[House Report 118-427]
[From the U.S. Government Publishing Office]
118th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 118-427
======================================================================
GUARANTEEING RELIABLE INFRASTRUCTURE DEVELOPMENT ACT
_______
March 19, 2024.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mrs. Rodgers of Washington, from the Committee on Energy and Commerce,
submitted the following
R E P O R T
together with
MINORITY VIEWS
[To accompany H.R. 6185]
[Including cost estimate of the Congressional Budget Office]
The Committee on Energy and Commerce, to whom was referred
the bill (H.R. 6185) to require coordination among Federal
agencies on regulatory actions that affect the reliable
operation of the bulk-power system, having considered the same,
reports favorably thereon without amendment and recommends that
the bill do pass.
CONTENTS
Page
Purpose and Summary.............................................. 2
Background and Need for Legislation.............................. 2
Committee Action................................................. 4
Committee Votes.................................................. 5
Oversight Findings and Recommendations........................... 8
New Budget Authority, Entitlement Authority, and Tax Expenditures 8
Congressional Budget Office Estimate............................. 8
Federal Mandates Statement....................................... 9
Statement of General Performance Goals and Objectives............ 9
Duplication of Federal Programs.................................. 9
Related Committee and Subcommittee Hearings...................... 9
Committee Cost Estimate.......................................... 11
Earmark, Limited Tax Benefits, and Limited Tariff Benefits....... 11
Advisory Committee Statement..................................... 11
Applicability to Legislative Branch.............................. 11
Section-by-Section Analysis of the Legislation................... 11
Changes in Existing Law Made by the Bill, as Reported............ 12
Minority Views................................................... 19
Purpose and Summary
H.R. 6185, the ``Guaranteeing Reliable Infrastructure
Development (GRID) Act'' was introduced by Representative
Duncan (R-SC) on November 2, 2023. This legislation would
require coordination among Federal agencies on regulatory
actions that affect the reliable operation of the bulk-power
system.
Background and Need for Legislation
This legislation amends the Federal Power Act (FPA) to
require coordination between the Federal Energy Regulatory
Commission (FERC) and any Federal agency that promulgates a
regulation that could have a significant negative impact on the
reliable operation of the bulk power system. This legislation
ensures that electric reliability authorities under the FPA are
given adequate input in the regulatory process when proposed
regulations pose a threat to grid reliability.
FERC is the agency that oversees and regulates the
interstate transmission of natural gas, oil, and electricity
through its authority under the Natural Gas Act and FPA. Under
the FPA, the North American Electric Reliability Corporation
(NERC) is the Electric Reliability Organization (ERO) certified
to establish and enforce reliability standards, subject to FERC
review and approval.\1\ NERC has stated that ``[e]nvironmental
regulations and energy policies that are overly rigid and lack
provisions for electric grid reliability have the potential to
influence generators to seek deactivation despite a projected
resource adequacy or operating reliability risk; this can
potentially jeopardize[e] the orderly transition of the
resource mix.''\2\ Additionally, NERC has repeatedly warned in
its reliability assessments that a majority of North America is
at risk of energy shortfalls during periods of high demand and/
or periods when intermittent resources like wind and solar do
not produce electricity.
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\1\https://www.law.cornell.edu/uscode/text/16/824o.
\2\Available at: https://www.nerc.com/pa/RAPA/ra/
Reliability%20Assessments%20DL/NERC_LTRA_2023.pdf.
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Electric system reliability is a pillar of economic and
national security. The accelerated retirement of generation
resources like coal, natural gas, and nuclear that produced
77.5 percent of all electricity in 2022 threatens
reliability.\3\ These retirements are occurring because of
regulations limiting production from fossil fuel resources and
from increasing environmental compliance costs on fossil fuel
resources. Other policies that support intermittent resources
like wind and solar make it more difficult for reliable
resources to recover costs in markets. The consequences of
these retirements are magnified by the fact that the wind and
solar that replace retiring resources do not have the same
attributes or provide the same level of reliability as retiring
coal, natural gas, and nuclear resources. The Committee has
held multiple hearings on electric reliability and, through
these hearings and testimony, the Committee has heard from
utilities, states, grid operators, and FERC Commissioners that
there is an increasing threat to grid reliability that could
lead to extensive, system-wide outages.
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\3\https://www.eia.gov/energyexplained/electricity/electricity-in-
the-us.php.
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The Environmental Protection Agency (EPA) has finalized or
proposed multiple rules impacting fossil fuel generators.\4\
Most recently in May 2023, EPA proposed ``New Source
Performance Standards for Greenhouse Gas Emissions from New,
Modified, and Reconstructed Fossil Fuel-Fired Electric
Generating Units: Emission Guidelines for Greenhouse Gas
Emissions from Existing Fossil Fuel-Fired Electric Generating
Units'' (the Clean Power Plan 2.0) that would set limits for
new gas-fired combustion turbines, certain existing gas-fired
combustion turbines, and existing coal, oil, and gas-fired
steam generating units.\5\ The Clean Power Plan 2.0,
effectively requires coal and natural gas generation resources
to commit to retire, limit operation to a percentage of their
capacity, co-fire with hydrogen, and/or install costly
infrastructure to capture carbon emissions.
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\4\Those rules include the Interstate Transport Rule, Regional
Haze, Risk and Technology Review for the Mercury Air Toxics Rule,
effluent limitations, and a legacy coal combustion residue rule.
