[Senate Hearing 119-125]
[From the U.S. Government Publishing Office]
S. Hrg. 119-125
HEARING TO IDENTIFY CHALLENGES TO
MEETING INCREASED ELECTRICITY DEMAND
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HEARING
BEFORE THE
COMMITTEE ON
ENERGY AND NATURAL RESOURCES
UNITED STATES SENATE
ONE HUNDRED NINETEENTH CONGRESS
FIRST SESSION
__________
JULY 23, 2025
__________
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the
Committee on Energy and Natural Resources
Available via the World Wide Web: http://www.govinfo.gov
______
U.S. GOVERNMENT PUBLISHING OFFICE
61-245 WASHINGTON : 2026
COMMITTEE ON ENERGY AND NATURAL RESOURCES
MIKE LEE, Utah, Chairman
JOHN BARRASSO, Wyoming MARTIN HEINRICH, New Mexico
JAMES E. RISCH, Idaho RON WYDEN, Oregon
STEVE DAINES, Montana MARIA CANTWELL, Washington
TOM COTTON, Arkansas MAZIE K. HIRONO, Hawaii
DAVID McCORMICK, Pennsylvania ANGUS S. KING, Jr., Maine
JAMES C. JUSTICE, West Virginia CATHERINE CORTEZ MASTO, Nevada
BILL CASSIDY, Louisiana JOHN W. HICKENLOOPER, Colorado
CINDY HYDE-SMITH, Mississippi ALEX PADILLA, California
LISA MURKOWSKI, Alaska RUBEN GALLEGO, Arizona
JOHN HOEVEN, North Dakota
Wendy Baig, Majority Staff Director
Patrick J. McCormick III, Majority Chief Counsel
Jake McCurdy, Majority Policy Director for Energy
Jasmine Hunt, Minority Staff Director
Sam E. Fowler, Minority Chief Counsel
Anais Borja, Minority Energy Policy Director
C O N T E N T S
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OPENING STATEMENTS
Page
Lee, Hon. Mike, Chairman and a U.S. Senator from Utah............ 1
Heinrich, Hon. Martin, Ranking Member and a U.S. Senator from
New Mexico..................................................... 3
WITNESSES
Huntsman, Peter, Chairman, President, and Chief Executive
Officer, Huntsman Corporation.................................. 4
Tench, Jeff, Executive Vice President, North America and Asia
Pacific, Vantage Data Centers.................................. 12
Gramlich, Rob, President, Grid Strategies, LLC................... 20
ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED
Gramlich, Rob:
Opening Statement............................................ 20
Written Testimony............................................ 22
Responses to Questions for the Record........................ 68
Heinrich, Hon. Martin:
Opening Statement............................................ 3
Hiatt, Shon R. and Angela Ryu:
Article entitled ``Turning Old Into New: Meeting Immediate
Data Center Demands by Converting Gas Peaker Plants to
CCGT'' published on July 30, 2025 by the University of
Southern California Marshall School of Business............ 83
Huntsman, Peter:
Opening Statement............................................ 4
Written Testimony............................................ 7
King, Jr., Hon. Angus S.:
Department of Energy press release entitled ``Department of
Energy Terminates Taxpayer-Funded Financial Assistance for
Grain Belt Express'' dated July 23, 2025................... 38
Photograph of a carbon fiber-based conductor next to a
conventional high-tension conductor........................ 41
Lee, Hon. Mike:
Opening Statement............................................ 1
McLaughlin, Thomas:
Letter for the Record........................................ 102
Tench, Jeff:
Opening Statement............................................ 12
Written Testimony............................................ 14
Responses to Questions for the Record........................ 63
HEARING TO IDENTIFY CHALLENGES TO
MEETING INCREASED ELECTRICITY DEMAND
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WEDNESDAY, JULY 23, 2025
U.S. Senate,
Committee on Energy and Natural Resources,
Washington, DC.
The Committee met, pursuant to notice, at 10:02 a.m. in
Room SD-366, Dirksen Senate Office Building, Hon. Mike Lee,
Chairman of the Committee, presiding.
OPENING STATEMENT OF HON. MIKE LEE,
U.S. SENATOR FROM UTAH
The Chairman. The hearing will come to order.
Good morning and welcome to all of you. Today's hearing
focuses on the challenges that America faces in meeting the
increased demand for electricity, something that has gotten a
lot of attention, with good reason. Demand has been trending
upward in recent years, and some expect it could grow by 25
percent just in the next five years alone. Data centers
supporting artificial intelligence, advanced manufacturing, and
the planned retirement of current production sources are just a
few of the causes creating this increased demand, and as more
people are drawn toward electric cars, that could put
additional demand in play, as well.
America needs to put more electrons on the grid, and we
will be hearing from three witnesses to better understand these
issues today, and we are very fortunate to have them. They are,
first, Peter Huntsman, the Chairman and CEO of Huntsman
Corporation; Jeff Tench, the Executive Vice President of
Vantage Data Centers--welcome--and finally, Rob Gramlich, the
President of Grid Strategies. Thanks to all of you for being
here.
Now, let's begin with a simple fact. America's electricity
demand is surging. It's not creeping up, it's surging. For
decades, power demand in this country remained relatively
flat--utilities planned for it, markets priced for it,
regulators counted on it, but that era is over. We are now
entering a new era of electrification--data centers, AI
computing, manufacturing returning home, electric vehicles, all
of it. Even conservative estimates suggest that we could see
two to three percent annual growth compounded over the next
decade. Now, that number, two to three percent, annually
compounded--that might not sound like much, but it's like a
two-way highway that was built decades ago that is now expected
to carry rush hour traffic to and from a major city every day
of the year--more cars, bigger trucks, constant congestion. And
if the road hasn't changed, but everything around it has
changed, that is going to be an issue. Now, that is a fairly
decent analogy, something to help understand our power grid and
the challenges now facing it.
Now, here is the real problem. We have spent much of the
last 20 years shutting down the generation that can actually
meet that demand--coal plants retired, nuclear blocked, natural
gas tied up in endless litigation. And we replaced a lot of
that capacity with wind, solar, and batteries--resources that
by design don't work all the time, but work roughly a third of
the time. One-third of the time--that's not enough. Not enough
to support the dispatchable baseload power that we got from the
other sources I mentioned. These resources, being non-
dispatchable, means that they cannot be dispatched at the exact
moment that they are needed with the predictability and the
reliability that is required. They do not provide baseload
power and they do not build themselves. They require massive
transmission overhauls, grid upgrades, and most importantly, in
many circumstances, subsidies. So this isn't a free market. In
many ways, it's a rigged one.
The Federal Government has been investing heavily in
certain green energy technologies for decades, handing out tax
credits like candy. So naturally, developers follow these
credits, and why wouldn't they? But what is the result? Ninety-
five percent of the projects waiting to connect to the grid
happen to be wind, solar, and batteries, but only 10 percent of
those ever make it online--onto the grid. Meanwhile, gas
plants, nuclear reactors, geothermal, these things that can
actually power a modern economy, providing predictable,
reliable, affordable, clean baseload power, they get crowded
out or delayed endlessly or blocked entirely. Why? Well,
government red tape is responsible for a lot of it and
activist-funded lawsuits also have a fair amount to do with it
because a government that picks winners and losers--and
consistently picks losers--creates a lot of this problem.
Now, look at what FERC tells us. According to FERC, between
now and 2028, we are set to retire 24 gigawatts of coal-fired
generation, just in the next three years alone, and replace it
with just five gigawatts of gas-fired power. That math doesn't
work--not in theory, not in practice, not now, not then, not
anywhere, or at any time. The system was built for slow, steady
growth. What we are facing now is a tidal wave. And if we don't
change course, if we don't wake up to this reality, the lights
are going out. We need utilities, developers, states, and
Congress to start telling the truth about this. The grid is not
ready. The system is not built for this. And the path that we
are on will culminate, quite predictably, in rolling blackouts,
rising prices, national vulnerability, and our inability to
remain competitive in what many are describing as the AI global
arms race.
In fact, on only July 7, the U.S. Energy Department warned
that between the growth in demand and the retirement of some
current sources, if we don't take steps to respond to the
increased demand, the risk of blackouts in the United States
will increase a hundredfold. I repeat, increasing 100 times
what we currently face in terms of blackouts across the
country. We currently experience annual outage hours in the
single digits. And if we don't take effective steps, the
estimate is more than 800 outage hours per year in the next
five years. We cannot allow that to happen. We have too much
riding on that. It's time that we face the facts, and that's
what this hearing is about.
The Chair now recognizes the Ranking Member, Senator
Heinrich.
OPENING STATEMENT OF HON. MARTIN HEINRICH,
U.S. SENATOR FROM NEW MEXICO
Senator Heinrich. Thank you, Chairman Lee. Welcome to our
witnesses, Mr. Gramlich, Mr. Huntsman, and Mr. Tench.
As we will discuss today, the scale and drivers of today's
rising electricity demand are relatively unprecedented. It's
not just that electricity demand is reaching record highs, it's
that we are entering a new era of sustained load growth. The
structural forces underlying today's load growth are
converging--the growth of AI data centers, the electrification
of vehicles, buildings, industry, as well as a resurgence in
domestic manufacturing. And meeting this load growth will
require structural changes to how we permit and build our
energy infrastructure.
In his testimony, Mr. Tench states that Vantage would
prefer to source power from the grid, but that the system is
out of sync. From interconnection timelines that are too long,
transmission lines that take too long to build, and permitting
that is too fragmented, the challenges that Mr. Tench
articulates are the same ones that this Committee has been
trying to address for some time. As Mr. Tench notes in his
testimony, no single business or technical workaround can
substitute for a coordinated, modern, responsive grid.
Fortunately, we sit on the Committee that can help make that
happen. The urgency isn't just about maintaining our edge in AI
innovation, it's about affordability. As Mr. Gramlich points
out in his testimony today, electricity bills are becoming
unaffordable for too many Americans, and recent actions by
President Trump and by the ``Big Bad Bill'' will make this
worse.
The reconciliation bill alone is estimated to increase
annual energy costs more than $16 billion in 2030, and more
than $33 billion by 2035. This is because, at a time when we
need every single electron we can get, the reconciliation bill
is causing many clean energy projects to be canceled. And the
President's tariffs are driving up equipment costs, raising the
cost of all energy generation resources--all of them. This is
leading directly to Americans spending more on their utility
bills. And on top of this, an aging electrical grid is causing
many energy projects to be stalled for years in interconnection
queues.
In June 2025, Grid Strategies released a study that found
that investing in well-planned, high-capacity transmission
could save U.S. households between $6.3 and $10.4 billion
annually, and that is even after accounting for the cost of
actually building those transmission lines. The amount of
energy currently in U.S. interconnection queues substantially
exceeds the existing electricity demands--if only the grid
could integrate it. According to the Energy Information
Administration (EIA), in 2024, the U.S. installed nearly 49
gigawatts of new grid capacity, 95 percent of which was for
renewable resources. This year, the EIA estimates that
developers will build 63 gigawatts of new capacity, including
32.5 gigawatts of new utility-scale solar, 7.7 gigawatts of
wind power, 18.2 gigawatts of energy storage, and just 4.4
gigawatts of natural gas-fired generation. Clean energy is the
most affordable, and it's the fastest type of energy generation
to deploy, outpacing natural gas, which is facing years-long
backlogs in turbine availability. If you order a combined-cycle
natural gas turbine today, you will be lucky if it puts its
first electron on the grid before 2032.
Meanwhile, states like Texas and California are
demonstrating that high levels of renewable energy do not
compromise grid reliability. In fact, they improve it. After
Texas added 9,600 megawatts of clean energy, including 5,400
megawatts of solar, 3,800 megawatts of energy storage, and 253
megawatts of wind, ERCOT CEO Pablo Vegas said that the risk of
grid emergencies dropped to less than one percent. That is down
from 16 percent the previous year. NERC's 2025 Summer
Reliability Assessment confirmed this trend, showing that the
risk of rolling blackouts in Texas fell from 15 percent to 3
percent as battery capacity came online.
I will close by saying that I am deeply disturbed by the
recent Department of Interior policy that requires Secretary
Doug Burgum to personally review and sign off on wind and solar
projects on federal lands. This nakedly political decision will
risk delaying new generation additions to the grid when we need
them the most. And consequently, it will drive up cost.
According to the Department of Energy, federal lands in the
contiguous United States could support more than 7,700
gigawatts of renewable energy capacity. And with that said, I
look forward to discussing how we can meet the rise in
electricity demand and lower energy costs for households by
integrating the most affordable and rapidly deployable energy
resources today while also investing in long-term
modernization.
Thank you, Chairman.
The Chairman. Thank you, Senator Heinrich.
We will now hear from each of our witnesses, giving you
five minutes to make your opening statements.
We will hear first from Mr. Huntsman, then from Mr. Tench,
and then from Mr. Gramlich.
Mr. Huntsman, you may proceed.
STATEMENT OF PETER HUNTSMAN, CHAIRMAN, PRESIDENT, AND CHIEF
EXECUTIVE OFFICER, HUNTSMAN CORPORATION
Mr. Huntsman. Thank you very much.
Chairman Lee, Ranking Member Heinrich, members of the
Committee, my name is Peter Huntsman, and I am Chairman,
President, and Chief Executive Officer of Huntsman Corporation.
For the first time in a generation, America faces an increase
in electricity demand that will have far-reaching consequences
if not managed appropriately by elected officials in both
parties at federal, state, and local levels. This may sound
like hyperbole, but it is not. Look no further than Germany,
the United Kingdom, and much of Europe and see how quickly
great powers can implement policy to kill productive and
thriving industries that form the backbone of modern economies.
Just a decade ago, these nations were great industrial
powerhouses. Today, they have the highest electricity prices in
the industrialized world, shrinking economies, and factories
are being shuttered almost daily. Sadly, I have experienced
this firsthand, as our company has laid off thousands of
employees in Europe. Facilities that were globally competitive
just a few years ago are now closed and are no longer operating
due to ruinous and unrealistic net-zero and decarbonization
policies and the failed ideas that you can power a modern
economy without developing oil and gas resources.
In the chemical industry, we use large amounts of energy
and electricity, take molecules mostly derived from oil and
gas, break them apart, and then put them back together to make
the physical building blocks of virtually everything you see,
touch, and consume in modern life. Our entire supply chain
employs millions of Americans and is mostly domestic-based--
from transportation, technology, food supplies, medical
equipment, building materials, pharma, and textiles--none of
this would be possible without the chemical industry. None of
it. Technology companies perform similar functions, taking
energy and electricity to create data that enables everyone of
us to tap our mobile phones--by the way, another product that
contains over 100 different chemicals to build--and access the
world at our fingertips. Virtually every step in the tech
world, from chip manufacturing to data generation, storage,
transmission, computing, and consumer interface, uses
petrochemicals and enormous amounts of electricity to not just
maintain, but to grow this vital industry.
The advent of artificial intelligence is fast changing the
face of modern society and global competitiveness. AI will
bring an enormous wave of societal benefit, similar to every
past industrial and technological advancement. However, it is
simply impossible for this to happen in a society that does not
have the basic hydrocarbons to both construct the physical
materials needed to build and the electricity required to power
this great advancement. The challenge before us today is real,
but the opportunities are even greater. The United States has
both the raw material and the technological base to not just
compete, but to continue to lead. Our greatest challenge will
be to balance the enormous demand for more electricity while
being able to keep prices affordable and supplies reliable for
both consumers and industry, especially those who do not
benefit from trillion-dollar balance sheets.
If our growing demand for electricity being consumed by
data centers and a growing tech industry are not met with
additional reliable and affordable energy sources, we risk
losing both our manufacturing and consumer affordability. It is
simply impossible to build a modern industrial and
technological economy on an energy base that is neither
reliable nor affordable. We can talk all we want to about
nuclear ambitions that are decades away or intermittent wind
and solar dreams that are operable 25 to 40 percent of the time
and require even greater investment and more reliable backup
and unrealistic battery storage, but these dreams will never
solve today's problems. The demand for power and raw materials
is here today and growing tomorrow. If we continue to build out
more tech industry consumption than production of electricity
while at the same time prohibiting the reliable and affordable
production of largely hydrocarbon-based energy sources, we will
look more like Europe and less like the continued model of
growth that has made the United States the envy of the world.
Senators, now is the time for ambitious and bipartisan
planning that will allow American industry, capital markets,
and innovation to meet the needs of these exciting times and
opportunities. Our company, our industry, and most importantly,
the millions of people who rely on our operations, look forward
to being a part of the needed solutions and innovations that
will be required for our continued success. Thank you.
[The prepared statement of Mr. Huntsman follows:]
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The Chairman. Thank you, Mr. Huntsman.
Mr. Tench.
STATEMENT OF JEFF TENCH, EXECUTIVE VICE PRESIDENT, NORTH
AMERICA AND ASIA PACIFIC, VANTAGE DATA CENTERS
Mr. Tench. Chairman Lee, Ranking Member Heinrich, and
members of the Committee, thank you for the opportunity to
testify today. My name is Jeff Tench, and I serve as the
Executive Vice President for North America and Asia Pacific at
Vantage Data Centers, a Colorado-based developer, owner, and
operator of hyperscale data centers for leading U.S. technology
companies. I would like to briefly summarize my written remarks
that have been submitted for the record.
While I do not claim to be an expert on energy policy, I
have spent my career building businesses and leading teams that
construct and operate the most efficient, secure, and resilient
large-scale digital infrastructure in the world, and I appear
before you with one message, based on what I have seen from my
position: the greatest barrier we collectively face to our
country's leadership on artificial intelligence today is timely
access to reliable electric power. Demand for the AI and cloud
infrastructure that Vantage provides is accelerating. Over the
past decade, I have seen the scale and speed of hyperscale data
center development grow dramatically. Five years ago, a 30-
megawatt facility was considered large. Today, 100 megawatts is
the starting point, with campus developments commonly reaching
500 megawatts or more. And we have multiple customers seeking
one gigawatt or more for AI infrastructure, which is the
equivalent of all electrical power used here in Washington, DC.
In market after market across the U.S., our development
teams all report the same issue: we cannot get the amount of
electricity we need in the time frame to build our data
centers. Without electrical power, it is not possible to build
digital infrastructure. The infrastructure that supports AI,
data centers, transmission lines, and generation facilities
must scale rapidly if the U.S. is to remain the global leader
in AI innovation. We are asking for your leadership to drive a
more modernized policy framework that reflects today's growth,
aligns with investment timelines, and ensures that the power
system is ready when and where it is needed. From Vantage's
perspective, the challenge is clear: we cannot access power on
a timeline that aligns with customer demand.
First, interconnection timelines are too long, both for new
load and new generation resources. Second, we must develop new
transmission for a more scalable and reliable grid. Third,
permitting is fragmented and sequential, resulting in both
increased costs and delays in projects that are otherwise ready
to proceed.
If we do not act decisively, we risk ceding AI leadership
to countries that are moving faster to modernize their energy
infrastructure. The United States is at a pivotal moment. The
United States is looking at an AI era that is not coming, but
is here. We have the capital. We have the customers and the
talent, but we will not lead if we cannot power it. By
prioritizing infrastructure for high-growth sectors,
strengthening federal leadership, enforcing interconnection
reforms, and incentivizing high-impact transmission, these
policies can unlock the power system needed to support
America's digital future.
Vantage is prepared to invest and deliver. We bring
development and operational expertise, capital, and long-term
commitments to the communities where we build. Let us work
together to build an energy delivery system that is ready to
meet the scale and the importance of this moment. Thank you for
the opportunity to share our experience. I look forward to your
questions and working together on solutions that can keep the
United States at the forefront of digital infrastructure,
innovation, and investment.
Thank you.
[The prepared statement of Mr. Tench follows:]
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The Chairman. Thank you, Mr. Tench.
Mr. Gramlich.
STATEMENT OF ROB GRAMLICH,
PRESIDENT, GRID STRATEGIES LLC
Mr. Gramlich. Chairman Lee, Ranking Member Heinrich,
members of the Committee, thank you for the opportunity to
testify. My name is Rob Gramlich. I am founder and President of
Grid Strategies. We are a power sector transmission and power
markets consulting firm based here in the DC area. Thank you
for doing this hearing. This is about one of the most important
topics facing the country before one of the most--if not the
most--important legislative committee. Power demand growth is
sudden and significant, and it will be a challenge to meet, and
affordability is equally important, as I am sure you are
hearing from your constituents.
I will focus now on how we can meet demand growth
affordably. Basically, we need both transmission and
generation. I am going to start with transmission because that
is the one that is largely in federal jurisdiction and has a
federal role, while generation is largely reserved for the
states under the Federal Power Act. Transmission is also the
main thing we need right now. It has the highest impact. It is
the great integrator of all resources. It may seem like it's a
renewable energy piece of infrastructure, but that is just
because over the last five years, that is all anybody was
trying to connect to the grid. Right now, we are seeing a lot
of other things trying to connect to the grid, including Jeff's
data centers and data centers around the country, other large
loads, manufacturing, and other types of generation. And
whether it is nuclear, CCS, or other types of generation, guess
what--it is going to face that same constrained grid. So we
should really focus on the grid.
Transmission is also a great deal for consumers. The
economies of scale are massive. There is a 75 percent discount
if you do it at the higher voltage, like 765-kV lines, as
opposed to 230, like four regions are doing. Transmission can
also help in the 2020s. It's not just the 2030s or 2040s
option. There are a lot of ways to expand transmission. Some
lines are actually quick, and there are advanced transmission
technologies and other ways to use existing corridors.
Transmission supports reliability and resilience more than any
other resource. The availability of transmission lines is 99.85
percent or above for all voltage classes, meaning it is much
more available than any type of generation.
With severe weather events in recent years, we have seen
tens of gigawatts, like up to 10 percent of a region's power,
served from large-scale movements of power across the regions
of the country because of interregional transmission, which is
why Congress directed the North American Electric Reliability
Corporation (NERC) to study interregional transmission, which
it did, and it found we have a need for 35 new gigawatts of
interregional transmission. The U.S. is falling far behind its
competitors. China is doing 80 times what we are doing here on
high-voltage transmission. So I do think transmission really
should be the bipartisan and the unifying force that commands
Congress's attention.
But in addition to transmission, we do certainly need to
expand generation as well. There are three general types. There
is, low-cost, plentiful energy. There is the fast, flexible
balancing type of generation. And then there is firm power. So
I am not saying all resources provide all of these things. We
do need firm power to meet peak loads. Resources provide
varying levels of contributions to meeting peak loads. Nuclear
has the highest contribution at 95 percent, but we're not able
to get much more very soon. Gas CTs, at least according to PJM,
are around 60 percent in terms of their ability to serve peak
loads. Combined cycle is a little higher--in the 70s. Offshore
wind is actually 69 percent. And so, none of these resources
are perfect, but the point is, when you put them all together
on the integrated grid, that is how you get nearly 100 percent
reliability of the power system--by way of flexible loads,
flexible data centers, and other loads to help alleviate the
need for that capacity.
The good news is, we have two working processes in this
country to get the generation we need. We have utility-owned
planning--sort of regulatory planning under states, and we have
some regions with markets. It's up to the state whether they
want to be in a market or have planning. It turns out, both are
working. Older plants are staying online longer than anybody
thought, and new plants are coming in, both in the integrated
resource planning context and in the market context. Look at
the PJM prices that came out yesterday. Markets are screaming
for generation to either stay on or be added, and that is
working. The interconnection queues do need some improvement to
get those there.
So in my final 20 seconds, what can Congress do here? I
really would focus on transmission. I have some specific ideas
in my testimony--regional planning, like FERC Order 1920-A,
interregional planning, like this Committee's EPRA. By the way,
congratulations on a bipartisan and decisive vote on EPRA last
year. It had a lot of great ideas, and I hope that is a
starting point for further bipartisan cooperation on
legislation.
Thank you.
[The prepared statement of Mr. Gramlich follows:]
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The Chairman. Thank you, Mr. Gramlich.
Okay, we will now begin five-minute rounds of questions,
alternating between Republicans and Democrats. I will lead off,
followed by Senator Heinrich and then we will alternate between
Republicans and Democrats in order of seniority, subject to the
early bird arrival rule.
Mr. Tench, let's start with you. In comments filed in
response to the AI action plan RFI issued by the White House,
Vantage noted its development of an onsite utility-scale gas
power plant in Virginia to power a data center in that region.
Can you explain why Vantage decided to use gas for that onsite
generation?
Mr. Tench. Well, the shortest answer is that we were left
no choice. The planning cycles for our data center developments
can sometimes expand multiple years. And in this particular
case, we were subject to a change in the demand algorithm from
the local utility. It had been planning on having allocated to
us 100 megawatts, or MVA worth, of power to power our data
center project there in Loudoun County, when suddenly, after we
were under construction, we were told that power was no longer
available and would not be available for five to seven years,
at which point we had already committed hundreds of millions of
dollars into the development project.
So in this particular case, we were fortunate in the fact
that our property sat on top of a high-volume, high-pressure
natural gas line. And we scrambled and we designed, built, and
commissioned a power plant operating completely independent of
the grid within 18 months, and that data center is up and
running with a very important customer of ours today.
The Chairman. Great. And I assume you didn't go with others
for various reasons. Nuclear would have taken too long. Why not
wind and solar?
Mr. Tench. Well, in this particular case, our option was
only to be able to develop a power solution for that site that
was not grid dependent at all.
The Chairman. Got you.
Mr. Tench. And that was the choice we made, and people may
refer to that as island mode, but it effectively has no
connection to the public grid.
The Chairman. Right. But wind and solar wouldn't provide
the----
Mr. Tench. Not in that particular case. The parcel was only
big enough to handle a turbine plant, and there would have been
no way to bring in wind and solar in that particular case.
The Chairman. Got you.
Mr. Huntsman, in testimony that you provided, I believe
last year to the Senate Finance Committee, you argued that
affordable, abundant, reliable energy is foundational to
American manufacturing dominance. America has abundant
resources like coal, gas, geothermal, and in some cases
hydroelectric. We also have expertise to build advanced
nuclear, which I am optimistic about as far as it becoming
commercially viable in the coming years, assuming we can
overcome the regulatory hurdles, which we are anxiously trying
to do.
Now, there have been some anti-growth forces, including
environmental NGOs, that have helped capture many of our
Fortune 500 companies--in some cases, big energy companies, in
other cases, big tech companies--to endorse a net-zero
framework. Now, I believe corporate leaders know that such
goals and commitments are impossible to achieve, not to mention
that they are harmful to many of the varied industries they
represent. Can you elaborate on how the sustainability
commitments harm energy affordability and reliability?
Mr. Huntsman. Well, so many of these commitments have a
longer-term objective, like we are going to be carbon free by
2050 and so forth. You would be shocked at the number of CEOs I
have spoken to that have said, ``I don't have to worry about
that, I won't be around.'' I can make the commitment today, but
I am not going to be around then. There is no viable path when
you look at, on a global basis, when you look at just replacing
hydrocarbons with renewables. Again, renewables have a very
important role to play in certain areas, in certain fields. We
make the raw materials to go into the wind blades and solar
panels and so forth. I am not anti any of that. I want to be
very clear on that. But as far as the reliable, the reason why
you are building gas turbines is because you don't have the
reliability. Nobody knows if a week from today wind turbines
are going to be turning or not. Nobody knows exactly how much
power you are going to be getting out of solar panels a week
from today. They can tell you what you are going to be getting
out of a gas turbine.
So I am more concerned about the today and how we get to
the issues of today and how we get to the issues over the next
five or ten years because that will dictate where we are in
2040 and 2050. And coming up with unrealistic goals that we
just hope that eventually we will come up with some means or
some mechanism just isn't plausible and isn't realistic. That's
what we are seeing in Europe.
The Chairman. So they have got their place, certainly, and
there are good things that can be accomplished with those, but
some of those areas, including those areas that are growing
fastest within our economy, things like AI data centers, you
can't really rely on that because it doesn't provide baseload
power. What would happen if you tried to do that, whether it's
manufacturing or an AI data center that needs consistent
baseload power? What would happen if you had to rely on
something that is intermittent?
Mr. Huntsman. Well, you are shutting down. In facilities
like ours, if they go down unexpectedly, they can take as long
as 30 days to restart, costing tens of millions of dollars. So
unexpected shutdowns--that is why I mentioned, I think, four or
five times in my oral testimony the word reliability. And that
is very key here.
The Chairman. Right. And some of the emerging nuclear
technologies certainly hold a lot of promise in that area,
offering zero-emissions alternatives. Those are coming--not yet
here in a way that is commercially deployable.
Okay, my time is expired. We will go to Senator Heinrich.
Senator Heinrich. Mr. Tench, you may be aware the
Department of the Interior recently released a memo that is
going to require the Secretary to review all wind and solar
projects on federal lands. It adds just one more layer of red
tape. Do you have an opinion on what the potential business
impacts are of energy projects being delayed in that regulatory
process--how further delays impact the business prospect?
Mr. Tench. Our observation and our requirement is for more
electrons, as you called out in your opening remarks. Vantage
is relatively agnostic as to the source of those electrons. So
in the case of rulemaking or regulatory action that slows down
the process of approving new generation or new transmission,
that would definitely be a negative for our business.
Senator Heinrich. In the sort of five-year window, like
2025 to 2030, shouldn't we be focused on putting as many
electrons, agnostic of generation source, on the grid as
possible to be able to meet the kind of demand that you
represent?
Mr. Tench. Yes. Our position is that efforts to move
electrons around through enhanced transmission is important.
Necessary, but insufficient----
Senator Heinrich. Sure.
Mr. Tench [continuing]. Relative to the overall demand. We
need more energy----
Senator Heinrich. More generation and----
Mr. Tench. More generation and we need more transmission,
independent of source. That said, it does need to be a
reliable, you know, grid-dispatchable source, which I believe
can be accomplished with the right combination of energy source
for generation and energy storage.
Senator Heinrich. And storage.
You know, one of my concerns is, we have an existing
pipeline that is the result of decisions that have been made
over the course of the last decade. That pipeline is 95 percent
clean energy plus storage. It's about five percent gas. You
know, a year or two ago, we had a couple of nuclear plants come
online, which are great. I support that, but that's kind of a
one-off. You know, in the next five years, if we start building
new nuclear today, whether that's SMRs or traditional light-
water reactors, that is going to take longer than the five-year
window. If I order a combined-cycle natural gas turbine today,
it's probably going to come on the grid in 2032 or 2033, if we
are lucky.
So if you don't allow the existing projects that are in the
queue today that are renewables plus storage, what does that do
to the price pressure on the grid? What's the impact of that?
Mr. Tench. As it relates to price pressure, I will probably
defer to Rob on that question as more of a grid expert, but in
the broader context, you know, our goal is to encourage speed
and change in the regulatory process to bring more electrons
onto the grid. And again, you know, depending upon the site we
are developing, our access to proximate energy sources varies,
and we are being very pragmatic about how we approach that,
making available to ourselves whatever we can in order to meet
the demand.
Senator Heinrich. Mr. Gramlich, do you want to address the
price pressure issue?
Mr. Gramlich. Sure, I mean, basically, it's supply and
demand. There is scarcity of generation, so anything that is
limiting new generation from coming on, whether it's
interconnection queues, permitting holdups at Interior, or
anything else, that is cutting off supply, and that is
definitely raising prices and----
Senator Heinrich. We are actually seeing prices go up as a
result.
Mr. Gramlich. We are seeing prices go up. Wholesale power
prices are going up. Those higher costs are required to be
incorporated by state public utility commissions into retail
bills. So retail consumers/voters are paying more.
Senator Heinrich. Are there places where prices have
actually come down in recent years that you can point to, and
what was the reason why those prices came down?
Mr. Gramlich. Sure, well, I mean, if you just look at, say,
the supply stack for someplace like Texas. Texas, just over the
last couple of days, has had a majority of their peak demands--
not just overnight, not just winter, but peak afternoon air
conditioning-driven demand served by a majority renewables plus
storage.
Senator Heinrich. And were there rolling blackouts?
Mr. Gramlich. There were not. Reliability----
Senator Heinrich. Has reliability gone up, or----
Mr. Gramlich. You probably heard about rolling blackouts in
California like five years ago. Honestly, they got behind on
resource adequacy, but what did they do? They built a lot of
solar and batteries. So same dynamic there. I am sure we are
seeing a majority renewable energy. Any hour now, it's going to
kick in and then, you know, when the air conditioning load this
afternoon is high, there is going to be solar, and then the sun
will set. Air conditioning load will still be high, but the
batteries will then kick in and serve through the evening. So
again, they don't do everything----
Senator Heinrich. One last question, because I am running
out of time here, Mr. Gramlich. What could we do, as the
Congress, to improve the interconnection queue process? Because
that is preventing a lot of resources, a lot of electrons from
getting on the grid in a timely way to meet the kind of demand
that Mr. Tench represents.
Mr. Gramlich. Yes, so, FERC has been working on
interconnection queues, and each RTO is kind of doing it in
their own way. I think there are some great models, like the
Southwest Power Pool, where it's more just a simple entry fee.
You pay it, you get in, and you don't have to do a four-year-
long study. Congress could encourage things like that,
encourage FERC to undertake activities like that, and you have
probably a couple of nominees coming before this Committee
pretty soon. You could ask them about that.
Senator Heinrich. I will.
The Chairman. We will now turn to our colleague from
Mississippi, Senator Hyde-Smith.
Senator Hyde-Smith. Thank you, Mr. Chairman. Thank you,
Ranking Member. And thank you to all of our witnesses that have
come to share your testimonies. It's great to have the resource
that we have to you and I appreciate your willingness to do
that.
My question is going to be directed to Mr. Tench. You
mentioned in your testimony that Vantage prefers to connect to
the grid for power, obviously, but there may be a need to
deploy outside generation at the start of the project, which
makes sense. And as you point out, beyond company building
schedules, adding to the grid can take a long time. It can take
years, and usually taking around five years for the most
traditional baseload power that you are looking at there. What
short-term solutions has Vantage explored for initial builds,
and do you think other companies would follow a similar pattern
waiting to connect to the grid?
Mr. Tench. In the case of Vantage, we have, coming out of
the experience I described in Virginia, been far more planful
in terms of the expectations of our delays as it relates to the
interconnection that we applied for to receive load from the
grid. And the form that it has taken, for the most part, has
been in investing in a supply chain of turbines and
reciprocating natural gas engines, which we increasingly plan
to deploy at a mobile setting so that we can deploy them on
trailers for, let's say, two years, three years, until we can
get the interconnection from the grid, and that has proven to
be an important part, but only one part, of our overall plan
for how we make our way through the wait, if you will, as it
relates to the electrons that we need.
Senator Hyde-Smith. And you think other companies may
follow a similar pattern to that?
Mr. Tench. Well, I think that would be up to them, but
certainly for us, we found it to be a way of reducing our risk
and smoothing out the gaps in availability.
Senator Hyde-Smith. And from a connectivity standpoint,
what would Vantage's plan be once utilities meet electrical
generation demand, once you get there?
Mr. Tench. Well, our plan would be to connect to the grid
and operate according to the regulations that exist in any of
those states in terms of having a firm commitment from the
utility through an electrical services agreement. And then, we
would use that as our primary source of power to our data
centers, coupled with emergency generation backup, which we
deploy in most of our sites as well.
Senator Hyde-Smith. Thank you, Mr. Chairman, and I will
yield.
The Chairman. Senator Wyden.
Senator Wyden. Thank you very much, Mr. Chairman. This is
an important panel. And let me begin by saying I don't believe
we got in this predicament by osmosis. The fact is, the
Republicans have been doing favors for their big oil buddies at
the consumer's expense, and that is why--a major reason why--
energy bills are going through the roof. And I am just going to
take a minute to look backward and then talk about where we
ought to be going. We had 50 years' worth of gridlock on
climate--no pricing, no regulatory reform, no nothing.
In the Senate Finance Committee, we put together an
alternative, and it was based on markets. It was based on
technology neutrality. Underline those words--technology
neutrality. Everybody is part of the market. You get choices.
And the more you reduce carbon, the bigger your tax savings.
And in a couple of years, we got hundreds of billions of
dollars committed--committed--to making sure that we had those
renewable choices.
Now, along come the Senate Republicans, particularly in the
last couple of weeks. And when the natural gas folks--these are
not the environmentalists, these are the natural gas folks--
basically said, we will take electrons if they are from Mars.
We have got to have electrons. We will take them from anywhere,
not just because of AI, but because of growth, because of
innovation. And regrettably, the Senate Republicans said, we're
not for choices. We're not for options. We're not for
alternatives. And of course, that doesn't let us meet the
challenge of demand.
So my view is, and what I am going to keep pushing for as
the senior Democrat in the Finance Committee, is working with
anybody across the political spectrum to get us more choices,
and particularly, as my colleague from New Mexico said, the gas
industry, not the League of Conservation Voters or the Sierra
Club, will tell you that the cheapest alternatives now are
solar and wind, and they need them today, not tomorrow. They
need them today in order to drive markets. So apropos of your
good work, Mr. Gramlich, I would be interested in what your
ideas are to kind of resurrect a choice-based system, rather
than one that just hands out the goodies to the big oil
companies. And by the way, people tell me, and you all are
welcome to add this, fossil fuels cannot meet our demand today.
If we are going to meet demand, we need solar and wind. We need
these alternatives.
And after 50 years of gridlock on this issue, we broke up
the inertia. We broke up the lack of progress. And we were
making a lot of progress. And I want to see us get back to
something that has as many of those choices, the technological
neutrality principles that we wrote in the Finance Committee,
because I think that is America's energy future. And by the
way, nobody knows what the big alternatives are going to be 30
years from now. We need a science-driven kind of approach. And
when we talked to Joe Manchin about putting this together,
which he backed, he said we need more science, and we will get
that with a technology-driven kind of system.
So tell us about what you would be working on in terms of
more choices for the days ahead.
Mr. Gramlich. Well, Senator Wyden, thank you for your
leadership on the technology-neutral tax credit. I think that
is a perfect example of something that provides the support to
any and all technologies that meet the performance standards
that Congress can set out. And so, I thought that was a great
idea. Glad to see it enacted. Sad to see the early phaseout. I
think at this point it's important for Treasury to implement at
least what Congress passed recently.
Senator Wyden. So you want to make sure that there is no
more stalling around because, as you know, we got a modest bit
of the current system into the final bill, and now it looks
like a bunch of people in the House are trying to roll that
back. You tell the Administration, suck it up here and stand in
there for choices and alternatives. Is that one of your
messages?
Mr. Gramlich. Certainty is critical for investment, and
uncertain IRS regulations kill certainty. You can't invest if
you don't know what the rules are.
Senator Wyden. What else would you do? More choices.
Mr. Gramlich. Well, I think, you know, generally, as I was
saying before, the transmission grid really is in the purview
of this Committee and Congress and FERC, and that is the great
integrator of all resources that enables choice of whatever a
state may choose, and generation----
Senator Wyden. Good. My time is up. That was the one thing
that we weren't able to get in the 2022 election, and had we
been able to negotiate a compromise with more choices, I would
have put transmission number one as our challenge for the
future. And we are going to try to get those choices back, and
we are interested in working with you on transmission.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Wyden.
We will go next to Senator Cortez Masto.
Senator Cortez Masto. Thank you, Mr. Chairman.
Thank you, all three of you, for being here. In many ways,
Nevada has really led the way in developing new energy capacity
over the last several years. And quite honestly, with the help
of the tax credits in the Inflation Reduction Act, Nevada was
able to attract new businesses hoping to use our natural
resources, one of them being solar, geothermal, in the great
state. I assume that's one of the reasons, Mr. Tench, you were
there. And I am excited to hear that not only has Vantage
pushed for new data centers to be sustainable by design, you
are including an AI campus in Nevada, which was announced July
15th, that also seeks to use a closed-loop chiller system to
minimize the need for large volumes of water, again, in the
West, where there is a lot of drought.
Can you talk a little bit about why renewables are
important, depending on the region where your data center is,
and are you using a renewable source for this data center and
the AI in Nevada?
Mr. Tench. Yes, we are, as you know, developing a
substantial AI-focused campus in TRIC, just outside of Reno,
and the selection of that location was driven by a number of
factors, including its proximity to the West Coast, as an
alternative to California, where things can get pretty
expensive and pretty hard to do. At the same time, the mix of
energy sources that were available to us through Nevada Power
included, as you noted, there are prior investments in solar,
in particular. And for Vantage, for our customers, again, we
prefer to use grid, and the combination of total cost of
ownership, the ease of doing business in Nevada, and the
physical location conspired to make it a great location for
this deployment.
Senator Cortez Masto. Thank you.
Mr. Gramlich, you have outlined some of the challenges
contributing to increased electricity bills across the country.
In addition to severe weather and electric equipment
constraints, you listed the uncertainty surrounding the current
administration's tariff policy and the Republicans' termination
of the tax credits. A recent Bloomberg Government article
stated that when fewer renewables meet more expensive gas and
explosive demand from data centers, an upward pressure on rates
is the predictable result. Some estimates suggest that
electricity bills in parts of the country could jump as much as
60 percent to 350 percent over the next decade.
My question to you is, can you summarize current market
considerations and why U.S. grid operators aren't in a position
to turn away renewable electrons?
Mr. Gramlich. Yes, grid operators need all the power they
can get, and as I have said, not all resources do all of the
functions, right? So we do need firm power, and by the way, the
geothermal in your state is providing excellent clean firm
power, and I really am hopeful about geothermal going in many
more states to provide that clean firm power, but the grid
operators do depend on it, and in terms of affordability, it's
supply and demand. If we take any of these resources out of the
mix, that just leads to higher wholesale prices, and those
necessarily move down into retail customers' electric utility
bills.
Senator Cortez Masto. And shouldn't the states, working
with the private sector, basically determine what that energy
mix or that portfolio should be based on their geography, based
on their opportunities there? I mean, we have geothermal. We
have solar. We have wind. We have battery storage. We have
natural gas. That's different than my colleague here sitting to
my left, from Maine. So shouldn't it be driven by that need,
based on the states where their region is, what the private
sector is wanting to build there? Does that make sense?
Mr. Gramlich. I think that's exactly right. Well, that's
the structure of the Federal Power Act that you all oversee on
this Committee and its implementation at FERC. Generation is
largely in the purview of states. I mean, it's kind of a
states' rights issue. And so, this micromanaging of individual
power plant dispatch through things like Department of Energy
emergency orders, or, you know, specific targeting of projects
for not getting permitting at Interior--that is really
micromanaging from the federal level something that really is
the states' job to address.
Senator Cortez Masto. And if we are going to compete with
other countries like China and others, and grow out our grid
and our transmission and really invest in it, that
micromanagement shouldn't occur. It really should be driven
from the states, the private sector on, correct?
Mr. Gramlich. That's right. And I mean, the reality is, we
have a very diverse electric industry structure. Your state has
one structure. It's very different in Maine and other states.
And so, each state uses markets or regulation or various
combinations of investor-owned and other types of utilities to
meet their power demand needs. And that is where the process
should take place.
Senator Cortez Masto. Thank you.
Thank you, Mr. Chairman.
The Chairman. Senator King.
Senator King. Thank you, Mr. Chairman.
The word transmission has come up numerous times today and
how important it is, and what a great important part it is of
this discussion. Unfortunately, this morning, the Department of
Energy terminated a loan program for a major interregional
transmission system in the Midwest.
[Department of Energy press release follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator King. So here we are talking about how important
transmission is, and here's the Department of Energy, and it
wasn't a grant, it was a loan guarantee program. I just think
the timing is somewhat ironic.
We all know that solar and wind are intermittent. We
understand that. Everybody knows that. I was in the hydro
business. That's also intermittent. It doesn't always rain, as
well as wind and biomass and large-scale conservation. But
what's really happening is really dramatic in terms of energy
storage. If you have adequate energy storage, solar and wind
are baseload, because you have something to make up the
difference. And I used AI in your honor, Mr. Tench, to check on
where we are on batteries.
As of five minutes ago, the U.S. added a record 10.4
gigawatts of utility-scale battery storage in 2024, marking a
66 percent increase from the prior year. In 2025, the EIA
anticipates a record-setting year, with another 18 gigawatts of
utility-scale battery storage on the grid. Looking ahead, the
EIA forecasts that U.S. utility-scale battery storage will
nearly double, reaching 65 gigawatts by the end of 2026. In
other words, the battery industry is no longer a fantasy or a
distant dream. It's happening right now on a very substantial
scale. And as you point out, Mr. Gramlich, it saved the day in
Texas and in California, and it's already working--the idea of
the integration of batteries with solar and wind.
Let me talk for a minute though about transportation. And
Mr. Gramlich, this is what worries me. It used to be an
electric bill in Maine was 25 percent transmission and
distribution and 75 percent source of energy. It's now about
50/50, and transmission is getting more and more expensive.
Everybody knows we have to rebuild the grid. My concern is,
it's going to be done in an expensive way that's going to add
dramatically to ratepayers' costs. Mr. Gramlich, you are
nodding. I take it you agree. The record doesn't show nodding.
Mr. Gramlich. Absolutely. We are doing transmission in
sometimes the most expensive way possible now and we could
change that.
Senator King. Well, one way to change it is reconductoring.
Here is a conventional electric line, a high-tension conductor.
Here is a carbon fiber-based conductor. This little guy will
carry twice the energy as this one.
[Photograph of the two conductors follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator King. So if we put these on the grid, we don't need
to change all the poles, the rights-of-way, all of that kind of
thing, and we can get a significant amount of additional
throughput in the grid at a fraction of the cost of rebuilding
the whole system. The same with--you are familiar with the term
GETs--the various technologies that enable the grid to be
managed more efficiently in terms of temperature and load and
all those kinds of things. The estimates I have seen is that
reconductoring and GETs could increase throughput on the grid
by something like 40 percent, at a fraction of the cost of
rebuilding. My concern is that the rate-based model encourages
utilities to build rather than to reconductor or use GETs.
Mr. Gramlich, talk to me about how we solve that problem.
How do we provide incentives for those who will be rebuilding
the grid to do so in the most cost-effective way and to
minimize the effect on the ratepayers?
Mr. Gramlich. Yes, well, and I would note, that cable that
you are holding is manufactured near Los Angeles, but
unfortunately, 90 percent of that company's sales go to other
countries, which are deploying advanced conductors and grid-
enhancing technologies in far greater levels than we are here.
Senator King. Is that partially because there is no
incentive on our utilities to use this kind of technology?
Mr. Gramlich. I think that is generally right. I think a
lot of utilities are actually looking at them now, but we need
to get beyond pilot stage to make it more systematic.
Senator King. And another factor we haven't talked about is
demand response. That is, the ability of customers to modify
their demand load in terms of what's on the grid. Is that a
promising technology?
Mr. Gramlich. That is a very promising technology, and it's
not just sort of the peak hour, but think about flexible data
centers. Sometimes there is some grid contingency that might
happen once every three years, and if they can just curtail
just a little bit at that time, then we can integrate a lot
more data centers without having to rely on the full network
capacity, which takes so long to serve that data center. So
that type of flexibility is critical.
Senator King. And I should point out, I know I have run out
of time, solar and wind today are (a) the cheapest and (b) the
quickest to deploy. And I am worried that, as the Vice Chairman
has said, there is a five- to seven-year lag in new grid-scale
gas turbines. We can't give China a five- to seven-year head
start in AI, and we have got to be timely as well as control
costs.
So thank you all for your testimony. Thank you, Mr.
Chairman.
The Chairman. Senator Risch.
Senator Risch. Well, thank you, Mr. Chairman, and thank you
for being here today. This is a fascinating subject, really, to
dig into. I have to tell you, in recent years, as I have sat in
this Committee, we have had the people come in here and predict
to us what was going to happen as far as demand for electricity
in America because of AI and the other things that are coming
on board, particularly AI. And I have to tell you, I was a
doubter at the beginning, but the further we go, the more
obvious it has become that we are going to be inundated with
demand for electricity here in the next recent years.
It's a problem, but the good news is that this particular
problem, we know how to deal with, and that is, we know how to
generate electricity. We, in Idaho, in 1951, demonstrated for
the first time that nuclear energy could be used to create
electricity and we have been at it ever since. Of course, we
had the setback as a result of Three-Mile Island, which really
put us a generation behind, but now I think the world knows
there is a real renaissance going on as far as nuclear energy
is concerned, not only in the United States, but also
particularly in Eastern Europe, where they are trying to cut
the cord with Russia.
So I guess I would like to get your thoughts on this. You
know, we are going flip the switch, hopefully, in the next year
or so on the first SMR, which is really going to change the
delivery of electricity in the world. And this August, we are
going to cut the ribbon on a microreactor that they are
starting at the INL in Idaho. We are very proud of the work we
do in Idaho on nuclear. We really think that we have the
solution to all of this. I really think that nuclear is going
to have to be--and I agree that we want to be all-of-the-
above--but I think to deliver the load, I really think it's
going to take nuclear to do that.
And I would like to get each of your thoughts on that.
Peter, good to see you again. And your thoughts first, please.
Mr. Huntsman. I believe that nuclear eventually will be
able to fill that baseload, but look, I just, I will be honest
with you. I am the only one that sitting here at this table
that pays a power bill of over a quarter of a billion dollars a
year. That's my gas and electric bill in my company. We can
talk all we want about all these renewables and so forth and
solar and wind. The fact of the matter is, it's failing in
Europe, where it has been implemented on a widespread basis, it
is failing. And the prices are going up through the roof. We
can't afford it. We are shutting down facilities. We are laying
off people. And we talk about these--especially in the State of
Texas, we have spent hundreds of millions of dollars a year
manufacturing in the State of Texas. The State of Texas's
entire baseload is natural gas and nuclear and petroleum-based
projects. The incremental piece that is renewable is wonderful.
Again, I am not opposed to that, but without the baseload, we
couldn't afford to buy electricity in Texas.
And the only way we are able to compete today is because of
the hydrocarbon-based energy sources. That's just the reality
of all of this. Eventually, somebody has got to pay for all
this stuff.
Senator Risch. Well, the fact that the utilities now are
really kindling a lot of interest in nuclear, does that give
you any solace going forward?
Mr. Huntsman. Not a great deal. Personally, I am very
concerned about where a lot of this stuff is going. When I see
how much of this is renewable coming off--for every windmill
that is built--again, this is our product--but for every
windmill that is built, you have got to build a backup to it
because 70 percent of the time it's not going to be turning. So
you have got to have a backup that most of the time is going to
be idle. So therefore, I am paying for two systems. If I have
wind, solar, and backup, I am paying for three systems.
Senator Risch. Not a problem with nuclear.
Mr. Huntsman. Not a problem with nuclear, no, but again, I
think we are probably ten-plus years away from having mass-
scale nuclear power.
Senator Risch. Mr. Tench.
Mr. Tench. You know, as I think about our fleet across the
United States, we are fortunate to be operating data centers in
places where part of the grid power we take down is nuclear. We
are big proponents of further investment and acceleration of
nuclear power, both as a complement to the entire grid, as well
as some of the emerging technologies around SMR. I hope you are
right about in the next couple of years us seeing the first
commercially viable solution for that, but I think nuclear is
absolutely a big part of the solution here.
Senator Risch. Mr. Gramlich.
Mr. Gramlich. Yes, I have not seen a change in public
perception about a technology ever as much as we have with
nuclear, which, because so many people motivated by the climate
crisis want clean power, and I think everybody who is looking
at the grid also realizes, we do need firm power. So that is a
clean firm source that could make a great contribution.
Senator Risch. Well, take heart, Idaho is here to help you.
We've got the SMR that we developed there and moving forward,
and we are really excited about the micro that's coming. Those
two things are just going to change the world, I think, as they
develop them and as they prove them out in the marketplace and
as they interest utilities in being able to get what will be a
new wave, I think, of how they produce nuclear energy.
My time is up. Thank you, Mr. Chairman.
The Chairman. Thank you.
Senator Hickenlooper, you are up next.
Senator Hickenlooper. Thank you, Mr. Chair.
Mr. Tench, let me start with you. I think we all agree with
you that we have got to win the AI race. And it's not just our
economic future, it's our national security that's at stake
there. In your testimony you highlighted the importance of
high-voltage transmission, noting that, and I will quote,
``Enabling the transfer of electricity between regions can
lower operational costs for data centers and other large
users.'' Without action from this Administration and this
Congress to accelerate high-voltage transmission development,
will the U.S. stay globally competitive in the AI race?
Mr. Tench. I don't think we can say definitively that
without interregional transmission we will fail to be globally
competitive. What I can say is that our ability to move
electrons seamlessly across this country in between these
regions will free up access to power where it's needed, and it
allows us to build the data centers that contain the AI that we
are all scrambling for here in terms of being able to stay
competitive. So it is one part--and an important part, I
think--of a change we can make in order to make better use of
the grid that we have, but it is not, in and of itself,
sufficient to avoid the outcome you are describing.
Senator Hickenlooper. Well, let me rephrase it then. Would
you agree that the probability of our losing ground in the race
toward AI, the probability that we are going to lose ground
increases if we don't address this issue within the grid?
Mr. Tench. Yes.
Senator Hickenlooper. Good. And would you believe that any
bipartisan or administration-led permitting reforms aimed at
supporting data centers should also include some of these
ambitious reforms to building that high-voltage transmission?
Mr. Tench. Yeah, I would agree with that, yes.
Senator Hickenlooper. Great.
Mr. Gramlich, studies show that high-voltage transmission
improves reliability and affordability, yet in the U.S. we have
only built 3,238 miles of high-voltage transmission from 2017
to 2024. Experts say we should be building 5,000 a year. So
that means we should have built 35,000, and we built less than
3,500. Meanwhile, China is rapidly building a super-grid of
ultra-high-voltage that allows it to support growth on a
variety of facets that we will not be able to match. In 2023,
Congress directed NERC to study U.S. transmission needs. The
Commission found we may need 35 gigawatts of additional
interregional capacity just to ensure reliability.
So Mr. Gramlich, can you explain in layman's terms the
value of interregional transmission in terms of affordability
and reliability?
Mr. Gramlich. Sure, thank you, Senator.
It is absolutely true that interregional transmission is
one of the best ways to improve reliability and resilience. We
sometimes see 10 percent of a region's power served by the
large-scale movement of power across the country over that
interregional transmission network. Unfortunately, none of us
inherited a power system that is very conducive to that, with
thousands of little vertical silos of utilities that don't have
those horizontal connections, and our regulatory structure is
only trying to catch up to that. So your work through EPRA and
other efforts, other bills that you have introduced on
interregional transmission, is very welcome.
Senator Hickenlooper. We always appreciate the preparations
that our witnesses make that make us Senators look good. We
appreciate that.
Senator Cassidy. It takes a lot of preparation for you, but
that's okay.
[Laughter.]
Senator Hickenlooper. Thank you, Senator, I appreciate
that.
Also, Mr. Gramlich, I was going to put out--within all of
this discussion we have been making, there is a hard truth that
we need 100 gigawatts of power or more, really, by 2030, yet
only four gigawatts of natural gas projects are even in the
pipeline, and certainly zero for coal. So the market isn't
buying what's out there being sold. What kind of state-level
intervention studies and subsidies should Congress and the
Trump Administration--what would we have to back, which they
would be backing, to actually build that 100 gigawatts of new
natural gas or coal capacity by 2030?
Mr. Gramlich. Yeah, it's not really feasible to do it all
with gas or, you know, nuclear in this decade isn't going to
happen. Nothing against it, it's just not going to happen. Gas
turbines are constrained, as Senator Heinrich mentioned. You
just can't get one to get in line. So we really have to, just
as a physical matter, we have to rely on many sources, all of
those sources that are being developed, and that certainly
includes wind, solar, and battery storage.
Senator Hickenlooper. Great, thank you.
So what you are saying is that we need to take those things
that are in the queue and are ready to be built, even though
they're not going to be sufficient to provide a baseline, that
I think there is a consensus that we need to raise the
baseline, or the baseload capacity. We need to build everything
we can right now.
Mr. Gramlich. Yes.
Senator Hickenlooper. Great, thank you. I yield back to the
Chair.
Senator Cassidy [presiding]. Mr. Huntsman, in your
testimony--now first, as context, I have seen that the GDP of
Europe over the last 20 years, which was roughly equal 20 years
ago to
the U.S.--collective GDP--has flattened out and ours has grown.
Now, there is a relationship we all know between power usage
and with economic growth. You speak about the
deindustrialization of Germany and how no rational executive
would now invest in Germany, which is incredible. Can you
expound on that? Because that would have incredible impacts
upon jobs for working Germans, just like having a similarly
wrongheaded policy in the U.S. would have incredibly negative
implications for working Americans.
Mr. Huntsman. Yeah, as somebody who has done business in
Germany for 40 years, we have never had power outages in
Germany. It's just not a question of availability of electrons,
it is a question about the value of electrons. And in Germany,
I'm paying for coal, I'm paying for solar, I'm paying for wind,
I'm paying for nuclear from France, and I'm paying for imports
of gas coming in from the United States. I am paying for five
sources. At best, two of those sources are actually operating
and supplying our facilities. But I am paying for all five of
them. I mean, that literally--and you add on to that the
regulatory, the carbon taxes, and the costs above that, and I
am paying roughly about six times more for electricity. For
exactly the same facility in your State of Louisiana, we
operate a very large facility in Geismar, Louisiana, and we
operate virtually the same facility----
Senator Cassidy. So how many people did you employ at peak
in Germany?
Mr. Huntsman. In Europe, across Europe was about 6,500.
Senator Cassidy. At peak?
Mr. Huntsman. At peak.
Senator Cassidy. And where are you now?
Mr. Huntsman. Just over a thousand.
Senator Cassidy. And so, the implications are that if you
get your regulatory policy and if you get your electricity
policy or your power policy wrong, then people disinvest, de-
invest, and then you end up with working families losing their
livelihood.
Mr. Huntsman. Not just ours, but our customers, our
suppliers, the entire supply chain.
Senator Cassidy. I once heard you say, going to another
portion of your testimony--intriguing conversation--you are
suggesting that the chemical industry may be more carbon-
intensive but the downstream effect is to decrease carbon
intensity. You use the example of using carbon fiber instead of
steel in a plane. I can imagine how much fuel that saves in a
plane. But I can imagine that the carbon-intense carbon fiber,
by definition, may be a little bit more carbon-intensive to
produce, or at least roughly equal. But it saves you more in
life cycle.
Mr. Huntsman. That's right.
Senator Cassidy. Can you elaborate on that? Because I think
there are probably other examples.
Mr. Huntsman. Earlier, the Senator, I believe it was King,
that had the cabling--the wraparound of that cabling, of that
carbon fiber, is going to be for the most part an epoxy
material that obviously insulates a lot of that transmission.
That's the same materials that are going in and lightening the
load, lightening the transmission, making these things
stronger. The Boeing 787 gets about 35 percent better mileage
than the Boeing 767, the model it replaced, and all of that is
virtually no aluminum, it's mostly carbon fiber and composite
materials. We have, just our company alone, about somewhere
between 17 and 18 tons of liquid material--glue, essentially--
that goes on each 787 or Airbus A350. That is lightening the
plane. It is allowing it to fly further over the lifetime of
that plane. You will be saving a hundredfold.
Senator Cassidy. So even though, in the moment in time, in
the snapshot, it may look like, oh, my gosh, emissions are
increasing, or whatever is increasing at Huntsman, but if you
take that product you are producing over the life cycle of its
use, the global climate is better, if you are looking at it
from the perspective of carbon.
Mr. Huntsman. That's right. I would also tell you though
that our carbon is actually coming down----
Senator Cassidy. I accept that too.
Mr. Huntsman. From our manufacturing.
We are getting the benefit of both, better and lighter
usage on the customer side and also the manufacturing side.
Senator Cassidy. Sounds good.
Well, next is going to be Senator Padilla.
Senator Padilla. Thank you, Mr. Chairman.
Senator Cassidy. Excuse me, hang on. I have Padilla before
Cantwell. That's the list given to me.
It's up to you guys. You all work it out.
[Laughter.]
Senator Padilla. All right, well, if you don't mind because
you were here earlier.
Thank you all for your participation here today. I want to
begin by talking about transmission. Obviously, the only way to
meet our growing energy demand is by building out the necessary
transmission infrastructure to get power from where it's
generated to where it's needed. In the last Congress, I was
proud to work with my colleagues on this Committee in a
bipartisan manner, as we crafted the Energy Permitting Reform
Act, which would have significantly advanced transmission
efforts. Since last Congress, we have not only continued to see
delays, but also consistent projections of load growth. And in
addition to that, we have seen energy costs increase.
So Mr. Gramlich, in your testimony, you talked about the
need to improve our transmission infrastructure as a means to
improve energy affordability. So I would love to see you expand
on that and specifically discuss how building more transmission
would directly increase energy affordability.
Mr. Gramlich. That's right. Well, your State of California
is now accessing resources in New Mexico, Wyoming, and other
parts of the West, and what that does is, it's like a puzzle--
putting pieces together. At different times of day, different
resources are operating, right? The wind from Senator
Heinrich's state or the wind from Senator Barrasso's state or
others are operating at different times than the solar in
Southern California, right? So you put all these resources
together and you get an overall much more steady supply that
holds rates down and it improves reliability. So the
transmission network is critical to making that happen. Your
state has been leading in getting a lot of that transmission
built.
Senator Padilla. Do I hear you suggest that multi-state
coordinating of the grid will improve affordability as well as
reliability and even efficiency, with some emission reductions,
as a result? I hear chatter among some western states around
that concept.
Mr. Gramlich. Yes, and that legislation in Sacramento is
critical to get that regional network of an integrated grid, a
seamless grid.
Senator Padilla. As long as we get it right, I agree.
Mr. Gramlich. That's right.
Senator Padilla. So, to be continued.
Let me also do a quick sidebar because I heard the Chairman
in his opening remarks talk about some concerns in some
quarters about solar and wind and other renewable energy and
the concerns about intermittency, to which I just want to make
sure we are adding storage to the conversation. If you look at
California's capacity now, not just breaking records on the
amount of our electricity that comes from renewable sources,
but a huge reduction in the threat of blackouts, even
brownouts, because of the stability brought when you add
storage to the equation.
In addition to storage, another technology that I am
excited about is reconductoring. So I was proud to hear a
couple of you talk about the benefits of grid-enhancing
technologies and high-performance or advanced conductors in
meeting our load needs. Rewiring our existing transmission
lines with state-of-the-art carbon fiber or aluminum alloy
materials has the potential to deliver as much as twice the
current of the same size conventional steel and aluminum
transmission cables. And what's especially exciting, it's by
utilizing existing infrastructure and existing rights-of-way.
So again, Mr. Gramlich, can you expand on how these new
technologies, particularly reconductoring, can help us meet
load growth in the future?
Mr. Gramlich. That's right. Well, we all know how scarce
rights-of-way are and how hard it is to get new rights-of-way,
right? So we have these rights-of-way around the country that
are a tremendous asset for this country. And so, if we can
squeeze more power over those rights-of-way, which might be as
simple as stringing up a new cable on the existing towers, or
it might be a rebuild of the towers, but these advanced
conductors and superconductors can really help to sometimes
double the capacity right there. And then grid-enhancing
technologies are more the operational technologies that Senator
King also referenced. Those squeeze more, sometimes up to 40
percent for dynamic line ratings, for example. And these
operational tools can create more headroom on the grid that
allows more load to be developed reliably.
Senator Padilla. So are you suggesting that with these
upgrades, we can deliver more electricity more quickly than
projects that are built from the ground up?
Mr. Gramlich. Yes, and we are going to need both. We are
certainly going to need new rights-of-way and lines as well,
but creating that headroom quickly and much more affordably
seems like a no-brainer.
Senator Padilla. So the last question I have, and I will
try to make it quick, I know my time is running out here.
Obviously, I am proud to represent California. We are proud
to be a policy leader on not just building capacity, but
lowering our emissions footprint as a result. But California is
not alone in investing and bringing online more solar, more
wind. Can you name other states, maybe some not-blue states,
that are similarly investing in improving their grid
reliability and affordability as a result?
Mr. Gramlich. Well, absolutely. I mean, the whole center of
the country from Texas up through North Dakota has tremendous
penetrations of both solar and wind. Texas, the last couple
days, has had over 80 gigawatts demand. They are nearing record
demand. And a majority is being met with solar, wind, and
battery storage. They are using storage, just as you suggest,
and just as you do in California when the sun is setting, that
is when the batteries have charged up with all the solar power
and then they discharge to keep the evening lights on.
Senator Padilla. So renewables plus storage is not a
Democratic agenda or a Republican agenda. It's just common
sense. Thank you very much.
Senator Murkowski [presiding]. Gentlemen, thank you for
being here. These kinds of hearings before this Committee, I
think, are so important because they remind us that an energy
policy that really covers from Maine to Alaska and Hawaii and
the parts in between requires a diversity, right? I come from a
state where we are proud to be producing oil. We are proud to
be producing natural gas. But our reality is that most of that
is--most of the oil, of course, is sent outside. Our natural
gas supplies in Cook Inlet are dwindling to the point where our
utilities today are discussing how they are going to keep the
lights on in the South Central region, where the vast majority
of Alaskans call home. And they are looking to Canada for their
source of supply. That is insult to injury to this Senator, who
has been working so hard to get us to a place where our energy
is affordable, reliable, secure, diverse, whatever you want to
call it. It is a challenge for us right now.
And one of the things that we have looked to, we have
recognized that there is no one-size-fits-all that fits us. And
so, I think we have--I don't know if it's fair to say that we
have pioneered microgrids in Alaska, but we have darn well been
leading in the country when it comes to how you take these
isolated grids, because we have one grid in the state, and it's
called our Railbelt grid. And it goes up about 350, 400 miles
and it comes down. And it's not a grid, it's like a rope, and
there is vulnerability in that rope. And so, this is something
that, again, we are looking at ways that we can reduce our
energy costs in the state that, unfortunately, experiences some
of the highest energy costs in the entire country. And I think
that is counterintuitive to so many people who think, well,
wait a minute, you guys supply all of this stuff. Why are you
not able to keep your own lights on?
So we are a little bit of a conundrum. At the same time, we
have got great opportunities. We would love to be a leader in
data servers. It's cold up there. We have got cold water. It's
all the right things for you all, but if we can't power it, we
can talk about these advantages until the cows come home. We
don't have very many cows in Alaska. But we need to recognize
that there is more that must be done in recognizing the
extraordinary diversity.
Mr. Huntsman, I really appreciated your testimony. You talk
about the risk of distorted markets. I absolutely agree. I
think our challenge is that we don't have a distorted market,
but we just need to have more on our Railbelt grid, just like
we need on our microgrids. We were kind of pushed behind with
this executive order that came out a couple weeks ago on wind
and solar because we do have a couple projects that were going
to be integrated into this broader grid that is LNG, it's
hydro, it's a little bit of wind, it's a little bit of solar.
Basically, we are piecing everything together as best we can,
and now we see a pushback on that EO by taking away the
opportunities for greater affordability and reliability.
It reminded me that we have been down this road before. It
was the late 70s where the government prohibited the use of
natural gas for electric generation. Think about where we would
be if we still had that policy in place. And so, we are back to
this place where it's kind of dangerous to pick winners and
losers. Just figure out how everybody participates in, again,
advancing a portfolio, an energy portfolio that makes sense
across the board.
So I guess I would direct a question, well, to any of the
three of you in terms of the importance of ensuring that our
federal policies are not in a position where we are picking the
winners and the losers. And I grant you, wind and solar have
been the ``mature'' technologies for a long time--a long time.
But we are now in a place where the Secretary of Energy and his
Deputy are going to be spending a lot of their time over at DOI
with a review of every individual wind and solar decision that
comes before the Department. They have got a lot to do. I think
that this is going to be distracting and taking away the time
that they need to be working on some of the issues that all
three of you have mentioned here this morning.
Any comment on that? I have run my full five minutes. So
that's not very fair to you, but go ahead.
Mr. Tench. Well, real quick. Oh, sorry, go ahead.
Mr. Huntsman. I would just say, to the extent that it adds
cost to consumers, I hope they take a long time in reviewing
those projects because there are a lot of companies out there
and a lot of consumers that just can't afford these redundant
systems and the higher cost to all of them. And I think we are
losing focus here. When a Tier 4 data center comes online, they
need 99.997. That means they are out of electricity--an Amazon
center could be out of electricity for 27 minutes per year.
They're not going to be relying on wind. They're not going to
be relying on solar. That may be part of their system--a very
small part of it--but for the most part it's why they are
looking to buy nuclear facilities and so forth. And it's the
consumers that are going to get caught up with this higher
pricing and it's companies like ours that are going to get
caught up with this higher pricing. So I am concerned about a
lot of those.
Senator Murkowski. No, I hear you. I just want to add one
final point to this. I am dealing with communities, though,
that if they can get 20 percent of their diesel-powered
consumption offset by some incremental wind and solar, it's 20
percent that they're not spending.
Mr. Huntsman. Totally right.
Senator Murkowski. So we are operating in different worlds,
I get that. I get your point. And I just need to make sure that
you understand what it means in some of these really remote
off-the-grid places.
Mr. Gramlich.
Mr. Gramlich. Well, I would just thank you for your
leadership on the permitting issue, not just this review, which
seems awfully inefficient and could take whole generation types
off the table. But on the staffing, many of these permitting
agencies for your state and others, have great staff, but they,
you know, they need to be staffed up. They are trying to get
permits issued, but they are trying to do it in a legally
sustainable way. And if we lose staff at these permitting
agencies, that is a real challenge for any of the
infrastructure we are trying to build.
Senator Murkowski. Very good.
Mr. Tench. You made the comment a minute ago that it's not
a job to pick winners and losers. You know, I agree. We are, in
our business, we are simply trying to deliver for our customers
the technology and the buildings and the infrastructure to
drive the deployment of AI, the grid, and as we receive
electrons off of it, it doesn't know what the source was. We
have requirements in terms of availability. We have backup
generation for those times when there is a problem with the
grid. But anything we can do to encourage as many different
sources of power to increase the total load that's available,
along with the transmission of that load, you know, I think is
a good idea.
Senator Murkowski. Thank you, Mr. Chair.
The Chairman [presiding]. Thank you, Senator Murkowski.
We will now begin a second round of questions under the
same terms as the original one.
Mr. Huntsman, I would like to start with you, if that is
all right.
One big tech company recently released its sustainability
report sometime last week, and it shows that that company's
carbon emissions rose by six percent last year in 2024,
primarily due to the development of data centers and
electricity consumption that goes along with that and other
activities. Now, despite the rhetoric from some big tech
companies and others about net-zero, the reality is that their
business model, particularly the business model of those that
are heavily reliant on big data centers, requires reliable
power, affordable power, and oftentimes natural gas is the best
option. In many cases, it is effectively the only realistic
option. Can you discuss how Huntsman Corporation focuses more
on innovation than sustainability as a means to achieve both
economic growth and cleaner supply chains?
Mr. Huntsman. Well, I think that in all of these supply
chains, again, as we look at, particularly in the chemical
industry, the innovation that we have is to make things
lighter. If you look at just the science of something as basic
as a water bottle. Think of the water bottles you pick up
today. This is, unfortunately, pretty poor science right here,
but most of the water bottles you pick up today, they feel like
they are almost going to fall apart. That water bottle today
contains about 15 percent of the material that the same
application did 10 years ago. That's innovation. It's making
the industry more efficient, it's lowering the cost, and it's
better for the environment.
And if you apply that same technology into the
lightweighting of an EV, you are going to extend the mileage,
and of a plane, you are going to extend the mileage and the
fuel consumption. A long-range power cable, high-voltage power
cables, again, being able to lighten that, being able to
increase the capacity of that, depending on the insulative
materials that are built into that cable. It's all about
science and it's all about innovation.
I would just note that when we talk about the battery and
the materials that make all of this stuff, how much of that is
actually being built and made and produced here in the United
States? That's something that I think may be a topic for
another day, but we import a lot of raw materials, especially
on the mineral side and the copper side and all this from
foreign powers and from foreign entities. And so, when we talk
about the battery buildout and we talk about the long-term
cable construction and so forth, a lot of this is going to
require more construction and more permitting here in the
United States. If we really want to domesticate and we really
want to take advantage of this buildout, we ought to be
building these raw materials in the U.S. as well.
The Chairman. If I am understanding you correctly, you are
saying for every widget that a Huntsman chemical produces, or
every widget that someone else produces using Huntsman chemical
products, something like this, for example (the Chairman holds
up a water bottle), I will never look at these any more without
thinking ``poor science.'' If you are able to innovate, you can
produce the same number of widgets or even more widgets with
fewer environmental impacts, including fewer emissions through
technological innovation. Do I understand you correctly?
Mr. Huntsman. I believe our industry does that as well as
anybody, if not better.
The Chairman. Mr. Tench, arguably, the primary issue that
your industry contends with involves the availability of
reliable power. According to some reports, there are some
utilities that told data center developers that additional
power to fuel data centers can take up to a decade to deliver.
Obviously, that could be unsatisfying in that industry, which
needs to be nimble and move quickly. What barriers exist within
traditional utility business models to deploying large data
centers at scale?
Mr. Tench. You know, I am not an expert on the underlying
business model for most of these utilities, but I can describe
what I observe and the interactions that we have, and that is
that when we begin our planning cycle, we will submit
applications for engineering studies, which can take a year.
They are then coupled with other developers that are looking to
do similar things and, in some cases, we are all attempting to
serve the same load requirement. So the utilities do have a
difficult job in sifting through ten requests that may be for
actually two projects that ultimately go live. Their response
to that has been to require very significant financial
commitments to even undertake the engineering studies. And
again, those take a long time.
The need that we have is speed and certainty as it relates
to that power. And in our observation over the last five years,
across the country, those two factors are moving in the
opposite direction.
The Chairman. So existing challenges coupled with the
urgent need for permitting and regulatory reform sort of
manifest to us a problem. We are kind of on the knife-edge of a
problem, which, if we move in the right direction can help
bring about needed reform quickly, and it can go the opposite
direction quickly.
And then, finally, I want to just make a point in response
to some of the comments that we have had so far that puts some
of the comments in context. As the Wall Street Journal pointed
out earlier this week, ``the IRA,'' meaning the Inflation
Reduction Act, ``turbo-charged subsidies for wind and solar in
ways that distorted energy investment because the subsidies can
offset more than 50 percent of the project's cost.'' It's a
significant amount that ends up being borne by the U.S.
Government and the U.S. taxpayer. Now, the claim that these tax
credits reduce electric rates is, I think, contradicted, or
certainly undermined, by experience. Wind and solar credits
must be backed by peaker gas plants or batteries, which cost
more than three times as much as baseload power.
So the problem is not that there is anything inherently
wrong with wind and solar being used to generate electricity.
As I said earlier, they have their place. There are things that
they can do. But baseload power is not something that they
produce. And when you need baseload power, nothing else will
do, and those don't provide that.
Senator Heinrich.
Senator Heinrich. I just want to make the point that in my
own experience, because the thing I find most intuitive is to
look at the power in my own grid and to ask the question, does
what people are representing line up with actual reality? On my
grid, we are only five percent coal now, and that's because
coal is really freaking expensive. We are 23 percent gas and
declining, but that's very useful generation. It's hard to add
to because you can't get a turbine. We are seven percent
nuclear, which is great. It's firm, it's baseload--if people
like those terms. I prefer capacity factors, and it has got a
really good capacity factor, but it's really expensive, really
expensive. And then, we are 35 percent solar, 15 percent wind,
and with just 15 percent battery storage and a little bit of
geothermal, we are able to balance all of that with incredible
reliability, and consumers will not compromise on reliability.
But most importantly, they also like low cost.
And in most of the country, the average--you are paying 17
and change cents per kilowatt-hour for electricity. In my grid,
we are paying about 11--10.8, to be precise. So it is bringing
the price pressure down and it is providing the cheapest new
sources of generation to replace the older, more expensive
sources of generation.
One of the things we have to deal with here is these
agencies and the role that they play in permitting new
generation and transmission. So Mr. Gramlich, if our permitting
agencies--for example, the Department of the Interior, which
has added this new level of red tape, stall or slow-walk
permits for generation projects, which we are currently seeing,
and those permit projects, as a result, don't get on the grid
or they get on the grid slower, what is the impact to people
who pay retail electric prices?
Mr. Gramlich. Sure, well obviously, that will raise prices.
And what's happening is, you know, love it or hate it, many
utilities with their state regulators have put in place plans
for the next few years of how they are going to meet load.
There might be retirements. There might be load growth. They
routinely go through these plans, and just the reality is, it's
largely wind, solar, and storage that are in those plans----
Senator Heinrich. About 95 percent in most cases.
Mr. Gramlich. Right, to meet next load. So if----
Senator Heinrich. So if you take that 95 percent out, even
some portion of it, say a third, what are you going to replace
it with in year one, two, or three? Nothing.
Mr. Gramlich. Curtailment, per load.
Senator Heinrich. Curtailment, exactly.
Why I said capacity factors is because I am an engineer and
I don't remember a lot the terms and buzzwords that get thrown
around a lot here now--firm, baseload, dispatchable. What I
remember from my education is capacity factors, right? And if
you look at generation today, you know, I have wind in my state
that has a 40 percent capacity factor. It's not perfect, but
it's pretty darn good. You know what else has a 40 percent
capacity factor, Mr. Gramlich?
Mr. Gramlich. The gas?
Senator Heinrich. Coal, today, in the United States of
America. Everybody says it's firm and baseload and it's not.
It's not, because it's expensive and it's unreliable. And when
you have a coal-fired generating station go down, the whole
thing goes down. It doesn't go down three percent, it doesn't
go down 10 percent--you lose that generation until that thermal
plant is back up and running.
So, in your testimony, you talked about the increase in
demand over time. DOE also is predicting a similar amount,
about two percent a year. But they are also claiming that there
is somehow a hundredfold increased risk of outage, and this
relates to the capacity factor issue if forecasted retirements
occur between now and 2030, as predicted. What were the
assumptions that went into that, that were baked into that
claim?
Mr. Gramlich. Yeah, I think the Department of Energy, I
mean, they provided useful analysis with this report, but I
think they vastly overstated the retirements of generation. And
as I said earlier, we have processes, either through utility
planning or markets.
Senator Heinrich. And markets.
Mr. Gramlich. Right, you know, to discourage or prevent
retirements, and that's happening, but also on the supply
addition side. There is a lot more generation out there that
could come onto the grid, and I think the Department of Energy
study understated that new supply. So if you understate supply,
overstate retirements, suddenly you have a reliability crisis,
but it might just be manufactured by those numbers.
Senator Heinrich. Yeah, we certainly haven't seen that in
New Mexico, and we haven't seen that next door in Texas. where
they have a totally separate grid from ours, but they are
bringing on lots of new sources of generation, lots of new
solar and batteries, in particular. You know, transmission
lines are such an important piece of all this because they do
help us wheel power around the country. And it's hard to build
transmission. It's why we need to actually do permitting
reform, which this Committee did last Congress, but hasn't done
this Congress yet.
You know, I worked on one transmission line for 17 years of
my life. And today, it has facilitated tens of billions of
dollars of economic output. It has facilitated the largest
renewable project in the continent's history, but it wasn't
easy to get that done. If you create a system where the
politics can change overnight, where, for example, a loan from
the Loan Programs Office can be decided by politics rather than
by metrics, what is the impact of that on reliability and on
price pressure?
Mr. Gramlich. Well, I mean, so many utilities have
testified before this Committee over the years about the need
for stability. They are making 60-year investments--6-0--and if
the policies change 180 degrees every four years, they simply
can't do that. So I think your point is well taken. We need
some stability, I do think. FERC is a great place for a lot of
these orders, as a bipartisan, non-partisan agency. For
permitting, they could do more in that regard, but we need to
get that regulatory stability for investment.
Senator Heinrich. Thank you.
The Chairman. Senator Justice.
We will go to Senator Justice, then Senator Cantwell, then
Senator Hirono.
Senator Justice. Thank you, Mr. Chairman.
Well, guys, you know, we have got some really smart folks
up here. There is no question about that. And I am sure that
you all are super-smart and I am very proud of your
contributions to this great country in every way. And I really
thank everybody out here in the audience and everything. I know
you have family and everything, and we congratulate everybody
for being here.
Let me just ask you just simply just this--or make this
statement: why do we continue to make this so much harder than
it is? Really and truly. I am from West Virginia. And I am a
new kid on the block and I have got a lot of white hair and
everything. But I was the Governor of the great State of West
Virginia for eight years and everything, and we did it with
logic, and reason, and businessmen or businesswomen approaches
and everything, and all of a sudden, we took a state that was
flat dead on its back any way you can cut it, to prospering
like you can't imagine in no time. We know in the energy sector
today that a year from now or a year and a half from now, we
are going to hit the wall like nobody's business. That is all
there is to it. We know that.
And we absolutely know the contribution of fossil fuels,
and that if we had carried on and gone down the pathway of some
that would say we want rid of all of it, coal is the nastiest,
terrible, most terrible word in the dictionary, and so, with
all that being said, we want rid of all of it, and what would
have happened? Here is exactly what would have happened, you
know, and there is no point in dancing around it. We would
absolutely be deciding between homes and industry or homes and
jobs because we couldn't do them both. There's no way. And you
know it. We all know it. All of you all know it.
So why don't get at trying to do something that is the
right thing? We know what the problem is. My dad would have
told me ten million times, son, you've got to first know how
deep you are in the hole, but when you know the position you
are in the hole, then we can try to get out of the hole. He
would have also said, for God's sakes-a-livin', I don't care
how hard you try, don't confuse effort with accomplishment. You
know, we've got to achieve right now. That is all there is to
it.
So I would ask you just this, and this is the simplest
thing I can possibly ask you. We all know we have got to have
reliable. We know we have to have a regulatory climate that we
can function. I mean, for God's sakes, we know all the answers.
Why don't we just get at fixing the problem? But my question is
just simply just this--from the standpoint of can you talk
about the dangers of retiring all fossil fuels, whether it be
gas or coal or whatever, can you talk about where we would be
in this country today if we just decided, okay, that is what we
are going to try to do, because I do know this--West Virginia--
83 percent of the power in West Virginia comes from coal. I do
know there are states out there that don't derive a lot of
power from coal. I was the guy that said embrace all, but for
God's sakes-a-livin', let's quit subsidizing one and making it
unfair against the others. If it's not fair, let's quit doing
it.
You know, so talk to us about just what I just asked. Talk
to us, please, and just go very quickly because I have only got
a minute left.
Mr. Huntsman. National suicide.
Senator Justice. I love it. And I will tell you this, I was
going to say this before we started. I love--and I don't know
Peter Huntsman at all, but I love your bluntness, gosh
almighty, because that's exactly what we need. We need to quit
dancing around the ring around the rainbow. We need to
absolutely do it.
Now, go ahead, sir.
Mr. Tench. Look, we are at the edge right now in terms of
having the power we need. We are going to be running short. We
need to preserve and add resources everywhere we can.
Mr. Gramlich. All I will just say, I mean, your state is
very different in its preferences than neighboring states and
that is a good reason why states are largely in charge of
generation choices and portfolios. So I don't think the Federal
Government needs to be meddling right now in specific power
plans. Let's leave that to the states.
Senator Justice. Would we not all say, if we were all being
really smart, we have a situation that could become a national
security situation, and it's right at our doorstep. Would we
not all say, for God sakes-a-livin', why in the world don't we
just look at what countries of the world are trying to do right
today? China is building a coal-fired power plant every day,
you know? And I am exaggerating to make my point, but they're
not doing it just for fun. I mean, they know how absolutely
important power is.
So nevertheless, I thank you for being here.
Mr. Chairman, I defer.
The Chairman. Thank you.
Senator Cantwell.
Senator Cantwell. Thank you, Mr. Chairman.
Good to see you, gentlemen.
I like the subject of affordable electricity. It has kind
of built the State of Washington over and over again. And so,
we have had a pretty robust conversation now with all of my
colleagues from different parts of the United States about how
to get there. I haven't heard the word fusion yet. I certainly
believe that while we are talking about transmission capacity
and various sources of energy, the United States continuing to
be a leader in breakthrough technology is also a key component,
very important to the equation. Maybe if somebody wants to
address that.
But I did, Mr. Huntsman, want to talk about the need for
more electricity in the AI revolution, and particularly this
issue you were talking about, the large amounts of composite
material. I really did want to follow Senator Cassidy because
it was a good lead up, being from the State of Washington and
aerospace and the transformation that we want to see in
aerospace with larger percentages of composite materials. But
won't we be able to create some efficiencies by using AI and
then making it more efficient in the development of these very
lightweight materials, but also intensity in what it takes to
actually produce them? Won't there be a feedback loop here that
will help us?
Mr. Huntsman. Absolutely, Senator. You are spot-on correct
in that if you use the sciences of material scientists to
lightweight anything, it's just a simple law of physics. You
are going to require less energy to move that product, whether
that end-item is an automobile or whether it's an airplane. And
yes, AI is going to greatly facilitate the design,
specifications, and the raw material usage to do these. What we
also need to make sure of is that we have a permitting process
in place. If AI can tell us that we can make this new product,
and we have got the capability of altering our manufacturing
footprint to make it tomorrow, I may have to wait three to five
years for the EPA to approve a new chemistry. And that is
simply not acceptable when you look at what we are doing with
AI and what we are doing with material sciences. So you are
spot-on.
Senator Cantwell. Okay, so how do we accelerate that then?
Mr. Huntsman. Well, it would be great if the EPA would
follow the laws that all of you passed creating TSCA, which is,
they have 90 days to approve a product or not. Right now, we
have products that have been waiting for three to four years to
get approval. I can build a facility in China in less time than
that. If you are going to be building these composite
materials, you are better off going someplace other than the
United States because it takes so long.
Senator Cantwell. No, no, we don't want that. We have a
world demand for 40,000 airplanes right now.
Mr. Huntsman. That's right.
Senator Cantwell. We are about to go to a major
transformation where instead of building 40 planes a month, you
will be able to build 100 planes a month. But wait, only if you
get this next phase of composite manufacturing or thermal
plastics right.
Mr. Huntsman. We are ready to go.
Senator Cantwell. And so, and we want to see that. We want
to see it particularly related to AI and large-scale parts of
the airplane. Obviously, you articulated very well in your
earlier testimony how much the current manufacturing prowess
has given us some percentage--18 to 20, maybe even higher--
percentage of an airplane now with these lightweight materials,
but the big move now is, you can build bigger pieces. And
obviously, instead of taking hours to bake in an autoclave, you
can do them in a large-scale press. And so, that's the thing in
front of us.
I was thinking a little more like, I mean, yes, TSCA, but a
little more about what agencies or what other people do you
think we need to get involved to get people to understand that
AI, you know, we went to one of our national labs and were just
seeing some testing that was done that might have been done in
the past by individuals--a very repetitive, formulated process,
very time consuming, probably would have taken, you know, maybe
years, but certainly months, but it was AI and automated and
they just ran 24/7. So they are going to get that chemical
analysis done in a few months instead. That's what AI is
helping us to deliver.
So how can we communicate this in a broader way that we get
more people understanding what the opportunity is?
Mr. Huntsman. Well, I think if you make it applicable to
the average person, for example, in cancer research, if you are
able to apply AI, what if your cancer outcomes for cancer
medications were to improve multiple fold? What if your prices
of your groceries and so forth because of growing seasons and
so forth and AI, what if that were to improve? I think you need
to be able to--there is such a fear of AI taking my job. That
needs to be supplanted with the idea that every technological
advancement we have had in modern industry has benefited larger
society. AI will do likewise. We need to do a better job
selling that, both at a federal level and a state level, and at
an industrial level.
Senator Cantwell. We just, I know my time is up, but
fusion, good idea to make sure we are keeping/making progress,
right?
Mr. Gramlich. I would say absolutely. That's an exciting
opportunity.
Senator Cantwell. Thank you.
Thank you, Mr. Chairman.
The Chairman. Thank you.
Senator Hoeven.
Senator Hoeven. Thanks, Mr. Chairman.
So you all need a lot of power for your AI. How are we
going to get more baseload on the grid? We keep adding
variable-rate sources, and that is creating grid instability.
You all want to use a lot of power off the grid. And when
Chairman Lee turns his lights on and the lights don't come on,
or he turns on his air conditioning on a hot day in Utah and it
doesn't work because you are sucking all the power off the grid
and we are having blackouts and brownouts, he is going to be
really unhappy, and he has got a temper. So how are you going
to get enough baseload out there to make sure that you not only
can do all your great AI stuff which you have been talking
about, but we keep the power on for everyone, all of our
consumers that need it 24/7?
And you can go in any order you want, but I would like to
get your opinions on it.
Mr. Tench. I would be happy to start. Look, I think what we
have been talking about in the hearing is about ways in which
we can ensure that we can gain access to the electrons that are
already on the grid through greater levels of interconnection,
enhancement to the intelligence of the grid itself, so that it
can be more adaptive to load changes that are occurring. And
again, use better the generation and transmission
infrastructure that we already have.
That said, it's not enough, and you know, our position is
that we need to encourage as much new generation of whatever
type as we can, including nuclear, including geothermal, et
cetera.
Senator Hoeven. Right, but if you don't balance it out, you
are going to have instability, you are going to have blackouts.
If you just keep adding wind power, or other variable sources,
you are going to have problems. And it seems to me there are a
lot of people who want to take coal off the grid and there are
a lot of people that seem to have phobia about nuclear, and a
lot of people don't want to allow any transmission or any of
those kinds of things to be built. How are you going to break
through that and get this done, because you all are bringing on
a big-time demand for power at a high rate. And at some point,
you know, everybody kind of wants to go on like everything is
going to be just fine and they are going to have all their
power and not kind of get the idea that we are going to have to
do some of these things.
How are you going to crack this mindset so people kind of
put their shoulder to the wheel and say, yeah, we need all
these things?
Mr. Tench. Well, hopefully, hearings like this, where we
are helping to inform folks like yourselves, who are in a
position to influence regulation and the other agencies that
are involved in this will help. But if we can agree that the
ability for the United States to be dominant in AI technology
is a matter of national security, which I think it is,
hopefully that will rally folks around us applying our
influence, our pressure, and in our case, our capital toward
incremental sources of generation and transmission.
Mr. Huntsman. Simple fact----
Senator Hoeven. Well, let me add one more thing before both
of you, the others, you know, give me some thoughts, but look,
nuclear is going to take some time. And we are going to have to
change the way we build it to practically build it at some
reasonable cost and a reasonable time frame, which, obviously,
we are trying to do. Chris Wright and everybody is trying to do
it. And we are going to need to keep baseload coal around, you
know, for a lot longer. So we are going to have to start
putting some of these things together. How do we do that? I
mean, it's not just telling our Chairman about it. I mean,
somehow, we have got to get folks to really understand and buy
in to this program if you guys are going to get the power that
you want for AI, because a lot of folks see the potential of
AI, but a lot of folks aren't all that thrilled about it.
Mr. Huntsman. I am not an AI producer. I am from the
chemical industry. But if I have got a trillion-dollar balance
sheet, I am always going to be able to afford the power. That's
not a concern to me. If he's got a billion-dollar balance
sheet, he comes behind me, and if he's got a thousand-dollar
balance sheet, like the average household in America, guess who
is going to pay the highest price, and guess who is going to
get the incremental last bit of electricity? And that is the
way it's going to work. It's a pyramid.
And so, if you can afford it, and what we need to be doing
is, you are absolutely right, we need to be building out the
baseload power, which has got to come back to natural gas. That
is going to be the cleanest. It's the fastest. It's the most
economical means of having a reliable baseload across the
board. And that's from our industry, because we don't have a
trillion-dollar balance sheet. That's--we have been through
Europe. We have been through all these continents that have
tried seven different ways of making electrons and they are
virtually bankrupt. It doesn't work. We know it. It's not a
theory. It doesn't work.
Senator Hoeven. That was a really well--that's exactly what
I am getting at. I think folks have got to hear what you just
said because that is going to be meaningful to them, you know?
That was very good.
And sir, any thoughts you would have?
Mr. Gramlich. Well, I would just say we have heard a lot
today about a balanced, diverse portfolio, and the power system
is more like a basketball team. The point guard doesn't do what
the center does and vice versa, and you need it all. And
particularly in this moment of rapidly rising load growth, we
can't be taking one of those players off the court.
Senator Hoeven. Yeah, I mean, I just think folks need to
understand what we have to do here. And I think how you all
communicate that, how we all communicate it, really matters
because we have got to get going.
Thanks for being here.
Thank you, Mr. Chairman.
The Chairman. Thank you very much, Senator Hoeven.
Just to wrap up, I want to push back a little on some of my
colleagues claims that renewable generation paired with
batteries is somehow significantly cheaper and more reliable.
It's just not borne out by the data. Renewables and storage
have a significant scalability issue. Backup power is required
and is needed whenever you have renewables and storage
operating as a significant leg of the energy stool because it
happens from time to time when they don't perform adequately up
to the task when demand peaks. Now, this is especially true
whereas is bound to happen with some frequency demand peaks for
a period of time longer than four hours. Four hours matters
because that is about the capacity of utility-scale batteries
to hold power.
So you are inevitably going to have times when the wind,
the sun, some combination of the two, aren't doing what they
need to do when demand peaks and then, at those moments, you
have got to have something to back it up. Then, additionally,
if we want to cherry-pick data, let's look at some of the
electric power costs in different parts of the country.
Louisiana's retail cost of electricity is lower than, say, New
Mexico's. And its electricity mix is 76 percent gas and three
percent renewables. Utah's retail cost of electricity currently
stands at around nine cents per kilowatt-hour, and statewide,
the grid runs on 77 percent coal and gas-fired generation. And
more specifically, my local utility also has low retail rates,
about ten cents per kilowatt-hour, and runs on roughly 60
percent gas and coal.
So renewables and storage have a place. They are capable of
helping do their part to make the grid more resilient and
reliable, but scalability is an issue. We cannot forget the
need for backup generating capacity. And if we are going to
have two grids to accommodate all of that, it's going to get a
lot more expensive, and that in turn drives a lot of the
potential for our competitiveness, a lot of the demand for
these things outside the United States, and we don't want to
lose that race.
This has been a great hearing, and I want to thank each of
you for being here and for your testimony. All three of you
have offered phenomenal insights, and I am grateful for the
participation of my colleagues as well, who made some great
points.
This will wrap up today's hearing. The deadline for
submitting questions for the record, any Senator who wants to
do that must do so no later than 6:00 p.m. tomorrow, Thursday,
the 24th of July. Senators will also have until 6:00 p.m. this
coming Wednesday, July 30th, to add statements for the record
to today's hearing.
Thanks again to our witnesses and to all of you who
participated.
The Committee stands adjourned. Thank you.
[Whereupon, at 12:05 p.m., the hearing was adjourned.]
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