And perhaps the implication on California's
reliability to the grid?
Mr. Mills. Thank you, Congressman. And I hope I used air
quotes, as they say, over the word ``stole'' because----
Mr. Graves. Yes, you did.
Mr. Mills [continuing]. They were legally entitled to usurp
the power that was in transit from hydro dams north of
California to Arizona, which were contracted by the Arizona
utility. I think those contracts will be written differently in
the future by the two counter parties, recognizing that those
clauses exist.
Look, California is an interesting state. You know, it
imports, on average, over the year 30 percent of its
electricity, according to the Cal ISO. So it is very dependent
on the grid in the region for the availability of dispatchable
power.
So the challenge in both transmitting power, whether it is
from a hydro dam, which can be dispatched as long as you don't
have a drought--you could dispatch power from a hydro dam, from
a coal plant, from a gas plant, even from a nuclear plant. You
can dispatch power from a battery.
But to keep lights on, the feature of the grid that is
really important--and this is what California was dealing
with--is they needed power at that particular moment that was
coming across their lines contracted elsewhere, so they took
it.
Arizona was able to survive the loss of that power, and
they were paid for it, because they had access to other power
which was dispatchable, which is sort of a key point I am
making.
I happen to agree with Congressman Casten. We really are in
desperate need for restructuring how we look at the electric
grids, because marginal cost power does disrupt things, but
recognizing how you price dispatchable power is also critical.
We haven't done that either.
Mr. Graves. Thank you. Thank you.
Chair Sutley, nice to see you again. I worked with you in
Louisiana, and I still run into Mike Boots every once in a
while. I hope you are doing well.
I have a question. I know that the Los Angeles Department
of Water and Power owns and imports its electricity from
Intermountain Power Station in Delta, Utah. In total, 62
percent of Los Angeles' electricity comes from natural gas,
nuclear, and coal. The coal plant has been L.A.'s single
largest power source for about three decades, supplying one-
third of the city's electricity----between one-fifth and one-
third of the city's supply of electricity.
Now, your city has set a goal of 100 percent carbon free by
2035, but 27 percent of Los Angeles' power currently comes from
natural gas. Looking at some of the high cost of electricity in
Los Angeles already, what kind of costs are you going to thrust
on your payers by forcing this conversion by 2035 to 100
percent carbon free?
Ms. Sutley. Thank you, Ranking Member Graves. And nice to
see you too.
Well, first of all, with respect to the Intermountain Power
Plant, it has served Los Angeles well for 30 years or more, but
it is going to close in 2025. The original plan was to replace
it with a smaller natural gas combustion combined cycle plant.
And we have the contracts in place for combustion turbines that
will burn up to 30 percent green hydrogen on the--or hydrogen
on the day that they are turned on. So we expect Intermountain
Power to continue to play an important role, just in a
different way.
But----
Mr. Graves. But have you all run price models looking at
the additional costs that your consumers will be impacted by?
Ms. Sutley. So, as part of the ``LA100'' study, the NREL
did look at costs, and this is going to require significant
investment.
They also pointed out that it was possible and probably
advisable to ensure that we are investing in electrification of
end users, because that will increase electricity sales and
increase the number of customers' kilowatt hours that those
costs are spread over. So that has a double benefit for our
customers, both in terms of reduced air pollution but also in
terms of mitigation of rate impacts.
So, right now, we are going through the financial analysis
for our rates. We have not had a base rate increase in a number
of years, and we are looking at that right now. But we continue
to meet all our financial metrics and are looking at ways to
ensure that we can do this transition in an affordable way.
Thank you for the question.
Mr. Graves. Thank you. Thank you very much.
And, Madam Chair, if you don't mind, I want to clarify
something earlier. I heard you all raise concerns about
comments made by Mrs. Miller, and I did want to just be very
clear for the record: She did not say that anyone was anti-
American. We went back and listened. She clearly stated that
she was advocating for policies that were anti-American energy
policies, so, in other words, anti-domestic energy production.
And I wanted to be clear that----
Ms. Castor. Hey, we are all about domestic energy in this
hearing today, so----
Mr. Graves. Okay. I just wanted to be clear that nobody was
called anti-American and that she did clearly say anti American
energy. So I just wanted to clarify that to make sure that
there was no ill will among committee members.
Ms. Castor. All right. Thank you----
Mr. Graves. Thank you.
Ms. Castor [continuing]. Ranking Member Graves.
Next, we will go to Rep. Neguse.
And I have to say, Rep. Neguse, we are still thinking about
all of your neighbors, that the wildfires that swept through
the Boulder area are still very fresh in everyone's minds. And
you are recognized for 5 minutes.
Mr. Neguse. Well, thank you, Madam Chair, first, for
holding this important and timely hearing on ensuring the
reliability and the resiliency of our electric grid, and also
for your very kind words and, of course, the words that I have
heard from colleagues on both sides of the aisle over the
course of the last few months as we have dealt with a very
difficult series of fires here in our community. I certainly
appreciate it, as does my community.
And as you noted, Chairwoman Castor, my district in
Colorado has experienced some of the most devastating wildfires
in the history of our state, all over the course of the last 15
months, from the Cameron Peak and East Troublesome Fires in
2020 that were the first and second largest fires in state
history, to the most recent Marshall Fire that destroyed more
than 1,000 homes and became the most destructive fire in our
state's history.
And many of you traveled to Colorado for the field hearing
that we held in Boulder over 2 years ago, pre-pandemic, and
during that hearing had an opportunity to visit these same
communities that have now been besieged by wildfires. So many
homes destroyed in the blaze that occurred on December 30th,
which is far later than what would be typically considered fire
season.
And as we have frequently discussed in this committee,
climate change is only increasing the severity and the
frequency of extreme weather events and natural disasters like
wildfires and, as I said, has caused I think all of us,
collectively, to reconsider what we previously considered to be
fire season. It clearly now goes all year long here in Colorado
and across the Rocky Mountain West.
And we have to ensure that our infrastructure is prepared
for these events, which is why today's hearing is certainly so
critical for me.
It is also why we introduced with Senator Wyden last year
the Disaster Safe Power Grid Act. I was glad to see some of the
investments that we called for in that bill included in the
Infrastructure Investment and Jobs Act, or the bipartisan
infrastructure law, to ensure our electric grid infrastructure
is prepared to withstand future disasters and wildfires. And I
appreciate the conversation about the particular benefits of
that bill that Chair Castor noted and articulated earlier
during the course of today's hearing.
I want to talk about a particular issue that is certainly
percolating here in our community as a byproduct of the
Marshall Fire and the rebuilding process that we are now deeply
engaged in. It is important that we support efforts to build
back better in the wake of disasters like those that my
district experienced, and we are working hard on those efforts
right now, particularly in the wake of the Marshall Fire.
Ms. Hamilton, you have talked a bit about this during the
course of the hearing but also in your written testimony, about
the importance of directly investing in physical structures,
such as homes and buildings, to reduce the risk of damage
during a natural disaster.
I wonder if you might be able to expound a bit on whether
you think the Federal Government should provide incentives for
homeowners to rebuild zero or lower-emission homes with
electric appliances and equipment after disasters and how you
believe that might help fight the climate crisis.
Ms. Hamilton. Absolutely. That is such a great question,
because often everything stems from the home, and, you know,
what do we need to make those resilient? So making sure that
the insulation is strong, that the roofing is strong.
In fact, there is an organization in Florida called the
Solar Energy Loan Fund that has found that, if they harden the
roof, it reduces--this is in the case of hurricane, but it
could certainly happen with any natural disaster--if they
harden the roof, they are able to put solar on, reduce
insurance costs that then pay for the solar.
This can happen in communities all over in very different
ways. In Louisiana, the company PosiGen does, first, energy
audits and then installs solar, so that immediately you can
start seeing the benefits of reduced energy costs, while making
sure that you have that power--if you install solar and you
have a backup battery, you will have the power there in case of
any kind of fire.
But, even more importantly, Mr. Neguse, is we need to plan.
We need visibility. We need technologies that allow us to
understand when something is going to happen, whether that is
on the transmission side or the distribution side, and be able
to react in a resilient way and plan for these instances.
So maybe not everybody is going to be able to withstand an
instance like this, but maybe you can have community centers--
microgrids that allow communities to continue running really
critical facilities for neighborhoods so that there is
someplace to go in case of an event like this.
Mr. Neguse. Well, your insights are certainly very helpful.
And our office is very interested in pursuing this further and
potentially introducing legislation on the same, in terms of
Federal rebates that might be brought to bear for consumers.
And I see that I am running out of time. Dr. Wayland, I
would just say I very much appreciated your testimony, in
particular the smart technologies that you described that can
predict problems on transmission lines before they can start
wildfires.
We recently had a wildfire in the northern part of my
district, far smaller, but in Estes Park, that was caused in
part by a downed power line. And it is clear that those smart
technologies are crucial for my communities, for communities
across the State of Colorado and, indeed, across the Rocky
Mountain West, as wildfires become more pervasive here. So I
look forward to continuing to work on that issue as well.
And, with that, I yield back the balance of my time, Madam
Chair.
Ms. Castor. Thank you, Rep. Neguse.
And thanks to all of our witnesses for your outstanding
testimony today.
I am going to go to the Ranking Member, if he wants to make
a unanimous consent request.
Mr. Graves, Rep. Graves, do you have any documents----
Mr. Graves. Yes, ma'am.
Ms. Castor [continuing]. For the record?
Mr. Graves. I have two documents.
Number one is a EIA report titled ``Oil fired generators
helped meet electric demand in New England this January.'' And
the second one is ``Big but affordable effort needed for
America to reach net-zero emissions by 2050,'' which is a
Princeton study, and just talking about two of the issues that
I cited earlier.
So I would ask unanimous consent that those be included in
the record.
Ms. Castor. All right. Without objection.
[The information follows:]
Submissions for the Record
Representative Garret Graves
Select Committee on the Climate Crisis
February 15, 2022
ATTACHMENT: Brown, M. Tyson, ``Oil-fired generators helped meet
electric demand in New England this January,'' U.S. Energy
Information Administration (EIA), 2022, 10 February.
This report is retained in the committee files and available at:
https://www.eia.gov/todayinenergy/detail.php?id=51238
ATTACHMENT: : E. Larson, C. Greig, J. Jenkins, E. Mayfield, A. Pascale,
C. Zhang, J. Drossman, R. Williams, S. Pacala, R. Socolow, EJ
Baik, R. Birdsey, R. Duke, R. Jones, B. Haley, E. Leslie, K.
Paustian, and A. Swan, Net-Zero America: Potential Pathways,
Infrastructure, and Impacts, Final report, Princeton
University, Princeton, NJ, 29 October 2021.