\5\https://www.regulations.gov/docket/EPA-HQ-OAR-2023-0072.
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While compliance strategies face technical hurdles and many
questions remain regarding the legality of the Clean Power Plan
2.0. EPA proposing the rule impacts the retirement decisions of
existing resources and the financial outlook potential new
resources that would remain in operation absent EPA's proposal.
In addition, there are serious unanswered questions about the
ability of resources acting in good faith to comply with the
Clean Power Plan 2.0's timelines.
A major theme of the Committee's hearing with FERC in June
2023 was the concerning trend of premature retirements of
dispatchable electric generation, particularly nuclear, coal,
and natural gas.\6\ Republican Commissioners Danly and Christie
repeatedly noted concerns from grid operators and reliability
entities while Democrat Commissioner Clements noted it as a
concern if the trend continues at its current pace. At the
September 28, 2023 hearing, many grid operators expressed
serious concern about the premature retirement of their
dispatchable generators because of policies and regulations.
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\6\``Oversight of FERC: Adhering to a Mission of Affordable and
Reliable Energy for America'' | Committee Repository | U.S. House of
Representatives.
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In August 2023, the grid operators ERCOT, MISO, PJM, and
SPP jointly filed comments on EPA's proposed Clean Power Plan
2.0. In their comments, the grid operators stated that their
systems will need to rely even more on generation able to
provide critical reliability attributes, like coal and natural
gas, as more intermittent resources come onto the system.\7\
The grid operators also noted that the Clean Power Plan 2.0
could result in material, adverse impacts to reliability if
significant technological advances in carbon capture and
storage and hydrogen supply and transport do not occur at the
pace or scale anticipated by the EPA.\8\ In December 2023, the
same grid operators filed comments to EPA's Supplemental Notice
in its Clean Power Plan 2.0 proposal that stated:
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\7\https://www.regulations.gov/comment/EPA-HQ-OAR-2023-0072-0673.
\8\Id.
[T]he proposed Rule and associated implementation
timelines would accelerate the retirement of generators
with the attributes needed to support grid reliability.
. . . Without waiving our previously stated concerns
with the Rule, the Joint ISO/RTOs propose herein
several `reliability safety valve' options that could
arise during Rule implementation. The Joint ISOs/RTOs
certainly hope that none of these reliability assurance
mechanisms will need to be utilized. However, in our
view, it would be imprudent to adopt a rule that does
not contain measures to ensure reliability.''\9\
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\9\https://www.regulations.gov/comment/EPA-HQ-OAR-2023-0072-8207.
In November 2023, FERC held its annual technical conference
on reliability and received testimony from EPA, grid operators,
utilities, states, and trade groups. There was overwhelming
consensus that the EPA's Clean Power Plan 2.0 would have
disastrous effects on electric reliability. Multiple
stakeholders requested that FERC formally study the Clean Power
Plan 2.0's impact on reliability. To date, FERC has not
committed to studying the Clean Power Plan 2.0's impact on
reliability despite its statutory authority under the FPA to
ensure reliability.
Committee Action
On June 6, 2023, the Subcommittee on Environment,
Manufacturing, and Critical Minerals held a hearing entitled
``Clean Power Plan 2.0: EPA's Latest Attack on Electric
Reliability.'' The Subcommittee received testimony from:
Patrick O'Loughlin, President and CEO,
Buckeye Power Inc. and Ohio Rural Electric
Cooperatives;
Todd Snitchler, President and CEO, Electric
Power Supply Association (EPSA);
Michael J. Nasi, Partner, Jackson Walker;
and
Jay Duffy, Litigation Director, Clean Air
Task Force.
On June 13, 2023, the Subcommittee on Energy, Climate, and
Grid Security held a hearing entitled ``Oversight of FERC:
Adhering To A Mission Of Affordable And Reliable Energy For
America.'' The Subcommittee received testimony from:
The Honorable Willie Phillips, Chairman,
FERC (Democrat);
The Honorable James Danly, Commissioner,
FERC (Republican);
The Honorable Mark Christie, Commissioner,
FERC (Republican); and
The Honorable Allison Clements,
Commissioner, FERC (Democrat).
On September 13, 2023, the Subcommittee on Energy, Climate,
and Grid Security held a hearing on H.R. 6185. The title of the
hearing was ``Keeping the Lights On: Enhancing Reliability and
Efficiency to Power American Homes.'' The Subcommittee received
testimony from:
Gene Rodrigues, Assistant Secretary for
Electricity, Office of Electricity, U.S. Department of
Energy;
David Ortiz, Director, Office of Electric
Reliability, Federal Energy Regulatory Commission;
Kevin Messner, Executive Vice President and
Chief Policy Officer, Association of Home Appliance
Manufacturers;
B. Robert ``Bob'' Paulling, President and
CEO, Mid-Carolina Electric Cooperative, on behalf of
the National Rural Electric Cooperatives Association;
Ben Lieberman, Senior Fellow, Competitive
Enterprise Institute; and
Andrew deLaski, Executive Director,
Appliance Standards Awareness Project.
