[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
BUILDING A 100 PERCENT CLEAN ECONOMY:
SOLUTIONS FOR THE U.S. POWER SECTOR
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON ENERGY
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
__________
OCTOBER 30, 2019
__________
Serial No. 116-77
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the Committee on Energy and Commerce
govinfo.gov/committee/house-energy
energycommerce.house.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
43-924 PDF WASHINGTON : 2021
-----------------------------------------------------------------------------------
COMMITTEE ON ENERGY AND COMMERCE
FRANK PALLONE, Jr., New Jersey
Chairman
BOBBY L. RUSH, Illinois GREG WALDEN, Oregon
ANNA G. ESHOO, California Ranking Member
ELIOT L. ENGEL, New York FRED UPTON, Michigan
DIANA DeGETTE, Colorado JOHN SHIMKUS, Illinois
MIKE DOYLE, Pennsylvania MICHAEL C. BURGESS, Texas
JAN SCHAKOWSKY, Illinois STEVE SCALISE, Louisiana
G. K. BUTTERFIELD, North Carolina ROBERT E. LATTA, Ohio
DORIS O. MATSUI, California CATHY McMORRIS RODGERS, Washington
KATHY CASTOR, Florida BRETT GUTHRIE, Kentucky
JOHN P. SARBANES, Maryland PETE OLSON, Texas
JERRY McNERNEY, California DAVID B. McKINLEY, West Virginia
PETER WELCH, Vermont ADAM KINZINGER, Illinois
BEN RAY LUJAN, New Mexico H. MORGAN GRIFFITH, Virginia
PAUL TONKO, New York GUS M. BILIRAKIS, Florida
YVETTE D. CLARKE, New York, Vice BILL JOHNSON, Ohio
Chair BILLY LONG, Missouri
DAVID LOEBSACK, Iowa LARRY BUCSHON, Indiana
KURT SCHRADER, Oregon BILL FLORES, Texas
JOSEPH P. KENNEDY III, SUSAN W. BROOKS, Indiana
Massachusetts MARKWAYNE MULLIN, Oklahoma
TONY CARDENAS, California RICHARD HUDSON, North Carolina
RAUL RUIZ, California TIM WALBERG, Michigan
SCOTT H. PETERS, California EARL L. ``BUDDY'' CARTER, Georgia
DEBBIE DINGELL, Michigan JEFF DUNCAN, South Carolina
MARC A. VEASEY, Texas GREG GIANFORTE, Montana
ANN M. KUSTER, New Hampshire
ROBIN L. KELLY, Illinois
NANETTE DIAZ BARRAGAN, California
A. DONALD McEACHIN, Virginia
LISA BLUNT ROCHESTER, Delaware
DARREN SOTO, Florida
TOM O'HALLERAN, Arizona
------
Professional Staff
JEFFREY C. CARROLL, Staff Director
TIFFANY GUARASCIO, Deputy Staff Director
MIKE BLOOMQUIST, Minority Staff Director
Subcommittee on Energy
BOBBY L. RUSH, Illinois
Chairman
SCOTT H. PETERS, California FRED UPTON, Michigan
MIKE DOYLE, Pennsylvania Ranking Member
JOHN P. SARBANES, Maryland ROBERT E. LATTA, Ohio
JERRY McNERNEY, California, Vice CATHY McMORRIS RODGERS, Washington
Chair PETE OLSON, Texas
PAUL TONKO, New York DAVID B. McKINLEY, West Virginia
DAVID LOEBSACK, Iowa ADAM KINZINGER, Illinois
G. K. BUTTERFIELD, North Carolina H. MORGAN GRIFFITH, Virginia
PETER WELCH, Vermont BILL JOHNSON, Ohio
KURT SCHRADER, Oregon LARRY BUCSHON, Indiana
JOSEPH P. KENNEDY III, BILL FLORES, Texas
Massachusetts RICHARD HUDSON, North Carolina
MARC A. VEASEY, Texas TIM WALBERG, Michigan
ANN M. KUSTER, New Hampshire GREG WALDEN, Oregon (ex officio)
ROBIN L. KELLY, Illinois
NANETTE DIAZ BARRAGAN, California
A. DONALD McEACHIN, Virginia
TOM O'HALLERAN, Arizona
LISA BLUNT ROCHESTER, Delaware
FRANK PALLONE, Jr., New Jersey (ex
officio)
C O N T E N T S
----------
Page
Hon. Bobby L. Rush, a Representative in Congress from the State
of Illinois, opening statement................................. 1
Prepared statement........................................... 2
Hon. Fred Upton, a Representative in Congress from the State of
Michigan, opening statement.................................... 3
Prepared statement........................................... 5
Hon. Frank Pallone, Jr., a Representative in Congress from the
State of New Jersey, opening statement......................... 6
Prepared statement........................................... 7
Hon. Greg Walden, a Representative in Congress from the State of
Oregon, opening statement...................................... 87
Prepared statement........................................... 88
Witnesses
Jim Matheson, Chief Executive Officer, National Rural Electric
Cooperative Association........................................ 9
Prepared statement........................................... 12
Answers to submitted questions............................... 138
Ralph Izzo, Chairman, President, and Chief Executive Officer,
Public Service Enterprise Group................................ 21
Prepared statement........................................... 23
Answers to submitted questions \1\........................... 148
Lee Anderson, Government Affairs Director, Utility Workers Union
of America..................................................... 29
Prepared statement........................................... 31
Additional material submitted for the record \2\
Answers to submitted questions............................... 151
Karen Palmer, Senior Fellow and Director, Future of Power
Initiative, Resources for the Future........................... 37
Prepared statement........................................... 39
Answers to submitted questions............................... 153
John Bear, Chief Executive Officer, Midcontinent Independent
System Operator, Inc........................................... 56
Prepared statement........................................... 58
Answers to submitted questions \3\
Jeffery S. Dennis, General Counsel and Managing Director,
Advanced Energy Economy........................................ 71
Prepared statement........................................... 73
Answers to submitted questions............................... 156
Submitted Material
Editorial of October 29, 2019, ``California's energy nightmare
shows us why Texas must trust the free market,'' Dallas Morning
News, submitted by Mr. Flores.................................. 128
Slides, ``Global Carbon Emissions ...,'' et al., submitted by Mr.
McKinley....................................................... 132
----------
\1\ Mr. Izzo did not answer submitted questions for the record by the
time of publication.
\2\ Additional material submitted by Mr. Anderson has been retained in
committee files and also is available at https://docs.house.gov/
Committee/Calendar/ByEvent.aspx?EventID=110174.
\3\ Mr. Bear's response to submitted questions for the record has been
retained in committee files and also is available at https://
docs.house.gov/meetings/IF/IF03/20191030/110174/HHRG-116-IF03-Wstate-
BearJ-20191030-SD004.pdf.
BUILDING A 100 PERCENT CLEAN ECONOMY: SOLUTIONS FOR THE U.S. POWER
SECTOR
----------
WEDNESDAY, OCTOBER 30, 2019
House of Representatives,
Subcommittee on Energy,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 10:30 a.m., in
room 2322, Rayburn House Office Building, Hon. Bobby L. Rush
(chairman of the subcommittee) presiding.
Members present: Representatives Rush, Peters, Doyle,
Sarbanes, McNerney, Tonko, Loebsack, Butterfield, Welch,
Schrader, Kennedy, Veasey, Kuster, Barragan, O'Halleran, Blunt
Rochester, Pallone (ex officio), Upton (subcommittee ranking
member), Latta, Rodgers, McKinley, Kinzinger, Griffith,
Johnson, Bucshon, Flores, Hudson, Walberg, Duncan, and Walden
(ex officio).
Also present: Representative DeGette.
Staff present: Adam Fischer, Policy Analyst; Jean Fruci,
Energy and Environment Policy Advisor; Cat Giljohann, FERC
Detailee; Waverly Gordon, Deputy Chief Counsel; Omar Guzman-
Toro, Policy Analyst; Caitlin Haberman, Professional Staff
Member; Rick Kessler, Senior Advisor and Staff Director, Energy
and Environment; Brendan Larkin, Policy Coordinator; Jourdan
Lewis, Policy Analyst; Elysa Montfort, Press Secretary; Alivia
Roberts, Press Assistant; Tim Robinson, Chief Counsel; Nikki
Roy, Policy Coordinator; Tuley Wright, Energy and Environment
Policy Advisor; Rebecca Tomilchik, Staff Assistant; Mike
Bloomquist, Minority Staff Director; Peter Kielty, Minority
General Counsel; Mary Martin, Minority Chief Counsel, Energy,
and Environment and Climate Change; Brandon Mooney, Minority
Deputy Chief Counsel, Energy; Brannon Rains, Minority
Legislative Clerk; and Peter Spencer, Minority Senior
Professional Staff Member, Environment and Climate Change.
Mr. Rush. The Subcommittee on Energy will now come to
order.
And the Chair now recognizes himself for 5 minutes for the
purposes of an opening statement.
OPENING STATEMENT OF HON. BOBBY L. RUSH, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF ILLINOIS
Good morning to each of you, and good morning to all of the
panelists.
I want to thank you all for attending today's hearing
entitled ``Building a 100 Percent Clean Economy: Solutions for
the U.S. Power Sector.''
Today's hearing is an extension of the subcommittee's
series focused on expanding our Nation's clean energy economy.
Further, it is a continuation of the committee's broader
objective to identify pathways to a 100 percent clean energy
future by the year 2050, as proposed by Chairman Pallone,
Chairman Tonko, and myself.
As we approach the year 2050, our Nation faces unique
challenges in its efforts to address more energy production
demands as well as the obligation to limit our contribution to
climate change. In the United States, the greatest sources of
greenhouse gas emissions that are directly linked to human
activity are attributed to the burning of fuels for
electricity, transportation, and the production of goods.
The power sector, whose electricity generation is
historically dependent on fossil fuels, accounts for nearly 30
percent of all U.S. emissions. In view of this, it is important
that the subcommittee evaluates what can be done to reduce that
impact. Therefore, discussions concerning necessary steps to
both meet rising energy demands while at the same time
considering critical technology to reduce the impact of the
power sector's immense carbon footprint are, to say the least,
essential.
Already diversification within the power generation sector
has contributed to a 25 percent decrease in carbon dioxide
intensity, and the opportunity exists to create further
reductions by incorporating additional low- or zero-carbon
sources of energy production. Further reductions in carbon
dioxide emissions are contingent upon, and made possible by,
variances among our energy sources.
According to the National Renewable Energy Laboratory,
renewables--like wind, nuclear, and solar--can help reduce
carbon emissions and produce up to 80 percent of all U.S.
electricity generation by the year 2050. However, in our haste
to address the real threat proposed by climate change, we must
make sure to effectively transition our workforce without
leaving minorities and other vulnerable communities behind.
My bill, the Blue and Green Collar Jobs Acts, would
accomplish that, but this subcommittee can still gain much-
needed insight from our witnesses today on how Congress can
make this transition more equitable and more just.
So I welcome each and all of our witnesses, which includes
our distinguished former Member, Mr. Jim Matheson, who was a
former member of this committee and someone whom we all had
found a lot of favor in working with during his tenure here in
Congress.
[The prepared statement of Mr. Rush follows:]
Prepared Statement of Hon. Bobby L. Rush
Good morning and I thank you all for joining us at today's
hearing entitled, ``Building a 100 Percent Clean Economy:
Solutions for the U.S. Power Sector.''
Today's hearing is an extension of the subcommittee's
series focused on expanding our Nation's clean energy economy.
Further, it is a continuation of the committee's broader
objective to identify pathways to a 100 percent clean energy
future by 2050, as proposed by Chairman Pallone, Chairman
Tonko, and myself.
As we approach the year 2050, our Nation faces unique
challenges in its efforts to address growing energy production
demands as well as the obligation to limit our contribution to
climate change. In the United States, the greatest sources of
greenhouse gas emissions, those that are directly linked to
human activity, are attributed to the burning of fuels for
electricity, transportation, and the production of goods.
The power sector, whose electricity generation is
historically dependent on fossil fuels, accounts for nearly 30
percent of all U.S. emissions. In view of this, it is important
that the subcommittee evaluates what can be done to reduce that
impact. Therefore, discussions concerning necessary steps to
both meet rising energy demands while, at the same time,
considering critical technologies to reduce the impact of the
power sector's immense carbon footprint are essential.
Already, diversification within the power generation sector
has contributed to a 25 percent decrease in carbon dioxide
intensity. The opportunity currently exists to create further
reductions by incorporating additional low and zero carbon
sources of energy production. Further reductions in carbon
dioxide emissions are contingent upon, and made possible by,
varying our energy sources.
