[Senate Hearing 117-208]
[From the U.S. Government Publishing Office]


                                                      S. Hrg. 117-208

                 STRATEGIES FOR IMPROVING CRITICAL ENERGY 
                               INFRASTRUCTURE

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

                                 HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
              GOVERNMENT OPERATIONS AND BORDER MANAGEMENT

                                 OF THE

                              COMMITTEE ON
               HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE

                    ONE HUNDRED SEVENTEENTH CONGRESS


                             FIRST SESSION

                               __________

                            OCTOBER 27, 2021

                               __________

        Available via the World Wide Web: http://www.govinfo.gov

                       Printed for the use of the
        Committee on Homeland Security and Governmental Affairs
        
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                               __________

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
46-706 PDF                 WASHINGTON : 2022                     
          
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        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                   GARY C. PETERS, Michigan, Chairman
THOMAS R. CARPER, Delaware           ROB PORTMAN, Ohio
MAGGIE HASSAN, New Hampshire         RON JOHNSON, Wisconsin
KYRSTEN SINEMA, Arizona              RAND PAUL, Kentucky
JACKY ROSEN, Nevada                  JAMES LANKFORD, Oklahoma
ALEX PADILLA, California             MITT ROMNEY, Utah
JON OSSOFF, Georgia                  RICK SCOTT, Florida
                                     JOSH HAWLEY, Missouri

                   David M. Weinberg, Staff Director
                    Zachary I. Schram, Chief Counsel
                Pamela Thiessen, Minority Staff Director
    Andrew Dockham, Minority Chief Counsel and Deputy Staff Director
                     Laura W. Kilbride, Chief Clerk
                     Thomas J. Spino, Hearing Clerk


      SUBCOMMITTEE ON GOVERNMENT OPERATIONS AND BORDER MANAGEMENT

                   KRYSTEN SINEMA, Arizona, Chairman
THOMAS R. CARPER, Delaware           JAMES LANKFORD, Oklahoma
ALEX PADILLA, California             RON JOHNSON, Wisconsin
JON OSSOFF, Georgia                  MITT ROMNEY, Utah
                                     JOSH HAWLEY, Missouri

                     Eric A. Bursch, Staff Director
            Anthony Papian, Senior Professional Staff Member
  James D. Mann, Minority Staff Director and Regulatory Policy Counsel
               Phillip J. Moran, Minority Policy Analyst
         Mallory B. Nersesian, Archivist and Subcommittee Clerk
                            
                            
                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Sinema...............................................     1
    Senator Portman..............................................     2
    Senator Lankford.............................................     6
    Senator Carper...............................................    18
    Senator Padilla..............................................    21
Prepared statements:
    Senator Sinema...............................................    41
    Senator Lankford.............................................    42

                               WITNESSES
                      Wednesday, October 27, 2021

Alex Herrgott, President and Chief Executive Officer, The 
  Permitting Institute...........................................     4
Bryce Yonker, Executive Director and Chief Executive Officer, 
  Grid Forward...................................................     8
N. Levi Esquerra, Senior Vice President for Native American 
  Advancement and Tribal Engagement, University of Arizona.......    10
Lanny Nickell, Executive Vice President and Chief Operating 
  Officer, Southwest Power Pool..................................    12
Robert Bryce, Author, Journalist, and Public Speaker.............    14

                     Alphabetical List of Witnesses

Bryce, Robert:
    Testimony....................................................    14
    Prepared statement...........................................    78
Esquerra N. Levi:
    Testimony....................................................    10
    Prepared statement...........................................    58
Herrgott, Alex:
    Testimony....................................................     4
    Prepared statement...........................................    43
Nickell, Lanny:
    Testimony....................................................    12
    Prepared statement...........................................    63
Yonker, Bryce:
    Testimony....................................................     8
    Prepared statement...........................................    50

                                APPENDIX

Grid Forward Briefing............................................    88
Responses to post-hearing questions for the Record:
    Mr. Herrgott.................................................    91
    Mr. Yonker...................................................    95
    Mr. Nickell..................................................    99

 
        STRATEGIES FOR IMPROVING CRITICAL ENERGY INFRASTRUCTURE

                              ----------                              


                      WEDNESDAY, OCTOBER 27, 2021

                                     U.S. Senate,  
                      Subcommittee on Government Operations
                                     and Border Management,
                    of the Committee on Homeland Security  
                                  and Governmental Affairs,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 2:30 p.m. via 
Webex, Hon. Krysten Sinema, Chairman of the Subcommittee, 
presiding.
    Present: Senators Sinema, Carper, Padilla, Ossoff, 
Lankford, Hawley, and Portman.

             OPENING STATEMENT OF SENATOR SINEMA\1\

    Senator Sinema. The Subcommittee will come to order. I 
welcome Ranking Member Lankford, Members of the Committee, and 
our witnesses today. We are examining strategies for improving 
critical energy infrastructure in the United States. This topic 
represents a key issue for Arizona, Oklahoma, and the rest of 
the Nation. Our businesses, communities, and families need a 
reliable energy grid to succeed.
---------------------------------------------------------------------------
    \1\ The prepared statement of Senator Sinema appears in the 
Appendix on page 41.
---------------------------------------------------------------------------
    However, this past year has brought severe weather and 
storms to every corner of our country, leaving families victim 
to the elements when the electrical grid goes dark. These 
outages present a financial cost to American families and 
businesses, with the American Society of Civil Engineers (ASCE) 
estimating that power outages cost U.S. data centers $8,851 for 
each minute of a disruption, and that the cost of each outage 
results in $42,000 in losses for the manufacturing sector. 
These outages also lead to deaths, and when sometimes grid 
failure is unavoidable, one death is too many.
    I support an all-of-the-above energy approach that 
maintains reliability, affordability, and safety, and that is 
why I was proud our bipartisan infrastructure package includes 
funding for grid infrastructure, resiliency, and reliability. 
New money to support supply chains and clean energy technology, 
including battery research and manufacturing, and investments 
in fuels and technology infrastructure, including carbon 
capture, utilization and storage (CCUS), hydrogen research and 
production, a civil nuclear credit program, and hydro power 
efficiency incentives.
    Finally, we were able to make the Federal Permitting 
Improvement Steering Council (FPISC) permanent and expand 
access to Tribes, Alaska native corporations, and Hawaii native 
organizations, so projects that improve America's energy 
infrastructure can be completed without needless delay.
    In Arizona, we are proud of the progress our utilities have 
made to utilize cleaner energy sources. My State has been a 
leader in integrating demand response into the grid, which has 
been a key component in maintaining grid operations and 
affordable pricing during the increasingly hot summers of the 
past 2 years.
    Arizona also has the highest solar potential in the Nation, 
and I have supported the growth of the solar industry and the 
economic opportunities it brings to Arizonans. However, I 
recognize the challenges an intermittent resource like solar 
can present, and that is why I support increased investments in 
battery storage and implementing technologies that enhance grid 
flexibility and resilience.
    By utilizing these programs, such as the Permitting 
Council, and funds made available through our bipartisan work 
to improve America's infrastructure, we can make sure that 
extreme weather events do not cost Americans money, and more 
importantly, that a grid failure does not result in death.
    I look forward to hearing from our witnesses, and now I 
will call on Ranking Member Lankford for his opening statement.
    [Pause.]
    It looks like we may not have Ranking Member Lankford with 
us yet, so I would like to turn to Ranking Member Portman for 
his opening statement.

              OPENING STATEMENT OF SENATOR PORTMAN

    Senator Portman. Great. Thank you so much, Senator Sinema, 
and Senator Lankford is coming soon, I think, and to both of 
you we appreciate you holding this subcommittee hearing on a 
really important topic. It has been great to work with you on 
these issues. Our energy infrastructure is so critical, and as 
you say, it is under threat so much now, particularly with all 
the natural disasters.
    We worked together on broader infrastructure issues--roads, 
bridges, and so on--but we also need to think about our energy 
infrastructure and be sure it is able to deliver that reliable 
and affordable energy to our homes and our communities, which 
our national security depends on, certainly our economic 
prosperity depends on.
    Senator Sinema and I, along with eight of our colleagues 
partnered on this bipartisan Infrastructure Investment and Jobs 
Act. Senator Carper and others were very involved in this. It 
does provide a $65 billion investment into our energy 
infrastructure and our electric grid.
    The larger bill includes something else that I think is 
very important and I know will be a topic at today's hearing 
and that is how to ensure that as we are moving forward with 
energy infrastructure we are doing it in a more cost-effective 
way, so the Federal dollar can be stretched further.
    Along those lines, Senator Sinema and I introduced what is 
called the Federal Permitting Reform and Jobs Act earlier this. 
It basically lifts the sunset on a program that has been in 
place for the last several years that has worked very well. We 
made that program permanent. It is called Fixing America's 
Surface Transportation Act (FAST-41), referring to the FAST 
Act, which was the service transportation bill.
    Title 41 of it is a proposal that Senator McCaskill, out of 
this committee, and I worked on back in 2014 and 2015. It is a 
common-sense way to bring agencies together at the start of a 
permitting process for some of our largest infrastructure 
projects to develop a transparent timeline, hold them 
accountable to it. It also establishes the Federal Permitting 
Improvement Steering Council.
    By the way, one of our witnesses today I see, Madam Chair, 
is Alex Herrgott, who was Executive Director of that group, and 
he continues to work on these issues.
    The notion is to help resolve conflicts between agencies on 
projects and develop permitting best practices, speeding up 
permitting, not going around the permitting requirements but 
doing so in a much more cost-effective way. And because the 
system has been so complicated, that is easy to do.
    I will give you one example of this. The FAST-41 programs 
have reduced the National Environmental Policy Act (NEPA) 
review process from 4.5 years, on average, to 2.5 years, on 
average, for covered projects. By the way, that is a 45 percent 
savings which represents billions of dollars in savings.
    This is one thing that is working in our Federal 
Government, faster, more effective permitting, green-lighting 
projects, and particularly for energy infrastructure this has 
been critical. Again, it does too without reducing any 
environmental or safety standards.
    The Senate passed a larger infrastructure bill, of course, 
with 69 votes way back in August, more than two and a half 
months ago. Our hope is that even in the next few days we may 
see the legislation pass the U.S. House of Representatives. I 
certainly hope so, because it is critical to fixing our 
crumbling infrastructure and strengthening our economy. But 
again, it also fixes our nation's core infrastructure, 
including energy infrastructure, without raising taxes or 
adding to inflation, while helping our economy grow in the long 
term.
    I really appreciate you holding the hearing today, and to 
you and Senator Lankford, it is always a pleasure to work with 
both of you. My hope is that we will get in some good Q&A today 
with some of your witnesses and learn more about how we can 
improve our critical energy infrastructure.
    Thank you, Madam Chair.
    Senator Sinema. Thanks so much, Ranking Member Portman.
    I believe that Ranking Member Lankford is back on after 
some technical difficulties. Ranking Member Lankford, if you 
are back on I would like to turn the time to you for an opening 
statement.
    [Pause.]
    No. We will come back to him when his technical 
difficulties are done.
    We are going to go ahead and start by swearing in our 
Committee. It is the practice of this Committee to swear in 
witnesses. All of our witnesses today, if you will please stand 
and raise your right hand.
    Do you swear that the testimony you give before this 
Committee will be the truth, the whole truth, and nothing but 
the truth, so help you, God?
    Mr. Herrgott. I do.
    Mr. Yonker. I do.
    Mr. Esquerra. I do.
    Mr. Nickell. I do.
    Mr. Bryce. I do.
    Senator Sinema. Thank you.
    We will now hear from our witnesses. I will ask each of our 
witnesses to keep their remarks to 5 minutes. Your full written 
statements will be entered into the hearing record.
    Our first witnesses is Alex Herrgott. Mr. Herrgott is the 
President and Chief Executive Officer (CEO) of The Permitting 
Institute. He was the first Executive Director of the Federal 
Permitting Improvement Steering Council and is a former Deputy 
Staff Director of the Senate Committee on Environment and 
Public Works (EPW).
    Welcome, Mr. Herrgott, and you are recognized for five 
minutes.

 TESTIMONY OF ALEX HERRGOTT,\1\ PRESIDENT AND CHIEF FINANCIAL 
               OFFICER, THE PERMITTING INSTITUTE

    Mr. Herrgott. Thank you. Chairman Sinema and Ranking Member 
Lankford, my name is Alex Herrgott, and I serve as the 
President of The Permitting Institute, a nonpartisan, nonprofit 
organization focused on simplifying the permitting process so 
we can rebuild, expand, and modernize America's aging 
infrastructure while preserving our environmental, cultural, 
and historic resources.
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    \1\ The prepared statement of Mr. Herrgott appears in the Appendix 
on page 43.
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    While we are based here in Washington, D.C., The Permitting 
Institute's most important work happens across the country, in 
the field, in Arizona, in Ohio. We help our members navigate an 
overly complicated process, work with you on achievable 
reforms, and train the next generation of government regulators 
and project developers.
    Unfortunately, volatility in our energy markets continues 
to increase as we transition from conventional to renewable 
energy sources, and much of the energy infrastructure required 
to head off an emerging energy crisis this winter remain idle 
in various stages of planning and development. This mismatch of 
supply and demand is responsible for the rapidly increasing 
cost of energy. Nearly half of all Americans rely on natural 
gas to heat their homes, and as we all are aware, the price of 
natural gas has nearly doubled since the beginning of the year 
and is expected to jump even higher this winter.
    Rising energy costs have placed a spotlight on new, clean, 
affordable, and reliable sources of energy and transmission. 
The hundreds of new projects to meet this imperative, many of 
which are shovel-ready, must routinely overcome a maze of 
permitting obstacles which developers report add 20 to 30 
percent of project costs, costs that are passed on in the form 
of higher taxes and escalating utility rates. Nobody wins under 
the current system--not the environment, not the distressed 
U.S. electricity grid, not the rate payers, and not the 
vulnerable communities who can least afford it, the small 
businesses, the farmers, the manufacturers, and the American 
families that ultimately bear the burden.
    Project developers, including many of our members, stand 
ready to pursue $600 to $800 billion in private investment for 
new wind, solar transmission storage and carbon capture. That 
is 200-300 gigawatts of new utility-scale renewable energy 
generating capacity, enough to power 30 million homes.
    The reality, however, is the benefits of projects initiated 
today will not be realized for 7 to 10 years because of the 
current permitting process. This includes billions in new 
offshore wind projects that are ready to go, but yet to receive 
their preliminary permitting timetable. Also proposed onshore 
renewable energy projects, largely in Arizona, Nevada, and the 
West are also on hold as Bureau of Land Management (BLM) 
staffing decreases and other key issues keep projects in limbo 
to the point where inaction serves as a de facto rejection. 
Once these projects do begin the formal process, many still are 
snarled for years in bureaucratic and legal gridlock.
    One telling example is a $3 billion investment in a clean 
energy transmission line that began the permitting process more 
than a decade ago. It underwent 7 years of review and it was 
finally deemed complete by the Federal Government 4 years ago. 
However, it is now entangled in court proceedings because one 
of the 49 participating agencies pursued a separate, 
programmatic workflow that renders the prior approval for this 
project moot, all because agencies in the same department did 
not know what the other were doing. This is not a Republican or 
Democrat issue. This is a process issue.
    The unpredictable permitting process is the enemy of 
progress, and that uncertainty is keeping hundreds of billions 
of new U.S. investments from getting off the sidelines and 
investing in more cost-efficient and next-generation 
infrastructure, which I know Chairman Sinema and Ranking Member 
Portman have spent a tremendous amount of time trying to 
reverse. This also limits the impact of any new public spending 
that we may see from an emerging infrastructure package.
    The Permitting Institute is building a large coalition of 
diverse entities, committed to achieving a balance between 
progress and protection. We are working with developers in 
every affected industry sector, officials at all levels of 
government, tribes, nongovernmental organizations, and 
community leaders to identify common goals that deliver 
permitting wins. But to achieve this balance we must untangle 
the web of the overlapping regulatory and statutory 
requirements, some enacted over 50 years, that are in critical 
need of modern revision.
    To achieve a greater coordination and efficiency is not 
limits on public stakeholder participation or shortcuts to laws 
and regulations. More comprehensive and lasting reform efforts 
in the past have been blocked by the notion that faster means 
fewer protections for the environment. This notion is simply 
false. There are no steps skipped for these highly scrutinized 
reviews for these large, complicated projects. Project 
developers must always comply with all the relevant 
environmental statutes. There are no shortcuts, just avoidable 
process delays.
    To overcome this political impasse to progress, Congress 
can start small, with a 7-year pilot program to test innovative 
policies on a targeted list of projects critical to our 
nation's energy needs. This temporary new authority will create 
room to experiment with expedited project approvals. Outcomes 
can be scrutinized by this Committee and others, studied by the 
whole of Congress for feasibility, and then converted into more 
lasting reforms.
    We should also look to expand local and tribal partnerships 
and State permitting councils. Earlier this year, The 
Permitting Institute successfully adopted, in Arizona, the 
introduction of a State permitting office focused on bridging 
the trust, communication, and the coordination gap between 
State and Federal regulators. Thank you, Chairman Sinema.
    To be clear, opportunities for progress are directly in 
front of us. Over the past decade, Congress took the first 
steps through the creation of the Federal Improvement Steering 
Council and through the improvements offered in One Federal 
Decision framework. A confession is good for the soul. This is 
not enough. We have way more work to do.
    To conclude, if we agree that a project development cycle 
of 7 to 10 years is simply too long, we must move past the 
fringe talking points and take the next steps together. Doing 
so, we will unlock the opportunity to modern and expanded 
energy infrastructure that safeguard communities, protect the 
environment, and move us closer to President Biden's clean 
energy goals while simultaneously securing new domestic sources 
of affordable energy, creating jobs, and bringing American 
industry to life.
    Thank you very much.
    Senator Sinema. Thank you, Mr. Herrgott.
    I would like to recognize Ranking Member Lankford for his 
opening statement. Senator Lankford, I hope that we are good on 
technical difficulties, so the time is turned to you now.

            OPENING STATEMENT OF SENATOR LANKFORD\1\

    Senator Lankford. Thank you. I believe we are good on 
technical difficulties. At some point we will all be able to do 
face-to-face hearings again, and that will be a good day for 
that, so thank you. Thank you, as well, to Chairman Sinema for 
holding this hearing. It is incredibly important for grid 
reliability. We have to be able to make sure we have adequate 
energy supply.
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    \1\ The prepared statement of Senator Portman appears in the 
Appendix on page 42.
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    As many of you may know, last year, in Oklahoma and much of 
the country, especially in all of the Plains area, in the 
Midwest faced unseasonably extremely cold weather and all the 
winter precipitation that challenged our grid and energy supply 
left many people in the dark, in the coldest time of the year, 
last February.
    I frequently say that Oklahoma is the Saudi Arabia of 
winds. About 40 percent of our electricity comes from wind 
annually. During that period of time last February, the supply 
power of our wind infrastructure, wind fell off the grid like a 
switch had been flipped. Meanwhile, coal, which usually is less 
than 20 percent of our generation, shot up to provide over 50 
percent of our power.
    Oklahoma is truly an all-of-the-above energy State. We have 
wind. We have solar. We have hydroelectric. We have geothermal. 
We have diesel. We have natural gas. We have coal. It is very 
important to us to be able to maintain that type of energy 
diversity for us, and I am very interested in the issues that 
happened last year, where we have weaknesses in our system, and 
how we can actually learn from that.
    There is a lot that we still need to be able to go through 
in the days ahead. As I am watching what is happening in other 
parts of the world, right now, for instance, in the United 
Kingdom (UK), their prices of energy have shot up dramatically. 
They are reducing reliability. What is happening in California 
right now, they are having reliability issues. Even China is 
battling an energy crisis right now, where they are dropping 
their energy usage across all of China and trying to be able to 
deal with certain provinces only certain days that they can 
actually use power.
    This is a very significant issue that is happening 
worldwide, and I want to be able to track and see how we in the 
United States can make sure that we can maintain power, 
maintain reliability for the protection of human life on very 
cold and very hot days, but also for consistency and actual 
economic development, manufacturing, all the things that are 
also important to us.
    There has been some consideration for renewable energy tax 
credits. What that looks like in the days ahead, we will have 
an opportunity to be able to talk through some of those things. 
As I have already heard mentioned, some of the permitting 
issues that are out there are very significant because none of 
these projects begin and end in a year. We have to be able to 
deal with basic distortions in our systems as we look on the 
horizon and see how we are over-accomplishing in some areas and 
not using some others for our energy development.
    All these are issues I hope to be able to address today as 
we deal with the responsibility that this particular 
Subcommittee has on energy diversity for our nation and how we 
can protect our nation and our economy with a diverse energy 
portfolio, to make sure that that is stable.
    So, Chair Sinema, thank you again for leading out on this, 
and I look forward to the ongoing conversation in the hours 
ahead.
    Senator Sinema. Thanks so much, Senator Lankford.
    I will go on to introduce our second witness, Bryce Yonker. 
Mr. Yonker is the Executive Director and the CEO for Grid 
Forward. Grid Forward maintains over 100 members from 
utilities, technology providers, national labs, investors, 
nonprofits, universities, and other advanced grid stakeholders.
    Welcome, Mr. Yonker, and you are recognized for five 
minutes.

  TESTIMONY OF BRYCE YONKER,\1\ EXECUTIVE DIRECTOR AND CHIEF 
                EXECUTIVE OFFICER, GRID FORWARD

    Mr. Yonker. Thank you, Chair Sinema, Ranking Member 
Lankford, Ranking Member Portman, Members of the Subcommittee 
for the opportunity. My name is Bryce Yonker and I am Executive 
Director and CEO of Grid Forward, as you said, an industry 
organization working to accelerate grid modernization and 
innovation.
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    \1\ The prepared statement of Mr. Yonker appears in the Appendix on 
page 50.
---------------------------------------------------------------------------
    The electric grid is considered the most important 
engineering achievement of the 20th Century. It is the backbone 
by which we build and sustain our lives, communities, business, 
and indeed society. However, we are not investing in the grid 
nearly enough to meet the demands we place on it.
    The Association for Civil Engineers predicts that in less 
than 8 years we will have underinvested in the grid by about 
$200 billion. Should we be surprised by the grid impacts that 
happened over the last 9 months, from overwhelming events such 
as winter storms, unprecedented heat, wildfires, a pipeline 
cyberattack, and major storms that have already been discussed?
    National Oceanic and Atmospheric Administration (NOAA) 
reports that the United States has had 18 climate weather and 
related disasters so far this year, costing U.S. communities 
more than $1 billion in damages each, after record damages of 
$100 billion from 22 events last year.
    At the same time, market dynamics are changing faster than 
ever before. Customers are buying into energy options ranging 
from smart thermostats to electric vehicles. Economics and 
policy drivers are accelerating energy transition to resources 
like wind, solar, and batteries rapidly. In the midst of this 
change, operators are trying to make do with 20th Century 
assets that in many instances are past their useful lives.
    For the last decade, we have helped to promote and 
accelerate a toolbox of advanced grid applications that are 
ready to be implemented at scale. I will summarize my remarks 
in four classes of capabilities: forecasting, monitoring, 
planning, and deployment.
    First, advanced forecasting. Simulation, advanced 
algorithms, supercomputers, and other technologies are helping 
us forecast future events depending on a variety of factors. 
For the electric grid, the industry is getting better at 
forecasting both supply and demand. Indeed, keeping customer 
demand and electric supply dynamically in balance is the basic 
equation for reliable power.
    However, outlier events that have been considered 
statistically improbable are becoming more frequent. For 
example, the heat dome I experienced in Oregon this summer with 
temperatures in the 115-degree range, right outside my door 
here, beat our previous high temperatures by eight degrees. 
With these events increasing in frequency and impact we need 
more sophisticated, higher resolution forecasting to keep the 
grid in balance.
    Second, real-time monitoring. Advanced sensing capabilities 
allow grid operators to see, in near real-time conditions of 
the grid that previously could only be determined through slow, 
manual, in-person inspection. Operators can track the health of 
assets of the grid such as rotting or damaged poles, abnormal 
electric currents, trees in contact with lines, and much more. 
We must now move into advanced and automated controls of our 
electric grid systems so that real-time awareness leads to fast 
action for enhanced grid reliability.
    Third, strategic planning. Today's planning frontier needs 
to consider such a large number of factors that it must be 
approached as a living set of contingencies and adaptive 
strategies. Unfortunately, many, if not most, communities do 
not have adequate resiliency action plans, let alone installed 
grid flexibility solutions to adapt to circumstances they are 
already facing. Grid operators and communities need support to 
develop broader strategic plans with actionable roadmaps to 
meet tomorrow's challenges.
    Fourth and finally, grid-enhancing deployment. Investing in 
advanced grid deployments is the foundation of making community 
resilience a reality. We have recently prepared a briefing that 
illustrates the benefit from advanced grid deployments ranging 
from smart grid investments that have brought over $2 billion 
of added impacts in one wider community to single grid 
hardening projects that have decreased outages by 10 percent or 
more.
    I would like to briefly highlight a couple of quick 
examples, as I know my time is running low. Last week, the CEO 
of PG&E in California talked about how advanced grid 
capabilities allowed them to pinpoint high-risk areas that 
could have prevented 96 percent of the structures that were 
damaged or lost from previous wildfires.
    The Department of Energy (DOE's) own Smart Grid Investment 
Grants from 2009 to 2013, directly brought nearly $8 billion of 
resources to advanced grid capabilities. Many utilities 
accelerated their grid modernization plans by as much as a 
decade.
    One utility in your home State, Chair Sinema, is working 
with two military facilities to deploy hardened grid 
infrastructure, including microgrids, that will significantly 
increase the reliability of their operations. In a neighboring 
State to yours, Ranking Member Lankford, smart grid deployments 
helped lower outage time from one recent storm by an estimated 
45 million outage minutes, and my utility here in Oregon is 
leveraging a portfolio of demand-side distributed assets and 
market resources alongside grid modernization capabilities to 
help meet the needs, like on that 115-degree day this summer, 
where neither I nor very many customers were out of power.
    In summary, our electric grid is becoming more complex and 
so our its challenges. Resilience is no longer a matter of just 
energy supply. Instead, we must consider the capabilities of 
all grid-connected resources and look beyond physical capacity. 
Central to harnessing these interconnected resources is access 
to and participation in wide markets that enable coordination 
and maximize their value, a topic I know we are going to talk 
about today.
    However, technology markets and policy or any factors alone 
will not solve this issue. We believe the bipartisan 
infrastructure package, passed earlier this year through the 
Senate, and the Energy Act of 2020 together provide an urgently 
needed down payment to advance much-needed grid resilience and 
capabilities. It is critical that Federal resources align with 
local realities to ensure that our grid can remain safe, 
reliable, and affordable. We must also prioritize and ensure 
that our grid is increasingly flexible, efficient, clean, 
equitable, secure, and as we are talking about today, 
resilient.
    Thank you for the time, and I look forward to the 
questions.
    Senator Sinema. Thank you, Mr. Yonker.
    Our third witness is Levi Esquerra. Mr. Esquerra is the 
Senior Vice President of Native American Advancement and Tribal 
Engagement (NAATE) for the University of Arizona. He has served 
as Tribal Chairman of the Chemehuevi Indian Tribe, and for 
three terms as their Tribal Councilmember.
    Throughout his career, his focus has been on economic and 
community development for Arizona's Native Tribes.
    Welcome, Mr. Esquerra. You are recognized for five minutes.

  TESTIMONY OF N. LEVI ESQUERRA,\1\ SENIOR VICE PRESIDENT FOR 
 NATIVE AMERICAN ADVANCEMENT AND TRIBAL ENGAGEMENT, UNIVERSITY 
                           OF ARIZONA

    Mr. Esquerra. Thank you so much, Senator Sinema. This is a 
great opportunity and an honor for me to be here today and to 
share a little bit of my thoughts.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Esquerra appears in the Appendix 
on page 58.
---------------------------------------------------------------------------
    I have been at the University of Arizona for a little over 
a year, and the very first thing I want to share with you is my 
first interview with President Robbins he asked me, he said, 
``Hey, Levi. I would like to work with the Tribes. What can we 
do?'' What I said to him, what I shared with him is, ``You 
know, that is a complex question that is hard to answer.'' But 
I said, ``If you really want to work with Tribes, it takes 
three main things. You have to have patience, from patience 
comes respect, and from respect comes trust.''
    I know what we are talking about today impacts our Tribal 
Nations. In Arizona we have 22 Tribal Nations, but throughout 
the United States there are 570-plus.
    I want to let you know that as I shared this with him, one 
of the things I want to commend you, Senator Sinema, and 
everyone, is when I started reviewing the Federal Permitting 
Reform and Jobs Act there is a section in there that they are 
adding Tribal and Native corporation projects to be eligible 
for infrastructure projects. This allows Tribes to have the 
same competitive access to funds that the States have 
historically benefited from. Kudos to you for doing that. That 
actually shows that you are actually making progress to not 
only listening to the Tribes but giving them an equal playing 
field. I want to commend you on that, because that is not 
always done.
    But in saying that, and after listening to some of the 
comments--I am deviating from my written testimony just to talk 
to you a little bit--I have found that one of the biggest 
struggles I have had in working with my Tribal Nation, 
Chemehuevi, and others, is sometimes we need to raise our 
capacity. We might have the desire to do a renewable energy 
project, but the capacity and the regulations that we have to 
go through, sometimes it is time-consuming and it is beyond our 
capacity.
    So not only is there a need, we just opened up the 
opportunity for Tribes to compete with States, right. States 
have been doing it for years. Tribes, this is going to be their 
first go-around doing it. We need to raise the capacity, not 
only of the Tribes themselves but those Federal agencies who 
are going to interact with the Tribes, so they can see them for 
the uniqueness that they are but the opportunities that are in 
front of them.
    Second, and I think even equally more important than that, 
is we need to understand, within the Federal agency, I know 
there was some talk about interacting and working together. I 
know we are talking about energy today, but there was a water 
structure that was done and Bureau of Reclamation took the lead 
on it, but they worked with Indian Health Service (IHS), they 
worked with the U.S. Department of Agriculture (USDA), they 
worked with four different other components, State agencies as 
well, to deliver water to a chapter within Navajo Nation.
    Each of them had a different component that they could 
fund. They could not fund the whole project entirely. Each took 
different components of it. As they worked together you saw a 
synergy take place, and the project was able to get completed. 
Very rarely do I ever see synergy take place between multiple 
agencies working together, whether it is the Federal 
Government, State government, or even with the Tribal 
communities themselves. I think that is a huge component of 
this. We need to raise the capacity but more importantly than 
that, those assets are out there--how can we communicate and 
work efficiently together?
    In closing, I want to tell you this. I know I only have 2 
minutes and I will deviate. Sorry, Senator Sinema, but I am 
just talking now, so I hope it is OK.
    I had a dean at Northern Arizona University (NAU). His name 
was Craig Van Slyke. His first day he came in I met with him, 
and he was from St. Louis, and he was eager to engage. About a 
week later I had the Hopi Tribe. We were talking, we were 
developing, and I asked Dean Van Slyke to actually come in and 
do a welcoming. He said he was busy and he could not so he sent 
an associate dean. The associate dean came in and said, ``Hey, 
it is great to have you here, Hopi. Any questions, follow with 
Levi,'' and he walked out the door.
    After about 5 hours we were concluding our discussion. The 
dean popped his head in and saw us and got really excited. He 
said, ``All right.'' He jumped in, did introductions, talked 
for 30 or 40 minutes, and then he left.
    I had a good friend from Hopi invited me to their dances. 
His name was Cliff. I said, ``Hey, I cannot make it to it but 
what about the dean.'' ``Do you think he would go?'' I said, 
``Let's go ask the dean.'' I asked him and he said, ``Oh, that 
is a great honor.''
    Two or 3 days later, Cliff came back to Northern Arizona 
University. He drew a map and said, ``This is where my sister's 
house is, and she will be expecting you.'' He went over some of 
the dos and do nots. Do not take your camera. Know where you 
need to be. Do not look at certain things.
    About 2 weeks later I was engaging with Dean Van Slyke and 
I said, ``How did it go?'' He looked perplexed to me. And I 
said, ``Uh oh. Something must have happened.'' He said, ``Levi, 
I want you to know, I took this job to help students be 
successful. I don't know nothing about the Hopi Tribe. I don't 
know anything about the other Tribes here in Arizona. How can I 
help them be successful if I do not know who they are?''
    I define success not making an A in a class or graduating 
from college. I define success as reaching your true potential. 
I know you have a consultation policy with Department of the 
Interior (DOI) and others. That is a key component to really 
helping Tribes reach their true potential and their success, 
and I think resilience is a natural with the Tribes because we 
have been resilient since time immemorial.
    With that I say thank you, and to-pik [phonetic].
    Senator Sinema. Thank you, Mr. Esquerra.
    Ranking Member Lankford, would you like to introduce our 
fourth and fifth witnesses?
    Senator Lankford. I would be glad to.
    Senator Sinema. Good.
    Senator Lankford. Sorry for the long hesitation. A little 
technical jump there as well again.
    Is Mr. Nickell and then Mr. Bryce the order you would like 
to go, Madam Chair?
    Senator Sinema. Great.
    Senator Lankford. Let me introduce Lanny Nickell. He is the 
Executive Vice President and Chief Operating Officer (COO) of 
the Southwest Power Pool (SPP), which is actually the power 
area that covers my home State, in Oklahoma. He is responsible 
for the provision of engineering, operations, information 
technology (IT) services to members and customers.
    He began his career in planning and engineering for the 
Public Service Company of Oklahoma. He joined Southwest Power 
Pool in 1997 as an operations engineer, where he helped 
establish Southwest Power Pool's reliability coordination and 
tariff administration functions. He was promoted to the 
management team in 1998, and became Vice President of 
Operations in 2008, Vice President of Engineering in 2011, 
Senior Vice President of Engineering in 2019.
    I cannot imagine a more fun job than to be in leadership of 
Southwest Power Pool, last February, when we were dealing with 
very difficult times.
    We are grateful that you are here to be able to walk 
through this. We look forward to your testimony.

  TESTIMONY OF LANNY NICKELL,\1\ EXECUTIVE VICE PRESIDENT AND 
         CHIEF OPERATING OFFICER, SOUTHWEST POWER POOL

    Mr. Nickell. Thank you very much for that introduction, 
Ranking Member Lankford, and thank you to Chair Sinema as well 
as Ranking Member Lankford and Members of the Subcommittee for 
the opportunity to participate in this very important hearing.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Nickell appears in the Appendix 
on page 63.
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    As Ranking Member Lankford mentioned, I am the Chief 
Operating Officer of Southwest Power Pool. Southwest Power Pool 
is responsible for assuring affordable and reliable delivery of 
wholesale electric power across our 14-State region in the 
central part of the United States.
    SPP relies on a diverse portfolio of generating resources, 
a well-functioning wholesale energy market operated across a 
broad, multistate footprint, and a robust electric transmission 
system to reliably deliver electricity to our utilities at the 
lowest possible cost. We very much understand and appreciate 
the critical role energy infrastructure plays in assuring our 
nation's safety, security, and vibrant economy.
    I can also assure you, we understand it even better after 
our experience with this year's winter storm Uri. Winter storm 
Uri was severe, particularly in our part of the country where 
many locations experienced record-low temperatures. The extreme 
cold caused record amounts of wintertime electricity 
consumption in our region.
    That consumption would have been even higher, and would 
have exceeded our previous winter record by more than 8 percent 
on Tuesday, February 16th, if we had been able to access 
sufficient energy supply. Unfortunately, only 42 percent of our 
generating capacity was available this time, which was 37 
percent lower than what we expect to have during peak 
consumption periods.
    While nearly all types of generation struggled to perform 
at expected capabilities, gas generation was most impacted, 
with 57 percent of its expected capacity being unavailable. 
Nearly half of this unavailability was attributed to lack of 
fuel.
    Despite our best efforts, and as a last resort, we were 
required to interrupt electric service twice, for a total of 
nearly 4 hours across 2 days, with the maximum amount of 
service interrupted representing 6.5 percent of our regional 
energy demand at the time.
    We very much appreciated and benefited from the tremendous 
amount of energy we received during this time from neighboring 
regions. This was enabled by our strong relationships and even 
stronger electric transmission interconnections. At times, 
nearly 14 percent of SPP's consumption was supplied from 
external parties through those interconnections.
    To put that in perspective, Eastern, Western and the 
Electric Reliability Council of Texas (ERCOT) total 
interconnection capacity would have allowed no more than 1.5 
percent of its energy needs to be supplied externally during 
this event. We would have had to interrupt much more service 
for longer periods of time without the assistance that we 
received from our neighbors.
    I believe there are three key opportunities to improve 
energy infrastructure that will best mitigate the potentially 
disastrous results of these extreme events. First, we need to 
better assure access to an adequate amount of generating 
facilities that we can count on when they are most needed. At a 
minimum, we must know more accurately what we can count on in 
order to be better informed of the reliability value provided 
by those resources.
    Second, additional investments in the gas industry are 
needed to more reliably produce and deliver fuel to generators 
during these conditions. It is also imperative that 
decisionmakers better understand the relationship between the 
gas and electric industries and how those industries impact 
each other.
    Third, a strong electric transmission grid provides 
significant value during these types of events because it 
enables access to a much larger portfolio of generation and 
provides increased resilience. SPP realized this value first-
hand. To better inform transmission investment decisions we 
must include extreme scenarios in our planning assessments and 
better recognize the value of increased resilience.
    In conclusion, I know the cost of increased energy 
infrastructure needed to adequately ensure our nation's future 
can be expensive, but not having this form of adequate 
insurance when catastrophe strikes is likely to be much more 
costly.
    Thanks again for the opportunity. I stand ready to answer 
any questions you may have.
    Senator Lankford. Mr. Nickell, thank you very much for 
that. I appreciate your testimony today.
    Let me next introduce our last witness and that is Robert 
Bryce. Robert Bryce is an author, journalist, film producer, 
and podcaster. He has been writing about energy, power, 
innovation, and politics for more than three decades. He is the 
acclaimed author of six books, including most recently A 
Question of Power: Electricity and the Wealth of Nations. He 
also is the host of the Power Hungry Podcast.
    Mr. Bryce, we are ready to receive your testimony.

 TESTIMONY OF ROBERT BRYCE,\1\ AUTHOR, JOURNALIST, AND PUBLIC 
                            SPEAKER

    Mr. Bryce. Many thanks. Good afternoon to you and thank you 
for the opportunity to testify today. Senator Lankford, I am a 
native Oklahoman so it is a pleasure to speak in front of this 
Committee. In fact, I have been in Oklahoma looking at energy 
infrastructure here over the last few days, and over the last 5 
years have been all over the world, in fact, looking at the 
world through the lens of electricity, including a new 
documentary that I produced called Juice: How Electricity 
Explains the World.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Bryce appears in the Appendix on 
page 78.
---------------------------------------------------------------------------
    My point today is to focus on the electric grid. America's 
electric grid is our most critical piece of energy 
infrastructure. The grid is the mother network, the network 
upon which all of our critical systems depend. But the 
affordability, reliability, and resilience of our electric grid 
are being undermined. Over the past few years, the fragility of 
our grid and its vulnerability to cyberattacks, physical 
attacks, and extreme weather events has become ever more 
obvious.
    I understand this vulnerability firsthand. In February, my 
wife, Lorin, and I were blacked in central Austin for 45 hours 
during Winter Storm Uri. Between 2000 and 2020, the number of 
what the DOE calls ``major electric disturbances and unusual 
occurrences'' on our grid jumped nearly 13-fold. Sales of 
standby generators, made by companies like Generac, Kohler, 
Caterpillar, and others are soaring.
    Our grid is being fragilized by three things. First is the 
increasing reliance on weather-dependent and intermittent 
renewables like wind and solar. In August, the North American 
Electric Reliability Corporation identified changing resource 
mix as the most urgent challenge facing the electric grid. It 
also said our generation capacity is, I quote, ``increasingly 
characterized as one that is sensitive to extreme, widespread, 
and long duration temperatures as well as wind and solar 
droughts.'' A prolonged wind drought is one of the reasons why 
Britain and much of Europe is in an energy crisis today.
    In March, at a Senate Environment and Public Works 
Committee hearing, Xcel Energy CEO Been Fowke said, I am 
quoting, ``At higher levels of intermittent renewables the cost 
of the energy system begins to skyrocket and its reliability 
degrades.''
    The second factor, dozens of coal-fired power plants as 
well as several nuclear plants, which provide resilient 
baseload power and help keep the grid stable, have been 
prematurely shuttered. The closure of those plants has made the 
grid more reliant on just-in-time delivery of natural gas. I am 
pro natural gas, but since Enron declared bankruptcy 20 years 
ago, the amount of gas burned for power generation has more 
than doubled.
    Finally, regional transmission organizations like ERCOT in 
Texas and California Independent System Operator (CAISO) in 
California are not providing enough incentives to assure the 
reliability and resilience of the electric grid.
    So what must be done? First, Congress must prevent the 
closure--should do all it can to prevent the closure of more 
coal and nuclear plants until regulators can be certain that 
their closures will not reduce the reliability and resilience 
of the grid.
    Second, the Federal tax incentives for wind and solar 
energy, the production tax credits (PTC) and the investment tax 
credits (ITC), which are costing taxpayers billions of dollars 
per year, must be eliminated. These subsidies distort wholesale 
power markets, make the grid more reliant on the weather, and 
undermine the financial viability of the thermal power plants 
that are essential for grid reliability. For years, renewable 
energy advocates have claimed wind and solar are the cheapest 
option. It is high time for them to prove it.
    Third, Congress, along with Federal regulators, should 
develop rules that incentivize onsite fuel storage at power 
plants. The blackouts in Texas that I lived through showed that 
the most reliable power plants during the blizzard were the 
ones that had onsite fuel, including the coal and nuclear 
plants. Federal incentives do not have to be limited, though, 
to coal and nuclear. They can also include fuel oil, which can 
be used in quick-start combustion turbines or in large 
reciprocating engines.
    Power plants with onsite fuel are absolutely essential for 
system resilience. If a regional grid fails, the grid operator 
must perform a black start, to re-energize the grid. Those 
black start generation units must have onsite fuel, and in the 
postmortem of the ERCOT blackouts it was clear that those black 
start units were not ready, and many of them did not have 
enough fuel.
    Fourth, Congress must act to stop the closure of existing 
nuclear plants, including the scheduled closure of the Diablo 
Canyon plant in California beginning in 2024. The closure of 
our existing fleet, including the April closure of the Indian 
Point nuclear plant in New York, was a travesty. Congress must 
also work to accelerate the licensing and deployment of small, 
modular reactors, which will bolster resilience and help with 
decarbonization.
    In conclusion, for too long policymakers have ignored the 
fragility of our electric grid. The grid is our biggest, most 
complex, and most important piece of energy infrastructure. We 
take it for granted at our extreme peril. We cannot allow our 
electric grid to fail.
    Earlier this year, the writer, Emmett Penney, had it right 
when he said, ``There is no such thing as a wealthy society 
with a weak electric grid.'' We cannot afford to have a weak 
electric grid.
    Thank you very much.
    Senator Sinema. Thank you so much, Mr. Bryce. Now we will 
begin the question portion of the hearing. Each Member of the 
Committee will have 7 minutes, and I recognize myself for those 
first 7 minutes.
    Mr. Herrgott, as you heard in Mr. Esquerra's testimony, 
Arizona Tribes have faced hurdles they could not overcome when 
attempting to enter into power purchase agreements to develop 
renewable energy and improve economic opportunity. What steps 
can we take with permitting and related issues to make sure 
that Tribes have ample opportunity to engage in energy 
production activities?
    Mr. Herrgott. Thank you for that question. I think it is 
important to realize that Tribal sovereignty also means Tribal 
energy independence, and the current structure and the way in 
which the Bureau of Indian Affairs (BIA) and other Federal 
gatekeepers regulate and give permission to Tribes, whether 
they be a direct service Tribe or a more independent, larger 
Tribe like the Navajo or the Hopi or the Ute Tribe in Utah, 
oftentimes makes it more difficult for them to be able to 
harness the opportunities for new investment.
    As my good friend, Levi, pointed out--who I have spent a 
good amount of time within Arizona--it is the institutional 
capacities on how to actually formulate a purchase power 
agreement. How are you not perceived to be steamrolled by 
developers that are moving through Tribal areas?
    It is important that we recognize that giving Tribal 
sovereign nations the ability to develop their own energy is 
something we should have been doing months ago, not waiting 6 
months for BIA to give that Tribe permission.
    Senator Sinema. Thank you. Mr. Esquerra, while developing 
the Federal Permitting Reform and Jobs Act with Senator Portman 
I wanted to make sure that we were deliberate in our efforts to 
protect Tribal interests. We accomplished this in two ways. 
First, we required that the Permitting Council produce annual 
best practices for effective coordination with tribal 
stakeholders. Second, we made sure that information provided by 
Tribes would remain confidential and would not be subject to 
FOIA to preserve sacred, cultural, and historic sites.
    In your testimony, you noted that engaging with Native 
Tribes, from patience comes respect, and after you have 
respect, trust will surely follow. For too long, Native Tribes 
in Arizona and across the country have not been treated as 
partners. So what impact will the Permitting Council reforms 
have on building respect and trust, and what additional steps 
should the Federal Government take on this front?
    Mr. Esquerra. I am sorry about that. Thank you, Senator. As 
I said in my testimony, just having Tribes to have the same 
competitive access to funds as a State I think is a great step 
in the right direction. I think the other thing that is really 
key that needs to be done is, as you take time to listen and 
learn from the Tribes, and whatever is in your capacity you can 
go back. A lot of times Tribes, we are talking about 
electrified renewable energy project--I bet you every Tribe 
here in the State has plans, but it has always been the failed 
implementation of how to get that done, and I think that is 
what your question goes to.
    I think the one thing is, is building that capacity. The 
other thing is working with the Bureau of Indian Affairs to 
increase their capacity as well, especially if you are talking 
about leasing lands. They have to do fair market value for the 
lease, and how do you determine fair market value, or future 
market values, when it comes to place?
    But I am just thrilled by just the changes that you have 
made, that you are proposing in this legislation, because that 
truly opens up the door for Tribes to have the same 
opportunities that States have, but more importantly, I think 
that goes to building that relationship of trust. A lot of 
Tribes feel like there has been mistrust, throughout our 
history with the United States. This is the direction that 
takes you in a different--because you are actually saying, 
``Hey, you have the same opportunity as States, and we are 
going to treat you as the same.'' Thank you.
    Senator Sinema. Thank you.
    Mr. Yonker, it is clear from your testimony and from the 
data available that the threats causing grid disruptions are 
becoming more frequent and their effects are more severe. We 
have seen this in Arizona with the effects of both wildfire and 
extreme heat.
    Can you provide examples of actions that States, the 
Federal Government, or energy providers have taken to address 
these threats?
    Mr. Yonker. Absolutely. Thanks for the question. First I 
would start with the basics, ensure that there is robust 
vegetation management, critical infrastructure is being 
refreshed and maintained, and basic monitoring is in place. 
Second, you start with comprehensive planning in place that is 
beyond just grid. It gets into other critical infrastructure--
public safety, health, and others. Then third, you have to get 
into the actual deployments, and you can precisely target 
them--real-time sensoring, grid analytics, and other 
capabilities.
    But let me give a couple of examples. In Washington State, 
Governor Inslee has created a clean energy fund that helps 
provide tens of millions of dollars to annually support grid 
operators in deploying advanced capabilities, and in their last 
legislative cycle they set aside $125 million specifically for 
forest restoration and community resiliency.
    Another quick example. The Bonneville Power Administration 
(BPA), a Federal agency, has developed an annual wildfire 
assessment plan, and this year they had to put it in action 
when there were wildfires raging in southern Oregon, and it 
helped them continue to keep operations of their transmission 
infrastructure going.
    Third, and very quickly, the National Labs in California 
are testing a very novel concept that would de-energize a line 
in under a second before it hits the ground. So think about the 
real-time analysis that is needed to do that, and this is at 
the core of a lot of the Federal investments that are being 
made.
    Senator Sinema. Thank you. I understand that Senator--
actually, I think I have time for one more quick question, so I 
am going to go quickly to Mr. Yonker. In your testimony--again, 
a follow-up question for you--you laid our four keys to 
improving and maintaining grid resilience--flexibility, 
reliability, affordability. I am interested in exploring one of 
these in more detail--demand response. This is about keeping 
customer demand and electricity supply in balance.
    Arizona Public Services is a leader in implementing this 
system, and that is important as our energy mix and grid 
technologies continue to evolve. Can you tell us what role 
demand response plays in managing peak energy demand and 
reducing strain on the grid, and how does it complement 
renewable and peaking generation assets?
    Mr. Yonker. Great question. So demand-side management is 
leveraging the flexibility that customers have to bring value 
on the overall grid system, and customers benefit. They get 
incentives. They get to be a part of the solution, and it also 
helps them keep their rates low.
    A commonly used form of demand response, for example, could 
be leveraging smart thermostats. So in this way, an aggregator 
or grid operator is going to send a signal to a smart 
thermostat and the customers are going to respond.
    But let me give you a couple other examples. There is 
nearly 200 gigawatts of flexibility from both traditional and 
more tech-enabled demand response that could reduce peak load 
by 20 percent, it is estimated, and save over $16 billion 
annually. There is a company in California called OhmConnect. 
They are working toward building out 550 megawatts of the 
virtual power plant that they say could cut half of what was 
needed for the 2020 blackouts. They have 150 megawatts now.
    My utility here in Oregon is leveraging a portfolio of 
demand-side distributed assets. This, in many ways as I said in 
my testimony, is what helped them mitigate the impacts of the 
outages from that 115-degree day.
    But what I would like to emphasize is that they just filed 
a plan, for 2030, where they think they can get 25 percent of 
their power needed for the hottest and coldest days from that 
demand flexibility and from aggregating distributed energy 
resources (DER). So it can be a very central role in running a 
modern grid.
    Senator Sinema. Thank you. My time has expired. I 
understand Senator Lankford wants to defer his questions to the 
end. So with that I will turn to Senator Carper for his 7 
minutes. Senator Carper, you are recognized.

              OPENING STATEMENT OF SENATOR CARPER

    Senator Carper. Thank you, Madam Chair, and I want to thank 
the Ranking Member for deferring his questions to the end. That 
is very kind, James. Thank you.
    To our five witnesses, welcome one and all. I look forward 
to the time we actually do this together, and we can thank you 
in person.
    I want to start my first question, if I could, with respect 
to electricity grid resilience, with you, Mr. Yonker. Do you 
feel up to it? All right. Good.
    As we all know, climate change is affecting just about 
every aspect of the electric grid in all parts of our country, 
from generation, including transmission, distribution, to also 
include demand for electricity. The electricity sector 
currently accounts, I am told, for about 27 percent of total 
U.S. greenhouse gas emissions, about another 25 percent is from 
power plants and another 23 percent coming from industrial 
operations. Think of cement plants, for example.
    As we saw with the Texas power grid failure, people too 
often try to blame renewables for not performing during an 
extreme weather event. But the real truth is that all energy 
sources, and that includes natural gas, includes coal, and 
wind, are vulnerable if not properly weatherized or made 
resilient for catastrophic climate events.
    My question, Mr. Yonker, would be this. Do you agree that 
wind turbines and other sources of renewable energy can 
generate the power in cold weather without problems if proper 
resiliency measures are taken, and clean energy does not 
necessarily mean unreliable energy? Do you want to take a shot 
at that?
    Mr. Yonker. I agree that clean energy does not necessarily 
mean unreliable energy. I think, like I said in my advance 
forecasting remarks, computational power is letting us have a 
new wave of capabilities to forecast and almost dispatch these 
variable resources. When you pair them with additional assets, 
like a battery that gives you multiple hours of flexibility, it 
becomes, in many ways, with expectations for, short-term 
forecasts, a much higher-capacity resource. But I agree with 
that.
    Senator Carper. All right. Good. Just a follow-up question. 
Do you agree that if resiliency measures that adequately 
account for the impact to climate change are not taken, every 
source of energy can be vulnerable to extreme weather events, 
like the crisis we saw and we have just been talking about here 
in Texas earlier this year?
    Mr. Yonker. Texas was not the failure of a single 
generation supply. It was a failure of advanced planning for an 
extreme event, and so it had cascading failures. So yes, I 
agree.
    Senator Carper. All right. Thank you. One more question for 
you and then I will pick on the other members of our panel. 
With respect to modernizing the electric grid, critical energy 
infrastructure includes both physical and cyber infrastructure. 
It includes pipelines. It includes energy generationsites as 
well as technology systems and software that help keep our 
energy systems up and running.
    The Infrastructure Investment and Jobs Act, which the 
Senate passed by 69-30 bipartisan vote on August 10th--a happy 
day in my life, and I think in most of our lives--but anyway, 
that bipartisan vote on August 10th includes funding to help 
improve the resiliency of our nation's critical infrastructure. 
Specifically, I think in the legislation there is more than $47 
billion in new funding for critical infrastructure resiliency 
programs, including cybersecurity efforts, including 
weatherization, wildfires, flood mitigation, and additional 
funding also for grid modernization, all in that bill which a 
couple of my colleagues, especially Senator Sinema, had a lot 
to do with the crafting.
    The question I have, in addition to making electric grid 
investments, which we know have been inadequately funded, what 
can we do, as lawmakers, to further support advanced grid 
modernization activity?
    Mr. Yonker. I know you want me to be quick so I will not 
recap with everything that you mentioned that is in the 
package. Hopefully we can talk more about it. We are very 
supportive of it.
    I am going to mention the title, of eight things we think 
there could be additional support for that we know is not quite 
as supported in the bipartisan packages we saw.
    Grid modernization and flexibility. It is in there some. It 
is a huge issue. There needs to be more of it.
    Let's appropriate the Energy Act of 2020. The RD&D in that 
is critical, and only very small bits and pieces of it have 
been fully appropriated.
    As you mentioned, cyber. Cyber was only $600 million. That 
is not enough for what we need to do to keep the frontier of 
our cyber capabilities leading class.
    Demand side management, as we talked about with Chair 
Sinema, was not funded. That is a key building block. We need 
to get some support behind that.
    Wildfire mitigation and grid resiliency we are somewhat 
focused on. Let's do more.
    Workforce development, we did not see for advanced grid 
capabilities. Let's get more innovations, long duration 
storage, microgrids, DER optimization, and then last, energy 
transition for local support.
    Senator Carper. Thank you. Thank you for all of those. That 
was great. You covered a lot in a very short period of time. 
You could do this for a living.
    My next question is for Mr. Herrgott?
    Mr. Herrgott. Yes, Senator.
    Senator Carper. OK. Thank you. Has your name ever been 
mispronounced?
    Mr. Herrgott. The last hearing I was in front of you I 
think I pronounced it incorrectly in front of you.
    Senator Carper. I recall that. Good to see you again. In 
your testimony you mentioned the challenge of staffing and 
funding shortfalls at permitting agencies which contributes to 
project delay. The last time that the Council on Environmental 
Quality (CEQ) assessed agency capacity for environmental 
reviews it found that more resources were needed at these 
agencies in order to improve review times.
    My question would be, would you agree that it makes sense 
to increase agency capacity to improve efficiency and address 
this longstanding problem? That would be the first half of my 
question. The second half, would you support greater Federal 
funding to permitting agencies, for example, like the Bureau of 
Land Management, in order to complete environmental reviews and 
public participation? So it is a two-part question, if you 
would.
    Mr. Herrgott. Sure. Thank you. I think the first 
unfortunate reality is the younger generation is graduating 
from college with biology and engineering degrees and are 
rushed to go work for the BLM, the Forest Service, or become a 
biologist at the U.S. Fish and Wildlife Service (FWS), which is 
why we have 100 vacancies currently at BLM for project 
managers. So you have one regulator that has a $2 billion 
project and must review a 1,000-page application, and that 
slows down the process.
    So yes, funding is an issue but it is also the reality that 
we have to right-size the way in which we move applications 
through the Federal Government, because it is a black box and 
sometimes we forget there is a 29-year-old biologist that must 
review a $4 billion transmission line, and then we complain 
when there are delays. So that is the important part.
    I also think we have to be very careful about deemed 
approved and hard deadlines on private approvals, because what 
is occurring is frontloading the process, and it is OK informal 
process on the front end which puts a lot of stress on 
individuals at the Forest Service, the Department of Interior 
to deem an application, but before the clock starts FPISC and 
one Federal decision and all these accountability tools get to 
work and there is no real guidance or education or training, 
both on the project developer side and the disconnect between 
the regulators when they do not talk. The fact the projects 
actually work is an exception, not the rule.
    So short answer, yes.
    Senator Carper. All right. I like that short answer. Thank 
you very much. Good to see you again. Thanks for your help. 
Madam Chair, thanks so much.
    Senator Sinema. Thanks so much, Senator Carper. I believe 
Senator Portman is still voting so we will move to Senator 
Padilla next. Senator Padilla, you are recognized for 7 
minutes.

              OPENING STATEMENT OF SENATOR PADILLA

    Senator Padilla. Thank you, Madam Chair. A couple of 
questions that are in some ways follow-ups to items that have 
been raised earlier. But to set the stage, last year the 
Department of Energy found weather-related power outages have 
increased by 67 percent since the year 2000. Across the 
country, extreme weather events are increasing in both severity 
and frequency--I think we all recognize that--and that has 
significantly strained electrical grids, whether it is extreme 
heat, extreme cold, and everything in between. Now these events 
erode public confidence in the grid and leave vulnerable 
populations in the dark for days, literally.
    Like many States, California continues to see an increasing 
in extreme weather events that have prompted outages and power 
shutoffs. That is why I was proud to partner with Senator 
Cornyn to introduce our Power On Act in the Infrastructure 
Investment and Jobs Act that passed the Senate in August. While 
this bill is just a start, it provides critical funding for 
utilities and States to upgrade and modernize their grid 
infrastructure to better withstand extreme weather and increase 
the overall reliability of the grid.
    Mr. Yonker, as you noted, the Infrastructure Investment and 
Jobs Act is going to be important for the resources it provides 
for grid stability and resiliency. Can you just expand on that 
by sharing maybe what some of the risks are and potential 
future impacts if we do not begin to evaluate the strength and 
reliability of our grid through the lens of resiliency, not 
just reliability but resiliency?
    Mr. Yonker. Yes. I think the start of the package section, 
40101, for those who know the details, to get into resiliency, 
those billions of dollars could not be more needed from utility 
States and other locations, especially some of the funding that 
is focused for smaller communities and more rural communities.
    To answer your question on what will happen if we do not 
fund this adequately, we can expect higher outages. There was a 
Washington Post article that described doubled outage time in 
the last 5 years. This could continue if we do not invest in 
our grid and have it be resilient.
    Certainly lost productivity. The Chair mentioned the nearly 
$9,000-a-minute impact for data centers. I saw in that article 
that it also cost large manufacturers $1 million an hour and 
large retailers $5 million a day. As we have been talking 
about, the loss of life. This last 9 months has been hugely 
impactful. Hundreds, if not thousands of people have been 
directly impacted from the severe weather events.
    So heat impacts, fire impacts, wind, water, ice, these are 
things that are going to be stressing our grid. We need to be 
proactive in investing in them.
    Senator Padilla. One more minute on the cybersecurity 
concerns that you raised earlier, is part of the same package?
    Mr. Yonker. Absolutely, so the subtitle on cybersecurity is 
fantastic. From what we have seen, we have not noticed cyber 
funded for about a decade, from package energy legislation. Is 
$600 million enough? I would argue no.
    Cyber considerations have to be in anything. We saw a study 
from Siemens a year and a half ago that said 56 percent of 
energy operators have experienced a data breach. I am just 
going to quote really quickly from the Government 
Accountability Office (GAO) Electric Grid Cybersecurity Report. 
I quote, they recommend that DOE develop a plan that addresses 
the key characteristics of a national grid strategy, including 
a full assessment of cybersecurity risks. DOE agreed to that 
and they are working on it. It has to be central to the 
investments that we make on our system.
    Senator Padilla. I could not agree more. Thank you for your 
testimony.
    One more question, this one for Mr. Herrgott. As noted by 
you and others, many of the renewable energy projects needed to 
meet our greenhouse gas emission targets remain in various 
stages of planning and development. So as we work to combat the 
climate crisis and transition to a green economy we must also 
work together to ensure that the permitting processing for 
clean, renewable energy projects is streamlined while also 
maintaining important environmental protections.
    Can you discuss the importance of making the Federal 
Permitting Improvements Steering Council permanent, and how the 
council could help meet the streamlining of permitting and 
climate goals?
    Mr. Herrgott. Sure. Thank you for the question. I think, at 
the outset, it is important to point out that more than 99 
percent of all new wind, solar, energy storage, and carbon 
capture are entirely supported by the private sector, unlike 
roads and bridges. They are not going to move forward and 
invest capital that will start a 2- to 3-year planning and pre-
engineering phase before they get to the 2- to 6-year for 
transmission lines environmental phase, and then the 2 years, 
especially with cash-strapped supply chains, 2 years to acquire 
all the materials, then 2 years to build, which is how they get 
to 10 years. Look, they have the long-term reliability because 
we have already had two or three transmission lines in the last 
year where utilities and companies just walked away.
    The Federal Permitting Council, making that permanent, 
gives the long-term certainty to U.S. companies, foreign as 
well, to invest in these multi-billion-dollar projects. 
Although we are looking at microgrid and new technologies, that 
is to retrofit an energy grid that is about 80 percent less 
than what it should be now.
    We should be pulling in new technologies by incentivizing, 
with predictability, through a process where we can start to 
dial down on the time it takes to advance renewable energy, 
because they are missing out on franchise agreements and the 
ability to actually provide a reliable source of new energy to 
offtakers in towns and cities across the country.
    Senator Padilla. Thank you very much. Thank you, Madam 
Chair.
    Senator Sinema. Thank you, Senator Padilla. I think Senator 
Portman may not be back yet from voting, so Senator Lankford, I 
will turn it to you to start your first round of questioning.
    Senator Lankford. Great. Thank you, Chair. Let me go 
through quite a few questions, because I am going to kind of 
drill down on several issues that are here. Mr. Nickell, I want 
to begin with you. Obviously, the issue of diversity of fuel 
sources has come up several times, trying to figure out how do 
we make sure that we have a diversity of fuel sources, so if we 
have problem with one we have availability in others.
    We have had a lot of conversation around wind and solar. 
Obviously making those more resilient has been an issue. We can 
make those more resilient but they are always going to be 
intermittent. There will be long periods of time, especially in 
the central part of the United States, where we will have days 
without a lot of sun and we will have days that we will have 
less wind, as they are experiencing right now across Europe and 
UK, causing some of those issues.
    So let's talk a little bit about diversity of fuel sources. 
What do we need--how do we know when we have overproduced or we 
are over-reliant on some sources that are more intermittent?
    Mr. Nickell. Thank you, Ranking Member Lankford, for that 
question. It is an important question, and I think the 
observation is very real and accurate. Diversity of resources 
is very helpful. None of us would invest in a single stock and 
plan on that stock to be our retirement plan. I think the same 
thing can be said of generating resources. The more diversity 
we have, the more we can count on being able to deal with any 
number of different events.
    This winter we were able to count on all of our diverse 
resources--gas, coal, wind, hydro, nuclear. It all produced. To 
some extent, a lot of it produced at a much lower degree than 
what we had hoped and expected, based on our studies. That is 
the real issue.
    The real issue is not whether we need less diversity or 
more diversity. What we need is to be able to better understand 
how that diverse portfolio of resources is expected to operate 
during these varying conditions, whether it be wintertime 
conditions, summertime conditions, fall, or spring. That is our 
job, and that is what we need to do a better job of going 
forward, is better understanding what to expect from that 
diverse portfolio of resources.
    Senator Lankford. I want to drill down on a couple of 
things on that. One is you had mentioned before 
interconnectivity, obviously, with other regional transmission 
groups. So you stated for Southwest Power Pool there was enough 
interconnectivity there. I have two sets of questions. Is that 
true for the other Regional Transmission Organizations (RTOs), 
they have enough interconnectivity? We obviously had 4 hours, 
as you mentioned, that was down time, so it was clear we were 
not able to take in enough during those times periods, or the 
other RTOs were not able to be notified fast enough to be able 
to get it over. Obviously, Texas has a different issue there 
with it.
    So the two sides of this. One is where does that strengthen 
us to have more connections, and do we have enough connections, 
and the second part is what does that make us more vulnerable, 
to have more connections with other RTOs?
    Mr. Nickell. As I stated in my testimony, we were very 
blessed and we realized a lot of value by the virtue of having 
the interconnected capability we did with our neighbors.
    Now SPP is a region that operates in what is referred to as 
the eastern interconnection. Another interconnection is the 
western interconnection. That is where Madam Chair receives her 
energy from, the utilities that operate in the western 
interconnection. Then you have the majority of Texas that 
operates in an interconnection known as ERCOT. By virtue of 
being in the eastern interconnection, and by virtue of having 
tremendous interconnection capability with our neighbors, we 
were able to have access to hundreds of thousands of megawatts 
of generation, to the extent it was available and to the extent 
the transmission system was able to deliver it.
    Because you have interconnection capability does not mean 
you have transfer capacity, and that is what really helped, is 
that we had enough transfer capacity to be able to import, at 
times, 6,000 megawatts. If that had been continuous throughout 
the entire 7-day week, we would not have had to shed load. 
Unfortunately, there were a few times where the transmission 
system, on an intervening system, was just simply not able to 
deliver that power to us, at the 6,000-megawatt area or level 
that we had been able to rely upon for most of the event.
    So without that capacity we would have seen a lot worse of 
a situation. We would have had to shed a lot more load. It 
could have looked more like what ERCOT experienced if we had 
not had the benefit of interconnection capacity.
    Now, could we use more of it? Absolutely. But that has to 
be determined and assessed on a cost-benefit basis. One of the 
things that we have to do a better job of, when we value the 
investment decisions that are being made and we are determining 
the benefits of those, we have to do a better job of 
understanding the value of resiliency and the increased 
resiliency that is available and afforded to us by transmission 
expansion.
    Senator Lankford. I know this is going to be evaluated 
based on costs, and in my second round of questions I am going 
to have lots of questions for some of the other folks that are 
here on the panel, so I appreciate your insight as well.
    Mr. Nickell, I want to drill down on one other thing. There 
has been a lot of conversation about the natural gas side of 
things. When I talk to the natural gas folks they will say they 
were electricity power-dependent, that once they lost power, 
and they have rolled off, for whatever reason for them, the 
well heads froze, they were not able to produce, then they were 
not able to send natural gas to do more electricity generation, 
which made the problem even worse and it became this event. 
When they lost power, then they lost capacity, and it became a 
bigger issue.
    One of the issues there is identifying those locations 
where, if you have to be able to pull some spots offline--
hospitals, for instance, nursing homes--also that your well 
heads and your places that are actually sending natural gas to 
your generation would also be on that list. Is that in 
conversation right now? Where does that stand?
    Mr. Nickell. Senator, it is in conversation right now, and 
we are really embarking on that learning exercise right now. 
One of the things that I think has to happen, we have to do a 
better job of, and that is we have to communicate more. The gas 
industry, the electric industry has to get together at the 
table and talk, and we have not done a good job of that in the 
past. That is why you are hearing, and other people have heard, 
similar comments and similar explanations for why gas did not 
perform.
    I know, anecdotally, based on some of the things I have 
heard, that there is some evidence that that occurred. It is 
certainly not the whole story, and it is certainly not the 
primary cause of the gas failure in SPP.
    Nevertheless, the more we can talk, the more we can 
communicate about how to work together more effectively, the 
better chance we have of resolving the issue, the right issue, 
and answering the right question with the right solutions.
    Senator Lankford. What would you say is the primary cause 
on the gas failure there for SPP?
    Mr. Nickell. In SPP, what we know is that there was a lack 
of fuel supply, and we believe, based on information that our 
market monitor has produced, is that it was a combination of 
two things: gas just simply was not available and/or gas prices 
were too high. Those were the two leading drivers of the gas 
unavailability.
    Again, having said that, I also know that there are 
situations, and were situations, where gas was not available 
because its electric service was shut off. I mean, we do know 
that that happened. We just do not think that that was the 
largest contributor to their lack of availability.
    Senator Lankford. Chair Sinema, could I just ask one more 
question here, just to close the loop on this?
    Senator Sinema. Sure. Of course.
    Senator Lankford. The issue on the gas side is a really 
important issue in trying to be able to determine dependency on 
where this goes. Right now I do not know what the standards are 
for any of those that are producing electricity, on what amount 
of gas that they are going to do by contract in advance, what 
they are going to purchase on spot price, and what they are 
going to do in storage that they have for quick capability on 
that.
    What is the typical formula? Now I know in SPP it is going 
to be different State to State on how that is handled, but the 
issue of how much gas is available on contract, what the price 
is going to be on the spot--obviously that floats from day to 
day--and what they have actually got onsite will matter in how 
much they are able to use in those peak moments. What is the 
basic formula for those three?
    Mr. Nickell. I wish I could give you a better answer than 
what I am about to give you, so let me just apologize in 
advance. SPP does not have any rules or criteria around how 
much of that gas should be purchased on a firm basis or on a 
non-firm basis, as you refer to, on the spot. What we do expect 
is that if a gas-fired generator is going to be counted as a 
credited capacity that it does need to have firm fuel supply 
during the period of time that it wishes to be accredited.
    It is kind of, if you want to be considered valuable you 
must do this. But it is really a choice that the generating 
utilities make regarding how they pursue that question.
    Senator Lankford. The challenge becomes then, if you get 
into a crisis moment where everyone is trying to get more 
natural gas, the spot price dramatically increases, and we will 
come back and talk about that later. That becomes a pretty big 
issue if you do not have enough storage that is available to 
you and you are fighting with everyone else to be able to get 
access to other things. You do have a critical gap that is 
there, on very cold or very hot days. What is your reliable 
power? That is not intermittent at that point. If your 
intermittent goes down your reliable power is now not reliable, 
just based on access to the source. Am I tracking that 
correctly?
    Mr. Nickell. Yes, absolutely, and you become much more 
exposed to really high gas prices, which is exactly what we saw 
in February and what drove a lot of our energy prices in our 
market to record high levels.
    Senator Lankford. This seems like a solvable issue in 
trying to be able to establish how much we are going to have to 
do on contract, to have a firm commitment there to be able to 
come in, because natural gas is not something you can just turn 
on more of at an instant and try to figure out how to be able 
to get more out. Then if you have the snowball effect with 
everyone else going after it, especially when Texas was hit 
desperately at that point and so many people that were selling 
were selling south at that point, it becomes a much bigger 
issue.
    Chair Sinema, thank you very much for the extra time there.
    Senator Sinema. Absolutely. Thank you, Senator Lankford. I 
recognize Senator Portman for his 7 minutes of questions.
    Senator Portman. Great. Thank you, Madam Chair, and thank 
you guys for great testimony today. In my opening statement I 
talked about the Permitting Council, and I want to get back to 
that in a minute. But first I was interested in some of the 
things you said. Mr. Yonker, you talked a little bit about 
flexibility and adaptability of both the supply and demand as 
being important to a resilient 21st Century grid.
    As you know, perhaps, the bipartisan infrastructure bill 
does include a number of provisions for energy efficiency, 
including some provisions from the work I have done with 
Senator Shaheen over the years on helping on efficiency, also 
weatherization for low-income Americans. What role does energy 
efficiency play in tempering the demand side of this, in terms 
of being sure we have a reliable grid and helping to supports 
its overall operation and reliability?
    Mr. Yonker. We do not weigh a whole lot into generation mix 
topics, but this is an exception to that rule. Absolutely, 
cost-effective, energy-efficiency resources, deployed first 
they lower the bar. If we have a peak need or we have a grid 
disturbance it just makes it easier to deal with that. So 
efficiency being deployed at scale is a great place to start, 
is the place to start.
    There is some really interesting overlap between automated 
energy efficiency and demand-side management and DER 
integration that is really blurring those lines in smart 
buildings and other areas that, as you said, is importantly 
supported in the package.
    Senator Portman. Great. I appreciate that and I do think it 
is an important part of the answer, and it is bipartisan, and 
it is something that is so great for the economy. It makes us 
more competitive globally to have more efficiency, because 
there are lower costs and manufacturing is an example. I 
appreciate your focus on that.
    Mr. Bryce, in your testimony you state that policies to ban 
the use of natural gas and to, as you say, electrify everything 
are dangerous to the reliability of our electrical grid. You 
talk about concerns about not having enough energy resources 
and diverse energy resources.
    This is exactly what is going on in Ohio. In Ohio, we have 
a very diverse portfolio but coal and natural gas still provide 
more than 80 percent of our State's electricity, and 
increasingly it is natural gas, about 40 percent coal, it is 
about 45 percent now and nuclear is about 13 percent and 
renewables are about 2.5 percent.
    Can you, Mr. Bryce, talk a little about the benefits of a 
diverse energy portfolio and how energy innovation in 
renewables, in storage technology, in advanced nuclear and 
hydrogen, and carbon capture, and storage technologies, how 
those can really help to provide for a more stable grid and 
more energy affordability?
    Mr. Bryce. That is a laundry list there, Senator, but I 
will take a couple of cracks at it. First, to the issue of 
natural gas and this push for electrify everything, I do indeed 
think it is not just a bad policy, it is a dangerous one, and I 
speak from personal experience. During the February blackout in 
Austin, my wife and I bought our house 21 years ago, one of the 
first things we did was plumb in natural gas. We were 45 hours 
without electricity but we still had gas, so we could cook. We 
had hot water. We could keep at least the kitchen warm by 
turning on the burners.
    The idea that we would just rely solely on the electric 
grid for all of our energy needs, including hot water for 
cooking, et cetera, for heating, is just a bad idea, and 
unfortunately we see, in California, now more than 50 
communities have banned the use of natural gas in new 
residential construction and commercial.
    It is also a regressive policy, Senator, that the price of 
electricity on a per-unit-of-energy basis is four times that of 
natural gas. This was according to a notice in the Federal 
Register published by the Department of Energy earlier this 
year.
    As far as the other issues that you mentioned, let me just 
touch on the nuclear because you brought up a lot of issues 
there. I am adamantly pro-nuclear, sir. If we are serious, and 
if the Senate, if Congress, if we are going to be serious about 
decarbonization in the United States we have to get deadly 
serious about nuclear energy. This is the fifth time I have 
testified before Congress and I have been consistent over the 
last 10 years in my testimony before Congress. If Congress is 
going to be serious about decarbonization we need bipartisan, 
long-term support for the development and deployment of new 
nuclear reactors, and we need to preserve and extend the lives 
of the existing reactors in our fleet.
    Senator Portman. I could not agree more, and this new 
technology is safer, fewer issues with regard to the disposal 
challenge. And, the rest of the world is going to surpass us 
unless we catch up on that technology.
    Mr. Bryce. If I could build on that, sir, it is clear that 
the Russians and the Chinese are the ones that are now leading 
internationally on the development and deployment of new 
nuclear. The French president, Macron, just, in the last few 
days, in response to the gas crisis in Europe, said the French 
are now going to be deploying small modular reactors. The U.S. 
needs to get off the dime and move, and move quickly.
    Senator Portman. Yes, and we also have an enrichment 
challenge here in this country. We have only one place that is 
an American enrichment source, and it is not commercialized 
yet. It happens to be in Ohio. And so that is the Portsmouth 
Gaseous Diffusion plant, which is now changing into a 
centrifuge plant. But we need to get the commercial level of 
enriched uranium up so that we can have an adequate industry 
here in the United States.
    How about hydrogen--and if anybody else on the panel wants 
to talk about hydrogen--derived from various sources, 
including, of course, fossil fuels and natural gas, as one 
example. We have a plant in Ohio that is doing that on a 
commercial scale. What is the potential there?
    Mr. Bryce. I will just jump in really quickly, sir. I am 
skeptical about hydrogen just for several reasons. One is the 
amount of energy needed to produce the hydrogen molecule. I 
have done the math many times. It is roughly one and a half 
units of energy and for one unit of hydrogen out. Then you have 
a molecule that is very difficult to handle, very difficult to 
store. We do not have a lot of fuel cells sitting around in 
which we can use hydrogen.
    I understand the discussions but I have been hearing the 
same discussions about hydrogen now for 20 years. I am happy to 
admit that I may be wrong, but we have heard this for a long 
time.
    Senator Portman. Anybody else on the panel want to talk 
about fuel cell technology and where you see it going, hydrogen 
fuel cells?
    Mr. Herrgott. Senator, I would just like to point out that 
the market is dictating the profitability and the ability to 
determine an return on investment (ROI) on new energy sectors. 
That is why you are seeing all of the old legacy utilities that 
previously, where it be a Duke Energy or Dominion, rebalance 
assets to try and figure out how they can operationalize new 
sources of electricity to derive a rate payer, whether that be 
coal, natural gas, hydrogen, you name it.
    In many cases the Federal Government does not have a role, 
except to get out of the way and try and fix this so that the 
20 to 30 percent on that project development cost, which we 
have $800 billion sitting right on the sidelines, we can 
actually address the capacity issues rather than looking at 
efficiencies and microgrids as our only solution, which is 
triaged to address the fact that we need to double our actual 
gigawatt output, regardless of where it comes from, 20 percent 
a year for every year for the next 20 years, to meet overall 
energy demand.
    I do not think we are in a position to dictate to the 
private sector that funds most of this what energy source they 
should choose and derive an ROI on.
    Senator Portman. Alex, let's talk about the project 
development cost issue a little bit. We talked earlier, during 
my opening, about the removal of the sunset on the FAST-41 
provision, which enables us to have some more certainty and 
predictability going forward with regard to the council on 
ensuring that we are saving money on everything single project 
that is covered, including a lot of energy projects.
    As the former director of the Federal Permitting 
Improvement Council--and, by the way, I appreciate you inviting 
me down to participate in some of those council meetings and 
listen to what goes on and meet with the agency leadership that 
is involved, from dozens of different parts of our government, 
it has been really interesting--but what can be done to improve 
the Permitting Council? How can it be even more effective?
    Mr. Herrgott. That is a good question. The Permitting 
Council is not a magic bullet. It cannot compel agencies to 
meet milestones and meet deadlines in a way in which it 
supersedes the 30-odd, 60 permitting laws that have been passed 
over the last 100 years, whether it be the Endangered Species 
Act (ESA) passed in the 1970s, the Rivers and Harbors Act from 
1910. Let's use a tool to coordinate Federal agencies and 
ensure accountability.
    But at the end of the day, the agencies are self-recording, 
self-selecting their permitting schedules, and what I worry 
about is there is a tremendous amount of front-loading 
happening before FPISC ever gets to provide those 
accountability protocols, which can now be as much as 2 to 4 
years before an application is deemed complete, and never makes 
it on to anyone's sheets. When we are talking about NEPA or 
NEPA reviews or what the CEQ is doing, it is about the 60 other 
permits that happen before and then the land use permits that 
happen after that delay construction.
    There has only been 10 projects out of the 50 this year, 
and I worry sometimes that the illusion of progress is no 
progress at all, and I get worried that it will lessen the 
urgency for us to actually do the hard work because there will 
be a mission accomplished that if we extend FPISC in perpetuity 
that we have solved all the world's problems, when, in fact, it 
is a small piece of the puzzle but an extremely necessary one 
to exhibit the best practices all agencies should incubate.
    Senator Portman. I appreciate your passion for this and 
your consistent advocacy up here on the Hill, and then at the 
council, and now in your private sector role. Yes, you talk 
about, in your testimony, these formal or informal policies to 
front-load biological, cultural, historical surveys. How do we 
bring more accountability to that process?
    Mr. Herrgott. I think most of all it is the idea that many 
of the Federal regulators do not actually talk to each other. I 
mentioned one of the projects where, in the Department of 
Interior, three different agencies within do not talk to each 
other, nor do they actually understand each other's 
requirements. There is this rush to meet a schedule without 
actually understanding that the folks putting these projects 
forward are not to be treated as adversaries but rather 
customers. They are the same Americans that are building the 
broadband, the transmission, the natural gas.
    But somewhere along the line the process has gotten so 
complicated that even I do not understand the documents when 
they are 10,000 pages long and have another 10,000 pages of 
appendices. Attorneys should not be talking to attorneys. 
Scientists should be talking to scientists. That is why my 
nonprofit, the nonpartisan group is working with Christine 
Harada, who is the current Executive Director of the Federal 
Permitting Council. She is doing an amazing job but she is only 
one person. She cannot make the agencies care about 
accountability and efficiencies and meeting milestones. She is 
only one person.
    You have to have an activated Executive Branch and an 
administration that is putting deputy secretaries as council 
members, in a place to adjudicate the speeds and clear out the 
communication breakdowns that happen amongst agencies. 
Unfortunately, I am not sure that is occurring.
    Senator Portman. Do you think we have the right people 
currently sitting on the council? The statute requires members 
to be deputy secretary or higher, but it appears to me that a 
number of the members currently are not at that level. Does 
that raise some practical problems in the Biden administration?
    Mr. Herrgott. I think the way in which President Obama and 
yourself and others, when they were enacting the council, and 
then it was, over the last 4 years, as a truly nonpartisan 
entity, this is not something that you inject politics into the 
process. All it requires is that somebody at the top end of the 
agency, able to adjudicate the speeds, and clear out the 
disagreeing voices on a risk-based decision on whether a 
project is a green light or a red light or what mitigation 
needs to occur. If you do not have that deputy secretary in 
that role then it hampers the council and in many cases it 
makes it ineffective.
    Senator Portman. Yes. So you think a more senior membership 
would be helpful, moving forward?
    Mr. Herrgott. Senator, the statute says deputy secretaries 
for a reason.
    Senator Portman. Great. Well listen, again, I appreciate 
your work in this over the years, and Alex, let's keep in 
touch, and thanks for coming before the Subcommittee today to 
give us your expertise, and all the witnesses, we thank you on 
your help on the infrastructure challenges we face.
    Thank you, Madam Chair.
    Senator Sinema. Thank you, Senator Portman. I am going to a 
second round of questions, first recognizing myself and then 
Senator Lankford for additional questions.
    Mr. Herrgott, in your time as the Executive Director of the 
Federal Permitting Improvement Council, you were able to help 
over 50 projects reduce their permitting timelines while 
maintaining the same standards for approval.
    With the historic investment in our country's 
infrastructure in the bipartisan infrastructure package, how 
can the Federal Government leverage the Permitting Council and 
its coordination ability to ensure the timely use of these 
funds?
    Mr. Herrgott. That is a great question and that is the crux 
of the reason why we created The Permitting Institute, which 
complements what Executive Director Harada and the 
administration are doing at the Federal Permitting Council. 
However, the reason why only 10 projects have joined FPISC this 
year is many of the offshore wind projects, $70 billion worth, 
13 projects in total, that have the ability to generate a 150-
baseload electricity within 6 to 7 years from now, with the 
appropriate energy storage capacities, they are still awaiting, 
in this construction operational management, pre-planning 
before they even get to NEPA 3 years from now.
    And so casting transparency on the entire project 
development lifecycle, without a lot of hyperbole from our 
flanks, make it difficult to pick up the veil and actually look 
at why projects are not being constructed is why FPISC 
permanence is important, because they plan integral role in 
bringing best practices and transparency to the systemic issues 
that continue to be ignored and that continue to push new 
investment on energy further into the future.
    It is extremely important that we support them, that the 
administration supports them. We have also got to take a hard 
look at the 60 other laws that are underlined within agencies 
or else FPISC is a fig leaf, and a fig leaf of a solution is no 
solution at all.
    Senator Sinema. Thank you. Turning back to Mr. Esquerra, 
throughout your career of promoting economic and community 
development for Arizona's Tribes you have noted the high number 
of Federal requirements that are necessary to accomplish any 
economic development project. By granting Tribes, Alaska Native 
corporations, and Native Hawaiian organizations expanded access 
to the coordinating benefits overseen by the Permitting 
Council, how can Arizona Tribes best access economic 
development opportunities that take advantage of this 
provision?
    Mr. Esquerra. Thank you for that question. As I previously 
said, I just think, opening up the funds to make it a level 
playing field with the States. I think the other thing that 
people need to realize is the Tribes, their basic 
infrastructure, even when it comes to energy, we are far behind 
on what is currently out there. There has been a discussion of 
what happened in Texas. The Hualapai Tribe, when they have 
electricity go out it is not for 2 or 3 hours. It is for 2 or 3 
days at a time--that is the average norm--because they only 
have one electrical line going in. They are in the process of 
putting in a loop system, but they have been struggling, going 
through the process. I think now they are in month 32 or 33, 
trying to get a loop system in place just so they can offset 
some of the issues that happen when power goes out in that 
community. That is nothing new with most of the Tribal 
communities in Arizona.
    I think the biggest thing, like I said earlier, is building 
the capacity of the Tribes themselves but also those Federal 
agencies when they engage with the Tribes. It is so important 
to have that relationship. I talked about how you can develop 
that relationship, but it takes time and some patience. But 
truly, if you really want to work with Tribes, engage with 
Tribes, it is that understanding of what makes them unique in 
their culture. Thank you.
    Senator Sinema. Thank you. Moving now to Mr. Yonker, 
innovation is a critical component of strategic planning and 
preventing grid outages. Two of our Arizona utilities are 
undertaking this type of work. Salt River Project has started 
work to develop an integrated system plan which will allow it 
to integrate new, renewable, and distributed resources and more 
effectively respond to changes in low growth with the growth of 
electric vehicles and electrification.
    Tucson Electric Power has partnered with military 
facilities, the Davis-Monthan Air Force Base and the Fort 
Huachuca Army Base to reduce single grid points of failure and 
ensure critical load continuity with enhanced grid 
infrastructure.
    What steps can we take to encourage these types of 
activities in other regions?
    Mr. Yonker. Great question. Historically, electric grid 
operators have not been incentivized to innovate or try 
something that maybe does not work. The rate of R&D investments 
by utilities versus basically all other industries is 
negligible.
    I would say that a culture of accelerating innovation must 
become a core competency of electric grid operators as they 
move into the 21st Century. They should not fear things like 
virtual power plants. They should be experimenting with real-
time monitoring and machine learning applications to pinpoint 
issues.
    A couple of examples, specifically. One is local but 
Federal support and signals could help. The idea of a 
regulatory sandbox is a great way to put guardrails and 
restrictions, to some extent, as State regulators work in 
partnership with the utilities that they are regulating. I 
would even be more supportive of more aggressive ideas, where 
utilities have upside potential if things go well while they 
are innovating, and maybe they even share those with some other 
stakeholders, those benefits, federally, competitive grants, 
like those in the bipartisan package, are at the core of making 
these solutions available, where new innovations can be 
experimented, and the risk or the opportunity to try something 
new can be shared amongst other capabilities. Then DOE and the 
agencies and the partnerships that they have to commercialize 
is just central.
    Senator Sinema. Thank you. Mr. Herrgott, improving 
redundancy is an important part of creating an electrical grid 
capability of satisfying demand, especially as we continue to 
develop an all-of-the-above energy strategy. How do we best 
harness our improvements to the permitting process to create a 
grid better able to function during extreme weather events and 
surging demand?
    Mr. Herrgott. Thank you. It is important to note that more 
than 90 percent of all transmission lines across the country 
are close to 70 years old. When we talk about the capacity 
needs they far outweigh the efficiency needs. The efficiency 
needs are the triage because we have not had the investments in 
the actual transmission because there has not been the kind of 
offtakers.
    But also are in a new situation now where the wind, solar, 
and even the dual fire power plants that might be natural gas 
and coal, are located in areas that were economically feasible 
but now require a 300-mile connection to bring them to the 
place where the energy is actually needed. There is a 
fundamental disconnect between Federal regulators that have 
never actually built a project before and are unaware, in many 
cases, of the financial development and legal risks that these 
companies are jumping off the cliff to provide for this 
country.
    The reality here is the very Princeton study that Secretary 
Granholm brings up with the 22 transmission projects that are 
shovel-ready. Twelve of those are actually not shovel-ready--
they are in a standstill with no resolution in sight--but we 
keep talking about them being shovel-ready.
    It is very difficult to talk about redundancy and 
resiliency when we have close to $120 billion right now of 
projects that are both inactive, permitting, they are at a 
standstill, and are looking at potentially abandoning the 
project, a big one in Arizona, in particular, and that is just 
something that we need to shine a light on, because those folks 
are going away. There has to be an incentive for people to put 
capital risk to build energy assets. The government is not 
going to do it for them.
    The confluence of the Federal Permitting Council, your work 
in the bipartisan package on the grants, and then also actually 
give them the real help that they need, by fixing the 
underlying complicated nature of all the 60 statutes that are 
inside and outside of NEPA, are essential. Otherwise, what are 
we doing here?
    Senator Sinema. Thank you. My last question is for Mr. 
Nickell. Extreme weather, including heatwaves and record low 
temperatures, have strained regional electric grids across the 
country, and at the same time the Federal Government is 
weighing investments in electric vehicles and conversions to 
electric heating. Now these investments would increase the 
nation's electricity use at the same time that siting new 
transmission lines has proven challenging.
    With the need to increase grid capacity and reliability and 
efficiently connect energy production with use, how can we 
upgrade and expand both our transmission and distribution grids 
across the country?
    Mr. Nickell. Madam Chair, what I would begin with is we 
have to make sure that we have willing investors. We have to 
make sure that we have an independent body or bodies that 
oversee the development, the approval, the regulatory approvals 
of the most effective and optimal projects.
    In SPP, we are rich in a lot of resources. We have 94,000 
megawatts of nameplate capacity to serve 51,000 megawatts of 
peak demand. What we have to do a better job of is making sure 
that that capacity is deliverable and that it energizes and 
provides energy when it is needed the most, and then we have to 
have effective and optimal transmission assets that are needed 
to deliver that.
    A regional transmission organization--granted, I am partial 
to that; I am a big fan of regional transmission 
organizations--those are the kinds of organizations that can 
achieve the collaboration and the engagement of large groups of 
participants, they can do it in an independent way, and make 
sure that the right and the most optimal transmission is 
provided and enabled.
    We also do not have any advocacy or picking and choosing 
over resources. Those resources are developed by the utilities, 
and they do that because they have customers that ask for those 
resources. Whether it is wind, solar, whatever, they have 
customers that are driving those decisions and they have their 
own analyses that determine what is cost-beneficial for them to 
invest in. But at the head of that you really do need somebody 
that has independent oversight in making sure that the 
appropriate transmission infrastructure is also being built to 
facilitate the reliable delivery of those assets.
    Senator Sinema. Thank you. Senator Lankford, I would like 
to recognize you for a second round of questions before we 
close out our hearing. You are recognized.
    Senator Lankford. Thank you very much. Mr. Nickell, I want 
to be able to follow up with one last question on this. There 
is a lot of conversation on the price of natural gas during 
last February's storm. You brought that up as well. There are a 
lot of market features that are there with supply, demand, the 
contract, the spot price, all of the stories, as we talked 
about before.
    But an odd question for you that I hope there is an answer 
to. How did it get to that price, the final price that it got 
to for natural gas? Why was that the final price? Because you 
all were dealing with the different costs for natural gas 
during that time period, how did it get to that spot?
    Mr. Nickell. Ranking Member Lankford, I do not know the 
answer to that question. There are certainly a lot of anecdotal 
pieces of information that I have been shared, but I do not 
know the whole story. I have heard that the lack of supply 
created the demand. I have also heard that the willingness of 
generators and utilities to pay what they could afford to pay 
in order to reliably serve load also contributed. But I cannot 
tell you to what extent either of those drove that price as 
high as it did.
    Senator Lankford. That is one of the features we are going 
to have to determine at some point. Obviously, ERCOT was ready 
to pay a pretty high price to be able to get some natural gas. 
It drove up natural gas prices everywhere else when people were 
dealing with it. If there is one area that I think you and I 
need to be able to follow up on it is this process of what is 
the combination of contract firm price, spot prices, and what 
is the dependency there and what percentage will be there, what 
amount of storage has to be there, and then how do we manage 
the price.
    Obviously, I am not one for price controls in this process. 
I do know our electricity has some price caps that are in it. 
We have to be able to figure out how to be able to manage that 
long term, because we will have other peak events, both summer 
and winter events, and this will be in different regions as 
well, and the lessons learned from last February would be 
helpful to other RTOs across the country.
    Mr. Bryce, I do want to be able to drill down on something 
you had mentioned before about nuclear power, and we have to be 
able to get that as a power source ongoing. That is not 
happening right now, with small, modular, or nuclear power. The 
reason that I hear most often is the cost and the investment 
there, and the capital that is required to be able to do that, 
in initially, and the second issue has become the permitting, 
that no one wants to put $8 billion forward to be able to 
prepare for a nuclear power plant if it is going to take 15 
years in permitting and the uncertainty of who will be 
President and what the rules will be when they actually get to 
that spot.
    Is that correct? Not correct? What do you think is the 
reason we are not seeing more nuclear power at this point?
    Mr. Bryce. Senator, thank you. I think you have hit on 
those exactly in the right way, that as Ray Rothrock, who is a 
veteran venture capital investor, has recently said, the 
Nuclear Regulatory Commission (NRC) and the Federal Government 
present, in terms of the licensing, an uncontrollable risk for 
investors who want to build new nuclear plants, and the length 
of the licensing process is a gigantic hurdle.
    We have also had the recent experience of the nuclear plant 
in South Carolina being canceled. Plant Vogtle in Georgia is 
overtime and over budget. I think it is clear, as well, that 
those plants, and generally speaking, are just too large. We 
need smaller reactors that are going to be lower cost, that we 
can build at scale, and do so quickly.
    I have written quite a lot about this. I have had several 
guests on my podcast talking about how do we scale up a new 
nuclear manufacturing sector in the United States. Robert 
Hargraves has a company called ThorCon. His idea is to 
fabricate them in shipyards.
    But if I may, and to refer to your question back to Mr. 
Nickell, I would like to make one point on the gas grid and the 
electric grid. In August, I published a piece in the Dallas 
Morning News about what happened in ERCOT, and I made point in 
that piece, and I want to reiterate it here, the natural gas 
grid and the electric grid in the United States have merged, 
but they are still being regulated separately. And your point 
about maybe requiring or incenting electric utilities, electric 
generators rather to have some amount of firm capacity I think 
is part of the answer. In know the Public Utility Commission of 
Texas is grappling with these issues now, trying to figure out 
how they assure the on-time delivery of natural gas during peak 
events.
    But we have to also understand that one of the reasons why 
we had such a high peak demand in Texas during Winter Storm Uri 
is because over 60 percent of the homes in Texas rely on 
electricity alone for heating. So that peak would not have been 
as high if we had had more homes using natural gas.
    But I think that the fundamental issue, in terms of that 
resilience, reliability, and when it comes to natural gas and 
the interface with the electric grid is that those grids have 
to be more closely regulated or the regulation has to be 
intertwined, because those grids are interdependent.
    Senator Lankford. Thank you. That is helpful.
    Mr. Herrgott, I want to ask you the same question about the 
nuclear power and the permitting process there. You have 
mentioned multiple different projects that are transmission 
projects that are quote/unquote ``shovel-ready,'' that everyone 
knows they are actually not shovel-ready out there, that they 
have been a decade or more in processing and they are currently 
stuck with competing Federal regulations or competing Federal 
requirements, preventing them from actually going forward.
    Any time I talk to anyone about nuclear power they bring up 
the same issues--why would I take the risk in $8 billion in 
capital if they cannot even get transmission lines up and going 
across multiple States to be able to move? What do you see as 
the biggest barriers in the permitting side for nuclear?
    Mr. Herrgott. Sure. So first of all we have to desegregate 
the two discussions about whether or not wind and solar, at any 
point in the future, can provide baseload by having energy 
storage so it can meet the demand response at any given time. 
We are still years away from that, especially where the 
development of the projects are now that are stymied, even 
though there are billions in private equity and investor-owned 
utilities and then public utilities that are putting money 
behind it.
    When it comes to developing new nukes, like we did with 
several projects while I was at the Permitting Council, even 
modest reductions in permitting times and increases in 
predictability and hard milestones had a direct relational 
correlation with a 2 to 3 percent increase in the debt and 
equity costs for these large owners, which are many times 
spread across multiple utilities.
    At the bottom line it is this. We have to be rational 
adults and look at the entire project schedule. The first 2 or 
3 years are design and planning, the access and the supply, 
fuel loads, especially like where Palo Verde and others in 
Arizona are still able to achieve those. Then there is the 
competing threat of whether or not, after 6 or 7 years, 
developing a 700-, 800-, 900-megawatt nuke plant are the off-
shore wind plants that are going to be able to do 1.2 gigawatts 
and are going to have cables that are going to land in the 
energy storage facility that is going to make this initial 
investment economically unfeasible.
    We are in this notch period. All this frustration and 
policy about wind and solar versus natural gas, and everyone 
talks about above the board, all-of-the-above energy solutions. 
We need it all, and the bottom line is that at the end of the 
day our job--not my job, potentially those that are 
policymakers--is to remove the headwinds and let the market 
dictate where the energy price and spot demand markets are 
going to end up, without manipulations.
    Although folks talk about the subsidies of the ITC and the 
PTC, that is about 2 percent of the benefit that can be a 
subsidy for a new plant. The 20, 30 percent of project process 
costs that is borne on the backs of the eventual rate-payers, 
is the big issue, and nobody seems to want to fix that. That 
just ends up rolling off the backs of these utilities that pass 
it on.
    Senator Lankford. OK. Mr. Bryce, quick question on this. 
What do you estimate of the cost for new nuclear modular, and 
how many of them would it take to replace coal in the United 
States? Because I hear that frequently being kicked around that 
we will replace all the coal facilities with nuclear, and so I 
am interested in what is the cost per of those facilities right 
now. We have already discussed the decade or more in permitting 
it would take to be able to do each one of those. What is the 
cost for each one of those right now, and then how many would 
you actually have to build to replace coal in America?
    Mr. Bryce. You are testing my memory here, Senator, but I 
think the goal should be, for new nuclear reactors, that they 
should be at par with new natural gas, which is about $1,000 
per kilowatt. So $1 million a megawatt is rule of thumb, 
generally speaking, for new natural gas-fired power plants.
    As far as how much the existing coal capacity in the United 
States--now you are really testing me because our coal-fired 
capacity has been declining rapidly over the last few years. 
The last time I looked, I think we are consuming about as much 
coal for electricity in the United States as we were in the 
1960s, although the Energy Information Administration (EIA) 
just did say that we are going to set a new record high for 
coal-fired generation this year, taking us back to where we 
were in about 2014.
    But I think we would need at least 200 megawatts but 
probably more if we are going to, if memory serves, replace 
existing coal in the United States.
    Senator Lankford. How many facilities would that be, 200 
megawatts to replace coal?
    Mr. Bryce. Of course, it depends on what size reactor is 
deployed, sir, because now you have companies like Oklo who are 
developing a 1.5-megawatt electric reactor, a very small 
reactor. Some of the other reactors are in the new scale. I 
have forgotten what that is, a 20- or 30-megawatt electric 
reactor that can be built in what they call a sixpack, I think, 
configuration.
    But that is the key challenge, sir, is just what is going 
to be the optimal size for these new reactors, and what is the 
market going to demand.
    I will make one other quick point here, which is that what 
makes entry of new nuclear into the market in the United States 
difficult is that electric consumption in the United States has 
been flat for 15 years. We are at a different point today in 
the United States than where we were in the 1950s, 1960s, 
1970s, and 1980s, when essentially all of the nuclear reactors 
in the United States were built, where we were seeing high 
single-digit increases in electricity demand in the United 
States. But over the last 15 years, despite population growth, 
electric generation in the United States has been flat, at 
about 4,000 terawatt hours a year.
    Senator Lankford. OK. Mr. Bryce, let me drill down on one 
other concern that we have all got, and we are watching on this 
as well. Europe and in many parts of Asia they are dealing with 
availability of electricity right now, and they have had a 
pretty significant challenge in multiple different areas in 
Europe, and across China we are watching that. We are also 
watching in India, the capabilities.
    What are the key features that you see there, in Europe, 
China, India, where they do not have enough electricity right 
now to be able to supply demand? What do we need to pay 
attention to there to make sure that we do not have that here?
    Mr. Bryce. My response, sir, was I think what we are seeing 
is what I call the ``iron law of electricity,'' which is that--
and this is based on what I have seen traveling around the 
world over the last 5 years, India, Iceland, Lebanon, Puerto 
Rico, New York, Colorado--people, businesses, and countries 
will do whatever they have to do to get the electricity they 
need.
    What we are seeing in Europe is a return to coal in a big 
way, because natural gas is so expensive. We are seeing spot 
prices of coal in the international market now, for the 
Newcastle benchmark at over $200 per ton, and in China, in some 
cases, over $300 per ton. We are seeing the deindustrialization 
across Europe because of a lack of natural gas. You see 
fertilizer plants being shut down, which will have knock-on 
effects in the slaughterhouses, knock-on effects in food 
supplies in the coming years because farmers do not have enough 
fertilizer.
    This is due to under-investment in hydrocarbons. Now this 
is not a popular view, but this is the reality. The world still 
runs on hydrocarbons, and now we are seeing that without there 
being enough natural gas, Europe is in crisis, and it is 
affecting multiple industries where steel producers, limited 
producers in China are shutting down. We are seeing the knock-
on effects from not a lack of renewables but a lack of 
hydrocarbons.
    Senator Lankford. Thank you for that. That is helpful, to 
be able to get a context on.
    Again, this particular Subcommittee we deal with the issue 
of energy diversity to try to make sure that the United States 
maintains a diverse energy portfolio that works and that is 
reliable and that is resilient enough to be able to manage it. 
We have obviously seen some gaps in our resiliency in multiple 
areas, with blackouts and things that are happening in 
California, with what has happened in the Great Plains and the 
Midwest in the storm Uri last February, and we have seen it in 
other areas as well. We are going to continue to be able to 
work on this.
    Mr. Yonker, I have one last quick question for you as well, 
and I am going to call you out on something. When there was a 
conversation on hydrogen earlier I was kind of watching your 
expression as I am watching through the Brady Bunch boxes that 
I have on my screen here, and I can see your expression when 
hydrogen was being discussed as well. Is there anything that 
you would want to be able to contribute as well on the issue 
about hydrogen?
    Mr. Yonker. I have not studied it enough to have an opinion 
on hydrogen, but I certainly think that other grid flexibility 
solutions at scale ought to be getting prioritized. We talked 
about demand side management. We have not really talked about 
long-duration storage which is stuck in early commercialization 
between labs and other areas.
    I think there are some solutions from a grid flexibility 
and a grid reliability standpoint that need significant 
investment, where the Federal Government can play a really 
important role, and this, in many ways, might be 
commercialization from the labs, this might be in grant 
programs, like that are stuck in the approved but yet 
appropriated Energy Act of 2020.
    Senator Lankford. Thank you. Chair Sinema, thank you for 
the additional time and the second round of questions. I 
appreciate that. For all of the folks that are testifying 
today, we very much appreciate not only your written testimony 
that you submitted but your oral testimony as well, and I 
appreciate your engagement on these issues. It is much needed 
in this season, as we deal with a lot of very complicated 
issues right now.
    Senator Sinema. Thanks so much. Thank you, Senator 
Lankford, and thank you to all of our witnesses.
    With that we have reached the end of today's hearing and I 
appreciate all the witnesses today for your time and testimony. 
I want to thank all of my colleagues for their participation.
    This was a very important and a timely hearing, and I know 
there were a lot of questions that not everyone had an 
opportunity to ask. I will be submitting additional questions 
for the record so we can continue to examine this critical 
need.
    As 15 days from today is Veterans Day, the hearing record 
will remain open for 16 days, until 5 p.m. on Friday, November 
12th, for the submission of statements and questions for the 
record.
    With that I will adjourn this hearing. Thank you.
    [Whereupon, at 3:26 p.m., the Subcommittee was adjourned.]

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