On September 28, 2023, the Subcommittee on Energy, Climate,
and Grid Security held a hearing entitled ``Powering America's
Economy, Security, and our Way of Life: Examining the State of
Grid Reliability.'' The Subcommittee received testimony from:
Gordon van Welie, President & Chief
Executive Officer, ISO New England;
Paul Suskie, Executive Vice President,
Regulatory Policy & General Counsel, Southwest Power
Pool;
Richard J. Dewey, President & Chief
Executive Officer, New York ISO;
Todd Ramey, Senior Vice President, Markets
and Digital Strategy, Midcontinent ISO;
Woody Rickerson, Senior Vice President &
Chief Operating Officer, ERCOT;
Neil Millar, Vice President for
Infrastructure and Operations Planning, California ISO;
and
Frederick S. Bresler III, Senior Vice
President--Market Services, PJM Interconnection, LLC.
On November 14, 2023, the Subcommittee on Environment,
Manufacturing, and Critical Minerals held a hearing entitled
``Clean Power Plan 2.0: EPA's Effort to Jeopardize Reliable and
Affordable Energy for States.'' The Subcommittee received
testimony from:
L. David Glatt, Director, North Dakota
Department of Environmental Quality;
Chris Parker, Director, Utah Department of
Commerce Division of Public Utilities;
Michelle Walker Owenby, Director, Division
of Air Pollution Control, Tennessee Department of
Environment and Conservation; and
Serena McIlwain, Secretary of the
Environment, State of Maryland.
On October 24 and 25, 2023, the Subcommittee on Energy,
Climate, and Grid Security met in open markup session and
forwarded H.R. 6185, without amendment, to the full Committee
by a record vote of 15 yeas and 12 nays.
On December 5 and 6, 2023, the full Committee on Energy and
Commerce met in open markup session and ordered H.R. 6185,
without amendment, favorably reported to the House by a record
vote of 24 yeas and 21 nays.
Committee Votes
Clause 3(b) of rule XIII requires the Committee to list the
record votes on the motion to report legislation and amendments
thereto. The following reflects the record votes taken during
the Committee consideration:
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Oversight Findings and Recommendations
Pursuant to clause 2(b)(1) of rule X and clause 3(c)(1) of
rule XIII, the Committee held hearings and made findings that
are reflected in this report.
New Budget Authority, Entitlement Authority, and Tax Expenditures
Pursuant to clause 3(c)(2) of rule XIII, the Committee
finds that H.R. 6185 would result in no new or increased budget
authority, entitlement authority, or tax expenditures or
revenues.
Congressional Budget Office Estimate
Pursuant to clause 3(c)(3) of rule XIII, the following is
the cost estimate provided by the Congressional Budget Office
pursuant to section 402 of the Congressional Budget Act of
1974:
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
H.R. 6185 would require the Federal Energy Regulatory
Commission (FERC), in consultation with the Electric
Reliability Organization (ERO), to review standards and
regulations proposed by other federal agencies that could
negatively affect the reliability of the bulk-power system in
North America. Agencies could not finalize those actions until
they respond to any concerns raised by FERC as part of that
review.
Using information from FERC, CBO expects that the agency
would need additional staff and would need to acquire new data
to fulfill the bill's requirements. CBO estimates that
implementing those requirements would cost FERC less than $10
million each year. However, because FERC is authorized to
recover 100 percent of its costs through user fees, any change
in agency costs (which are controlled through annual
appropriation acts) would be offset by an equal change in fees
that the commission charges. Accordingly, CBO estimates that
implementing those provisions would result in no net change in
discretionary spending for FERC.
CBO further estimates that the costs for other agencies
(primarily the Department of Energy) to coordinate with FERC on
those reviews would total $1 million over the 2024-2029 period;
that spending would be subject to the availability of
appropriated funds.
Finally, enacting H.R. 6185 would increase direct spending
and revenues because spending by the ERO is recorded on the
budget as direct spending, and the organization assesses fees,
which are recorded as revenues, to cover its costs. CBO
estimates that consulting with FERC would increase costs for
the ERO by less than $500,000 over the 2024-2034 period.
Because any amounts collected would be spent soon thereafter,
CBO estimates that the net effect on the deficit would be
negligible.
If FERC and the ERO increase fees as a result of the bill,
it would increase the cost of an existing mandate on public and
private entities, such as electric utilities, that are required
to pay those fees. CBO estimates that the additional amount
collected would average several million dollars annually and
fall well below the annual threshold established in the
Unfunded Mandates Reform Act for intergovernmental and private-
sector mandates ($100 million and $200 million in 2024,
respectively, adjusted annually for inflation).
The CBO staff contacts for this estimate are Aaron Krupkin
(for federal costs) and Brandon Lever (for mandates). The
estimate was reviewed by H. Samuel Papenfuss, Deputy Director
of Budget Analysis.
Phillip L. Swagel,
Director, Congressional Budget Office.
Federal Mandates Statement
The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.
Statement of General Performance Goals and Objectives
Pursuant to clause 3(c)(4) of rule XIII, the general
performance goal or objective of this legislation is to amend
the Federal Power Act to require coordination between FERC and
any Federal agency that promulgates a regulation that could
threaten the reliable operation of the bulk power system to
ensure that electric reliability authorities are given adequate
input in the regulatory process when such regulations pose a
threat to grid reliability or resource adequacy.
Duplication of Federal Programs
Pursuant to clause 3(c)(5) of rule XIII, no provision of
H.R. 6185 is known to be duplicative of another Federal
program, including any program that was included in a report to
Congress pursuant to section 21 of Public Law 111-139 or the
most recent Catalog of Federal Domestic Assistance.
Related Committee and Subcommittee Hearings
Pursuant to clause 3(c)(6) of rule XIII, the following
hearings were used to develop or consider H.R. 6185:
On June 6, 2023, the Subcommittee on
Environment, Manufacturing, and Critical Minerals held
a hearing entitled ``Clean Power Plan 2.0: EPA's Latest
Attack on Electric Reliability.'' The Subcommittee
received testimony from:
Patrick O'Loughlin, President
and CEO, Buckeye Power Inc. and Ohio Rural
Electric Cooperatives;
Todd Snitchler, President and
CEO, Electric Power Supply Association (EPSA);
Michael J. Nasi, Partner,
Jackson Walker; and
Jay Duffy, Litigation Director,
Clean Air Task Force.
On June 13, 2023, the Subcommittee on
Energy, Climate, and Grid Security held a hearing
entitled ``Oversight of FERC: Adhering To A Mission Of
Affordable And Reliable Energy For America.'' The
Subcommittee received testimony from:
The Honorable Willie Phillips,
Chairman, FERC (Democrat);
The Honorable James Danly,
Commissioner, FERC (Republican);
The Honorable Mark Christie,
Commissioner, FERC (Republican); and
The Honorable Allison Clements,
Commissioner, FERC (Democrat).
On September 13, 2023, the Subcommittee on
Energy, Climate, and Grid Security held a hearing on
several bills, including a discussion draft: H.R. __,
the ``GRID Act.'' The title of the hearing was
``Keeping the Lights On: Enhancing Reliability and
Efficiency to Power American Homes.'' The Subcommittee
received testimony from:
Gene Rodrigues, Assistant
Secretary for Electricity, Office of
Electricity, U.S. Department of Energy;
David Ortiz, Director, Office of
Electric Reliability, Federal Energy Regulatory
Commission;
Kevin Messner, Executive Vice
President and Chief Policy Officer, Association
of Home Appliance Manufacturers;
B. Robert ``Bob'' Paulling,
President and CEO, Mid-Carolina Electric
Cooperative, on behalf of the National Rural
Electric Cooperatives Association;
Ben Lieberman, Senior Fellow,
Competitive Enterprise Institute; and
Andrew deLaski, Executive
Director, Appliance Standards Awareness
Project.
On September 28, 2023, the Subcommittee on
Energy, Climate, and Grid Security held a hearing
entitled ``Powering America's Economy, Security, and
our Way of Life: Examining the State of Grid
Reliability.'' The Subcommittee received testimony
from:
Gordon van Welie, President &
Chief Executive Officer, ISO New England;
Paul Suskie, Executive Vice
President, Regulatory Policy & General Counsel,
Southwest Power Pool;
Richard J. Dewey, President &
Chief Executive Officer, New York ISO;
Todd Ramey, Senior Vice
President, Markets and Digital Strategy,
Midcontinent ISO;
Woody Rickerson, Senior Vice
President & Chief Operating Officer, ERCOT;
Neil Millar, Vice President for
Infrastructure and Operations Planning,
California ISO; and
Frederick S. Bresler III, Senior
Vice President--Market Services, PJM
Interconnection, LLC.
On November 14, 2023, the Subcommittee on
Environment, Manufacturing, and Critical Minerals held
a hearing entitled ``Clean Power Plan 2.0: EPA's Effort
to Jeopardize Reliable and Affordable Energy for
States.'' The Subcommittee received testimony from:
L. David Glatt, Director, North
Dakota Department of Environmental Quality;
Chris Parker, Director, Utah
Department of Commerce Division of Public
Utilities;
Michelle Walker Owenby,
Director, Division of Air Pollution Control,
Tennessee Department of Environment and
Conservation; and
Serena McIlwain, Secretary of
the Environment, State of Maryland.
Committee Cost Estimate
Pursuant to clause 3(d)(1) of rule XIII, the Committee
adopts as its own the cost estimate prepared by the Director of
the Congressional Budget Office pursuant to section 402 of the
Congressional Budget Act of 1974.
Earmark, Limited Tax Benefits, and Limited Tariff Benefits
Pursuant to clause 9(e), 9(f), and 9(g) of rule XXI, the
Committee finds that H.R. 6185 contains no earmarks, limited
tax benefits, or limited tariff benefits.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
Section-by-Section Analysis of the Legislation
Section 1. Short title
Section 1 provides that the Act may be cited as the
``Guaranteeing Reliable Infrastructure Development Act'' or the
``GRID Act.''
Section 2. Coordination process to protect electric reliability
Section 2 amends Section 215 of the FPA and redesignates
subsections (h) through (k) as subsections (i) through (l),
respectively. Section 2 then amends Section 215 of the FPA to
include the legislation in the new subsection (h) Commission
Review and Comment for Proposed Covered Agency Actions.
The new subsection (h)(1) includes the requirement that the
Commission (FERC) or a State commission provide to the
Commission for review the covered agency action that is likely
to have a significant negative impact on reliability and
adequacy of the bulk-power system. Subsection (h)(1)(A)
requires that the agency action for review shall be provided to
the Commission when the proposed covered agency action is
provided to the Office of Management and Budget or another
Federal agency for review. Subsection (h)(1)(B) requires that
the proposed covered agency action be submitted to the
Commission within 90 days of publication in the Federal
Register if the proposed covered agency action is not provided
to the Office of Management and Budget or another Federal
agency for review and comment.