According to the National Renewable Energy Laboratory,
renewables--like wind, nuclear, and solar--can help reduce
carbon emissions and produce up to 80 percent of all U.S.
electricity generation by 2050. However, in our haste to
address the real threat posed by climate change, we must make
sure to effectively transition our workforce without leaving
minorities and other vulnerable communities behind. My bill,
the Blue Collar and Green Collar Jobs Act, would accomplish
that, but this subcommittee can still gain much-needed insight
from our witnesses today on how Congress can make this
transition more equitable and just.
So I welcome each of our witnesses, which includes our
distinguished former colleague Jim Matheson, to today's
hearing. I look forward to engaging you on the best ways to
accomplish these objectives. And now I recognize my friend and
colleague, Ranking Member Upton, for his opening statement.
Mr. Rush. And now I recognize my friend and my colleague,
the Representative from the Great State of--the Wolverine
State--Michigan, my friend, Ranking Member Upton, for an
opening statement.
OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MICHIGAN
Mr. Upton. Well, thank you, my friend, Mr. Chairman.
Today's hearing does examine an issue that this committee
has spent a considerable amount of time on in the last couple
of Congresses through our bipartisan ``Powering America''
hearing series.
Now, while this hearing appears to be part of the
majority's legislative effort to decarbonize the entire
American economy by 2050, I would urge the chairman not to
politicize the issue. We certainly owe it to our constituents
to take this work seriously and work together.
And, yes, over the last decade, the U.S. has become the
world's leading processor of oil and natural gas. I am real
proud of that. We import less and we are more energy secure
today than ever before because of it. And thanks to hydraulic
fracturing and the shale revolution, we are all reaping those
benefits in the form of affordable and reliable supplies of
energy from gasoline to electricity.
We are also leading the world in carbon emission
reductions, and we didn't need a top-down Federal mandate or a
Waxman-Markey cap-and-trade bill. We owe it to the free market
and competition for our tremendous progress to reduce
emissions. And these are the facts that we should keep in mind
as we hear proposals for new Federal mandates, carbon taxes, or
complicated emission trading schemes.
Our power sector has been at the forefront of significant
changes as natural gas has overtaken coal as the primary fuel
used to generate electricity for our homes, factories, and
businesses across the country. And, with the rise of natural
gas, we are seeing early retirements of base load coal and
nuclear plants and increases in generation from intermittent
renewables led by wind and solar.
We are also seeing shifts in consumer preferences, in new
technologies having been developed to monitor, store, and
distribute energy across the grid. And, at the same time,
increasing energy efficiency has kept electricity consumption
relatively flat, even as our economy continues to grow.
In its Annual Energy Outlook, the Department of Energy's
Energy Information Administration, EIA, predicts a continued
decline of electricity generation from both coal and nuclear
power plants, with a significant shift toward natural gas and
an increase in renewables. And by 2050, EIA predicts that 31
percent of electricity will be produced from renewables across
the country, 39 percent from natural gas, 12 percent from
nuclear, and 17 percent from coal.
Of course, as you would expect, these trends are not
uniform across the country. They vary significantly by region,
depending on available resources and market prices. What works
in Michigan may not work in other parts of the country due to
the climate or the amount of sunshine and wind that we receive.
But we also must recognize that States, rather than the Federal
Government, are the primary drivers of the trends that we see
today, because many of them, certainly Michigan, have developed
legally binding portfolio standards that require electricity
suppliers to source their electricity from designated renewable
sources or eligible technologies.
We also have independent regional entities, authorized by
FERC, that have developed complex market rules governing the
operation of the electric grid.
Thanks to the rise of affordable natural gas, improvements
in efficiency, and the leadership of the States, carbon dioxide
emissions are down about a third from the 2005 levels.
Tremendous accomplishment. But I am confident that, with a
balanced, market-driven policy, we will continue to make
progress.
As this committee examines the challenges and opportunities
associated with reducing emissions from the power sector, I
will be particularly focused on the issues that matter most to
my constituents: the cost of electricity, the reliability of
our electric grid, and the diversity of options for all
consumers.
We also need to have reality-based discussions on energy
infrastructure, specifically how can we get it built within the
reasonable timeframes and cost. The permitting process for
energy generation, distribution, and transmission
infrastructure, whether it be from a solar farm, a natural gas
pipeline, offshore wind, or a transmission line, has got to be
improved.
While I don't agree with the proposals like the Green New
Deal, if the majority is pursuing these kinds of radical
transformations of our country's energy system, shouldn't
getting infrastructure built as quickly and safely as possible
be at the very top of their to-do list?
I encourage all of us to talk to utilities, engineers,
union workers, about the realities of infrastructure permitting
and sit down with all of us to discuss how can we solve the
problem.
With that, I look forward to hearing from our witnesses
today, and I yield back the balance of my time.
[The prepared statement of Mr. Upton follows:]
Prepared Statement of Hon. Fred Upton
Thank you, Mr. Chairman. And thank you to our witnesses for
appearing before us, especially those that have traveled from
out of town to be with us today.
Today's hearing examines an issue that this committee spent
a considerable amount of time on last Congress through our
bipartisan Powering America hearing series. While this hearing
appears to be part of the majority's legislative effort to
decarbonize the entire American economy by 2050, I would urge
the chairman not to politicize this issue. We owe it to our
constituents to take this seriously and work together.
Over the last decade, the United States has become the
world's leading producer of oil and natural gas. We import less
and we are more energy secure today than ever before because of
it. Thanks to hydraulic fracturing and the shale revolution, we
are all reaping these benefits in the form of affordable and
reliable supplies of energy--from gasoline to electricity.
We are also leading the world in carbon emissions
reductions, and we didn't need a top-down Federal mandate, or
Waxman-Markey's cap-and-trade. We owe it to the free market and
competition for our tremendous progress to reduce emissions.
These are facts that we should keep in mind as we hear
proposals for new Federal mandates, carbon taxes, or
complicated emissions trading schemes.
Our power sector has been at the forefront of significant
change as natural gas has overtaken coal as the primary fuel
used to generate electricity for our homes, factories and
businesses across the United States. With the rise of natural
gas, we are seeing early retirements of base load coal and
nuclear plants and increases in generation from intermittent
renewables led by wind and solar.
We are also seeing shifts in consumer preferences and new
technologies are being developed to monitor, store, and
distribute energy across the grid. At the same time, increasing
energy efficiency has kept electricity consumption relatively
flat, even as our economy continues to grow.
In its annual energy outlook, the Department of Energy's
Energy Information Administration (EIA) predicts a continued
decline of electricity generation from both coal and nuclear
power plants, with a significant shift toward natural gas and
an increase in renewables. By 2050, EIA predicts that 31% of
electricity will be produced from renewables; 39% from natural
gas; 12% from nuclear; and 17% from coal.
Of course, as you would expect, these trends are not
uniform across the country. They vary significantly by region
depending on available resources and market prices. What works
in my home State of Michigan may not work in other parts of the
country due to the climate, or the amount of sunshine and wind
we receive.
We must also recognize that States--rather than the Federal
government--are the primary drivers of the trends we see today,
because many of them, including Michigan, have developed
legally binding portfolio standards that require electricity
suppliers to source their electricity from designated renewable
resources or eligible technologies. We also have independent
regional entities authorized by the Federal Energy Regulatory
Commission (FERC) that have developed complex market rules
governing the operation of the electric grid.
Thanks to the rise of affordable natural gas, improvements
in efficiency, and the leadership of the States, carbon dioxide
emissions are down about a third from 2005 levels. This is a
tremendous accomplishment, but I am confident with balanced,
market-driven policies, we will continue to make progress.
As this committee examines the challenges and opportunities
associated with reducing emissions from the power sector, I
will be particularly focused on the issues that matter most to
my constituents: the cost of electricity, the reliability of
our electric grid, and the diversity of options for consumers.
We also need to have reality-based discussions on energy
infrastructure--specifically, how we can get it built within
reasonable timeframes and costs. The permitting process for
energy generation, distribution, and transmission
infrastructure--whether it is a solar farm, a natural gas
pipeline, offshore wind, or a transmission line--has to be
improved. While I do not agree with proposals like the Green
New Deal, if the majority is pursuing these kind of radical
transformations of our country's energy system, shouldn't
getting infrastructure built as quickly and safely as possible
be at the top of their ``to do'' list? I encourage them to talk
to utilities, engineers, and union workers about the realities
of infrastructure permitting--and then sit down with us to
discuss how we can solve the problem.
With that, I look forward to hearing from the witnesses
today--especially Mr. Bear with the Midcontinent Independent
System Operator, which is responsible for maintaining the
reliability of the grid in 15 States, including Michigan. I
look forward to discussing some of the more practical
challenges and considerations, such as how these policies could
impact affordability for consumers.
Thank you. I yield back.
Mr. Rush. The Chair thanks the gentleman for that brazenly
nonpolitical opening statement.
And now the Chair recognizes the chairman of the full
committee, Mr. Pallone, for 5 minutes.
OPENING STATEMENT OF HON. FRANK PALLONE, Jr., A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF NEW JERSEY
Mr. Pallone. Thank you, Chairman Rush.
Today's hearing is the fifth in the committee's series on
building a 100 percent clean economy by 2050. Each of these
hearings has focused on a separate sector of our economy. And
today we look at pathways to developing a 100 percent clean
power sector.
The power sector has made noticeable progress over the last
15 years in reducing emissions from the facilities that deliver
electricity to American homes and businesses. Its carbon
emissions have fallen steadily since 2005 thanks to a gradual
move away from coal to natural gas and renewable energy like
wind and solar. In some respects, decarbonizing the power
sector presents fewer challenges than other parts of the
economy, but that does not mean it will happen overnight,
especially if we electrify more aspects of the economy.
And, as we have heard in the previous hearings, the pathway
to net zero greenhouse gas pollution by 2050 relies on
aggressively improving energy efficiency across all sectors,
quickly electrifying as much of the economy as possible,
developing and deploying low- and zero-carbon fuels where
electrification is not possible, and switching to clean sources
of generation for that electricity.
Electrifying a wide range of services, processes, and end
uses will be crucial to achieving our climate goals, but only
if that electricity comes from clean sources. And electrifying
more segments of the economy through the increased use of
electric vehicles, heat pumps, and other technologies will be
necessary to achieve a 100 percent clean economy.
But this creates challenges even broader than the simple
question of how we can incentivize more consumers to use these
products. For example, a comprehensive transition to electric
heat pumps over gas-fired furnaces would shift peak electricity
load to the winter in many parts of the country, which presents
several new challenges that would have to be addressed by power
generators, and we will likely need more transmission to
transport power across the country or in from the offshore.
In the power sector, there are clear, achievable ways to
get to 80 percent decarbonization, but it is the last 20
percent that will be by far the biggest challenge. We must use
all available tools. Getting to 100 percent will require a
balanced portfolio of low- and zero-carbon technologies,
including solar, wind, and nuclear power, as well as energy
storage and carbon capture technologies. Without this balanced
portfolio, deep decarbonization will happen at a slower pace
and at a higher cost to homeowners and businesses.
A solution that is unaffordable or technologically
infeasible isn't really a solution at all. As we transition to
a 100 percent clean economy, we must ensure that it does not
harm people already struggling to afford their electricity
bills.
We have to also look to break down market barriers to clean
electricity development. For example, in some parts of the
country, monopoly utilities effectively prevent customers from
installing and using rooftop solar. Over 70 percent of
corporate renewable energy purchases occur in areas with
competitive electricity markets, which illustrates the
challenges that exist to renewable deployment in markets where
one utility has a monopoly.
And, while the power sector has made progress reducing its
emissions, we need Federal action to expand and accelerate the
transition to a 100 percent clean economy.
There are several different policy options available to put
us on a pathway to achieve this goal. Many States have
implemented either a Renewable Portfolio Standard or a Clean
Energy Standard to increase their proportion of clean and
renewable power. And several States, including my own, New
Jersey, have banded together to develop a mandatory market-
based program to reduce greenhouse gas pollution.
So I would like to welcome Ralph Izzo, chairman and CEO of
New Jersey's PSEG. Ralph has been a great partner in helping
New Jersey address climate change and to modernize our energy
systems.
And I am also pleased to welcome back to the committee our
friend and former colleague Jim Matheson. It is great to have
you here, Jim, as well.
So our goal today is to examine which policies have been
most effective in reducing power sector emissions and to learn
how we can build upon those successes on a national scale to
successfully develop a 100 percent clean net power--or net zero
power sector by 2050.