This report is retained in the committee files and available at:
https://netzeroamerica.princeton.edu/the-report
Ms. Castor. And, without objection, I would like to enter
into the record a February 2022 report from Grid Strategies
titled ``The One Year Anniversary of Winter Storm Uri: Lessons
Learned and the Continued Need for Large Scale Transmission'';
two, a July 2021 report from the American Council on Renewable
Energy and the Macro Grid Initiative titled ``Transmission
Makes the Power System Resilient to Extreme Weather''; and,
three, a February 2022 report from Environment America titled
``Rooftop Solar and the 2021 Texas Power Crisis: Exploring
Small Scale Solar's Potential to Improve Grid Resilience During
a Deep Freeze Event.''
[The information follows:]
Submissions for the Record
Representative Kathy Castor
Select Committee on the Climate Crisis
February 15, 2022
ATTACHMENT: Goggin, M. and Schneider, J., The One-Year Anniversary of
Winter Storm Uri: Lessons Learned and the Continued Need for
Large-Scale Transmission, Grid Strategies, 2022, 13 February.
This report is retained in the committee files and available at:
https://gridprogress.files.wordpress.com/2022/02/the-one-year-
anniversary-of-winter-storm-uri-lessons-learned-and-the-
continued-need-for-large-scale-
transmission.pdf
ATTACHMENT: Goggin, M., Transmission Makes the Power System Resilient
to Extreme Weather, Grid Strategies, American Council on
Renewable Energy (ACORE), and the Macro Grid Initiative, 2021
July.
This report is retained in the committee files and available at:
https://acore.org/wp-content/uploads/2021/07/GS_Resilient-
Transmission_proof.pdf
ATTACHMENT: Searson, E., Dutzik, T., and Huxley-Reicher, B., Rooftop
Solar and the 2021 Texas Power Crisis: Exploring Small-Scale
Solar's Potential to Improve Grid Resilience During a Deep
Freeze Event, Environment America Research & Policy Center and
the Frontier Group, 2022 February.
This report is retained in the committee files and available at:
https://environmentamericacenter.org/sites/environment/files/
reports/
Rooftop%20solar%20and%20the%202021%20Texas%20power%20crisis.pdf
Ms. Castor. You know, this was a very important hearing.
And I think we again have to let the American people know that
we hear you. We are overwhelmed, watching these climate fueled
disasters, whether it is the deadly winter storm in Texas or
floods in the Midwest, like Tennessee,--or I see Rep.
Bonamici--the deadly heat wave in the Pacific Northwest, the
wildfires everywhere, and we are doing something about it.
Thankfully, this bipartisan infrastructure law gives us new
resources to work with the Biden administration to make our
grid more reliable and resilient. And if we can now work to
expand clean energy and reduce pollution, create jobs, and
lower costs for consumers, that is what we aim to do here.
So thank you all for participating in this hearing.
And the committee hearing is adjourned.
Thank you.
[Whereupon, at 4:35 p.m., the committee was adjourned.]
United States House of Representatives
Select Committee on the Climate Crisis
Hearing on February 15, 2022
``Keeping the Lights on:
Strategies for Grid Resilience and Reliability''
Responses to Questions for the Record
The Honorable Nancy Sutley
Senior Assistant General Manager of External and Regulatory Affairs
Chief Sustainability Officer
Los Angeles Department of Water & Power
the honorable kathy castor
1. From your perspective at LADWP, could you please describe the
costs of inaction on climate change? How would capital investments now
to help transition to 100% clean energy by 2035 achieve greater
benefits for your service territory as compared to the status quo?
The negative impacts of climate change include, but are not limited
to, the ability of LADWP to maintain resource adequacy, rising
temperatures increasing customer electricity demand, accelerated
degradation of critical transmission/distribution equipment resulting
in more frequent outages, and our ability to serve load during
transmission outages which may become more frequent due to wildfires.
The cost of inaction on climate change would be the continued adverse
health effects on the citizens of Los Angeles from PM2.5 and NOx
emissions due to a lack of investment in significantly decarbonizing
the transportation sector. Climate change is also affecting water
supply in Los Angeles--we are experiencing more frequent and longer
drought cycles.
These impacts led to action by state and local government entities
and the investment in the Los Angeles 100% Renewable Study (LA100)
completed in March 2021, in partnership with the National Renewable
Energy Laboratory (NREL). The LA100 Study analyzed and quantified the
capital investments necessary for transitioning to 100% carbon free by
2035 to achieve greater benefits for LADWP's service territory,
relative to the status quo to meet the requirements of California
Senate Bill 100 and avoid these costs of inaction.\1\ As discussed in
my testimony, the LA100 Study evaluated multiple pathways and costs to
achieve a 100% renewable electricity supply. The study considered
electrifying key end uses while maintaining a high degree of
reliability, quantified the reductions in GHG emissions contributing to
climate change and local air quality and resulting health impacts. It
also evaluated the economic and employment impacts to our community.
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\1\ https://www.nrel.gov/analysis/los-angeles-100-percent-
renewable-study.html
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Through a zero-carbon electricity grid, LADWP will help spur
decarbonization efforts across multiple end users, including the
transportation and building sectors. Significant capital investments to
enable LADWP's vision of becoming a carbon free utility by 2035 will
yield several benefits, including, but not limited to, reducing
greenhouse gas emissions, improving local air quality, and providing
clean electricity to fuel transportation and buildings.
2. The United States is blessed with affordable and abundant
renewable energy resources, but they are often located far away from
densely populated cities. Upgrading and expanding our electric grid
could help ensure that every American can access clean energy. The
Biden Administration has already launched an initiative to use existing
rights-of-way to site transmission to make this easier. In your
testimony, you mentioned the need for transmission investments.
a. How would Federal investments to upgrade and expand
transmission help LADWP improve electric grid
reliability and resilience as you transition to 100%
clean energy?
Federal investment can assist in bringing renewable resources to
load centers. Renewable energy resources, for the most part, are
resource dependent and location specific. Federal investments would
help meet the need to expand transmission system to access low-cost
renewable energy resources. To transition to 100% renewable energy
resources, LADWP will consider two critical elements as part of its
strategic transmission plan:
Siting a variety of resources in diverse regions to
ensure reliability during unfavorable weather conditions.
Funding for multiple transmission corridors to
increase operational flexibility and to minimize the risks
caused by system failure, wildfires, and other unforeseen
events.
As such, using Federal investments would enable LADWP to meet those
two elements by upgrading existing transmission corridors making the
system more efficient and reliable. It will also create an opportunity
for increased economic, environmental, and consumer benefits as we
thrive toward 100% clean energy.
b. How would upgrading and expanding the electric grid
help consumers save money on electric bills?
As a publicly owned utility, our focus is on delivering reliable,
cost-efficient electricity while also transitioning the generation mix
to decarbonized resources. Upgrading and expanding the electric grid on
various levels--transmission, sub-transmission, and distribution--
increases access and delivery of low-cost renewables and energy storage
resources outside of LADWP's service territory, and provides access to
customer-side, distributed energy resource options for customers to
save money on their bills (e.g. local solar, demand response, and
energy efficiency).
Bolstering the electric grid to support widespread adoption of
transportation and building electrification also translates to overall
customer cost savings by increasing electricity sales that can cover
more of the fixed costs to support the delivery of electricity
resulting in lower electricity rates.
To meet the growing need, LADWP must upgrade at least ten (10)
major internal transmission lines with the LA Basin over the next 10
years, expand the in-service ratings of several existing lines, and
coordinate with other utilities and private developers to obtain access
to renewable and storage resources. To date, LADWP has worked with
developers and successfully entered into power purchase agreements for
some of the largest and most cost-effective renewable energy and energy
storage projects in the country.
c. How would the Bipartisan Infrastructure Law and the
initiative to use existing rights-of-way facilitate
transmission development without compromising
environmental protections?
The use of existing transmission infrastructure to pivot from
fossil fuel generation to renewable energy integration will be vital in
reaching the 100% clean energy goals. Implementation of the Bipartisan
Infrastructure Law (P.L. 117-58, Bipartisan Infrastructure Law) aims to
accelerate building and upgrading thousands of miles of transmission
lines to improve reliability, reduce energy costs and facilitate the
expansion of clean energy. LADWP has initiated that process with such
programs as the Intermountain Power Project (IPP) through the upgrade
of the associated High Voltage Direct Current (HVDC) Southern
Transmission System (STS). This upgrade is required due to the IPP
generation facility transitioning from large base-load coal units to
green hydrogen/natural gas generating units, allowing greater
integration with variable renewable energy in the Utah area and
transmitted to the greater Los Angeles area.
The Bipartisan Infrastructure Law's ability to make funds, grants,
and investment assistance available to support these conversions, in
addition to assisting in streamlining the permitting process, will move
the resiliency and reliability of transmission systems at a much
quicker pace. Additionally, with some of these resources, we hope that
the Power Marketing Agencies will upgrade their transmission systems.
3. Energy efficiency is a critically important near-term strategy
because it can help Americans save money on their household energy
bills and on their transportation fuels as well as reduce carbon
pollution. In your testimony, you highlighted the Comprehensive
Multifamily Retrofit program for deep energy savings for residents
living in multifamily units. Could you please help us understand how
energy efficiency also helps improve grid reliability and resilience to
power interruptions and other disruptive events?
We agree, energy efficiency (EE) saves customers money on their
electric bills and helps manage the peaks and base load generation.
LADWP anticipates that the electrification of the transportation
sector will grow demand and EE is a cost-effective way to balance the
system. With careful planning & targeted EE efforts, these anticipated
effects may be mitigated. The visual below demonstrates how EE may
counter the effects of Building Electrification (BE) load growth in the
residential sector and interactions of various layers of Distributed
Energy Resources (DER) to the distribution system. Specifically, these
graphs demonstrate that additive properties of EE & DR in load
constrained areas yield beneficial results. The avoidance of
overloading the system capacity and avoidance of grid interruptions
provides for a more reliable and resilient grid.
PEV Charging Loads (weekday/weekend)
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Source: CEC & NREL
Furthermore, EE efforts, in the way of incentives, outreach,
education and community partnerships, raise awareness and accelerate
consumer adoption of new technologies that enable connected demand
responsive/flexible load appliances and devices within the household.
For example, the introduction of economic incentives for Smart
Thermostats resulted in increased adoption rates. Demand Response (DR)
programs provide the ability to reduce demand during system wide high pe
ak periods.
EE is a fundamental part of LADWP's DER strategy and will continue
to be innovated/optimized over time to maximize its benefits to
customers and the utility in its efforts to increase reliability of its
grid services.
4. In your testimony, you referenced a grid resilience project at
the Green Meadows Recreation Center in South Los Angeles that provided
solar panels, energy storage, and EV charging in a disadvantaged
community. In your view, how would the EV charging investments in the
Bipartisan Infrastructure Law help achieve LADWP goals?
The programs funded or created in the Bipartisan Infrastructure Law
will help LADWP meet decarbonization goals, strengthen equity
initiatives and reduce transportation-related emissions. More details
on these goals are:
Federal investments--including investments in clean
energy and energy efficiency, clean transit, and pollution
reduction--help LADWP reduce carbon and other tailpipe
emissions, improving air quality for the entire region.
