[House Hearing, 119 Congress]
[From the U.S. Government Publishing Office]
SCALING FOR GROWTH: MEETING THE DEMAND
FOR RELIABLE, AFFORDABLE ELECTRICITY
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON ENERGY
OF THE
COMMITTEE ON ENERGY AND
COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED NINETEENTH CONGRESS
FIRST SESSION
__________
MARCH 5, 2025
__________
Serial No. 119-9
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Published for the use of the Committee on Energy and Commerce
govinfo.gov/committee/house-energy
energycommerce.house.gov
______
U.S. GOVERNMENT PUBLISHING OFFICE
59-912 PDF WASHINGTON : 2025
COMMITTEE ON ENERGY AND COMMERCE
BRETT GUTHRIE, Kentucky
Chairman
ROBERT E. LATTA, Ohio FRANK PALLONE, Jr., New Jersey
H. MORGAN GRIFFITH, Virginia Ranking Member
GUS M. BILIRAKIS, Florida DIANA DeGETTE, Colorado
RICHARD HUDSON, North Carolina JAN SCHAKOWSKY, Illinois
EARL L. ``BUDDY'' CARTER, Georgia DORIS O. MATSUI, California
GARY J. PALMER, Alabama KATHY CASTOR, Florida
NEAL P. DUNN, Florida PAUL TONKO, New York
DAN CRENSHAW, Texas YVETTE D. CLARKE, New York
JOHN JOYCE, Pennsylvania, Vice RAUL RUIZ, California
Chairman SCOTT H. PETERS, California
RANDY K. WEBER, Sr., Texas DEBBIE DINGELL, Michigan
RICK W. ALLEN, Georgia MARC A. VEASEY, Texas
TROY BALDERSON, Ohio ROBIN L. KELLY, Illinois
RUSS FULCHER, Idaho NANETTE DIAZ BARRAGAN, California
AUGUST PFLUGER, Texas DARREN SOTO, Florida
DIANA HARSHBARGER, Tennessee KIM SCHRIER, Washington
MARIANNETTE MILLER-MEEKS, Iowa LORI TRAHAN, Massachusetts
KAT CAMMACK, Florida LIZZIE FLETCHER, Texas
JAY OBERNOLTE, California ALEXANDRIA OCASIO-CORTEZ, New York
JOHN JAMES, Michigan JAKE AUCHINCLOSS, Massachusetts
CLIFF BENTZ, Oregon TROY A. CARTER, Louisiana
ERIN HOUCHIN, Indiana ROBERT MENENDEZ, New Jersey
RUSSELL FRY, South Carolina KEVIN MULLIN, California
LAUREL M. LEE, Florida GREG LANDSMAN, Ohio
NICHOLAS A. LANGWORTHY, New York JENNIFER L. McCLELLAN, Virginia
THOMAS H. KEAN, Jr., New Jersey
MICHAEL A. RULLI, Ohio
GABE EVANS, Colorado
CRAIG A. GOLDMAN, Texas
JULIE FEDORCHAK, North Dakota
------
Professional Staff
MEGAN JACKSON, Staff Director
SOPHIE KHANAHMADI, Deputy Staff Director
TIFFANY GUARASCIO, Minority Staff Director
Subcommittee on Energy
ROBERT E. LATTA, Ohio
Chairman
RANDY K. WEBER, Sr., Texas, Vice KATHY CASTOR, Florida
Chairman Ranking Member
GARY J. PALMER, Alabama SCOTT H. PETERS, California
RICK W. ALLEN, Georgia ROBERT MENENDEZ, New Jersey
TROY BALDERSON, Ohio KEVIN MULLIN, California
AUGUST PFLUGER, Texas JENNIFER L. McCLELLAN, Virginia
DIANA HARSHBARGER, Tennessee DIANA DeGETTE, Colorado
MARIANNETTE MILLER-MEEKS, Iowa DORIS O. MATSUI, California
JOHN JAMES, Michigan PAUL TONKO, New York
CLIFF BENTZ, Oregon MARC A. VEASEY, Texas
RUSSELL FRY, South Carolina KIM SCHRIER, Washington
LAUREL M. LEE, Florida LIZZIE FLETCHER, Texas
NICHOLAS A. LANGWORTHY, New York ALEXANDRIA OCASIO-CORTEZ, New York
MICHAEL A. RULLI, Ohio JAKE AUCHINCLOSS, Massachusetts
GABE EVANS, Colorado FRANK PALLONE, Jr., New Jersey (ex
CRAIG A. GOLDMAN, Texas officio)
JULIE FEDORCHAK, North Dakota
BRETT GUTHRIE, Kentucky (ex
officio)
C O N T E N T S
----------
Page
Hon. Robert E. Latta, a Representative in Congress from the State
of Ohio, opening statement..................................... 1
Prepared statement........................................... 4
Hon. Kathy Castor, a Representative in Congress from the State of
Florida, opening statement..................................... 7
Prepared statement........................................... 10
Hon. Brett Guthrie, a Representative in Congress from the
Commonwealth of Kentucky, opening statement.................... 12
Prepared statement........................................... 14
Hon. Frank Pallone, Jr., a Representative in Congress from the
State of New Jersey, opening statement......................... 16
Prepared statement........................................... 19
Witnesses
Todd Brickhouse, Chief Executive Officer and General Manager,
Basin Electric Power Cooperative............................... 21
Prepared statement........................................... 24
Answers to submitted questions............................... 143
Asim Z. Haque, Senior Vice President, Government and Member
Services, PJM Interconnection.................................. 31
Prepared statement........................................... 33
Answers to submitted questions............................... 149
Tyler H. Norris, James B. Duke Fellow, Nicholas School of the
Environment, Duke University................................... 45
Prepared statement........................................... 47
Answers to submitted questions............................... 152
Noel W. Black, Senior Vice President of Government Affairs,
Southern Company Services...................................... 55
Prepared statement........................................... 57
Answers to submitted questions............................... 159
Submitted Material
Inclusion of the following was approved by unanimous consent.
List of documents submitted for the record....................... 104
Letter of March 3, 2025, from Paul N. Cicio, President and Chief
Executive Officer, Industrial Energy Consumers of America, to
Mr. Latta and Ms. Castor....................................... 105
Letter of February 26, 2025, from Jeffrey D. DeBoer, President
and Chief Executive Officer, The Real Estate Roundtable, to
Representative Tom Cole, et al................................. 107
Letter of March 4, 2025, David Terry, President, National
Association of State Energy Officials, to Mr. Latta and Ms.
Castor......................................................... 118
Letter from Naoki Kono, Vice President, Public Policy and
Government Affairs Department, IHI Americas, Inc., to Mr.
Guthrie, et al................................................. 121
Letter of March 4, 2025, from Brent Gardner, Chief Government
Affairs Officer, Americans for Prosperity, to Mr. Guthrie, et
al............................................................. 123
Letter of March 4, 2025, from Joanne Frederick, President, Stop
MPRP, Inc., to Mr. Latta....................................... 126
Report by Brattle, ``A Wide Array of Resources is Needed to Meet
Growing U.S. Energy Demand,'' February 2025.................... 128
Report by NERA Eonomic Consulting, ``Electricity Price Impacts of
Technology-Neutral Tax Incentives With Incremental Electricity
Demand from Data Centers,'' February 10, 2025\1\
Letter of March 5, 2005, from Matthew J. Agen, Chief Regulatory
Counsel, Energy, American Gas Association, to Mr. Guthrie and
Mr. Pallone.................................................... 140
Report by Nicholas Institute for Energy, Environment &
Sustainability, Duke University, ``Rethinking Load Growth:
Assessing the Potential for Integration of Large Flexible Loads
in US Power Systems,'' 2025\1\
----------
\1\ The report has been retained in committee files and is included in
the Documents for the Record at http://docs.house.gov/meetings/IF/IF03/
20250305/117979/HHRG-119-IF03-20250305-SD035.pdf.
SCALING FOR GROWTH: MEETING THE DEMAND
FOR RELIABLE, AFFORDABLE ELECTRICITY
----------
WEDNESDAY, MARCH 5, 2025
House of Representatives,
Subcommittee on Energy,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 10:01 a.m., in
the John D. Dingell Room 2123, Rayburn House Office Building,
Hon. Robert E. Latta (chairman of the subcommittee) presiding.
Members present: Representatives Latta, Weber, Palmer,
Allen, Balderson, Pfluger, Harshbarger, Miller-Meeks, James,
Bentz, Fry, Lee, Langworthy, Rulli, Evans, Goldman, Fedorchak,
Guthrie (ex officio), Castor (subcommittee ranking member),
Peters, Menendez, McClellan, Matsui, Tonko, Veasey, Schrier,
Auchincloss, and Pallone (ex officio).
Also present: Representatives Carter of Georgia and Joyce.
Staff present: Ansley Boylan, Director of Operations;
Jessica Donlon, General Counsel; Andrew Furman, Professional
Staff Member, Energy; Sydney Greene, Director of Finance and
Logistics; Emily Hale, Staff Assistant; Calvin Huggins, Clerk;
Megan Jackson, Staff Director; Sophie Khanahmadi, Deputy Staff
Director; Mary Martin, Chief Counsel, Energy; Joel Miller,
Chief Counsel; Ben Mullaney, Press Secretary; Jackson Rudden,
Staff Assistant; Chris Sarley, Member Services/Stakeholder
Director; Peter Spencer, Senior Professional Staff Member,
Energy; Kaley Stidham, Press Assistant; Waverly Gordon,
Minority Deputy Staff Director and General Counsel; Tiffany
Guarascio, Minority Staff Director; Kristopher Pittard,
Minority Professional Staff Member; Emma Roehrig, Minority
Staff Assistant; Kylea Rogers, Minority Policy Analyst; Andrew
Souvall, Director of Communications, Outreach and Member
Services; and Tuley Wright, Minority Staff Director, Energy.
Mr. Latta. Good morning. The Subcommittee on Energy will
now come to order. And the Chair recognizes himself for an
opening statement.
OPENING STATEMENT OF HON. ROBERT E. LATTA, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF OHIO
Welcome to today's hearing, ``Scaling for Growth: Meeting
the Demand on Reliable, Affordable Electricity.'' Today, we
will discuss the state of our Nation's bulk power system and
the opportunities that lie ahead in the next-generation
economy.
Our economy's electric grid, built over the course of well
over 100-plus years, has been referred to as the most complex,
sophisticated machine known to mankind. When operating
correctly, the U.S. grid efficiently delivers low-cost,
reliable energy to communities of all sizes. Through extensive
planning, coordination, and collaboration from a host of
government and industry partners, this complex process
seamlessly responds in real time to maintain reliability in
both normal and extreme weather conditions.
Yet today, historic increases in electricity demand,
primarily from energy-intensive AI models and domestic
manufacturing, are exposing key impediments to the ability of
utilities, grid operators, and generators to keep the lights
on. When the lights go out, people's lives are at stake.
The entities charged with overseeing our electric grid have
been warning of potential shortfalls under normal weather
conditions. Extreme weather or unforeseen circumstances could
turn catastrophic. In 2025, the Energy Information
Administration projects that 12.3 gigawatts of cocapacities are
set to retire. By the end of the decade, the North American
Electric Reliability Corporation projects as high as 52
gigawatts of thermal generation will retire. The stakes cannot
be higher.
Across the world, our adversaries are seeking to undermine
U.S. leadership on the world stage to write the rules on the
next-generation economy. Nations like Communist China, who do
not share our democratic values, are seeking to develop world-
leading AI models through authoritarian military lens to export
their command-and-control style of governments across the
world.
Yet within this emerging crisis, there is an opportunity of
our Nation to correct the course and grow jobs-creating
industries right here at home. But to get there, we need more
energy, and we need it fast.
The Department of Energy's Berkeley Lab estimates that U.S.
status center growth alone is projected to double or triple by
2028. I know in my district, it is home to over 86,000
manufacturing jobs. I am keenly aware of this problem. And I
always say that we are not just operating with needing
electricity and power in my district, we need affordable power
to make sure.
The Clean Power Plan 2.0 is driving accelerated premature
retirements of our baseload power. Permitting barriers for new
natural gas pipeline infrastructure are handicapping regions of
the country such as the Northeast that are desperate for
energy.
Meanwhile, subsidized intermittent energy resources and
public policy decisions favoring renewable energy are flooding
interconnection queues and making baseload power from coal,
natural gas, and nuclear near uneconomic. Generation developers
continue experiencing ongoing supply chains constraints for
distribution, transformers, and generation turbines.
As we will hear today, House Republicans are not alone in
raising the alarm. Today's discussion will help illuminate the
ways in which grid operators, utilities, and co-ops are all
addressing these challenging dynamics to address reliability
and affordability while providing the opportunity to grow jobs
and creating industries.
The witnesses before us today will provide a holistic
approach of the Nation's electricity system, the unique
characteristics of each respective region of the country, and
the challenges facing grid-governing regime.
PJM, the Nation's largest regional transmission
organization, which spans 13 States and Washington, DC,
organizes competitive wholesale markets to buy, sell
electricity, and monitors reliability standards across the
multistate footprint.
In the West, Basin Electric Power Cooperative members serve
3 million consumers across nine States, spanning both
vertically integrated States in organized markets. Southern
Company, a traditionally vertically integrated utility,
reliably serves customers across the Southeast with a diverse
portfolio of generating resources.
So I look forward to discussion that we are going to have
today with each of the respective entities and regions and how
they are confronting this new frontier and the demand
expansion. And this subcommittee will play an integral role in
laying the groundwork to unlock the necessary capital
investment for job-creating industries while ensuring
affordable and reliable energy for American households and
small businesses.
[The prepared statement of Mr. Latta follows.]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Latta. And with that, I yield back the balance of my
time with 3 seconds.
At this time, I recognize the ranking member of the
subcommittee, the gentlelady from Florida, for 5 minutes for
your opening statement.
Ms. Castor. Well, thank you, Mr. Chairman. And welcome to
our witnesses.
Mr. Chairman, we have just received some very sad news: the
passing of one of our colleagues, Congressman Sylvester Turner
from Houston. And if Representative Fletcher were here, she
would say Houston is the energy innovation capital of the
world. Also, Sylvester Turner was the longtime mayor of
Houston. He was just elected. He was with us yesterday and
brought his guest to the Capital. So would you indulge us with
a moment of silence for his memory.
Mr. Latta. Absolutely. The subcommittee will pause for a
moment of silence.
[Moment of silence.]
Mr. Weber. Will the gentlelady yield?
Ms. Castor. I yield to the gentleman.
Mr. Weber. Thank you. I thank the gentlelady. I served with
Sylvester Turner 4 years in the Texas House. I hated him,
because when he went to the back mic and talked against my
bill, he made me look like a fool--which is not hard to do.
Y'all all know that, right? Great champion for Texas, great
champion for Houston. Such a gentleman. Such a scholar. I saw
him last night----
Ms. Castor. Yes.
Mr. Weber [continuing]. Coming off the floor in his
wheelchair. I was shocked this morning. So he will be missed.
And, Mr. Chairman, I yield back.
Ms. Castor. Thank you, Mr. Weber.
Mr. Latta. The gentleman.
Mr. Goldman. Thank you. I, too, served with Sylvester, and
I am a little shook. He was a legend. And he is one of the most
decent men you ever met. And Randy's correct. If you are at the
front mic and he was at the back mic, you are dead. He was one
of the smartest men you have ever met. One of the nicest.
My father has a wall of fame at the house. He has got a
photo with him and Ronald Reagan, him and Lady Thatcher, and
then George H.W. Bush, George W. Bush, and Sylvester Turner.
That is how much he meant to people. It wasn't about party, it
was about the person, and it was about Texas. And that is who
Sylvester Turner was, and he will be greatly missed.
Thank you, Mr. Chairman. I yield.
Mr. Latta. Thank you. The gentlelady is recognized.
OPENING STATEMENT OF HON. KATHY CASTOR, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF FLORIDA
Ms. Castor. Well, thank you. I want to thank our colleagues
for sharing their sentiments about Congressman Turner.
Meanwhile, back here in the Energy Subcommittee, it is
difficult to dive into this very important topic. Mr. Chairman,
I really appreciate you focusing in on that. But at the same
time, it is rather absurd that we are tackling strengthening
our electrical system while Elon Musk and the Trump
administration are taking a sledgehammer to the Department of
Energy, and especially the initiatives that strengthen and
modernize the grid.
The new administration has spent weeks illegally shutting
down DOE grants and loans and partnerships that make energy
safe, reliable, and affordable, and that includes the illegal
firings of the Department of Energy Inspector General, who is
tasked with rooting out waste, fraud, and abuse, and firing the
scientists who protect our nuclear enterprise.
Meanwhile, the administration and House Republicans have
offered noting to help hardworking Americans tackle the cost of
living, including their electric bills. In fact, consumers are
losing confidence as Republicans focus on tax breaks for the
wealthy and the well-connected and handouts to big oil and gas.
And beware, Canada and Mexico are major manufacturers of
electrical grid components like transformers and circuit
breakers and switch gears, which are needed to update our
growing grid. And Trump's tariffs will make these upgrades more
expensive, and they will take even longer, not to mention the
direct cost increases that tariffs have on electricity,
especially on the northern States.
As part of the Bipartisan Infrastructure Law, the
Department of Energy was administering a large grid resilience
and innovation partnership initiative. The intent there was to
enhance grid flexibility and improve the resilience of the
power system against extreme events, like hurricanes in my neck
of the woods.
One grid project was a battery installation add in Iron
Mountain Data Center in Virginia that was meant to test the
potential to store clean backup power in grid support uses. On
his first day in office, though, the President illegally froze
that project as well as $103 million in grid funding that
should be helping my neighbors back home in Florida.
Growing America's leadership and artificial intelligence
requires access to more energy. We will see a doubling in data
center electricity capacity by 2030 from projects already under
construction. A 1-gigawatt data center would be the single
largest energy load in the United States today, and we are
building dozens of them. And to support data centers and
broader electricity growth, the U.S. Energy Information
Association forecasts that the U.S. will build 63 gigawatts of
new utility scale capacity this year. Ninety-four percent of
that is zero carbon.
And gas will not magically solve this challenge, even for
those who decide they want to build a new gas plant. If they
make that decision today, the plant won't come online before
2030.
Next-generation technologies like advanced geothermal and
nuclear, while incredibly promising, are at least several years
away. And here is a fact check of the speech last night. The
President misleadingly said the Biden administration had closed
more than 100 power plants. That is not true. According to the
Department of Energy, the total number of electric power plants
increased by 2,187 from 2020 to 2023.
That is, the number of utility-scale electric power plants
in the Nation actually increased during the Biden
administration. There were about 11,000 in 2020 compared with
about 13,250 in 2023.
Solar wind and batteries are the least expensive, cleanest,
and fastest way to add energy to the grid right now. They are
driving down energy costs now. And if we want to lower the cost
of energy and we want more reliable energy, then we should be
making it easier to build solar, wind, and batteries whenever
it makes since to do so.
That is why it is raising huge red flags that the Trump
administration is unceremoniously halting these grid and power
projects. And if Republicans were willing to stand up for the
innovative work to modernize the grid that is happening right
now, then there are real policies that we could work on
together.
The real barriers to getting new power online for data
centers for large-scale manufacturing of just everyday American
families is the limited capacity and disjointedness of our
power grid. We need to build more transmissions to enable more
generations and get more out our existing grid infrastructure.
The U.S. has two options: We can choose to double down on
outdated fossil fuel strategies that are more expensive, slower
to interconnect, and are big polluters; or we can choose the
other option, advancing real policies that deliver cheaper,
cleaner, faster power that could benefit everyone.
[The prepared statement of Ms. Castor follows.]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Ms. Castor. I yield back.
Mr. Latta. The gentlelady's time has expired, and yields
back. The Chair now recognizes the gentleman from Kentucky, the
chairman of the full committee, 5 minutes for an opening
statement.
OPENING STATEMENT OF HON. BRETT GUTHRIE, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF KENTUCKY
Mr. Guthrie. Thank you, Mr. Chairman, for the time, and
thank you to all the witnesses for being here.
Gosh, I just met Mr. Turner, Representative Turner, I think
yesterday--it is yesterday or the day before--sitting in the
center aisle. I just chatted with him and introduced myself.
And for what I have heard from people spoken today, I really
missed a lot, of only knowing him for less than a day. And my
thoughts and prayers are with his family. And all of us here in
Congress, when we lose a colleague, it is tough. So God bless
his family.
But turning to today's hearing, it is going to continue our
important work in this committee to identify what is necessary
to unleash American energy for the benefit of the public, the
economy, and our national security. Without question, energy--
and especially the affordable, reliable, delivery of electric
power--is essential for America to make and do the things
needed for a secure and strong economy. Affordable, reliable
power is essential for growing manufacturing, for advancing the
great promises of AI, and for producing the goods and services
our constituents rely upon. It is essential for health and
safety.
To ensure we have the right Federal policies, we must
examine how the key players in our power sector--utilities,
grid operators, State and Federal regulators--are preparing for
a future of extraordinary electricity growth.
The witnesses today who have worked to provide power will
help us in this examination. A pair of tough challenges make
our task particularly urgent.
The first challenge concerns the factors behind the
emerging reliability crisis. In recent years, we have witnessed
the failure to ensure that there is power when our communities
need it the most. This crisis has been caused by the loss of
huge amounts of reliable, baseload, and dispatchable generation
across many regions of our Nation following the misguided
regulations, and without adequate replacement for their
resources.
The resulting threats of blackouts and brownouts even in
normal peak demand conditions have been extending across the
most populous regions of the Nation as authorities like the
North American Electric Reliability Corporations show.
Federal and State policies have driven growth of
intermittent or weather-dependent wind and solar generation at
the expense of generation we will need for a reliable system.
It is all important. This has increased the risk for tens of
millions of Americans.
Many of our constituents have already experienced costly
and deadly power outages. This started in California, then we
witnessed it in Texas 3 years ago during Winter Storm Uri. Just
2 years ago, southeast and east coast communities, including
Kentucky, lost power. We had rolling blackouts in Kentucky, a
TVA area, due to the lack of supply power during the winter
event. The root cause of this situation is a lack of reliable
generation capacity and constraints on natural gas supplies.
The second challenge involves the new energy demand of AI
in cutting-edge technologies. The need for power to expand and
advance AI in America is coming with a blinding-fast urgency
that represents a generational challenge and the need for more
reliable electricity. This presents its own unique challenges
layered upon the existing problems and threats.
This hearing will help us understand what is being done by
the power sector utilities and operators to meet these
challenges and respond to the urgency of exploding demand.
I thank you, Chair Latta, for hosting--having this hearing.
I welcome the witnesses.
[The prepared statement of Mr. Guthrie follows.]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Guthrie. And I will yield to the gentlelady from North
Dakota, Mrs. Fedorchak, for the remainder of my time.
Mrs. Fedorchak. Thank you, Mr. Chairman. I appreciate this
opportunity. I would have been honored to introduce three out
of the four panelists because I worked closely with all of
them, but I am going to take a minute to introduce a fellow
North Dakotan.
I am honored to introduce Mr. Todd Brickhouse, who embodies
the values of hard work, innovation, and community service. As
the CEO and general manager of Basin Electric Power
Cooperative, Todd leads one of our State's largest and most
prominent businesses. It is an organization that delivers
reliable, affordable power to millions of people throughout the
Great Plains.
With over 25 years of experience, Todd has dedicated his
career to ensuring that rural America, and America as a whole,
has the energy it needs to grow and thrive. Like most in this
industry, Todd's work isn't about politics, it is about problem
solving. That is what I appreciate most about working with
folks in this industry. It is about powering everything from
farms and small businesses to emerging leaders--like emerging
industries like carbon capture and data centers. Todd's
leadership is doing just that, as are others on this panel.
Today, Todd brings Dakota common sense to DC, and I am
proud to welcome him and his amazing team, who are behind him
before our committee today.
Thank you very, Mr. Chairman. I yield back.
Mr. Latta. The gentlelady yields back. And the chairman
yields back the balance of his time.
The Chair now recognizes the gentleman from New Jersey, the
ranking member of the full committee, for 5 minutes of
questions--or, pardon me, for 5 minutes for an opening
statement.
OPENING STATEMENT OF HON. FRANK PALLONE, Jr., A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF NEW JERSEY
Mr. Pallone. Thank you, Chairman Latta. This hearing is an
important and timely topic. Unfortunately, it is happening in
the midst of chaos and confusion for the energy industry
because of the actions of President Trump and congressional
Republicans.
Grid operators around the country are begging Congress to
take the challenges they are facing seriously, and instead
Republicans just passed a budget that would gut programs and
incentives vital to electric reliability while simultaneously
cutting Medicaid to fund tax breaks for billionaires.
President Trump's Department of Energy continues to freeze
and slow-walk billions of dollars in investments in the clean
energy sector, which could result in higher energy costs on
American families.
It is all unacceptable, in my opinion, and it is
frustrating because this subcommittee has important policy
decisions to consider.
After a 20-year pause, demand for power in the United
States is growing again. And as I have repeatedly said, this is
an opportunity. It means that companies are investing in
America, that cutting-edge technologies are being developed
here, and that families are making investments in decarbonizing
their homes and vehicles. These are good things if the power
sector could meet the challenge.
We need to act to make sure that our grid remains reliable
and affordable over the next decade. That means removing
unnecessary barriers to clean energy and making sure that we
are adequately planning for a 21st century grid.
Claims that this challenge could only be met with an
endless fleet of natural gas power plants are completely
misguided. For one, the gas turbine supply chain simply won't
allow it. Gas turbine manufacturers are backed up and cannot
fulfill new orders until 2029.
But more importantly, we need a solution that won't saddle
homeowners and businesses with higher energy bills to pay for
assets that may not be used for 20 years. And we need to find a
way to ensure that new large loads, like data centers powering
AI, are paying for their fair share of grid infrastructure,
regardless of whether they are colocated with generation
sources or pulling electricity directly from the grid itself.
And these aren't speculative issues to the future. They are
happening now. Families in my home State of New Jersey are
going to experience a nearly 25 percent increase in their power
costs this June in part because PJM seems incapable of getting
its act together to quickly add renewable resources to its
grid.
The Texas grid operator, which serves less power demand
than PJM, managed to add 11 gigawatts of generation in storage
capacity last year. And PJM only managed to add less than half
of that, despite having a whopping 143 gigawatts in its queue.
We should be working together to develop solutions to
address this problem. But unfortunately, the Trump
administration and Republicans have other ideas. Bonneville
Power Administration, which is absolutely vital for electric
reliability in the Pacific Northwest, was forced to fire 20
percent of its workforce as part of Elon Musk's dismantling of
the Federal workforce, despite the fact that it doesn't cost
taxpayers a dime.
Republicans are also taking aim at independent regulators,
vital for reliability and affordability, like FERC and the NRC.
And because the Trump administration cut corners in its
definition of energy in its Executive orders, there is a lot of
confusion about whether the tariff on electricity imports from
Canada is zero, 10, or 25 percent. It is a complete disaster,
and it is going to likely lead to higher energy costs for
American consumers, particularly in the Northeast.
Now Trump and Republicans are trying to gut and repeal the
Inflation Reduction Act, the Bipartisan Infrastructure Law, and
these laws are critical to ensuring that new energy sources get
built and that existing ones, especially nuclear plants, stay
online.
Two new studies--and I would like to ask unanimous consent,
Mr. Chairman, to insert them into the record. I will hand them
over to you.
Mr. Latta. Without objection, so ordered.
[The information appears at the conclusion of the
hearing.\1\]
---------------------------------------------------------------------------
\1\ A report from Brattle appears at the conclusion of the haring.
A report from NERA Economic Consulting has been retained in committee
files and is included in the Documents for the Record at https://
docs.house.gov/meetings/IF/IF03/20250305/117979/HHRG-119-IF03-20250305-
SD035.pdf.
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Mr. Pallone. Thank you. They show that repealing the
Inflation Reduction Act's technology-neutral tax credit would
increase prices on families and decrease the amount of power
brought onto the grid. The reality is that clean energy is the
only source of new generation capable of meeting growing power
demand at scale.
Clean energy sources and battery storage are 95 percent of
the interconnection queue, and they are not going away. In
fact, they are the only thing that can come to the rescue and
power our manufacturing and AI renaissance. And gutting the
Inflation Reduction Act and illegally freezing funds will only
ensure that our grid won't be able to keep up with demand, all
while radically increasing energy prices for our constituents.
So I can say, Mr. Chairman, Democrats are going to fight
against Republicans' radical agenda that makes our electricity
less reliable, more expensive, and dirtier.
So thank you, and I yield back the balance of my time, Mr.
Chairman.
[The prepared statement of Mr. Pallone follows.]
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Mr. Latta. Well, thank you very much.
The gentleman yields back the balance of his time. And that
now concludes our Member opening statements. The Chair would
like to remind Members that, pursuant to committee rules, all
Members' opening statements will be made part of the record.
At this time, we want to also thank our witnesses again for
being here with us today and taking the time to testify before
the subcommittee. Each witness will have an opportunity to give
an opening statement, followed by a round of questions from the
Members.
Our witnesses today are Mr. Todd Brickhouse, the chief
executive officer and general manager of Basin Electric Power
Cooperative; Mr. Asim Haque, senior vice president for
governmental and member services at PJM; Mr. Tyler Norris, the
James B. Duke Fellow at Duke University; and Mr. Noel Black,
senior vice president of regulatory affairs at the Southern
Company.
Before we get started, just a quick housekeeping, if you--
you want to make sure you pull the mic up close to you when you
speak. And there is the set of red lights there that will
signal. If you have a green light, 4 minutes. It will go yellow
with 1 minute remaining. And at red, that means stop. We
appreciate you following that.
And with that, Mr. Brickhouse, you are now recognized for 5
minutes for an opening statement.
STATEMENTS OF TODD BRICKHOUSE, CHIEF EXECUTIVE OFFICER AND
GENERAL MANAGER, BASIN ELECTRIC POWER COOPERATIVE; ASIM Z.
HAQUE, SENIOR VICE PRESIDENT, GOVERNMENTAL AND MEMBER SERVICES,
PJM INTERCONNECTION, LLC; TYLER H. NORRIS, JAMES B. DUKE
FELLOW, NICHOLAS SCHOOL OF THE ENVIRONMENT, DUKE UNIVERSITY;
AND NOEL W. BLACK, SENIOR VICE PRESIDENT OF GOVERNMENT AFFAIRS,
SOUTHERN COMPANY SERVICES
STATEMENT OF TODD BRICKHOUSE
Mr. Brickhouse. Thank you, Mr. Chairman. As you indicated,
my name is Todd Brickhouse, and I am the CEO of Basin Electric
Power Cooperative. Basin is a not-for-profit generation and
transmission cooperative, and we are owned by 139 member
cooperatives across nine States, and we serve 3 million
consumers. As measured by our geographic retail service
territory, Basin is the largest electric utility in the
country. We serve roughly half a million square miles, which is
12 percent of the United States. So we like to say that Basin's
assets are the engines of commerce for a service territory that
feeds and fuels our Nation.
Basin is one of nearly 900 not-for-profit electric
cooperatives across the country that are independently owned
and governed by the people that we serve. Electric cooperatives
provide electric service to 42 million Americans in 48 States.
There are a number of trends and policies impacting our
country and electric utilities, and I would like to touch on a
few of those this morning.
Reshoring our manufacturing base, guaranteeing our energy
security, and supporting the development of artificial
intelligence all significantly increase demand for electric
power. After all, the electrons that many of us on this panel
provide are the raw materials of a modern economy.
To satisfy this growing demand, Basin is currently
increasing its generation portfolio by more than 40 percent.
And we are increasing our transmission mileage by more than 20
percent. Over the next decade, we will spend $12 billion on
these endeavors. That compares to currently $8\1/2\ billion of
assets on our balance sheet today.
Federal regulations should be streamlined to support our
efforts. For example, our recent Roundup-to-Kummer-Ridge
transmission project required two separate environmental
assessments, one from the Bureau of Land Management and another
from the Bureau of Indian Affairs, even though both these
agencies are under the Department of the Interior. This
resulted in added time, expense, and of course, red tape.
Secondly, Basin is currently adding 1,500 megawatts of
nondispatchable, renewable resources to our generation fleet.
This has required years of planning and development work. And
these business decisions were made based on the availability of
production tax credits. We understand and we support the need
to put our country on a sustainable, physical path, but the
immediate removal of PTCs will not allow utilities to plan for
and avoid increased costs, and this will also immediately harm
rate payers.
Another policy matter that needs to be on your mind is
tariffs, which the President spoke about last night. We strive
to source our capital expenditure program domestically. But the
utility industry relies on global supply chain. Our $12 billion
capital expenditure program will be adversely impacted by
tariffs. And I would just like to explain to you that these are
not one-time costs. These are costs that will be felt over 30
years as we depreciate these assets and we repay the debt used
to fund them.
Finally, and most importantly, in order to capitalize on
the opportunities of reshoring our manufacturing base,
guaranteeing our energy security, and fully developing
artificial intelligence, we need consistent and rational energy
policies from you all.
Every sector of our economy depends on reliable and
affordable electricity, whether it be households,
manufacturers, or the technology industry.
As Daniel Yergin and Peter Orszag wrote in an article last
week, ``We are not''--and I quote--``We are not so much in an
energy transition, we are in an energy addition.'' Periodic
efforts to severely curtail major sources of the dispatchable
electric generation are counterproductive, and they do not
further our national interest.
Microsoft and Amazon recognize the importance of
dispatchable resources, as evidenced by the recent partnership
with the nuclear industry. Similarly, Meta--or Facebook--has
recently partnered with Entergy for the development of 2,300
megawatts of dispatchable natural gas resources in Louisiana.
Basin is in discussions with more than 7,000 megawatts of
similar loads. The Great Plains where Basin serves offers
abundant wind and carbon-based natural resources, helping Basin
satisfy growing demand in a balanced manner.
Basin stands ready to support efforts by Congress, the
administration, and Federal agencies to enhance affordability
and reliability for the American consumer. Thank you.
[The prepared statement of Mr. Brickhouse follows:]
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Mr. Latta. Thank you very much. Mr. Haque, you are
recognized for 5 minutes for your opening statement.
STATEMENT OF ASIM Z. HAQUE
Mr. Haque. Chairman Latta, Ranking Member Castor, Chairman
Guthrie, Ranking Member Pallone, and members of the
subcommittee, thank you for the invitation to participate in
this hearing to provide PJM's perspective as it relates
electric grid reliability and cost during this period of heavy
forecasted demand growth. My name is Asim Haque, and I am the
senior vice president of governmental and member services at
PJM Interconnection.
PJM is considered the largest grid operator in North
America, as we ensure the reliable flow of power to 67 million
consumers in all or parts of 13 States and the District of
Columbia. PJM is an entity without profit motive, as we
effectively function as a not-for-profit that is fully
regulated by the Federal Energy Regulatory Commission, an
independent Federal agency that plays a critical role in the
oversight of the energy industry.
We are a mission-driven organization whose primary focus is
to keep the lights on for the 67 million consumers that we
serve.
This past January, during a cold spell, we experienced our
all-time winter peak of approximately 145,000 megawatts. And if
you were here in the District or otherwise in our footprint
during MLK weekend, you probably didn't think for a second
about the cold weather and its impact on the grid. And that is
how we like it. And that is the expectation that we create for
ourselves at PJM, which is in tandem with our asset owners to
keep the lights on 24/7 without you having to think about it.
While our industry can be quite complicated, what we are
seeing projecting out into the future actually is not
incredibly complicated. After years of what has been relatively
flat demand for power in PJM, we are now seeing a major uptick
in forecasted growth due primarily to the proliferation of data
centers, but also due to electrification in the onshoring of
U.S. manufacturing.
According to our most recent forecast, PJM expects its
summer peak to climb to 220,000 megawatts over the next 15
years. To compare, our all-time summer peak, which occurred in
2006, is 165,563 megawatts. For winter, the forecast is
estimated at 210,000 megawatts, again, 15 years out. PJM's
record-high winter peak, again, occurred just this past January
at 145,000 megawatts.
So we are experiencing in real time as well as forecasting
out, the substantial increase in demand.
So let's talk about supply. After years of having a healthy
reserve margin in PJM, we are seeing that reserve margin get
eaten up. PJM conducted a study in 2023 where we estimated
retirements in the amount of 40,000 megawatts by 2030, driven
primarily by State and Federal policies and some economics.
Now, we do have a number of mostly renewable resources that
want to connect to the system that are currently in our
generation interconnection queue. That queue has undergone
quite a bit of reform per our own efforts and an order from the
FERC in 2022, and we are nearing the end of that FERC-approved
reform.
We hope that all of these projects interconnect. But we
certainly have quite a few projects that are through the queue
right now that aren't constructing at the pace needed to keep
up with supply retirements and certainly not the projected
increase in demand.
Last year, we interconnected just 4,800 megawatts into an
otherwise 180,000-megawatt system. So supply is coming off of
the system, and new supply additions are not keeping pace
again.
Currently, about 50,000 megawatts through the queue,
nothing left to do with PJM, and not interconnecting or not
constructing. And we can talk about that a little more.
We should also note that the resources leaving the system
are larger, dispatchable coal and gas resources. And the
resources they are adding from our queue are primarily
intermittent renewable resources. We are resource agnostic. And
when you flip the switch, you don't know whether that is a
nuclear, coal, gas, renewable watt that you have just consumed.
But when you trace those watts all the way back to their
source, all of these resource types have different capability
and availability. So we need to be conscious of that. It is not
a one-for-one swap in terms of availability and capability of
the resources that we are retiring and then the resources that
we are adding to the system.
But either way, we want those watts. We want those
renewable resources to find their way under the system as soon
as possible. We want as much supply as we can get in order to
meet this growing demand that means delaying retirements, new
supply, that is supply in our queue, and even additional supply
on top of that.
So again, supply is decreasing, demand is increasing, but
for your constituents, the supply demand in balance has the
potential to bleed into fundamental pillars of power delivery
for the average American to really reliability and cost. We all
need to consider reliability degradation and consumer cost
increases as a natural byproduct of policies that exacerbate
the supply, demand, and balance.
I want to end my opening statement with some optimism. The
fact that we are here talking about supply and demand is great
progress. We have been talking about this--PJM--for some years
now. And the fact that this committee is focused on the supply/
demand challenge is a really good thing. The fact that demand
is growing means that our Nation's economy is growing, and that
is a really good thing as well. We have lots of resources that
want to interconnect in the PJM system. That is a really good
thing as well.
PJM, in particular, has markets that it can utilize to
incentivize our next major technological breakthrough as well
as any new resources that we can possibly find onto the system.
Mr. Latta. Pardon me. If you could just finish up, please.
Thank you.
Mr. Haque. Yep. So, again, this is a moment here at PJM, it
is a moment for the industry, and in conjunction with our
stakeholders and all of you, we expect to meet that moment.
Thank you.
[The prepared statement of Mr. Haque follows:]
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Mr. Latta. Mr. Norris, you are recognized for 5 minutes for
your opening statement.
STATEMENT OF TYLER H. NORRIS
Mr. Norris. Good morning, Chairman Latta, Ranking Member
Castor, Chairman Guthrie, and Ranking Member Pallone, and
members of the subcommittee. Thank you for the opportunity to
testify. I am informed that another Tyler testified a month
ago. I assure you, this is not coordinated.
My name is Tyler Norris. I am a James B. Duke Fellow at
Duke University. My Ph.D. research focuses on electric power
systems. My research is informed by 15 years of experience in
the energy sector, spanning utility-skilled power plant
development, electricity market forecasting, and technology
commercialization at the Department of Energy. I am here today
in my personal capacity.
My testimony draws, in part, from my research as lead
author of a new study called ``Rethinking Load Growth,''
released last month by Duke University's Nicholas Institute.
While demand presents challenges, our research suggests
that with strategic planning, the U.S. power system is well
positioned to integrate these loads in a reliable and cost-
effective manner.
My testimony focuses on three areas: first, how the
existing power system can integrate new large loads while
preserving reliability; second, how interconnection reforms can
accelerate new generation; third, how these near-term solutions
can buy time and capital for long-lead resources, like bulk
transmission and nuclear power.
First, our analysis finds that with modest flexibility from
new large loads, the grid can accommodate significant demand
growth without major new infrastructure. The U.S. power system
is already designed to handle extreme peaks and demand, meaning
that in most hours the substantial portion of the power system
is unutilized. And, in fact, we found that the average
utilization rate of the U.S. power system is 53 percent,
meaning that nearly half of our power infrastructure sits
unused at any given time.
If new large loads such as AI data centers can adjust their
power consumption during a small fraction of high-stress hours
on the order of 0.5 percent of their maximum up time, the grid
could absorb the equivalent of four or five Project Stargates,
the $500 billion data center initiative announced by President
Trump. This highlights a key opportunity. Leveraging existing
capacity through flexible load strategies can provide a bridge
while long-lead resources, such as new transmission and a clean
firm generation, are developed.
Second, while load flexibility can help, interconnection
delays remain a major obstacle to deploying new generation. And
the volume of projects stuck in interconnect queues has
quadrupled to 2,600 gigawatts.
However, there is one market--the Electric Reliability
Council of Texas--they have taken a different approach, and it
is achieving significantly greater interconnection and
performance than other U.S. markets.
Between 2021 to 2023, ERCOT interconnected at least 70
percent more generation capacity than any other organized
market, despite serving a load that is half the size of PJM's.
Unlike other regions which require extensive studies and
costly network upgrades before allowing new generators to
connect, ERCOT permits interconnection first and manages grid
impacts in real time, while planning transmission upgrades
separately.
While not all markets can replicate the ERCOT's approach
without structural reforms, there are meaningful steps that
FERC and other policymakers can take to improve interconnection
efficiency. These include adopting a less restrictive approach
to energy resource and interconnection service, enabling
generators to use grid capacity reserved for existing power
plants and developing interconnection entry fees to provide
greater upfront certainty.
Finally, long-term reliability will require investment, new
transmission and clean firm generation. These resources can
take a decade to develop, and their high capital cost makes
them highly sensitive to policy uncertainty.
So stable Federal policies, including maintaining tax
incentives, loan guarantees, and clear transmission-planning
processes, will be critical to ensuring that these projects are
built.
At the same time, a hasty overbuild of new gas
infrastructure in response to load growth could undermine
private investment and clean firm technologies such as advanced
nuclear and geothermal.
If investors perceive that policymakers are tilting the
playing field towards gas or creating excess capacity that
substantially depresses capacity prices, they may be reluctant
to commit to these higher-risk, long-term investments.
In conclusion, by leveraging flexible load, streamlining
interconnection, and investing in long-lead resources, the U.S.
can maintain reliability while enabling economic growth and
making progress on decarbonization.
Thank you for the opportunity to testify, and I look
forward your questions.
[The prepared statement of Mr. Norris follows:]
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Mr. Latta. Well, thank you very much for your opening
statement.
Mr. Black, you are recognized for 5 minutes for your
opening statement.
STATEMENT OF NOEL W. BLACK
Mr. Black. Thank you up, Chairman Latta, Chairman Guthrie,
Ranking Member Castor, and members of the committee for the
opportunity to discuss what we see as exciting but pressing
policy issues around electricity.
Electricity is the lifeblood of our modern society. Its
essential service is woven into every aspect of our lives. It
powers our homes and hospitals, drives our economic growth, and
ensures the well-being and safety of our customers.
We believe this interconnected grid that we have built over
the last 100 years is irreplaceable in delivering electric
service and provides scale and value that other solutions can't
match.
Electricity is a necessity. An access to reliable
electricity is a fundamental expectation. When electricity is
unstable or unaffordable, the real-world impacts are immediate
and can be severe. Our responsibility is to ensure the grid
delivers dependable, cost-effective energy no matter the
circumstances and over the long term.
At Southern Company, our 28,000 employees take this very
seriously. Every day, we work to serve 9 million customers who
rely on us. Our diverse 44,000-megawatt interconnected fleet
spanning nuclear and hydro, natural gas, coal, and renewables
demonstrates how an intentionally engineered approach provides
a foundation for energy security.
Our system, this interconnected grid, is a modern
engineering marvel, as we have heard earlier. Utilities like
ours are an essential piece of the energy equation. It is not
only the interconnected grid with its--it is only--I beg your
pardon--the interconnected grid with its scope and scale that
can meet all customers' needs.
Southern Company's commitment to innovation resilience is
evident. With the recent addition of new nuclear units at
Vogtle, we now operate the largest nuclear generation station
in the country. In this moment of rapid energy growth, it has
become obvious how electricity and energy, though, are highly
regional in nature. The weather, resources, State and local
politics, geography, the region's load profile and market
structure greatly impact the physics and finance of delivering
electricity.
We have all heard the one-size-fits-all approaches are
often not appropriate for energy policy. That is because of
this intense regionalism that drives energy outcomes. At
Southern Company, our customers are the beneficiaries of a
State-regulated, vertically integrated market structure that
holds us, Southern Company, directly accountable.
Straightforward regulatory models like ours, where the
accountability for the grid is clearly understood, are
producing results enabling this innovation economy.
In short, the Southeast remains open for business. Regions
with unusually complex regulatory processes are experiencing
slower infrastructure build-out. I think this may be why the
concept of colocation has become so popular in certain parts of
the country.
Time-challenged customers see colocation as a tool to cut
through some of the complexities. As those regions consider
colocation arrangements, however, it will be critical to ensure
that existing everyday customers are protected.
Colocation arrangements we don't see are not necessary in
our region because we are timely serving this demand. At
Southern Company, we have a robust, well-planned energy system
that seeks to protect all customers from price volatility.
Under the watchful eyes of our regulators, we strive to
make the right investments today to keep prices stable and
support economic expansion, which helps mitigate any
inflationary pressures tomorrow.
However--and I am about to wrap up, and this is important--
to sustain this momentum, we must continue to invest in
infrastructure. The reality is clear: Infrastructure,
particularly natural gas infrastructure, is required now to
meet the rising demand. Pipelines, transmission systems, and
generation capacity must keep pace with the economy.
Thank you for the opportunity to speak. I look forward to
discussing how we can work together to ensure America continues
to benefit from abundant, reliable, and affordable energy.
[The prepared statement of Mr. Black follows:]
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Mr. Latta. Well, thank you very much for your opening
statement. And that will conclude our opening statements from
our witnesses. We will now begin the questions for our Members.
And I will begin the questions. I recognize myself for 5
minutes.
One of the questions I ask everybody that came before us in
the subcommittee in the last Congress is very simple. I usually
get a yes or no.
Do we need more energy production in this country, or less?
Mr. Brickhouse?
Mr. Brickhouse. Yes.
Mr. Latta. Mr. Haque.
Mr. Haque. Yes.
Mr. Latta. Mr. Norris?
Mr. Norris. Yes,
Mr. Latta. Mr. Black?
Mr. Black. Absolutely.
Mr. Latta. Thank you. That is exactly the same response I
got from everybody in the last Congress.
Boy, lots of questions and so little time that we get. But
if I can start--Mr. Haque, if I can ask you some quick
questions. We had the polar vortex, it went across the Midwest
in 2014. And I know in talking with PJM, I think every year I
ask the same questions, if we could sustain what we were able
to do, not having blackouts, brownouts at that time.
But when looking at PJM's statements and also what was told
in my office, that we also now are looking at 2026. What could
happen in 2026 if we had another massive polar vortex?
Mr. Haque. So, Chairman, you know, where we are headed is
this continued supply/demand crunch--so, again, supply is
coming off the system, we are not seeing a lot of the new
supply added to the system, and then we are seeing these major
upticks in demand----
Mr. Latta. Let me interrupt. I am sorry to interrupt. Let
me just ask you what you just said. Because, also, in your
testimony you brought this up. You know, we are taking off
generation at the same time the demand is going up. Should we
be looking at not taking off that generation? And why is that
generation being taken offline?
Mr. Haque. The drivers behind generation leaving the system
are primarily State and Federal decarbonization policies in
tandem with some economics. We put out a study in 2023. It was
an energy transition study that we put together that expressed
the statistics around the drivers for supply leaving the
system.
Mr. Latta. Well, you know, that is concerning because, you
know, if we are taking it off at the same time we are having
more need, it is going to be a real problem for us.
Mr. Black, if I could ask, in your statement, and also
towards your closing in your statement, you are talking about
we need to be investing in that infrastructure that supports
rapid growth.
You know, was the whole idea and the whole notion of all
these data centers coming online ever projected maybe 10 years
ago from what we are looking at in our generation that we had
to have?
Mr. Black. Definitely not projected, but definitely
manageable, right? So I think we would go through processes
called IRPs, or integrated resources planning processes, every
few years. And we expedited one in Georgia recently so that we
can--it gets back to that notion of intentionally designing and
engineering our system fleet to meet this moment. I would say,
we think about it and manage it really through this notion of
energy abundance as well, right?
Supply and demand, obviously, is an issue in everything and
everything and, you know, we deal with in our lives. But I
think we seek to make sure we are available. And that
availability and abundance puts downward pressure on rates for
us, right? And I think that is a really, really important
issue. And obviously, in this moment of meeting this demand, we
can do both.
Mr. Latta. Well, thank you. Mr. Brickhouse, I have probably
more electric co-ops in my district than any other districts in
the State of Ohio. And I know the importance of what you all do
out there. But, you know, a couple other questions I think it
is very important that you brought up was about addressing
permitting. And on the permitting side, if we don't do
something, what is going to happen out there if we don't
address permitting, especially for not just you, but for
anybody that is out there, either generating or on the
transmission of power?
Mr. Brickhouse. Well, what my colleague from PJM referenced
was a large uptick in--or mismatch between supply and demand.
And I think this mismatch is critical for policymakers to
understand. It takes us 7 years from initial concept to
bringing on and actually generating electrons for a power
plant. You can bring on a data center in 3 years. So what we
are faced with now is having to tell data centers and other
large loads that they need to wait up to 7 years in order to
build their facilities. So permitting is a key part of it, and
we need more sensible, you know, permitting action coming out
of Congress and, frankly, in some of the States we serve as
well.
Mr. Latta. Well, again, I appreciate everyone being here
today, because all of the things that we have heard from our
witnesses, you know, this is what we have to be addressing to
make sure we meet our power needs into the future.
And my time has expired, and I now recognize the gentlelady
from Florida, the ranking member of the subcommittee, for 5
minutes for questions.
Ms. Castor. Thank you, Mr. Chairman.
Mr. Norris, your new study caught my attention because you
say that we can accommodate some of the additional capacity we
need through flexible load strategies. What are you talking
about here?
Mr. Norris. Thank you, Ranking Member. What flexible load
strategies refer to is we are a very, very small summer--number
of hours a year where the system is experiencing its highest
stress, that these large electricity consumers could reduce
their assumption from the grid from a variety of possible
avenues. One would be if they have their own onsite power for
batteries to work if they could tap, again, we are talking on
an average basis of 2 hours per event. That is one option.
A lot of the new AI centers--data centers have the ability
to defer their workloads. These are the training workloads that
train the foundational models. And so those are deferrable.
Other advanced data center companies have now found the
ability to shift those workloads to other data centers and
other regions during extreme weather events. And then, finally,
there is the option to simply temporarily reduce operations.
And this is the case for other computational loads like Bitcoin
mining. And those are actually some of the most flexible loads
on the system that we see right now. And they are able to
dispatch down almost instantaneously in signal from the grid.
Ms. Castor. Will this help us address the growing concern
with additional costs to consumers, to other rate payers as AI
data centers demand more energy?
Mr. Norris. Yes. So there is an opportunity here because,
you know, we already have a relatively low utilization rate for
the existing power system. So if new load utilize the existing
more, that can result in actual reduction in rates to the
existing rate payers. So that is a great opportunity.
The challenge becomes when the new loads end up triggering
the need for substantial new grid infrastructure and new power
plants that are only needed to serve a limited number of hours
in the air for peaking capacity.
And so, I think it is important to consider guardrails when
you are talking about potential, significant increase in rates
in response to that capacity expansion.
Ms. Castor. So is that a job for Congress? Is that a job
for FERC? Is that a job for public utility commissions, or all
of the above?
Mr. Norris. I think it is probably all of the above. I
mean, one of the challenges that we face right now is that in
large-load interconnection, there are no standardized
processes. So this is State jurisdictional as, you know, retail
rates usually are. But, you know, it is very different from
generator interconnection, where we have very standardized
processes. It is work regulated.
So it is really the Wild West right now, and each State is
kind of doing it differently. And so I won't--I am not a
lawyer. I am not going to opine into the jurisdictional issues
between FERC and States, but I think other previous former FERC
Commissioners are seeing right now as we speak that it would be
helpful to have some degree of synergization,
Ms. Castor. So, Mr. Haque, what do you think of this? And
have you looked at the study?
Mr. Haque. I have looked at the study. I think there is a
lot there with respect to demand flexibility. And we have
actually been in conversations with data centers who are trying
to locate it in the footprint about their ability to be
flexible. It is not clear whether or not these data centers can
actually express the kind of flexibility that is described in
Mr. Norris' paper.
And so, you know, I agree with Mr. Norris that, if we are
able to get some flexibility from data center load, that, you
know, we may not have to plan necessarily for--because we
planned our systems based on peak, because we want to serve 24/
7, 365.
Ms. Castor. And I hear you loud and clear about the
interconnection queue problem. And that clearly is an area
where Congress could help get these large power sources onto
the grid. Do you agree?
Mr. Haque. Representative, our generation interconnection
queue has been reformed. So we got an order from the FERC in
2022, and we are at the tail end of implementing that reform.
It has taken some time to get the queue from a position where
it was evaluating these large centralized generating stations,
now evaluating many hundreds, if not more of smaller, renewable
projects. So we realize queues are a challenge.
Ms. Castor. You are ahead of the game compared to others?
Mr. Haque. I have not benchmarked us necessarily against
others, and I don't want to speak against. But we are, again,
at the tail end of that queue reform effort.
Ms. Castor. OK. Mr. Norris, you also highlight this problem
with the interconnection queues in your testimony. What do you
recommend that Congress needs to do about it?
Mr. Norris. Thank you for that. I know we are limited on
time, so I will try to be brief. I think, while I mentioned
that it is hard for other markets to fully replicate what ERCOT
is doing, I think there are a lot of lessons there and things
we can do enable generators that are willing to accept some
risk of curtailment to be added to the grid much more quickly.
And we have adopted this very sort of conservative, restrictive
approach that actually imposes these very high barriers of
entry to getting new generators on the system.
And so I think there are opportunities to streamline an
interconnection service and actually make it more consistent
with the original intent of energy resource center connection
service that FERC set out in 2003.
Ms. Castor. Thank you. I yield back my time.
Mr. Latta. The gentlelady's time has expired, and yields
back. The Chair now recognizes the gentleman from Kentucky, the
chairman of the full committee, for 5 minutes for questions.
Mr. Guthrie. Thank you. I appreciate it very much. And a
lot of my thinking in this area came--a lot of us were at the
Library of Congress last fall, and Eric Schmidt--the Google
Eric Schmidt, not Senator Eric Schmitt--was presenting to us,
and he talked a lot about the demands for AI, the demands for
power. And in his book ``Genesis'' he wrote with--the last book
written by Henry Kissinger--just really lays out the need to
win the battle of AI against China.
And who is going to control the platform for AI? And he
didn't say this, but I took away from it, it is like the
dollar. Are we going to be the world currency or not? And so,
in the biggest driver for AI is the innovators are going to
figure it out. What they need is access to power so they can
generate these. And there's trainable AI data centers that can
be flexible. But China is not building--they are building
others as well as that we have to compete with. And we are
going to have to be flexible and efficient as much as we
possibly can.
But to believe that we can stay down the path that we are
on in electricity and to defeat China, that I think it is
just--it is like European thinking: Let's run the world, let's
plan for the world like we want it to be, not like it is. And
you deal things in the ivory tower. It has just been
devastating to Europe right now. Go there and see.
And so we have to be responsible and we have to have--but I
think it is imperative that we win the fight for AI. If we
don't, then we are going to lose the battle for AI to China.
And China is building 2 coal plants a week--or a coal plant
every 2 weeks--to support their AI. We are also going to lose
the other battle for climate change as well unless China has a
different climate than we do, and I don't think that is
accurate.
So, Mr. Black, in your testimony you talk about energy
policies are highly regional in nature and how it affects the
physics of finance and making and moving electricity. For
policymakers, what should we take away from that point?
Mr. Black. So we just had a question, sort of, talking
about whose job it is to deal with some of these issues. You
know, I will say we are always thinking through how do we
regulate as close to the customer as possible from the State
perspective.
So a lot of the programs that Mr. Norris has studied in
presenting we have had for a number of years. I am going to age
myself. At 25 years ago, I helped develop a tariff called the
customer-owned dispatchable energy tariff, which is a standby
generator tariff that does exactly what Mr. Norris is talking
about. But that is all through the State level, right.
So when we get into these responsibilities of who can
manage the grid and help us improve utilization rates, we would
say much of that is at the State level. And we do that through
IRPs and, again, the careful, careful management and oversight
of our State regulators.
Mr. Guthrie. So thank you.
And we are going to have more hearings and hopefully have
people that build these data centers that will just talk about
what the risk is if we go down the path that Europe has gone
where they are not building them in Europe. They are not
building them. They can't afford to build them in Europe, and
that is a--it set Europe back. Absolutely, their energy policy
has set them back.
So, Mr. Brickhouse and Mr. Haque, you are in different
regions of the country, under different regulatory setups.
Would you each briefly explain how you plan to meet new growth
and power demand and ensure reliability and affordability?
Mr. Brickhouse first, and then Mr. Haque.
Mr. Brickhouse. Thank you.
So our process and actually how Basin was formed more than
65 years ago, it starts with a load forecast. And from that
annual load forecast, we will plan out what our generation
assets are going to look like in the future. So you get
something similar to what Mr. Black was referencing on an
integrated resource plan.
And Basin's recent history has been rapid growth. Since
2010, we have averaged an increase in megawatt hour sales to
our members of about 5 percent a year. And you are not going to
find hardly any other utilities that have grown that rapidly.
And over that----
Mr. Guthrie. I have a limited amount of time. So, Mr.
Haque, if you could. I am running out of time, so----
Mr. Haque. Sure. PJM is, again, a 14-jurisdiction regional
transmission organization, and we have both regulatory
paradigms. We have the vertically integrated jurisdictions,
about half, and we have restructured jurisdictions, about half.
Restructured jurisdictions, they rely on markets to incentivize
new resources. Vertically integrated jurisdictions, the same as
Mr. Brickhouse and, I think, as Mr. Black were describing,
through integrated resource planning.
Mr. Guthrie. So thank you.
And wind and solar is important to this mix. As a matter of
fact, you can produce it quicker, is what my colleague from
Florida talked about. But the problem is, if you incentivize it
to the point where people don't build other dispatchable power
because you can't be competitive, then we lose in the long
term.
So in the short term, wind and solar is going to be--
because of the supply chains and others, we are going to need
it, but we also need to make sure we don't disincentivize
building power to win this battle.
So my time has expired, and I yield back.
Mr. Latta. Thank you much. The chairman yields back.
The Chair now recognizes the gentleman from New Jersey, the
ranking member of the full committee, for 5 minutes of
questions.
Mr. Pallone. Thank you, Mr. Chairman.
Mr. Norris, I want to ask you some questions. I want to
focus on something you mentioned in your written testimony,
which was that if large energy loads can be a little flexible,
it will buy us a lot more time to increase the grid's
generation and transmission capacity. And, frankly, we are
going to need that time because many grid operators have been
abysmally slow at getting sources of clean energy hooked up to
the grid.
So let me ask you this, Mr. Norris: Can you talk about what
policy changes to interconnection queues or anything else we
need to make to get energy on the grid as quickly as possible,
and how important it is to make those changes sooner rather
than later?
I have three questions, so----
Mr. Norris. Thank you, Congressman.
This has been a significant area of research for us, and
what is actually interesting about it is how similar the
solutions are on the large-load side for the large-generator
side to get them onto the grid faster. And the way it works,
sir, is they look at the maximum output or draw that the
generator or the load puts on the system, and they study it.
And what happens is it often triggers a lot of upgrades on the
system.
But if the load or the generator is willing to be flexible
such that it might be curtailed in a small number of hours a
year, it can connect to the grid much more quickly. That is
what ERCOT does, and that is why their speed to interconnection
is twice as fast as every other market.
And so with modifications to energy resource
interconnection service and making these large-load services
available, they may be able to connect with the grid much more
quickly so that we can win the AI race, as the other Member
just said.
Mr. Pallone. All right. I guess I am going to have to go
quicker, because I actually realized I have four questions.
With all this increased demand on the grid, how can we best
protect residential ratepayers from skyrocketing costs, and how
much of this is the Federal Government's responsibility versus
State regulators' responsibility?
Mr. Norris. Yes, I think for a lot of these large loads
that are coming on the system, they are coming into a paradigm
where we had no load growth. And where the traditional paradigm
was, we need any new loads of any cost. And the problem is
that, under this kind of paradigm, with this amount of load
this quickly, the rate impacts could be substantial.
And so I think you are seeing a number of jurisdictions
realize that there need to be guardrails put in place. And
ideally, any incremental cost of service to serve the new load
for these large loads should be covered by that large load.
And I think there are other guardrails that can be put in
place like upfront security they could post while they are
trying to interconnect, and then exit fees as well.
Mr. Pallone. OK. And then I wanted to go back to the
studies I entered into the record earlier, and they show that
repealing the IRA's technology-neutral tax credits could
increase the price families pay for power in some States by up
to 20 percent.
So, Mr. Norris, just because--you know, of course, I
question a lot my Republican colleagues' what they describe as
facts. But wouldn't that be bad for affordability? Am I
correct?
Mr. Norris. Yes. And there are a few studies out there that
are demonstrating this right now. I mean, it is sort of
obvious, right? If you pull back incentives for a given
activity, you are going to see less of that activity. In this
case, that means there is going to be less generation out of
the system, and that is going to impose higher cost.
And there was a study just released last week by NERA
Economic Consulting that found that there would be higher rates
of 7 percent for residential customers in 2026 alone, and I
think it was 10 percent for commercial customers.
Mr. Pallone. OK. My last question is of Mr. Haque. FERC
recently approved PJM's Reliability Resource Initiative, or
RRI, which allows the one-time assertion of up to 50 projects
in the PJM's queue ahead of other resources.
I am very aware of PJM's challenges of getting enough power
line, but just ask--you know, if you ask any of my
constituents, they will certainly talk about that.
But, Mr. Haque, can you confirm that the RRI framework is a
one-time solution for PJM and that the grid operator is
dedicated to working diligently to comply with FERC Order 2023
and create an interconnection process that doesn't need these
manual interventions to allow energy to access the grid?
Mr. Haque. I can confirm all of that, Representative. Thank
you.
The RRI initiative is actually one of three different
initiatives that we advanced to try and expedite supply trying
to come onto the system, and we are grateful for FERC's
assistance in approving our proposals.
If you think about it, you know, we are going to be in a
position next year where we are in our new queue reformed
process. Any project that comes through the queue will have a
1-to-2-year turnaround timeframe. It has taken us a few years
to, sort of, unclog the queue and get to that position, but
while we are doing that, we have actually created, through the
FERC's approval, some additional expedited lanes to try and get
resources onto the system to meet this growing demand.
Mr. Pallone. And, you know, obviously, I am concerned about
this approach of deciding which projects can get onto the grid
is going to disincentivize clean energy developers from, you
know, ever building generators that serve PJMs again.
I know my time has run out, but I do want to say, Chairman
Latta, I was happy to see--he is not here, I don't think--that
Chairman Guthrie talked about the importance of solar and wind
power. Because every time I hear Trump, he says he wants to get
rid of it completely. So it is good that you guys, at least--or
I hope--do not agree with Trump in that regard, but we will
see.
Thank you.
Mr. Latta. The gentleman's time has expired. He yields
back.
The Chair now recognizes the gentleman from Texas, the vice
chairman of the subcommittee, for 5 minutes for questions.
Mr. Weber. I thank the chairman.
Mr. Norris, I am going to come to you. You made some
interesting statements in your testimony about ERCOT has
certain advantages. Would you go back through there and state
those again for us?
Mr. Norris. Yes. So ERCOT makes it much easier for new
generators to connect to the grid, and there are different
reasons for this, but basically it is come one, come all. They
study them. They give them the result of the study, but they
don't charge them for the cost of big grid upgrades.
So a project can connect at its own risk, and the result is
that their speed to market, speed to interconnect is twice as
fast as other markets. And they have been adding more capacity,
as I mentioned earlier, than any other market by far.
Mr. Weber. When you say speed to connect is twice as fast,
what does that mean? They are able to get up and running in
half a day, 1 day, 2 weeks? What does that mean?
Mr. Norris. Well, these are big assets. So it is a little
longer than that, but you are generally talking about on the
order of 2 years. The speed we are talking about is from
interconnection request to getting online. And so we are
talking about, you know, 3 years, approximately. And in other
markets, it can take 5 or 6.
Mr. Weber. OK. Mr. Brickhouse, I am going to come to you.
With that in mind--and I know, of course, ERCOT, do I recall
correctly--I will ask all of you. There are nine grids in the
country. Is that right? Nine various grids. Is that right?
Mr. Haque. There are nine grid operators in the country.
Mr. Weber. Nine grid operators. OK.
So with that in mind, trying to make things easier to
connect to, Mr. Brickhouse, how do you all follow along those
lines? Are you like ERCOT, less like ERCOT? Where do you all
fall in that scenario Mr. Norris just painted?
Mr. Brickhouse. Well, with respect to connections, as I
mentioned earlier, you can get a data center online a lot
quicker than you can build a power plant. So our focus is--
lately, has been getting power plants online as quick as
possible. And so we will go--primarily, most of our load is in
the Southwest Power Pool. So we will go through an
interconnection process with them.
And with Pioneer IV, which is 580 megawatts of dispatchable
natural gas generation we are finishing up, we have actually
elected to connect to the grid prior to the final cost estimate
of what grid upgrades will need to take place.
Mr. Weber. Is that a 2- or 3-year process?
Mr. Brickhouse. Yes.
Mr. Weber. How about you, Mr. Haque, 2- or 3-year process?
Mr. Haque. Our process is different than ERCOT's process.
If you are load that wants to connect to the system, you know,
we feel like there is an obligation to serve that load, but our
processes are different than the others.
Mr. Weber. So what timeframe does it take?
Mr. Haque. I am sorry. Can you repeat the question?
Mr. Weber. What timeframe does it take? If you are going to
hook up--you identified a load. What is it going to take: a
year, 2, 3?
Mr. Haque. That is dependent. OK. The load that wants to
interconnect to the system, it will be dependent on a series of
different factors. And it will be dependent on, first of all,
the transmission system, whether the transmission system can
actually accommodate the load.
Mr. Weber. Bear the load.
Mr. Haque. And so we will study it and see if the
transmission system can actually accommodate the load. And then
there are some--we will just characterize them as adventurous
arrangements that some of these data centers are trying to
enter into, which then adds to the potential complexity with
the possibility of this concept of colocation generally.
Mr. Weber. So you are studying right now about AI, aren't
you?
Mr. Haque. Yes, we are.
Mr. Weber. OK. How about you, Mr. Brickhouse, studying
right now about AI?
Mr. Brickhouse. Yes, we are expected to connect AI.
Mr. Weber. Did either one of you all--and I will start back
with you, Mr. Brickhouse--have to knock offline a coal plant?
Mr. Brickhouse. Have we knocked offline a coal plant?
Mr. Weber. Have you all had to take a coal plant offline?
Mr. Brickhouse. No.
Mr. Weber. How about you all, Mr. Haque?
Mr. Haque. For the purposes of AI?
Mr. Weber. No, just in general.
Mr. Haque. Yes, we have had quite a bit of coal retire on
our system.
Mr. Weber. So let me go back to Mr. Brickhouse. Not just
for AI, but have you had to take a coal plant off just in
general?
Mr. Brickhouse. We do have periodic outages. And then with
the wind resources across the great planes, periodically----
Mr. Weber. But you have not decommissioned a coal plant?
Mr. Brickhouse. We have not decommissioned a coal plant.
One of our original coal assets was actually decommissioned in
the '80s, which I don't think you are referring to. But that
was for different reasons.
Mr. Weber. What, I don't look that old? Is that what you
are trying to say? I like this guy.
So I guess I will come to you, Mr. Black. How do you feel
about commissioning--or decommissioning some of the coal
plants? You have got 13 seconds.
Mr. Black. Sure. We have retired some coal plants, but we
have some coal plants, obviously, still in our fleet. They are
incredibly useful for us, and we have extended the life of
those recently in our IRPs to meet demand.
Mr. Weber. OK. I appreciate that.
Mr. Chairman, I yield back.
Mr. Latta. Thank you. The gentleman's time has expired, and
he yields back.
The Chair now recognizes the gentleman from California's
50th District for 5 minutes of questions.
Mr. Peters. Thank you very much, Mr. Chair.
And thanks for holding the hearing on this issue. This is
something I have been looking forward to for a while, where we
can have a discussion about kind of what the challenge is and
what we might do to come up and meet it as a country.
It will be a challenge to keep the lights on and keep costs
low given what we have, this unprecedented increase in energy
demand from data centers, manufacturing electrification,
population growth. I think we have all acknowledged that.
I don't believe we are prepared to handle this demand as
is. We can't just address the problem by building more of any
one particular kind of energy, and anyone who thinks otherwise,
I think, is probably maybe being a little bit ideological,
which I don't want to be.
New cleaner generation has to play a role in meeting the
energy demand. We also need to make significant investments in
our electric grid and pipeline infrastructure so that power can
be moved more efficiently from where it is abundant to where it
is needed. And we need to use all the tools in the toolbox to
meet the challenge.
But we do fail if we don't get shovels in the ground and
start building what we need at the pace we need to build it, at
a pace that meets the urgency of the challenge. And every day
we waste will increase costs, give our competitors an edge,
make us more open to unreliability, and make us less safe.
In the 1970s, when many of the first environmental rules
were passed, our priority was to stop dirty, destructive
projects. We were on defense. Today, if we want to continue to
reduce our emissions and build the infrastructure of the future
while reducing cost for taxpayers, we need to go on the offense
and reform our laws to meet the challenges of today. As we have
spoken before, that means permanent reform in many different
contexts.
I look forward to working with my colleagues on real
solutions that will strengthen the electric grid, drive down
costs, and build a more resilient future for our constituents.
Mr. Norris, I have put forward several bills to incentivize
grid planning to harden utility infrastructure, more
efficiently site and permit national-interest transmission
lines. And one of those bills is my bipartisan Speed and
Reliability Act, which streamlines permitting for large
transmission lines that relieve grid congestion and improve
reliability.
Can you talk about the cost and reliability benefits to
identifying the highest-valued projects and streamlining
permits for those projects?
Mr. Norris. Absolutely. And thanks for your leadership,
Congressman.
I think a good case study on this, actually, is in our
region in the Carolinas where the industry worked with Duke
Energy on a proactive transmission upgrade. It was to the
eastern Carolinas. And the reason is because the least-cost
resources available to the system are located there. Its large-
scale solar power plants.
But that area of the grid is relatively weak, and so they
went through a proactive public-policy-driven process. They got
approval from the utilities commission, $560 million, but it
unlocked gigawatts of projects. And not only was that expected
to reduce rates overall but actually could improve reliability
because, you know, on the hottest summer days where you get a
really nice solar profile, that could actually help support the
summer peaks. So, you know, that is a good example.
And I think your bill there is a no-brainer, right? When
you have to go through two separate permitting processes, both
from FERC and the Department of Energy, it makes a lot of sense
to consolidate into one because, again, if we are going to meet
this load growth in a fast manner, we have to get into the
transmission build as quickly as possible.
Mr. Peters. Thanks. I appreciate you being here. Also, we
have a Duke connection, which I also--so I am listening to you
extra hard. I appreciate that very much.
Mr. Haque, I wonder if you could talk about interregional
transmission and the importance of investing in the electric
grid. How is that complementary to building new generation
sources, and how do you think about that, both regional and
interregional transmission?
Mr. Haque. So, certainly, the build-out of transmission
will be essential to getting our resources, especially our
renewable resources that are in the queue, connected to the
power grid. The more transmission that you build out--we build
out for reliability, we build out for market efficiency. We are
advancing down this path of long-term planning. That was
approved by the FERC. But the more transmission you build out,
theoretically, the less that renewable developers need to pay
in upgrades. And so that will be helpful there.
Interregional, we currently--we export quite a bit of power
to our neighbors. February, we were exporting--in fact, we
exported 14,000 megawatts during a cold weather snap to our
neighbor, the Midcontinent ISO. And so there is actually quite
a bit of interregional capability that exists today, and so we
will continue to study this to see if there is any additional--
--
Mr. Peters. PJM has determined that it is not just about
building transmission in your region for reliability, for
consumer service. You have decided that as part of your
business it is important for you to plan and to execute on
interregional transmission, right?
Mr. Haque. We have, again, quite a bit of interregional
transfer capability, and we will continue to analyze that. We
are actually doing a joint study with the Midcontinent ISO
right now. And, of course, FERC Order 1920 actually mandates
that we look at interregional planning in tandem with our long-
term planning framework.
Mr. Peters. Well, thank you. Thanks for your leadership.
And thanks to all the witnesses.
I yield back.
Mr. Latta. Thank you. The gentleman's time has expired, and
he yields back.
The Chair now recognizes the gentleman from Alabama's Sixth
District for 5 minutes of questions.
Mr. Palmer. I appreciate the witnesses being here. And I
want to raise some questions about the reliability of the grid,
particularly as it regards transformers.
A couple years ago, there was an attack on two--on
transformers in North Carolina that shut down power for about 4
or 5 days. And one of the things that I found out was that they
had to salvage or scavenge transformers from around the
country. They didn't have transformers in reserve to get those
back up.
Mr. Black--I should say, Mr. Brickhouse, you flagged these
concerns in your testimony. And I am concerned that we have a
major supply chain problem in our ability to manufacture
transformers here to meet our needs if we were to have a
catastrophic event, a coronal mass ejection, a geomagnetic
issue that could shut down huge numbers of--huge portions of
our power grid.
So I would just like for you to comment on that and
particularly something that President Trump mentioned in his
speech last night about the need to declare I think critical
minerals, rare earth elements, as critical to our national
security.
Mr. Brickhouse. So on the transformer issue, I think it
extends a little bit further to breakers as well. And part of
the issue that you are having is with these large loads that I
think everyone has talked about today. A data center needs
similar equipment as a power plant. We need breakers and
transformers when we build a power plant to get that energy on
the grid, and to receive that energy, a data center needs
breakers and transformers.
So with the advent of these large loads in the form of data
centers, you have almost double demand for the similar
equipment that are needed by the two facilities.
Mr. Palmer. If we had a catastrophic event--are you
gentlemen familiar with an event that occurred in 1859 called
the Carrington event? It was the worst coronal mass ejection
ever recorded.
If we had an event like that, Lloyd's of London has done an
assessment that it would--there would be about 30 million
people in North America that would be without power for
anywhere from 2 weeks to 2 years. If we were to have something
along that scale, how long would it take us to replace the
transformers, the breakers, to get our grid back up and
operational?
Mr. Brickhouse. It would be a considerable period of time,
depending on how wide the impacts were. We did have--it causes
the Northern Lights in North Dakota, actually, and there was
significant activities within the past 12 months on those. And
the grid operators, especially in the Western area, the power
administration watched that closely.
Mr. Palmer. The point I am trying to make, sir, is that we
don't have the manufacturing capacity in this country. We don't
have the skilled labor. We don't have access to the critical
minerals that we need to build our own transformers. We don't
have an adequate supply of transformers. Most of the
transformers we get either come from Mexico or China.
We would be in a very, very serious situation that would--
Lloyd's of London I think would--report would indicate a
potential massive loss of life, depending on when it occurred,
and that is a huge concern to me.
And what happened in North Carolina, Mr. Black, the guy
goes in and shoots up the oil tanks, which cooled the
transformers, and we lose that whole station.
Does Southern Company have a plan if we were to have even
not a catastrophic event but a major event?
Mr. Black. Certainly, GMDs, who have been on our radar for
quite some time, and, you know, physical security like you
mentioned in the Carolinas there are something we plan for and
test and prepare for all the time.
I think your sensitivity around, in the midst of all this
growth, the supply-and-demand challenges, you know, we have
seen it ebb some, the challenges, since COVID, but there is a
lot going on, right, and the international stress on the supply
chain is there for sure. So we are preparing for it.
Mr. Palmer. My concern too is we are in an arms race for
artificial intelligence. And I am looking at the NERC report on
the high-risk areas and the medium-risk areas, and it is clear
we don't have the power capacity to build the data systems that
we need in order to win that arms race with China.
With that, Mr. Chairman, I yield back.
Mr. Latta. Thank you very much. The gentleman yields back.
And the Chair now recognizes the gentleman from New
Jersey's Eighth District for 5 minutes of questions.
Mr. Menendez. Thank you, Chairman.
Clean energy is the only source of new generation capable
of meeting electricity demand. A report by the Clean Grid
Initiative suggests that we need to rapidly deploy clean energy
generation and transmission faster than we currently are.
And 94 percent of proposed power generation waiting to be
interconnected is zero carbon. But, instead, the President's
energy policy focused primarily on oil and gas while ignoring
clean energy sources, such as solar and wind. In New Jersey, we
have already seen the consequences of the President's
prioritization of oil and gas, as the future of renewables,
like wind, have been put at risk.
We should all be committed to accelerating our clean energy
production and connecting it to the grid as quickly as
possible. Instead, Republicans and Trump are focused on
repealing critical programs that invest in renewable energy
generation, putting the future of clean energy at risk.
The Inflation Reduction Act provides certainty for the
energy industry, allowing us to plan for future energy demands.
Investing in clean energy generation is critical for ensuring
the future reliability of our grid. Not only does repealing the
IRA jeopardize the future of renewables, it will also increase
energy cost for consumers and our constituents. The IRA is on
track to save Americans up to $38 billion on their electricity
bills.
Mr. Brickhouse, during your opening remarks, you made a
reference to consistent reliable policies. And I believe it is
safe to say that you would agree that the energy industry needs
certainty. Is that correct?
Mr. Brickhouse. Consistent policy is helpful, correct.
Mr. Menendez. And having some predictability is helpful in
terms of these long-term investments?
Mr. Brickhouse. Having predictability? Is that what----
Mr. Menendez. Predictability in terms of future policies is
helpful in making these long-term investments. Is that correct?
Mr. Brickhouse. Yes.
Mr. Menendez. So wouldn't repealing the IRA make it harder
for the industry and States to make the investments needed for
projected demands for reliable, affordable electricity? Yes or
no?
Mr. Brickhouse. I think that depends.
Mr. Menendez. I think the answer is yes, but I will move
on.
Mr. Norris, would repealing the IRA, as our colleagues
across the aisle seek to do, make life more or less affordable
for Americans?
Mr. Norris. According to economists, based on studies they
have conducted in the past couple of months, it will lead to an
increase in electricity rates. And the NERA study says 7
percent for residential customers in 2026, 10 percent for
commercial customers in 2026.
Mr. Menendez. So the answer would be, yes, it would make
life more--it would be less affordable for Americans?
Mr. Norris. Correct.
Mr. Menendez. And how disruptive would the repeal of the
IRA be to the long-term investments currently underway across
the country to increase our access to, again, reliable,
affordable electricity?
Mr. Norris. I want to highlight one resource in particular,
which is nuclear power. And I think it is unequivocal that--I
mean, it is a resource that is still above cost. Georgia did a
great service in some sense by paying above market for those
two reactors at Vogtle, but there still has to be some cost
premium paid to get those resources online. And they are
heavily reliant on Federal subsidies and incentives.
And so if there is a repeal of the IRA tech-neutral tax
credit for nuclear or any impact on the Loan Programs Office,
there will not be a nuclear renaissance in the United States.
And similar principles apply to enhanced geothermal and other
possible firm baseload or clean baseload sources in the future.
Mr. Menendez. And to achieve energy dominance in this
country, shouldn't we want an all-of-the-above approach, and
shouldn't we continue these investments that are already
underway and funded by the IRA?
Mr. Norris. One of the, I think, could-have-been bipartisan
opportunities in the IRA was to shift from resource-specific
tax incentives to a technology-neutral structure. And so the
whole idea there was to make it an all-of-the-above approach,
and so I think that was a key design. And, again, for these
advanced resources, it is going to be critical to keep those in
place if we want to see them move forward.
Mr. Menendez. Thank you.
Mr. Haque, I understand that wind, solar, and storage make
up the vast majority of resources in PJM's queue, and PJM is
currently undergoing queue reform efforts. So let me ask you
this: If the IRA's tax credits were to be repealed, wouldn't
the vast majority of resources in PJM's interconnection queue
see a substantial amount of their financial incentives erased?
Mr. Haque. Representative, we haven't studied what
potential repeal of the IRA would do to the queue. I have read
studies independently that say that repeal of the IRA would
create financial challenges for those resources to come to
eventual fruition.
And right now, you know, we have got a challenge because we
have actually cleared, through our queue, about 50,000
megawatts, 50 gigawatts of primarily renewable resources that
are having challenges related to financing, that are having
challenges related to supply chain, that are having challenges
related to State and Federal citing.
And so I think that, you know, pursuant to your point,
that, you know, this would probably create additional financial
strain on those resources should the IRA be repealed, but,
again, nothing that I have specifically seen.
Mr. Menendez. That is why we should work to make sure we
continue the IRA and see its full implementation, not repeal
it.
Thank you all so much.
Mr. Latta. Thank you. The gentleman's time has expired, and
he yields back.
The Chair now recognizes the gentleman from Georgia's 12th
District for 5 minutes of questions.
Mr. Allen. Thank you, Mr. Chairman.
And I would like to thank the witnesses for being here
today and sharing your expertise on this important challenge
that we have.
The United States has an abundant energy supply, and the
question is not do we have enough energy resources but can we
produce energy at the levels needed to meet the Nation's future
demand?
My State of Georgia is the top State to do business in 12
years in a row, and with that, new manufacturing and data
centers are coming to the State. This is leading to high demand
for the grid, and we must continue to ensure we can provide
reliable, affordable energy as we power our Nation's needs.
In my district, the 12th District of Georgia, we have Plant
Vogtle, the largest nuclear energy clean power station in the
country. Nuclear energy will play a critical role in meeting
our growing needs to ensure U.S. leadership in the next-
generation economy.
The ADVANCE Act was signed into law last year and included
my legislation, the Nuclear Licensing Efficiency Act, which
will drive more efficient, timely, and predictable reviews of
reactor licenses.
Mr. Black, thank you for being here today. Can you discuss
the consideration Southern Company takes into account when
seeking to invest in nuclear facilities and how you see the
role of nuclear energy in our future energy mix?
Mr. Black. Well, we are certainly proud of Vogtle and glad
we have it online, particularly in this moment of radical
expansion of our grid. It is operationally a fantastic resource
and provides a lot of, sort of, electrical benefits to our
system that enables us to take even more customers to our
system.
I think the AP1000 is a solution that we understand. Its
risks are understood, and I think it is a solution that we in
our Nation should think through in expanding its development.
Mr. Allen. Right. We know how to build them. I mean, it was
30 years----
Mr. Black. Yes.
Mr. Allen [continuing]. Before we built.
And this is somewhat of a modular project. I mean, it is
made off--a lot of it is made offsite and then brought in and
erected. And we can continue probably to improve on that. But
at least we now have the workforce. We have the capability. We
know we can do it, and we know that things are going to be
running there are for a long, long time.
Mr. Brickhouse, in my State, the Oglethorpe Power is a
wholesale provider of energy for electric co-ops, and they tell
me that it is critical for reliability of the grid. They have
the ability to run their dispatchable baseload assets like
nuclear but also their coal plants and natural gas generation.
During the Biden administration, the EPA's Clean Power Plan 2.0
would only make it harder and more expensive for cooperatives
to maintain reliability of the grid.
Can you walk us through how the EPA regulations on power
plants are factored into Basin Electric members' planning and
investment decisions and how that may impact the ratepayer and
reliability in your areas?
Mr. Brickhouse. Certainly. Thank you. And our chief
financial officer, who is with me today, used to work at
Oglethorpe, so we have some things in common there.
I think the most illustrative example for the committee
would be that a baseload coal plant, you want it to be
available and online, or available, at least, 90 percent of the
time. If you have to go and do carbon sequestration on that,
you are going to have a parasitic load of about 25 percent of
the output of that unit, and you are combining another
industrial process to that unit. And the combined--you are not
going to have 100 percent reliability for your carbon capture,
which is going to bring down the entire availability of that
power plant.
Mr. Allen. In other words, put you pretty much out of
business there.
Mr. Brickhouse. Or makes your rates a lot more expensive.
Mr. Allen. Yes. I would like to circle back on the role of
nuclear energy. Mr. Haque, as an organized market, PJM operates
very differently than the vertically integrated structure of
the State of Georgia. When operating efficiently, the market
should send price signals that invite potential nuclear
developers to enter the region. Given growing energy demands in
the market, there should be an opportunity for more nuclear
energy to help meet future energy needs of the region.
What are the barriers you are seeing in PJM's region to
expand the use of nuclear energy?
Mr. Haque. Thank you, Representative. I think we are
actually seeing some good movement on nuclear in the PJM region
right now, and so we are seeing particularly nuclear uprights
to existing facilities. There was a recent announcement of the
reopening on what was formerly Three Mile Island, now called
the Crane Clean Energy Center, in the State of Pennsylvania. So
we are seeing some good movement in the nuclear space.
When you have these supply/demand challenges, it means the
prices go up. And so when prices go up, it sends a price signal
to those who would want to invest in our market and
specifically invest not on the backs of consumers but private
dollars into the marketplace to build a new unit.
That is the, sort of, crux of what the markets are, and we
are actually, you know, seeing some of that activity already in
our footprint after sending just, frankly, one high clearing
price.
Mr. Allen. Well, thank you very much.
And I yield back, Mr. Chairman.
Mr. Latta. Thank you. The gentleman's time has expired, and
he yields back.
The Chair now recognizes the gentlelady from Virginia's
Fourth District for 5 minutes for questions.
Ms. McClellan. Thank you, Chairman Latta and Ranking Member
Castor, for holding this hearing on how we can meet our growing
demand for reliable and affordable electricity.
I am glad to hear Chairman Guthrie in his questions earlier
say that that should include clean energy sources like wind and
solar. I agree.
So I am a member of Gen X, and I grew up on ``Schoolhouse
Rock.'' And I think everybody here knows and is very familiar
with ``I'm Just a Bill.'' But my favorite episode actually was
``The Energy Blues.''
And I can't help, as we have been listening to your
testimony and the questions, I have had ``Energy Blues''
rolling through my mind. Maybe one day I will ask for unanimous
consent to put the lyrics in the record. I am not going to sing
it, but I do want to highlight a couple of them.
``Energy. Sometimes I think I'm runnin' out of energy.
Seems like we use an awful lot for heatin' and lightin' and
drivin', readin' and writin' and jivin'. Energy. You'd think
we'd be savin' it up.''
It goes through a history of the energy sources and the
increase in demand in American history. It says, ``Energy.
We're looking to try and find some new kinds. Energy. Exploring
to try and make a new find. Nuclear and thermal and solar. If
we miss, we'll get colder and colder. Energy. We've gotta stop
usin' you up.''
Then it introduced my little kid self to the concept of
energy efficiency: ``So don't get cross when Mama says turn
that extra light out. Just turn it off till we find us a fuel
that never runs out. If everyone tries a bit harder, our fuel
will go farther and farther. Energy. We're gonna be stretchin'
you out.''
So just want to remind you that our childhood shows, our
childhood jingles are actually very educational and still very
relevant.
So, Mr. Brickhouse, I think I misheard you in one of your
answers, and I want to make sure I set the record straight. In
your written testimony, you urged Congress to keep the
investment tax credit and production tax credit. Is that
correct?
Mr. Brickhouse. Correct. And in my oral testimony, I
referenced that as well.
Ms. McClellan. OK. I thought I--I might have misheard you.
I thought I heard something that contradicted that. So I just
wanted to make sure that your position on that was clear.
In Virginia, we have the Coastal Virginia Offshore Wind
project, which is an incredible example of how offshore wind
can be a powerful economic engine for the entire region. And it
is something that has bipartisan support that grew out of
bipartisan--the Virginia Clean Economy Act and related wind
legislation that we passed. And nationally, offshore wind has
brought $25 billion in new investments to ports, factories,
manufacturing facilities, the electrical grid, and jobs.
You all have discussed the demand for electricity in the
region is expected to grow significantly in the coming years
for a wide variety of reasons. And there are currently offshore
wind projects like the one in Virginia and elsewhere that could
contribute to PJM's grid.
Mr. Norris, could you explain how, despite Chairman
Guthrie's view that wind and solar are necessary and we should
continue down that path, can you talk about how President
Trump's Executive order halting new Federal leases and permits
for wind energy and the massive uncertainty it creates for
businesses will impact PJM's ability to meet the growing demand
for energy in the coming years?
Mr. Norris. Yes. Well, one of the great things about
offshore wind is it actually has a pretty high-capacity factor
and a capacity value, because it actually produces on winter
mornings when we need power. So it has a nice profile.
What is happening is that some States have said, ``We are
willing to pay above market to get the offshore wind industry
kick-started.'' Kind of like Georgia said, ``We are willing to
pay above market to get these two new reactors online.'' And
that is a great service to the country that they are performing
because offshore wind is an immense resource. It could offer a
lot of energy in the future. It does require some upfront
investment to get it down the cost curve. But if you are going
to get rid of the leases, then it has no possibility of growing
as an industry, and you are basically preventing those States
from saying we want to develop this resource.
Ms. McClellan. Thank you.
And I will just note in my final seconds that one of the
quickest ways that we can help to address the growing demand is
to also help mitigate that demand through things like energy
efficiency programs that are the fastest and cheapest way to
help address demand and slow its growth.
So you all touched on that in your testimony, and I just
wanted to reiterate that point given that we are taking some
opposite actions here in Congress last week and this week on
the House floor.
Thank you, and I yield back.
Mr. Latta. The gentlelady's time has expired, and yields
back.
The Chair now recognizes the gentleman from Ohio's 12th
District for 5 minutes for questions.
Mr. Balderson. Thank you, Mr. Chairman.
And I will start my questions this morning. Thank you all
for being here with my good friend and always my chairman from
the great State of Ohio, Mr. Haque.
Mr. Haque, I would like to discuss some concerning trends
we are seeing with operators' interconnection queues. It has
been talked a little bit about here this morning.
PJM's existing installed capacity mix is overwhelmingly
made up of dispatchable power generation, such as natural gas,
nuclear, and coal. However, 97 percent of PJM's queue capacity
comes from renewable generation.
Mr. Haque, in your testimony, you note that, unlike
traditional thermal generation, renewable resources do not
provide certain essential reliability services that are
necessary to balance and maintain the power grid. Do you have
any concerns with the lack of dispatchable power generation
entering PJM's interconnection queue, and are there enough of
these projects to offset premature retirements and meet rising
growth demand?
Mr. Haque. Thank you, Representative. Great to see you.
We certainly have concern with not having dispatchable
resources in the generation or connection queue, and the grid
is a machine and it is a machine governed by the laws of
physics. And this is not us, this is the North American
Electrical Liability Corporation who has published papers,
published analyses that say that we need central reliability
services, which are things like--control things like ramp and
voltage and things that, as a lawyer, I don't quite understand
but that are necessary.
And so we do need our spinning mass resources. We do need
our thermal resources--nuclear, coal, gas--to continue to run a
power grid the size of PJM interconnection.
Having, you know, said all that, you know, again, we need
these dispatchable resources to find the wind system. We can
integrate more renewables onto our system. There are grid
operators. There are grids that run on, you know, more
renewable resources than we currently run on. Now, what that
sort of balance is and what that threshold is, you know, we are
not quite there yet, but we do need dispatchable resources to
run our system.
Mr. Balderson. All right. Thank you.
Mr. Haque, again, I recently introduced the Grid Power Act
with Senator Hoeven of North Dakota and Senator Todd Young of
Indiana. Our bill provides a process that would give grid
operators the authority to identify and expedite the
consideration of essential projects that will protect our grids
reliability and provide the power needed to meet America's
growing demand.
As you know, the key backlog isn't unique to PJM. Depending
upon the region, projects may sit and wait in interconnecting
queues for over 5 years before they can even begin their
feasibility and impact studies. I appreciate that PJM is ahead
of the curve here. And as you said, you are making good
progress getting through the queue backlog. But I also
understand that last year PJM cleared 50 gigawatts of resources
through their queue, and developers are not getting those
projects built.
Mr. Haque, can you briefly discuss why PJM's Reliability
Resource Initiative is so critical to improving grid
reliability and maintaining resource adequacy? First question.
And how can grid operators, FERC, and Congress build all this
initiative to get more reliable generation?
Mr. Haque. Yes, absolutely. I think grid operators across
the country are facing what we are facing, which is the supply/
demand challenge and clogged queues.
Again, you know, I would like to think that we are ahead of
the curve. Again, I have not benchmarked us against other grid
operators, but, you know, again, next year we will be through
our queue reform effort, 1-to-2-year turnaround timeframe.
But in the meantime, we needed to create an opportunity for
resources that are more shovel ready that can best contribute
to reliability to find their way into the queue because
otherwise you would have to get back--you would have to get in
the back of a line starting in 2026, and we need those
resources now.
Now, there has been a misnomer out there that, you know,
these are going to be effectively fossil resources, and that is
actually not true. In fact, what we know right now is that
nuclear uprights and this Crane Clean Energy Center, this TMI
reopening are going to find their way into the RRI, the
Reliability Resource Initiative. And we are hearing anecdotally
that we will have some storage projects as well find their way
through to the RRI.
So to us--again, we are agnostic in terms of the resource
type. Every resource type has its capability, and we have to
be, sort of, honest about the physics of the grid and how it
operates. And so that is our RRI, which I think is very akin to
the legislation that you introduced.
Mr. Balderson. Yes. Thank you.
Mr. Chairman, I yield back.
Mr. Latta. Thank you. The gentleman yields back.
And the Chair now recognizes the gentlelady from
California's Seventh District for 5 minutes for questions.
Ms. Matsui. Thank you, Mr. Chairman. And I would like to
thank you and Ranking Member Castor for having this hearing
today. And I want to thank the witnesses for joining us today.
I am particularly concerned by President Trump's
unprecedented power grab to exert control over independent
agencies, including FERC. Congress created the Federal Energy
Regulatory Commission as an independent agency to insulate its
decisions from political influence.
Mr. Norris, can you very briefly explain FERC's role in
regulating electricity, how that impacts Americans' electricity
bills, and why FERC's impartiality is so important?
Mr. Norris. Yes. Thank you, Congresswoman.
I like to think of FERC as, sort of, the referee that makes
sure that markets are functioning properly and calls fouls
where they take place. But the whole point is to have efficient
markets, right, that are competitive to ensure that the least-
cost electricity that is reliable is available to the
customers. And so that is the role.
I think it is concerning. Look, I have been part of a
number of FERC proceedings, a lot of State PUC proceedings. I
have never--I can't remember ever hearing a participant in one
of those proceedings say we wish this was more politicized and
had less quality review, right.
So I think when you are talking about a business context
with decisions that are this critical, you need substantial
expertise, and that is exactly why we have FERC, because that
brings that to bear.
Ms. Matsui. Right. Now, you worked as a solar developer,
adding new energy capacity to the grid to help meeting rise in
demand. So I guess from an energy project developer's
perspective, what would be your top concern if the President
had ultimate authority over FERC rulemaking?
Mr. Norris. I could think of a variety of concerns. I mean,
I think even just from a speed of business standpoint--I mean,
it already takes a long time to get these proceedings done. But
if you add another layer of review and approval, that could
make the process even less efficient.
I think knowing that the regulators are impartial and
technology neutral is critical to ensure that there is business
confidence and that you attract investment from a variety of
different sectors. So those two issues, I think, speed of
business and a lack of impartiality, would be the two biggest
concerns.
Ms. Matsui. So every member of this committee should be
gravely concerned about protecting FERC's independence,
correct?
Mr. Norris. I believe so.
Ms. Matsui. Otherwise, FERC's policies could shift
dramatically from each new administration.
Fundamentally, I don't disagree with my Republican
colleagues about the challenges we are facing. The Chair has
called this hearing to highlight the need to meet rising energy
demand while also lowering energy costs for consumers. That is
a goal we all share. But if your objective is to add more
affordable generation to the grid, it doesn't take an energy
expert to tell you that repealing Federal incentives that lower
the cost of building and operating new energy projects is
counterproductive.
It was just reported that Republicans will start drafting a
bill next week that will repeal Federal incentives for new
energy projects which are supporting the build of affordable
energy across the country, including in many of my Republican
colleagues' districts.
Mr. Norris, what effect would this repeal have on the
electric grid in, let's say, Southeastern U.S.?
Mr. Norris. I think there are a variety of potential
impacts. I will note that a key component of Duke Energy's
resource plan going out 10 to 15 years now is nuclear power
expansion, building on what has happened to Vogtle. And if
those incentives are repealed, I think it is quite unlikely
that there will be any nuclear expansion that takes place in
the Southeast.
Offshore wind is another impact. They are planning for
that. It is part of their Carbon Plan integrated resource plan.
That would probably be taken off the table, and, of course, it
would make solar and wind more expensive as well. So it is
likely to increase rates, and it may have impacts on
reliability.
Ms. Matsui. OK. I want to switch gears, Mr. Norris, to talk
about load flexibility. I am a strong proponent of virtual
power plants because I believe they have the potential to meet
rising demand faster and cheaper than many other options.
Our utility in Sacramento, SMUD, is a leader on virtual
power plants, but many utilities are skeptical that virtual
power plants can reliably meet demand.
Mr. Norris, what would you say to a utility that is
skeptical of virtual power plants?
Mr. Norris. Well, you know, the largest form of a virtual
power plant is what we call demand response, and it plays a
very substantial role in some markets. So in the Midwest
Independent System Operator, demand response contributes to
about 10 percent of their overall system peak. That is quite
substantial. And then in many other markets, it is about 5
percent.
In Duke Energy, where I am based, you know, they have a
PowerPair program where most of the subscribers actually allow
the utility to have direct control over the battery storage
onsite. So in this case, you can actually have the utility
knowing that it is able to operate because they can send a
direct control signal to that device.
Ms. Matsui. OK. Well, thank you very much.
And I have run out of time. Thank you. I yield back.
Mr. Latta. Thank you. The gentlelady's time has expired,
and yields back.
The Chair now recognizes the gentleman from Texas' 11th
District for 5 minutes for questions.
Mr. Pfluger. Thank you, Mr. Chairman.
It is amazing to me that we still have a math problem
between the two sides of the aisle here, but we do. And, you
know, I want to try to address this math problem.
Last year, when I asked the Secretary of Energy, Ms.
Granholm, how much energy does the United States consume, she
couldn't answer the question. And, you know, when you go back a
couple years ago, you see that the consumption has actually
risen by about .5 percent annually. But Department of Energy,
the same one that Ms. Granholm ran, actually has predicted that
it is going to be between 5 to 6 percent increase in
consumption in the next 10 years. And yet, we are still talking
about unreliable sources here, which is just unbelievable to
me.
And the billions of dollars that are being pushed out
because of the IRA--we will get to those questions--but the
answer to that question was 4,292 terawatt hours in 2022, with
a .5 percent increase annually. But that is changing.
So, Mr. Brickhouse, what I want to talk to you about first
off is, in your testimony, you talk about tripling of increase
for natural gas demand. And I want to hear, what is holding us
back from using that as a provider?
Mr. Brickhouse. Well, Basin Electric's perspective, nothing
is preventing us from using it. Since 2010--again, we have
grown 5 percent annually each year, on average. Since then, we
have added roughly 1,000 megawatts of natural gas generation to
our portfolio. At the same time, thankfully for the wind
resources in our service territory, we have added a similar
amount of wind generation.
As we look out through the balance of this year, we will
add 600 megawatts of dispatchable natural gas generation, and
then we will spend $4 billion between now and 2030 to add
another 1,500 megawatts of natural gas generation.
Mr. Pfluger. What is the most important quality to you? Is
it affordability? Is it reliability? Is it this notion that
somehow one form or another is cleaner? I mean, what is the
most important? As a deliverer of electricity, what is the most
important characteristic?
Mr. Brickhouse. Well, I think anybody that joins the
electric utility industry--we are a public service industry,
which I think is a noble calling, and our objective is to
produce safe and reliable and affordable power in an
environmentally responsible manner. I think everyone at this
table that is employed by a utility, that is our tagline.
Mr. Pfluger. And natural gas can do that and is that----
Mr. Brickhouse. Most definitely.
Mr. Pfluger [continuing]. With 40 percent of the production
of----
Mr. Black, permitting reform. What I was trying to get at,
what is holding us back from using that? Tell us about the
detrimental effects of not having permitting reform to deliver
affordable, reliable, clean energy.
Mr. Black. Sure. Yes. There are three fairly specific
things that we could do to amend, you know, this process, the
Clean Water Act and NEPA and judicial reform to prevent
litigation and uncertainty around infrastructure projects.
And I think the important point of all this is--and you
asked a great question of, sort of, What is the constraint
right now? And I checked gas prices this morning. They were a
little less than $3 for MMBtu, and pipelines are the
constraint, right.
There is a finite amount of space in a pipe, and if we
don't have enough pipes, you get to a point where you have
things like basis blowout, which is the cost of transportation
blows out, you know, 10 times more than the cost of gas.
So our need is to build the infrastructure so that we don't
create our own constraint, and then we can get access to that
today's sub-$4 gas.
Mr. Pfluger. I was just trying to Google gas prices in
Europe, and I am sure we can do that relatively quick. But it
is not $3 at NCF. It is much higher than that.
Mr. Haque, in the last 45 seconds, any expanded thoughts on
permitting and how we can deliver for the needs that we know--
we are in energy expansion. That is where we are.
Mr. Haque. We support permitting reform. Anything we can do
to get energy infrastructure built more expeditiously, whether
that is generation or transmission, will be extremely helpful.
You know, one additional factor that we didn't discuss with
respect to--I appreciated Mr. Brickhouse and Mr. Black's
responses. You know, I think policy also has--and specifically
decarbonization policies, specifically in the gas industry
right now, it can be the cheapest resource possible to build
out and would also, you know, help with great reliability in
tandem with the renewable resources that we are going to
naturally see find their way onto the system.
You know, but if, sort of, there is a policy overhang that
creates a risk premium that is really too high for investors to
invest in, that is, sort of, another factor on top of what has
already been referenced that creates challenges for natural gas
generation to get built out on the system.
Mr. Pfluger. Thank you very much.
Time has expired. I yield back.
Mr. Latta. Thank you. The gentleman's time has expired, and
yields back.
The Chair now recognizes the gentleman from New York's 20th
District for 5 minutes for questions.
Mr. Tonko. Thank you, Mr. Chair.
I am glad that there is a bipartisan recognition of the
impending challenges facing our electricity system to meet
growing demand, but we are doing ourselves a disservice if we
continue to ignore demand-side solutions.
Mr. Norris, I appreciated your testimony because I believe
we need to incentivize energy efficiency, demand response, and
smarter grid management. Reducing peak demand allows our
existing generation resources to be stretched further.
So, Mr. Norris, can you make the case for reducing peak
demand as one of the fastest and most cost-effective strategies
we can implement to match near-term growth projections?
Mr. Norris. That is correct. And I can expand on that. So
there----
Mr. Tonko. If you would, please.
Mr. Norris. You know, the cheapest form of a megawatt is a
megawatt, right, so not having the need to deliver the
megawatt. And so there are a growing number of loads on the
system that could be flexible, right. So they could be
deferred, or they could be front loaded by a couple of hours.
Because these system peaks that we are talking about, they are
on average events that are approximately 2 hours. The most
trickiest is when they occur during winter mornings, and that
is from 6 to 8 a.m.--or 6 to 9 a.m. is the period that is well-
defined for a lot of the jurisdictions in the eastern
interconnect.
And so for flexibility of 2 to 3 hours--for example,
running your hot water heater, you know, before you wake up, so
that your water is already warm and ready to go so you don't
have to run it, right, like when that peak is occurring--we can
get more headroom out of this system out of that.
And I think the biggest opportunity may be from these large
centralized new loads that are coming in. Because, especially
if they already have their own onsite power and they are able
to run that for a few hours a year, then we would add a lot
more of that load a lot more quickly.
Mr. Tonko. Thank you. I appreciate that. And unfortunately,
demand-side policies are not the only tools being ignored by
the Trump administration. We really are going to need every
available electron to meet our needs. It is hard to believe
that the administration is so brazenly dismissing the
importance of wind, of solar, and of storage.
Excluding wind and solar from energy dominance counsels
launch, and making it harder to permit wind projects on both
Federal and private lands is completely antithetical to any
claim that we need to rapidly expand our electricity system.
Certainly, renewables have supply chain and permitting
challenges, but so do gas plants with turbines currently being
ordered for delivery in 2029.
So Mr. Norris, since wind and solar and storage resources
make up the bulk of the interconnection queue and are able to
be deployed most quickly amongst new resources, do you think
there is a disconnect in the administration's position of
disadvantaging these resources while also seeking to encourage
near-term load growth?
Mr. Norris. Yes, I think it is worth noting. So, you know,
in Texas, for example, they have seen record summer peaks in
the past 2 years. At the same time, they have added record
amounts of new capacity. And most of those additions were solar
and batteries. And so, I think, most analysts have concluded
that if ERCOT had not added that solar and storage as fast as
they did, there would have been rolling blackouts in the summer
periods during those summer peaks.
Solar and storage can contribute to reliability, and it is
doing so in a number of markets. And wind as well. It actually
balances out the solar profile oftentimes because you can still
get decent wind resource in those winter mornings. I think what
you said is generally accurate.
Mr. Tonko. We also know policy stability is needed to
properly plan for and make energy investments. There have been
several independent studies finding that repeal of clean energy
tax incentives will result in major cost increases for our
American families and businesses. And creating uncertainty
about the future availability of these credits is already
having a chilling effect on private-sector investments.
So Mr. Norris, if we need projects to be built as quickly
and at the lowest cost possible, how does tax credit policy
uncertainty discourage investment and upend planning?
Mr. Norris. You know, we are already hearing of impacts.
You know, there are active procurements taking place in the
Southeast right now for new solar and solar-plus storage
resources. And even the uncertainly of not knowing where the
tax incentives are going to land as a result of then developers
pulling projects out of those RFPs, which means necessarily the
cost of those procurements is going to increase. And so, even
the uncertainty--before we even, you know, decided if we
actually repeal them is already having an impact.
But, you know, it is just kind of basic economics, right.
If you pull back incentives from a given activity, you are
going to see less of that activity. And in that case, this
means that you are going to see less generators added to the
system.
Mr. Tonko. Thank you. And, Mr. Black, there is a strong
bipartisan support for nuclear energy on the committee. Can you
explain the role the Department of Energy's Loan Programs
Office played in supporting the development of the plant
Vogtle? And if you could answer that quickly. My time is
expiring.
Mr. Latta. And if you could answer that quickly. The
gentleman's time is expiring.
Mr. Black. Yes, it provided hundreds of millions of dollars
of benefit in Vogtle.
Mr. Tonko. OK.
Mr. Black. That is the buy-down of that loan.
Mr. Tonko. I appreciate that. With that, Mr. Chairman, I
yield back.
Mr. Latta. Thank you very much. The gentleman yields back.
And the Chair now recognizes the gentlelady from Tennessee's
First District for 5 minutes for questions.
Mrs. Harshbarger. Thank you, Mr. Chairman. Thank you to the
witnesses for being here today. I will start with Mr. Black.
Tech companies make a tremendous amount of money by running
their own super computers at data centers. It seemed to me that
they would want to focus their resources on building these data
centers rather than getting into the power business. So why do
you think these tech companies are going behind the meter,
because they can buy wholesale power from utilities, or buy
utilities--or at regular rates or a negotiated rate?
Mr. Black. I think it is a great question. And I think in
parts of the country where maybe they are finding it difficult
to find available power that is affordable, that is a solution.
I think it is likely a near-term solution. Again, I have waxed
on about the benefit of the integrated grid. And I think the
one-off colocation solutions may be short term. For the long
term, I think the unassailable benefits of the way we provide
power will be recognized.
Mrs. Harshbarger. Yes, that was my next followup. What
would the benefits be to these tech companies or individual
rate payers or the system as a whole when adding these new
loads like the data centers in front of the meter and sitting
behind the meter?
Mr. Black. Yes, so the benefits of these customers and the
growth and the amount of generation they require done right,
charged right with the right tariffs, allow us to build a
system that indeed puts down refresh-on rates. And it is around
some of the conversations that Mr. Norris has had in around
that utilization rate. So I need fewer resources to produce
more electricity. Well, that puts downward pressure on each
unit produced of electricity. So it can be a fantastic thing.
Mrs. Harshbarger. Yes. OK. Thank you, sir.
Mr. Haque, different types of computing facilities, whether
they be cryptocurrency, mining facilities, AI computing, or
otherwise, they have different demand needs. And as our
committee considers these policies based on growing load
demand, would there be any need to define these facilities
differently based on their differing demand needs?
Mr. Haque. It is a great question, Representative. One
thing that needs to be examined is this load, and specifically,
you know, the--we will just characterize it as cost and other
obligations that it creates. And so, you know, we have spent a
lot of time with our stakeholder community and within our
stakeholder process talking about this load in particular, how
big it is, how quickly it is coming on to the system.
You talked about, you know, behind-the-meter opportunities
as well as in-front-of-the-meter opportunities for these folks
to come on. And look, it is a good story. It is a good story
for the Nation to have these data centers and to have this
growth. But simultaneously, I do think we need to think about
whether there needs to be, you know, additional we will just
call it, you know, for us, you know, tariff structures or
revisions to deal with this load coming on, specifically, you
know, their cost for the system.
And, you know, for instance, whether they are paying their
fair share of transmission upgrades, whether they are paying
their fair share of ancillary services, which is a service
within, you know, our grid framework.
And so I think you are bringing up an important point. I
think it is something that deserves analysis.
Mrs. Harshbarger. Yes. You know, we talked a little bit a
few minutes ago. You know, PJM covers just a sliver of my
district, and then TVA, you know, covers the vast majority. And
you talked about the Winter Storm Elliott, where there was a
surge in demand. It affected my district tremendously. And that
allowed you to get that waiver to meet the demand to sell
excess power to TVA on the open market.
You know, we don't need all plants to be in use at the same
time. You know, it is kind of like when you lose weight and you
have your closet, you don't throw those clothes away, you take
them upstairs, and you put them in the closet. And then you got
your overweight clothes and then you got your skinny clothes.
And it is kind of the same way with this power structure, you
know. You don't want to turn all of it off or get rid of it all
at once. Do you agree?
Mr. Haque. I agree with that. I have, historically, been a
weight fluctuator, so I do have my heavy suits and my skinny
suits.
Mrs. Harshbarger. Well, we all do. I just go upstairs to
shop.
Mr. Haque. But I also agree fundamentally with the premise.
And look, the tighter we get on supply, the less we are going
to be able to export to our neighbors. And we have been,
historically, when the weather gets rough, especially these
last few winters, we have been able to export to our neighbors
in order for them to keep the lights on. And so the tighter we
get with supply, we have generally been the, sort of, the grid
in the eastern interconnect that has had the most robust
supply. The tighter we get, the less we are going to be able to
help our neighbors. And so, I think, fundamentally, you know, I
do agree with what you are saying.
Mrs. Harshbarger. You keep those overweight clothes. I got
you, pal. All right. My time is up, and I will yield back.
Mr. Latta. The gentlelady's time has expired, and yields
back. And that is the first time I have heard that analogy
before.
The Chair now recognizes the gentleman from Texas' 33rd
District for 5 minutes for questions.
Mr. Veasey. Thank you, Mr. Chairman. And I did want to take
a personal privilege here to talk about my friend, Sylvester
Turner, that we lost. When I was in the State legislature with
Sylvester, this was his wheelhouse. He loved talking about
ERCOT and knew it in and out, and the transmission piece. And
from someone that he would always probably say that--he would
never say he was from Houston. He would always say he was from
Acres Homes, which is a neighborhood in Houston. And from Acres
Homes to Harvard, Sylvester got his lesson and literally
learned this particular thing that we are talking about today
in and out. And I am devastated. And I thank y'all for being
here today.
One of the problems that we are obviously having is that
bringing new resources onto the grid, it is a challenge for a
lot of different reasons, but we know that we are going to
continue to have electricity demand. There was just a great
article recently in one of our local papers in north Texas
talking about some nuclear reactors that were going into the
Haskell area of West Texas in order to help with, you know,
data centers and all of the new demand that is going to be
online for ERCOT.
One of the things that worries me is I don't know that
FERC's order of 2023 to modernize interconnection process has
made some progress with that. There are still some barriers
that remain. The connect and manage model that is used in my
home State of Texas allows generators to connect faster by
managing grid constraints in real time instead of waiting for
upgrades. And that means that sometimes the generators will
have to curtail their production, but that is a market decision
that they make. And it works so well that ERCOT interconnected
2.5 times more capacity than PJM, despite PJM serving a much
larger load.
And so knowing all of that and knowing that America is
going to have energy needs to be met and that we need a more
efficient interconnection system, I wanted to ask Mr. Norris. A
lot of your highlights at ERCOT is far more efficient than
other regions in interconnection, and I wanted to ask you what
policies allow ERCOT to interconnect projects faster than other
RTOs and ISOs, and do you think they can be applied nationally?
Mr. Norris. Thank you, Congressman, for the great comments
and the very good question. I think this is a very, very
significant phenomenon that has happened in ERCOT over the past
years. I don't know that we have ever seen such a differential
between one market exceeding every other market so
substantially and such a critical area, and in this case a new
capacity addition.
ERCOT has taken a forward-looking approach here. So they
allow generators to connect freely, and they don't charge them
for the cost of network upgrades. They plan their grid
separately via a separate process that is designed to identify
the upgrades that have the best benefits for the rate payers.
And then they manage the impact, as you said, in real time. So
they have sophisticated real-time operational tools that allow
them to manage all these new generators that are coming online.
And the rest of the country, we have actually established
very high barriers to entry for new generation. And the way we
study them is highly restrictive, and it is likely, in many
cases, to trigger substantial network upgrades. And that is
really--in some ways, the primary cause of all these
interconnection queue backlogs is that we have taken this
highly restrictive approach to getting new generation on the
system.
So I do think there are lessons that other jurisdictions
can learn from ERCOT. They can't necessarily adopt it
immediately, because that would require larger structural
reform. But there are ways that they can offer services to
generators to allow them to move forward more quickly.
Mr. Veasey. I know that in a lot of your work, you also
suggest that better allot and interconnection transmission
planning and resource procurement should take place. And I was
wondering, how should FERC and Congress incentivize more
proactive transition investment?
Mr. Norris. Proactive transmission planning is going to be
critical, in part because we are in a very supply-chain-
constrained environment. My rates are already rising, and so
there is just a threshold for how much we can do very quickly.
So we need proactive planning so that we can identify the
highest-value upgrade to the system and focus our limited
resources on those. And that is exactly what Order 1920 tried
to do, right, is to create this multivalue, proactive approach
to transmission planning.
And so, you know, I mentioned one example in the Carolinas
that we did with Duke Energy. And everyone got behind that. It
was highly bipartisan. It is going to unlock a lot of cheap
generation. It is going to contribute to reliability. But we
have to make sure that we maintain Order 1920 if we want to
reap the benefits of that type of proactive approach going
forward.
Mr. Veasey. Thank you very much. Mr. Chairman, I yield
back,
Mr. Latta. Thank you. The gentleman yields back the balance
of his time.
The Chair now recognizes the gentlelady from Iowa's First
District for 5 minutes for questions.
Mrs. Miller-Meeks. Thank you to Chairman Latta and the
Ranking Member Castor for holding this hearing today. I want to
also thank our witnesses for testifying before the
subcommittee.
Mr. Norris, I want to especially thank you for
acknowledging that the perverse incentives of the Biden
administration the past 4 years actually dampened the energy
generation from carbon-based fuels, but I digress.
The United States is experiencing unprecedented energy
demand growth, requiring us to rapidly deploy new generation
capacity across the country. In Iowa, we are seeing this
firsthand with the recent announcement of QTS' new data center
campus in Cedar Rapids, the largest economic development
investment in the city's history at a minimum of $750 million.
This facility chose Cedar Rapids in part because of access
to reliable, affordable, renewable energy sources,
demonstrating how energy infrastructure directly impacts our
ability to attract cutting-edge industries.
As these technology-intensive facilities continue to expand
across America, we face several critical challenges in meeting
skyrocketing demand. Meanwhile, EPA's Power Plant 2.0 rule
threatens to undermine grid reliability by forcing plants to
implement carbon capture technology that isn't yet commercially
viable at scale.
We need commonsense, pragmatic approaches that facilitate
faster development, such as repurposing existing generation
sites and unused transmission capacity to streamline permitting
and accelerate clean energy integration.
With that context, I would like to ask a few questions
about how we can best meet this growing demand while
maintaining reliability and affordability for all consumers and
not ceding national security interests to the Chinese Communist
Party.
Mr. Brickhouse, you mentioned that technology-based loads
like data centers become operational in 3 years, while
dispatchable generation takes 7 years to build. How is Basin
Electric leveraging existing sites and transmission corridors,
along with considering wind, solar, and energy storage, which
can be placed into service sooner to meet this interim
reliability gap?
Mr. Brickhouse. Well, with respect to renewables, when
renewables were used to hit or to satisfy our peak demand, we
typically think of it as needing to have backup dispatchable
generation in order to satisfy the times when the wind is not
blowing and the sun is not shining.
For example, on February 20, it was negative-30-something
degrees in North Dakota and across the Great Plains and
probably down into Iowa, and STP had a peak of 48,000
megawatts. And the wind contribution to generation was about
2,000 megawatts. And that had, I believe, decreased sevenfold
in 24 hours.
So we need to have dispatchable generation given the harsh
climates in our service territory.
Mrs. Miller-Meeks. Exactly. And we have seen the same thing
in Iowa, as well, as when I visited MISO. And we know that the
U.S. needs to significantly accelerate domestic energy
production infrastructure, both to meet growing demand and, as
I said, to compete with the Chinese Communist Party in
strategic sectors like AI and clean energy.
Mr. Black, your experience with developing transmission
projects across multiple jurisdictions gives you unique insight
into supply chain challenges. How critical are tax incentives
like the tech-neutral electricity credits under 45Y and 45E and
45X advanced manufacturing for onshoring American manufacturing
and energy sector? And what would the competitive implications
be against China if these credits were significantly reduced?
Mr. Black. Yes, so there is definitely a significant amount
of investment required. And those investments or those tools
that you just discussed are incredibly helpful in ensuring that
we can get those projects built and online in a manner that is
affordable for our customers.
Mrs. Miller-Meeks. Thank you. Mr. Haque, Basin Electric is
experiencing load growth significantly higher than natural
average, in part, due to data center demand.
Given your experience at PJM, what best practices would you
highlight to balance increased costs to rate payers and
economic development?
Mr. Haque. So as supply decreases and demand increases, it
will raise prices. And this is just the reality of the
marketplace. Now, one thing that we can do is work with our
retail regulators on how those costs end up getting passed down
to consumers.
I was a former retail regulator myself from the State of
Ohio. You know, how those we call them default service
procurement auctions work, how a deregulated State, how those
costs are passed down is something that is worth examining,
frankly, in all of our jurisdictions. Because a price increase
in just one of our markets should not actually result in a
direct proportionality of costs that are passed down to
consumers.
Mrs. Miller-Meeks. Thank you. We need to significantly
accelerate domestic energy infrastructure to meet growing
demand. Tax incentives, like the tech-neutral clean energy
credits under 45Y, 45E, and the 45Q carbon sequestration credit
and the 45X advanced manufacturing credit, aimed to strengthen
American manufacturing capability and reduce the engineering
procurement and construction risks that have plagued major
energy projects.
With that, I yield back.
Mr. Latta. Thank you. The gentlelady's time has expired,
and yields back.
The Chair now recognizes the gentlelady from Washington's
Eighth District for 5 minutes of questions.
Ms. Schrier. Thank you, Chairman Latta. And thank you to
our witnesses today. I am going to start with just a few
questions for Mr. Brickhouse.
Mr. Brickhouse, Basin Electric purchases electricity from
hydropower assets at the Western Area Power Administration,
correct?
Mr. Brickhouse. Yes, ma'am.
Ms. Schrier. Thank you. And for those who don't know, this
is one of just five Federal agencies that market electricity
from federally owned hydropower. Can you talk about just how
valuable the Western Area Power Administration's hydropower is
to your co-op's energy mix?
Mr. Brickhouse. Yes. So the Western Area Power
Administration owns and operates about 17,000 miles of
transmission through the Great Plains and down into the desert
Southwest. And then Bonneville Power Administration, which we
don't have adjacent service territory in about 15,000 miles of
transmission, if memory serves me correctly.
And with respect to WAPA specifically, their transmission
lines will end at one of their substations. On the other end of
that substation, Basin's transmission line will connect and
take it to the rest of our members.
Ms. Schrier. Got it.
Mr. Brickhouse. So a key partner.
Ms. Schrier. So you are focusing more on transmission. I
was really focusing on hydro power, which is, of course,
important because it is base load, and it is dispatchable, it
is clean and affordable.
Mr. Brickhouse. And we transact through the hydropower with
them on a daily basis.
Ms. Schrier. What would happen if this hydropower were to
suddenly become unavailable?
Mr. Brickhouse. My colleague from PJM says when you have a
supply and demand imbalance on the demand side or the supply
side shrinking, you are going to have higher prices
immediately.
Ms. Schrier. Higher prices, less reliability. Thank you.
And in this context, the Bonneville Power Administration is a
similarly public power that supplies Washington, Oregon,
Montana, and Idaho and is funded by our electric bills, not by
the Federal Government.
So I want to extrapolate what this means from my State of
Washington. It has twice the generating capacity of WAPA. And,
in fact, Bonneville is the largest of the five power marketing
administrations. So I want to also mention that this is
important to several of the Republican colleagues in this
committee.
Across the Pacific Northwest, Bonneville accounts for about
65 percent of the generating capacity in the region and most of
the high-voltage transmission, as you discussed. The
operations, therefore, at Bonneville are essential to
maintaining the grid at existing energy rates. And again, you
pointed out that we the rate payers pay for the operations, and
not the Federal Government.
So despite all of that, the administration and Elon Musk
have still set their sights and succeeded in cutting nearly 20
percent of the workforce there, and that includes a lineman who
worked on downed power lines, the system operators that make
sure that demand meets supply, and they are up 24/7, and then,
of course, the vice president of transmission.
I just want to point out that these deliberate words of
``probationary employees'' is really pretty disparaging. It
implies that they are in trouble and are dispensable. Really,
that is not the case. It just means they have been 1 or 2 years
or just got promoted.
So I am not saying BPA is perfect, but this decision is not
saving taxpayer money. It is not just reckless, and it is also
not helping to pay for the gigantic tax cuts that my colleagues
are planning for the wealthiest people and corporations in the
U.S.
If this weren't even enough, the self-inflicted damage from
trade wars with our allies with Canada just started yesterday.
And the rates here, again, are going to be unprotected from
rate hikes. So in this case, the majority in the administration
may not know that the largest share of Washington State's
natural gas actually comes from Canada.
So this administration--the same one that promised to slash
energy bills in half in the next year--is doing exactly the
opposite. And over and over, either a basic misunderstanding of
the facts or lying to the public or retaliation against the
Northwest region, which includes Idaho and Montana, is hurting
my constituents. And I sure hope that Secretary Wright is
listening.
Thank you, and I yield back.
Mr. Latta. Thank you. The gentlelady yields back the
balance of her time.
The Chair now recognizes the gentleman from South
Carolina's Seventh District for 5 minutes for questions.
Mr. Fry. Thank you, Mr. Chairman, and thank you to our
witnesses for being here today and your testimony. I come from
the great State of South Carolina, where we have seen record
investments from an economic development standpoint, advanced
manufacturing, AI, and, of course, a rapidly increasing
population. Myrtle Beach, one of the towns that I represent, is
the fastest-growing city in the country, creating more of a
demand on our grid. Companies like DC Blox are investing in our
critical infrastructure, including the Myrtle Beach Cable
Landing Station data centers across the State, expanding
connectivity and supporting high-performance computing.
And as these industries grow and as people continue to move
to South Carolina, energy must keep up. Nuclear is key in my
mind to meeting some of that demand. In fact, South Carolina
already generates 55 percent of its electricity from nuclear
thanks to initiatives like the Palmetto nuclear coalition. We
have a strong, industry-led effort to advance large-scale
reactors and small modular technologies.
But we can't rely on the status quo for long. We have to
meet that challenge in Congress. We need policies that
prioritize energy expansion, modernize transmission and
regulatory certainty to ensure that American industry has the
power it needs when it needs it. So I look forward to talking
with y'all today.
Mr. Norris, you discussed in using demand response and load
management programs to incorporate massive new loads onto the
grid. You also mentioned how this creates headroom for more
expansion in the short term.
But I am curious, how do utilities and grid operators
approach the demand side response, which if I understand
correctly, expands existing energy conservation measures?
Mr. Norris. Yes, so what we are talking about is a little
different from existing demand response programs, because what
we are trying to do is in this planning realm, right, we are
all trying to plan for this large load that is coming. We want
to connect the dots between the large customer and the electric
utility and say, ``We recognize, say, this data center, you are
going to have some onsite power--it could be natural gas, by
the way--you are going to have onsite natural power plants
already. So let's not have redundant capacity so that we are
going to have to install a new gas power plant and all the
transmission to deliver the power.''
In response, that data center could get online even more
quickly, right, so we could compete in the AI race.
Mr. Fry. OK.
Mr. Norris. So I think that is what we are trying to create
here.
Mr. Fry. Mr. Black, I saw you writing down some stuff. Do
you care to respond to that same question?
Mr. Black. Yes, so to do what he was just reflecting on, we
need what we call the abilities: the visibility, the
dispatchability, the predictability of these loads. If we don't
have that kind of control, we can't, frankly, pay that customer
an appropriate amount so that they provide benefits to our
system.
And we have been--Southern has a long history of doing this
from our RTP, real-time pricing, to interruptible standby
generation rates. We have been doing this a long time. And it
is an important part of, sort of, rate world. We trim the peaks
and fill the valleys, and that improves the efficiency of our
system. So absolutely necessary, but those abilities are
probably the key to unlocking that value.
Mr. Fry. Mr. Brickhouse, the same question to you. And by
the way, I am a big fan of co-ops. South Carolina co-ops are
some of the best. We love them. The same question to you.
Mr. Brickhouse. Thank you. I live in Congresswoman
Fedorchak's district, but I was born in the great State of
South Carolina. So thank you.
Mr. Fry. Good game Friday.
Mr. Brickhouse. I guess from our perspective, as a load-
serving entity, we have to look at it with some skepticism and
say, What happens if the load does not respond? And that can
happen. And we are in a regional transmission organization, and
we were obligated to abide by their rules. I will let Mr. Haque
talk about this a little more specifically, if he would like.
But a number of years ago, PJM adjusted their demand
response rates because they had--and I don't want to
mischaracterize this--but they had significant demand for those
demand response rates, and they changed the rules and gave it
less capacity accreditation.
So it is a utility that is not subject to PJM's RTO rules
but to STP's RTO rules, you do have to have that in the back of
your mind: Is a load going to show up when you curtail that
demand, and is the regional transmission organization going to
change the rules down the road, and we are suddenly going to
have to come up with more capacity?
Mr. Fry. Thank you for that. Mr. Brickhouse, as a utility
operator, what are the benefits of policies that promote energy
abundance rather than scarcity management.
Mr. Brickhouse. Permitting reform is a concern. And I think
that there are a number of changes that Congress can make to
the National Environmental Policy Act that would be very
helpful to have additional resources come online more quickly.
Mr. Fry. Thank you for that. Mr. Chairman, I see the
balance of my time has just now expired, and with that, I yield
back.
Mr. Latta. The gentleman's time has expired, and yields
back.
The Chair now recognizes the gentlelady from Florida's 15th
District for 5 minutes.
Ms. Lee. Thank you, Mr. Chairman. And welcome to all of our
witnesses here today. Ensuring the reliability and
affordability of our electric power system is crucial for our
national security, our economy, and the well-being of our
communities.
My home State of Florida is one of the Nation's largest
producers of electricity, with a rapid population growth,
increased manufacturing, and advances in technology, including
artificial intelligence and the data centers needed to power
it, our demand, and production will only continue to rise.
It is imperative that our electric grid is prepared to meet
this growing demand for power. Our generation and transmission
systems must be reliable and resilient with the ability to
ensure continuous power supply and to respond quickly to
unforeseen circumstance and changes in demand.
Mr. Brickhouse, in your testimony you mentioned the rapidly
evolving threat landscape and that the electric sector faces
considerable challenges from our cyber adversaries. Would you
expand, please, on the types of cyber threats that our electric
power system faces?
Mr. Brickhouse. Well, it is not terribly different than
what you and I face every day when we go home. If you click on
a wrong link and your computer gets some type of virus in it
that can spread rapidly, and it shuts your computer down, and,
obviously, in the utility space or at any business we have,
large networks in that can be shut down and harmed relatively
quickly by those.
Ms. Lee. You also mentioned several specific programs that
Basin Electric has leveraged to strengthen its cybersecurity
posture, including the Threat Analysis Center, Rural
Municipality Utility Cybersecurity Program. Are there any
specific programs or best practices related to cyber that you
want to highlight or share as success stories?
Mr. Brickhouse. Well, I will answer it a little bit
differently, is that we appreciate the Federal Government's
support here because these are national security issues, and
many of the bad actors are people from overseas. And so we need
to work in a coordinated fashion with intelligence agencies in
order to make sure that we understand the threats and can
defend ourselves and our networks from those threats.
Ms. Lee. And Mr. Black, in your testimony you mentioned
that energy policy is highly regional due to some variations
and factors like weather, geography, and resources. And
Florida, like several of the other Southern States that your
company serves, experienced devastating hurricanes last year.
I am interested in discussing further with you how utility
companies like yours prepare for these types of events.
Mr. Black. We are certainly practiced, unfortunately, at
dealing with hurricanes. We had one of the largest hurricanes
in our company's history this last year as it moved through
Georgia. More poles--but I can go through all the statistics.
It is devastating.
Our ability to work with our friends in a coordinated
manner to get customers back on is probably better than it has
ever been, right? I think the investment in our system from a
resilience perspective and the investment in our system in
recovery has been--it improves year to year.
These events get more remarkable, it seems, as the South
continues to grow and proliferate. But our ability to invest in
the system for resilience so that we can get back on quicker
and work with our peers and colleagues around the country to
bring those resources in is better than it has been ever.
Ms. Lee. And you just touched on something that I want to
ask a followup question about, and that is, I understand the
investor-owned utilities' mutual assistance program has been
beneficial for getting customers' lights back on in the wake of
these extreme weather events.
Can you share with us what that program is and how it has
helped you work on disaster recovery?
Mr. Black. Certainly. It is the processes and communication
and the network that is required to call in crews from all over
the country. And again, these last few storms we had trucks and
folks as far away from the West Coast coming into Georgia and
North Carolina and so many of these States that were
devastated.
So the mutual assistance program, again, at this point so
wel- practiced. And the ability of companies to get people
quickly on the work is the challenge. Having just the resources
is step one. Getting them on the work is where the practice and
the training and the commitment comes from.
Ms. Lee. Thank you, Mr. Chairman, I yield back.
Mr. Latta. Thank you. The gentlelady yields back the
balance of her time.
The Chair now recognizes the gentleman from New York's 23rd
District for 5 minutes for questions.
Mr. Langworthy. Thank you, Mr. Chairman.
Mr. Brickhouse, in its 2024 Long-Term Reliability
Assessment issued last month, NERC ranked the middle part of
the country in the MISO area as high risk for energy
shortfalls, with elevated risks throughout many other regions.
And NERC notes at Section 111 Standards, MATS rule, coal ash
regulations, and effluent limitations guidelines specifically
are, quote, ``regulations [that] impose considerable financial
and operational challenges on coal-fired generators'' and,
quote, ``have the potential to influence generators to seek
deactivation during the 10-year assessment period'' of NERC's
study.
For the first time in years, we are facing increasing
demand for electricity, in part due to ballooning demand from
data centers and increased electrification. But the previous
administration under President Biden tried to engineer an
accelerated shift in the mix of electricity generation in the
country with the goal of trying to force the shutdown of coal-
fired power plants while discouraging natural gas transmission
in generation.
Mr. Brickhouse, should we have requirements that any
environmental push to shift the mix of electricity production
be fully vetted by reliability authorities like FERC and NERC?
Or should we have reliability at the center of electricity
planning moving forward?
Mr. Brickhouse. I think that in terms of regulations, we
have to be careful of unintended consequences and regulations
that are put in by well-intentioned people today have the
threat of being misused in the future. As a utility--and I
think Mr. Black referenced this earlier as well--it is our
obligation to balance supply and demand.
Mr. Langworthy. Thank you. In the last 4 years and looking
even earlier than that, Democratic administrations have put
their own public policy agenda items ahead of real issues like
reliability and affordability. We saw this play out with former
President Biden's work to shut down generation. And we see it
on a State level, where States like my home State of New York,
where radical, even irresponsible public policies like the
Climate Leadership Community Protection Act are putting zealous
goals for emissions reductions and electrification ahead of
basic questions about reliability, affordability, and the
safety of residents.
So I would like to go down the row here and ask: Have you
seen State policies lead to or have an effect on higher rates
and lower reliability? Mr. Brickhouse?
Mr. Brickhouse. Yes.
Mr. Langworthy. Mr. Haque?
Mr. Haque. Absolutely.
Mr. Langworthy. Mr. Norris?
Mr. Norris. Yes.
Mr. Langworthy. Mr. Black?
Mr. Black. I will say our region in support of our States
and that regulation close to the States has resulted in
affordable and reliable power for our companies--so in our
customers. So I would say State alignment around that issue, at
least in our region, and this is back to that regionalism, has
been strong.
Mr. Langworthy. Now, the New York grid plans to add 3.5
gigawatts of new large loads to its system by 2030, including
Micron's microchip fabrication facilities in the Syracuse area,
which are creating thousands of new jobs and leading to
billions of dollars of new investment.
Now, currently, my State relies on energy supplies from
other States and Canada to meet more than 80 percent of its
total energy needs and has the country's seventh-highest
average residential electricity rates.
Now meanwhile, vast natural gas, hydropower, and geothermal
resources in New York remain untapped. I mean, I find this to
be unacceptable. Unlocking our abundant energy resources can
lower the cost of electricity, while adding new loads to the
system can put downward pressure on consumer rates.
Mr. Black, we have heard today about the demand needs of
various technologies like AI computing, cryptocurrency mining,
and expanded manufacturing, such as the Micron facility that I
mentioned. What policy consideration should be made to ensure
grid reliability and efficiency while accommodating very
energy-intensive industries coming into new areas?
Mr. Black. So I think two important points there: firm gas
pipes, and we have talked a little bit about today this
interconnection, sort of, accountability and affected systems.
Those are processes at our State level that we see that results
in a more ubiquitous transmission and gas system. You don't
build a gas pipeline without a firm gas contract. And that
could be some of the struggles. I don't know. I am not as
familiar with your region. I am sorry for that. But our area is
committed to that. And again, those firm gas contracts are
resulting in more infrastructure to support the region.
Mr. Langworthy. Thank you. These policies and their
consequences are being felt across the country and will be felt
in the coming years. They clearly warrant greater scrutiny,
even vetting. As a New Yorker whose constituents experience the
results of such irresponsible policies as they relate to our
electricity needs firsthand, I believe strongly that we need to
ensure reliability and affordability are always at the
forefront of energy policy moving forward in all levels of
policymaking.
And with that, Mr. Chairman, I yield back.
Mr. Latta. Thank you very much. The gentleman's time has
expired, and yields back.
The Chair now recognizes the gentleman from Colorado's
Eighth District for 5 minutes of questions.
Mr. Evans. Thank you, Mr. Chairman. Thank you, Ranking
Member. And thank you, of course, to the witnesses for coming
today.
In Colorado's Eighth Congressional District, I represent a
working-class district, northern suburbs of Denver, for whom
energy is a major, major driver in the economy. In fact, the
Loyal Electric utility that provides power to our area also
services one of the major oil and gas fields in the area. And
in my conversations with them, they have said that they are
forecasting needing 3 times as much electricity in the next 10
years as they are currently using now, and that is after
doubling the amount of electricity that they have to provide
over the last 10 years.
And so, Mr. Brickhouse, the first question to you is, I
have also heard directly from these utilities that because of
Colorado's just very draconian laws around greenhouse gases
emissions and the so-called carbon-free roadmap in Colorado,
they are being forced to pull gigawatts of coal-fired
generation off of the grid in Colorado.
And so the question to you is, When you or your members are
faced with those draconian regulations that require gigawatts
of electrical generation to be pulled off of the grid, how does
that impact your ability and the ability of other electrical
providers to be able to keep up with the growing demand for
electricity and keep it affordable?
Mr. Brickhouse. We had a very short period of time in the
late teens where our growth was slowing, and it quickly
reaccelerated after COVID, and we have grown basically 5 to 7
percent in unit sales every year after that. And that
dramatically changed our expected path of our resources. We had
tentative plans to evaluate closure of some facilities, and
those are gone today. And I concur with the distribution
cooperative you have been talking to down there that demand
growth that we have in the future is going to require every
existing resource, and it is going to require utilities to
build enormous amounts of dispatchable generation in the
future.
Mr. Evans. How would you characterize the decision to
retire coal-fired generation in the United States and in
Colorado?
Mr. Brickhouse. We have a member in Colorado that serves
that load. So they had dealt with it one way. In North Dakota
and other parts of our service territory, Wyoming, close
proximity to Colorado, we are keeping all-of-the-above resource
strategy intact.
Mr. Evans. Do you think it is wise to be retiring coal-
fired generation when we need additional capacity, not less?
Mr. Brickhouse. No.
Mr. Evans. Thank you. Moving on to NEPA reform. We know how
critical it is that we not be our own worst enemy when we are
trying to expand electrical generation so that folks have
access to affordable and reliable electricity. And we have
often heard conversations about how NEPA can sometimes get in
the way of that.
So do you have any examples that you might be willing to
elaborate on about how Congress can streamline the permitting
of getting more electrical generation onto the grid?
Mr. Brickhouse. I think with NEPA, the best example is
there is a project that we were doing with two partners. It was
a natural gas development. And we got caught up in an extra
review. And it, as a result of that, will likely write off a
significant portion, if not all of the development costs of
that project.
Mr. Evans. Thank you. Switching to Mr. Haque. I represent a
truly and all-of-the-above energy district. We have a major oil
and gas footprint, but we also have wind, we have solar, we
have geothermal. We used to have nuclear generation. We don't
have that anymore in Colorado. We are trying to get that back.
And so my question to you is as we are looking at, again,
in my area needing three times as much electricity in the next
10 years, are there any emerging technologies, SMRs,
geothermal, that you would like to see us be able to move
forward to help meet some of this demand and then also be able
to colocate the generation with the demand knowing that we have
certain shortcomings in the transmission?
Mr. Haque. Representative, great question. In the near
term, here is what we are going to see: We are going to see
quite a few of the renewables, hopefully, that are in our queue
connect to the system. We are going to see uprates of existing
generating units. I think I described some of the nuclear
uprates. There is a possibility of gas uprates as well. And I
think you are going to see more demand response participate in
our marketplace long-term. We are going to get more renewables
into the system. We are going to need new natural gas. And we
are going to need new, you know, new technologies.
SMRs are, you know, very promising technology, but they are
some years away. So we were dealing with the technology that
exists today. And that technology is--you know as we sit here
today, again, we have got, you know, effectively, our existing
fleet and then new renewables, new storage, new natural gas.
Mr. Evans. Thank you. I yield back.
Mr. Latta. The gentleman's time has expired, and yields
back.
The Chair now recognizes the gentlelady from North Dakota
for 5 minutes for questions.
Mrs. Fedorchak. Thank you, Mr. Chair. Thank you all for
being here and sharing your expertise with us. I have a few
rapid-fire questions I want to ask to start, just because I
want to hear from all of you. So just a yes or no on the first
one.
In your opinion, can you both support renewables and
support the urgent need for more dispatchable, fuel-secure
resources? Mr. Brickhouse?
Mr. Brickhouse. Yes.
Mr. Haque. Yes.
Mr. Norris. Yes.
Mr. Black. Yes.
Mrs. Fedorchak. Thank you. Secondly, is the call for more
dispatchable, fuel-secure power generation driven by partisan
politics or grid physics and mechanics?
Mr. Brickhouse. Physics.
Mr. Haque. Physics.
Mr. Norris. It is a more complex answer.
Mrs. Fedorchak. You only get one choice: grid mechanics or
partisan politics?
Mr. Norris. So I think there are cost considerations that
come into play as well. But other than that, physics.
Mrs. Fedorchak. OK.
Mr. Black. Physics. And finance. But physics, yes.
Mrs. Fedorchak. Thank you. I am glad you brought up
finance, because I want to talk about that next. As it relates
to cost, there is a lot to talk about this is the lowest cost,
that is the lowest cost.
As it relates to cost, does the cost per kilowatt cover the
full cost of any generation source? And if not, what is the
left-out of that? What goes into the bill that customers pay?
Because I had a lot of customers tell me as a regulator, ``If
everything is so cheap, why is my bill going up?''
So, Mr. Brickhouse, what else besides the cost per kilowatt
do you include in your bills to customers?
Mr. Brickhouse. We include the hundreds of millions of
dollars a year of costs related to environmental compliance. So
that is one area. And then, when we talk to our members, a good
example for Basin is that our existing generation assets are on
our books for $800 of KW installed. A new generation of a
dispatchable baseload sort would cost about $2,600 of KW
installed. So there is a cost aspect to that as well.
Mrs. Fedorchak. Mr. Black, what goes into your customer
bills that we haven't talked about?
Mr. Black. So certainly the wires cost. You know,
transmission distribution. The variable O&M and the capital
required to run our plants and keep them up to compliance, you
know, EPA requirements along those lines. So, you know, it is
the capital and the variable aspects of fuel and such. And so
it is a lot of components.
And I would say it differs a little bit, too, in the
structure that you have. Obviously, we are a vertically
integrated structure. We build, and then they pay, you know, a
share of the capital costs in our bills as opposed to, sort of,
the market component maybe that PJM has that is broken out. It
is a little more complex, I think.
Mrs. Fedorchak. OK. Thank you. Mr. Haque, the one most
disappointing thing for me in this new role is that partisan
politics gets way too involved in the management of the grid,
in my opinion.
You are the smart person, you are the one ultimately
keeping the grid running in the PJM area. MISO does it. STP
does it. What do you wish that Federal and State policymakers
understood or knew more about before they made policies
affecting energy?
Mr. Haque. All policy choices that exacerbate our supply/
demand challenges will have direct consumer impact. They will
have impact on reliability degradation, they will have impact
on cost. And I would say the other thing is that, again, I
think we are all collectively trying to find this balance of,
you know, our North Star is reliability, but we are very
conscious of costs. And, you know, I have got two little boys
at home. I mean, I would want them to breathe cleaner air as
well. And so we are trying to find this, sort of, balance and
sweet spot between all three of these.
But in order to find that balance and sweet spot, we also
have to understand the physics of these resources and what they
can provide to the grid. That is also essential.
Mrs. Fedorchak. Mr. Brickhouse--and I have 1 minute left,
so I will ask two more questions. You are seeing significant
demand increase. Do you expect that you can meet that demand
with renewables alone?
Mr. Brickhouse. No.
Mrs. Fedorchak. How about you, Mr. Black?
Mr. Black. No, not renewables alone.
Mrs. Fedorchak. Mr. Haque, do you think that we can meet
the demand for what we are seeing in terms of AI
manufacturing----
Mr. Haque. Not based on our forecast, no.
Mrs. Fedorchak. All right. Sir, I forgot your name because
I don't have it in front of me. Mr. Norris, do you think we can
meet demand with renewables alone?
Mr. Norris. No, but that also includes storage and nuclear
and thermal resources, so yes.
Mrs. Fedorchak. With all of those you think we can.
Mr. Norris. And demand response and energy efficiency too.
Mrs. Fedorchak. OK. Well, I have only got 10 seconds, so I
yield back. Thank you.
Mr. Latta. Thank you. The gentlelady yields back.
And the Chair now recognizes the gentleman from
Pennsylvania for 5 minutes for questions.
Mr. Joyce. First, I want to thank Chairman Latta for
allowing me to waive on to this important hearing. When it
comes to energy generation, I believe in all of the above, but
all of the above--I believe that we can all agree we need to
utilize accessible, affordable energy, and that is the coal and
the natural gas that is under the feet of my constituents.
Our generation is not created equal. The capacity factors
of wind and solar are simply too small to provide the reliable
energy that our grid requires. What we need in simple terms is
more baseload generation. We need more coal, more gas, and more
nuclear. It doesn't matter how many gigawatts of wind and solar
capacity that are built if they are not generating them when
you need them. Unfortunately, we were doing worse than not
building dispatchable generation. We are actually retiring it.
We are shutting it down.
PJM, which is the Nation's largest RTO--it includes my
district in Pennsylvania--released a report in 2023 projecting
40 gigawatts of reliable, dispatchable generation will retire
by 2030. PJM labels the majority of these retirements as,
quote, "policy-driven decisions." This is at a time when demand
is growing. Tech leaders like Elon Musk have said AI could lead
energy demand to be as much as twice as what it currently is
today.
Pennsylvania is in a great position to benefit from the
investment in the jobs of the AI revolution. We have already
begun to see this benefit with agreements between AWS and Talen
Energy at the Susquehanna nuclear generation facility, and the
reopening of Three Mile Island thanks to the power purchase
agreement between Constellation Energy and Microsoft.
Mr. Haque, successfully deploying and empowering new AI
data centers at the speed demanded to compete on the global
stage will be heavily dependent on the actions taken by FERC to
address colocation. How is PJM approaching the issue of
colocation, both in its work with FERC and on its own?
Mr. Haque. Thank you, Representative. It is still an
evolving story. And the FERC recently actually had--they issued
an order that requires us and the transmission owners to come
to them with a potential solution. We are in the throes of
working with our membership and our States to try and figure
out what that solution should look like. I would have more
information for you in 30, 60 days, but we are working that
solution right now with, again, our States and members.
Mr. Joyce. Mr. Haque, I hope you will agree with me that we
need more generation built within PJM. And what are the tools
in PJM's toolbox to encourage the investment and the building
of new generation?
Mr. Haque. The tools in the toolbox, depending on whether
you are a restructured or deregulated State or a vertically
integrated State--Pennsylvania is a restructured or deregulated
State--who are reliant on markets to try and incentivize new
investment.
Now, you know, we have a capacity market that is meant to
be a residual market. So parties like the ones you are
referencing--you actually referenced TMI and Microsoft--they
can enter into bilateral transactions in order to make sure
that they have--Microsoft in this instance--has the power that
they need. And the capacity market can be relied upon to send
what I would say are directional price signals as well as to
incentivize new investment.
Mr. Joyce. So, Mr. Haque, are capacity auctions one of the
tools in your toolbox? And do you believe that capacity
auctions are working to incentivize building new generation?
And if not, what can be used to attract that new generation,
that new investment?
Mr. Haque. Yes, so Representative, for our deregulated
States, the capacity market is the primary tool that is
utilized to try and incentivize new investment to the
marketplace. However, I continue to think that, as we see this
proliferation and demand driven by data centers, driven by the
onshoring or U.S. manufacturing, I think you will see more,
again, bilateral transactions that occur within the footprint.
And the other thing I would say is, you know, there are
tools that can be utilized that have not been utilized yet. For
instance, we have got the potential if we clear 3 years below
our reserve margin that we can use a competitive procurement
mechanism. That is a tool that is a currently in our toolbox
that we can utilize. States have taken action, as well,
depending on the resource types that they prefer in order to
try and advance new generation. And those actions can find
their way into our marketplace as well.
Mr. Joyce. As we see the expansion of AI, we are going to
rely more on you expanding those tools in your toolbox.
Mr. Chairman, I thank you for allowing me to waive on, and
I yield back.
Mr. Latta. The gentleman's time has expired, and yields
back.
The Chair now recognizes the gentleman from Georgia's First
District for 5 minutes of questions.
Mr. Carter of Georgia. Thank you, Mr. Chairman. I
appreciate the opportunity to waive on to this committee, and
thank all of you for being here. I suspect I am the last one to
ask questions. So you are almost done.
Business is booming. We need more electricity. We are
counting on y'all. I don't want you to feel any pressure, but
we were counting on you, OK? We need you.
My own State of Georgia, 11 years in a row, the number 1
State to do business in. I am very proud of that, and there is
a reason for that: Because we have created a pro-business
environment. Our legislature, our Governors, they have created
a pro-business environment. And we have available energy. We
have affordable, reliable energy. That is another reason why
people and businesses want to locate to Georgia.
I know firsthand that the demand for more electricity is
one of the top challenges that we face right now, and we will
continue to face that going forward.
Mr. Black, in your written testimony, you also note that
the State of Georgia is open for business. In fact, companies
are flocking to Georgia because we have good policies, as I
say, for business.
Mr. Black, what is unique about Georgia? What should
Congress do to make sure that Georgia can remain open for
business?
Mr. Black. Yes. So the load coming to Georgia is
remarkable. I mean, we have line of sight on 10,000 megawatts.
I know we have said a lot of numbers today, but that is a lot
of electricity. In the queue, another 50,000 of proposed and
projects that may come our way.
I believe some of the structures, sort of, the electricity
structure that we have is incredibly important. It will result
in firm gas pipelines. It will result in firm electric
transmission. But those pipelines and the need for those and
some of the reforms we have talked about in and around NEPA and
the Clean Water Act and some judicial reform to get the
pipelines done in time is essential.
Mr. Carter of Georgia. OK.
Mr. Black. That is a national issue.
Mr. Carter of Georgia. Let me ask you something. And if I
get any of this wrong, you are the expert, so please correct
me, OK?
But I think it is important to note that the State of
Georgia is the only State that has built nuclear reactors in
the last 30 years. We have two new nuclear reactors at Plant
Vogtle, and I believe that Plant Vogtle right now, with the
four nuclear reactors that are there, is providing about 22
percent of the electricity needs in the State. And if you
combine that with Plant Hatch, which is in my district, in the
First District, they are providing about 8 percent. Therefore,
about 30 percent of the energy in the State of Georgia is
coming from nuclear.
Mr. Black. That sounds accurate, yes.
Mr. Carter of Georgia. Yes. So let me ask you something,
because I heard SMRs. A lot of people have been talking about
SMRs. But we don't have any under construction right now, do
we? Does anybody on the panel know of any that we have under
construction?
Mr. Black. Not domestically that I am aware of, no.
Mr. Carter. OK.
Mr. Black. AP1000s, as you know----
Mr. Carter of Georgia. Well, the reason I ask this is
because--and hang with me here, if you will. If Georgia Power
were to build more nuclear, would it be SMRs, or will you
continue with the reactors like you have at Plant Vogtle?
Because it is my understanding that you would rather do that
than to do the SMRs.
Mr. Black. Well, we learned a lot, and we have, I think,
understand the risks and the time. I mean, the improvement from
three to four was about 20 percent.
Mr. Carter of Georgia. That is what I understand.
Mr. Black. It is remarkable. So, you know, if you could go
five, six, seven, you know, either in our State or some other
States within the country, the AP1000, I think the risk--the
cone of risk, if you will, is much smaller than some technology
we haven't quite developed fully.
Mr. Carter of Georgia. Well, I would submit to you that
Georgia following through on that project--even though it was
challenging, no question about that--but I would submit to you
that following through on that project gave the blueprint, if
you will, for nuclear reactors in the United States. Because,
as you say, we had a 20 percent saving between number three and
four and learned a lot of important lessons that can be shared.
Mr. Black. Yes, absolutely. Hard but worth it. And, again,
the fact that it is on all the time is such a remarkably
important element.
Mr. Carter of Georgia. And it is the largest provider of
clean energy in the United States. Is that correct?
Mr. Black. That is correct. Number 1.
Mr. Carter of Georgia. Number 1.
Mr. Black. Yes.
Mr. Carter of Georgia. Plus, Georgia is the number 7 State
in the country for solar.
Mr. Black. Why are we the number 7 State?
Mr. Carter of Georgia. Georgia is the number 7 State. Is
that correct?
Mr. Black. That is. It is in the top 10. There are a number
of States in the Southeast that have solar resources. I think
we are finding--I think it is important to be resource agnostic
but resource aware, and we are able to find ways to get solar
on because it is an asset and a resource within our State we
can bring on the system--
Mr. Carter of Georgia. Well, Mr. Chairman, I thank you for
the opportunity to come in here and brag about my home State of
Georgia, as I have done for the last 5 minutes.
So thank you all very much for being here.
Mr. Weber. But the gentleman of Georgia, Texas is number 1,
just so you know.
Mr. Latta. Well, let's not get into that.
OK. The gentleman's time has expired, and yields back.
And seeing no other Mmbers wishing to ask questions of our
witnesses today, I remind Members if they do have additional
written questions that they might be submitting to you, that we
would ask that you get those back to us within 10 business
days.
And I ask unanimous consent to insert in the record the
documents included on the staff hearing documents list.
Without objection, so ordered.
Without objection, the subcommittee is adjourned.
And, again, thank you to our witnesses for appearing today.
[Whereupon, at 1:03 p.m., the subcommittee was adjourned.]
[Material submitted for inclusion in the record follows:]
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