And again, I thank you, Chairman Rush, for having this and
other hearings in this effort to try to come up with a climate
bill that is meaningful.
Thank you.
[The prepared statement of Mr. Pallone follows:]
Prepared Statement of Hon. Frank Pallone, Jr.
Today's hearing is the fifth hearing in the committee's
series on building a 100 percent clean economy by 2050. Each of
these hearings has focused on a separate sector of our economy,
and today we will look at pathways to developing a 100 percent
clean power sector.
The power sector has made noticeable progress over the last
15 years in reducing emissions from the facilities that deliver
electricity to America's homes and businesses. Its carbon
emissions have fallen steadily since 2005 thanks to a gradual
move away from coal to natural gas and renewable energy like
wind and solar. In some respects, decarbonizing the power
sector presents fewer challenges than other parts of the
economy, but that does not mean it will happen overnight,
especially if we electrify more aspects of the economy.
As we have heard in previous hearings, the pathway to net
zero greenhouse gas pollution by 2050 relies on aggressively
improving energy efficiency across all sectors; quickly
electrifying as much of the economy as possible; developing and
deploying low- and zero-carbon fuels where electrification is
not possible; and switching to clean sources of generation for
that electricity. Electrifying a wide range of services,
processes, and end-uses will be crucial to achieving our
climate goals, but only if that electricity comes from clean
sources.
Electrifying more segments of the economy through the
increased use of electric vehicles, heat pumps, and other
technologies will be necessary to achieve a 100 percent clean
economy. But this creates challenges even broader than the
simple question of how we can incentivize more consumers to use
these products. For example, a comprehensive transition to
electric heat pumps over gas-fired furnaces would shift peak
electricity load to the winter in many parts of the country,
which presents several new challenges that would have to be
addressed by power generators. And we will likely need more
transmission to transport power across the country or in from
offshore.
In the power sector, there are clear, achievable ways to
get to 80 percent decarbonization--but it's the last 20 percent
that will, by far, be the biggest challenge. We must use all
available tools. Getting to 100 percent will require a balanced
portfolio of low- and zero-carbon technologies--including
solar, wind and nuclear power--as well as energy storage and
carbon capture technologies. Without this balanced portfolio,
deep decarbonization will happen at a slower pace and at a
higher cost to homeowners and businesses. A solution that is
unaffordable or technologically infeasible isn't really a
solution at all. As we transition to a 100 percent clean
economy, we must ensure that it does not harm people already
struggling to afford their electricity bills.
We must also look to break down market barriers to clean
electricity development. For example, in some areas of the
country, monopoly utilities effectively prevent customers from
installing and using rooftop solar. Over 70 percent of
corporate renewable energy purchases occur in areas with
competitive electricity markets, which illustrates the
challenges that exist to renewable development in markets where
one utility has a monopoly.
While the power sector has made progress reducing its
emissions, we need Federal action to expand and accelerate the
transition to a 100 percent clean economy. There are several
different policy options available to put us on a pathway to
achieving this goal. Many States have implemented either a
Renewable Portfolio Standard or a Clean Energy Standard to
increase their proportion of clean and renewable power. And
several States--including New Jersey--have banded together to
develop a mandatory, market-based program to reduce greenhouse
gas pollution.
I'd like to welcome Ralph Izzo, chairman and CEO of New
Jersey's PSEG. Ralph has been a great partner in helping New
Jersey address climate change and modernize our energy systems.
And I'm also pleased to welcome back to the committee our
friend and former colleague, Jim Matheson. It's great to have
you here, Jim.
Our goal today is to examine which policies have been most
effective in reducing power-sector emissions--and to learn how
we can build upon those successes on a national scale to
successfully develop a 100 percent clean, net zero power sector
by 2050.
Mr. Rush. The Chair thanks the chairman.
The Chair now recognizes Mr. Walden, the ranking member of
the full committee--he is on his way?
All right. In that event, we will move forward to the
witnesses, and when the ranking member comes in, then we will--
--
Mr. Upton. He likes the term chairman, but that is OK.
Mr. Rush. Well, I am sure he does, but he won't have it for
a while.
I would like to now welcome all of our witnesses to today's
hearing. And I will introduce our witnesses.
From my left, as I mentioned previously, we are really
delighted to have our former Member, the Honorable Jim
Matheson, who serves as the CEO of the National Rural Electric
Cooperative Association, present with us.
Next to Mr. Matheson is Mr. Ralph Izzo. I think that is how
you pronounce it, Izzo. He is the chairman and president and
CEO of the Public Service Enterprise Group, Incorporated, PSEG.
Next to him is Mr. Lee Anderson. Mr. Anderson is the
governmental affairs director for the Utility Workers Unions of
America, AFL-CIO.
And next to Mr. Anderson is Ms. Palmer--Ms. Karen Palmer.
She is a senior fellow and director of the Future of Power
Initiative at Resources for the Future.
And then lastly but not least, we have next to Ms. Palmer,
Mr. John Bear. He is the CEO of the Midcontinent Independent
System Operator, Incorporated.
And last but not least, Mr. Jim Dennis. Mr. Dennis serves
as the general counsel and managing director for the Advanced
Energy Economy.
Thank you for joining us here today, and we look forward to
each of your testimony.
Before we begin, I would like to explain the lighting
system that is before you. In front of you is a series of
lights. The light will initially be green at the start of your
opening remarks. The light will turn yellow when you have 1
minute remaining. And please, at the yellow light, begin to
wrap up your testimony. And then the light will turn red when
your turn expires.
And I will begin by asking our friend and former colleague,
Mr. Matheson, to begin. You are recognized for 5 minutes.
STATEMENTS OF JIM MATHESON, CHIEF EXECUTIVE OFFICER, NATIONAL
RURAL ELECTRIC COOPERATIVE ASSOCIATION; RALPH IZZO, CHAIRMAN,
PRESIDENT, AND CHIEF EXECUTIVE OFFICER, PUBLIC SERVICE
ENTERPRISE GROUP; LEE ANDERSON, GOVERNMENT AFFAIRS DIRECTOR,
UTILITY WORKERS UNION OF AMERICA; KAREN PALMER, SENIOR FELLOW
AND DIRECTOR, FUTURE OF POWER INITIATIVE, RESOURCES FOR THE
FUTURE; JOHN BEAR, CHIEF EXECUTIVE OFFICER, MIDCONTINENT
INDEPENDENT SYSTEM OPERATOR, INC.; AND JEFFERY S. DENNIS,
GENERAL COUNSEL AND MANAGING DIRECTOR, ADVANCED ENERGY ECONOMY
STATEMENT OF JIM MATHESON
Mr. Matheson. Well, thank you. Thank you, Chairman Rush and
Ranking Member Upton. I really appreciate the opportunity to
return before this committee that I proudly served for 8 years.
Simply put, America's electric cooperatives are focused on
responsibly delivering reliable and affordable electricity.
And, as you know, when you are a cooperative, you are built by
and you belong to each community that you serve. So each
cooperative is different, based on their community's specific
needs.
Historically, electric co-ops proudly shouldered the
responsibility of bringing electricity to rural communities,
and this obligation is not without its challenges today.
Sparsely populated communities are more expensive to serve
and provide less revenue compared to those areas served by
investor-owned or municipal utilities. On average, for every 1
mile of distribution line that a electric co-op serves, it is
only 8 consumers, and we collect about $19,000 of revenue a
year.
For the rest of the utility sector combined, it is 4 times
that: 32 customers per line, roughly $79,000 in annual revenue.
And yet, 1 in 8 Americans are served by an electric
cooperative.
Importantly, electric cooperatives serve 92 percent of the
Nation's persistent poverty counties.
So these factors make it especially important for co-ops to
keep electric rates affordable, maintain reliability, and
improve sustainability as they explore all ideas to meet the
evolving energy needs of their local communities.
Diversity of electric generation, including base load
resources, is essential to meeting co-op members' expectations.
Co-ops have and will continue to diversify their energy
portfolios, with the majority of their power now coming from
low- and no-emissions resources.
For example, electric co-op solar capacity has more than
quadrupled since 2016. This is due to in large part to a
partnership between DOE, NRECA, and 17 co-ops, reduced the cost
of solar installations, addressed deployment barriers, and
developed financing models and other resources.
Just last week, DOE selected NRECA, in partnership with the
Pacific Northwest National Laboratory, to research small-scale,
community-based wind energy that can similarly be deployed by
electric co-ops. Interest among electric co-ops in deploying
energy storage is also growing and should accelerate as more
experience is gained, costs decline, and battery performance
improves.
Hydropower and nuclear energy also remain an essential
source of zero-emission generation for electric cooperatives in
certain regions.
Knowing that both natural gas and coal will continue to
play an important role in providing affordable and reliable
electricity in a carbon-strained future, electric co-ops are
actively engaged in carbon capture research and development.
As not-for-profit utilities, all costs incurred by a co-op
are ultimately passed on to our consumer members, and that is
why co-ops are committed to generating power as efficiently and
cost effectively as possible. It is also why we are
particularly attuned to the potential for stranded assets. We
have no shareholders to help shoulder that type of burden.
Actions taken by co-ops continue to meet the resource needs
of their communities and have also resulted in significant
reductions in carbon dioxide emissions. CO2
emissions in 2017 from co-op-owned generating facilities were
12 percent below 2005 levels, even as co-op electric generation
increased during that time. And, of course, the whole U.S.
electric sector has decreased its CO2 emissions to
around 1988 levels, and it is well positioned to contribute to
CO2 reductions in other sectors through beneficial
electrification.
There are meaningful opportunities for further
electrification of commercial, industrial, and agricultural
applications, which would significantly reduce carbon emissions
economywide.
Responsibly providing reliable, affordable electricity
remains the shared commitment of all NRECA members, but a
technology program or policy that works for one co-op might not
work for another.
Ultimately, and most importantly, every co-op's resource
mix is unique to the needs of that co-op and will continue to
vary greatly depending on existing resources and assets, the
impact on electricity costs for its member-consumers,
reliability implications, the availability of alternative
electric generation, and other local circumstances.
So having the flexibility to implement energy solutions
across the many regions where cooperatives serve is a critical
factor for today and for the future of our members.
So policymakers should be mindful of this and ensure that
any proposals that this committee considers provide long-term
certainty and that flexibility that maintains energy diversity
for electric co-ops, that protects reliability of the electric
grid, and minimizes undue economic impact for consumers.
Again, I appreciate this opportunity. I look forward to
taking your questions.
[The prepared statement of Mr. Matheson follows:]
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Mr. Rush. Next, we will have Mr. Izzo.
Mr. Izzo, you are recognized for 5 minutes for an opening
statement.
STATEMENT OF RALPH IZZO
Mr. Izzo. Good morning, Subcommittee Chair Rush, Ranking
Member Upton, and good morning and thank you to full committee
Chairman Pallone for his greeting.
As was mentioned, my name is Ralph Izzo, and I am the CEO
and chairman of New Jersey-based Public Service Enterprise
Group. We are the parent company of the State's largest
electric and gas utility, serving millions of customers in most
of the State's major urban areas.
Our subsidiary, PSEG Power, owns 12,000 megawatts of
generation across the northeast and Midatlantic. Power's fleet
ranks third-lowest in carbon intensity among the country's
major generators, at about half the national average.
Thank you for holding this hearing and for the bigger task
you are undertaking to steer us toward a 100 percent clean
economy by 2050.
In the 10 years since Congress last considered the topic of
climate change, my company has continued to make progress. We
have worked with our State to preserve at-risk nuclear
generation, which supplies over 90 percent of New Jersey's
carbon-free electricity. We have invested over $1.7 billion in
solar energy. We have closed our New Jersey coal plants and
will close our only remaining coal unit, which is located in
Connecticut, by the middle of 2021.
We have proposed bringing energy efficiency and other
elements of a clean-energy future to our New Jersey customers
at a historic scale.
Last summer, we committed to reducing our power plant
emissions 80 percent below 2005 levels by 2046. And with
advances in technology, customer behavior, and public policy,
we believe we can achieve our vision of net zero carbon
emissions from our fleet by 2050.
As to why Federal action is needed, I frequently ask this
riddle: Is the current cost of emitting carbon dioxide in New
Jersey $0 a ton, $5 a ton, $17 a ton, $100 a ton, or $400 a
ton?
Sadly, the answer is all of the above. Here is how. Our
regional energy market, PJM, does not include carbon in its
electricity price, so the cost of emission is zero. But under
the Regional Greenhouse Gas Initiative, the carbon cost is
around $5 per ton for an emissions credit.
In New Jersey, the zero-emission credit for existing
nuclear translates to a carbon cost of $17 per ton.