The Bipartisan Infrastructure Law will help
accelerate the adoption of and confidence in electric vehicles,
including for those who cannot reliably charge at home
Additional resources, through the Bipartisan Infrastructure Law,
help support the development of convenient, accessible, reliable, and
equitable EV charging.
The Bipartisan Infrastructure Law helps achieve LADWP
goals by further reaching the needs of historically
marginalized and underserved communities within our service
territory.
Federal funding can help bring opportunities for
innovative financial and technological solutions to increase
access to home charging in multi-family residences and
community-based charging solutions in underserved areas,
including disadvantaged communities. Federal funding helps
achieve quantifiable improvements in EV adoption, charging
access, reliability, and consumer confidence in EVs.
5. In your testimony, you discussed Federal financing tools for
clean energy and resilience investments. Could you please describe how
the Federal government can encourage more private sector investment in
electricity infrastructure that is clean, reliable, and resilient?
LADWP supports efforts to develop legislation to preserve tax-
exempt financing (i.e., the exclusion of interest for state and
municipal bonds from taxable income) and the restoration of the ability
to issue tax-exempt advance refunding bonds. Advance refunding is an
important tool for municipal utilities to lower borrowing costs
associated with infrastructure development, which results in lower
electric rates in the communities that we serve. On the customer asset
side, providing funding or tax incentives for manufactures to develop
vehicles, trucks, and potentially electrify existing trainlines to
transport people and goods would help customers adopt and adapt to
having transportation assets, normally powered by gasoline, change to
electricity.
One other area discussed in the past is expanding the utilization
of large hydroelectric plants, such as Hoover Dam, to create a pump
storage system that allows for additional clean dispatchable energy.
While the engineering to create the system can be accomplished several
ways, there is a lack of water that comes down the Colorado River into
Lake Mead that presents a significant challenge. If the Federal
government was able to capture the storm water east of the Colorado
River that ends up going out to the ocean and direct it into the
Colorado River, increasing clean energy from Hoover Dam could be
feasible.
6. How would American companies benefit from the Section 48C
incentive to manufacture climate solutions in this country?
Some critical power-related components are not manufactured in the
U.S., forcing utilities, including LADWP, to rely on imported
components when they are making investments in their power
infrastructure. Limited availability and increased prices of these
foreign-sourced components can cause delays to utility modernization
projects resulting in increased costs to ratepayers. Incentivizing the
domestic production of advanced electric grid, energy storage, fuel
cell equipment, as well as renewable energy and energy efficient
equipment helps secure a resilient power grid at lower costs to
ratepayers. It can also address the need for high-skilled jobs here at
home. These benefits extend beyond the electric grid to manufacturing
of advanced light-, medium- and heavy-duty vehicles and components that
will be powered by the electric grid. These incentives help reduce
risks that would result from reliance on foreign components, while
making American components more cost competitive.
7. Could you please describe the state of California's efforts to
improve grid resilience? How could Congress complement these efforts?
California's utilities, grid operators, and communities face
heightened risks from climate change, most prominently due to
increasingly frequent and destructive wildfires, as well as threats
like extreme heat events. These impacts jeopardize the state's energy
infrastructure, prompting a robust effort to improve the resiliency of
the electrical grid. A range of technologies and programs have been
promoted to increase clean energy integration, grid reliability and
community resilience in the face of these climate change-related risks.
These solutions include microgrids, distributed renewable generation,
energy storage, building energy management systems, building
performance and load flexibility and vehicle-grid integration.
California regulators such as the California Public Utilities
Commission (CPUC), the California Energy Commission (CEC) and
legislators have implemented programs to support resiliency
technologies such as the deployment for microgrids and battery storage,
a Self-Generation Incentive Program (SGIP), required wildfire
mitigation plans, focus on lower-income communities that face
particular barriers to energy resilience and Title 24 building energy
efficiency standards requiring new residential construction to include
rooftop or community solar installations.
LADWP has utilized these state programs to make the portions of the
grid we manage and maintain more resilient. We propose Congress can
complement California's efforts with the following:
Establish a reliability standard, within the Federal
Power Act that addresses resiliency related to extreme weather
events;
Create a program through the Department of Energy
(DOE) to advise and be a resource for states and local
utilities on ways to improve the resiliency of their electrical
grids; making funds, grants, and investment assistance
available to support resiliency projects;
Fund and prioritize emerging grid and community
resilience technologies and pilot projects; and,
Publish a Department of Energy report that provides
recommendations on how to minimize planned electric power
outages due to extreme weather conditions.
8. High-voltage direct current transmission lines could help
connect transmission interconnections and transmission regions, which
would allow more Americans to access clean energy. What Federal
investments could ensure that these HDVC transmission lines are
themselves resilient to the unavoidable impacts of climate change?
LADWP is the only utility in the Western grid that operates two
High Voltage Direct Current (HVDC) links to import energy from remote
locations to load centers. Those HVDC systems were built based on
technologies from the early 1980s. Over the years, HVDC systems have
significantly improved due to research and development of emerging
technologies. New HVDC systems are robust, reliable, and better suited
for transmitting renewable energy resources.
For those reasons, LADWP is highly interested in adding additional
HVDC in its transmission system to access remote and low-cost renewable
energy. To ensure that new HVDC systems are resilient to the
unavoidable impacts of climate change, the following investments should
be considered:
Weatherization of HVDC systems to weather
extremities such as induced-climate change extended-heat wave
Redundant devices such as thyristors in the series
string composing a HVDC valve, so that thyristor failures can
be replaced in timely manner
Double pole HVDC system which provides a high level
of reliability simply because the failure of one pole does not
affect the operation of the other pole
Adequate overload rating on DC conductors to ensure
that the pre-contingency power level can be maintained even
with permanent outage of one pole
9. Why is it important for the federal government to invest in
recycling and reuse of critical minerals that are important inputs to
batteries and other clean energy technologies? For instance, the
Bipartisan Infrastructure Law invests $7 billion in critical mineral
supply chains, including a $140 million program recently announced by
the Department of Energy to develop a first-of-a-kind refinery to
extract rare earth elements from coal ash waste. How could these
efforts complement new mining and processing domestically and around
the world?
We are encouraged by efforts such as California's Lithium Valley
Commission to produce, protect, recycle and reuse critical minerals.
10. In your view, could you please describe how California can
maintain grid reliability even as the state and the Western part of the
country transition to a clean energy economy? What role would
strategies like expanding transmission, investing in grid-scale energy
storage, and expanding the use of distributed energy resources play?
Expanding transmission, investing in grid-scale energy storage,
maintaining firm capacity near the load center, and expanding the use
of distributed energy resources, in combination, all contribute to
LADWP reaching its goal of a 100% clean energy future. All LA100
scenarios were evaluated to ensure that LADWP can balance demand for
electricity with supply, even after failures of transmission and
generation equipment or other extreme events occur. While wind and
solar technologies provide a large fraction of the energy needs, all
scenarios rely heavily on storage with less than 12 hours of duration,
demand response, renewably derived fuel like green hydrogen, to provide
sufficient operational flexibility and operating reserves as required
by NERC/WECC operating standards. As LADWP expands its resource mix to
100% clean energy by expanding transmission and renewable energy
further from the load center, it must also maintain firm capacity near
its load center (˜300 hours of duration) in the face of extreme
events such as wildfires, or consecutive days with low renewable
production.
the honorable garret graves
1. In our hearing, you acknowledged that Los Angeles' goal to
become 100 percent carbon-free by 2035 will ``require significant
investment.'' You also indicated that Los Angeles Department of Water
and Power is currently conducting financial analysis of those plans.
Further, the NREL report that you cite in your testimony states, ``the
estimated total cumulative costs of new investments needed to achieve
the 100% target across the suite of scenarios explored range from $57
billion to $87 billion (in 2019 dollars) depending on the scenario and
load projection.'' \2\ Even this astronomical cost projection is not
all inclusive. NREL excluded some critical elements such as: future
operating costs for the distribution grid; distribution upgrade costs
beyond equipment and labor, including land acquisition costs for
substation expansion; new substations; or circuit reconfiguration. And
costs associated with customer programs, for example, to support energy
efficiency or encourage demand response.
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\2\ https://www.nrel.gov/docs/fy21osti/79444-ES.pdf
Can you say for certain that Los Angeles' plans to
restructure its power grid between now and 2035--a grid that
currently relies on 27% of its power from natural gas \3\--
won't result in rate increases for your customers?
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\3\ https://www.ladwp.com/ladwp/faces/ladwp/aboutus/a-power/a-p-
factandfigures;
jsessionid=QMggvdfRX3jhfs1KrXgFdDmWKn3k822QWJkyhlfg1njs1sLrvZlN!19010123
32?_
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afrWindowId%3Dnull%26_afrLoop%3D478600879122470%26_
afrWindowMode%3D0%26_adf.ctrl-state%3Dfm29dp575_4
To determine the rate impacts, LADWP is currently determining rate
options through the upcoming 2022 Strategic Long-Term Resource Plan
(SLTRP). The LA100 Study indicated that 100 percent renewable pathways
could be implemented cost effectively and largely in-line with
inflation. This determination relies on aggressive transportation and
building electrification growth, sufficient to support investment costs
through increased retail sales, which we are well on the path to
implement. LADWP's mission is to provide our customers and the
communities we serve with safe, reliable, and cost-effective water and
power in a customer-focused and environmentally responsible manner and
we must balance these multiple objectives while giving consideration to
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cost.
If it will result in increased costs to consumers,
has that been communicated to the citizens of Los Angeles?
Through the LA100 Study and through 2022 SLTRP Advisory Group
process, LADWP has consistently communicated its plan development,
which ultimately will provide the total power system investment cost
and rate impacts in the near term, through 2045. Consistent with its
planning practices, LADWP also intends to hold public outreach
workshops in mid-2022 to further communicate the costs and benefits to
customers as part of the SLTRP. LADWP has also launched the LA100
Equity Strategies Initiative, which is a stakeholder-driven effort to
identify community driven, energy-just outcomes, particularly for those
in disadvantaged communities, as LADWP transitions to 100% clean
energy.
LADWP rate setting is a public process. LADWP must consult with
LA's neighborhood councils representing more than 100 communities
within Los Angeles. The Board of Water and Power Commissioners
considers any rate actions, which then go to Los Angeles City Council
and ultimately to the Mayor of Los Angeles for final approval. Rate
setting must meet the requirements of Los Angeles City Charter, as well
as criteria in the California Constitution regarding local government
revenue.
2. In your written testimony, you stated, ``Through the remainder
of this decade, Los Angeles' goals include providing an energy mix that
is 80 percent renewable and 97 percent carbon-free resources by 2030 on
the way to a 100 percent clean energy grid.'' According to the
Intermountain Power Agency's website, net generating capacity will be
840 megawatts.\4\ The website also states that, ``the new natural gas
generating units will be designed to utilize 30 percent hydrogen fuel
at start-up, (in 2025) transitioning to 100 percent hydrogen fuel by
2045 as technology improves.'' \5\ Finally, the National Renewable
Energy Laboratory (NREL) study you mention in your testimony states,
``These aspects of the SB100 scenario allow for 10%-15% of power
generation to be derived from natural gas. As a result, this scenario
allows some of the existing natural gas plants to stay active in
2045.'' \6\ Today, Los Angeles Department of Water and Power depends
upon 62% of its electricity needs from reliable sources, such as
natural gas and coal.\7\ Note that over 25% of your current production
is met by coal powered generation coming from the Intermountain plant
in Utah. It seems that you will need to continue to use fossil fuels
well past the 2035 date you stated.
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\4\ https://www.ipautah.com/ipp-renewed/
\5\ Ibid.
\6\ https://www.nrel.gov/docs/fy21osti/79444-ES.pdf
\7\ https://www.ladwp.com/ladwp/faces/ladwp/aboutus/a-power/a-p-
factandfigures;
jsessionid=QMggvdfRX3jhfs1KrXgFdDmWKn3k822QWJkyhlfg1njs1sLrvZlN!19010123
32?_
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afrLoop%3D478600879122470%26_afrWindowMode%3D0%26_
adf.ctrl-state%3Dfm29dp575_4
Can you explain how Los Angeles will be 100 percent
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carbon free by 2035?
The City of Los Angeles has set ambitious goals to transform its
energy supply. LADWP partnered with the National Renewable Energy
Laboratory (NREL) on the LA100 Study, a first-of-its-kind objective,
highly detailed, rigorous, and science-based study to analyze potential
pathways the community can take to achieve a 100% clean energy future.
While 3 of the 4 key scenarios identified shows LADWP reaching 100%
clean energy by 2045, the Early & No Biofuels scenario outlined a
pathway to reach the 100% carbon-free goal 10 years sooner by 2035.
This scenario was evaluated under moderate and high load
electrification, included no natural gas generation or biofuels, and
allowed for use of existing nuclear resources and upgrades to
transmission.
LADWP has amended the long-term power sales agreement to stop
taking coal power from the Intermountain Power Project (IPP) no later
than 2027, as required by California Senate Bill 1368, and has plans to
accelerate that date to no later than 2025. IPP will be converted from
a 1,800 MW coal-fired power plant to an 840 MW combined cycle gas
turbine capable of using a blend of natural gas and 30% green hydrogen
upon commissioning in 2025. The combined cycle gas turbine will then be
converted and will operate on 100% green hydrogen when the technology
is available. In parallel, LADWP will be procuring the renewable
resources and will facilitate the purchase of electrolyzers and fuel
storage to support green hydrogen at IPP. The IPP Operating Agent is
working closely with the turbine manufacturer and they have optimistic
hydrogen glidepaths for significantly increasing the hydrogen
capability in the 2030s timeframe. The technology maturity must move in
lock step in order for LADWP to achieve its 100 percent carbon free
goal by 2035.
LADWP will build upon the LA100 Study outcomes, and is assessing
the implementation feasibility of achieving 100% carbon free by 2035.
To that end, the 2022 SLTRP will be expanded to address implementation
feasibility, assess technology innovation, and include an Integrated
Human Resources Plan to help achieve its goal.
the honorable veronica escobar
1. How can local governments work with utilities to advance
environmental justice and how can the Federal government support that?
LADWP works to coordinate, build partnerships, and collaborate with
local, state, and federal government agencies to streamline and
overcome opposition, legal challenges and hurdles that may prohibit
LADWP's ability to advance environmental justice through traditional
mechanisms.
In addition, funding for power programs in the form of loans,
grants, incentives, cooperatives, agreements, and/or credit allocations
could vastly improve LADWP's ability to target funding of its programs
towards disadvantaged communities.
LADWP has also launched the LA100 Equity Strategies Initiative,
which is a stakeholder-driven effort to identify community driven,
energy-just outcomes, particularly for those in disadvantaged
communities, as LADWP transitions to 100% clean energy. We expect the
results of this study to be finalized by the end of 2023.
Questions for the Record
Dr. Karen Wayland
Chief Executive Officer
GridWise Alliance
the honorable kathy castor
1. The United States is blessed with affordable and abundant
renewable energy resources, but they are often located far away from
densely populated cities. Upgrading and expanding our electric grid
could help ensure that every American can access clean energy. The
Biden Administration has already launched an initiative to use existing
rights-of-way to site transmission to make this easier.
a. How would upgrading and expanding the electric grid
help your members improve electric grid reliability and
resilience as we transition to a clean energy economy?
The electric grid has been providing reliable and affordable
electricity for over 100 years. However, the grid was designed for one-
way flow of electricity from centralized generating units through the
transmission and distribution systems to the customer. With the
incorporation of distributed energy resources and highly digitized
technologies, the grid now must accommodate two-way flows of energy and
information. Upgrading and expanding the grid is critical to ensure
more secure, resilient and efficient delivery of a necessary service.
To balance electricity supply and demand, especially as more
renewable energy comes on-line, the grid must have system flexibility,
which can be provided by a mix of supply- and demand-side options,
including flexible conventional generation, curtailment of renewable
generation, new transmission, and more responsive loads.\1\ Grid
technologies like controls, sensors, storage, data analytics and
software-as-service (SAS) can provide flexibility by improving
visibility of the system for grid operators, helping to quickly
rebalance the system with autonomous controls, and facilitating the
aggregation of distributed energy resources to serve as assets to grid
operations. These technologies help integrate utility-scale and
distributed renewables, can relieve transmission constraints and reduce
the need for peak generation. These flexibility technologies also build
resilience by providing back up power, automatically rerouting power
around damaged lines, and self-healing grid damage.
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\1\ https://www.nrel.gov/docs/fy16osti/64764.pdf
b. How would upgrading and expanding the electric grid help
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consumers save money on electric bills?
Upgrading and expanding the grid allows for more effective and
efficient delivery of electricity. These efficiencies are passed on to
consumers. Modern grid technologies also significantly improve
resilience to severe weather disruptions, which then reduces the number
and duration of outages and speeds recovery. Outages have human and
dollar costs for consumers, so grid modernization investments that
improve resilience will save consumers money, not only on their
electric bills. Most utilities in the United States have adopted energy
efficiency programs as part of the services they provide but more needs
to be done in the form of energy education. Most consumers have no idea
how they use, generate and store energy. Technologies like Advanced
Meter Infrastructure (AMI) can provide better transparency and
education for consumers, but must be supported and enabled by the
regulatory entities.
c. How would the Bipartisan Infrastructure Law and the
initiative to use existing rights-of-way facilitate
transmission dev
elopment without compromising environmental protections?The
GridWise Alliance has not studied the impacts of rights-of-way policies
in the Bipartisan Infrastructure Law or how developing new transmission
in these rights-of-way would be treated under state or federal
environmental statutes.
2. Energy efficiency is a critically important near-term strategy
because it can help Americans save money on their household energy
bills and on their transportation fuels as well as reduce carbon
pollution. Could you please help us understand how energy efficiency
also helps improve grid reliability and resilience to power
interruptions and other disruptive events?
Buildings consume 76% of electricity generated in the United
States.\2\ IIJA includes significant funding for weatherization and
energy efficiency improvements for federal, residential, and commercial
buildings through updated building codes, funding for building
retrofits, state energy grants, and other policy levers. Improving the
efficiency of the nation's building stock will enhance resilience to
energy disruptions in addition to saving energy. Well-insulated
buildings reduce heating and cooling load during periods of high
electricity demand associated with extreme weather and keep occupants
more comfortable during power outages. Focusing resources for
weatherization on underserved and low-income communities is critical to
ensure that those populations do not suffer disproportionately during
energy disruptions. IIJA funding will result in the weatherization and
retrofitting of millions of public and private buildings across the
country.
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\2\ U.S. Department of Energy. ``Quadrennial Technology Review,
Chapter 5: Increasing
Efficiency of Building Systems and Technologies.''
https://www.energy.gov/sites/prod/files/2017/03/f34/qtr-2015-
chapter5.pdf, accessed March 22, 2021.
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In my testimony I provide a dramatic example of how energy
efficiency at the household level improves grid reliability as well as
the consumer experience. GridWise member Bandera Electric Cooperative
(BEC) in Texas has deployed technology to analyze energy use at the
appliance level, allowing granular visibility into how the grid
functioned during and after Winter Storm Uri, the 2021 freeze and
described how households were affected in a paper entitled, ``What was
happening inside Texas homes during the February 2021 freeze?'' \3\ In
this paper and a submission to the Public Utility Commission of Texas
(PUCT, Docket 52373), BEC described the impact of energy efficiency on
grid reliability and affordability. Average home power draw was almost
500% higher and average HVAC power demand 620% higher during the period
of February 11-20 compared to February 1, 2021. However, the kWh/sqft
of homes monitored by Apolloware varied by a factor of 21, meaning some
homes were more cold-sensitive and used more energy the colder the
outside temperatures relative to other homes.
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\3\ https://www.ideasmiths.net/wp-content/uploads/2022/02/
BEC_TX_FREEZE_HOMES_APW_
20220212_v2.pdf
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Energy efficiency is good for the grid and consumers. Through
adoption of technologies where consumers can see their energy usage in
real time you are providing them actionable information to conserve and
reduce energy. This is the first step in education and awareness.
Numerous technical papers and research shows that consumers who are
aware of the energy usage in real time save about 22% on their energy
bills. This is accomplished by changing behavior. In Texas following
Winter Storm Yuri, BEC saw firsthand how providing consumers
information during the event dramatically changed their behavior.
Technologies exist today that if adopted and utilized would reduce the
number of power interruptions during disruptive events. This is how
energy efficiency technologies can reduce power interruptions, reduce
energy costs and thereby improve grid resiliency and reliability.
While the weather in Texas on Feb 3-6 of 2022 was not as severe as
2021, Bandera experienced only 10 outages and was able to utilize
energy analytics to provide better transparency of real time energy
usage to its customers. In its submission to the PUCT in November 2021,
BEC concluded that ``Having granular individual data tied to
substation, feeder and phase is an important aspect of understanding
energy use tied to weather . . . Having behind the meter visibility and
transparency would help ERCOT with better grid planning and more
importantly better understanding of how to minimize black-outs through
the development of an intelligent demand response program based on
fleet wide monitoring and control of HVAC, Water Heaters and Pool pump
devices ties to wholesale market prices. If this type of program had
been in place during Winter Storm Uri the impacts would have been
minimal. With the right pricing signals (utilities) could incentivize
voluntary load reductions thereby avoiding MANDATORY rolling
blackouts.''
BEC's CEO, William Hetherington, concluded in the PUCT filing, ``We
have the technology to operate an intelligent grid down to the
appliance level, but we need energy efficiency programs and
individualized demand response programs that tie directly to market
pricing to keep the loss of power voluntary. If these programs had been
in place last February, I believe that Voluntary load reductions would
have been adequate to keep the grid for rolling blackouts on a
statewide basis.''
3. Could you please describe how deploying more electric vehicles
helps improve grid reliability and resilience to climate impacts? How
can EVs serve as a resource to a modernized, resilient grid?
The GridWise Alliance recently published a report entitled, ``Near-
Term Grid Investments for Integrating Electric Vehicle Charging
Infrastructure.'' \4\ The report describes grid services that electric
vehicles can provide when fully integrated, from peak shaving to
balancing to emergency power supply (See Table 1.)
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\4\ https://gridwise.org/wp-
content/uploads/2022/02/
GWA_22_NearTermGridInvestmentsEVChargingInfra_Final.pdf
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Our report notes that ``To enable these additional benefits,
investments in hardening, upgrading, and modernizing the grid will be
needed to ensure a safe, secure, reliable, and affordable electricity
system. In this brief, we focus on investments that would be necessary
to accommodate an initial exponential EV share increase. While we
expect these near-term investments to include those that support
managed charging and time-of-use pricing programs, they may not yet
enable EVs to support aggregated grid services. It is important that
any near-term grid-side investments are ``no-regrets'' investments that
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allow for and support the increasing integration of EVs.''
4. How do your members think about public-private partnerships in
the context of upgrading the electric grid?
Our members support public-private partnerships in the context of
upgrading the electric grid. For example, the GridWise Alliance
recommendations for grid investments in Bipartisan Infrastructure Law
included cost-share programs for improving grid resilience and
flexibility where private dollars would be leveraged by federal
funding.
5. In your testimony, you mentioned the successes of the Section
48C Manufacturing Tax Credit when it was included in the 2009 Recovery
Act. How would a tax credit for domestic manufacturing of grid
technologies help your members?
Section 48C Advanced Manufacturing Tax Credit in the 2009 American
Recovery and Reinvestment Act (ARRA) originally provided a 30 percent
investment tax credit to 183 domestic clean energy manufacturing
facilities valued at $2.3 billion and was extended to provide an
additional $150 million in 2013. The tax credit helped build a U.S.
manufacturing capacity and supported significant growth in U.S.
exports. Almost three times as many companies submitted applications
for the 48C tax credit as were approved by DOE, demonstrating
significant interest by the clean energy industry in investing in
domestic manufacturing. Qualifying manufactured clean energy products
in the statute include electric grid equipment to support the
transmission and distribution of electricity, which would include
technologies manufactured, sold, purchased and deployed by GridWise
Alliance members.
6. High-voltage direct current transmission lines could help
connect transmission interconnections and transmission regions, which
would allow more Americans to access clean energy. What Federal
investments could ensure that these HDVC transmission lines are
themselves resilient to the unavoidable impacts of climate change?
The Bipartisan Infrastructure Law includes two programs that will
catalyze investments in grid resilience:
Preventing Outages And Enhancing The
Resilience Of The Electric Grid. This funding will be
administered by the new Grid Infrastructure office
created during DOE's recent reorganization. IIJA
divides the $5 billion funding into two grant
programs--one at DOE and the other to states and
tribes--to support utility resilience investments. The
DOE grants will carve out 30% for small utilities
(annual sales less than 4 million MWh), and the state
carve out will be based on a percentage of customers
served by small utilities.
Electric Grid Reliability and Resilience
Research, Development, and Demonstration. This $6
billion program, which will be administered by DOE's
new Clean Energy Demonstration Office, will provide
grants to demonstrate innovative approaches to
enhancing resilience across the transmission and
distribution systems. Congress included a carve out for
rural and remote areas of $1 billion.
Both programs could support improving the resilience of existing
HVDC transmission lines. However, given the limited mileage of HVDC
transmission in the United States, resilience demonstration funding is
the more likely funding stream for exploring how to make HVDC lines
more resilient to climate change.
7. Why is it important for the federal government to invest in
recycling and reuse of critical minerals that are important inputs to
batteries and other clean energy technologies? For instance, the
Bipartisan Infrastructure Law invests $7 billion in critical mineral
supply chains, including a $140 million program recently announced by
the Department of Energy to develop a first-of-a-kind refinery to
extract rare earth elements from coal ash waste. How could these
efforts complement new mining and processing domestically and around
the world?
The GridWise Alliance recently responded to a Department of Energy
Request for Information (RFI) on supply chain issues.\5\ In our
submission, we note the importance of recycling critical minerals used
in batteries and other grid technologies:
---------------------------------------------------------------------------
\5\ https://
gridwise.org/wp-content/uploads/2022/01/
GridWiseAlliance_EnergySectorSupplyChain_DOERFI.pdf
``Whether directly connecting to the grid as a resource,
being paired with home solar panels to support system
operation, or connecting to the grid as the engine in a
electric vehicle, the quantity of energy storage on the
electric grid is increasing year over year. Lithium-ion (li-
ion) batteries are a dominant energy storage technology today.
A primary vulnerability of this technology is battery cell
manufacturing and a strategic opportunity could lie in second
battery life manufacturing (recycling) in the U.S. In short
order, thousands of li-ion batteries from both electric
vehicles and other industries will be reaching their end of
life. Investment in the research of technology and production
methods is needed to understand optimal ways to reuse the
materials in batteries with minimal pollution. Beyond li-ion
batteries, there are a variety of other energy storage
technologies both in use and under development. Other energy
---------------------------------------------------------------------------
storage technologies include:
other batteries (using different
electrochemical technologies),
hydrogen and its various transport/storage
mediums (such as ammonia),
thermal,
compressed air, and
pumped hydro.
For most of these technologies, the greatest supply chain
vulnerability lies in the mining and refining of rare earth
elements and critical minerals.''
the honorable veronica escobar
1. Can you please talk a little more on how investing in an aging
transmission system can benefit states like Texas, and why it is
important that local governments take advantage of federal funding that
would advance grid resiliency.
GridWise Alliance member Bandera Electric Cooperative notes that as
a transmission owner in Texas, the ERCOT model has numerous benefits,
but it also has flaws. One of the flaws is the process of how
transmission projects are reviewed and prioritized in Texas. By
investing in more transmission you are improving the grid capacity. One
of the contributing factors to inadequate supply during Winter Storm
Uri was the capacity constraints on the transmission grid. Most of the
resources are in west Texas and most of the load is in east Texas and
therefore a robust transmission grid is vital to avoiding future power
interruptions due to extreme events.
Questions for the Record
Mark Mills
Senior Fellow
Manhattan Institute
the honorable garret graves
1. You have stated in ``Consider the implications just for
California. If the rest of the nation switches to a solar/wind grid,
California won't be able to count on neighboring power plants to make
up for losses during regional dips in wind and sunlight availability.''
\1\
---------------------------------------------------------------------------
\1\ https://www.city-journal.org/california-switch-to-primarily-
solar-and-wind-powered-grid-is-dead-end
Can you explain what you mean and why this is
---------------------------------------------------------------------------
important?
California imports roughly 30% of its electricity from adjoining
states. If there are wind/solar `droughts' across the region, CA
residents can (and have) counted on those (non-wind/solar) imports from
conventional power plants in the neighboring states to keep the lights
on. When, or if, all the neighboring states also have wind/solar as
primary sources of electricity, the lights wil go out when there is a
large regional wind/solar `drought'--as happened in northern Europe
this past fall, and as it did over the entire mid-West of the US for 10
days in July 2021, and as meteorological records show, happens
frequently over entire continental areas.
2. You have spoken about the scale and magnitude of the materials
we need for a ``green'' power system.
Can you speak to our existing regulatory
regime and the United States' ability to meet this
increasing demand for critical minerals?
The challenges with, and opposition to, opening new mines and
mineral processing in America has been well documented by federal,
state and private entities and frequently addressed by Congress over
the decades. In general, new mines take more than two decades from
concept to opening; if they can be opened at all. The current
Administration, for example, recently cancelled new mines in both
Minnesota and Alaska, even in the face of escalating mineral demands
and imports, and prices.
3. In order to have a true impact on global emissions, we need to
work toward technology that is affordable and exportable. Developing
nations need sources of inexpensive, secure, and reliable sources of
energy to develop their economies--especially as global energy demand
is expected to increase nearly 50% by 2050.
What technologies do you see that the U.S.
has an advantage and can become exportable in the next
5-10 years?
On the fuel supply side of the equation, the U.S. is the world's
biggest natural gas and oil producer and could expand its ``clean''
capabilities to produce and export more of both. On the energy
consumption side, many U.S. firms and entrepreneurs have developed
radical improvements in combustion engine efficiency; facilitating and
exporting such technologies would be a faster and lower cost means to
reducing global fuel use and thus emissions.
What challenges exist to the deployment of
these technologies--within and outside of the United
States?
It is perhaps obvious that there is not a favorable political and
policy environment to support, in any fashion, the development of
technologies that lead to more efficient production and use of
hydrocarbons.
4. Do you think President Biden's Paris Climate Commitment to
reduce GHG emissions by 50% by 2030 is achievable?
No. It is both structurally--in engineering and science terms--and
economically unachievable. The only path to such a radical reduction in
emissions would be through a collapse in economic growth and
prosperity.
Questions for the Record
Katherine Hamilton
Chair, 38 North Solutions
Chair, Global Future Council on Clean Electrification
World Economic Forum
the honorable kathy castor
1. The United States is blessed with affordable and abundant
renewable energy resources, but they are often located far away from
densely populated cities. Upgrading and expanding our electric grid
could help ensure that every American can access clean energy. The
Biden Administration has already launched an initiative to use existing
rights-of-way to site transmission to make this easier.
a. How would upgrading and expanding the electric grid
improve electric grid reliability and resilience as we
transition to a clean energy economy?
Building high capacity, high voltage, and long-distance
transmission lines underground along existing transportation corridors
to connect abundant and affordable renewable energy to demand centers
will improve both electric grid reliability and resilience. Such
transmission facilities will enable wind and solar development where it
is most abundant and cost-effective and from areas otherwise
constrained by lack of access to transmission. These interstate and
often interregional transmission facilities will help avoid blackouts
and allow renewable energy resource-sharing among regions. For example,
underground transmission cable installation along railroad rights-of-
way provides a climate resilient lifeline between states, regions, and
energy markets to stabilizes the grid, ensuring weather-related events
have minimal impacts. Taking advantage of opportunities to develop
high-capacity underground transmission will help ensure power
reliability as the clean energy transition accelerates. The Biden
Administration announced the Building a Better Grid initiative that
will be solving for multiple challenges at once. From an infrastructure
standpoint, the U.S. needs to expand transmission by 60% by 2030 and
perhaps triple it by 2050.\1\ Funding in the Bipartisan Infrastructure
Bill will enable transmission build-out that in turn is foundational
for achieving the Administration's goal of 100% clean electricity by
2035. Grid Strategies' analysis of Winter Storm Uri's impact on Texas
one year after Winter Storm Uri makes the case for resilience through
better transmission planning and investment.\2\ As an example of a
state taking decisive action to tie transmission build-out to
resilience, the California Independent System Operator recently
approved 23 transmission projects totaling nearly $3B that are expected
to increase resilience in the state.\3\
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\1\ https://www.environmentalleader.com/2022/01/doe-launches-
initiative-to-upgrade-nations-electric-grid/
\2\ https://gridprogress.files.wordpress.com/2022/02/the-one-year-
anniversary-of-winter-storm-uri-lessons-learned-and-the-continued-need-
for-large-scale-transmission.pdf
\3\ https://www.pv-tech.org/caiso-approves-us2-9bn-of-transmission-
projects-to-enhance-reliability/
b. How would upgrading and expanding the electric grid
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help consumers save money on electric bills?
Expanding the power grid will unlock otherwise inaccessible high
quality and low-cost renewable energy resources that can benefit
consumers. Providing much needed export paths to market for such
resources will directly help consumers save money on electric bills.
Access to such affordable resources will be increasingly important as
more aspects of our economy are electrified, including homes and
transportation. It is estimated that for every $1 spent on
transmission, $3 of savings are achieved by consumers.\4\ PJM, the
largest energy market in the world, runs over 84,000 miles of
transmission and estimates that transmission lines that link PJM zones
together allow them to share capacity and leverage load diversity,
reducing the need for additional generation by up to $3.78 billion
annually. New transmission projects in the works could save $100
million in the first four years of commercial operations.\5\ In late
2020, Local Solar for All, the Coalition for Community Solar Access,
Vote Solar, and Vibrant Clean Energy released a road map for the lowest
cost grid. Their modeling shows that local distributed solar plus
storage could save customers $473B by 2050, while unlocking the full
potential of utility scale wind and solar.\6\ Stepping back to look at
the entire U.S. electricity sector, if it were to be fueled entirely by
clean energy, consumers would avoid using 437 million tons of coal,\7\
11.6 trillion cubic feet of natural gas,\8\ 72 million gallons of
oil,\9\ and avoid approximately $107 billion in costs used to purchase
these fuels (at 2021 prices) each year. Transitioning to a cleaner grid
should save consumers on their electricity bills.
---------------------------------------------------------------------------
\4\ https://gridprogress.files.wordpress.com/2022/02/the-one-year-
anniversary-of-winter-storm-uri-lessons-learned-and-the-continued-need-
for-large-scale-transmission.pdf
\5\ https://pjm.com/-/media/library/reports-notices/special-
reports/2019/the-benefits-of-the-pjm-transmission-system.ashx?la=en
\6\ https://
www.vibrantcleanenergy.com/wp-content/uploads/2020/12/
LocalSolarRoadmap_FINAL.pdf
\7\ https://www.eia.gov/energyexplained/coal/use-of-coal.php
\8\ https://www.eia.gov/tools/faqs/faq.php?id=50&t=8#:˜:text=
In%202020%2C%20the%20United%20States,(Tcf)%20of%20natural%20gas
\9\ https://www.eia.gov/tools/faqs/faq.php?id=33&t=6#:˜:text=
EIA%20uses%20product%20supplied%20to,day%20over%20consumption%20in%20202
0
2. How would the Bipartisan Infrastructure Law and the initiative
to use existing rights-of-way facilitate transmission development
---------------------------------------------------------------------------
without compromising environmental protections?
Pernicious siting and permitting issues often impede the deployment
of overhead interregional transmission lines. Such projects typically
take ten or more years to develop, assuming they can be built at all
given landowner opposition, environmental impacts, among other
barriers. In contrast, installing high voltage transmission lines
safely underground along existing railroad rights-of-way manages the
typical impediments to long distance transmission development. By
protecting landowners, avoiding eminent domain, and eliminating visual
impacts, underground installation along existing transportation
corridors simplifies and expedites permitting, allowing the project to
be built in half the time of traditional overhead transmission projects
while avoiding nearly all environmental impacts associated with major
linear infrastructure development. This underground rail co-location
development approach can use horizontal directional drilling to avoid
any sensitive habitats, ecosystems, or waterways, further ensuring
environmental protections. There are several programs within the BIL
that provide support for using existing transmission rights of way. One
project example is that of SOO Green HVDC (High Voltage Direct Current)
Link, which would follow existing rail and highways rights of way to
bury HVDC lines connecting wind resources in Iowa to load centers in
Chicago. Because the rights of way were already developed by rail and
roadways, burying cable along the same path would have minimal
environmental impact.\10\ Another example would be using overhead
transmission technologies, such as high-ampacity low sag lines and
HVDC, as well as MVDC (Medium Voltage Direct Current), that can move
more power than conventional Alternating Current transmission lines
within existing rights of way with less or no additional impact on the
environment. Other new technologies include superconductors that could
move five-times the amount of power over long-distances in the same
space as conventional overhead transmission with shorter towers, a
narrower right of way, and far less environmental impact.\11\ Research
funds in the BIF would help accelerate the development of this
technology with significant benefit to the electric grid, while
reducing impact on the environment.
---------------------------------------------------------------------------
\10\ https://www.soogreenrr.com
\11\ See technology being developed by VEIR: https://veir.com
3. Energy efficiency is a critically important near-term strategy
because it can help Americans save money on their household energy
bills and on their transportation fuels as well as reduce carbon
pollution. In your testimony, you also highlighted the energy
efficiency investments from the Bipartisan Infrastructure Law and
referenced the Solar Energy and Loan Fund from my home state of
Florida. Could you please help us understand how energy efficiency also
helps improve grid reliability and resilience to power interruptions
---------------------------------------------------------------------------
and other disruptive events?
The Department of Energy's Better Buildings program has developed
case studies and other resources for communities and consumers who want
to deploy energy efficiency technologies to increase resilience. Energy
efficiency alone can allow for passive survivability during a disaster,
while also providing reduced disruption from demand spikes, lower costs
for energy, greater comfort, and healthier air quality during normal
grid operations. By including onsite generation like solar power and
storage, customers can continue electric service during a disruptive
event.\12\ Many providers of renewable energy resources first install
energy efficiency measures to maximize the savings from the solar
resource. For example, before installing rooftop solar, PosiGen, a
Louisiana-based rooftop solar company that focuses on low-income
communities, conducts an energy audit and installs energy efficiency
measures to ensure bill savings from the solar system are achieved and
protected.\13\
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\12\ https://betterbuildingssolutioncenter.energy.gov/resilience/
about
\13\ https://www.posigen.com
4. In your testimony, you highlighted that the EV charging
investments in the Bipartisan Infrastructure Law are important for grid
resilience. You also cited a study from the American Council for an
Energy-Efficient Economy which concluded that increased electrification
of vehicles and buildings paired with energy efficiency would increase
grid reliability. Could you please describe how deploying more EVs and
distributed energy resources (DERs) helps improve grid reliability? How
---------------------------------------------------------------------------
can EVs and DERs serve as resources to a modernized grid?
A recent study by the Pacific Northwest National Laboratory looked
at how a distribution system operator (DSO) along with active customer
engagement (Transactive Energy) could coordinate a variety of flexible
assets such as electric vehicles (EVs) and distributed energy resources
(DERs) to reduce load, lower energy prices, and lessen needed
infrastructure.\14\ The grid is constantly working to maintain balance
between supply and demand; an overbalance of either or disruption to
delivery lines can cause the entire system to falter. DERs, when
properly incentivized and constructed, improve grid reliability by
giving more options for grid operators to manage that supply and
demand. In PJM alone, DERs account for between 15-25% of demand
response. EVs have the promise of similarly serving as flexible demand.
A future grid would ideally be able to take advantage of these mobile
services by allowing EV-to-Grid operations where EVs can charge or
discharge where needed to support the grid. California is experimenting
now with using EVs to power homes as electricity demand and renewable
energy both increase.\15\
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\14\ https://
www.pnnl.gov/sites/default/files/media/file/EED_1574_BROCH_DSOT-
ExecSumm_v11.pdf
\15\ https://www.morningbrew.com/emerging-tech/stories/2022/03/18/
california-s-vehicle-to-grid-experiments-offer-a-glimpse-of-the-future
5. In your testimony, you noted that additional climate
investments like the clean energy and energy storage tax credits and
the Greenhouse Gas Reduction Fund will help encourage more private
sector investment in climate solutions. Could you please help us
understand how Federal investments can unlock private sector capital,
which is a much bigger market? What are some examples of public private
---------------------------------------------------------------------------
partnerships?
The goal of the federal government should be to send market signals
that organize the nation around clear goals--in this case the goal of
reducing our nation's impact on the climate--and to fill gaps that the
private sector is unable to fill. In the case of the Greenhouse Gas
Reduction Fund, we know that last year state green banks drove nearly
$2B in investment and in total have caused $9B in total investment,
leveraging private capital three to one. While 42 states, the District
of Columbia, and Puerto Rico all have active or nascent green banks, a
national entity would capitalize and supercharge this state activity.
Many of these state programs do not have enough state funding to
leverage with that of the private sector; this national fund would
ensure those state entities are able to run their own entities while
also financing projects of broad national importance.
Another way in which policy can unlock private sector capital is
through tax credits with direct pay provisions. The current regime
forces project developers to work through financial middlemen in a
supply constrained tax equity market to monetize the tax credit for
renewable energy. The legal cost of this is prohibitive for many
distributed energy projects which have a capital expenditure of under
$1 million and is even more difficult for residential projects,
especially for those customers who do not have a tax burden at all and
would not be able to take advantage of an investment tax credit. As Jon
Powers, President of CleanCapital states in a recent article in PV
magazine, ``to say this creates a major bottleneck in clean energy
investment and deployment is an understatement. At a time when the
opportunity for the energy transition is greatest, two thirds of wind
projects set to being construction this year are still seeking tax
equity financing, along with more than half of large-scale solar
projects. These delays hold America back from its potential as a global
clean energy leader.'' \16\ Smaller projects face an even more
difficult path to monetization. And yet, despite these numbers, solar
has grown 52% annually since enactment of the ITC in 2006.\17\ While
solar and other renewables would expand exponentially with a more
efficient direct pay option, even this constrained ITC has already made
a significant impact in encouraging private sector investments in
climate solutions. This construct also creates opportunity for not-
taxed entities like municipalities and tribes to better extract value
from the incentive.
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\16\ https://pv-magazine-usa.com/2022/02/28/clean-energy-tax-
credit-reform-is-our-last-best-chance-for-a-net-zero-future/
\17\ https://www.seia.org/sites/default/files/2021-01/SEIA-ITC-
Factsheet-2021-Jan.pdf
6. How would American companies benefit from the Section 48C
---------------------------------------------------------------------------
incentive to manufacture climate solutions in this country?
According to the National Association of Manufacturers,
manufacturing jobs have one of the highest multiplier effects of any
industry\18\ Modeling done by Data for Progress concluded that federal
investments of $8 billion through 48C would create nearly 140,000
direct and indirect jobs nationwide over the next several years, and
would add over $27 billion to our Gross Domestic Product (GDP).\19\ The
think tank Third Way, in collaboration with Industrial Economics, Inc.,
found in their modeling that for every $1 billion issued annually
through a new 48C credit program, $3.6 billion in GDP would be added
and roughly 8,000 direct jobs created across the country, a number that
would reach 23,000 annually with indirect supply chain and ``induced
jobs.'' \20\ Not only manufacturers would benefit--the entire ecosystem
will. For example, underground HVDC transmission cable is not currently
manufactured in the U.S. Creating incentives for cable manufacturing
will thus impact the speed and cost of transmission development.
Another example is in hydropower, a zero-emission resource. Small
turbines--between 5-30 megawatts--are not manufactured in the U.S.
Based on the U.S. DOE Hydropower Vision, 13GW zero emission hydropower
could be added to the clean energy mix by simply upgrading existing
plants and adding power at existing dams.\21\
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\18\ https://www.nam.org/facts-about-manufacturing/
\19\ https://www.dataforprogress.org/memos/the-cepp-amplifies-the-
jobs-impacts-of-the-48c-
tax-credit
\20\ https://www.thirdway.org/memo/manufacturing-the-future-of-
clean-energy-with-48c
\21\ https://www.energy.gov/sites/default/files/2018/02/f49/
Hydropower-Vision-021518.pdf
7. High-voltage direct current transmission lines could help
connect transmission interconnections and transmission regions, which
would allow more Americans to access clean energy. What Federal
investments could ensure that these HDVC transmission lines are
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themselves resilient to the unavoidable impacts of climate change?
Direct current lines do not have same sensitivity to higher ambient
temperatures as AC lines since they do not generate heat within the
line, so in the case of extreme temperatures, DC lines will perform
better.
Investments should also be made in sensor-based Dynamic Line Rating
(DLR) technology that provide transmission owners and grid operators
with improved situational awareness and real-time visibility,
increasing the resilience of the system overall. Real-time sensors
equip grid operators with data on the performance of their transmission
lines, helping to optimize safety and reliability of the transmission
grid. Conductor asset health reports provide valuable information used
for prioritizing maintenance activities and efficiently dedicating
resources. DLRs can also unlock greater grid flexibility, enabling
operators to accommodate shifting loads and reduce interconnection
queues while also improving reliability in N-1 scenarios.
8. Why is it important for the federal government to invest in
recycling and reuse of critical minerals that are important inputs to
batteries and other clean energy technologies? For instance, the
Bipartisan Infrastructure Law invests $7 billion in critical mineral
supply chains, including a $140 million program recently announced by
the Department of Energy to develop a first-of-a-kind refinery to
extract rare earth elements from coal ash waste. How could these
efforts complement new mining and processing domestically and around
the world?
Many of the materials essential for Lithium-Ion Batteries (LIBs)
are not found in the U.S., making it vital that the U.S. invests in
minerals processing and a supportive trade policy with nations that
have these natural resources. Nickel, for example, is an essential
element for today's batteries. Most of the nickel used for the LIB
industry today comes from mature Western and Japanese nickel companies
making nickel powder, briquette and nickel sulphate. There is currently
no nickel mining and/or processing of nickel salts for the battery
industry in the U.S. and today's nickel price does not support
investment in new mines and processing facilities. Given that Indonesia
and Philippines are the key countries for nickel deposits, U.S.
refiners will most likely have to rely on growth of new feed coming
from these countries in the coming years, with smaller amounts from new
mines in Australia, New Caledonia, and Brazil.
Lithium is of course another essential element for LIBs. Most
lithium comes from brine resources in South America and rock resources
in Australia. The U.S. currently has one active lithium mine,
Albemarle's Silverpeak, a small brine-based lithium carbonate
production in Nevada. Additionally, North Carolina hosts two conversion
assets from carbonate to hydroxide from both Livent and Albemarle in
addition to a halted spodumene mine at Kings Mountain. The U.S. also
has a diverse lithium junior company community that is exploring
geothermal and clay to more conventional lithium resources like brine
and spodumene.
Cobalt is still an important element used in the cathode for most
LIBs, especially those used for electric vehicles. The U.S. does not
have any significant domestic sources of cobalt, nor does it have
cobalt refiners. Cobalt is not mined on its own but is rather most
commonly a by-product from copper or nickel mining. Over 60% of the
global cobalt supply originates from the Democratic Republic of Congo.
Furthermore, cobalt refining is predominantly a China-based
business. One company--Umicore--is an exception to the Chinese cobalt
refining dominance, operating the only significant non-Chinese cobalt
refining operations in Kokkola, Finland and Olen, Belgium that is used
to supply western nations.\22\
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\22\ https://csm.umicore.com
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For the U.S. to meet its needs for these metals and an advanced
energy economy, we should focus on working with trusted allies to
increase its access to supply. Additionally, the U.S. can invest in the
low-cost, low-emission technologies needed to process battery raw
materials, ideally using resources found in the U.S. to convert them
into a form used in LIBs. This could help support the development of a
market for the precursor materials which require these raw materials
and are in turn used to produce cathodes for LIBs.
To further mitigate risk for the U.S. market, the Department of
Energy and other U.S. policymakers could create a policy framework that
incentivizes domestic manufacturers along the battery supply chain.
Refining materials and manufacturing cells within U.S. borders would
mitigate a great deal of supply chain risk for this growing domestic
industry. The North American LIB supply chain could be incentivized
through a revised regional approach. Currently, there are no incentives
to locally produce components (i.e., cathode active materials) used in
LIB production. A regional agreement in North America could motivate
important regional supply production investment, mitigating domestic
national security risk, while promoting increased collaboration with
allies such as Canada which has important raw material resources.
Taking steps that result in the growth of a robust U.S. electric
vehicle market will help to reduce investment risk and uncertainty for
LIB supply chain participants who are considering establishing
manufacturing in the U.S. In addition, this market certainty would
foster an environment in which critical materials recyclers, such as
Umicore which operates a battery recycling plant in Belgium,\23\ would
want to site their plants here in the U.S. closer to the EV and battery
manufacturing ecosystem.
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\23\ https://www.umicore.com/en/newsroom/news/new-generation-li-
ion-battery-recycling-
technologies-and-announces-award-with-acc/
9. How can we help industries with expertise in legacy fossil fuel
technologies become partners in the transition to a clean energy
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economy?
While it might seem counterintuitive, it is critical to engage oil,
gas, and fossil fuel companies in energy transition efforts if we want
to make our 2050 climate goals. Given that the next 10-20 years will be
crucial in preventing the worst impacts of climate change, we must work
with the fossil fuel industry to reduce their emissions as they
continue to be a sizable part of our energy mix.
As an example of the incumbent fossil fuel industry stepping up to
scale a low carbon future, Greentown Labs in Houston, TX, has been
collaborating with oil and gas companies since their founding. Shell
and Chevron were some of the Lab's earliest partners and both helped
Greentown expand nationally. These corporate partners understand and
can provide the scale needed to deploy energy transition solutions;
existing fossil fuel companies have the capital, talent, and
operational capacity to bring new technologies to scale within the
looming climate timeframe. Hydrogen and CCUS/carbontech are two of the
most promising solutions to decarbonize power generation as well as two
of the fastest growing sectors of climate tech. Greentown Labs is
currently running two programs in partnership with industry partners:
the Low Carbon Hydrogen Accelerator \24\ and the Carbon to Value
Initiative.\25\ With both initiatives, corporate partners like Shell,
NRG, Fluor, and ConEdison leverages company expertise and incubation
services to drive an innovation ecosystem for commercializing climate
mitigating technologies.
---------------------------------------------------------------------------
\24\ https://greentownlabs.com/lcha/
\25\ https://www.c2vinitiative.com
10. What types of Federal investments would increase equity and
access to clean energy while also enhancing grid resilience and
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reliability?
To ensure programs and federal investments are equitable and allow
access by all Americans, we must be intentional in our policy
development. We cannot assume that by using the word ``equity'' that it
will then happen. A coalition of private sector companies,
environmental and civil rights groups collaborated to develop a roadmap
that would ensure equity is included through federal climate
policy.\26\ These policies include direct pay provisions in the tax
code, bonus credits for low and middle income communities, and,
crucially, funding for state, local, and tribal governments to fund
existing and new distributed and community solar programs to ensure
that at least 50% of incentives support underserved communities,
communities of color, indigenous communities, rural, and low to
moderate income households. All of these policies not only expand
access to clean energy, but also increase resilience inherent in those
technologies.
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\26\ https://static1.squarespace.com/static/
5f4637895cfc8d77860d0dbc/
t/607de3e8885bd43ae87deded/1618863082445/
Building+Back+Better_+A+Roadmap+to+
Expand+Solar+Access+for+All+-+FINAL.pdf
11. While the Investment Tax Credit has been helpful in driving
down the costs of solar energy, there are still additional barriers to
deployment at the scale required by the climate crisis. Could you
please describe the scale of solar deployment we need and describe some
of the remaining barriers? How could extension of the Investment Tax
---------------------------------------------------------------------------
Credit help? What other Federal policies would be helpful?
The Investment Tax Credit was momentous for the solar industry, and
yet more is needed to address, for example, consumers who rent their
homes or who live in multi-family housing, communities that are in low-
and middle-income areas, and those who live in areas historically
adversely impacted by extractive or polluting industries. Direct pay,
bonus credits, and interconnection tax credits as well as complementary
credits for energy storage, microgrids, and transmission will all
create the market signals for an ecosystem of U.S. investment in clean
energy. For solar specifically, the Solar Energy Industries Association
has set a goal of 100 GW (30%) by 2030; \27\ the Coalition for
Community Solar Access has set a goal of 20 GW by 2025 for community
solar.\28\ These goals align with the Biden Administration and indicate
a commitment by industry to deploy apace once policy certainty is in
place.
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\27\ https://www.seia.org/research-resources/solar-decade-american-
renewable-
energy-manufacturing
\28\ https://www.communitysolaraccess.org/community-solar-industry-
commits-to-develop-20-gw-of-capacity-by-2025-in-alignment-with-u-s-
department-of-energy-goals/
12. In your view, could you please describe the types of Federal
policies that would enable the country to meet President Biden's goal
---------------------------------------------------------------------------
of reducing economy-wide emissions by 50% by 2030?
Federal policy will be an important part of achieving 50% emissions
reduction by 2030. Policies that can enable that goal include a
combination of tax incentives, grant programs, rebates, appliance
standards, building codes, emissions regulation, and consistent
research and development to foster and seed ideas for the future energy
transition. The Select Committee on the Climate Crisis released a
report and action plan with many of those policy recommendations \29\
and the Build Back Better Act \30\ in concert with the Bipartisan
Infrastructure Law will send the appropriate market signals to the
private sector that clean energy transition investments will create
jobs, reduce risk from climate change, lower costs, and increase
resilience.
---------------------------------------------------------------------------
\29\ https://climatecrisis.house.gov/report
\30\ https://climatecrisis.house.gov/sites/climatecrisis.house.gov/
files/
Climate%20Investments%20In%20The%20Build%20Back%20Better%20Act%20Fact%20
Sheet%
2011-19.pdf
13. From your work on global decarbonization, could you please
describe the kinds of technologies that are most beneficial to
developing countries to help them meet their climate and economic
development goals? How would renewable energy and electric vehicles
help developing countries leapfrog over legacy fossil fuel
---------------------------------------------------------------------------
technologies?
Many people in mature markets have an impression that developing
economies simply need a solar panel to serve a light bulb and perhaps a
sewing machine or a refrigerator. To be clear, those technologies can
be life changing for girls and women to study and gain economic
independence.\31\ Emerging economies, however, need more than just
solar panels, and most of the issues facing these economies are not
technology related. According to Blackrock, emerging economies will
need $1T in investment for the zero emission transition, not because of
technology issues but because of political, legal, regulatory, and
macroeconomic risk.\32\ Another report from IEA and the World Economic
Forum discusses financing opportunities in emerging markets for energy
efficiency, electrification, clean power, and emissions-intensive
sectors.\33\ The issue in all of these analyses is not about technology
solutions but about financing and policy structures that can reduce
risk and accelerate deployment.
---------------------------------------------------------------------------
\31\ Companies like Solar Sister have made an enormous difference
in the lives of women in Sub-Saharan Africa:
https://www.un.org/en/chronicle/article/sustainable-energy-all-
empowering-women
\32\ https://www.reuters.com/business/sustainable-business/
emerging-markets-need-1-trln-year-get-net-zero-blackrock-2021-10-14/
\33\ https://www.iea.org/reports/financing-clean-energy-
transitions-in-emerging-and-developing-
economies?utm_content=buffer7259e&utm_medium=social&utm_source=twitter-
ieabirol&utm_campaign=buffer
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the honorable garret graves
1. In your testimony you state that transmission ties could have
helped bring power from states like Alabama and Louisiana to Texas in
the aftermath of Winter Storm Uri to ultimately reduce recovery time.
You blamed a lack of investment in transmission as why this didn't
happen. In our hearing, you stated that ``there are plenty of ways to
get transmission built.'' I agree that we need to make smart
investments to deploy innovative technologies, but all the money in the
world won't overcome the other barriers to deployment of these
technologies, particularly for projects that cross state lines.
a. How many federal agencies are involved in the
permitting process for projects like this, and how many
permits would these projects need?
The number of agencies involved in permitting will vary based on
the technology and application. Energy projects are not materially
different from developing any infrastructure policy in the approvals
needed to proceed.
b. Do you think the currently regulatory barriers that
are in place--that often delay projects like the ones
you reference by 7-10 years--should be reformed to
allow for faster deployment?
Based on my experience, the regulatory barriers that exist today
are often caused by a lack of adjustment in regulation to include new
technologies with new characteristics that were not contemplated at the
time of the original regulation. It is helpful when federal agencies
set up processes or platforms to help developers track progress and
approvals for projects.
c. Your testimony references ``market signals''--would
one of those signals be a permitting process that
provides certainty to developers and utilities alike to
attract investment and actually get things built?
Certainty is crucial for investment. In fact, many investors are
sitting on the sidelines today awaiting passage of the reconciliation
package for exactly that reason. Developers and utilities must plan
several years ahead, so understanding how the policy landscape will
look over the next decade is of utmost importance. I am party to
several Integrated Resource Planning proceedings throughout multiple
states, including Louisiana, and know it is very difficult for
utilities to model and plan long term without an understanding of
policies that will be in place that can impact their supply and demand
side resources.
2. The Princeton University study that I cited in our hearing
found that in order to meet net zero by 2050, ``high voltage
transmission capacity expands ˜60% by 2030 and triples by 2050. .
. total capital invested in transmission is $330 billion through 2030
and $2.2 trillion by 2050.'' \34\
---------------------------------------------------------------------------
\34\ Pg. 108: Princeton%20NZA%20FINAL%20REPORT%20(29Oct2021)%20(4)
a. Do you think this massive expansion of capacity and
the needed capital investment will increase costs for
---------------------------------------------------------------------------
utilities and therefore increase rates for consumers?
While there is a need to expand transmission investments, that
investment does not necessarily translate into higher costs for
consumers. Based on the report by Grid Strategies that I cited in my
testimony, for each gigawatt of transmission capacity, more than $100
million of consumer savings can be generated during an extreme weather
event. An Investment Tax Credit for transmission could spur $37B in new
transmission deployment, resulting in $75B in customer savings.\35\ In
addition, there are low-cost solutions with Grid Enhancing Technologies
(GETs) like Dynamic Line Ratings that can maximize capacity for
renewables integration. A recent study by The Brattle Group found that
GETs can double the amount of renewable energy integrated onto the
grid, and deliver $5B in consumer cost savings nationally, with a
payback of under six months.\36\ Importantly, these technologies can be
deployed in weeks or months, and at a unit cost of less than 5% of
traditional projects. To minimize the potential cost impacts of future
infrastructure development, technology solutions that can enable
additional capacity with existing infrastructure at a fraction of the
cost of traditional transmission line construction projects and without
requiring a time-consuming permitting process could be prioritized.
---------------------------------------------------------------------------
\35\ https://gridprogress.files.wordpress.com/2022/02/the-one-year-
anniversary-of-winter-storm-uri-lessons-learned-and-the-continued-need-
for-large-scale-transmission.pdf
\36\ https://watt-transmission.org/unlocking-the-queue/
b. Have you seen any strategic plans laying out how to
specifically achieve the amount of expanded capacity
---------------------------------------------------------------------------
that is needed to achieve these goals?
Many analysts have considered how to achieve a future of zero
carbon emissions. One example is Energy Systems Integration Group that
has focused on the grid and found that the cheapest solutions to the
transition are coordinated transmission and distributed energy
planning. Their modeling team found that ``when clean electricity is
not a target, the savings materialize immediately and reach to over
$300 billion cumulatively by 2050. When clean electricity is mandated,
the savings are less in the early years (through 2030), but expand
rapidly to over $470 billion by 2050.'' \37\ Barclay's released a five
pillar approach to zero emissions that lays out the need for ending
waste, increasing electrification, reinvigorating bioenergy, investing
in hydrogen, and sequestering carbon.\38\ There are no zero emission
scenarios that promote the increase of the use of fossil fuels and even
given the current situation in Ukraine, the International Energy Agency
(which has proposed a scenario to move to net zero by 2050) \39\ has
proposed an acceleration of electrification and renewable energy
deployment to reduce EU's reliance on Russian natural gas.\40\ S&P
Global found that climate change could have huge financial costs for
corporations and almost 80 percent of the S&P Global 1200, which
includes the world's largest companies, will be exposed to moderate-to-
high physical risks from climate change by 2050.\41\
---------------------------------------------------------------------------
\37\ https://www.esig.energy/coordinated-deployments-of-
transmission-and-distribution-scale-
resources-provide-the-lowest-cost-electricity/
\38\ https://www.cib.barclays/our-insights/Emission-impossible-
closing-in-on-net-zero.html?cid=paidsearch-
textads_google_google_themes_decarbonization_us_
research_net-
zero_phrase_892853615478&gclid==CjwKCAjwiuuRBhBvEiwAFXKaNJVM7KvTLbEBW2zg
-RLx1B8uDv6y6GHMINRBwZcyHJbKgVw-
bzKYeBoCFfcQAvD_BwE&gclsrc=aw.ds
\39\ https://www.iea.org/reports/world-energy-model/net-zero-
emissions-by-2050-scenario-nze
\40\ https://www.iea.org/reports/a-10-point-plan-to-reduce-the-
european-unions-reliance-on-
russian-natural-gas
\41\ https://www.greenbiz.com/article/state-net-zero-now
3. In your testimony you stated that ``One of the most important
market tools is in the tax code. Access to tax credits will drive down
the cost of energy storage of all types, opening up new markets in
---------------------------------------------------------------------------
dozens of States.''
a. How long has the Investment Tax Credit (ITC) been
in place for?
The Energy Policy Act of 2005 (P.L. 109-58) created a 30 percent
ITC for residential and commercial solar energy systems that applied to
projects placed in service between January 1, 2006, and December 31,
2007. The Solar Energy Industries Association has been tracking the
credit and the growth it has spurred in the sector.\42\
---------------------------------------------------------------------------
\42\ https://www.seia.org/initiatives/solar-investment-tax-credit-
itc
b. What percentage of the nation's power is generated
---------------------------------------------------------------------------
by solar energy?
Based on the Energy Information Administration and the Federal
Energy Regulatory Commission, renewable energy resources provide 25.81%
of total U.S. available installed generating capacity, more than coal,
which generates 18.49% and three times more than nuclear power, at
8.29%.--a share significantly greater than that of coal (18.49%) and
more than three times that of nuclear power (8.29%). More information
is available in the References Page. Of the total renewable energy
resources installed, solar energy, including utility scale and
distributed solar, makes up 98.2 Gigawatts, or roughly 3%. Solar
resources are projected to grow to 20% by 2050.\43\ \44\
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\43\ https://www.eia.gov/todayinenergy/detail.php?id=50357
\44\ https://www.environmentalleader.com/2022/03/us-renewables-
accounted-for-81-of-new-
generating-capacity-in-2021-says-sun-day-campaign/
c. At what point do you believe we need to allow the
free market to work and ensure that technologies can
stand on their own two feet, rather than perpetually
subsidizing a technology that hasn't been widely
---------------------------------------------------------------------------
adopted in the market?
A 2021 International Monetary Fund report found that in 2021 fossil
fuels--oil, natural gas and coal--were globally subsidized at $5.9
trillion, $660 billion of that in the U.S.\45\ One could argue that
those incentives are provided to proven technologies in long-profitable
sectors. What is called the ``free market'' is a set of market
signals--in part from states and the federal government--that encourage
or discourage investment in certain sectors based on prioritization of
attributes and characteristics of those resources. Because of the
global and U.S. commitment to greenhouse gas reduction, it would follow
that policy would send signals to the market to incentivize deployment
of zero emission technologies.
---------------------------------------------------------------------------
\45\ https://www.imf.org/en/Publications/WP/Issues/2021/09/23/
Still-Not-Getting-Energy-Prices-Right-A-Global-and-Country-Update-of-
Fossil-Fuel-Subsidies-466004
Additional References (EIA and FERC)
``Energy Infrastructure Update for December 2021'' was released by
FERC on March 8, 2022.
https://cms.ferc.gov/media/energy-infrastructure-update-december-2021.
See in particular the tables ``New Generation In-Service (New Build and
Expansion),'' ``Total Available Installed Generating Capacity,'' and
``Generation Capacity Additions and Retirements.''
``Energy Infrastructure Update for December 2020'' report by FERC.
https://cms.ferc.gov/media/energy-infrastructure-update-december-2020
``Short-Term Energy Outlook'' released by EIA on March 8, 2022
includes 2021 data for wind, utility-scale solar, and distributed
solar.
https://www.eia.gov/outlooks/steo/report/electricity.php
``Electric Power Monthly'' report by EIA released on February 25,
2022, ``Total Electric Power Industry Summary Statistics, Year-to-Date
2021 and 2020.''
https://www.eia.gov/electricity/monthly/
epm_table_grapher.php?t=table_es1b
[all]