Subsection (h)(2) clarifies that the Commission shall
consult with the ERO (NERC) to provide comments to the agency
proposing the covered agency action. Subsection (h)(3)(A)
requires that an agency proposing a covered agency action may
not finalize a proposal covered in subsection (h)(1) until the
agency head responds to the Commission in writing with an
explanation of how the agency has modified, or why it proposes
to not modify, the action in response to comments provided by
the Commission. Subsection (h)(3)(B) states that the agency may
not finalize the proposal if the agency has not modified the
proposed to prevent a significant negative impact on
reliability and adequacy of the bulk-power system based on the
comments provided by the Commission.
Subsection (h)(4)(A) provides that an agency head shall
include comments and responses in the Federal Register or
otherwise publicly available under subsection (h)(4)(B).
Subsection (h)(5) provides definitions for terms used
throughout this section.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, and existing law in which no
change is proposed is shown in roman):
FEDERAL POWER ACT
* * * * * * *
PART II--REGULATION OF ELECTRIC UTILITY COMPANIES ENGAGED IN INTERSTATE
COMMERCE
* * * * * * *
SEC. 215. ELECTRIC RELIABILITY.
(a) Definitions.--For purposes of this section:
(1) The term ``bulk-power system'' means--
(A) facilities and control systems necessary
for operating an interconnected electric energy
transmission network (or any portion thereof);
and
(B) electric energy from generation
facilities needed to maintain transmission
system reliability.
The term does not include facilities used in the local
distribution of electric energy.
(2) The terms ``Electric Reliability Organization''
and ``ERO'' mean the organization certified by the
Commission under subsection (c) the purpose of which is
to establish and enforce reliability standards for the
bulk-power system, subject to Commission review.
(3) The term ``reliability standard'' means a
requirement, approved by the Commission under this
section, to provide for reliable operation of the bulk-
power system. The term includes requirements for the
operation of existing bulk-power system facilities,
including cybersecurity protection, and the design of
planned additions or modifications to such facilities
to the extent necessary to provide for reliable
operation of the bulk-power system, but the term does
not include any requirement to enlarge such facilities
or to construct new transmission capacity or generation
capacity.
(4) The term ``reliable operation'' means operating
the elements of the bulk-power system within equipment
and electric system thermal, voltage, and stability
limits so that instability, uncontrolled separation, or
cascading failures of such system will not occur as a
result of a sudden disturbance, including a
cybersecurity incident, or unanticipated failure of
system elements.
(5) The term ``Interconnection'' means a geographic
area in which the operation of bulk-power system
components is synchronized such that the failure of one
or more of such components may adversely affect the
ability of the operators of other components within the
system to maintain reliable operation of the facilities
within their control.
(6) The term ``transmission organization'' means a
Regional Transmission Organization, Independent System
Operator, independent transmission provider, or other
transmission organization finally approved by the
Commission for the operation of transmission
facilities.
(7) The term ``regional entity'' means an entity
having enforcement authority pursuant to subsection
(e)(4).
(8) The term ``cybersecurity incident'' means a
malicious act or suspicious event that disrupts, or was
an attempt to disrupt, the operation of those
programmable electronic devices and communication
networks including hardware, software and data that are
essential to the reliable operation of the bulk power
system.
(b) Jurisdiction and Applicability.--(1) The Commission shall
have jurisdiction, within the United States, over the ERO
certified by the Commission under subsection (c), any regional
entities, and all users, owners and operators of the bulk-power
system, including but not limited to the entities described in
section 201(f), for purposes of approving reliability standards
established under this section and enforcing compliance with
this section. All users, owners and operators of the bulk-power
system shall comply with reliability standards that take effect
under this section.
(2) The Commission shall issue a final rule to implement the
requirements of this section not later than 180 days after the
date of enactment of this section.
(c) Certification.--Following the issuance of a Commission
rule under subsection (b)(2), any person may submit an
application to the Commission for certification as the Electric
Reliability Organization. The Commission may certify one such
ERO if the Commission determines that such ERO--
(1) has the ability to develop and enforce, subject
to subsection (e)(2), reliability standards that
provide for an adequate level of reliability of the
bulk-power system; and
(2) has established rules that--
(A) assure its independence of the users and
owners and operators of the bulk-power system,
while assuring fair stakeholder representation
in the selection of its directors and balanced
decisionmaking in any ERO committee or
subordinate organizational structure;
(B) allocate equitably reasonable dues, fees,
and other charges among end users for all
activities under this section;
(C) provide fair and impartial procedures for
enforcement of reliability standards through
the imposition of penalties in accordance with
subsection (e) (including limitations on
activities, functions, or operations, or other
appropriate sanctions);
(D) provide for reasonable notice and
opportunity for public comment, due process,
openness, and balance of interests in
developing reliability standards and otherwise
exercising its duties; and
(E) provide for taking, after certification,
appropriate steps to gain recognition in Canada
and Mexico.
(d) Reliability Standards.--(1) The Electric Reliability
Organization shall file each reliability standard or
modification to a reliability standard that it proposes to be
made effective under this section with the Commission.
(2) The Commission may approve, by rule or order, a proposed
reliability standard or modification to a reliability standard
if it determines that the standard is just, reasonable, not
unduly discriminatory or preferential, and in the public
interest. The Commission shall give due weight to the technical
expertise of the Electric Reliability Organization with respect
to the content of a proposed standard or modification to a
reliability standard and to the technical expertise of a
regional entity organized on an Interconnection-wide basis with
respect to a reliability standard to be applicable within that
Interconnection, but shall not defer with respect to the effect
of a standard on competition. A proposed standard or
modification shall take effect upon approval by the Commission.
(3) The Electric Reliability Organization shall rebuttably
presume that a proposal from a regional entity organized on an
Interconnection-wide basis for a reliability standard or
modification to a reliability standard to be applicable on an
Interconnection-wide basis is just, reasonable, and not unduly
discriminatory or preferential, and in the public interest.
(4) The Commission shall remand to the Electric Reliability
Organization for further consideration a proposed reliability
standard or a modification to a reliability standard that the
Commission disapproves in whole or in part.
(5) The Commission, upon its own motion or upon complaint,
may order the Electric Reliability Organization to submit to
the Commission a proposed reliability standard or a
modification to a reliability standard that addresses a
specific matter if the Commission considers such a new or
modified reliability standard appropriate to carry out this
section.
(6) The final rule adopted under subsection (b)(2) shall
include fair processes for the identification and timely
resolution of any conflict between a reliability standard and
any function, rule, order, tariff, rate schedule, or agreement
accepted, approved, or ordered by the Commission applicable to
a transmission organization. Such transmission organization
shall continue to comply with such function, rule, order,
tariff, rate schedule or agreement accepted, approved, or
ordered by the Commission until--
(A) the Commission finds a conflict exists between a
reliability standard and any such provision;
(B) the Commission orders a change to such provision
pursuant to section 206 of this part; and
(C) the ordered change becomes effective under this
part.
If the Commission determines that a reliability standard needs
to be changed as a result of such a conflict, it shall order
the ERO to develop and file with the Commission a modified
reliability standard under paragraph (4) or (5) of this
subsection.
(e) Enforcement.--(1) The ERO may impose, subject to
paragraph (2), a penalty on a user or owner or operator of the
bulk-power system for a violation of a reliability standard
approved by the Commission under subsection (d) if the ERO,
after notice and an opportunity for a hearing--
(A) finds that the user or owner or operator has
violated a reliability standard approved by the
Commission under subsection (d); and
(B) files notice and the record of the proceeding
with the Commission.
(2) A penalty imposed under paragraph (1) may take effect not
earlier than the 31st day after the ERO files with the
Commission notice of the penalty and the record of proceedings.
Such penalty shall be subject to review by the Commission, on
its own motion or upon application by the user, owner or
operator that is the subject of the penalty filed within 30
days after the date such notice is filed with the Commission.
Application to the Commission for review, or the initiation of
review by the Commission on its own motion, shall not operate
as a stay of such penalty unless the Commission otherwise
orders upon its own motion or upon application by the user,
owner or operator that is the subject of such penalty. In any
proceeding to review a penalty imposed under paragraph (1), the
Commission, after notice and opportunity for hearing (which
hearing may consist solely of the record before the ERO and
opportunity for the presentation of supporting reasons to
affirm, modify, or set aside the penalty), shall by order
affirm, set aside, reinstate, or modify the penalty, and, if
appropriate, remand to the ERO for further proceedings. The
Commission shall implement expedited procedures for such
hearings.
(3) On its own motion or upon complaint, the Commission may
order compliance with a reliability standard and may impose a
penalty against a user or owner or operator of the bulk-power
system if the Commission finds, after notice and opportunity
for a hearing, that the user or owner or operator of the bulk-
power system has engaged or is about to engage in any acts or
practices that constitute or will constitute a violation of a
reliability standard.
(4) The Commission shall issue regulations authorizing the
ERO to enter into an agreement to delegate authority to a
regional entity for the purpose of proposing reliability
standards to the ERO and enforcing reliability standards under
paragraph (1) if--
(A) the regional entity is governed by--
(i) an independent board;
(ii) a balanced stakeholder board; or
(iii) a combination independent and balanced
stakeholder board.
(B) the regional entity otherwise satisfies the
provisions of subsection (c)(1) and (2); and
(C) the agreement promotes effective and efficient
administration of bulk-power system reliability.
The Commission may modify such delegation. The ERO and the
Commission shall rebuttably presume that a proposal for
delegation to a regional entity organized on an
Interconnection-wide basis promotes effective and efficient
administration of bulk-power system reliability and should be
approved. Such regulation may provide that the Commission may
assign the ERO's authority to enforce reliability standards
under paragraph (1) directly to a regional entity consistent
with the requirements of this paragraph.
(5) The Commission may take such action as is necessary or
appropriate against the ERO or a regional entity to ensure
compliance with a reliability standard or any Commission order
affecting the ERO or a regional entity.
(6) Any penalty imposed under this section shall bear a
reasonable relation to the seriousness of the violation and
shall take into consideration the efforts of such user, owner,
or operator to remedy the violation in a timely manner.
(f) Changes in Electric Reliability Organization Rules.--The
Electric Reliability Organization shall file with the
Commission for approval any proposed rule or proposed rule
change, accompanied by an explanation of its basis and purpose.
The Commission, upon its own motion or complaint, may propose a
change to the rules of the ERO. A proposed rule or proposed
rule change shall take effect upon a finding by the Commission,
after notice and opportunity for comment, that the change is
just, reasonable, not unduly discriminatory or preferential, is
in the public interest, and satisfies the requirements of
subsection (c).
(g) Reliability Reports.--The ERO shall conduct periodic
assessments of the reliability and adequacy of the bulk-power
system in North America.
(h) Commission Review and Comment for Proposed Covered Agency
Actions.--
(1) Requirement.--If the Commission or a State
commission determines, on its own motion or on a
request from another Federal agency, that a covered
agency action proposed by a Federal agency other than
the Commission is likely to have a significant negative
impact on the reliability and adequacy of the bulk-
power system in North America, the agency head with
respect to such proposed covered agency action shall
provide to the Commission such proposed covered agency
action for review and comment--
(A) on the first date on which such proposed
covered agency action is provided to the Office
of Management and Budget or any other Federal
agency for review and comment; or
(B) if such proposed covered agency action is
not provided to the Office of Management and
Budget or any other Federal agency for review
and comment, not later than 90 days before the
date on which the agency head publishes in the
Federal Register or otherwise makes available
for public inspection or comment such proposed
covered agency action.
(2) Commission comments.--The Commission, in
consultation with the ERO, shall, by order, provide to
the agency head that provides a proposed covered agency
action to the Commission under paragraph (1) comments
on such proposed covered agency action.
(3) Agency response.--An agency head may not finalize
a proposed covered agency action for which a
determination is made under paragraph (1)--
(A) until the agency head has responded in
writing to the Commission with an explanation
of how the agency head has modified, or why the
agency head has determined not to modify, such
proposed covered agency action in response to
each comment provided by the Commission under
paragraph (2); or
(B) if the Commission finds that the agency
head has not modified such proposed covered
agency action based on the comments provided by
the Commission under paragraph (2) to prevent a
significant negative impact on the reliability
and adequacy of the bulk-power system in North
America.
(4) Public availability of comments and responses.--
An agency head shall include the comments and responses
for the proposed covered agency action in the proposed
agency action as--
(A) submitted to the Federal Register for
publication; or
(B) otherwise made available for public
inspection or comment.
(5) Definitions.--In this subsection:
(A) Agency head.--The term ``agency head''
means the head of a Federal agency that
proposed a covered agency action.
(B) Covered agency action.--The term
``covered agency action'' means a rule,
regulation, standard, criteria document,
deadline, or determination.
(C) Federal agency.--The term ``Federal
agency'' means an Executive department (as that
term is defined in section 101 of title 5,
United States Code) or any other Executive
agency that is in the President's cabinet.
[(h)] (i) Coordination With Canada and Mexico.--The President
is urged to negotiate international agreements with the
governments of Canada and Mexico to provide for effective
compliance with reliability standards and the effectiveness of
the ERO in the United States and Canada or Mexico.
[(i)] (j) Savings Provisions.--(1) The ERO shall have
authority to develop and enforce compliance with reliability
standards for only the bulk-power system.
(2) This section does not authorize the ERO or the Commission
to order the construction of additional generation or
transmission capacity or to set and enforce compliance with
standards for adequacy or safety of electric facilities or
services.
(3) Nothing in this section shall be construed to preempt any
authority of any State to take action to ensure the safety,
adequacy, and reliability of electric service within that
State, as long as such action is not inconsistent with any
reliability standard, except that the State of New York may
establish rules that result in greater reliability within that
State, as long as such action does not result in lesser
reliability outside the State than that provided by the
reliability standards.
(4) Within 90 days of the application of the Electric
Reliability Organization or other affected party, and after
notice and opportunity for comment, the Commission shall issue
a final order determining whether a State action is
inconsistent with a reliability standard, taking into
consideration any recommendation of the ERO.
(5) The Commission, after consultation with the ERO and the
State taking action, may stay the effectiveness of any State
action, pending the Commission's issuance of a final order.
[(j)] (k) Regional Advisory Bodies.--The Commission shall
establish a regional advisory body on the petition of at least
two-thirds of the States within a region that have more than
one-half of their electric load served within the region. A
regional advisory body shall be composed of one member from
each participating State in the region, appointed by the
Governor of each State, and may include representatives of
agencies, States, and provinces outside the United States. A
regional advisory body may provide advice to the Electric
Reliability Organization, a regional entity, or the Commission
regarding the governance of an existing or proposed regional
entity within the same region, whether a standard proposed to
apply within the region is just, reasonable, not unduly
discriminatory or preferential, and in the public interest,
whether fees proposed to be assessed within the region are
just, reasonable, not unduly discriminatory or preferential,
and in the public interest and any other responsibilities
requested by the Commission. The Commission may give deference
to the advice of any such regional advisory body if that body
is organized on an Interconnection-wide basis.
[(k)] (l) Alaska and Hawaii.--The provisions of this section
do not apply to Alaska or Hawaii.
* * * * * * *
MINORITY VIEWS
H.R. 6185, the ``Guaranteeing Reliable Infrastructure
Development Act'' would amend the Federal Power Act (FPA) to
allow the Federal Energy Regulatory Commission (FERC) to block
any rule, regulation, standard, criteria document, deadline, or
determination from any other Federal agency under the guise of
reliability concerns. Committee Democrats strongly oppose the
bill, as it unnecessarily duplicates FERC's existing ability to
provide feedback on proposed rulemakings from other agencies.
FERC itself does not think that it currently has the capacity
to implement the bill, and it would unnecessarily slow down
environmental regulations with clear benefits to public health.
The bill amends section 215 of the FPA to add a subsection
(h) that would give FERC the ability to prevent any proposed
covered action by another agency from going into effect until
the agency is able to mollify FERC's concerns through changes
to the proposed action. The majority's report compares this to
``consultation,'' however it is much more onerous than
consultation. It would in effect give FERC veto power over any
agency action that FERC--or a state public utility commission--
seeks to alter, an unprecedented expansion of FERC's power.
The power given to state commissions by the bill is
particularly troubling. It would give state commissions the
ability to bring any pending rulemaking process at any agency
to a halt, by demanding that FERC consult with the North
American Reliability Corporation (NERC) to provide comments to
the head of the agency proposing such action. It would create
50 different veto points throughout the nation, and it is far
too easy to imagine a particularly pernicious partisan state
commission voting to subject every proposed Federal rule to
this scrutiny, sending FERC, NERC, and the rest of the Federal
government into gridlock.
These fears were validated during a Subcommittee on Energy,
Climate, and Grid Security hearing on a draft version of H.R.
6185, where the Subcommittee heard testimony from Gene
Rodrigues, Assistant Secretary for Electricity at the U.S.
Department of Energy. Assistant Secretary Rodrigues testified
that the real-world impact of the bill would be to create a
vague standard that would make it ``impossible for [the
Department of Energy] to meet our legislative and court-ordered
mandates'' and anticipated that every single rule would be
challenged by a State commission and would see its
implementation delayed as FERC studied the proposed action.\1\
Additionally, during that same hearing, the Subcommittee also
heard testimony from Dr. David Ortiz, Director of FERC's Office
of Electric Reliability. Dr. Ortiz testified that FERC lacked
the staffing, data, and computational modeling resources
necessary for FERC to implement the bill as written.\2\
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\1\House Committee on Energy and Commerce, Testimony of Gene
Rodrigues, Assistant Secretary for Electricity, U.S. Department of
Energy, Hearing on Keeping the Lights on: Enhancing Reliability and
Efficiency to Power American Homes, 118th Cong. (Sept. 13, 2023).
\2\House Committee on Energy and Commerce, Testimony of Dr. David
Ortiz, Director, Office of Electric Reliability, Federal Energy
Regulatory Commission, Hearing on Keeping the Lights on: Enhancing
Reliability and Efficiency to Power American Homes, 118th Cong. (Sept.
13, 2023).
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The majority's report seems particularly focused on a
proposed rule by the Environmental Protection Agency (EPA)
regarding new source performance standards for greenhouse gas
emissions for certain electric power plants.\3\ However, FERC
already enjoys broad authority to comment and consult on the
potential reliability impacts of other agency's regulations.
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\3\The majority's report makes several unfounded claims about EPA's
proposal. Under the Clean Air Act, EPA is clearly authorized and
legally obligated to control greenhouse gas pollution from power
plants. The majority's report further ignores that Congress
specifically directed EPA to reduce this pollution in the Inflation
Reduction Act, and inaccurately describes the requirements and
available, affordable technologies underpinning EPA's proposal.'' See
e.g. Comment from Rep. Frank Pallone, Jr. and Sen. Thomas R. Carper, to
Docket No. EPA-HQ-OAR-2023-0072 (Sept. 12, 2023).
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In April 2023--before the proposed rule was released, FERC
staff within the Office of Electric Reliability met with EPA
staff regarding their comments on the proposed rule.\4\ On
November 9, 2023, FERC held its annual reliability technical
conference. It devoted the entirety of the afternoon session of
the conference to the EPA's proposed rule, and Principal Deputy
Assistant Administrator Joseph Goffman presented to FERC
Commissioners and took questions. FERC staff then led two
additional panels featuring stakeholder perspectives on the
rule.\5\ FERC Chair Willie Phillips has committed to providing
a link to the complete docket record of the technical
conference to the EPA, and a transcript of the conference is
publicly available.\6\ Furthermore, former FERC Commissioner
James Danly submitted two comments to the EPA.\7\\8\ Eleven
days after the technical conference, EPA noticed in the Federal
Register a supplemental notice of proposed rulemaking,
specifically soliciting comments on how the proposed rule
related to reliability.\9\
---------------------------------------------------------------------------
\4\House Committee on Energy and Commerce, Response from Dr. David
Ortiz, Director, Office of Electric Reliability, Federal Energy
Regulatory Commission, to a Question for the Record from Chair Jeff
Duncan, Hearing on Keeping the Lights on: Enhancing Reliability and
Efficiency to Power American Homes, 118th Cong. (Sept. 13, 2023).
\5\ Federal Energy Regulatory Commission, 2023 Annual Reliability
Technical Conference (Nov. 9, 2023).
\6\Response letter from Chairman Willie Phillips, Federal Energy
Regulatory Commission, to Rep. McMorris Rodgers, Chair, House Committee
on Energy and Commerce, et al. (Dec. 6, 2023).
\7\Commissioner James Danly, Comment to Docket No. EPA-HQ-OAR-2023-
0072 (Aug. 8, 2023).
\8\Commissioner James Danly, Comment to Docket No. EPA-HQ-OAR-2023-
0072 (Dec. 20, 2023).
\9\Environmental Protection Agency, New Source Performance
Standards for Greenhouse Gas Emissions From New, Modified, and
Reconstructed Fossil Fuel-Fired Electric Generating Units, 88 Fed. Reg.
80682. (Nov. 20, 2023) (proposed rule).
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In short, the current feedback mechanisms that FERC
possesses--including both its ability to call technical
conferences and submit comments to a rulemaking docket--appear
more than sufficient to meet the majority's alleged goal of
ensuring that FERC has adequate ability to provide feedback to
EPA on its rules.
For the reasons stated above, we dissent from the views
contained in the Committee's report.
Frank Pallone, Jr.,
Ranking Member.
[all]