At the highest end, renewable energy credits needed to meet
a renewable portfolio standard for offshore wind and solar
produce carbon costs closer to $400 and $100 per ton.
In the absence of a national price on carbon, we are left
with economic inefficiency that translates to customers as a
cost. It is time for Congress to bring the consistency that
only a national program can provide.
In addition to a price on carbon, there are other near-term
actions to consider. We must ensure Federal policy does not
undo State efforts to preserve clean energy, including existing
nuclear. Nuclear energy provides over half the Nation's carbon-
free electricity. But low natural gas prices have put many
plants on the brink of closure.
Much is at stake as FERC weighs fundamental change to the
PJM capacity market, and some options would worsen the
economics for at-risk plants, to the detriment of the
environment and the resilience of our regional power supply.
Secondly, I can think of no more urgent priority than doing
all we can to reduce carbon emissions through energy
efficiency. When these efforts are led by the regulated
utility, the savings can more than offset the cost of the
investment, thus carbon reductions can be achieved this way at
$0 per ton.
Congress can leverage the power of utilities as a
transformative investor by providing Federal dollars through a
LIEAP-like program to States that aggressively move in this
direction. These funds could help ease the burden on low-income
customers of other, more expensive strategies. A model program
already in the LIFT Act for methane could be expanded for this
purpose.
But make no mistake, the shortest path to a net zero
economy requires setting a national price on carbon. This is
what will drive the innovation needed to achieve our goals.
This is what allows us to end technology-specific subsidies
that layer on additional costs. And this is what will help
drive emissions reductions through market mechanisms, not just
from the power sector but economywide, with the utmost obvious
opportunity coming from the electrification of the
transportation sector.
A national price on carbon could take many forms. Cap-and-
trade concept is market-based and proven and deserves another
look. In the alternative, an upstream emissions fee could
generate as much as $250 billion per year for consumer
dividends, debt reduction, or R&D.
I am pleased to continue this discussion during the Q&A.
Thank you for your time.
[The prepared statement of Mr. Izzo follows:]
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Mr. Rush. The Chair now recognizes Mr. Anderson for 5
minutes.
STATEMENT OF LEE ANDERSON
Mr. Anderson. Thank you, Chairman Rush, Ranking Member
Upton, and distinguished members of the committee.
My name is Lee Anderson, and I am the government affairs
director for the Utility Workers Union of America.
The Utility Workers Union represents more than 50,000
workers in the electric, gas, nuclear, and water utility
sectors. In the power sector specifically, our members maintain
electric generation assets including nuclear, coal, natural
gas, and liquid fuel power plants, as well as utility-scale
wind farms, solar arrays, and energy storage facilities. We
also have substation operations, above- and below-ground line
crews, and even tree-trimming crews.
It is a truism at this point that the manner in which the
world generates electricity is evolving rapidly. In America,
ever more coal and nuclear assets are being taken offline every
year, with natural gas and renewable generation expanding.
Abroad, other countries are expanding coal and nuclear
power alongside gas and renewables, as their rapidly growing
economies demand ever more energy to make them function.
The Utility Workers Union recognizes that change is being
driven by economics, by the recognition that global climate
change is happening, and that it is the result of manmade
carbon emissions.
Our union is made up of highly skilled people whose
everyday work involves thinking like an engineer, a mechanic, a
scientist.
We ask how do we engineer our way through this challenge,
not how do we argue or vote our way out of this. In answering
this question, there are both opportunities and challenges in
the power sector.
For our union, the polestar in understanding the science of
climate change and the appropriate response to it is the
Intergovernmental Panel on Climate Change. Bringing together
the world's leading climate scientists to understand the
problem and the necessary responses seems the obvious starting
point.
One such response that, according to the IPCC, is
indispensable to our ability to combat a changing climate is
carbon capture. In their reporting, the IPCC has stated that
less than 50 percent of their climate models can achieve a 450-
parts-per-million CO2 target by the year 2100
without the widespread use of carbon removal technologies and
power generation and industrial processes. For those models
that do achieve the goal without its use, the price increases
by 138 percent.
In the nuclear fleet, there are still over 90 nuclear power
plants in operation across the U.S. And taken together, this
fleet already provides over half of America's carbon-free
electricity. Unfortunately, our union's experience is
increasingly informed by the closure of nuclear facilities.
To date, UWUA members have lost some of the best jobs in
the power sector due to nuclear closures in California,
Massachusetts, and Michigan, with additional closures slated to
occur at an additional facility in Michigan, as well as in New
York.
We are losing already-built zero-carbon facilities that
could be kept online to obviate the need to build whole new
systems from scratch.
In renewable energy, America's demand is, of course,
growing. Our only Power for American Training Trust, or P4A as
we call it, has developed the country's first Department of
Labor-certified apprenticeship program in renewable energy that
includes training for apprentices across three technologies:
Wind, solar, and battery storage systems.
So today we see a consensus growing that a net zero
emissions philosophy is needed. Even civilization is deeply
complex, and it will always have a carbon----
However, although we must decarbonize our economy, we must
do so in a manner that does not crash the economy. The closure
of a power plant means the loss of many hundreds or even
thousands of jobs for people directly employed in these large
facilities and their supply chains.
Increasingly, entire regions and ways of life are changing
too rapidly for individuals and small communities to adapt on
their own. We must recognize the contribution made by these
workers to build this Nation and aid them in making this
change.
So in summary, we see reason for optimism but also reasons
to be cautious. The technology already exists to retain and
build out low- or zero-carbon power generation. There is
nothing which needs to be invented from scratch, only systems
which need to be scaled, improved, or in some cases simply
retained.
I thank you for the opportunity today to be a part of these
proceedings, and I look forward to answering your questions.
[The prepared statement of Mr. Anderson follows:]\1\
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\1\ Additional information submitted by Mr. Anderson has been
retained in committee files and also is available at https://
docs.house.gov/Committee/Calendar/ByEvent.aspx?EventID=110174.
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Mr. Rush. The Chair now recognizes Ms. Palmer for 5
minutes.
STATEMENT OF KAREN PALMER
Ms. Palmer. Thank you.
Chairman Rush, Ranking Member Upton, and distinguished
members of the subcommittee, my name is Karen Palmer, and I am
a senior fellow and director of the Future of Power Initiative
at Resources for the Future.
RFF is an independent, nonprofit research institution in
Washington, DC. Our mission is to improve environmental,
energy, and natural resource decisions through impartial
economic research and policy engagement. The views I express
here today are my own and may differ from those of others at
RFF. RFF does not take positions on specific legislative
proposals.
This hearing is timely and takes place against the backdrop
of a rapidly evolving power sector shaped by policy and
economics. Emissions from the power sector are down 27 percent
from 2005 levels, due to a combination of falling costs for
lower-emitting natural gas and renewables, and State and
Federal policies.
However, without further policy intervention, the power
sector will fall far short of the 100 percent net-zero emission
goal put forward by the committee leadership. In this
testimony, I am going to offer a discussion of relevant policy
options and some potential challenges that need to be addressed
along the way.
Economic theory and experience indicate that the most cost-
efficient policy solutions are those that introduce a price for
carbon emissions, either through a carbon tax or cap-and-trade
program. An economywide price on carbon makes carbon-intensive
fuels more expensive than those with lower carbon content,
sending an economic signal to reduce emissions through the
entire economy.
When carbon pricing is applied to the electricity sector,
all emissions are priced consistently, enabling a wide range of
reduction strategies.
In comparing climate policy options, the greater the number
of available options to reduce emissions, the lower the overall
cost of the policy.
Carbon pricing policies can raise substantial revenue, and
how such revenue is used affects the outcomes driven by the
policy. Decisions about the use of revenues involve tradeoffs
among efficiency, emissions reductions, and distributional
outcomes.
Another option would be to build on the success of
Renewable Portfolio Standards that have been implemented at the
State level to require a fully renewable sector by 2050.
However, renewables-only policy would reduce emissions at
relatively higher costs than a more technology-inclusive
policy, such as a clean energy standard, which would credit
additional zero- or low-carbon generation, such as nuclear, or
coal or natural gas fitted with carbon capture.
RFF bottling of proposed CES policies has shown that a CES
would put the power sector well on its way to full
decarbonization with modest effects on electricity rates,
approach the cost efficiency of a carbon price, and increase
retail electricity rates by less than an equivalent carbon
pricing policy that does not use its revenue for electricity
rate reduction.
An alternative approach would be to clarify EPA's existing
authority to regulate greenhouse gas emissions from stationary
and mobile sources under the Clean Air Act. Congress could
specify emission reduction targets, reaffirm the Clean Air Act
as a mechanism that can be used, and clarify both the relevant
sections of the statute and that carbon pricing and other
market mechanisms would constitute valid approaches.
Transitioning to a decarbonized electricity sector raises
some important challenges to traditional approaches to
electricity system operations and wholesale electricity
markets. But these challenges are not insurmountable.
First, a high penetration of renewables can be expected to
drive wholesale energy prices to zero in many hours of the day.
Markets may need to be altered in order to promote new
investment while delivering power reliably and at low cost.
Second, maintaining a reliable grid with high penetration
of intermittent renewables will likely require a build-out of
bulk energy storage and more flexible electricity demand
activated by greater time-varying prices.
Newly electrified loads, such as electric vehicles, may be
an important source of flexible demand to aid renewables
integration.
Third, targeting electricity-sector emissions in isolation
from the rest of the economy could discourage electrification
of our sectors, such as transportation and buildings. Ideally,
simultaneous efforts to address carbon emissions from these
sectors would be put in place.
In closing, I note that climate policy outcomes are certain
to involve a portfolio of these measures at Federal, State, and
local levels. This policy mix may be desirable for various
reasons, such as to promote innovation, achieve local air-
quality improvements, or achieve better distributional
outcomes. Policies should be designed in anticipation of
overlapping influence to maximize the effectiveness of the
entire portfolio.
Notably, meeting the environmental challenge before us is
not totally unprecedented. Though these emission targets are
ambitious, so too were targets under the Clean Air Act in 1970,
which addressed multiple pollutants across the economy and for
which technologies to achieve emission reductions did not exist
at that time. The dramatic declines in air pollution achieved
under the act happened at the same time the U.S. economy grew
16-fold and as the population grew by roughly 150 percent.
I look forward to addressing your questions today.
[The prepared statement of Ms. Palmer follows:]
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Mr. Rush. The Chair now recognizes Mr. Bear for 5 minutes.
STATEMENT OF JOHN BEAR
Mr. Bear. Good morning.
Chairman Rush, Ranking Member Upton, and members of the
subcommittee, I am John Bear. I am the chief executive offer of
the Midcontinent Independent System Operator, or MISO. It is a
pleasure to be with you today as you consider the future of
renewable energy and its impact on our Nation. I hope you will
find MISO's insights useful in your work in shaping U.S. energy
policy.
MISO is a regional transmission organization, commonly
referred to in the industry as an RTO. In fact, we were the
first RTO approved by FERC in 2001. RTOs were established to
independent entities, and we put a priority on maintaining that
independence. We are fuel-source neutral and policy neutral,
meaning we don't favor, prefer, or advocate for any fuel or
policy outcome.
That doesn't mean, however, that we are disinterested
observers. MISO is a 501(c)(4) not-for-profit social welfare
organization with responsibility for ensuring the reliability
of the high-voltage electric transmission system to deliver
low-cost energy to consumers.
The topic of this hearing, the role of renewable energy,
can have a direct impact on both the reliability of the system
and the value created for consumers.
The system that MISO operators, including 72,000 miles of
transmission lines, 175,000 megawatts of generation, is the
largest in North America in terms of geographical scope. We
serve 42 million people across all or part all of 15 States, a
Canadian province, and border from Canada to the Gulf of
Mexico. This vast footprint provides for tremendous diversity
in terms of the types of resources, State policies, weather
patterns, and, notably, perspectives and viewpoints across our
stakeholder committees that are crucial to us solving today's
complex challenges.
On this topic, we have stakeholder sectors that include
utilities that are having to respond to customer demands for
100 percent renewable energy, others that are responsible for
approving the State and resource plans that ensure the utility
has those type of resources in its fleet, and yet others that
represent end-use customers and that interest and appropriately
remind us that customers are still paying to have reliable
power and the resources that are contemplated being replaced by
new green resources whose cost will be borne by those same
customers.
Our fleet is evolving, and it is evolving significantly.
MISO has experienced significant fleet evolution over the last
15 years, going from 80 percent coal to 50 percent coal, 7
percent gas to 30 percent gas, zero percent wind to 8 percent
wind, and is increasing.
The required innovative changes to our planning, our
markets, our operations to maintain reliability along the way--
and we continue to learn and adapt in response to the
associated impacts of low reserve margins, degrading unit
performance, increased reliance on variable generation, and
what that means to us.
We see several macro trends, and we expect the transition
to more renewable energy to continue to be driven by those
three macro trends. We call them the three d's:
demarginalization, decentralization, and digitization.
Our work to understand the implication of these trends has
identified the future needs to reliably meet these challenges:
improved availability, improved flexibility, and improved
visibility.
We have conducted a Renewable Integration Impact
Assessment--we call it RIIA--and it really has been informed by
our future planning scenario and the requests that we have
received for new resources to connect to our grid.
Three years ago, we started a study with our stakeholders
to identify the inflection points of these increasing levels of
renewable penetration, what were the implications on our
policies, our procedures, and the attributes that we needed our
assets to demonstrate.
Thus far, our findings reveal that it is very manageable,
to a 30 percent renewable level. However, at 40 percent the
integration complexity goes up significantly, and we have got a
lot of things to think about in terms of how to accomplish that
in a reliable and cost-effective manner. New processes and
market products are required, new pricing regimes are required,
and the potential role of new technologies that can help
mitigate these system risks, system stability attributes, and
transfer capability.
Our industry engagement has been very strong, not just here
in the United States but also across the globe. As a member of
a group called the Geo 15, which is the largest market and grid
operators across the planet, we are all dealing with very
similar problems as we see significant increase in renewable
portfolios.
In terms of how we think about things in the past and how
we are going to think about things in the future, significant
changes are taking place. In the past, we planned for the peak
hour of a peak day, and we assumed that the resources would be
there all year long when we needed them.
With renewable and intermittent portfolio increases, that
is not true anymore. Now it is about availability, how much
assets--where are the assets, and are they available? Pricing
mechanisms are critical, as Ms. Palmer noted. We are seeing
demarginalization take place to the point where we need to
think about how to price these attributes so that the assets
are incented to provide what we need them to provide at that
time that we need them to provide that.
Again, our steady work and our information-gathering
experience have helped to identify these changes in these
attributes that we need, and they show a further paradigm shift
going forward.
With that, I look forward to your questions.
[The prepared statement of Mr. Bear follows:]
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Mr. Rush. The Chair now recognizes our final witness for an
opening statement.
Mr. Dennis, you are recognized for 5 minutes.
STATEMENT OF JEFFERY S. DENNIS
Mr. Dennis. Thank you.
Chairman Rush, Ranking Member Upton, and members of the
subcommittee, it is an honor to testify today on the
opportunity to utilize clean, advanced energy technologies to
decarbonize the power sector in the U.S. economy.
My name is Jeff Dennis, and I am general counsel and
managing director at Advanced Energy Economy.
AEE is a national organization of businesses making the
energy we use secure, clean, and affordable. Advanced energy
technologies include energy efficiency, demand response, solar,
wind, energy storage, and electric vehicles, to name just a
few.
AEE also manages the Advanced Energy Buyers Group, a
coalition of large electricity consumers interested in
increasing their purchases of advanced energy.
AEE strongly supports this committee's efforts to undertake
a broad review of policy options for decarbonizing the power
sector and reaching net-zero carbon emissions by 2050. We
welcome the opportunity to work with the committee as it
explores these policy options.
This conversation comes at a time when advanced energy
technologies have become the most cost-effective resources on
the grid. This innovation success story means that we can
transition to a 100 percent clean power sector and save
consumers money rather than driving up their costs.
Advanced energy technology costs have fallen so sharply
that investing in new wind and solar resources can be more cost
effective than continuing to pay the operating costs of some
traditional generating technologies.
For example, recent research shows that retiring the vast
majority of the existing coal fleet by 2025 and replacing it
with local wind and solar would lower electric bills across the
United States while reducing carbon emissions substantially.
Advanced energy technologies are also reliable and provide
enhanced resilience in the face of extreme weather and other
threats to the grid and fuel supplies.
For example, earlier this month, over 700 megawatts of
flexible demand response resources were deployed to maintain
reliability in the Midatlantic States during an unusual hot
weather event which occurred during a period when many
traditional technology resources are shut down for maintenance.
Advanced energy is already a $238 billion industry in the
United States, supporting 3.5 million American jobs, spread
across all 50 States, in both rural and urban communities and
in communities that previously relied on fossil-fuel-based
industries.
States, utilities, and large electricity consumers are
acting to capture the economic and reliability advantages of
switching to advanced energy. State policy changes and large
corporate customer commitments, in fact, are the primary
drivers of growth in the advanced energy market and resulting
reductions in carbon emissions.
While each State is unique, some of the common policy
approaches States are pursuing today include expanded renewable
and clean energy standards, improved utility resource planning,
and allowing for customer choice and competition in retail
service.
In addition, since 2008, commercial and industrial
customers have signed contracts to procure 22 gigawatts of
renewable energy, including a record 7.15 gigawatts so far this
year.
In addition to renewables, these large corporate customers
are also increasing their investments in energy efficiency,
demand response, distributed energy, and energy storage.
Federal leadership can build on these trends. In addition
to the longer-term policy options we will discuss today,
improving competition in the federally regulated wholesale
electricity markets is an important near-term opportunity. When
wholesale markets allow all technologies to compete based
solely on price and performance, least-cost advanced energy
technologies win and displace high-emitting power plants,
driving down power sector emissions and lowering prices for
consumers.
Too often, however, the rules and regulations in wholesale
markets either implicitly or explicitly preclude advanced
energy technologies from fully participating.
Progress has been made in removing barriers to advanced
energy in wholesale electricity markets, including important
actions to open markets to energy storage and ensure that
resources like energy efficiency aren't excluded.
But continued action by FERC and Congress is necessary to
ensure that wholesale markets are technology neutral and
capture the benefits of advanced energy.
Doing so would unleash significant market-based investment
in clean energy, more energy innovation, reduced emissions, and
lower consumer costs.
Thank you for the opportunity to be here today, and I look
forward to the discussion.
[The prepared statement of Mr. Dennis follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Rush. I want to thank all of the witnesses.
And I will now recognize the ranking member, whose recent
announcement sent the stock markets reeling--Mr. Walden is
recognized for 5 minutes.
OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF OREGON
Mr. Walden. Wow. Yes, I didn't know that happened. Maybe I
should reconsider. No. No, I am not. Actually, it is only down
13 points.
So thank you, Mr. Chairman. Appreciate that. And I really
appreciate you holding this hearing today. I think it is an
important one as we examine the opportunities and challenges
associated with modernizing our electric grid.
And I want to thank our witnesses for being here.
We had another hearing going on downstairs in the Health
sub that I had to stay for a little longer--the Health sub, I
guess it is.
Today's hearing is obviously a part of a series the
majority scheduled to look at all of these opportunities and
challenges and the transformations that some policies propose.
And I have a great belief in American ingenuity and get-it-done
attitude and all of that. But I also want to make sure that, as
policies move forward, we put the consumer first as we work on
reducing emissions. I think we have to do that. Cost matters.
We have seen different strategies play out in both
different States and different countries. And some of them are
working better than others. And there are actually wonderful
laboratories you can go look at and go, ``Ahh, we don't want to
do that necessarily, or maybe we want to do this.'' But we have
to make sure that the grid is safe and secure and adequate. We
did a lot of work on that in last Congress and the one before,
as you integrate new energy sources in.
And as I have said before, Mr. Chairman, Republicans are
more than willing to sit down with you and work on some of
these issues, and I know there is a lot to be done.
But the stakes are high. Our grid is facing many new and
emerging challenges, and the potential to significantly impact
grid reliability and increase prices for consumers could result
if we make the wrong choices.
Base load coal-fired and nuclear power plants are closing
around the country at a record pace. I know in Europe, they
have put a lot of renewables on, but they have taken nuclear
off. So, in some cases, it is a sort of net zero, in effect, in
terms of what they are trying to do there.
We are relying more and more on natural gas for electricity
than ever before, and yet we are facing all kinds of pipeline-
siting bottlenecks and permitting challenges that affect
reliability of natural gas supply, both for heating and for
electricity generation. And then we have some politicians that
then attack the companies who are trying to build the pipelines
to get gas to their areas who are not getting gas to their
areas in adequate amounts. And it is like, you know, you can't
have it both ways.
Electricity generation from intermittent renewable
resources is also on the rise. And I know in the northwest, for
a long time we had a little more flexibility, with the dams and
the river system as a battery, but most of that is gone out of
the system now for all kinds of reasons. And so we have to make
sure that we can deal with that.
As these trends continue, we will need a tremendous amount
of new solar panels, new wind farms, more electricity storage,
more high-voltage transmission lines. We will also need more
natural gas pipelines, and the industry must develop
commercially viable grid-scale storage and advanced
technologies for distributed energy resources and demand
response.
I think we also have to deal with serious physical threats.
We have all been in briefings and hearings about the cyber
threats, about the severe weather threats, and tragically
watching what is happening in California and the threats and
the loss of life there year after year. Over the past several
weeks, we have seen millions of people without power and
affected and moved out of their homes because of the fires.
And while some say California's policies are partially to
blame to forcing utilities to redirect resources away from
basic maintenance and for making it difficult to manage
vegetation on rights-of-way, the facts of the matter is that
people are suffering, and a one-size-fits-all policy is not
going to solve that.
So there is a lot of work to do. And I think nuclear has to
play a key role in this. The committee has worked in the past
and under Chairman's Upton's leadership, and in the last
Congress mine, to try and figure out what can we do to advance
new technology for nuclear power. You want zero emissions, it
is right there. And we can have base load power, but we know
that is a bit in the distance.
I am told, for example, in South Korea, I think they can
site a new nuclear facility in just a few years for a couple
billion dollars, and here it is a few lifetimes and 10 or 15
times that. And so other countries are kind of figuring this
out, and I think we have got to take a look at what they do.
So, Mr. Chairman, thank you for indulging my tardiness in
getting here. Thanks for your leadership on this issue and your
friendship, and I look forward to the discussion continuing.
And I yield back.
[The prepared statement of Mr. Walden follows:]
Prepared Statement of Hon. Greg Walden
Mr. Chairman, thanks for holding today's hearing to examine
the challenges and opportunities associated with modernizing
our Nation's electric grid. I would also like to thank our
witnesses for appearing before us today.
Today's hearing is part of a series that the Majority is
holding to identify the paths to decarbonizing the American
economy by 2050. Last week, we heard the chairman say that this
``will be one of the most ambitious, challenging and necessary
transformations our country has ever attempted.'' While I
believe in American ingenuity and hard work, the kind of
transformation that the chairman's words suggests signals a
radical upheaval of our energy systems at a scale that sounds
an awful lot like the policies of the ``Green New Deal.''
As policymakers, I believe we should be putting our
constituents first. I also believe that we should be focused on
pragmatic policy solutions, rather than catchy slogans, to
ensure our constituents can have more affordable, more
reliable, and more diverse options for electricity.
As I've said before, Republicans are ready to get to work
on real solutions for the real problems facing our constituents
today--the ones that they are talking about around their
kitchen tables. Mr. Chairman, Green New Deal-style policies
will be disastrous for grid security, jobs, and our economy. I
urge you to work with Republicans and return to the bipartisan
approach to electricity policies that we began together during
our Powering America hearings last Congress.
The stakes are too high to go it alone. Our grid is facing
many new and emerging challenges that have the potential to
significantly impact grid reliability and increase prices for
consumers.
Base load coal-fired and nuclear power plants are closing
around the country at record pace. We are relying more on
natural gas for electricity than ever before, while pipeline
bottlenecks and permitting challenges threaten the reliability
of natural gas supplies. Electricity generation from
intermittent renewable resources is also on the rise, which is
straining the grid and, at times, distorting electricity
markets.
As these trends continue, we will need a tremendous amount
of new solar panels, new wind farms, more electricity storage,
and more high-voltage transmission lines. We will also need
more natural gas pipelines, and the industry must develop
commercially viable grid-scale storage and advanced
technologies for distributed energy resources and demand
response.
We must also deal with serious physical threats, cyber
threats, severe weather, and wildfires. Over the last several
weeks, millions of people in California have had their power
disconnected as the electric utility struggles to deal with
high wind and wildfires.
While some are saying that California's environmental
policies are partially to blame for forcing the utility to
redirect resources away from basic maintenance, and for making
it difficult to manage vegetation along rights-of-way, the fact
of the matter is that people are suffering and a one-sized-
fits-all climate policy won't solve it.
While I am aware that some investor-owned utilities are
setting ambitious climate-related goals--often as a result of
activist shareholders--there are important caveats.
In many cases, these plans rely on an expensive price on
carbon and new technologies that haven't even been invented
yet. These plans also rely on a strong nuclear fleet,
increasing reliance on natural gas, a lot more wind and solar,
and the development of commercially viable grid-scale storage.
While it's nice to have these aspirations, we must be
honest about the challenges to grid resilience and reliability,
and we must be transparent about the costs to consumers. What
works for a utility in our coastal urban centers may not be a
good fit for those in rural America.
Adapting to our changing energy landscape requires
thoughtful consideration by members of this committee, which is
why I take this issue so seriously.
As I said last week, Republicans have urged our majority
colleagues to avoid resurrecting economically harmful, top-down
regulatory policies that punish consumers with higher prices
and fewer choices.
Republicans support innovation, conservation, adaptation,
and preparation. America can continue to lead the world in
carbon emissions reductions if we stay true to the core
principles that enabled our success.
I believe that overregulating the power sector or imposing
a carbon tax will hurt consumers--especially low-income and
rural consumers--which will lead to economic stagnation.
We eagerly await the opportunity to work together on these
important policies to encourage innovation, conservation and
preparation. There's so much we could do together in this space
to help consumers and reduce emissions.
Mr. Rush. The gentleman yields back.
The Chair would like to remind Members that, pursuant to
committee rules, all Members' written opening statements shall
be made part of the record.
And now the opening statements have been concluded, and now
we will move on to the questioning of the witnesses.
And the Chair recognizes himself for 5 minutes for the
purpose of questioning the witnesses.
The committee has set its sight for reaching a 100 percent
clean energy economy by the year 2050 and demonstrating that we
are ready to move boldly to aggressively tackle issues linked
to climate change.
And my first question is to Ms. Palmer.
Ms. Palmer, in your testimony you were highlighting that
environmental equity and environmental justice considerations
should be a central focus in both climate policy and
transforming energy systems discussions.
I am interested in how this corresponds with a renewable
energy workforce transition.
Ms. Palmer. Yes. Thank you, Chairman Rush.
So I think an important opportunity that presents itself
with policies that impose a price on emission allowances is it
generates some revenue that can be used for job training or
transition assistance to make opportunities available for
people who are losing their jobs potentially in the fossil fuel
sector to transition to jobs in other sectors, maybe--and in
particular, in the clean energy sectors, to the extent that
those geographies correspond.
I know that sense of place is really important to people.
But there are places, for example, in West Virginia, where you
could exploit wind resources and create a clean--more of a
clean energy economy as you move out of fossil fuels.
And I think, in order to do those types of activities,
though, you do need resources. And one of the opportunities
created by putting a price on carbon is it does create revenues
that would be available to fund such an effort.
Mr. Rush. Uh-huh. I also appreciate the statement that you
made in your written testimony where you stated that
``disadvantaged communities are most vulnerable to the
potential costs of policy and to the effects of a changing
climate.'' I appreciate this sentiment.
And I wanted to just ask you, none of the communities frown
upon those sentiments?
Ms. Palmer. Right. So I think as we look to address and
mitigate that emissions that are contributing to climate
change, it is also important to take actions to adapt to it.
Because there is--the climate is already changing. And some
adaptation is going to be necessary.
And particularly folks who don't have access to a lot of
resources, they may be prone to vulnerabilities associated with
changes in agriculture or changes in floods being--in flood
zones and also being proximate to areas where pollution has
been an issue in the past.
So, while policies to address emissions in the electricity
sector are really important, it is also important at the same
time that we focus on adaptation issues, and the most
vulnerable are going to be the folks that we should target in
those efforts.
Mr. Rush. Thank you.
Mr. Matheson, with these communities in mind, what
additional incentives should the Government consider to support
the transition of electric utilities to create a cleaner
economy?
Mr. Matheson. I think it is important, first of all, to
look at the fact that, as I mentioned in my opening testimony,
different communities have different circumstances. So a
simplistic one-size-fits-all is not necessarily going to target
these communities.
And, as I mentioned, electric co-ops are 92 percent of the
persistent poverty counties in America. So this is an issue for
a lot of our membership in terms of making sure we make sound
decisions that do not have significant economic harm to these
vulnerable communities.
One aspect of Federal policy that would be meaningful for
electric co-ops is we are non-for-profit entities. So when it
comes to the tax credits for renewables, for example, we offer
having a contract with a third party to do it because we don't
have a tax appetite ourselves. So one policy option that could
be considered at the Federal level is making it a more elegant
or simple way for nonprofit entities to monetize the value of
tax credits that are part of Federal policy.
Mr. Rush. How do we insure that the policies that we pursue
will not result in higher rates for customers who live in
disadvantaged areas?
Mr. Matheson. Great question, without an easy answer. I
think that you want to make sure you understand the cost
implications, but I would also say also the reliability
implications as well when you look at these policies. And I
think for folks in the most vulnerable areas--like I say, we
can't push these things on shareholders. It all goes to the
bottom line to our ratepayers for any impact we face.
So I think electric co-ops provide an interesting
perspective on any of these policy considerations or how it
affects someone's rates.
Mr. Rush. The chairman's time is up.
The Chair now recognizes Mr. Upton for 5 minutes.
Mr. Upton. Well, again, thank you, Mr. Chairman.
And I will indulge my colleagues a little bit. The Michigan
example, in Michigan, we are making great progress in reducing
emissions from the power sector. Electricity is affordable. In
fact, we are ranked number 11 for electricity prices. We
haven't had any issues with reliability other than a few storms
every now and then.
In fact, we export some of our electricity as well, and we
have a pretty diverse fuel mix. In fact, as of July of this
year, natural gas was 33 percent. Coal was 34 percent, and it
is going down because our utilities have announced that they
are going to be closing the remaining coal plants in the next 5
to 7 years.
Nuclear is about a little bit less than 25 percent, and
renewables then are about somewhere between 6 and 8 percent. In
fact, when you take down the coal percentage, that will
probably be split between natural gas and renewables.
And I guess the first question I have for Mr. Bear, who
knows Michigan maybe better than anybody else, perhaps,
likelihood, what has happened with emissions? Do you all track
emissions within the region that you represent by State?
Mr. Bear. We don't track it by State. We track it sort of
overall as far as what is happening.
Mr. Upton. Is Michigan about the representative sample of
the other States within MISO?
Mr. Bear. I think it is fair, yes. It is probably a
representative State, although things are changing. We have
moved from, you know, having all the States look fairly
homogeneous to different policy choices being made, some moving
a lot more towards renewables, some stepping into renewables
lightly and some not stepping in at all. So now things are
changing pretty significantly.
Mr. Upton. Michigan has been a leader, actually, in terms
of increase in its percentage of renewables from where we were
15, 20 years ago and to where we are headed. Our major
utilities have announced that they are going to be dramatically
increasing that percentage over the next number of years on
their own, which is a good thing.
Mr. Bear. That is correct. Michigan, Minnesota, and Iowa.
Mr. Upton. And what has that done to prices as it relates?
Again, I mentioned Michigan was number 11. Where do you think
Michigan is headed in the region in terms of competitiveness as
it relates to prices for consumers?
Mr. Bear. Very competitive. Michigan has done a very good
job of keeping their prices low.
Mr. Upton. Mr. Matheson, you mentioned in your opening
statement about carbon capture. Of course, you were on the
committee when we began to pursue that. I think many of us
here, regardless, both sides of the aisle, think that this is
an approach we could take. Where exactly is your side of things
on carbon capture?
Mr. Matheson. Well, certainly we think it is an important
technology to pursue. You are right. This has been discussed in
the public domain for quite a while. Not a lot of action has
happened in terms of significant commitment and research. From
our perspective of the electric co-ops, we have been active in
pursuing it. We funded something called the Wyoming Integrated
Test Center, which is a co-op facility in Wyoming where they
are testing different technology for carbon capture.
Another one of our members, Minnkota Power in North Dakota,
has got a project called Project Tundra. They are moving ahead
now. That is going be a carbon capture effort at their coal-
fired facility.
So we are trying to act on this and demonstrate how it can
work in the real world, but I would suggest that the technology
is not as mature as it would like to be in terms of being
readily economically available across the country.
But I think it is an important tool for us to take a hard
look at and pursue because I think having reliable base load
power is an important part of maintaining grid reliability.
Mr. Upton. I think we all would agree.
With that, Mr. Chairman, I yield back.
The birthday boy, as I understand it.
Mr. Rush. The Chair now recognizes the chairman of the full
committee, Mr. Pallone, for 5 minutes.
Mr. Pallone. Thank you.
I wanted to start with Mr. Izzo. In your testimony you
highlighted the impressive progress that PSEG has made in
reducing carbon emissions, and I appreciate that you also
acknowledge that Federal climate change legislation is crucial
to achieving decarbonization in all sectors of the economy. And
we heard testimony at previous hearings about the need to
electrify other sectors of the economy that are reliant on
fossil fuels, including the transportation sector.
So my question is, PSEG has installed hundreds of electric
vehicles charging stations in New Jersey to date, with plans to
install thousands more. What are some of the barriers to the
build-out of the EV infrastructure?
Mr. Matheson. So the primary barriers for the build-out are
market barriers. There is a chicken-and-egg issue that folks
don't want to develop the infrastructure absent penetration of
electric vehicles, and folks don't want to buy electric
vehicles absent the development of the infrastructure.
So States that have successfully primed the market by
having utilities build out the infrastructure as a way to
eliminate the range phobia that limits the penetration of the
electric vehicle itself.
Mr. Pallone. We have been reading these news reports about,
you know, cities across the country that proposed a large EV
charging network, but then they run into roadblocks. Seattle in
particular comes to mind. What policies can we implement at the
Federal level to broaden adoption of EV charging technology?
Mr. Izzo. Well, as is always the case, a little bit of
encouragement of grant programs to States that do allow this to
be part of a utilities rate base would encourage utility
investment in that infrastructure.
Mr. Pallone. All right. I wanted to just--I wanted to--is
this working? This is not working? I will just talk louder.
You wanted to--Mr. Dennis--and should the issue of market
barriers to the deployment of renewable energy.
Increasingly electricity customers are becoming more
sophisticated with their electricity needs, and whether the
goals are simply to save money or supply reliable power and
demonstrate leadership and sustainability in the UC, customers
are looking for more options. But multiple barriers again
remain, such as dependence on different countries that may not
be allowed to put solar powers on your roof.
So, if I could ask Mr. Dennis, you spoke about this issue
in your testimony. In your opinion, what are the highest
priorities that Congress can take in a potential climate build
to remove these market barriers?
Mr. Dennis. We see a number of market barriers in the vein
you talked about in terms of customers being able to better
access renewable energy supplies or manage their own energy
needs, and there are a number of steps you can take. Certainly
laying the policy groundwork for removing those barriers in
wholesale markets, but there is much more that needs to be done
in terms of those wholesale market rules in terms of they take
advantage of and recognize the technical and operational
characteristics of those technologies.
We also see our corporate purchasing customers really
prefer operating in a regional wholesale market where they see
clear price signals that can really guide their investment in
energy technology.
So certainly considering ways to continue to improve those
constructs and continuing to expand them is something that
would be of interest to our industry.
Mr. Pallone. Let me ask you one more thing. Are there forms
of the transactions in consumer-driven innovations that can't
be undertaken, steps that have a vertically integrated market?
And, if so, could you give us some examples?
Mr. Dennis. We see a number of examples today, particular
in the realm of distributed energy resources. So customers are
adopting distributed energy resources at the Cox fall and as
they want to manage their own energy use better and a number of
companies are offering innovative services to those customers
where they can maintain operation of that resource at the
retail level, provide a service to those customers, and then
also offer more services from that resource into the wholesale
market.
So offering services across retail and wholesale markets is
a challenge. Many States, States and local utilities, put up
both implicit and explicit barriers to doing that, and there is
much that can be done at both the Federal and the State level
to remove those barriers and allow these technologies to
provide a broader range of services.
Mr. Pallone. Thank you, Mr. Chairman.
Mr. Rush. Thank you.
We are having some technical difficulties. This hearing has
global infrastructure. So we have some technical difficulties,
and so bear with us.
The Chair will now recognize Mr. Latta for 5 minutes for
questions.
Mr. Latta. Thank you, Mr. Chairman.
And I will speak louder, and welcome to the Energy and
Commerce Committee, where we also have the committee I am a
ranking member on. The communications, we can't make the
microphones work. So, welcome. Thanks to our witnesses for
being here.
Thanks, Mr. Chairman, for having the committee hearing
today, and if I could welcome our former colleague. If I could,
I would like to direct my questioning to you, because I think
it is important because I have the largest number of electric
co-ops in a congressional district in the State of Ohio. I am
proud of that fact. They do a tremendous job. I am now with
them all the time. I know when they are doing out there.
They know more than I do, good or whether bad. The taxes
they face today, that they are talking about that economic
impact they might have but, you know, they are out there,
dealing with things like security. They work, and they want to
make sure that they are also reliable. So, they are trying to
do the upgrades.
So, you know, many of those consumers are on fixed incomes
that live out there, you know, a lot of them mainly rural
areas, and then you look at anything that is increasing energy
costs have a significant impact on their daily lives.
And a couple of things that if I could just ask quickly you
can follow up on. One, would you define base load capacity--
what you are talking about? Because I think that is a term that
people have got to understand. I have 60.000 manufacturing jobs
in my district from steel. I have a central foundry that make
engine blocks at General Motors.
Mr. Matheson. Base load means that, absent some failure, it
is available all the time. That is the simple definition.
Others are intermittent.
Mr. Latta. So I know that you just can't shut that on and
off.
So, and the other term I would really like you to get into
is when you are talking about that undue economic impact out
there. Could you go into that?
Because, again, for my small, medium, and large companies
out there--I think the mic is back on--but we want to make sure
that small companies thrive out in our rural areas. But could
you just talk a little bit about that undue economic impact?
Mr. Matheson. Yes, and I offered partially on the previous
question as well. Not only base load is helpful, but when you
mention those manufacturing entities, they need reliable power.
They can't--power bumps for certain manufacturing processes can
be extremely costly.
So, having a reliable grid is also--I am going to sound
like a broken record: reliability, affordability, reliability,
affordability. So I wanted to mention that as well,
particularly for many in the manufacturing sector that means a
lot.
I think we want to be cautious as we look at, as all
Federal legislation and policy, we always make decisions and
then there are consequences that fall out from then that
weren't thought through at the front end, and that just is a
creature of the business, but I think we ought to be really
careful here when we talk about energy policy because, again,
this is for my members' perspective we have a very disbursed,
sparsely populated area. So the revenue per mile is limited,
and any additional costs we have disproportionately hits every
one of our ratepayers.
That is what I mean by those undue costs. It could be far
more impactful for the rural areas than it is going to be for a
more densely populated urban area in terms of cost impact
because we just can't spread the cost over as many people and
so we are really in the most vulnerable spot in that regard,
and that is what I was trying to communicate to the community.
Mr. Latta. Well, thank you.
And many of the co-ops in my district have supported an
all-of-the-above energy policy. I know that we really started
talking about that back in 2008, especially on our side, that
we want to make sure we have both things running parallel
together. When we are talking about that, we always talk about
reliability.
Would you give your thoughts on this, and why it is
important to foster choice in selecting energy sources and not
picking winners and losers out there?
Mr. Matheson. In my case I represent an association. We
have over 900 cooperatives. They are in 48 States. There is a
lot of diversity of circumstance. It is dangerous to paint
rural America with a broad brush in a lot of ways, including
their electricity profile, and so it is really important to
meet the needs that are in a local area based on geographic
considerations.
You know, solar in Arizona and solar in Michigan and solar
in Maine are three different things, and it is really important
that we have policy that allows that flexibility for the whole
portfolio of energy choices to do what makes the most sense for
those communities.
And since we are consumer owned and we are owned by the
people in the community we serve, that drives all of our
decisionmaking in the cooperative movement. So, that is why we
think the all-of-the-above or having full complement of choices
makes sense for my membership.
Mr. Latta. That is really important because, again, I am in
my district all the time when I am back home, and I know that
we have got to keep that power on and, you know, we have issues
like we did back in 2014 with the polar vortex that hit that we
didn't have any blackouts, brownouts in the State of Ohio, and
it was important because everybody was out there, doing what
they had to do to keeps the lights on and keep everything
running. So I appreciate you coming back, and it is good seeing
you again.
Mr. Chairman, I am going to yield back the balance of my
time.
Mr. Rush. The gentleman yields back.
The Chair now recognizes Mr. Peters for 5 minutes.
Mr. Peters. Thank you, Mr. Chairman. I also echo that it is
nice to see Mr. Matheson. He was always our coach when I was a
freshman about how to behave out here and not to take dumb
votes, but I appreciate seeing you again, Jim.
I want to ask a question for Ms. Palmer. In September 2008,
Governor Brown of--then the Governor of California--signed SB-
100 in my home State which managed the State to achieve a
hundred percent carbon neutrality by 2045, and we are advancing
toward that goal as far as I understand.
Why is that approach not the right approach, or is it the
right approach at the Federal level?
Ms. Palmer. So thank you, Congressman, for your question.
So one of the features of SB-100 is, while there is
specificity about the renewables goal in the interim years,
there is a declared goal for 2045, but the mechanism by which
you are going to get to that goal and the technologies that are
going to count is sort of unfolding, and I think the types of
bills that we are talking about here today are examples of
things that could be used to reach that goal.
For example, a clean energy standard would be kind of in
the spirit of SB-100 because it is open to allowing variation
technologies and getting the full fleet of options out there
through a crediting mechanism. So there is a lot of
similarities between policies that might emerge under that type
of policy and the policies that we have been talking about
here.
Mr. Peters. I assume that a pricing strategy for carbon
would be one of the tools you would use to reach that goal as
well.
Ms. Palmer. Yes. So one could directly price carbon, as I
mentioned in my testimony, or use a crediting program that
credits clean energy relative to some emission rate standard.
And, depending upon how those policies are designed, they can
be very similar in outcomes and levels of efficiency as work at
Resources for the Future has shown.
Mr. Peters. Right. We appreciate your work.
I would ask the question to Mr. Izzo or Mr. Dennis about
other base load clean technologies. We are creating energy
resources using technologies like battery storage and smart
grids. But what percentage of a carbon-free portfolio do you
think we can create across the Nation with new carbon-free base
load technologies, including hydro, smart modular reactors, and
what would Congress be most useful--what would be the most
useful thing for us to be doing in terms of affecting that?
Mr. Izzo?
Mr. Izzo. So we have pledged we believe we can get to a
hundred percent carbon free by 2050 through some combination of
public policy changes in technology developments. The
technology developments that we would anticipate would be
needed, you mentioned two of them. They would be improvement in
battery storage technology and advanced nuclear fuel cycles.
Mr. Peters. OK. Mr. Dennis.
Mr. Dennis. Like others on this panel, we support a
technology-neutral approach that allows all technologies to
compete in the market, and so what percentages within the base
load definition that Mr. Matheson gave you or in some other
definition is really, it is how do all of these technologies
work together. The technologies you mentioned--modular nuclear
reactors, battery storage in particular--how do they work
together to maintain moment-to-moment balance and reliability
on the system? It would be a variety and a portfolio of
technologies, all operating within that goal that this
committee has of a net zero carbon emissions by 2050.
Mr. Peters. So one of the carbon--one of the technology-
neutral strategies we have heard about to push these
developments, to incentivize development, is carbon pricing.
Other than either cap-and-trade or carbon fee, do you see
something that the Federal Government should be doing to
generate that innovation?
Mr. Dennis?
Mr. Dennis. I think I agree with the thrust of Ms. Palmer's
testimony in the sense that there are a number of options that
this committee should consider. It should really take a
holistic approach. As I mentioned in my testimony, we support
the policy objective of net zero carbon emissions by 2015 and
carbon pricing and clean energy standards. Those are all
potential options that should be studied. There is probably no
one silver bullet here. They are all going to work in different
ways, and so considering all of those options together. Take a
look at what the States are doing as well. The States have
pursued a number of different objectives, your State and
others, that can all be looked at and considered by this
committee.
Mr. Peters. Since you are here, and I will push you a
little bit more because we are the ones that are supposed to
study it. I think this is the classroom here a little bit.
Are there particular States you think are doing a better
job than others?
Mr. Dennis. That is a hard question to answer because we
have a number of States we are working in, and I don't want to
choose among our children that have done well in moving toward
a hundred percent clean energy grid.
But certainly, you know, some of the examples are obviously
your State of California in setting the objectives and, as Ms.
Palmer talked about, working through those policy objectives.
We have recently seen Colorado move toward 100 percent clean
energy as well in its legislation. So, there are a variety of
approaches.
Mr. Peters. My time has expired.
Thank you, Mr. Chairman.
Mr. Rush. The gentleman yields back.
The Chair now recognizes Mrs. McMorris Rodgers for 5
minutes.
Mr. Rodgers. Thank you, Mr. Chairman.
And I wanted to say thank you to the entire panel for being
here today. I appreciate hearing your perspectives.
Reducing emissions, carbon emissions, is a shared goal.
However, I believe that we must be realistic, and we must be
honest about the challenges that we face. We need a strategy
that provides consumer choice, ensures affordability, and
maintains grid reliability and capacity.
Clearly, the United States is a large country. It is
diverse; and coming from different regions, different States,
you find that there are different strengths and needs. A top-
down Government-mandated approach is not going to be workable.
For some States, nuclear is the best option. For others it is
wind, solar, or natural gas. Others it is hydropower.
I am excited about the technological innovation and the
American ingenuity that enables us to develop a variety of new
cutting-edge ways of clean energy production. I am proud that
America is leading the world in reducing carbon emissions.
Eastern Washington is a leader in clean energy solutions.
Hydropower built the Pacific Northwest. It built our economy,
and it continues to provide clean, renewable, reliable
electricity. In fact, we are number one. We have the lowest
electricity cost in the country. It accounts for 70 percent of
the energy in Washington State; and as we all know, it is the
largest source of renewable energy in the country. We could
double hydropower in America without building a new dam simply
by investing in technology.
However, right now in America it takes 10 years to license
a new hydropower project. You compare that to 18 months for a
natural gas facility. We can and we should do better.
Washington State is known as being a leader in wanting to bring
down and reduce carbon emissions. Just in January, though,
there was an article in The Seattle Times that was highlighting
that carbon emissions are actually up.
In Washington State over a decade ago, we wrote a plan into
law to reduce carbon gas emissions to 1990 levels by 2020; but
the latest tally of States emissions show that we are trending
in the wrong direction to meet that target and that more
emission goals are ahead of us. In fact, the legislature has
continued to increase those carbon emission goals. The fact,
though, is from 2012 to 2015 our carbon emissions spiked 6.1
percent due in part to increasing fossil fuel-generated
electricity.
So, at a time when we have this shared goal, we should be
embracing what makes sense in each region of the country, and
for us it is hydropower. We shouldn't be putting more costs and
more mandates on hydropower. We should be actually moving
forward with licensing reform here at the Federal level, in
Congress.
And you know that I have worked on this and I encourage the
majority in their goal to move legislation to--I urge you to
take action to address the licensing of hydropower projects in
this country. Without it, I am not sure there is a realistic
path to success.
So I wanted to ask Mr. Matheson--and I, too want to welcome
you back to the committee and appreciate your service and your
continued leadership. I want you to expand on the role of
hydropower in terms of grid reliability, capacity. How does it
compare to other forms of renewable electricity?
Mr. Matheson. Well, you stated the case well, and it
matters a lot. Pacific Northwest, of course, is where it is so
important, but I have to got tell you: We have got over 600
electric co-opers in the country to get hydro from Federal
power marketing agencies in 34 States. So this issue translates
across a lot of the country, maybe not quite to the proportion
it is in the Pacific Northwest, but by members in that part of
the country it is a significant part of their power supply. The
low rates are an important part of how they provide affordable
power, and it is extremely reliable.
It is interesting. You mentioned the history, that it built
Washington and it is such a significant part of the history of
the northwest and yet here we are today, talking about moving
to more of a carbon-constrained future. It is just another
value adder for the hydro assets, quite candidly.
And it seems to me that I would concur with your statement
that any discussion about moving ahead for Federal policy to
enact a more carbon-restrained future, that the consideration
of how we can best enhance our hydroelectric generating
capacity ought to be right at the top of the list, because it
is there.
Ms. Rodgers. Thank you. I appreciate you making that point
because--hydropower, we have new technology, and it isn't just
Washington State. It is all over the country, 34 States. and
there is potential to double it.
Thank you, Mr. Chairman.
I yield back.
Mr. Rush. The gentlelady yields back.
The Chair now recognizes Mr. Doyle for 5 minutes.
Mr. Doyle. Thank you, Mr. Chairman, for holding this
hearing today.
Jim, it is good to see you back here, and appreciate all
the work that we were able to do together when you served on
the committee here.
We know climate change is real. It is affecting our
communities today. It is going to get worse if we do nothing to
reduce our greenhouse gas emissions. I believe we must get to a
100 percent net zero emission economy by 2050, and we have to
take aggressive action to do so. Since the power sector is
responsible for almost one-third of the country's greenhouse
gas emissions, finding ways to decarbonize a sector is going to
be vital as we attack climate change.
Ms. Palmer, we know that in order to get to net zero
emissions there will be a large expansion of renewable energy
resources such as solar and wind. We also know there are
challenges to rapidly incorporating a large amount of
intermittent renewables onto the grid. This is why I believe it
will be important to deploy energy storage so that grid
operators can better manage the fluctuating power supply of
renewables.
For this reason I have introduced H.R. 2096, the Energy
Storage Tax Incentive and Deployment Act, which aims to expand
the deployment of energy storage by extending a 30 percent tax
credit to qualifying energy storage products.
Ms. Palmer, as we add large amounts of intermittent energy,
how critical is energy storage going to be to ensuring grid
reliability and resiliency? And, if an incentive like my bill
is successful in getting more energy storage deployed, would
that significantly alter the modeling for the amount of
renewables we could deploy as we move towards net zero by 2050?
Ms. Palmer. Thank you, Congressman, for that question.
Energy storage is indeed going to be crucial as we move
forward with a renewable grid. I think energy storage could
take a variety of forms, including grid scale batteries, but
there also could be storage opportunities on the customer side
of the meter associated with charging vehicles and perhaps
preheating water, for example, as happens in some locations
today but could happen more if we move to electrify our water
heating stock out there.
And, in addition, longer-term types of storage are going to
be necessary as well. I have to confess I am not familiar with
all the details of your bill, but I do think we need to attack
storage from a sort of shorter-term perspective of carrying
renewable energy through the day but also dealing with seasonal
fluctuations in the supply of renewables, which is probably a
bigger challenge, particularly as they become an increasing
share. So storage is going to be really important in that realm
as well.
Mr. Doyle. Thank you.
Mr. Izzo, New Jersey is a member of the Regional Greenhouse
Gas Initiative, a regional cap-and-trade system, but as you
testified, the State also created a clean energy credit for
nuclear power. Our Governor in Pennsylvania has recently
announced that we are going to join RGGI, and while our long-
term goal is to reach net zero carbon emissions in the short
term, I don't want to see a situation where nuclear power
plants are closing now and being replaced by fossil fuels. That
would only lead to increased emissions and the loss of hundreds
of good-paying jobs.
What lessons about incentivizing and retaining clean energy
sources have you learned from your experience as part of RGGI,
and what do you believe are the best strategies for retaining
our current nuclear power fleet so that we can more quickly
meet our clean energy goals?
Mr. Izzo. Thank you for the question, sir.
So the biggest challenge between RGGI and electric power
markets, Pennsylvania and New Jersey alike, is that the RGGI
States do not coincide with the PGM power market States. So,
therefore, the regional power market does not see the price
signal that RGGI is intended to deliver. So, the RGGI costs
don't get reflected in other generators that are not part of
RGGI, and therefore nuclear does not benefit the way it should
from being carbon free, thus the need currently for direct
State action to rescue the nuclear plants. Otherwise, as you
said, we would lose an important carbon-free source of
electricity.
If there were Federal action, then nuclear in Pennsylvania,
New Jersey, Maryland, and every other State would see the
benefits of being carbon free.
Mr. Doyle. Mr. Anderson, first of all, I want to thank you
for being here. I think it is important that we get labor's
perspective in this hearing also, and we have talked a lot
about how the grid will change as we decarbonize. We have also
seen firsthand in Pennsylvania how devastating it is for a
community when a nuclear manufacturing plant closes.
What can we do at the Federal level to ensure that workers
are at the table for these discussions, and how can climate
legislation reflect the needs of workers in these energy-
intensive industries?
Mr. Anderson. Thank you very much for that question, sir.
This is a topic we take more seriously than almost any other on
energy policy. We used to have considerable coal assets in
Pennsylvania. Today we have none, zero, and the effects when
those plants in Pennsylvania closed were the same as they were
when they closed anywhere. They were devastating. You cannot
overstate the impact that it has on workforces and communities.
What we can do as a Nation is begin to design robust policy
response to that, and it is not impossible. It is just a choice
to do it. Other countries have undertaken this. A particularly
good example is Germany that is powering billions of euros into
transforming their coal sector, and at the microlevel they go
all the way down to assigning individual case workers to
workers to take what are their situation, what are their
skills, how do we move them over here, and they have a very
high success rate in doing that. Canada similarly has
undertaken a national effort and a provincial effort in Alberta
to design robust policy to do this.
In all of those cases--in those cases and others, there are
other countries--they have fully integrated labor into those
discussions and to into designing those and asking people, What
do you need? What are your communities going to need? If you
don't ask, you don't know. I will humbly submit that labor is
indispensable to designing that.
Mr. Doyle. Thank you Mr. Chairman. Thank you.
I yield back.
Mr. Rush. The gentleman yields back.
The Chair recognizes the gentleman from West Virginia, Mr.
McKinley.
Mr. McKinley. Thank you, Mr. Chairman.
For the foreseeable future, the world is going to continue
to have this voracious appetite for fossil fuels. We just have
to understand that.
And, according to the IER--I guess we have been screwed
over.
Mr. Rush. Waiting for the popcorn.
Mr. McKinley. The quote that we wanted to put up there that
they didn't want to show says that global carbonization, that
we are going to increase by 16 percent by the year 2040 around
the world, and China, India, other Asian countries, we have got
a chart that they have chosen not to put up that shows the rest
of the world is going to continue to build fossil fuel plants
all over the world.
The next chart that they didn't show shows that in China
the CO2 emissions are going to be up 290 percent in
the last 10 years. India is up 235 percent in the same time the
United States----
Mr. Rush. Mr. McKinley, excuse me. We are having a--some
more technical difficulties. Are you prepared----
Mr. McKinley. We tried to work it out, and they said they
would be fine when they did it. So obviously they weren't. They
weren't straight up with us.
Voice. I think they are trying to get it done.
Mr. McKinley. The next is we see China out there funding
carbon plants all across the world at 102 gigawatts. That is
like the equivalent of maybe a hundred power plants or 150
coal-fired power plants. China is still going to use coal.
So, if we ignore this body of evidence--let's look for just
a moment then, just ignoring this--let's look at the body of
evidence about this commitment that we are trying to make to go
a hundred percent renewables. It would halt fossil fuel
research, and we would be abdicating our role of global
leadership in developing technologies on carbon capture, but we
would be pivoting to renewables.
Look at Moniz's quote that we have--and, again, his quote
earlier this year in February said that the idea that by 2050
we are going to have 100 percent renewable system is not
realistic. This is the Secretary of Energy saying this.
So, let's deal with how we are going to concentrate on
battery storage that everybody likes to talk about. Let's look
at the complications with that, because the Wood Mackenzie
report has already said, if we are going to rely on batteries,
we have to have 900 gigawatts of power capacity, but around the
whole world today there is only 5.5 gigawatts of power.
We have got a real challenge. We have got to get away from
the political jargon of saying we need the battery. How are we
going to do it? And so, if we are going to battery storage,
let's talk about the ecological impact of extracting lithium
for batteries, 500,000 gallons of water to get 1 ton of
lithium. What about the social cost of acquiring cobalt, the
new blood diamond in Africa?
So, and then we have to disregard the 2017 study that
Moniz's group did, the Energy Futures Initiative, that
declared, that found out that in California 1 in 4 days, 25
percent of the time, there was not sufficient wind to have wind
energy in California.
So, despite all of this science and the evidence to the
contrary, let's assume America can decarbonize. What would be
the metrics of the progress? Think tanks have already concluded
that, because of the continued international consumption that
we have already talked about, the fossil fuels, the fact that
they are going to continue to increase their use within 5 years
of us totally decarbonizing, we will be back to neutral again,
because they are going to continue to use it and we won't
have--there will just simply be offset by what the other
countries are doing.
And we are still going to have--we are still going have all
those threats: temperature, sea levels, wildfires, droughts,
tornadoes. The MIT quote that we tried to put up said--MIT has
come out and said that, regardless of anything the United
States does to decrease its emissions, until China and India
reduce their emissions, the results will be climate
catastrophe.
So, I want to get to this as quickly as I can. I am sorry
that we lost the time in not being able to get our quotes up.
So, if we totally do transform our economy--and for initially
the air will be cleaner, but having abandoned our research on
fossil fuels--America will be at the mercy of harmful emissions
of other nations that are not following our lead.
So it has come down to a choice. What are we going to do?
Are we going to abandon what built America great, powerful, and
switch over, or why don't we fix it? Why don't we do it? We
stay in the game to do research and innovation. Do any rational
scientists really expect that China and India are going to cut
their coal fire emissions? No.
So, if I could go back to you, Matheson, I begin. Am I
wrong then?
You cost me the time up there.
Mr. Rush. Mr. McKinley, I know and I understand, and the
Chair will give you an additional 1 minute. However, I really
do want to apologize.
Mr. McKinley. Thank you.
Am I wrong? Are we going to have wildfires?
Mr. Matheson. I do think it is important, your statement
that we should continue with fossil fuel research, because, as
I said in my opening statement, I believe that coal and natural
gas are going to continue to be part of our portfolio, and we
should be looking at carbon capture technologies that allow us
to do that. I think it is going to be an important step.
If the United States leads in that opportunity and develops
that technology here, I think that that may have the impact
globally over time where that technology--but we should be the
leader on that technology.
Mr. McKinley. We have got to have it. What about the USE IT
Act? Would you support the USE IT Act?
Mr. Matheson. Yes, yes, the--we do.
Mr. McKinley. Mr. Anderson, how about you? Would you
support the USE IT Act?
Mr. Anderson. We already do, sir.
Mr. McKinley. OK. Thank you.
I yield back whatever time you gave me.
Mr. Rush. Mr. McKinley, I want to reiterate most staff are
working on this technical issue, and I do want to reiterate.
The Chair now recognizes the gentleman from Maryland, Mr.
Sarbanes, for 5 minutes.
Mr. Sarbanes. Thank you, Mr. Chair.
We are having trouble again. I am just going to--we are cut
out again. I will use my outside voice. I want to welcome our
former colleague, Jim Matheson. Thanks for coming and
testifying, and the rest of the panel as well.
And thank you, Mr. Chairman, for holding the hearing today.
The hearing is an important issue. Obviously, we all appreciate
that climate change, the existential crisis of our time, and we
have to take all measures to address that.
Decarbonizing our economy is at the top of that list in
trying to achieve zero emissions by 2050 if we can in order to
avoid the most disastrous impact.
You all have been emphasizing, we certainly appreciate it,
that addressing the climate crisis will take a multilayered
approach, and a component of that will certainly be the
infrastructure that we are building, and in this committee, you
probably know, we introduced an infrastructure package to
address, among other things, the energy infrastructure needs.
As we move towards decarbonizing energy sectors and where it is
more renewable energy, we need to invest in our electric grid.
Not only is that grid aging, but we need to modernize it for
the 21st century.
Now, I am going to come clean. I have a bill--we have been
hawking our wares up here today--it is called the 21st Century
Power Grid Act, which is designed to do just that. It would
empower the Department of Energy to support projects that
improve grid performance, security, resiliency through
grantmaking and cooperative agreements. It is designed to kind
of leverage investment and put attention on when it comes to
building that smart grid.
So, Mr. Dennis, can you explain, in your view, do you agree
why our Nation must invest in modernizing electric grids to
accommodate these renewable energy and innovative technologies?
In other words, we are talking a lot about the innovation
of energy, but talk a lot about the grid that receives those
new kind of components of portfolio and how to make sure that
we are maximizing that in a way that decarbonizes the
environment.
So, if you could, just speak to that and what reliable
service to customers looks like.
Mr. Dennis. Absolutely. It is, again you are going to hear
from me a lot. It is arange of technologies working together.
You mentioned the grid, and both the transmission and the
distribution grid. There is a number of investments we can make
to make those grids more flexible, to make them more efficient,
to get more out of the infrastructure than we already have.
And then we have got a real job do to build infrastructure
in key places to access low-cost, renewable resources that
aren't near the grid we have today. That takes a lot of
planning and then obviously the will to get it done.
But certainly all of those technologies working together is
what is going to provide us a reliable and resilient grid, and
we have to think about it both at the transmission level and at
the distribution level as well.
You know, obviously transmission is key to accessing
renewables, but we also need a strong and flexible distribution
grid to allow customers to take advantage of new technologies
like energy storage and distributed energy technologies.
Mr. