[House Hearing, 119 Congress]
[From the U.S. Government Publishing Office]
KEEPING THE LIGHTS ON: EXAMINING THE STATE
OF REGIONAL GRID RELIABILITY
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON ENERGY
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED NINETEENTH CONGRESS
FIRST SESSION
__________
MARCH 25, 2025
__________
Serial No. 119-12
[GRAPHIC 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
60-019 PDF WASHINGTON : 2025
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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........................................... 9
Hon. Brett Guthrie, a Representative in Congress from the
Commonwealth of Kentucky, opening statement.................... 11
Prepared statement........................................... 13
Hon. Frank Pallone, Jr., a Representative in Congress from the
State of New Jersey, opening statement......................... 15
Prepared statement........................................... 17
Witnesses
Manu Asthana, President and Chief Executive Officer, PJM
Interconnection................................................ 19
Prepared statement........................................... 22
Answers to submitted questions............................... 201
Gordon van Welie, President and Chief Executive Officer, ISO New
England........................................................ 33
Prepared statement........................................... 35
Answers to submitted questions............................... 206
Jennifer Curran, Senior Vice President, Planning and Operations,
Midcontinent Independent System Operator....................... 46
Prepared statement........................................... 48
Answers to submitted questions............................... 213
Richard Dewey, President and Chief Executive Officer, New York
Independent System Operator.................................... 58
Prepared statement........................................... 60
Answers to submitted questions............................... 226
Lanny Nickell, Executive Vice President, Chief Operating Officer,
Southwest Power Pool........................................... 66
Prepared statement........................................... 68
Answers to submitted questions............................... 234
Elliot Mainzer, President and Chief Executive Officer, California
Independent System Operator Corporation........................ 76
Prepared statement........................................... 78
Answers to submitted questions............................... 254
Pablo Vegas, President and Chief Executive Officer, Electric
Reliability Council of Texas................................... 87
Prepared statement........................................... 89
Additional material submitted for the record................. 95
Answers to submitted questions............................... 263
Submitted Material
Inclusion of the following was approved by unanimous consent.
List of documents submitted for the record....................... 157
Letter from Matthew J. Agen, Chief Regulatory Counsel, Energy,
American Gas Association, to Mr. Latta and Mr. Pallone......... 158
Letter from Danielle Russo, Executive Director, Center for Grid
Security, SAFE, to Mr. Latta................................... 160
Report of the North American Electric Reliability Cooperation,
``2024 Long-Term Reliability Assessment,'' December 2024....... 164
Report of the North American Electric Reliability Cooperation,
``Reliability Insights: The Interconnected Gas and Electric
Systems,'' March 2025.......................................... 174
Fact sheet from the North American Electric Reliability
Cooperation, ``2024 Long Term Reliability Assessment''......... 176
Letter of March 25, 2025, from the American Public Power
Association to Mr. Guthrie, et al.............................. 177
Article of March 25, 2025, ``Trump Says Coal Should Make a
Comeback. At what price?,'' by Peter Behr, Politico Pro........ 180
Article of December 8, 2022, ``The Business Case for New Gas is
Shrinking,'' by Lauren Shwisberg, RMI.......................... 188
Presidential Memorandum of January 20, 2025, ``Temporary
Withdrawal of All Areas on the Outer Continental Shelf from
Offshore Wind Leasing and Review of the Federal Government's
Leasing and Permitting Practices for Wind Projects''........... 196
KEEPING THE LIGHTS ON: EXAMINING THE STATE OF REGIONAL GRID RELIABILITY
----------
TUESDAY, MARCH 25, 2025
House of Representatives,
Subcommittee on Energy,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 10:14 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, DeGette, Matsui, Tonko, Veasey,
Schrier, Fletcher, 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; Sydney Greene, Director of Finance and Logistics;
Emily Hale, Staff Assistant; Megan Jackson, Staff Director;
Mary Martin, Chief Counsel; Joel Miller, Chief Counsel; Ben
Mullaney, Press Secretary; Jake Riith, Staff Assistant; Jackson
Rudden, Staff Assistant; Chris Sarley, Member Services/
Stakeholder Director; Emma Schultheis, Clerk; Peter Spencer,
Senior Professional Staff Member; Kaley Stidham, Press
Assistant; Matt VanHyfte, Communications Director; Rasheedah
Blackwood, Minority Intern; Waverly Gordon, Minority Deputy
Staff Director and General Counsel; Tiffany Guarascio, Minority
Staff Director; Perry Hamilton, Minority Member Services and
Outreach Manager; Kristopher Pittard, Minority Professional
Staff Member; Emma Roehrig, Minority Staff Assistant; Kylea
Rogers, Minority Policy Analyst.
Mr. Latta. Well, good morning. The Subcommittee on Energy
will now come to order.
And the Chair recognizes himself for 5 minutes 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, ``Keeping the Lights On:
Examining the State of Regional Grid Reliability.'' Today, we
will continue the subcommittee's work to address the ongoing
electric reliability crisis facing our Nation.
The witnesses before us are each of the regional grid
operators and ERCOT, who collectively cover two-thirds of the
country. These organizations are charged with overseeing
reliability to their State or region, administering markets for
the sale and purchase of electricity products, and coordinating
transmission development.
While each grid operator functions in a similar manner,
they all take unique approaches to addressing the regional and
demographic differences of communities and their footprints.
But no matter where in the country they serve, they are
confronting the challenges facing our power sector.
It is no secret that our country is in the midst of a
reliability crisis, and it could not come at a worse time. The
North American Electric Reliability Corporation, NERC, recently
stated that 52 gigawatts of generation will retire in the next
4 years. To put this into context, that is the rough equivalent
of 40 nuclear plants or 500 square miles of solar panels.
While dangerous amounts of baseload generation are leaving
the grid, we are facing historic levels of demand entering the
system and interconnection queues that are backlogged with
intermittent resources and battery storage facilities. We know
that renewables are not a one-on-one replacement for
dispatchable baseload power that is essential to reliability
and provides spinning reserves needed to stabilize the system
through fluctuations.
It is not clear that the pace at which baseload generation
is coming online will bridge the gap of retiring supply and
meet increasing demands over the next few short years.
As we are well aware, these new demands are largely driven
by developments in artificial intelligence and domestic
manufacturing. Achieving a leadership position in the
development of AI and reshoring domestic manufacturing is not a
pipe dream to strive for, it is a national security imperative
that could shape America's future in the global economy.
Regional grid operators before us today are on the front
lines of the reliability crisis, and this is a new era of
historic electricity demand.
When operating correctly, electricity markets should allow
clear market signals to drive investment into new generation,
efficient interconnection of new resources should address
increasing demand, and coordinated transmission planning should
bring needed electricity supplies to growing load centers.
However, these organizations and electricity markets do not
operate in a vacuum. Excessive Federal overreach, like the
Clean Power Plan 2.0, drove significant premature retirements
of baseload power and discouraged long-term investment into
baseload generation sources. Significant subsidies for
intermittent generation undermine the economies of baseload or
on-demand dispatchable generation resources that are essential
to keeping the lights on.
These grid operators are also tasked with the difficult job
of maintaining reliability and resource adequacy as States
implement restrictive policies designed to attack fossil
resources. Because the interconnected nature of much of our
bulk power system, the decisions of one State to drive out
baseload power inherently impact the reliability of our
neighboring States.
All these problems are compounded by systematic permitting
challenges that make it nearly impossible to develop new
infrastructure in large parts of our country. Markets cannot
build where governments do not let them do. We need to address
these challenges through a pragmatic whole-of-government
approach that recognizes the benefits of different source--of
fuel sources, the limitation of others, and prioritizes energy
expansion.
There is a value to ensuring a diverse resource mix, but it
is important to recognize that not all electrons should be
treated equally. The variability of intermittent resources like
wind and solar innately require backup generation during
inclement weather conditions and where battery storage
facilities are operationally restricted. Often it is during
these periods of inclement weather when we need electricity the
most to protect the health and safety of our communities.
I look forward to today's discussion regarding the ongoing
reliability crisis and the important steps regional grid
operators are taking to correct market inefficiencies to keep
the lights on for all Americans.
[The prepared statement of Mr. Latta follows:]
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Mr. Latta. And with that, I yield back the balance of my
time and at this time recognize the gentlelady from Florida,
the ranking member of the subcommittee, 5 minutes for an
opening statement.
OPENING STATEMENT OF HON. KATHY CASTOR, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF FLORIDA
Ms. Castor. Well, thank you, Chairman Latta. And welcome to
our witnesses today. And I want to thank you and everyone
working to keep America's power system as modern and as
efficient, affordable, and reliable as it can be, from the
linemen who were restoring power after the devastating
hurricane season in my neck of the woods to folks dealing with
wildfires, extreme events, and just now the new calls for huge
new sources of energy and capacity across the country.
A resilient and reliable electric grid that utilizes the
cleanest resources possible is vital to all Americans. And
decade after decade, we have modernized energy sources in the
grid, and we must continue to do so.
And while I am pleased that we are focused on strengthening
the grid, the hearing ignores the damage being done by the
Trump administration and Elon Musk to reliable, affordable
energy, including the investments under the infrastructure law
and the Clean Energy Climate Resilience Law, the IRA.
Since I started thinking about this hearing, I have had the
lyrics from ``Wicked,'' that great dance number, stuck in my
head, ``Dancing Through Life'': ``We are dancing through life,
no need to tough it when you can slough it off as you do."
For example, the early Trump shutdown of grants and loans
halted electricity and grid projects, causing chaos and
additional costs for co-ops and power producers and,
ultimately, consumers. Then you have the illegal layoffs of
energy experts in various agencies, the illegal firings of the
Department of Energy Inspector General, and the disruption of
electricity trade between Canada and the U.S. It is all leading
to higher cost for American consumers.
For instance, the U.S. imposed a 10 percent tariff on
Canadian electricity imports. And Ontario retaliated with a 25
percent surcharge in electricity exports to Michigan, New York,
and Minnesota. And although Ontario suspended the surcharge,
the tariffs have strained the integrated power grid shared by
the two countries. This interconnected system has historically
provided reliability and cost benefits, but tariffs now are
threatening its efficiency.
So I urge colleagues to stand up to this chaos that is
fueling higher costs and uncertainties. It has weakened our
ability to strengthen the grid.
And as Republicans hammer out their tax giveaways to
billionaires, that should not come at the expense of grid
infrastructure investments and clean energy tax credits for
solar, wind, nuclear, and pollution reduction.
One analysis predicts that repealing the clean energy tax
credits would increase annual energy costs for each U.S.
household. It would cost us about 800,000 jobs and decrease our
GDP.
Solar wind and battery storage are the cheapest and
cleanest ways to add energy supply to the grid now. They are
driving down energy costs now. RTOs, ISOs, and FERC are making
progress on interconnection queues, and Congress should help
them. Because we understand there are over 2,000 gigawatts of
energy and storage waiting in line. That is equivalent to about
one billion homes at peak demand.
Also, there are many commonsense, practical policy
solutions to help our grid connect more resources and
strengthen the grid. My bicameral Advancing GETs Act is a great
example. The bill would encourage FERC to implement shared
savings, incentives that promote the deployment of grid-
enhancing technologies--that is the cheapest way to supercharge
our power grid--and would allow utilities to earn a profit for
saving money and save consumers billions on their electricity
bills every year.
Similarly, the Expediting Generator Interconnection
Procedures Act would make commonsense reforms to the outdated,
sluggish process that we use to bring energy of all kinds onto
the grid. We could promote the use of automation and
standardization studies, ensuring that grid upgrade costs are
fairly allocated to customers who benefit from the
interconnection of new resources.
The energy affordability crisis we are grappling with today
requires real forward-looking policy solutions. It requires a
politically independent and well-staffed FERC, and it requires
a consistent commitment to energy policy, one that keeps
Americans safe, helps us compete with our foreign adversaries,
and continues to deliver investments in jobs across America.
Thank you, Mr. Chairman. I yield back.
[The prepared statement of Ms. Castor follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Latta. Thank you. The gentlelady yields back.
And the Chair now recognizes the gentleman from Kentucky,
the chairman of the Energy and Commerce Committee, for 5
minutes for his opening statement.
OPENING STATEMENT OF HON. BRETT GUTHRIE, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF KENTUCKY
Mr. Guthrie. Thank you, Chairman Latta, and thank you for
the recognition. Thank you for all of our witnesses being here.
There's a lot of sayings that--I don't see my friend from
Michigan in here on our committee this morning, but her
husband, a lot of sayings are attributed to Chairman Dingell
over looking at the globe and say, ``That is the jurisdiction
of Energy and Commerce.'' Another one is, he always said, if
it--for our jurisdiction--``If it moves, it is energy. If it is
not moving, it is commerce.'' So that is our jurisdiction.
So I use the Dingell corollary. It takes energy to move
commerce, and for us to be successful to turn--somebody said
the other day that AI turns energy into intelligence. And so it
is vitally important that we as a country get together and
figure out how we are going to beat China, and it is by having
affordable, reliable delivery of electric power.
And the complicated question of how to deliver that power
effectively is compounded by the tremendous increase in demand
projected over coming years for specific purposes like AI, and
broader increases in consumer demand. I know we have met slower
energy growth over the last generation and also more
efficiency, which is absolutely part of it is to be more
efficient, but now we are seeing a rising in demand. And so we
have to ensure affordable, reliable delivery of power to meet
our needs, and the tremendous amount of energy it is going to
require for the utility grid.
So here in Congress we must identify and understand the
forces impacting the ability of engineers to plan and operate
this system for better or for worse. And we must address the
commonsense policy reforms that will allow utilities and
operators to do their work cost-effectively.
Over the past decade, certain Federal and State policies
have made it more difficult for operators to keep the lights
on. The threats of the Biden administration's electricity
policy was to shut down baseload coal and limit natural gas
generation with onerous new rules and regulations. During this
time, many States also established policies to transition away
from fossil generation that is essential for maintaining grid
reliability. Momentum behind this so-called transition
continues just as a generational increase in power demand is
emerging.
Consider how new demand growth is clashing with the
residual Biden-Harris policies today. In December, the North
American Electric Reliability Corporation, NERC, projected peak
power demand to grow by 151 gigawatts--151 gigawatts over the
next 10 years. Over the same period, NERC reports expected
retirements of dispatchable generation which is needed for
reliability to be as much as 115 gigawatts. This gap between
retirements and growth in demand alone accounts over 240
gigawatts or an equivalent amount of power needed to support
195 million homes over an entire year.
Ensuring the availability of reliable power will require
stopping and reversing retirements of dispatchable resources
and building out new natural gas generation and eventually
nuclear and other reliable sources. Yet the vast amount of the
new generation that is aligned today to connect the grid is
intermittent wind and solar, which cannot be relied upon when
you need it the most.
As a result, half of the Nation is at risk of power
shortfalls over the next 10 years--think about it, half the
Nation. For all the benefits of all-the-above resource
policies, the current path that incentivizes a massive
renewable build is putting the electric system out of balance
and dramatically increasing risk.
Today we will talk to the grid operators that are caught at
the center of the clash between failing policies and strong
economic demand affecting our Nation's generation mix. They
must deal with the consequences, so understanding the
challenges you face and how you plan to meet the growing demand
is essential for our work.
Last week the Secretary of Energy noted that the
existential security implications of our race with China on AI
and other advanced technologies, a focus on meeting the China
challenges and with the DeepSeek, that should wake us up that
we are challenging China. We can't always expect to be on top
if we don't focus on being on top. So that raise--should raise
serious questions about what is necessary to clear the way in
permitting and regulatory policy, which will enable tremendous
energy and power growth in the coming years.
Recognize we have to be--we have to be focused on making
sure we do everything in the right way and in a sustainable way
as much as we can possible. But we have to fully appreciate the
scale of the pace of change coming because of the AI, the data
centers, and the demand. As well with Microsoft. Microsoft
data--not all, but some Microsoft data centers can use as much
power as the city of Seattle. That puts it into perspective.
I look forward to this discussion. I will yield back.
[The prepared statement of Mr. Guthrie follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Latta. Thank you. The gentleman yields back.
The Chair now recognizes the gentleman from New Jersey, the
ranking member of the full committee, 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.
For the third time this Congress, we have had an important
hearing focusing on the reliability and affordability of
electricity in this country. And for the third time, my
Republican colleagues are going to purposely ignore the fact
they are attempting to repeal the single biggest incentive to
build electricity capacity in this country, and that is the
Inflation Reduction Act. Repealing billions of dollars in
technology-neutral funding for all types of new energy is not
the way to address the increasing need for energy.
It also ignores the fact that the Trump administration is
freezing Federal funding and trying to rescind grants for grid
reliability projects that the grid operators sitting before us
today have said are vital to addressing increasing energy
demand. It also ignores the fact that President Trump is
attempting to put tariffs on electricity imports from Canada,
which could seriously drive up energy costs for people in the
Midwest and the Northeast.
It is time that we recognize that the chaotic and
constantly changing policies of Trump and Elon Musk are the
single greatest threat right now to grid reliability.
Just last week, yet another study came out, this time from
Energy Innovation, showing that repealing the Inflation
Reduction Act would increase American families' power bills.
Republicans are talking about the importance of affordability,
but their actions don't match their words.
Despite continued Republican attacks on our grid's
reliability and affordability, today's hearing is still
important. Regional grid operators play a critical role in
keeping the lights on for our customers. And 27 years ago, FERC
Order 888 brought competition to electricity markets around the
country. Since that time, the competition encouraged by these
markets has broadly lowered wholesale energy prices and made
the grid cleaner, all while ensuring reliability.
But that is not guaranteed. And I am worried that some of
the rules of the road that govern regional transmission
organization could start to harm consumers.
Last year, partially as a result of poor market design,
capacity prices in the PJM region exploded from $29 to $270 per
megawatt day. And these price increases aren't abstract. They
are directly responsible for roughly $25 per month increase in
New Jersey power bills that my constituents will start feeling
this June.
So, Mr. Asthana, I want to be clear: This is completely
unacceptable. PJM's years of dragging its feet on reforming its
capacity markets and interconnection queue are finally coming
home to roost, but it is my constituents who are stuck paying
the bill. PJM has demonstrated a complete inability to connect
resources to the grid in a timely fashion. And I recognize that
PJM has taken a number of steps in the last few years to
rectify this, but frankly it is too little, too late.
The years of inaction have already taken their toll. A
recent report found that, if PJM had implemented proactive
transmission planning and simplified interconnection processes
years ago, it could have avoided half of these costs. And I am
frustrated that PJM is touting its progress in connecting more
energy with its grid when it still has not fully complied with
FERC's requirements under Order 2023. Meanwhile, PJM is
spending my constituents' rate paper dollars--ratepayer
dollars, I should say--suing for over--Order 2023, creating
further uncertainty for potential developers of power plants.
And, Mr. Asthana--I hope I am pronouncing it right--your
organization simply must get its act together. I appreciate
that PJM has introduced some short-term tweaks to its market
and is working together with States, including New Jersey, to
find a pathway to protect ratepayers, but this all should have
been figured out years ago.
And as we continue this discussion today, it is important
we recognize that, in this time of increased demand for
electricity, families are increasingly at risk of their power
bills becoming unaffordable. Grid operators and, frankly, FERC
must remember that they have a legal obligation to ensure that
their policies are just and reasonable, and anything else does
a disservice to the American people who depend on you.
And with that, Mr. Chairman, I will yield back.
[The prepared statement of Mr. Pallone follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Latta. Thank you very much. The gentleman yields back
the balance of his time. And this now concludes Member opening
statements.
The Chair reminds Members that, pursuant to committee
rules, all Members' opening statements will be made part of the
record.
We want to thank all of our witnesses for being with us
today and taking time to testify before the subcommittee. Each
witness will have the opportunity to give an opening statement
followed by a round of questions from the Members.
Our witnesses today are Manu Asthana, the president and CEO
of PJM Interconnection, LLC; Mr. Gordon van Welie, president
and CEO of Independent Service Operator of New England; Ms.
Jennifer Curran, the senior vice president for planning and
operations at Midcontinent Independent Service Operator; Mr.
Richard Dewey, president and CEO of New York Independent System
Operator; Mr. Lanny Nickell, the chief operating officer of
Southwest Power Pool; Mr. Elliot Mainzer, the president and CEO
of California Independent System Operator; and Mr. Pablo Vegas,
the president and CEO of the Electric Reliability Council of
Texas, ERCOT.
Again, we appreciate all of our witnesses for being with us
today. And before we get started, just a quick reminder about
our light system in front of you. You will have 5 minutes to
give an opening statement. At 4 minutes, you will get a yellow
light, meaning you have 1 minute remaining. Red light signifies
your time is up. So if you please wrap up when you see the red
light come on.
Also, just pull the mike up close to you as you are
speaking.
And at this time, we will begin with our witnesses that are
before us today. Mr. Asthana, you have 5 minutes to give an
opening statement. Thanks again for being with us today.
STATEMENTS OF MANU ASTHANA, PRESIDENT AND CHIEF EXECUTIVE
OFFICER, PJM INTERCONNECTION; GORDON VAN WELIE, PRESIDENT AND
CHIEF EXECUTIVE OFFICER, ISO NEW ENGLAND; JENNIFER CURRAN,
SENIOR VICE PRESIDENT, PLANNING AND OPERATIONS, MIDCONTINENT
INDEPENDENT SYSTEM OPERATOR; RICHARD DEWEY, PRESIDENT AND CHIEF
EXECUTIVE OFFICER, NEW YORK INDEPENDENT SYSTEM OPERATOR; LANNY
NICKELL, EXECUTIVE VICE PRESIDENT, CHIEF OPERATING OFFICER,
SOUTHWEST POWER POOL; ELLIOT MAINZER, PRESIDENT AND CHIEF
EXECUTIVE OFFICER, CALIFORNIA INDEPENDENT SYSTEM OPERATOR
CORPORATION; AND PABLO VEGAS, PRESIDENT AND CHIEF EXECUTIVE
OFFICER, ELECTRIC RELIABILITY COUNCIL OF TEXAS
STATEMENT OF MANU ASTHANA
Mr. Asthana. Yes. Chairman Latta, Ranking Member Castor,
Chairman Guthrie, Ranking Member Pallone, and members of the
subcommittee, good morning. My name is Manu Asthana. I am the
CEO of PJM Interconnection. PJM works to ensure the reliable
flow of power to 67 million people across 13 States and DC. We
serve about one in five Americans.
We are fully regulated by the FERC. As you know, FERC plays
a critical leadership role in our industry. And the value of
having a fully staffed, well-functioning Federal regulator,
particularly at this time, cannot be understated.
We don't have a profit motive. Our core mission is grid
reliability. Our work, along with that of our member companies,
has ensured a strong and stable grid for almost a century since
our founding in 1927.
More recently, however, we have seen three notable trends I
wanted to share with you that concern us. First, dispatchable
thermal generation is retiring, often driven by Federal or
State policy.
Second, most of our interconnection queue is made up of
intermittent renewable generation. And I want to be clear:
These generators play an important role on the grid, and we
want them--we want them to come online, but they are not a one-
for-one substitute for the machines that they are replacing.
And finally, third, electrical demand is growing, driven
primarily by data center load growth. Less supply, more demand:
It adds up to increased reliability risk and higher prices. And
we are seeing this across large parts of our country. This is
not just a PJM phenomenon.
Our industry has been working hard on solutions.
Specifically, in PJM, amongst other things, we have reformed
our generator interconnection process. We had a queue of about
200,000 megawatts of generation. We have whittled that down to
67,000 megawatts, an incredible amount of progress, with
another 50,000 megawatts through the queue ready to go. And,
actually, parts of it have started to construct, and some has
already come online. We have opened new pathways for generators
to connect to the grid, and we have implemented reforms to our
market rules.
And the good news is these initiatives are having an
impact. I am happy to report several generators have withdrawn
their retirement decisions. We have a shuttered nuclear power
plant that has announced its return and is working hard to come
back.
Pennsylvania's former largest coal plant is being studied
to come back to life as a gas generator. Demand response
providers are looking for ways to bring more supply onto the
system, and developers are working hard to bring their projects
to market. In fact, just last week, one of the new pathways to
interconnection that I talked about resulted in 27,000--almost
27,000 megawatts of new generation applying to interconnect to
PJM, which is very exciting.
But our work is not done. It still takes roughly 18 months
to build a data center. Takes 5 years-plus to build a power
plant. And global supply chains for grid components like
transformers and turbines are backlogged.
The stakes are high, and we remain committed to the task at
hand. In our opinion, we have six key areas of focus for the
industry looking forward, and I wanted to share them with you.
First, we must keep the supply that we have today. More
retirements are going to make it much harder for us to serve
this load growth. Second, we must try to bring back what we can
from retirement, whether in its current form or repowered form
with a different fuel, or using those sites for different
generators. Third, we need to connect new generators rapidly,
and that includes upgrades of existing generators. Fourth, we
need to harness demand flexibility, which I think is a real
hidden opportunity. Fifth, we do need siting and permitting
reforms for generation and transmission, and we could use help
with that. And, finally, more investment in natural gas
infrastructure is needed to support power generation
flexibility.
Thank you for the opportunity to testify today. I look
forward to your questions.
[The prepared statement of Mr. Asthana follows:]
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Mr. Latta. Well, thank you very much for your opening
statement.
Mr. van Welie, you are now recognized for 5 minutes for
your opening statement.
STATEMENT OF GORDON VAN WELIE
Mr. van Welie. Good morning, Chairman Latta, Ranking Member
Castor, Chairman Guthrie, Ranking Member Pallone, and members
of the subcommittee. Thank you for the opportunity to appear
here today.
Like other regions, New England's electric system is
undergoing an energy transition. Historically, power system
planning has focused on having enough resources. We refer to
this as resource adequacy. However, as we transition to more
weather-dependent resources, one of the biggest challenges
facing New England is making sure that there is sufficient
energy in the system to meet expected electricity growth.
The wholesale markets run by ISO New England effectively
price supply-and-demand conditions, providing important signals
to developers when investment is needed. However, the wholesale
markets alone cannot assure resource adequacy. State and
Federal policies also play a key role in achieving regional
resource adequacy.
While the wholesale markets operate on shorter timeframes,
the States have the ability to structure longer-term
commitments, through various hedging strategies, to incentivize
to develop the sufficient resources to meet the resource
adequacy standard that is priced in our capacity market.
Moreover, the States have the ability to address barriers to
entry for resources participating in wholesale electricity
markets. These longer-term commitments can also protect
consumers against price volatility in both the energy and the
capacity markets.
In short, the ISO and the New England States have a joint
and complementary role in achieving resource adequacy.
Furthermore, investor confidence in the wholesale markets is
dependent on a supportive policy and regulatory framework at
both the State and the Federal level.
As a region, New England has made progress in evolving the
market design to align with the resources that are coming
forward. We are implementing new approaches to plan the
transmission system to meet the States' policy objectives, and
we have new tools to help us better quantify our reliability
risks in a rapidly changing power system across the region.
Incentivized by State policies, the region has invested
heavily in energy efficiency and behind-the-meter solar
resources, which have effectively reduced demand for
electricity from the grid operated by us in New England. These
investments, coupled with relatively little interest from data
centers and other AI-driven activities, has meant that New
England has thus far not seen the rapid growth in consumer
demand forecasted in other regions.
The reliability and market outlook for the near term is
favorable, though potential challenges lie ahead. Our latest
10-year forecast projects regional electricity consumption will
increase by about 17 percent over the next decade. It remains
to be seen whether that load growth will outpace the net effect
of generator retirements and new supply coming online.
It is difficult to build new grid-scale energy
infrastructure in New England. And recent developments give us
cause for concern about the region staying on pace with
maintaining resource and energy adequacy as load grows. This
may have implications towards the end of this decade.
Due to recent Federal executive actions, New England is
facing new uncertainty about the timing of offshore wind
development, which has been planned as a major new domestic
source of energy for our region.
As of January, battery storage and wind resources make up
the largest proposals in our interconnection queue at 47
percent and 45 percent, respectively. There are currently no
other categories of resources proposed at that scale. And this
could have implications in both the near and the short term.
The current deliberations about new tariffs on imports have
the potential to affect not only the price of electricity in
New England but also the availability of power to New England
from our longstanding electricity trading partners in eastern
Canada. This could also have implications in both the near and
the long term.
As demand grows for electricity in New England, the region
will need new resources to meet resource adequacy needs, and it
will be critical to ensure that we have a supportive policy and
regulatory framework in place to allow for the entry of those
resources.
Thank you.
[The prepared statement of Mr. van Welie follows:]
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Mr. Latta. Well, thank you very much for your statement.
And, Ms. Curran, you are recognized for 5 minutes for your
opening statement.
STATEMENT OF JENNIFER CURRAN
Ms. Curran. Thank you.
Good morning, Chair Latta, Ranking Member Castor, Chairman
Guthrie, Ranking Member Pallone, and members of the
subcommittee. I am Jennifer Curran, vice president of
operations and planning for the Midcontinent Independent System
Operator, or MISO, as we are more commonly known. It is a
pleasure to be here today as you consider the state of regional
grid reliability and its impact on our Nation. I hope MISO's
experiences and insights will be helpful as you continue your
work on this.
MISO serves over 45 million customers in a territory that
spans all or part of 15 States. We created in 2024 alone $5
billion in value for the region. That in turn has an impact on
cost for consumers in the region.
Unlike some other RTOs, in MISO our utilities and load-
serving entities are the ones with the responsibility for
resource adequacy. We work closely with them to ensure that
there is an accurate picture of the evolving and current
resource risks that exist, so that as they make their
investment decisions they can be better informed.
We are fuel-source and policy neutral in MISO. That means
we do not advocate, prefer, or favor any kind of fuel type or
electric policy. Instead, we work to implement State and
Federal policies and the goals and objectives of our members.
That doesn't mean, of course, that we are disinterested
observers. Reliability of the bulk electric system is our
mission, and that is the topic today.
And as we consider the energy landscape, I think we have
already talked about a number of the factors, and MISO is no
different. We see rapid retirement of existing resources,
significant growth of noncarbon-emitting resources, many of
which do not have the same attributes in terms of duration of
operation as those retiring resources, and, of course, load
growth driven not just by data centers but also the reshoring
of manufacturing into the U.S.
We have been following and working to get ahead of these
issues for a number of years through an initiative we call the
Reliability Imperative. Over the last several years, we have
made a number of changes, including instituting changes to how
we accredit generation resources. That is how we determine how
they will perform during those most high-risk hours and gives
us all a more accurate picture of the resource adequacy
picture.
We are updating our markets, things like market pricing
signals to ensure that we are sending the right signal to
incent generation output during the times of the tightest
operating conditions.
Over the past few years, we have approved over $30 billion
of new regional transmission lines that will substantially
improve electric transfer capability across the region and
ensure electric reliability and the associated economic growth.
We, like others, have instituted a number of improvements
to the generator interconnection queue process to hasten the
approval of generation. And we are currently seeking approval
at FERC for something we call the Expedited Resource Addition
Study. That study is a temporary framework to provide an
ability to expedite certain new-generation projects that are
desperately needed to meet resource adequacy and reliability
risks.
But much more work remains to be done. One of the easiest
approaches is to slow down the retirement of the existing
resources. We need to keep as many of the resources as we have
online until adequate replacements are in place to ensure that
we are able to continue to provide customers 24 hours a day, 7
days a week, 365 days a year.
But that doesn't mean we can slow down investment in new
infrastructure. We need to continue at a very rapid pace the
development of new-generation resources of all types to serve
that growing electricity need, and we need to ensure that we
are investing in the transmission assets that are needed to
deliver that energy to where it is needed.
Finally, we need to continue to work on process reforms to
ensure that our markets and planning processes enable the
changes to meet the changes we need in the future. Things like
the Expedited Resource Adequacy Study that I mentioned, things
like ensuring that we have the right accreditation for demand
side and other resources, the addition of market products and
the like are all going to be important to our future.
MISO's extensive analytical work and operational experience
make it clear that no single electric-generating resource type,
transmission line, new technology, or process change is going
to solve all of our problems on its own. It is a multifaceted
problem that is going to take a coordinated approach that
leverages all of these tools.
I appreciate your attention to these vital issues, and I
look forward to working with Congress and Federal and State
regulators to ensure a reliable electric system.
[The prepared statement of Ms. Curran follows:]
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Mr. Latta. Well, thank you for your opening statement.
And, Mr. Dewey, you are recognized for 5 minutes for your
opening statement.
STATEMENT OF RICHARD DEWEY
Mr. Dewey. Thank you, Mr. Chairman.
On behalf of the NYISO, I would like to thank Chairman
Latta, Vice Chairman Weber, Ranking Member Castor, and Ranking
Member Pallone, subcommittee members, staff, and all for the
invitation to discuss the state of grid reliability with you
today.
My name is Rich Dewey. I am the president and CEO and a 25-
year veteran of the New York ISO. My full statement has been
filed with your offices, but I want to share a couple of key
points with you at the start here.
For the past 25 years, New York ISO has operated the New
York State power system to the strongest reliability criteria
in the Nation. In addition to standards enforced by the North
American Electric Reliability Corporation, or NERC, we comply
with standards by the NPCC, or the Northeast Power Coordinating
Council, as well as the New York State Reliability Council,
which is specific to New York.
We are champions of the essential role that the power grid
plays in preserving the health and safety of New Yorkers,
empowering our modern economy. It is our number-one priority.
In addition or in filling this role, we perform essential
planning studies that are continuously monitored to ensure
reliability. And we administer wholesale electricity markets
that allow for the most efficient scheduling and solutions to
meet the reliability needs for consumers, which is a critical
piece.
In New York State today--primarily driven by public policy,
and like many other parts of the country--the power system is
rapidly transitioning to a cleaner supply resources. This
transition presents significant challenges because firm
dispatchable generation, primarily powered by fossil fuels, is
being replaced by intermittent wind and solar and storage
resources that are dependent on the weather.
At the same time, demand is growing significantly due to
the electrification of the economy and welcome economic
development and manufacturing. More than twice as much legacy
generation has been retired in recent years as the entry of
this new supply.
In my filed comments and these remarks, I am going to
highlight how our planning processes and how our markets
position us to tackle these challenges.
From a planning perspective, we have a comprehensive
reliability planning process that examines the future in three
ways: We do a 20-year scenario-based analysis to show options
of how the power system could transform over the next 20 years;
we have detailed reliability studies that look for potential
reliability violations over a 10-year horizon; and on a
quarterly basis we do short-term assessments to allow us to
rapidly react to changing conditions.
In short, we are continuously studying the reliability of
the grid and are prepared to take actions when it is necessary.
Our most recent reliability study which looks at the 10-
year horizon identifies reliability violations as early as
2033. Acceleration of load growth or unplanned generator
retirements could accelerate these deficiencies. Our report
also highlighted the increased reliance on electricity in
winter, the heightened severity of winter reliability events,
the uncertainty of fuel supply, as well as the reliance on a
rapidly aging generation fleet.
In order to satisfy load growth projections necessary to
meet these economic factors, more generation and transmission
assets are needed.
From a markets perspective, our wholesale electricity
markets play a crucial role in delivering reliable outcomes and
at the least production costs. Properly designed markets ensure
pricing signals, attract necessary new resources to the right
location, incentivize needed performance response from existing
resources, and shift investment risk from consumers.
The NYISO markets optimize schedules to supply resources to
maximize value to consumers, performance from suppliers, and
provide the right attributes for reliability. Recent innovative
market products at the NYISO encourage dynamic scheduling of
reserves, encourage flexibility of load through demand
response, and signal entry of distributed energy resources and
energy storage that will improve the flexibility of the system.
This flexibility will be crucial to manage the intermittency
inherent in the grid of the future and are important components
of the market.
I want to thank you for the opportunity to share these
thoughts with you. I look forward to your questions and future
dialogue.
Thank you.
[The prepared statement of Mr. Dewey follows:]
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Mr. Latta. Well, thank you very much for your opening
statement.
And, Mr. Nickell, you are now recognized for 5 minutes for
your opening statement.
STATEMENT OF LANNY NICKELL
Mr. Nickell. Well, good morning. Chairman Latta, Vice
Chairman Weber, Ranking Member Castor, Ranking Member Pallone,
and members of the subcommittee, thank you for the opportunity
to speak to you this morning about grid reliability.
I am Lanny Nickell. I am currently executive vice president
and chief operating officer of Southwest Power Pool, and I am
the incoming CEO as of April 1. We are a regional grid
operator, serving 18 million people across 14 States in the
central part of our country. We are responsible simply for
keeping the lights on today and in the future.
Our industry is at an inflection point as it experiences a
rate of change I have not previously seen in my 32-plus-year
career. Over the last decade, the transition and resource mix
and demand growth has drastically increased operational
complexity and has almost exponentially increased risk of
having to interrupt electric service due to insufficient
supply.
We have already witnessed significant growth in both our
summer and winter peak demands. Our current summer peak was 10
percent higher than the highest peak set 2 years earlier. And
this winter we set a winter peak that was 2.5 percent higher
than the previous winter record demand.
Electricity use in our region grew about 25 percent over
the last 10 years. This growth in demand is expected to
continue in unprecedented fashion as we are forecasting peak
demand to be as much as 50 percent higher over the next 10
years, mostly driven by the AI data center boom.
As consumption has grown, we have also witnessed a rapid
shift from a more steady source of dispatchable generation to a
more intermittent renewable heavy generation mix. In other
words, many aging coal and gas plants have been retired and
replaced with wind generation in our region, shrinking the firm
capacity margin that we have long depended on for reliability.
This growing imbalance between the rising demand and a less
dispatchable, more intermittent resource mix lies at the heart
of what we have referred to as our generational challenge.
Without a collective set of corrective actions, we will
struggle to keep up with future needs, and our risk of not
being able to continuously supply electric service to consumers
will be at an all-time high.
On our end, in SPP we have been acting to increase regional
requirements for excess capacity, and we are urging generators
to stay online until sufficient replacement capacity is ready.
We are working feverishly to accelerate our study processes for
generator interconnections, and we have recently approved a
transmission expansion plan requiring over five times the
transmission investment of our previous largest project
portfolio. We need significantly more generation and more
transmission to meet the growing demands, and we need it to be
interconnected much quicker than we have historically seen.
We will also need more of the generation being
interconnected to be dispatchable so that it is available when
needed to offset the variability of intermittent weather-
dependent generation. Simply put, we need a lot more steel in
the ground, and time is short. Meeting this challenge will
require everyone's cooperation. We have to work together.
For example, we need a fully functioning FERC so that they
can continue their good work ensuring reliability, permitting
infrastructure, and supporting competitive energy markets.
Additionally, utilities can bring generation and
transmission. RTOs can work together to lead and envision this
future that we are all depending on.
We all have to do our part to safeguard the grid so that
the life-enhancing and life-sustaining product of power can
continue to be provided as affordably as possible. I am
confident that we can meet this challenge, but we cannot do it
alone. We need your help.
Thank you, and I look forward to your questions.
[The prepared statement of Mr. Nickell follows:]
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Mr. Latta. Well, thank you very much for your statement.
And, Mr. Mainzer, you are recognized for 5 minutes for your
opening statement.
STATEMENT OF ELLIOT MAINZER
Mr. Mainzer. Chairman Latta, Ranking Member Castor,
Chairman Guthrie, Ranking Member Pallone, and members of the
subcommittee, thank you for the opportunity to testify today.
My name is Elliot Mainzer. I serve as president and CEO of the
California Independent System Operator Corporation, commonly
referred to as the CAISO.
The CAISO is a nonprofit public benefit corporation that
does not own any generation or transmission assets. We play a
number of key roles to ensure the grid is reliable, including
transmission planning, overseeing interconnection of new
resources, operation of electricity markets, and providing
reliability coordinator services to entities across the Western
interconnection. We do not operate a centralized capacity
market but work with State and municipal entities to ensure
adequate procurement and deployment of generation and storage
resources.
Like other regions of the country, California has faced
extreme weather and other challenges. But the CAISO and our
State partners have made major advances in reliability in
recent years due to commonsense approaches to expanding energy
supply, efficiently interconnecting new resources, and
proactively planning for transmission upgrades. New resources
are coming online at a rapid pace.
Since 2020, over 24 gigawatts of new generation capacity
has been added to the CAISO grid, including approximately 7
gigawatts last year. This new capacity includes over 11
gigawatts of battery storage. The CAISO relies on these new
resources as well as a diverse generation mix that includes
solar, wind, geothermal, bio gas, hydro, natural gas, and
nuclear generation to maintain reliability. During the next 5
years, we expect resource growth to continue to be comprised
largely of battery storage, solar, and wind resources.
At the CAISO, we work to ensure safe and reliable service
to our electricity customers through collaboration with
California State agencies and other local regulatory
authorities.
The CAISO, the California Public Utilities Commission, and
the California Energy Commission have entered into a memorandum
of understanding to help synchronize load forecasting, power
and transmission planning, interconnection queueing, and
procurement of new resources. This enhanced coordination has
been essential to onboarding the thousands of megawatts of new
generating capacity and battery energy storage that have come
online in recent years and will continue to guide our approach
to ensuring reliability and resource adequacy in California.
The reliability of our grid has also been advanced by
thoughtful and timely oversight by FERC. Last year, FERC
approved a comprehensive set of interconnection queue reforms,
resulting from an extensive CAISO stakeholder process that was
anchored in our approach to coordinated planning. Based on our
implementation so far, we have observed a significant reduction
in projects clogging our interconnection study process.
The CAISO's most recent transmission plan included 26 new
projects at an estimated cost of $6.1 billion to support over
85 gigawatts of new resources by 2035. We are also actively
engaged in several interregional transmission projects that
will access clean energy resources identified in the CPUC's
resource planning efforts that will also help deliver new
generating resources and support reliability for utilities in
other States.
Electrification of transportation and buildings has been
the primary driver of load growth today within the CAISO's
footprint. The CEC's latest demand forecast shows a 33 percent
growth in peak demand over the next 10 years and a 45 percent
growth in peak demand over the next 15.
Currently, there is about 1 gigawatt of data center load
connected to the CAISO system. The CEC projects an increase in
data center loads over the next 15 years with a sharp increase
projected to start around the 2028 timeframe. The CAISO is
working diligently to serve emerging large electric loads
within our footprint, including major transmission enhancements
to the transmission system in the Silicon Valley.
Reliability in the West is further enhanced by the success
of the CAISO's Western Energy Imbalance Market, which has been
in operation since 2014. Optimizing supply and demand in 15-
minute and 5-minute intervals, the Western Energy Imbalance
Market today spans 22 market participants in 10 States and
leverages the significant transmission connectivity and
resource diversity across parts of the West, which is
particularly valuable during extreme weather events.
We are now working to extend a new day-ahead market
platform to others in the West. Fully approved by FERC in 2024,
the Extended Day Ahead Market will expand the ability to
optimize supply and demand in the day-ahead timeframe, which
will further enhance market efficiency and reliability and
reduce cost to the ratepayers of participating utilities.
The CAISO recognizes that our work continues in order to
maintain the pace of new resource development to meet growing
electric demands and State policy goals. We remain focused on
implementing our coordinated planning and interconnection
processes in extending our market service offerings to other
entities across the West.
We look forward to further engaging with the Federal
Government to ensure reliability and cost savings for
electricity consumers.
Thank you again for the opportunity to be here this
morning, and that concludes my testimony.
[The prepared statement of Mr. Mainzer follows:]
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Mr. Latta. And thank you very much for your opening
statement.
And, Mr. Vegas, you are recognized for 5 minutes for your
opening statement.
STATEMENT OF PABLO VEGAS
Mr. Vegas. Chairman Latta, Ranking Member Castor, Chairman
Guthrie, Ranking Member Pallone, and Vice Chairman Weber, and
members of the subcommittee, it is an honor to be here
representing the Electric Reliability Council of Texas--or
ERCOT, as we are referred to--where we manage the flow of
electricity to over 27 million Texans.
Texas continues to experience unprecedented economic and
population growth, driving electricity demands to record levels
each year. At the same time, the energy mix that powers Texas
is evolving rapidly, with intermittent resources and battery
storage playing an ever-increasing role in system operations.
This transition presents opportunities but also real challenges
that require planning and investments to ensure system
reliability.
Today, I want to share how ERCOT is managing this shift
while keeping reliability at the forefront, the lessons that we
have learned from recent weather events, and why ensuring a
balance and resilient power supply remains essential for the
future.
In the summer of 2023, ERCOT set a new all-time peak demand
record of 85,508 megawatts. Last month, we set a new winter
peak demand record of 80,525 megawatts, a demand level that is
normally seen and experienced in the summer.
This isn't just about a growing population. Texas has
become a magnet for industries that require increasing amounts
of electricity, from semiconductor plants to data centers,
broad industrial growth, and large-scale industrial
electrification in the Permian Basin.
Today, wind and solar make up 42 percent of our installed
generation capacity. Both of those represent the most installed
capacity in the United States, with thousands of megawatts
being added each year.
Battery storage, which was just emerging a few years ago,
is playing a critical role in balancing supply and demand
during tight grid conditions, and it is acting as a growing
bridge asset during critical hours.
From an operations perspective, solar generation helps to
meet peak afternoon demand, and batteries provide rapid
response to system fluctuations with their growing presence in
the ancillary services market.
Wind and solar power are variable by nature, meaning that
their output is not always available when it is needed most.
Batteries help significantly, but current storage technology is
still limited in duration, in our market typically 1 to 2
hours, meaning that it cannot fully replace the need for
traditional, long-duration dispatchable generation.
Natural gas, coal, and nuclear power still supply 65
percent of the delivered energy on the ERCOT grid in 2024.
Those long-duration dispatchable resources remain the backbone
of reliability, providing critical generation around the clock.
We are seeing an uptick in the generation interconnection
queue from gas generation, and efforts that have been
spearheaded by the Texas legislature, such as the Texas Energy
Fund, are providing incentives for dispatchable power plant
development.
We cannot lose sight of a fundamental reality: A reliable
grid must have a balanced mix of generation resources,
especially with the all-of-the-above approach we see in the
ERCOT power region.
Additionally, flexible demand is becoming a more critical
component of reliable operations, and we are exploring ways to
best leverage that potential in the face of a significant
forecast of demand growth ahead of us.
Immediately following Winter Storm Uri, the Texas
legislature put in place a set of weatherization standards
during the 2021 legislative session. And to date, ERCOT has
conducted over 3,300 inspections of generation resources and
transmission facilities. The weatherization program inspects
facilities for various preparation measures intended to
reasonably ensure sustained operation at weather-zone-specific
cold and hot conditions. And new programs such as the Firm Fuel
Supply Service is available to ensure reliability during winter
events in the event of a fuel curtailment for gas generation
resources.
This combination of efforts has shown to be beneficial over
the last several winter seasons, where the performance held to
the standard that Texans have come to expect from their grid.
As we look to the future, ERCOT remains focused on ensuring
that Texas has a grid capable of supporting its continued
growth and economic success. That means encouraging investment
in dispatchable generation, expanding and modernizing
transmission infrastructure, leveraging demand-side solutions
and new technologies, and enhancing grid security and
resilience.
The ERCOT grid is not alone at being at an inflection
point. We are balancing record-breaking demand growth with a
rapidly evolving generation mix, all while ensuring that we are
focused on reliability for millions of Texans. It is a
challenge, but it is also an opportunity to build a smarter,
stronger, and more resilient grid that can continue to support
Texas and the United States for generations to come.
I appreciate the opportunity to testify today, and I look
forward to your questions.
[The prepared statement of Mr. Vegas follows:]
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Mr. Latta. Well, thank you very much for your statement.
And that concludes our opening statements from our
witnesses. And at this time, we will start questions from our
members. And I will start with myself for 5 minutes.
And I am going to ask the same question I have asked for
the last 2 years, maybe just get an answer more or less from
everyone: We have to have more or less power produced in this
country?
Mr. Asthana. More.
Mr. van Welie. More.
Ms. Curran. More.
Mr. Dewey. More.
Mr. Nickell. A lot more.
Mr. Mainzer. Significantly more.
Mr. Vegas. Agreed. We need more.
Mr. Latta. Thank you very much.
Mr. Asthana, if I can start my questions with you. There
are reports of supply chain delays for dispatchable generation
resources as well as ongoing delays for essential grid
components such as distribution transformers. How important is
it to address these delays quickly?
Mr. Asthana. Yes, I think it is both critical to address
the delays quickly as well as try to be creative with the tools
that we do have immediately. And we are trying to do both.
Mr. Latta. Well, let me follow up. Your testimony also
details a striking graph explaining the delta between grid
additions and deactivations. How much value is there to bring
back mothballed power plants back online immediately or short-
term or long-term reliability challenges?
Mr. Asthana. I think it is an important part of the mix.
And I think it is an important part of the mix because it
requires less reliance on the supply chain. Because these
plants exist, and so it is easier in some cases to actually
restore them than to build a whole new one. But I think it is
part of the solution. If we can get plants back from mothball,
we would appreciate it.
Mr. Latta. Let me just follow up real quick on that. In
your testimony, you had mentioned--you said--how long does it
take to build an AI plant?
Mr. Dewey. Data center, maybe 18 months.
Mr. Latta. OK. And then how long to build a power
generation station?
Mr. Asthana. Five-plus years.
Mr. Latta. Is that including the permitting?
Mr. Asthana. Including the permitting, yes.
Mr. Latta. OK. Thank you.
Ms. Curran, your testimony similarly discusses the need to
allow reliability to inform the pace of retiring generation
resources. How can we ensure that the pace of retiring
generation resources does not outpace the addition of new
resources?
Ms. Curran. So first and foremost, it is considering
reliability in those retirement decisions. Today, as those
decisions are made, they are generally driven by policy, in
some cases economics. But there is not a check, at least at the
MISO, to determine what the impact would be on the ability to
have sufficient energy to serve the system.
Mr. Latta. OK. Thank you.
Mr. Asthana, if I could go back to you again. Your
testimony went on to highlight some of the barriers of
generation growth, including Federal and State energy policies,
supply chain constraints, and systematic permitting challenges.
As I stated in my opener, the markets that you administer do
not operate in a vacuum.
How are the policies outside the purview of your
electricity markets and grid operations causing premature
retirements and inhibiting growth in generation development?
Mr. Asthana. Absolutely. So there is multiple, mostly
decarbonation policies that are State and Federal that have
either forced generators to choose between really expensive
upgrades that they couldn't afford or to go offline and have
pushed generation offline.
And, you know, I wrote down something you said, Chairman:
``Markets cannot build what governments do not let them.'' I
think we are seeing that. It is also true for power plants
cannot operate if governments do not let them. And we have seen
policies that do that.
An example of that is the EPA 111 decarbonization policy. I
mean, again, I don't make a value judgment. Climate change, in
my opinion, is real and needs to be addressed. But I think
reliability needs to be addressed also and simultaneously.
Mr. Latta. Let me follow up one last question to you. I
have heard concerns from workers in an Ohio coal plant about
what are the detrimental effects of the previous
administration's policy and recent State=level initiatives that
could threaten their jobs.
As you grapple with challenges resulting from rapid and
widespread retirements of dispatchable generation without
adequate replacement, is there merit in pausing the adoption of
harmful policies at the Federal and State levels?
Mr. Asthana. For a reliability perspective, definitely
there is merit in making sure that we don't retire generation
that we will need to keep the lights on.
Mr. Latta. Thank you.
In my last 38 seconds, Mr. Nickell--it will be real quick,
if I may--while much of the focus of our electric grid is on
increasing demands for electricity from data centers and
domestic manufacturing, we also have to make sure the
ratepayers are not unduly burdened. As you mentioned in your
testimony, SPP enjoys some of the lowest wholesale electricity
prices in the country because of your diverse generation mix in
renewables and baseload.
Will new investments into energy-intensive industries raise
costs on ratepayers, or how can these new investments lower
price for households? I only have about 3 or 4 seconds.
Mr. Nickell. Yes, it could. It depends on how you do it,
and I think we have to be really smart about how we move
forward with that. Today, transmission needed to serve new load
is spread across the region. It is cost-shared. We may not be
able to do that when large data centers are located in certain
very specific locations. So we are evaluating that now.
Mr. Latta. OK. Thank you very much. My time has expired.
I recognize the gentlelady from Florida, the ranking member
of the subcommittee, for 5 minutes for her questions.
Ms. Castor. Well, thank you, Mr. Chairman.
Last week, the President fired--illegally fired the
Commissioners from the Federal Trade Administration. Two of
those members, Commissioners on the Federal Energy Regulatory
Commission and the Nuclear Regulatory Commission, enjoy
basically the identical statutory protections as the FTC
Commissioners, meaning that the President likely thinks he can
fire the FERC and NRC Commissioners too.
And I think the politicization of our energy regulators,
allowing the President's whims to dictate which FERC and NRC
Commissioners can serve, is an awful idea, and it follows the
National Nuclear Security Administration firings by Elon Musk.
All of this really socks it to consumers, whether we are
talking affordability, reliability. It is just dangerous and
costly.
Mr. Asthana, I heard you talk explicitly about a stable
FERC and what that means to your operation. In fact, at one of
our last hearings, a witness said they never want to see
proceedings before FERC and State utility commissions to become
politicized.
So I would like to ask each of you: Is more
politicalization of FERC a good thing or a bad thing?
Mr. Asthana. Yes. I would say FERC is an incredibly
professional body, and I think they make technical decisions,
and we rely on that--on that technical expertise.
Ms. Castor. So just if you could answer maybe more or less,
should FERC be more politicized or less politicized?
Mr. Asthana. I think less between those two choices, for
sure.
Mr. van Welie. So my observation over the years is FERC has
tried to stay in the middle to the extent possible, and I think
that less politicization is helpful.
Ms. Castor. Thank you.
Mr. van Welie. The other point I would make is it needs to
be alignment between Federal and State policies.
Ms. Castor. Thank you.
More or less politicized?
Ms. Curran. For the same reasons, I will also say less. The
stability of FERC is very important to move all of these things
forward.
Mr. Dewey. A less politicized, balanced approached would
make all this transition a whole lot easier.
Mr. Nickell. Less politicized, independent absolutely is
important for keeping the lights on.
Mr. Mainzer. A strong and independent FERC is essential to
the success of our industry, so I would say less
politicization.
Mr. Vegas. Speaking on behalf of my peers since FERC really
doesn't provide much oversight in Texas, I think a stable,
independent FERC works best.
Ms. Castor. Thank you.
One of our greatest challenges today is getting new sources
of electricity onto the grid as quickly as possible in this era
of increased electricity demand. Interconnection processes,
while critical to maintaining the reliability of the grid, can
also take far too long under the current framework.
Last week, FERC Commissioner David Rosner wrote a letter to
each of you detailing new opportunities to streamline the
interconnection process. In a recent study by the Midcontinent
Independent System Operator, MISO, an automated process was
able to nearly replicate in 10 days the results of an
interconnection study that took nearly 2 years to conduct.
So, Ms. Curran, can you briefly talk about what MISO found?
What are the results? How can other grid operators start
looking at automating and speeding up their interconnection
studies?
Ms. Curran. Sure. Absolutely. One of the challenges,
actually, in operating the grid is that there is not a lot of
software development that happens in this space.
There is a vendor that has come to market that has put some
automation around work that currently takes more of a guess-
and-check approach by our engineers, and by automating some of
that work with a codified rule set, we have been able to speed
up on small samples the progress of the queue study by quite a
bit. We are very optimistic about it. We are starting to apply
it to larger samples. We do spend a lot of time with our peer
RTOs sharing best practices, including information about what
we are doing here.
Ms. Castor. Thank you.
And, Mr. Nickell, you have also had some success here. What
else can FERC do to support this kind of innovation?
Mr. Nickell. Encourage us, which clearly is happening with
the letter from Commissioner Rosner. Very much appreciate what
he has tried to do with that.
Ms. Curran spoke about the fact that we share best
practices already, and we have got a lot that we are really
focusing on. We call it transformative technology. We are going
to have to rely on that, and we are going to have to depend on
artificial intelligence to make the solutions not only quicker
but much better.
So thank you for your support, and we will need that
support from FERC and the encouragement that they have already
begun to provide.
Ms. Castor. Thank you very much.
I will yield back.
Mr. Latta. Thank you. The gentlelady yields back.
The Chair now recognizes the gentleman from Kentucky, the
chairman of Energy and Commerce Committee, for 5 minutes for
questions.
Mr. Guthrie. Thanks. Thanks, Mr. Chair. I appreciate the
recognition.
Thank you all for being here.
You know, on the FERC and then the other agencies, we just
can't assume that the members of those agencies don't have
agendas as well. And so we want them to work--want them to work
properly, but we also have oversight and checks and balances we
need to have.
When I first came into the role that I have this Congress
right before--actually, I have kind of been associated more
with the healthcare side of this committee. Our committee has a
broad--as I pointed to Mr. Dingell earlier, we have a lot of
broad jurisdiction.
And I had an opportunity that--we are actually going to
have a great opportunity in a couple of weeks to have a hearing
with Eric Schmidt from--Google Eric Schmidt, not Senator Eric
Schmitt--wrote a book with Henry Kissinger called ``Genesis,''
presented it at the Library of Congress, and I walked away with
my mouth open, my heart beating, going, ``Wow, this is the
fight of our lives. Are we going to win the AI battle with
China?'' And it really is. It is the fight of this committee, I
think, or at least the direction I want to take the committee.
And he didn't say this. These are my words, not his, but
essentially he said it. He said that it is like being the
dollar being the world currency. Somebody is going to have the
world currency. Europe has chosen not to be that by their
energy policies and their regulatory policies, which is right
in the purview of this committee. China--we don't want to have
the regulatory policies of China, but we--so if you talk to
people in this area, they say we have the brain power. We have
the capital. We have to have a stable regulatory environment,
and we have to have the energy. We absolutely have to have the
energy.
And so if you look at the demand and growth of energy, what
the scary thing about it is, even if we said, ``All right,
let's go full bore,'' we are still probably a decade behind
where we need to be.
And so when I talked in my opening statement--so this is
for Mr. Asthana and Mr. Nickell. In my opening statement, I
mentioned that we are going to take offload power, baseload
power--we are going to take it offline as much as--almost as
much as we are going to--demand is going to grow in the next
few years.
And so what do we need to do, Mr. Asthana--is that how you
say it correctly?
Mr. Asthana. Yes.
Mr. Guthrie. And Mr. Nickell. So what do we need to do to
reverse just retirement of generation we know that produces
energy that we need?
Mr. Asthana. I think there are a couple of things,
Chairman. One is just sending the right price signals so that
those generators can afford to stay. Those do lead to increases
in prices for customers, but I think that is----
Mr. Guthrie. How do we send the right price signal?
Mr. Asthana. Our markets are doing that. Our markets are
holding up a mirror and reflecting back the supply-and-demand
situation, and this pricing is being----
Mr. Guthrie. So that happens without government doing
anything? There is no initiative we need to do to----
Mr. Asthana. Not for Congress, I would say. I think FERC is
critical in making sure that the markets are holding up a true
mirror to the supply and demand situation but not for Congress.
I think----
Mr. Guthrie. What would be a not-true mirror if they are
holding up--what would FERC do to hold up not a true mirror?
Mr. Asthana. Well, I would say there is a lot of tweaking
that can happen around the market rules, and we have been
continuously improving them. But the fact is I think that all
of our markets are in some shape or form signaling we need more
supply, and that is--
Mr. Guthrie. But that is my question, I guess.
So if the market is signaling you need more supply, and you
are saying--you are taking baseload power offline--not because
of what Congress or the government is doing, it is because the
market signal is not there--I don't understand that then.
Mr. Asthana. Yes. So let me get to the second part of my
answer, which is the markets cannot keep a power plant open if
it is illegal to operate the power plant, no matter what price
signal you sent.
Mr. Guthrie. OK.
Mr. Asthana. And I think--so there are laws, whether they
are environmental laws passed by the States or the Federal
Government----
Mr. Guthrie. I get your point. There is not a role in the
market. There is a role in us to allow you to participate in
the market.
Mr. Asthana. Yes.
Mr. Guthrie. OK. OK. That makes sense. All right.
Mr. Nickell?
Mr. Nickell. You bet. And thank you for the question.
So I mentioned in my testimony earlier that RTOs have a
role to play, and that role consists of leadership and vision
and communication. We have to be more visible, and within SPP's
footprint, we have done just that. We have been communicating
the challenge that we are facing.
Mr. Asthana talked about market signals. For us, what that
looks like is setting a requirement that all load serving
entities have to meet for excess generation, and that
requirement has been increased now three times over the last 2
years.
Mr. Guthrie. You need stability in the market.
Mr. Nickell. So utilities know that in order to be able to
meet that requirement, they can't retire generation until
significant replacement generation is available.
Mr. Guthrie. All right. Thanks. And I only have 20 seconds.
So, I mean, if the world's existential threat is climate
change, or if you believe it--I am simplifying this to two. It
is a little more complicated--dominating AI over--being the
world platform for AI.
If you go the European route and say it is all climate
change and we are going to let AI not participate in that
market, that world--if you go that route, you are going to cede
the AI to China. And China is building a coal plant every 2
weeks to support the energy, first of all. So you are not going
to win. You are going to lose both. And that is why we have to
focus on making sure we win this battle in a responsible way.
So thank you, and I will yield back.
Mr. Latta. Thank you. The gentleman yields back.
The Chair now recognizes the gentleman from New Jersey, the
ranking member of the full committee, for 5 minutes for
questions.
Mr. Pallone. Thank you, Chairman Latta.
You know, I want to say with the full committee chairman, I
want to win the AI battle with China too, but you have got a
national security advisor who can't even send an email without
jeopardizing national security. I mean, I don't know how the
hell we are going to win an AI battle with China with these
characters running the show, including the Vice President and
the Secretary of Defense and the others. I mean, it is like a
clown show. But, in any case, let me go back to the issue at
hand.
Mr. Asthana, as I alluded in my opening statement, I am
incredibly frustrated at the cost that PJM's failures are
imposing on my constituents. The vast majority of the rate
increase on New Jersey families is due to what happened with
PJM's capacity market.
So do you think it is fair that families around the region
are seeing their bills spike? Simple question.
Mr. Asthana. Let me correct the record. So New Jersey
imported last year 43 percent of the energy that it consumed,
OK? And that is New Jersey's right to have that plan. That is a
benefit of being a PJM.
New Jersey's plan to make up that gap was to build offshore
wind from 2018 onward. And New Jersey came to us and said,
``Hey, can you help us with the offshore wind plant?'' And we
put in probably more effort than we have with any other State
to help New Jersey with the offshore wind plant, and we were
proud to do it. And, in fact, the New Jersey BPU gave us credit
for saving New Jersey consumers $900 million through our work.
Now, the problem is there is not one turbine spinning----
Mr. Pallone. I have to get to my other questions. But, yes,
the Trump administration is doing whatever they can to stop any
kind of offshore wind. They repealed all the permits and
whatever. So to talk about offshore wind when you have an
administration that is totally opposed to any kind of wind
power, I don't even know what the point is.
But, look, you said in your testimony more supply, more
demand. You said that you are trying to create more supply now.
But I just think it is a shame that New Jersey families are
paying for what I consider PJM's mistake. The changes that PJM
is making that you talked about, whether it is the processes to
get energy hooked up to the grid or for regional plant--
transmission planning or capacity markets--all of these changes
should have been made years ago, in my opinion.
So why didn't PJM make its reforms to its interconnection
queue and grid-planning processes a decade ago? Why did it wait
so long?
Mr. Asthana. Well, just to clarify my answer earlier since
you asked, the reason we don't have turbines spinning offshore
in New Jersey--it happened before the current administration.
Mr. Pallone. No, I know. But, look, Trump has killed the
whole thing. So, you know, he made that decision to pull it
all. It is a political decision. It is a mistake.
Back to this. Why didn't PJM make its reforms to its
interconnection queues and grid-planning process a decade ago?
Why did it wait so long? I appreciate you testified about how
you are trying to increase supply and address these things, but
what was the reason for the delay?
Mr. Asthana. It wasn't a delay, Ranking Member. We have
been making continuous reforms for the last decade, and the
process for interconnection needs to match the type of
generators that are interconnecting. And so when the generators
shifted to more intermittent renewable generators, we shifted
our process with the support of FERC.
And I would point to you, we have 50,000 megawatts of
generation ready to go--ready to go--on a system that only
consumes 150,000 at peak----
Mr. Pallone. Well, I just think you should have made these
changes sooner, and the pace of change just hasn't been
acceptable.
But I want to shift to a national problem. The Inflation
Reduction Act is, in large part, responsible for making nearly
all the planned new electricity generation in this country
feasible. Without it, the economics for many of these projects
simply wouldn't work, driving rates up even higher for
families.
So let me just ask--I know there is only a minute--Mr. van
Welie. In your testimony, you mentioned the battery storage,
wind resources, and grid-scale solar make up nearly the entire
of ISO New England's interconnection queue. Would it be good or
bad for your grid's reliability if the repeal of the Inflation
Reduction Act meant that none of those projects were ever
built, if you will?
Mr. van Welie. I think it is going to make it harder for
the supply resources to come forward.
Mr. Pallone. All right. See, I mean, my point with the
two--both gentlemen is I think that we need more supply. There
is greater demand. We need to have all kinds of energy
generation. I am an advocate for wind, for solar, for nuclear,
and I understand that we also need more with fossil fuels. We
need all of the above.
But what I see happening here is that, you know, right now,
because of the efforts by the Republicans, you know, to repeal
the Inflation Reduction Act, that is not going to happen. And
there is going to be less supply and greater demand, and that
is not a good thing.
So thank you. Thank you, Mr. Chairman.
Mr. Latta. Thank you. The gentleman's time has expired and
he yields back.
The Chair now recognizes the gentleman from Texas, the vice
chair of the subcommittee, for 5 minutes for questions.
Mr. Weber. I thank the chairman for the recognition.
I do want to make note that the Member from New Jersey
calling the administration clowns was an editorial statement
and not necessarily reflecting the view of the management. I
want to get that in the record.
But I also want to ask some of you all--we will start over
here with you on the left. Do you ever feel or hear--or you
feel about hearing about you are somewhat unfairly criticized
because sudden environmental changes happen which you had zero
control over? Do you all ever feel like you are unfairly
criticized in that regard?
Mr. Asthana. Thank you for the question. I think I would
say yes, but I also think it is fair to hold us to a high
standard. We want to be held to a high standard.
Mr. Weber. OK.
You are next. You are feeling, yes or no, unfairly
criticized?
Mr. van Welie. Yes.
Mr. Weber. OK.
Ma'am?
Ms. Curran. Sure.
Mr. Weber.Sir?
Mr. Dewey. Absolutely. We strive to be the authoritative
source, the independent source of information. So as long as we
can stick to the facts and its balanced assessment of what the
impact to some of these policies are, that is generally a safe
place to be, and it is helpful--
Mr. Weber. Kind of like Sergeant Friday. They just stick to
the facts.
Sir?
Mr. Nickell. You asked a difficult question. We deserve the
criticism that we deserve. There are things that we can do
better and we will do better, and we deserve criticism for
those.
Mr. Mainzer. I think at the end of the day it all starts
with accountability--with extreme accountability for
reliability. If we get criticized, we will take it, but we are
always going to stay focused on producing results.
Mr. Weber. Mr. Vegas?
Mr. Vegas. Vice Chairman, we are always working to get
better. Continuous improvement is our motto.
Mr. Weber. Absolutely. And I hope people watching this
interview or seeing it later--this hearing--recognize that you
all have a very critical place to play--a role to play.
So I am going to come back to you, Mr. Vegas. In Texas, as
you discussed in your testimony, Texas is seeing significant
investments into data centers and manufacturing facilities
because of our business-friendly State posture and access to
reliable and affordable power, quite frankly. Can you discuss
how these particular opportunities are important to potential
economic development projects?
Mr. Vegas. It is critical. Economic growth is directly
correlated with energy reliability and affordability, and we
recognize that in Texas. The light regulatory environment that
we have enables resources to be added to our grid more quickly
than virtually anyplace else in the U.S. on both the supply and
on the demand side. That is the engine for economic growth, and
we continue to try to do everything to--
Mr. Weber. And we recognize that. I am glad you all do.
And for our colleagues across the aisle who have filed a
proposition to make ERCOT join the rest of the grid, you know,
we have a bumper sticker that says, ``Don't mess with Texas.''
So we want to adhere to that.
How do you conduct generation and resource planning to
ensure all electricity consumers are paying the lowest possible
rates and yet still have reliable power? You actually alluded
to it in your testimony.
Mr. Vegas. Yes. Affordability is something that is at the
front of our strategic pillar and focus. So we think about
reliability as well as affordability.
And the way we do allocations in Texas, you know,
everything just flows down to load, to consumers, large and
small alike. And so it is really important, especially as we go
into a growth environment--which we are all going into--to look
at how that cost allocation is done to make sure it is
continued to be done fairly.
We have a method that we have been using for the last 20
years. It has been working, but we are going into a new phase.
Looking forward, it is a good time to look at that again and
make sure it remains fair.
Mr. Weber. Well, thank you for that. And ERCOT leads the
Nation in renewable energy. Of course, you weren't there when
the CREZ project went into effect. You know, I spent 4 years in
the Texas House before I got demoted to Congress. And so we
passed that project. We made sure that energy was efficient.
So wind and solar are compromising 42 percent of ERCOT's
installed generation capacity, and yet Texas remains well-
balanced with dispatchable sources providing 65 percent of
deliverable energy. Given that solar is one of the fastest
energy generation sources and its role that it plays in ERCOT,
how important is us in Texas that solar technology is
manufactured right here in the U.S. of A.?
Mr. Vegas. It is critical that we see the supply chain move
here to the United States. The security and the reliability of
that supply chain is fueling the growth and a lot of the energy
supply in the country. So the ability to have that supply chain
protected here in America is critical.
Mr. Weber. So when you see restraints on supply chains--I
know this is a question for each and every one of you, but I am
down to 27 seconds--on those supply chains, and these things
are getting built in China as well as other countries, you all
have to cringe. You have to know in your heart of hearts that
this stuff needs to be done in the United States of America.
Mr. Chairman, I am going to yield back you 10 seconds.
Mr. Latta. 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.
This summer, my constituents in New Jersey are bracing for
a 17 percent increase in their utility bills. This jump is
completely unacceptable and unsustainable, especially
considering it was avoidable. PJM blames these increases on
increasing demand and decreasing supply. I would like to
understand these claims a bit better, specifically the point on
decreasing supply.
One of the biggest drivers in the last capacity auction was
a significant change in how dependable PJM assumed natural gas
plants were. According to its independent market monitor, fully
half of the price increase we saw in this auction was due to
the change in how reliability was calculated. To put it in
plain English, it turns out that natural gas plants were less
reliable than we thought, and now our constituents are paying
the price.
Mr. Asthana, can you talk about why PJM only updated those
accreditation values for natural gas plants last year and not
earlier, especially after Winter Storm Uri in Texas, where we
saw thermal plant outages drive a huge amount of the unexpected
outages?
Mr. Asthana. Thank you for that. That is a great question.
The answer to that is because after Winter Storm Uri in
Texas--we get our natural gas from the Marcellus and Utica
shales from our region. And we went to the industry in that
region and said, ``Hey, are we protected? Are we winterized?
Are we protected against this sort of winter outage risk in the
fuel supply system?'' And the answer was yes. And then we had
Winter Storm Elliott, and we learned that we weren't. We lost
almost a quarter of our generation.
And so immediately after Winter Storm Elliott, we said we
have to recognize this risk that we have now seen in how we
accredit generation, and that is when we took action.
Mr. Menendez. OK. But we have to acknowledge, right, there
is increasingly changing weather patterns, right? And so we
have to sort of be a little bit more on the forecast front than
we can do in sort of historical trends, because these changes
are happening so quickly that to prevent these types of outages
and shortages, we need to be a little bit more forward-thinking
and think about redundancy to ensure we are not just hoping for
the best-case outcome but preparing for the worst-case outcome.
I know you have also referenced eight policies driving
generator retirements. I just want to make the point that, even
though policy may have influence on such retirements, PJM and
its partners have reasonably known for years about a large
number of these retirements. Surely the capacity market has
known about these retirements for a long time as well and
priced them in.
The discussion about transitioning to clean energy sources
has been ongoing for decades. These retirements of
decarbonization policies which PJM blames for decreasing supply
should not have been a surprise.
As Ranking Member Pallone mentioned, PJM by far has the
worst backlog and slowest interconnection process of any other
grid operator in the country. Thousands of projects are waiting
to get connected. As you talk to us about the importance of
building more power, your organization has lagged in its
ability to actually connect power to the grid. Now our
constituents are paying for this mismanagement, and I am
concerned that my constituents will continue to foot the bill
with additional increases in 2026 and beyond.
So will PJM commit to taking every step possible to bring
new generation online, including the clean energy sources
already in the queue, and bring down costs for New Jerseyans?
Mr. Asthana. Yes. We are definitely committed to that.
I do have to correct you. We do not have the worst queue in
the country, particularly when you adjust for the size of our
system. We serve 21 percent of U.S. GDP. We believe we have
less than 20 percent--much less than 20 percent of the national
queue. So the work that we have done on our queue is showing
dividends.
But to your question, absolutely. New Jersey is critical to
us. We want to do everything we can to support you, and we are
committed to accelerating our queue continuously as much as we
can.
Mr. Menendez. I appreciate it. What immediate steps is PJM
taking to address their interconnection backlog?
Mr. Asthana. Well, the steps we have taken already that I
pointed out have got us from almost 200,000 megawatts in the
queue down to 67,000 left to go, with 50,000 more through the
queue signed, ready to build, some of which we are building.
So for that 67,000, we have a FERC-approved process. We are
executing it now. We will get 17,000 of that by the end of this
year, the other 50,000 by the end of next year. Then we will be
on a regular 1-to-2-year queue cycle, which is a huge
advancement from where we have come, and we are not stopping
there.
On top of that, we have just opened two additional windows
for generators to come into the queue to add to what we already
have. So we are growing the queue by opening the door, and we
have a lot of people that want to come through that door, and
we are committed to processing them as well.
Mr. Menendez. And just real quickly, with respect to the
energy capacity that is cleared but is yet to be connected to
the grid, what challenges are those developers facing in
getting their projects online?
Mr. Asthana. A lot of supply chain issues, financing
issues, and a lot of what we call NIMBY issues--not in my back
yard. People don't want the infrastructure where they live.
Mr. Menendez. And with respect to supply chain and
financing, does the disruptive nature of this administration
help with supply chain issues and with financing issues? Yes or
no.
Mr. Asthana. I am not sure.
Mr. Menendez. I think the answer is no.
Thank you so much. I yield back.
Mr. Weber [presiding]. The gentleman yields back.
The Chair now recognizes the gentleman from Alabama, Mr.
Palmer.
Mr. Palmer. Thank you, Mr. Chairman.
Ms. Curran, MISO issued warnings about brownouts and
blackouts. What was the basis for those warnings?
Ms. Curran. If you are speaking to the NERC assessment that
recently came out, we do a forward projection of the expected
supply-and-demand balance.
Mr. Palmer. That was the basis? The NERC assessments?
Ms. Curran. The NERC assessment, I think, was where that
forecast was made, via NERC.
Mr. Palmer. Wasn't the NERC assessment that the biggest
challenge for meeting power demand and avoiding the blackouts
and brownouts the change to the resource mix?
Ms. Curran. No. The NERC assessment laid the information
that we showed, which says that our forecast of the amount of
supply that is available to meet the demand that we expect
faces shortfalls in the coming years.
Mr. Palmer. But I think the MISO report also indicated that
it was the shutting down of hydrocarbon-produced power and
trying to replace it with renewables had created basically, in
my terminology, a deficit in power output that has not yet been
met.
The NERC report, particularly in 2023, in assessing the
challenges facing our power grid, said that the single biggest
challenge or threat for power output was the change in resource
mix. In other words, to put it in lay terms, we have shuttered
too many hydrocarbon plants without bringing online enough
renewables to meet the demand.
When you take that in context to the fact that we are in an
arms race with China for development of artificial intelligence
and quantum computing, I think it really becomes problematic.
And we keep talking about--we get into my colleagues on the
other side of the aisle and their concerns about the climate.
We all are concerned about climate issues, but we are losing
sight of what I think is a major national security issue.
If China--whoever takes the lead in artificial intelligence
and quantum computing, they are going to be the superpower. And
we don't have the power generation capacity right now that we
are going to need. We have got to build these data centers.
They are going to require massive amounts of power.
So I am glad to hear--and I am not sure I have heard this
before from some of my colleagues, that they support all of the
above, including nuclear, which is where I think we need to go.
I am going to ask Mr. Vegas, Mr. Asthana, Ms. Curran, Mr.
Nickell. In your opinion, did the EPA take--each of you
coauthored comments--I will set this up--to the EPA during the
previous administration which expressed strong concerns about
the Clean Power Plant 2.0 because of the impact it would have
on reliability within each of your footprints. And then those
in charge of ensuring grid reliability in your respected
areas--it should have been imperative that the EPA, who does
not have the necessary expertise to analyze reliability, listen
to those concerns.
And what I would ask each of you, in your opinion, did the
EPA take your concerns into consideration when they were
finalizing the Clean Power Plant 2.0?
Mr. Vegas?
Mr. Vegas. No, I don't think EPA adequately considered
reliability in making their final determinations----
Mr. Palmer. Mr. Asthana?
Mr. Asthana. Yes. I would say the same thing as Mr. Vegas
said.
Mr. Palmer. Ms. Curran?
Ms. Curran. So a little more nuance from me. I think that
they did make some changes in response to our feedback, but as
my colleagues noted, not nearly sufficient to address the issue
at hand.
Mr. Palmer. Mr. Nickell?
Mr. Nickell. Congressman Palmer, I would agree with Ms.
Curran. I think they did listen. I don't think they went far
enough.
Mr. Palmer. But would you all agree that the Clean Power
Plant 2.0 impacts reliability in your area and ultimately will
impact the ratepayer?
Mr. Vegas?
Mr. Vegas. Yes. It has the potential to shut down nearly
14,000 megawatts of coal plants in our region, which would
affect reliability and cost.
Mr. Palmer. Which goes back to the point I am making
earlier that we have shut down too much hydrocarbon-generated
power without bringing renewable power online or some other
form of power generation to meet the demand.
Same question to you, Mr. Asthana.
Mr. Asthana. Yeah. It definitely raises reliability
concerns for us.
Mr. Palmer. Ms. Curran?
Ms. Curran. Yes. Reliability concerns.
Mr. Palmer. Thank you.
Mr. Nickell?
Mr. Nickell. Yes. Absolutely increases our reliability
concerns and increases our concerns about the affordability of
electricity as long as those units are needed to be maintained
online.
Mr. Palmer. Real quickly, in my last second here, would it
have been more workable if FERC or some other agency had done
the actual reliability assessment? Quickly, yes or no.
Mr. Vegas?
Mr. Vegas. I am sorry. I didn't understand the question.
Mr. Palmer. Would the EPA rule have been more workable if
the Agency or FERC had conducted an actual reliability
assessment of the rule's impacts and adjusted the rule to
prevent these impacts?
Mr. Weber. Very quickly, please.
Mr. Vegas. It would have been more--yes, it would have been
more effective.
Mr. Palmer. Mr. Asthana?
Mr. Asthana. That is a tough hypothetical for me to answer.
Mr. Palmer. Ms. Curran?
Ms. Curran. Somebody needs to be doing reliability analysis
on retirement.
Mr. Palmer. That is a good answer. Thank you.
Mr. Nickell?
Mr. Nickell. I agree with Ms. Curran.
Mr. Palmer. Mr. Chairman, I yield back.
Mr. Weber. The gentleman yields back.
The gentleman recognizes the lady from Virginia, Ms.
McClellan, for at least 5 minutes.
Ms. McClellan. Thank you, Mr. Chairman and Ranking Member
Castor, for having this hearing.
Mr. Asthana, I am glad that you mentioned the lessons
learned from Winter Storm Elliott. As you know, Virginians will
never forget Winter Storm Elliott in 2022 when more than
100,000 people in the Commonwealth and 1.5 million others in
nearby States lost power. And while we expected some outages,
40 gigawatts of coal and natural gas plants failed, shutting
down, as you said, a quarter of PJM's generation capacity. Gas
plants alone, whether due to the issues at the power plant or
issues with gas availability, were responsible for 70 percent
of the outages.
Now, that didn't need to happen. And with more clean energy
generation and smarter long-term transition planning, we could
have kept the lights on and saved families money.
Renewables actually performed well during the storm, and
wind power exceeded expectations thanks to the strong winds of
the hurricane.
As you mentioned, we can't afford to ignore these lessons,
particularly as climate change continues to make winter storms
and other extreme weather events more frequent and severe. And
so, while we want to ensure that we have enough generation to
meet demand, we want to also make sure it is reliable and can
meet peak demand.
And so when clean energy combines with energy storage,
these generation sources can play a key role in stabilizing the
grid during peak demand, and clean and renewable energy are
also becoming cheaper to operate than fossil-fuel-based
generation and help protect consumers from fuel cost spikes.
So the Coastal Virginia Offshore Wind Project is one that
we care very much about in Virginia, Democrats and Republicans.
And if it had been up and running during Winter Storm Elliott,
it is estimated it could have saved ratepayers an estimated $10
million in a single day.
So, Mr. Asthana, would you agree that adding renewable
energy paired with storage to the grid can benefit grid
reliability?
Mr. Asthana. Yes, it definitely can, and we would love more
of that, and we support Coastal Virginia Offshore Wind
significantly.
If I may, I just wanted to add one clarification. The
outages that consumers saw during Winter Storm Elliott in
Virginia were not because we didn't have generation. It was
because of icing and storm damage for more local power lines.
Ms. McClellan. OK. But it was the gas power plants, right?
Mr. Asthana. It wasn't really because of the gas power
plants. It was because of storm damage to the local--even
though we had a lot of gas power plants fail, in part thanks to
exports from Rich in New York, we had enough power to serve all
our customers.
Ms. McClellan. But the point is you had gas power plants
fail, and if the wind project had been up, the wind generation
could have helped to keep people online during that.
Mr. Asthana. It would have helped us import less from New
York.
Ms. McClellan. I am going to take that as a yes.
So you can understand why I am perplexed that the Trump
administration has this all-out war on wind and wants to
prohibit any new wind projects, when we keep hearing from our
friends on this committee on the other side of the aisle that
we need more generation. That includes more renewables in the
mix. And so I am glad we agree that that would help.
And I hope PJM keeps this in mind as it makes selections
for its projects that it is expediting under the new
Reliability Resource Initiative framework, because I am
concerned that if frameworks like that are used for more than a
one-time fix, it could permanently imperil the benefits that
consumers see from regional grids and competition.
So can you confirm that PJM views RRI as a one-time
intervention into its interconnection queue?
Mr. Asthana. Yes.
Ms. McClellan. Thank you.
Now, I was very glad to hear all of the witnesses talk
about how important an independent FERC is, and I agree. But
FERC is not the only Federal agency that is important to
whether new generation projects come online. Is that right?
Mr. Asthana, I will start with you.
Mr. Asthana. Yes. There are various agencies that have a
role.
Ms. McClellan. And two of those are the Department of
Energy and EPA, right?
Mr. Asthana. [Nonverbal response.]
Ms. McClellan. And you cannot have new generation come
online without mandated-by-law reviews by EPA, right?
Mr. Asthana. I think it depends on the State. So I don't
know the answer to that question specifically.
Ms. McClellan. OK. Well, subject to check, it is yes.
But you would agree that the Department of Energy and EPA
play an important role in new power generation coming online?
Mr. Asthana. Yes, I agree.
Ms. McClellan. OK. And yet, President Trump and DOGE have
led to the firing of over a thousand employees from the
Department of Energy----
Mr. Weber. The gentlelady's time has expired.
Ms. McClellan [continuing]. And the EPA, and that is going
to take us in the wrong direction.
And I yield.
Mr. Weber. The gentlelady's time has expired.
The Chair now recognizes the gentleman from Georgia, Mr.
Allen, for 5 minutes.
Mr. Allen. Thank you, Chair Weber and Chair Latta, for
convening this hearing to hear our Nation's regional grid
operators. I would also like to thank all of you for your
testimony today.
Obviously, we pointed out the importance of grid
reliability as paramount. We have rising electricity demand,
and we must ensure that our grid's capacity meets that demand.
Georgia benefits from a vertically integrated energy system
,which I believe delivers reliable and affordable power
tailored to our State's unique needs. Nuclear energy plays a
vital role in this equation. My district is the location of
Plant Vogtle. We are very proud of this achievement. It is the
Nation's largest clean nuclear energy facility, the first two
new reactors built in over 30 years, and it exemplifies our
commitment to sustainable, dependable power.
Mr. Asthana and Mr. Dewey, while State and Federal efforts
have aimed to prevent the premature closure of nuclear power
plants, some facilities have nonetheless shut down earlier than
anticipated. Had those plants not been allowed to close, what
effect would they have had on wholesale energy and capacity
prices, and how would open plants have impacted consumers in
your region?
Mr. Asthana?
Mr. Asthana. Yes. We need more nuclear, and if we had it,
it would--other things being equal, result in lower prices.
Mr. Allen. Okay. Mr. Dewey?
Mr. Dewey. Same situation in New York. The closure of the
Indian Point plant was deemed to be a safety issue by New York
State as a policy matter. That eliminated 2,000 megawatts of
carbon-free supply close to New York City that would have
certainly--certainly did impact capacity prices.
Mr. Allen. OK. Ms. Curran and Mr. Vegas, Congress has been
working to speed the licensing and deployment of nuclear
reactor technologies. Are either of you working to develop
incentives in how prices are formed to encourage investment in
the very long-term assets nuclear power provides to the
systems?
Mr. Vegas. Yes. Congressman Allen, we are looking at
opportunities inside of the Texas Legislature to incentivize
the development of nuclear power in the State of Texas.
Mr. Allen. OK. Mr. Curran?
Oh, Ms. Curran. I am sorry.
Ms. Curran. That is OK. Just making sure it was me.
So our States are largely vertically integrated, and so it
is the State utility regulatory commissions that are making
those resource decisions. So while our market signal does
provide information about the overall supply/demand balance,
ultimately, those choices are made in the States.
Mr. Allen. A question for all of our witnesses. Nearly 20
percent of our Nation's electricity is generated by 94 nuclear
reactors constructed 40 to 50 years ago. These reactors
represent enduring assets, continue to deliver significant
value long after the visionary decisions to build them were
made. Today's market conditions, however, would likely
discourage companies from pursuing such generational
investments. As States grapple with rising power demands, they
are seeking innovative tools to drive the deployment of next-
generation nuclear facilities.
So I offer this question to all of our witnesses: How can
these potential State actions fit within your markets?
Starting with you, Mr. Asthana.
Mr. Asthana. Yes. I would like to clarify. About half of
our States are actually vertically integrated, where the States
can make that decision on what they want to build, and then the
other half, it is based on the market.
But I do think it is difficult for private capital to build
nuclear power plants today. It is just really difficult. It is
very risky and very expensive. And so I think if we as a Nation
want more nuclear power, we should think about ways to support
it federally.
Mr. Allen. Uh-huh. Mr. van Welie?
Mr. van Welie. Good question. So it really comes down to
the States. I mentioned in my testimony that the States have
the ability to select resources and make longer-term
commitments to certainly resource classes. There is renewed
entry in small modular reactors in New England. So there are
conversations happening in State legislatures and with
governors.
And so, you know, ultimately, I would make the same point
Ms. Curran made, which is the ISO does not select these
resources. It is really up to State policymakers to decide how
they want to go about incentivizing or contracting for certain
resource types.
Mr. Allen. Yes. Ms. Curran?
Ms. Curran. Yes. I have nothing to add to that.
Mr. Allen. OK. Mr. Dewey?
Mr. Dewey. New York State has initiated a blueprint process
for exploring the development of new nuclear, specifically
small modular reactors. We would welcome that from a grid
operation standpoint, and with our all-in approach towards
generation, we think it would be a good mix for our fleet.
Mr. Allen. OK. I am out of time. So if you would submit for
the record the answer to that question, I would appreciate it.
And I have an additional question that I will submit to you,
and if you would answer that for the record.
With that, I yield back, Mr. Chairman.
Mr. Weber. The gentleman yields back.
The Chair recognizes the gentlelady from Colorado for at
least 5 minutes.
Ms. DeGette. Thank you so much, Mr. Chairman.
Mr. Allen, I have such good news for you because in the
last Congress when we had Chair Duncan of this subcommittee and
I was the ranking Democrat on this subcommittee, we passed the
ADVANCE Act, which we actually all voted for on both sides of
the aisle in this committee. It went to the floor. We passed
it, and President Biden signed it.
And what this bill was designed to do is exactly what you
are concerned about, which is to streamline and modernize the
regulations around nuclear power.
And as Mr. Pallone said, my colleagues on the other side of
the aisle really every time seem stunned that Democrats support
an all-of-the-above approach. But as we are seeing large loads
like data centers and increasing demand for electricity all
across America, we recognize that we are going to have to have
an all-of-the-above approach, including renewables and
everything else.
So, you know, let's stop acting like we haven't done
anything, because the last Congress we did some very important
things. One of the important things we did was the Inflation
Reduction Act. I want to talk to some of you about that.
Now, all of the panelists early in this hearing, all of you
said that demand for electricity is going to increase in this
country. Is there anybody who disagrees with that?
No. They are all shaking their heads no.
And so the second question is, regardless of the source of
the power to accommodate the increase, we are just going to
need to have a variety of sources for electricity transmission,
and we are going to have to increase reliability. Does anybody
disagree with that statement?
No. They are all shaking their heads no.
Well, so one other question is, all of your grids that you
are talking about here today, they don't just rely on fossil
fuels. They also rely increasingly on renewable energy. Does
anybody disagree with that statement?
No. They are all shaking their heads no.
Here is why I ask that. Because my colleagues on the other
side of the aisle are implying that the way we are going to
solve the issue of increased demand and increased reliability
is by just simply jettisoning renewable energy and going, I
guess, to nuclear and fossil fuels.
Is there anybody who thinks that your agencies and the
people who you--are running the grids could jettison all
renewable energy?
No. They are all shaking their heads no.
There was a recent study that was published by a think tank
called RMI, and what it said is that the Inflation Reduction
Act made clean energy cheaper than more than 90 percent of
proposed gas plants.
And, Mr. Chairman, I would ask unanimous consent to put
that article into the record.
Mr. Weber. So ordered.
[The information appears at the conclusion of the hearing.]
Ms. DeGette. Thank you.
Now, collectively, the IIJA and the IRA allocated almost
$17 billion in loans and grants for grid development, but
despite that, the Republicans voted 54 times to repeal the
clean energy plan since the Democrats passed the IRA.
So I don't have time to ask all of these wonderful
witnesses today. So the one closest to me is Mr. Asthana. I am
sorry for you. But what I want to ask you is, if we repealed
all of that money going for grid development from the IRA,
would that help or hurt our ability to stabilize the grid and
to increase production?
Mr. Asthana. I think in the near term, the interconnection
queue is full of a lot of renewable projects, many of whom are,
I am sure, counting on the IRA. And so I am sure it would make
those less likely to come, and we do need them to come.
Ms. DeGette. OK. Does anybody disagree with that on this
panel?
No. They are all shaking their heads no.
Now, I just want to ask one more thing to follow up on what
Ms. McClellan was asking.
Mr. van Welie, in your written testimony you talked about
offshore wind as a potential vital resource for grid
reliability in New England. Is that right?
Mr. van Welie. Correct.
Ms. DeGette. Now, were you aware that, as part of the very
early Executive orders, President Trump signed an Executive
order putting a halt to wind production offshore nationwide?
Mr. van Welie. Yes.
Ms. DeGette. What would that do to the ability to have
reliable grid production in New England?
Mr. van Welie. It has an impact, as I said in my testimony,
towards the end of the decade because we were counting on these
resources coming into the system by the end of the decade.
Ms. DeGette. Thank you.
And, Mr. Chairman, I would ask unanimous consent to put a
copy of that Executive order into the record.
Mr. Weber. Without objection, so ordered.
[The information appears at the conclusion of the hearing.]
Mr. Weber. The gentlelady's--
Ms. DeGette. Thank you so much. I yield back.
Mr. Weber [continuing]. Time has expired. She yields back.
The gentleman now recognizes the gentleman from Texas, Mr.
Pfluger, for 5 minutes.
Mr. Pfluger. Thank you, Mr. Chairman.
I want to state that I believe in the best of the above,
not all of the above, and I think that differs from State to
State. In west Texas, we have no access to hydropower,
unfortunately, like they do in the Pacific Northwest. But if
you have access to affordable, reliable sources, then we should
use those.
Mr. Vegas, I think we need to do a math problem here. So
sorry for math in public, but let's talk about what the current
demand is in Texas for what ERCOT is serving. What are we
seeing annually?
Mr. Vegas. Current demand peak in the summer is around 80
to 85 thousand, and in the winter about 80,000.
Mr. Pfluger. OK. And in the next 3 or 4 years with added
industrialization, added population, data centers, what do we
think that is going to grow to in Texas?
Mr. Vegas. We are now forecasting that, by 2030, we expect
around 150,000 megawatts. So that is an additional 65,000
megawatts over where we are today.
Mr. Pfluger. Almost double?
Mr. Vegas. Almost double.
Mr. Pfluger. In 3 to 4 years. This is incredible.
So what I want to get to is, when you look at the balance,
you are balancing price. You are balancing reliability. You are
balancing all these different things.You know, what are the
best sources that you are looking for today at 85 and, in 3
years, at 150-plus?
Mr. Vegas. So we are getting to a point on the Texas grid
where you can start to see that the peak demand is exceeding
the dispatchable generation that we have available on the grid.
So it is important, as we look forward, to meet the demands of
this growth to grow the supply in a balanced way.
The balanced resource mix brings, I think, the best
portfolio for consumers. It brings cost combinations that vary
and give the optimal price, and it also brings characteristics
around reliability and resilience that are important.
So as we look forward, we need to make sure we keep up with
firm dispatchable generation in addition to the strong growth
that we continue to see on renewables.
Mr. Pfluger. Firm dispatchable generation.
So I just looked it up on your website, ERCOT.com. And
right now in my hometown, it is 78 degrees. And we have got a
little bit of wind, which is serving 18 percent of the grid, 45
percent solar.
But talk to us about when it is hot or when it is cold and
how reliable on those days where you have 100-degree-plus--
which we have about 90-plus days in the summer in Texas of 100
degrees or more--or when it is cold. How reliable are those
sources?
Mr. Vegas. Yes. As I said earlier, over the course of a
year, the actual delivered energy on the Texas grid, 65 percent
of it comes from our thermal fleet, which is our coal, our
natural gas, and our nuclear. They are the backbone of
reliability. They complement what we are getting from the
renewable mix as well. And right now we need all of the supply
that is there. It is clear that we need it all. We are seeing
63 percent right now coming from renewables.
But when the wind isn't blowing and when it is nighttime
and in the summer when it is hot, you still need a lot of
energy to support that air-conditioning load, and that requires
long-duration, dispatchable resources to do that.
Mr. Pfluger. I have only taken a few weather classes in my
life, but I would invite my colleagues on the other side of the
aisle to come out to west Texas in the summer. It is miserable.
When the wind blows in the springtime, it at least cools you
off, but not in the heat of the summer.
NERC said that we are in a reliability crisis. That is
their 2024 overview, their analysis. Do you agree with that
going forward?
Mr. Vegas. I think the concern with the pace of load growth
and the pace of retirements, coupled with the lack of
dispatchable, long-duration resources coming online, leads to
that being a logical conclusion.
Mr. Pfluger. Mr. Asthana, I feel like there were responses
that you had in a previous line of questioning, and I would
like to give you a minute or so if you want to clear up
anything or talk about the role of natural gas, which,
obviously, I think as you look at ERCOT is very important, and
it seems like it is to you as well.
Mr. Asthana. Thank you for that. The only clarification I
would make is about half of our system, our capacity is natural
gas. And the rate of investment in natural gas infrastructure
has significantly lagged the rate of growth of natural gas
utilization. And so natural gas is becoming less flexible for
us, and that is why one of the things I mentioned in my top six
hit list is making sure that we invest in natural gas
infrastructure, because we need it to be flexible.
Mr. Pfluger. Mr. Vegas, I will end with you in the last few
seconds. When government dictates policy that doesn't allow you
to have the right capacity or the right mixture, what does that
do to affordability, reliability, and, at the end, what does it
do to our national security?
Mr. Vegas. It is absolutely detrimental to affordability
and to reliability, and it risks our energy security.
Mr. Pfluger. Thank you. Mr. Chairman, I yield back.
Mr. Weber. The gentleman yields back.
The Chair now recognizes the gentlelady from California,
Ms. Matsui, for at least 5 minutes.
Ms. Matsui. Thank you, Mr. Chairman. I want to thank the
chairman and the Ranking Member Castor for calling this hearing
today.
And I want to have a special welcome to the California ISO
president, Elliot Mainzer. You haven't been asked many
questions, so I will ask you a lot of them today.
At any rate, grid operators face many challenges today:
rising electricity demand, aging infrastructure, rising energy
costs, and the need to reduce greenhouse gas pollution. My
Republican colleagues often say we need more energy, not less.
Well, I agree. We need more energy, but it must be cleaner,
cheaper, and built faster than we have in decades.
Yet President Trump is deliberately obstructing energy
projects, freezing funding, halting critical projects, and
firing Federal employees responsible for maintaining and
permitting our energy infrastructure. Reuters reported last
week that President Trump and Elon Musk's mass layoff have
predictably slowed Federal energy permitting.
Mr. Mainzer, hypothetically, if many energy projects in
California were delayed because there is no Federal employees
to review permits, how would that impact grid reliability?
Mr. Mainzer. Given the increasing demand for electricity,
anything that crimps the supply will have detrimental impacts
on reliability.
Ms. Matsui. OK. It has also been reported that President
Trump and Elon Musk have fired Bureau of Reclamation employees
that operate and maintain critical hydropower infrastructure.
Mr. Mainzer, hypothetically, if we see a significant
reduction in hydropower output because these systems are not
adequately maintained, how would that impact grid reliability?
Mr. Mainzer. Well, hydropower plays a critical role not
only within California but in the broader West, also in the
Pacific Northwest. So maintaining and maintaining the health of
those assets is critically important.
Ms. Matsui. OK. The Federal Government is not Twitter. We
cannot let Elon Musk play around and gamble with our critical
infrastructure. If a dam fails or the electric grid goes down,
the consequences could be catastrophic.
Meanwhile, congressional Republicans are planning to repeal
Federal energy tax credits that are currently financing
hundreds of energy projects across the country. Independent
analyses from Aurora Energy Research and Energy Innovation show
that repealing the IRA tax credits would cost American families
billions in higher energy costs and reduce new energy
deployment by hundreds of gigawatts.
Mr. Mainzer, hypothetically, if there is a significant drop
in the number of financially viable energy projects over the
next 10 years, how would that affect reliability?
Mr. Mainzer. Again, I think as I and my other colleagues
have mentioned here today, anything that is going to impact the
supply of commercially viable projects to meet the rapidly
growing demand in our grids is going to be problematic and
could potentially compromise reliability and affordability.
Ms. Matsui. OK. So that would impact our ability to meet
new energy demand and slow down the time to power up our new
data centers?
Mr. Mainzer. Yes.
Ms. Matsui. OK. I know a lot of my Republican colleagues
think clean energy is unreliable, and many of my colleagues
like to point to California as proof that clean energy is
unreliable, but that view is really badly outdated.
Mr. Mainzer, very briefly, can you talk about how grid
reliability has improved in California over the last few years?
Mr. Mainzer. A reliable grid relies on a portfolio of
resources of different attributes and complementary
characteristics. What we have found in California, as we have
seen the State choose to elect a much larger proportion of
solar energy in particular, is that by pairing those resources
with dispatchable batteries, that that has helped to increase
reliability in recent years.
So it is a portfolio effect. We need to plan carefully, but
by carefully considering all the different resource attributes
and making sure that they are all available to the system, we
have been able to significantly improve reliability in recent
years.
Ms. Matsui. OK. Thank you.
CAISO has also worked to improve reliability in meeting
rising demands by supporting the build-out of long-distance
transmission infrastructure and by participating in larger
energy markets spanning 10 Western States.
Mr. Mainzer, can you briefly explain how improving
interregional energy transfer across the Western U.S. helps to
improve reliability and meet rising demand?
Mr. Mainzer. Yes, thank you. We have been very fortunate
over the last decade to be able to take advantage of the
significant transmission connectivity that exists between
California and the Northwest and the desert Southwest. And by
leveraging that transmission connectivity and resource
diversity, we have been able to operate a Western Energy
Imbalance Market that has significantly improved reliability
and affordability. We are also engaged in working with other
States and other utilities to further enhance the Western grid,
which will make a big difference in reliability going forward.
Ms. Matsui. OK. Thank you very much. My time is up. I yield
back.
Mr. Weber [presiding]. The gentlelady yields back. The
Chair now recognizes the gentlelady from Tennessee for 5--at
least 5 minutes.
Mrs. Harshbarger. At least 5 minutes. Thank you, Mr.
Chairman. Thank you to the witnesses for being here today.
Mr. Nickell, I am going to start with you, so listen
closely. I am going to come up with a scenario for you. And in
this scenario, let's assume that Southwest Power Pool increases
its wind capacity by 30-fold over two decades. And let's say
that on a very windy day, as much as 90 percent of your
regent's demands met by wind power. The date is February 27.
And let's just say that changing wind speed caused generation
to plummet by 12,000 megawatts in just 2 hours. So what are you
going to do when the wind dies down in this scenario?
Mr. Nickell. That is an interesting scenario. I don't know
where you picked up on that.
Mrs. Harshbarger. Right out of my head.
Mr. Nickell. It is a real scenario. It is something we have
experienced. And what we were forced to do is to rely on the
backup generation that we had available, and that primarily
consists of gas generation because it can be started quickly,
it can be ramped up quickly, and it could meet the need very
reliably. So that is what we did.
Mrs. Harshbarger. OK. Thank you for that answer.
Ms. Curran, it is your turn. In this scenario, let's say
that you experience a wind drought that lasts 40 consecutive
hours. How do you make up for that?
Ms. Curran. Thank you, another familiar scenario that did
happen to us. The way you make up for it is with resources that
do have fuels that are available on demand. So in MISO that
would be coal and gas generation that is able to run for that
duration.
Mrs. Harshbarger. Yes. Thank you, ma'am.
Now, Mr. Asthana, it is your turn. The date is December 24,
2022, during one of the coldest days that the Tennessee Valley
Region's ever experienced in decades. And TVA calls and says it
doesn't have enough power to meet this demand. So what do you
do, sir?
Mr. Asthana. That is a great question. Thank you. They did
call. They called me directly.
Mrs. Harshbarger. Yes, they did.
Mr. Asthana. And we did our best to support them with a
significant amount of exports.
Mrs. Harshbarger. So what kind of exports?
Mr. Asthana. They were on the margin, natural gas and oil.
Mrs. Harshbarger. And why did you still have enough power
on your wires to help TVA while still meeting your own needs?
Mr. Asthana. Well, we had healthy reserves then, and so we
were able to support our neighbors. And it wasn't just TVA. We
were exporting power to multiple neighbors at the same time.
Mrs. Harshbarger. Yes. I remember that, and I had a lot of
companies that had to shut down from some brownouts and
blackouts.
You know, I have looked at all your testimony, and the key
challenges every one of have you talked about was the rising
demand in energy due to electrification, manufacturing growth,
data centers, you know, producing AI. And then you talk about
generation transition, accelerated retirements of transitional
power plants who are outpacing new renewable generation
capacity. You talked about extreme weather impacts and then
transmission limitations. And current infrastructure is
inadequate to meet growing needs. And new projects face
regulatory and logistic hurdles.
And, you know, the testimony paints a really clear story,
and for one, wind energy may have value to power companies, but
it cannot be depended upon when people need it most. And this
wind energy has been widely deployed around the country because
of generous government subsidies which increase reliability
problems, as it crowded out more reliable sources.
So I personally think that it is astonishing that wind
continues to receive government subsidies, and especially while
the utility companies still have to keep their other power
plants online even when they aren't making any money, just to
make up for the overbuilt wind. As long as the policies that we
make here continue to emphasize unreliable weather-dependent
energy rather than supporting the no-fail grid, blackouts are
going to keep happening, aren't they?
And so I think it is time we have to revisit our priorities
and focus our efforts toward keeping the lights on, ladies and
gentlemen. So with that, Mr. Chairman, I yield back. Thank you
all.
Mr. Weber. The gentlelady yields back.
The Chair now recognizes the gentlelady from Washington for
at least 5 minutes.
Ms. Schrier. Thank you, Mr. Chairman. Thank you to our
witnesses as well. As all of you know, the Pacific Northwest
does not have an RTO or ISO represented here. Our energy
markets and balancing authorities are very different. RTOs are
not, though. Most of us are seeing exploding load growth in the
Northwest because of affordable energy. In the Pacific
Northwest, it is chip fabrication and data center expansion
that are the demand drivers.
Now, depending on who you ask, we are likely facing a
nearly 16 percent increase in load growth by the end of the
decade, five-fold increase in what was previously forecasted,
and we have heard today about how long it takes to interconnect
and to build new energy.
Now, I say ``likely'' because we don't have great quality
of data inputs for these models, and accurately forecasting
load growth from data centers is difficult because they are
notoriously secretive. We also know these companies shop around
to multiple utilities, potentially duplicating the same load in
several service territories.
For the existing data centers, operators often don't want
to share data about their energy uses for proprietary or
national security concerns.
Mr. Asthana, you have been on a lot today. I have got
another one for you. Given the surge of demand that you are
seeing at PJM, I am more concerned about making sure we are
building strategically than about overbuilding. But considering
all of these challenges, how do we ensure that power planters
have the right tools to accurately predict load growth?
Mr. Asthana. A wonderful question. Thank you for that. We
are at a time where growth demand is growing rapidly and the
rate of the growth is incredibly uncertain. I mean, it is
really hard, all the issues you talked about, whether you are
double-counting something or not, and so we significantly
discount down from the gross numbers that are being submitted
to our utilities. In fact, they will discount their numbers
based on their own criteria, some of which are--have people put
up money behind this project, or is this just a conversation or
a signed contract? But I do think this is an opportunity for
continued refinement.
Ms. Schrier. Does discounting numbers mean lowballing the
estimate?
Mr. Asthana. No, not lowballing but applying criteria. So
if you start with a gross pool that is huge and it is not just
plausible, how do you cut down to what you think is reasonable?
Their filters apply. Have these people, you know, put up money?
Do they have a signed contract? Have they acquired the land?
Ms. Schrier. Got it. OK, thank you.
We all agree we are going to need a lot of energy and
really fast, and we want more domestic manufacturing. We talk
about that all the time. We are going to win, that we need to
win the AI race with China, and that is going to require a ton
of energy. And no power planter is saying natural gas won't be
part of that puzzle. Absolutely will. But really, we should all
have the goal of deploying more non-GHD-emitting energy. So
let's do these things, like nuclear and geothermal and the
like.
My next question is for Mr. Mainzer and Mr. Nickell. At the
last hearing with your organizations, I asked both CAISO and
SPP about the governing structures of day-ahead markets
developing in the West. And there have been significant
developments since then with Bonneville's draft decision to
join SPP markets plus. But I would love to hear from each of
you how utility membership in your market would uniquely
benefit the Pacific Northwest in the face of surging growth
from data centers and manufacturing. And I am going to start
with Mr. Nickell.
Mr. Nickell. So thank you for that question, Congresswoman.
SPP's current 14-State footprint is flush with a lot of wind
generation. In fact, you heard it earlier today that we have
seen as much as 90 percent of our demand served by wind
generation. We know it is not always available. It is plenty
available when the wind is blowing. And the same thing can be
said of the solar generation that is in the desert Southwest
part of the United States. When the Sun is shining, it is a
tremendous resource, and we love having it available to us.
The same thing is true of the hydro generation of the
Pacific Northwest. We find that for those participants that
want to participate in our market, a tremendous opportunity to
leverage a diverse portfolio of renewable generation that is
very important to you and to your constituents in the
Northwest.
Ms. Schrier. Thank you. Mr. Mainzer.
Mr. Mainzer. Which I would just add that from a physics and
economics perspective, we have that connectivity today to the
Bonneville system. We have been leveraging it for years and
providing billions of dollars of economic and reliability
benefits, and I give Bonneville a lot of credit for pushing the
envelope on governance. And we're also reforming our governance
structure to address their concerns. Thank you.
Ms. Schrier. And thank you for heading up on development
for so many years. Thank you. I yield back.
Mr. Latta [presiding]. The gentlelady's time has expired,
and yields back.
The Chair now recognizes the gentlelady from Iowa's First
District for 5 minutes for questions.
Mrs. Miller-Meeks. Thank you, Chairman Latta and Ranking
Member Castor, for holding this important hearing on grid
reliability. Iowa's First District has emerged as a national
leader in renewable energy, including wind energy, with 59
percent of our electricity now generated from this renewable
resource. It has the power to be transformative to our region,
driving down energy costs for families and businesses while
also creating jobs in manufacturing.
Our success with wind demonstrates how quickly clean energy
can be deployed at scale. In just 5 years, we have reduced coal
dependence from 45 percent to 23 percent while maintaining some
of the lowest electricity rates in the country.
However, as I have already heard, we have to recognize that
a balanced, diversified approach is critical for grid
reliability. Our natural gas facilities in Coralville and
Burlington provide flexible generation needed. Our historic
Keokuk Hydroelectric Plant contributes baseload renewable power
that has been operating reliably since 1913. And we have an
additional hydroelectric plant at Lake Red Rock.
The closure of Iowa's only nuclear plant, Duane Arnold,
represented a loss of 601 megawatts of carbon-free baseload
power. And I am encouraged by next year's discussion about
potentially restarting operations at this facility.
And as we listen to testimony from the regional grid
operators today, I am particularly interested in MISO. I have
been there. I had a wonderful tour, and I encourage all Members
to visit their grids and how they are integrating increasing
amounts of renewable energy while ensuring we maintain
sufficient dispatchable resources to address the reliability
challenges highlighted in your memorandum.
The recent loss of load expectation, a 2025, 2026 study
found that wind's effective load-carrying capability in winter
dropped drastically from 53 percent to 29 percent year over
year. And we, of course, saw that in the polar vortex in Texas.
As a State that is invested heavily in wind, this is
concerning. What is driving this change, and what are the
implications for future wind development?
And, Ms. Curran, what is your approach to maintaining
reliability?
Ms. Curran. Thank you. One of the implications of this
portfolio shift that is underway is that we have increasing
dependencies and correlations between our type of generation,
and we are increasingly looking at what is available when it is
most challenging from an operational perspective, including the
time when you most need resources maybe changing. And that
certainly affects that accreditation.
We are very focused on making sure that we are coming up
with the right values so that those that are making the
decisions to invest in resources can understand what value they
provide, both from that capacity perspective as well as energy.
The other piece of the equation that we have not talked a
lot about today is transmission. So transmission is necessary
to get the resources from where they are generating to where
they are needed. At MISO, we benefit from a large geographic
diversity, and that means we have the opportunity to transport
power across multiple States that may have different weather
patterns at different times to help meet that reliability need.
Mrs. Miller-Meeks. Thank you.
Mr. Asthana, President Trump has made it clear that he sees
colocation as a key arrangement to power data centers. However,
colocation arrangements and PJM have become a major policy
topic at FERC and in States that inhibited timely access to
energy for data centers. When structured correctly, colocation
can provide timely access to energy while ensuring other
ratepayers are held harmless. How can PJM ensure that
colocation arrangements are allowed to move forward in a timely
manner?
Mr. Asthana. We actually made a filing with FERC yesterday
highlighting three different ways in our current rules that you
can actually accomplish colocation, and then we suggested five
other mechanisms to do that. And now we are awaiting feedback
from FERC on how best to proceed.
Mrs. Miller-Meeks. Thank you. In the 2024 Long-Term
Reliability Assessment, NERC recommends that to maintain demand
and supply balance, dispatchable generators, including carbon-
based fuel generators, must be available and capable of
following changing electricity demand.
And for the past 2 years when I was on this committee, we
have hammered on this. To ensure reliability, what measures are
you taking to discourage premature retirement of carbon-based
fuel generators, such as the Power Plant 2.0 rule? How are we
able to maintain dispatchable--our energy when we are retiring
carbon-based fuel generators prematurely?
Mr. Asthana. Yes, I mean, for me, I think I partially
answered this earlier, but part of it is through sending the
right market price signal to induce in the State. Part of it is
through working with our States and, you know, Federal
regulators to try to ensure that we don't have rules that force
these generators offline prematurely.
Ms. Curran. And I would say the same market rules that
ensure that these resources get appropriate compensation, and
then in our ability as having a regional view providing
information about what the supply/demand balance really is. And
we have seen States taking action based on that information
that we have provided.
Mrs. Miller-Meeks. Thank you so much. Mr. Chair, I have a
question to submit for the record, and I yield back.
Mr. Latta. Thank you. The gentlelady's time has expired,
and yields back. The Chair now recognizes the gentlelady from
Texas' Seventh District for 5 minutes for questions.
Mrs. Fletcher. Well, thank you so much, Chairman Latta. And
thank you to our witnesses for your time and your testimony
today. I am glad to have Mr. Vegas here from ERCOT as a fellow
Texan for this important hearing. And no surprise, I will have
a few questions for you.
But I think there has been a really important theme that
has come out of today's hearing. And as we have discussed, the
United States is on the brink of a new boom in energy demand.
And demand arises from things we have touched on, from data
centers and AI development, from widespread electrification,
to, as you noted, Ms. Curran, efforts to reshore American
manufacturing that we have undertaken over the last 4 years,
including through some very important legislation passed by
Congress.
And I think you all have made clear that this is an area
where smart policy is needed and that this committee and this
Congress have an important role to play in setting that policy.
It is kind of contrary to the efforts underway to take a
chain saw to the Federal Government. This is precisely where we
need smart policy and nationwide coordination and sharing of
knowledge.
This is really core to what government is about, right,
pooling our resources and our expertise to keep us safe, right.
To make sure that the lights come on 24 hours a day, 365 days a
year, to make sure that we have power when we need it. It is
important to our safety. It is important to our national
security. It is important to our ability to grow our economy.
It is important to life, liberty, and the pursuit of happiness.
And so, before we look forward to some of the issues that
have been raised, I want to look back on one thing, Chairman
Latta, just to touch on this. I understood you to say something
in your opening statement about wind and solar not being as
reliable during weather events. And I just want to point out
that, during Winter Storm Uri, we actually found that solar
generation was the only one of the resources to outperform, or
cuts worst-case scenario expected output. So I do think that
there are lessons to be learned from our experience in Texas,
and I would be glad to share them when we have more time on
this committee.
But I do want to talk about this energy demand and growth.
I know it varies by region. And in Texas, we are already home
to 330 data centers, approximately 60,000 Texans employed
there. More on the way. And I understood that ERCOT is
forecasting nearly 76 percent load growth by 2030. And while we
have seen commitments to build a variety of generation, we know
that demand is going to exceed current generation capacity
without continued investment.
So Mr. Vegas, I want to ask you: Last month, ERCOT released
its capacity to demand and reserves report for 2025 through
2029, and it indicates that, absent major changes, ERCOT's
reserve margins will drop to negative values within 2 years.
Can you just explain what that means for consumers? In real
terms, does that mean rolling blackouts, higher energy bills?
How are you protecting ERCOT customers from the market shock
that the large data centers might bring in this increased
demand?
Mr. Vegas. So I think it is helpful to set a little context
on that report. That report is a very rigidly structured report
that requires us to report effectively the amount of generation
that is in our queue that we expect to come online, the amount
of load that is expected to be built based on the rules in how
we count load.
And so, what it does not reflect is as important as what it
does. What it does not reflect is the response of the market to
the conditions as they evolve over time. So what we would
expect to see as we get to a condition where demand is growing,
supply needs to keep up, we would expect to see prices start to
be more elevated on a consistent level in the wholesale market
that would send signals to developed resources. It would also
send signals to slow down load growth. Load is very responsive
to prices. And so it doesn't reflect those dynamics of the
market working.
And so I don't want consumers to think it is forecasting
blackouts or brownouts in the future. What it is forecasting is
that there needs to be a concerted effort to match the demand
growth with supply. The market economics should deliver that.
But without that market dynamic, we are looking at shortfalls
in the future.
Mrs. Fletcher. OK. Well, I think that that is helpful so
that folks aren't too worried. But I do know that there are
proposals in the legislature, for example, that would sort of
hamstring ERCOT's ability, I think, to quickly add some
renewable assets to the grid and that, you know, you are forced
to pair them with natural gas and/or coal plants.
So I think, you know, from your perspective as a grid
operator, do those kinds of policies that limit the development
of certain energy resources help or hurt your ability to meet
demand?
Mr. Vegas. Right now, we need policies that support the
growth of all the resources that can come onto the grid. And I
emphasize, again, the balance of those resources is so critical
to meet the future demand that is coming, because it is such a
large growth. We need to have a balanced portfolio going
forward.
Mrs. Fletcher. Thank you so much. I have gone over my time.
But, again, thank you all, and thank you, Mr. Chairman, and I
yield back.
Mr. Latta. Thank you very much. The gentlelady's time has
expired, and yields back. The Chair now recognizes the
gentleman from South Carolina's Seventh District for 5 minutes
of questions.
Mr. Fry. Thank you, Mr. Chairman. I really appreciate that.
This issue is especially critical for South Carolina in the
Seventh District, where economic growth and energy security
really go hand in hand. As we continue to witness rising energy
demands with manufacturing, with data centers, and
electrification efforts, we have to be prepared to ensure our
grid remains reliable and resilient. Your testimony has talked
about that a lot.
South Carolina has faced fewer reliability risks thanks to
our strategic decisions. But they still do exist.
Ms. Curran, as we have discussed today, it is unclear
whether the generation expected to come online will be enough
to meet future demand and replace retiring resources.
Developers seeking to enter the market are hampered by
permitting delays, supply chain issues, and overly burdensome
environmental regulations.
Are there changes to market rules or new technologies that
can help us maximize the capacity and efficiency of our current
grid to improve reliability over the next few years?
Ms. Curran. Sure. So having some of those new technologies
or other changes are one of the pieces of the portfolio we will
have to do maximizing our existing system is important. One of
the most important tools from the MISO perspective is actually
the operations of the MISO market. One of the things we do is
seek to actually get the most out of the existing assets we
have within the constraints of reliability, which means we are
not leaving excess capacity on the system, be that generation
or transmission capacity. And I think that is a model for all
electricity operation.
Mr. Fry. Do you find that model duplicated across other
sectors? I mean, like with your neighbors here, do they do the
same thing roughly?
Ms. Curran. So we have and do that maximization, for
example, with our neighbors, PJM and SPP. It is not
necessarily, though, the same across the country, including in
those areas that don't have a regional transmission
organization.
Mr. Fry. Thank you for that. Is MISO currently utilizing AI
models to improve operational efficiencies and system
management? And if so, can you expand on how these tools are
enhancing your ability to forecast demand, manage resources,
and mitigate reliability risks?
Ms. Curran. Absolutely. As we have talked about a lot
today, there are a lot of new variables in the system. You have
this intermittent generation, you have changing load patterns,
be it from data centers or just consumer changes, weather
impacts, and the like. There is a lot more uncertainty in the
system.
We use in our operation something we call an uncertainty
management model, where we leverage artificial intelligence to
better forecast what the next day might look like with all of
that variability, though taking in all of those very hard-to-
forecast variables, and trying to come up with an impact.
We have seen tremendous results both in reliability, but
probably more importantly getting that reliability more
affordably. So we have been able to plan better, and that
results in lower cost for customers from using that technology.
Mr. Fry. Thank you for that.
Mr. Asthana, your testimony highlights the importance of
reliability must-run, RMR, agreements as a critical tool for
ensuring short-term reliability as plants retire and new
resources come online. Can you describe how PJM utilizes these
agreements to maintain grid reliability during those
transitions?
Mr. Asthana. Yes, we like to use reliability must-run
contracts as little as possible. They are really only used for
local transmission constraints. So when a generator wants to
retire and submits that request to us, and we feel like we need
that generator to keep the grid reliable for local transmission
constraints until we can build the transmission system, then we
enter or seek to enter into a reliability must-run agreement
with that generator. But we want to use it as little as
possible and let the markets work as much as possible.
Mr. Fry. You want to build new plants, or a new generation,
right?
Mr. Asthana. We definitely want new generation, yes.
Mr. Fry. Are there ways in which these agreements can be
improved to offer additional flexibility, particularly in light
of the supply chain challenges and infrastructure delays that
we have?
Mr. Asthana. Are you asking about reliability must-run
contracts, or just in general?
Mr. Fry. Right. Yes, sir.
Mr. Asthana. Yeah, we are working with our members right
now on ways that we might improve our reliability must-run
process.
Mr. Fry. And how would that look? Just curious.
Mr. Asthana. We haven't decided. But some of the things
that we are thinking about are whether we have a standard
contract with every generator that wants to--or that ends up
needing to sign up, or with the spoke contract. So that is an
example. But there's a host of issues that are on the table and
being considered.
Mr. Fry. OK. Thank you for that. Mr. Chairman, I yield
back.
Mr. Latta. Thank you. The gentleman yields back. And the
Chair now recognizes the gentleman from New York's 20th
District for 5 minutes for questions.
Mr. Tonko. Thank you, Mr. Chair. I associate myself with
the consensus that we have heard from our witnesses--and thank
you all for being here--on the importance of building new
transmission for improving reliability and bringing new
resources online. But I would also like to hear more about how
New York is pursuing other strategies for addressing
reliability challenges.
So, Mr. Dewey, first let me thank you for your leadership
at my home ISO. I appreciate the work you and the team at the
ISO do each and every day and respond to New York's needs.
We know New York is dealing with increasing electric
demand, especially chip manufacturing upstate, and an aging
generation fleet. For the past several hearings, I have been
trying to highlight the role that demand management, including
energy efficiency and demand response can play in reducing peak
demand, improving system reliability.
So can you discuss what New York is doing to simultaneously
support grid reliability and energy-intensive economic
development? And do you see a role for demand-side policies to
contribute to New York ISO's efforts?
Mr. Dewey. Thank you, Congressman. I would say that the
ability for demand to be flexible and to recognize the
opportunities for flexibility in demand--whether it be demand
response, whether it be load shifting to different hours of the
day--is going to be absolutely crucial to maintain reliability
in this modern grid, where the intermittency of variable
resources like wind and solar can vary a lot over time. We are
going to need to have that flexibility in the load profile. We
are going to need to be able to recognize which loads can be
flexible.
Some of the data center loads, and some of the chip
manufacturing, which is so crucial to both jobs and national
security issues to onshore more of that processing, they have a
very constant fixed demand, and they can't be as flexible. So
we have got to look for opportunities that other loads that can
participate in that way can do so and coming up with the
appropriate market mechanisms in place to provide the right
kind of incentives and provide the right kind of revenues to
recognize the willingness to do that.
Mr. Tonko. Thank you. And part of the challenge of meeting
this new demand is certainly interconnecting new resources. So
what changes have you made to your interconnection process, and
have they been working?
Mr. Dewey. So we have reformed our interconnection process
really three times over the last 6 years. Most recently, the
reform process culminated in our filing. We mentioned--I think
the gentleman from New Jersey mentioned for a quarter 2023, we
have issued and filed our compliance filing to be completely
compliant with that new rulemaking from FERC. And we have
initiated our transition cluster that does the combined study
of all the resources in that mix.
We have the largest interconnection queue that we have ever
seen at the New York ISO. And we are proceeding along a
timeline that will allow us to finish it quicker than we ever
have.
Mr. Tonko. Thank you. And if the overwhelming majority of
projects in the queue today are battery and solar and wind
projects, is it fair to say these technologies are important to
future reliability in New York?
Mr. Dewey. I would clarify that the entirety of the New
York ISO queue is wind, solar, and storage. So it is crucial
that we bring these resources online, that we locate them and
site them at the right location so they maximize the benefit
and reliability of the system, and we come up with the
necessary upgrades, including transmission expansion, that
would enable that reliable operation, yes.
Mr. Tonko. There has been much talk in Congress about
repealing Federal tax energy incentives like the ITC and PTC
through the reconciliation process. If those credits were to
disappear, I think it is pretty safe to assume it will be, you
know, a huge implication for the wholesale market. Project
developers may need to bid into the energy market at higher
prices to make their projects economically viable. Capacity
payments may need to be higher to introduce, or to induce a
stronger investment signal that fewer projects are going to be
developed.
So, Mr. Dewey, I realize you may not have done independent
analyses on this issue yet. Maybe you could just talk in
hypotheticals. Does what I am suggesting check out? What could
be the impact on energy prices and investments in the ISO
market if these tax incentives go away?
Mr. Dewey. In a hypothetical sense, I would expect that
some of the viability of these projects, generally, would come
into question based on the financing arrangements that they
have to develop and construct them. At a minimum, I would
anticipate higher costs when they come, interconnect into the
system, which would ultimately result in higher costs passed
down to consumers.
Mr. Tonko. And we know that there have been considerable--
much considerable confusion about how tariffs on Canadian
energy might affect New York's electricity. Our systems are
interconnected, and New York has long benefited from that
importation of clean, reliable Canadian hydropower. We also
know that Ontario has considered imposing a surcharge on its
electricity exports.
How is the ISO prepared for the possible imposition of
tariffs and export charges on Canadian power?
Mr. Dewey. I would say that the interconnection between New
York ISO, and really, the whole northeastern United States and
Canada is mutually beneficial from both the reliability and an
economic standpoint. And I say mutually beneficial because it
works both ways across the border with tremendous benefits
throughout the region.
We have put in mechanisms to collect and remit those
tariffs if we need to. And we are working closely from a
reliability standpoint to make sure that at least on an energy
basis, but hopefully on an economic, day-to-day basis that
power will continue to flow. Thank you.
Mr. Tonko. Thank you so much. And with that, Mr. Chair, I
yield back.
Mr. Latta. Thank you. The gentleman's time has expired, and
yields back.
The Chair now recognizes the gentlelady from Florida's 15th
District for 5 minutes of questions.
Ms. Lee. Thank you, Mr. Chairman, for convening this
important hearing. And thank you to all of our witnesses for
being here today to testify.
As our energy demand continues to rise due to growth in
manufacturing, advances in technology, like artificial
intelligence, and increasing electrification, it is critical
that our electricity production and transmission are prepared
to meet these needs.
Alarmingly, in their 2024 Long-Term Reliability Assessment,
the North American Electric Reliability Corporation found that
most of the continent is at risk of experiencing electricity
shortfalls within the next 5 years. Considering these
developments, I look forward to speaking with our witnesses who
represent regional grid operators from across the country on
how we can best strengthen our electric grid, prevent
shortfalls, and meet this growing demand for power.
Mr. van Welie, in your testimony you mentioned that
independent system operators in States play a joint and
complementary role in resource adequacy. I am interested in
discussing further the role that state policies can have on
reliability and affordability of the electric grid. The Trump
administration recently discussed moving forward with building
national gas pipelines across New York and into New England to
help supply energy to that region.
What would additional natural gas capacity mean for
reliability in the New England area? And what impact do you see
winter weather conditions having on consumer demand for natural
gas?
Mr. van Welie. So I will start at the end of your question,
which is New Englanders have lived with a natural gas pipeline
constraint for 20 years. So we know what happens. When it gets
cold, it will switch to burning other stored fuels, typically
oil and imported LNG. So the question, you know, with regard to
the benefits of relieving that pipeline constraint, clearly the
region recognizes, and I think the States understand that
additional pipeline capacity would be beneficial. But they have
made very distinct policy choices over the last several decades
to work around that issue. So there are workarounds. But,
ultimately, this decision about fuel infrastructure is really
in the States' hands.
Ms. Lee. And if you would tell me about some of those
workarounds. And as lawmakers seek to address the growing
electric demand, what factors are the most important for them
to be considering?
Mr. van Welie. Well, I think in New England what
policymakers are generally doing is trying to weigh
affordability versus decarbonization objectives. And so, as
they think about the relative weight of those two objectives,
they tend to steer the policies one direction or the other,
Ms. Lee. In my home State of Florida, a recent report from
Tampa Electric found that 70,000 Florida businesses are
directly fueled by natural gas. Would more natural gas capacity
drive investments into economic development projects, like
manufacturing facilities, that require significant amounts of
affordable energy?
Mr. van Welie. I think it is--there is a complex answer to
a simple question in the sense that ultimately to build new gas
infrastructure into New England, you need to have a custom for
that. So the pipelines will not build on speculative need. They
need customers to do this. And, ultimately, the customer
decision rests with the States ultimately. And we had this
conversation about a decade ago. So I think the prevailing
policy wisdom has been to rely on stored fuels and imported
LNG. I think the conversation is starting to turn to whether or
not it makes sense to relieve those constraint directly.
Ms. Lee. Thank you. And Mr. Asthana, you mentioned in your
testimony that PJM facilitates the transfer of power to and
from interconnected neighboring systems, including the
Midcontinent Independent System Operator and the Southwest
Power Pool to help meet electricity demands. Can you elaborate
on how PJM works with neighboring jurisdictions to coordinate
operations?
Mr. Asthana. Yes, thank you. We have joint operating
agreements with our neighbors. So when we export to the
Southwest Power Pool, they are not an immediate neighbor, w go
through the Midwest ISO. But, particularly, with the Midwest
ISO and with New York, we are continuously coordinating power
flows back and forth. And then with Duke in the Carolinas and
with TVA also, all of their operators are talking between our
systems. Because our systems impact each other. It is actually
one big electrical system. And so you do have to coordinate at
the seams.
Ms. Lee. Thank you, Mr. Chairman. I yield back.
Mr. Latta. Thank you very much. The gentlelady yields back.
And the Chair now recognizes the gentleman from Texas' 33rd
District for 5 minutes for questions.
Mr. Veasey. Thank you, Mr. Chairman. I think everybody
knows, and it has been briefly talked about--Mr. Vegas knows
this very well--that Texas is growing very, very rapidly. We
are having record-setting growth. We are also having record-
setting heat. And every now and again we will have some record-
setting cold. And demand is likely to continue growing. And as
I stated in our last hearing in the subcommittee, ERCOT does a
great job in enabling new generation in its interconnection
process. And to its credit, ERCOT vastly outpaces other regions
in bringing new generation online, but that is only part of the
question.
You know, we are constrained by our grid infrastructure.
And our failure to invest in grid infrastructure is a threat to
our economic and national security. And unfortunately, I don't
think that we are doing enough.
There has been a lot of talk today about generation and
load growth, and rightly so. But today, I would like to hear
from Mr. Vegas about a couple of other things focusing on Texas
and our grid, and that is ERCOT's transmission planning and its
demand response initiatives.
And, Mr. Vegas, how is ERCOT considering transmission
planning, given ongoing congestion issues around the State?
Mr. Vegas. Thank you for the question, Congressman.
Transmission planning is absolutely one of the critical legs of
the stool to ensuring the reliability, resiliency, and to
enable the growth that we have been talking about.
We have recently actually published a new regional
transmission plan which lays out what the grid in ERCOT needs
over the next 10 years, and it has new elements in it.
Today, the ERCOT transmission system operates at a peak of
345,000 volts. We have laid out a plan that continues that
strategy, but also one that adds a new extra high -oltage
network at 765,000 volts. That is helping to address the large
power flows that are going to have to move around the State. It
helps with congestion management, could eliminate a lot of the
congestion constraints that we have, and will support the kind
of growth that we are talking about.
Mr. Veasey. Yes, I also wanted to ask, too, when we had the
Winter Storm Uri that, you know, we were, what, 1 minute and 30
seconds away from the entire grid crashing down, you know, one
of the things that hasn't been talked enough about that I think
we should talk more about is the winterization of Texas'
infrastructure. You know, we saw failures in both renewable
and, you know, natural gas components during that storm.
And I want to ask you, in a State like Texas it would be
fairly inexpensive to do things like winterize, you know, wind
turbine blades, but you wouldn't want to spend a lot of money
enclosing, for instance, outdoor, you know, gas facilities and
things like that. That could end up being very, very costly.
And in a State like Texas, what can they do to protect
those larger, older platforms that are going to be much, much
tougher to winterize?
Mr. Vegas. Yes, the kind of tactics that they are using are
putting in wind breaks, putting in thermal heaters near where
there's critical components and valves, compressors, elements
that when they are exposed to the wind typically are the ones
that are at highest risk.
Historically, Texas has always been--weatherized their
system for the heat of the hot summers so that they could run.
So enclosing, it was never really a strategy. So that now we
are seeing more significant cold winter weather, what we need
to do is deal with the changes that that brings in, and that is
what they are doing to those gas plants as well as to the
natural gas facilities, is managing the wind chills, the
weather breaks, and things like that.
Mr. Veasey. If we have another storm like Uri next winter,
has enough already been done to prevent those older, larger
platforms from crashing again?
Mr. Vegas. I think the weatherization measures we have in
place today are very good. During any extreme weather event,
there is always a risk of impact. Remember, these are 40-, 50-,
60-year-old machines that we are talking about. They do fail
under duress and extreme conditions. But we are much better
prepared today than we were during Winter Storm Uri.
Mr. Veasey. And also, too, I wanted to just ask very
briefly in the last remaining seconds here. Everybody is always
concerned about reliability and affordability, and not just the
large industrial loads that we talk a lot about here. What
strategies are being implemented to increase demand response
participation among our residential and small-business
customers?
Mr. Vegas. Thank you for that question. We actually have
initiated a strategic program this year to initiate a new
Consumer Residential Demand Response Program that is going to
be financially supported by ERCOT. That work is going to be
done in conjunction with the Public Utility Commission. And our
goal is to have that meaningfully advanced throughout this year
and available for residential consumers soon.
Mr. Veasey. Thank you.
Mr. Vegas. I would like to also add, we do have good
residential programs in place today, but we want to grow them
even further.
Mr. Veasey. Right.
Mr. Vegas. I think it is a great opportunity.
Mr. Veasey. Thank you very much. Thank you, Mr. Chairman, I
yield back.
Mr. Latta. The gentleman yields back the balance of his
time.
The Chair now recognizes the gentleman from Texas'--oh, I
am heading that way. OK. Let's see, we have the gentleman from
Texas for the next 5 minutes for his questions.
Mr. Goldman. Thank you, Mr. Chairman. Thank you all very
much for being here and for your time.
Mr. Vegas, just for the record, so everyone knows, you were
not there during Winter Storm Uri?
Mr. Vegas. That is correct.
Mr. Goldman. And have done a remarkable job since then.
ERCOT has, the entire team has, the entire new team that has
been put there.
It was a perfect storm. It was extremely unique, as people
said, 100-year storm. And just for the record as well, have
y'all had to shed load at all or request a shedding of load in
the State of Texas since you have been in power?
Mr. Vegas. No, we have not.
Mr. Goldman. Thank you very much. I kind of rest my case
with that. It is my opinion that there certainly was human
error involved during the record storm. And I just want to
thank you for your leadership and all of ERCOT for what you
have been able to accomplish and do in the last several years.
So thank you very much.
Mr. Vegas. Thank you.
Mr. Goldman. With that, I will turn to a little bit of the
panel.
Mr. Asthana, you talked about permitting reform. What
reform needs to happen in permitting? I am sorry if these
questions have been asked and we are here at the end, get the
very last questions. And so I am sorry if that was asked
earlier.
But if you don't mind, what kind of reforms need to be put
in for permitting?
Mr. Asthana. Yes, I mean, there was bipartisan permitting
reform that was being advanced in Congress before, and we were
supportive of that. But I think the broader point is, it is
taking too long to build new generation and very difficult to
build new transmission, and there are good reasons for that.
People don't want large infrastructure on their property and
near them, and we need to respect that.
But I think we are going to have to solve this issue. And I
think giving authority to--and there are various bodies you
could give authority to--but giving centralized authority to
approve permitting, I think, is one idea.
Mr. Goldman. Something like the nuclear modular reactor,
does that excite you or concern you?
Mr. Asthana. I think it is exciting. Definitely exciting.
Mr. Goldman. Good. OK.
Mr. van Welie, you said there was new supply coming online.
What type of new supply is coming online in your area?
Mr. van Welie. Well, sir, so the proposed new supply was
offshore wind. So as I mentioned in my testimony, given----
Mr. Goldman. Sorry to interrupt. You said the new supply is
wind coming offline?
Mr. van Welie. Offshore wind.
Mr. Goldman. Offshore wind.
Mr. van Welie. Yes.
Mr. Goldman. What happens if the wind doesn't blow?
Mr. van Welie. I think the region is going to have to--
well, your question is whether the wind doesn't blow or whether
the offshore wind comes online.
Mr. Goldman. So you said the new generation is offshore
wind coming online.
Mr. van Welie. Right.
Mr. Goldman. What happens if the offshore wind doesn't
blow?
Mr. van Welie. I think you have to have enough resource on
the system to back that up.
Mr. Goldman. So will you have enough? If that is the new
coming online, what is the backup to that if the wind doesn't
blow?
Mr. van Welie. Well, sir, the good thing about offshore
wind in the wintertime, it actually helps with the gas
constraint that we have on the system because the wind profiles
in the winter are actually quite favorable. So it helps
displace the use of stored fuels.
Of course, there will be times when an offshore wind does
not blow, and at those times, you have to depend on other
resources like natural gas or oil resources.
Mr. Goldman. Do you have enough natural gas?
Mr. van Welie. Now modeling, we have enough in combination
with the offshore wind to make it work.
Mr. Goldman. Right now?
Mr. van Welie. Right now.
Mr. Goldman. So what is the solution moving forward?
Mr. van Welie. The solution moving forward is that the
region is going to have to deal with the energy constraint. It
really comes down to storage of energy in some form. The
question is, what does that look like? Or you could solve this
problem through moving to other technologies like small modular
reactors. So there's a variety of options, and the States are
going to have to think about where they want to see a policy to
address this over time.
Mr. Goldman. And what is your personal position on the
modular reactors?
Mr. van Welie. I am in favor of them.
Mr. Goldman. OK. Thank you very much.
Mr. Chairman, I will yield the rest of my time. Thank you,
panel, very much for your time.
Mr. Latta. Well, thank you very much.
The gentleman yields back the balance of his time.
The Chair recognizes the gentleman from California's 50th
District for 5 minutes of questions.
Mr. Peters. Thank you, Mr. Chairman. I had to step out a
little bit. I didn't hear and I don't think there has been any
discussion whatsoever of conservation as part of this
conversation. The idea that you don't even think about not
burning energy as part of this approach to supply, I think we
are letting it get away from us.
And, in fact, this week what we are voting on, the business
of the House of Representatives is to overturn efficiency
standards for refrigeration that would help us save energy and
make us have to produce that much less energy. And I just think
it is crazy.
The other thing I still recommend and I am still interested
in is the Energy Innovation and Carbon Dividend Act, which is a
way to price carbon and then return the dividends to people so
that their overall tax burden doesn't go higher but they have
an incentive to conserve energy. We should provide that
incentive from every economic decision maker in the economy,
from a household to the biggest corporation. It just makes
sense to me.
As we face a challenge which is really unprecedented, I
certainly think we ought to build everything we can. We ought
to build as much generation and transmission as we can. And for
years, I have said I have sounded the alarm that our energy
grid is too small, it is too old, and it is done. And we have
to do better.
But the construction of new high-voltage transmission in
the U.S. which allow us to send energy from where it is
abundant to where it is needed is slowed to a trickle. In 2023,
we built just 55 miles of new high-voltage transmission.
At our current pace, we will build in this decade a fifth
of the transmission we did a decade ago. The truth is that
building big projects in America has become extraordinarily
difficult. Our agencies don't have enough people who are
funding to permit these projects in a timely manner. Large-
scale projects also face litigation, complex environmental
review, bureaucratic delays. And we all ought to be about
fixing that. And certainly, this committee knows that I have
been working on permitting reform to the displeasure of some of
the incumbents on the environmental side, because we have to
get this done. But I think conservation ought to be something
that we think about as well.
Let me just ask--you know, Mr. Asthana, you were asked for
some specifics on permitting reform. I am going to just say,
what I would ask for all of you, and maybe you can provide this
in writing, is if your companies have experiences that they
have--you can go to your lawyers about this, if you need to--
but if you have got experiences that this committee should
understand that you think don't make any sense, that could be
improved, just specific recommendations on laws that could be
changed, I would love to hear them. I think we are ready for
that here. And I think all of the above means all of the above.
You know, credit to Texas, by the way, which has the
closest thing to a free market in energy that we have. They are
building more wind than anybody, because that is what the
market demands. And good for them. You know, they deserve our
congratulations. And I think in some ways we could learn some
lessons from them.
Mr. Mainzer, I know in California we have been working hard
on interconnection as a priority for years. California has
added 20 gigawatts of new resources, 11 gigawatts of storage
while investing in transmission. Can you talk about how grid
capacity is a barrier to getting new resources on the grid and
how CAISO is trying to interconnect in smarter ways that we
might learn from here?
Mr. Mainzer. Absolutely. Thank you, Congressman. So we have
also been, just actually just last year submitted very
significant package of reforms to our interconnection community
process to FERC that were fully approved. We have already put
them into place. Last fall, we have seen a 67 percent reduction
in requests in queue in our current cluster.
So we are absolutely taking friction out of the system
there. We need to keep moving. We need to keep going. And that
process is grounded in the coordination that we have with the
State agencies to on-board up to 85 gigawatts in new resources
over the next decade.
Mr. Peters. I put forward a number of bills to help
efficiently plan and permit transmission projects. And one of
them is my bipartisan Speed and Reliability Act, which
streamlines permitting for lines that significantly relieve
grid congestion and improve reliability.
Ms. Curran, you say in your testimony that approving and
building new high-voltage transmission lines is a complex and
lengthy process. Congratulations on that. That is well stated.
But maybe you could give me a little bit of color on that.
What do you find is a challenge for you? And what is the
complexity you think doesn't need to be so complex?
Ms. Curran. Sure. So really, I think about the length of
time and the complexity in three phrases: first planning, then
permitting, then actually building it. And the role of the ISO
is really on the side of the planning. We have been successful
in taking an approach where we look at multiple values for
transmission--not just economic but also reliability, also
enabling whatever the State or member needs are and have gotten
a fair amount of transmissions built. Our States have really
leaned in on the permitting questions. But we have also made
decisions like trying to utilize existing transmission.
The key in our world is, who pays for it? And so having a
business case that shows benefits well in excess of cost has
been, I think, the secret to getting that transmission
approved.
Mr. Peters. OK. I am out of time, Mr. Chairman. But I would
ask that I be permitted to ask that those questions be
submitted in the record, answers on specific ideas from the
operators on permit reform, and I yield back.
Mr. Latta. Thank you very much. The gentleman yields back.
And the Chair now recognizes the gentlelady from North
Dakota for 5 minutes for questions.
Mrs. Fedorchak. Excellent. Thank you. Thank you all for
being here. I have said to a few of you that this panel is the
most powerful panel of people in our whole country. And I mean
that sincerely. Because at this table--and I hope my colleagues
appreciate just how much, experience and technical expertise
exists at this table--you have the power to pretty much bring
us all to our knees and shut our whole country down. So thank
you for everything that you do every day to keep our economy
going and our communities safe.
So a couple of questions I would like to dig into here.
First of all, are government incentives affecting what types of
resources are coming into the market and getting into the
queue? And if you could each just kind of say, like, either in
your view, in your market, the impact that the government
incentives are having on what resources come would be either
significant, modest, minimal, or any qualification you want to
say. Starting with you, Mr. Asthana.
Mr. Asthana. Yes, I would say they are significant and the
incentives from the Federal Government are significant, and
then our different States have different incentives that make a
difference as well.
Mrs. Fedorchak. OK.
Mr. van Welie. I would agree with that point.
Mrs. Fedorchak. Significant?
Mr. van Welie. Significant, yes. State and Federal.
Mrs. Fedorchak. Excellent.
Ms. Curran. Yes, also significant. We have seen over a
number of years that, depending on what the incentive is, the
makeup of our queue and the volume of generation in it does
change fairly dramatically.
Mrs. Fedorchak. OK.
Mr. Dewey. It is a very significant driver in New York,
yes.
Mrs. Fedorchak. OK.
Mr. Nickell. I agree with everything that has been said so
far. Significant.
Mr. Mainzer. I would probably characterize it as modest to
significant only because the major driver of our queue is
really State policy at this particular juncture, so--but it is
certainly an impact.
Mr. Vegas. And in Texas it is significant impact as well.
Mrs. Fedorchak. OK. And so across the board significant,
and State policy also being significant. What I didn't hear, or
what I think is missing in there, is that it is market forces
that's driving what comes into the queue or even like the
demand--what you need, what the markets need doesn't seem to be
factoring in there. That to me is a pretty significant problem
that we all ought to be thinking about moving forward.
There is a lot of talk about costs. And, you know, what is
low cost? You know, everyone wants low costs. Everyone wants to
keep the cost down for consumers.
Mr. Nickell, in SPP--and I am going to ask Ms. Curran, too,
in MISO--what costs are often not included in this calculation
of different comparisons between fuel, you know, in terms of
their total cost to the grid? What costs are not included in
that often, in your opinion?
Mr. Nickell. I think, you know, the cost of reliability
risks are often not included. We know from Winter Storm Uri--at
least, reports have indicated--$200 billion-plus of cost just
as a result of that one event. And I think we oftentimes too
quickly forget about the cost of not being able to provide
reliable electric service. We think all too often about the
cost of investment.
Mrs. Fedorchak. Yes.
Mr. Nickell. The cost to invest new transmission, the cost
to invest new generation. We forget about the benefits of
resilience, and we forget about the cost of not having reliable
service.
Mrs. Fedorchak. OK. Very good. And, Ms. Curran, I am going
to skip you for now and ask everybody one quick question.
If you could tell us--if you could pick one thing--I know
there's many things you have highlighted today that you want us
to take away--but what is the one thing--if you could pick one
thing that we need to correct to meet and maintain reliability,
meet the demand, what is the sort of one thing you would say we
need to do quickly or first?
Mr. Asthana. I think hang onto the generation that we have
already to start with.
Mrs. Fedorchak. OK.
Mr. van Welie. I will add the paying attention to the gas/
electric interdependency because we need to view this as one
system, not separate systems.
Mrs. Fedorchak. Excellent.
Ms. Curran. I will also say hold onto the generation we
have, slow down those retirements of existing units.
Mr. Dewey. I would say hold onto the generation, but also
make sure that the market signals and the development of the
markets align with the type of reliability attributes that you
need so we attract the right kind of investment.
Mrs. Fedorchak. Excellent.
Mr. Nickell. Only because I want to be a little different.
Mrs. Fedorchak. It is OK to be the same.
Mr. Nickell. I think we need to more effectively use the
grid we already have.
Mrs. Fedorchak. OK.
Mr. Mainzer. I would say we want to ensure we have strong
accountability mechanisms to resource adequacy.
Mr. Vegas. I agree with all of my peers. And I will just
add, incentivizing reliability discretely and explicitly will
be very helpful.
Mrs. Fedorchak. Excellent. Thank you all. I yield back.
Mr. Latta. The gentlelady's time has expired, and yields
back.
The Chair now recognizes the gentleman from Massachusetts'
Fourth District for 5 minutes for questions.
Mr. Auchincloss. Thank you, Chairman. Before I begin the
questions, I do want to dig into the concept of the market for
energy production, because Democrats actually really agree. We
want competition in the market for energy generation, because
as the gentleman from Texas, Mr. Pfluger, said earlier,
different types of generation portfolios make sense in
different States. And we want low cost and reliability to be
rewarded, which is why we passed the Inflation Reduction Act,
which said (1) there is an overall negative externality
associated with fossil-fuel-emitting types of generation, and
so we are going to issue a tech-neutral tax credit to all clean
sources of generation that don't have greenhouse gas emissions,
which have a negative externality. But we are not going to pick
winners or losers in that form of clean energy generation.
The IRA was an energy pro-market piece of legislation. And
it is, in fact, the Trump administration who is picking winners
and losers and distorting energy markets. They are doing so
with tariffs on electricity from Canada. They are doing so by
canceling offshore wind contracts, despite the fact that in
some States offshore wind is an important part of that
generation portfolio. They are doing so by trying to get fossil
fuels to jump the queue.
So when we talk about energy markets, it is Democrats who
are supporting well-functioning energy markets, and it is the
Trump administration that is impairing them.
Let's talk now about how this is affecting Massachusetts,
Mr. van Welie. First of all, tariffs. New England is a net
importer of electricity, correct?
Mr. van Welie. Correct.
Mr. Auchincloss. And we get that from Canada?
Mr. van Welie. And from New York.
Mr. Auchincloss. But New York gets some from Canada too?
Mr. van Welie. Correct.
Mr. Auchincloss. Now, under chapter 27 of the Harmonized
Tariff Schedule of the United States, electrical energy is
identified as a good but has a, quote, ``free tariff
designation that is not subject to the border entry procedures
through which custom duties are imposed.''
Public statements have suggested that it would not be
tariffed, but do you know?
Mr. van Welie. We do not know. We have asserted what you
have just said, but we have also put in a backstop, which is to
ask the FERC to give us the permission to allocate the cost if
we need to collect those monies.
Mr. Auchincloss. And what is the cost of that uncertainty
to New England ratepayers?
Mr. van Welie. It depends on the level of the tariffs. At
the level of 25 percent, there is probably of the order of
about $160 million a year.
Mr. Auchincloss. And even the uncertainty is impairing your
ability to run the grid?
Mr. van Welie. Not at this point. So tariffs, you know,
will affect price in some way, but they shouldn't--it shouldn't
affect reliability.
Mr. Auchincloss. But are you having to spend resources and
time on figuring out how you would levy that tariff?
Mr. van Welie. Yes, of course.
Mr. Auchincloss. Yes. And that has an indirect cost.
Let's talk about our reliance on liquefied natural gas.
That is our sort of swing winter source of energy, yes?
Mr. van Welie. Correct.
Mr. Auchincloss. And it comes mostly from Trinidad and
Tobago?
Mr. van Welie. Correct.
Mr. Auchincloss. And the Everett port terminal?
Mr. van Welie. Correct.
Mr. Auchincloss. And it is subject to global spot prices?
Mr. van Welie. Well, I would say it is another major import
point for New England, which is the same joint terminal in New
Brunswick. Between that terminal----
Mr. Auchincloss. Between those two.
Mr. van Welie [continuing]. And Everett is where the gas
comes.
Mr. Auchincloss. But it is subject to the spot price
globally, right, that LNG?
Mr. van Welie. Correct.
Mr. Auchincloss. So Massachusetts is at the whim of global
movements in LNG prices, right? So when something exogenous
happens like, I don't know, Russia invades Ukraine, we bear the
brunt of higher LNG prices?
Mr. van Welie. That is correct.
Mr. Auchincloss. So Massachusetts is not in control of its
own energy destiny right now?
Mr. van Welie. Correct. I think Massachusetts can do some
things to reduce those effects.
Mr. Auchincloss. Yes. And those things could include
offshore wind?
Mr. van Welie. And--yes--or dual fueling, or relieving the
gas pipeline constraints.
Mr. Auchincloss. Let's talk about some of those in the next
minute.
Mr. van Welie. Uh-huh.
Mr. Auchincloss. Offshore wind, as you said--actually, the
wind does blow in the wintertime pretty consistently, which is
exactly when we have that peak LNG demand. So offshore wind
would be very helpful in offsetting our vulnerability to global
LNG spot prices.
Nuclear. Would it help us if we built a nuclear power plant
in Massachusetts?
Mr. van Welie. It would, but I think that will be some time
before that would be practically realized.
Mr. Auchincloss. Well, the best time to plant a tree is 20
years ago, but the second best time is now, right?
Mr. van Welie. I agree.
Mr. Auchincloss. And then tell me about dual use in our
last 30 seconds.
Mr. van Welie. Say again?
Mr. Auchincloss. Dual use. The dual fueling.
Mr. van Welie. Dual fuel. So that is really to allow--we
have some 7,000 megawatts of gas on these resources that cannot
access gas from the pipelines when it gets cold. So one way of
working around the gas constraint is for the New England States
to allow for permitting of dual fueling----
Mr. Auchincloss. Dual fueling.
Mr. van Welie [continuing]. Which would allow them to
switch to fuel oil and utilize that fuel instead of gas.
Mr. Auchincloss. Thanks for your time and your expert
testimony, Mr. van Welie.
I yield back.
Mr. Latta. Thank you. The gentleman yields back.
The Chair now recognizes the gentleman from New York's 23rd
District for 5 minutes for questions.
Mr. Langworthy. Thank you very much, Mr. Chairman.
Mr. Dewey, the New York ISO has repeatedly raised strong
concerns over our State's aggressive transition away from
sources of energy like natural gas and towards, quote,
``renewables'' like wind and solar. In a 2023 report, the ISO
stated, ``It is important to note that commercially available
technologies to provide dispatchable, nonemitting supply do not
exist at scale at this time.''
Does the ISO's definition of ``dispatchable'' encompass the
ramp-up time for this nonemitting supply mentioned in this and
other reports?
Mr. Dewey.Yes, it does. When we talk about dispatchable,
emission-free resources, we are projecting the need and the
necessity to have a resource that can both meet the State's
climate legislation, which mandates a carbon-free electric
system by 2040, as well as continuing to meet the
dispatchability requirements of managing the grid. That gap,
that resource, does not exist today. The technology does not
exist today.
Mr. Langworthy. What impact does a longer ramp-up time for
these sources of generation like wind and solar have on grid
reliability in a State, particularly when we experience weather
events like Winter Storm Elliott that hit my district in the
winter of 2022?
Mr. Dewey. It requires extensive planning. It requires a
lot of focused attention on the planning models so that we are
not caught surprised by those swings in weather. It requires us
to have additional and subsequent resources on standby in case
we get those forecasts wrong so that we can quickly shift to
fill in the gap that can sometimes surprise us if it happens
too quickly.
Mr. Langworthy. Thank you. As you point out in your
testimony today, the 2024 to 2034 RNA directly implicates our
State's own public policies in the concerns over declining
reliability margins. Specifically, since the enactment of New
York's Climate Leadership and Community Protection Act, more
than twice the capacity of generation has been deactivated than
has been added to the system. You go on here in your testimony
to mention how this transition is raising new challenges for
grid reliability in the event of significant weather events.
Mr. Dewey, has any oversight been conducted by the Federal
Energy Regulatory Commission into these reliability concerns
voiced by New York ISO, and has FERC given any warning signals
to the State of New York based on what seem to be very
consistent concerns with reliability resulting from public
policy choices?
Mr. Dewey. We had a lot of engagement and a lot of
oversight with the North American Electric Reliability
Corporation, or NERC, which is the reliability arm of the FERC.
They are predominantly the enforcement arm to make sure
reliability criteria is met. We work very closely with them to
make sure that the market rules that we develop that we
administer under the FERC tariffs contemplate some of the
changes that we are going to see on the electric power grid.
So, primarily, that engagement is with NERC on reliability
and with FERC on the implementation of the market rules
necessary to be able to meet those reliability criteria.
Mr. Langworthy. OK.
And on this subject of State-level policy choices impacting
reliability and affordability, Mr. van Welie, in 2013, you
testified before this committee that there were concerns in ISO
New England that insufficient natural gas infrastructure would
result in increased costs, increased emissions, and reduced
reliability. You reiterated your testimony in 2017, and in
today's testimony you stated that ISO New England gets more
than 50 percent of its electricity from natural gas, yet it
doesn't have enough natural gas pipeline capacity in the
winter.
With this history, Monday's Washington Post reports that
electricity costs in New England are 40 percent more than in
the rest of the country. Do you continue to have fuel security
concerns, and would additional pipeline capacity sourcing
domestic supplies to source efficient natural gas lower costs
for consumers and address fuel security concerns?
Mr. van Welie. So the actions that States have taken in the
last decade have mitigated some of the price effects of the gas
constraint by essentially taking demand off the system, and
they have done that through investment in generation and demand
response and energy efficiency, but the long-run concern still
is there.
And to your point, I think the gas constraints have
resulted in big costs every winter when it gets cold and we
have had to rely on LNG or oil. So I think the policy question
for the States is how best to mitigate those effects.
Their actions have also focused on trying to add offshore
wind into the mix because that would be beneficial. To the
extent offshore wind is delayed, I think the conversation will
turn to what are the other possibilities. And so the options on
the table would be additional pipeline infrastructure, the dual
fueling that I mentioned, and I would say one thing Congress
could help us with here is the Jones Act.
So I saw an article just earlier this week that Puerto Rico
is now finally getting domestic LNG shipped to it, and it would
be helpful if New England could access domestic LNG. We export
it at $6 for million Btu, but we are having to import it at $35
to $40 per million Btu. So I think Congress--that is something
that could help.
Mr. Latta. I am sorry. The gentleman's time has expired.
Mr. Langworthy. My time has expired. Thank you, and I yield
back.
Mr. Latta. Thank you very much.
The Chair now recognizes the gentleman from Ohio's 12th
District for 5 minutes for questions.
Mr. Balderson. Your colleague from Ohio. Thank you, Mr.
Chairman.
Thank you all for being here today. I do have to--just in
case, Mr. Vegas, I don't get to you, I have a question for you.
But we miss you in Ohio. Good seeing you.
My first question is for Mr. Asthana. I would like to start
with you and follow up on a conversation I had with your
colleague, Asim Haque, during a hearing this subcommittee held
earlier this month.
PJM's existing install capacity mix is overwhelmingly made
up of dispatchable power generation such as natural gas,
nuclear, and coal. However, as of a few days ago, only 5
percent of the active projects in the PJM queue are thermal
generation. Additionally, between 2022 and 2023, PJM saw over
11,000 megawatts of generation deactivated, and only 4,000
megawatts of new generation added to the 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 the rising growth demand?
Mr. Asthana. Yes. We do have concerns with the lack of
dispatchable generation in the queue, and we have taken
significant action to deal with that, including our Reliability
Resource Initiative. And I am happy to talk about that if you
would like.
Mr. Balderson. Thank you. FERC recently approved PJM's
Reliability Resource Initiative, or RRI, to allow shovel-ready
projects that enhance grid reliability to get built and
connected to the grid as quickly as possible. So I do want you
to expand on it a little bit. PJM recently announced that the
RRI received 94 applications, totaling over 26 gigawatts of
nameplate capacity.
Mr. Asthana, I understand PJM is actively reviewing these
applications. Can you discuss how you will score or weigh these
projects to ensure they will get built and online as quickly as
possible?
Mr. Asthana. Yes. Thank you for the question,
Representative.
So our goal with this initiative was to get shovel-ready
projects that had certain attributes, and those attributes were
really reliability-supporting attributes. We are really excited
that we have gotten almost 2x subscription of this
opportunity--27 gigawatts, almost--and now we are scoring them.
We are scoring them based on 100-point scale based on criteria
like ELCC and UCAP, which are technical terms for just firmness
and reliability support, also on viability and project support
and things like location. So if they are located--projects are
located in a more constrained area, they will get extra points.
So there is a set of criteria. It adds up to 100 points.
And, really, we are looking for viability, constructability,
how quickly they can come online, and how much they can support
the reliability of the grid.
Mr. Balderson. OK. A followup to that is how can grid
operators, FERC, and Congress, build off this initiative to get
more generation built and connected?
Mr. Asthana. Yes. I am happy to ask my colleagues here.
I know we have all talked about this, and some other
systems are considering similar initiatives, but I think it is
really important when we are facing a problem without a clear
solution--which is generators are retiring--we need to serve
more load and that we be creative and come up with ways to fill
the pipeline with the type of generators that will serve that
load, and that is what we are trying to do with this
initiative. And we are happy to share our experience with
others.
Mr. Balderson. Thank you very much.
Mr. Vegas, I did have time for you, but it is also for
Asthana. I would like Mr. Vegas to go first.
Last year, PJM, ERCOT, SPP, and MISO jointly filed an
amicus brief with the DC Circuit Court against the Biden EPA's
Clean Power Plant 2.0. I am extremely grateful that, just a few
weeks ago, Administrator Zeldin announced that EPA will be
reconsidering the Clean Power Plant 2.0 along with dozens of
other Biden-era rules and regulations.
Since I am limited on time, Mr. Asthana and Mr. Vegas--and,
Mr. Vegas, you go first--if the Clean Power Plant 2.0 were to
remain in effect, would your service territory see an increased
risk of rolling brownouts and blackouts?
Mr. Vegas. Yes. That plan had risked more than 14,000
megawatts of existing coal plants that are serving the grid
today. They would be at risk, and that would be a significant
reliability concern.
Mr. Balderson. Thank you very much.
Mr. Asthana?
Mr. Asthana. Yes. That plan would have increased the
reliability risk and will in our region if it goes forward.
Mr. Balderson. Thank you both.
Thank you, everybody.
Mr. Chairman, I yield back.
Mr. Latta. Thank you very much.
I will just let everyone know they did just call votes. It
is the only way we will get through, we still have about six
members that are still on the list.
And so, at this time, we are going to go to the gentleman
from Colorado for 5 minutes for questions.
Mr. Evans. Thank you, Mr. Chairman and Ranking Member.
Thank you, of course, to the witnesses for coming today.
Mr. Nickell, my first question will be to you. We have
heard a lot of conversation today about how we need more power,
and I don't know that I have fully wrapped my mind around some
of the nuances that I am sure you are much more familiar with,
particularly when it comes to power versus dispatchable power
and things like cost efficiency versus reliability in terms of
actually obtaining that power.
And so what I mean by that is I have been on the floor for
some of my largest electric utility providers in Colorado where
they are talking about not just what is currently powering the
grid but looking forward into the future in terms of weather
reporting to figure out what is the weather going to be. Is the
wind going to be blowing? Is the Sun going to be shining? Where
is not only the affordable power going to come from or
forecasted to come from in the next couple of hours to days,
but is it the most cost efficient? Is it the most reliable?
So can you just speak a little bit to the complexities of
managing a grid, understanding that not all power is created
equal and drawing some of the distinctions between the
dispatchable power and the variable power and also the most
affordable power versus the most reliable power?
Mr. Nickell. Sure. And thank you for the question. It is a
difficult question to answer, but I will do my best.
So, when I think of dispatchable power, that is generation
that has fuel that can be stored. It is not weather dependent.
And so, gas, for example, is a primary source of dispatchable
generation today in SPP's footprint, as is coal generation.
Nuclear as well is a dispatchable, although not as quickly
dispatchable as gas and coal.
So, when we have weather-dependent situations on the grid,
we have to depend on dispatchable generation to show up in
order to deal with that intermittent nature of renewable
generation.
I will give you an example. On June 6 of 2024, last year,
out of 32,000 megawatts of nameplate wind capacity, only 100
megawatts were produced. One hundred divided by 32,000
megawatts is a really small number. It is practically zero. And
that is across 14 States in the middle part of America, where
wind is supposed to be at its strongest potential.
So we have to have dispatchable generation that has fuel
available to be able to offset the fact that that wind
generation didn't show up.
Mr. Evans. So, in that space, we talked about the
dispatchability and the reliability. Can you also speak to the
affordability? I am from a State that does wholesale power, and
so I have had conversations with the folks that are looking to
the next 24 hours and the next 72 hours for those bulk power
purchases.
Can you speak to the end impact for the consumer in terms
of not only the reliability but the affordability in looking at
the power mix that is going to supply the grid?
Mr. Nickell. So affordability comes into play (1) at the
State level. For SPP, we still have vertically integrated
utilities, and the State regulators have jurisdiction over the
affordability equation.
I will say that if, for example, a power plant that is a
wind generator only gets a certain amount of capacity credit
and, for example, it only, let's say, on average is about 20
percent--a gas generator gets about 90 percent capacity
credit--it would take 5 times as much nearly of wind generation
to offset the cost of a single gas plant.
So that is the equation. That is the cost equation that
each of our utilities and their States have to manage in order
to figure out what is the most affordable plan going forward to
serve demand.
Mr. Evans. So, to your previous example, you were talking
about 32,000 megawatts of wind generation, and you have seen
that dip down to 100 megawatts of wind generation. You have
still got to be able to fuel the grid.
Mr. Nickell. That is right.
Mr. Evans. Is it more or less expensive in those situations
to have to go get power from a dispatchable source versus from
a 32,000 megawatt facility that, at that particular moment, is
only producing 100?
Mr. Nickell. Well, it is not a matter of affordability at
that point, it is a matter of keeping the lights on. So you
have no other choice but to use what is available and what has
actually already been paid for by the ratepayers in the
footprint. So at that point, it is not a matter of
affordability, it is a matter of reliability.
Mr. Evans. Thank you.
I yield back, Mr. Chairman.
Mr. Latta. The gentleman yields back.
The Chair now recognizes the gentleman from Georgia for 5
minutes for questions.
And, again, we are about 5 minutes into votes right now.
Mr. Carter of Georgia. Mr. Chair?
Mr. Latta. I am sorry. I guess they had the order wrong on
my sheet.
The gentleman from Pennsylvania.
Mr. Joyce. First, I want to thank Chairman Latta for
allowing me to waive on to this important hearing.
When it comes to energy production, all energy is not
created equal. The capacity factors of wind and solar are
simply too small to provide the reliable energy that our grid
requires today. What we need in plain terms is more baseload
generation. We need more coal, more gas, and more nuclear.
It does not matter how many gigawatts of wind and solar
capacity are built if they are not generating them when you
need them. Unfortunately, we are doing worse than not building
dispatchable generation. We are actually retiring it. We are
shutting it down.
PJM--and I thank you for testifying here today--is the
Nation's largest RTO, and includes my district in Pennsylvania.
PJM released a report in 2023 projecting 40 gigawatts of
reliable dispatchable generation will retire by 2030, roughly
25 percent of the system's installed capacity at that time. PJM
labels the majority of these retirements as policy-driven
decisions.
This is a time when demand is actually growing.
Pennsylvania is in a great position to benefit from the
investment in jobs of the AI revolution, but we need to have
the energy available to build it. With Microsoft and Amazon
poised to build colocated data centers in Pennsylvania, we need
to steady the ship. We need to encourage investment to unleash
the energy that is underneath the feet of my constituents.
Mr. Asthana, do you agree with me that we need more
dispatchable generation built within PJM?
Mr. Asthana. Yes, very much so.
Mr. Joyce. Mr. Asthana, PJM has a variety of tools to
incentivize building new generation, and I am encouraged by the
success of the Reliability Resource Initiative, but it is a
one-time fix, and the potential 26.6 gigawatts of additional
power is simply not enough. Holding consistent capacity
auctions are critical to providing long-term solutions for the
PJM market.
Do you believe that the capacity auctions are working to
incentivize building and retaining that generation, and if not,
how can it be changed to attract new investment?
Mr. Asthana. Yes. We are seeing the capacity auctions work.
So we have seen multiple generators withdraw their retirement
notices, for example. We have seen a nuclear power plant, the
Crane Clean Energy Center--835 megawatts--announce that it is
coming back. Homer City in Pennsylvania, the plant was
demolished, but they are looking at repowering--using that site
to build a very large gas generator. And, while the capacity
market isn't the only reason, it is definitely setting the
stage for these decisions.
Now, I think the challenge that we are facing looking
forward is that there is a big backlog for turbines. And so
there is a big price premium for turbines. And so the price of
the capacity market will have to ascend to incent new
generation that is not already--beyond what is in the queue
already is going to be really high, and I think it is going to
create affordability issues that we are going to have to deal
with.
Mr. Joyce. Mr. Asthana, I am concerned that PJM gave into
political pressure of some of the Governors of its member
States, and this is a very distressing precedent. What are the
dangers of Governors in the future influencing PJM's market to
score short-term political points?
Mr. Asthana. Yes. Thank you for that question. We did have
fairly bipartisan support for instituting, I think, a short-
term price gap, if that is what you are referring to. We had 11
of our 13 States write to us and support that, and five
Governors.
But I do think it is important to let our markets work, and
we are going to have to make sure that we really allow that in
the future.
Mr. Joyce. I think that the path that PJM currently is on
is unsustainable. When some member States shut down baseload
power plants and others harm investment in new generation, this
is creating a situation that will make the grid unstable. If
this continues, it will be blackouts during extreme weather
events, and my concern is that this will ultimately cost human
lives.
I thank you, Chairman Latta, for holding this important
hearing and allowing me to waive on. I yield the balance of my
time.
Mr. Latta. Thank you. The gentleman yields back the balance
of time.
The Chair now recognizes the gentleman from Georgia for
questions.
Mr. Carter of Georgia. Thank you, Mr. Chairman. Thank you
for allowing me to waive on. I will be very brief.
I thank all of you for being here. This is extremely
important, particularly in the State of Georgia, eleven years
in a row the number-one State in which to do business. We have
over 50 major data centers. So as you can see, we have a great
need for electricity.
We are very blessed to have providers in our State who
have--Georgia Power and Oglethorpe Power have invested in a
nuclear reactor. So that is very important, but delivery of
that is extremely important, too.
So, in the brief time that I want to ask you just a couple
of questions. And I will go to you, Mr. Nickell. I will ask
you.
Tell me about the permitting process, because that is one
thing that we really want to concentrate on in this
administration and in this session and in this Congress, is the
permitting. I don't care what sector of our economy you are
talking about. Whether you are talking about energy, whether
you are talking about healthcare, technology, I have people in
my office all the time. Permitting. Regulations. ``It is
crushing us. It is crushing us.'' All the same. So tell me
about that.
Mr. Nickell. So I think a bipartisan permitting process is
absolutely fundamental and critical to support a quicker build-
up of the resources and the transmission infrastructure that we
need.
We hear all the time about how projects have been slowed
down because they can't get built for a various number of
reasons, and I think that is the number-one problem that we
have--that we have to deal with in order to speed up the
construction of the actual infrastructure that we need.
Mr. Carter of Georgia. Mr. Curran, would you have an
opinion on that as well?
Ms. Curran. I am sorry.
Ms. Curran. That is fine.
I think it is the same kind of answer. We have seen good
work in our States to accelerate permitting, particularly of
transmission lines, but there are still a number of roadblocks
that we run into. We recently had a transmission line go into
service after--I think it was about 13 years after approval due
to permitting issues.
Mr. Carter of Georgia. Great. Again, I thank all of you for
being here. This is extremely important, and we appreciate your
attention to it.
I yield back, Mr. Chairman.
Mr. Latta. I thank the gentleman for yielding back.
Seeing no other Members wishing to ask questions, I want to
thank our witnesses for appearing today. Members have 10
additional questions--or may have additional questions for you.
I remind Members they have 10 business days to submit
additional questions for the record, and I ask the witnesses to
submit their responses within 10 business days upon receipt of
the questions.
I also ask unanimous consent to insert in the record the
documents included on the staff hearing documents list. Without
objection, so ordered.
[The information appears at the conclusion of the hearing.]
And, without objection, the subcommittee is adjourned. I
want to, again, thank our witnesses for their excellent
testimony today.
[Whereupon, at 1:41 p.m., the subcommittee was adjourned.]
[Material submitted for inclusion in the record follows:]
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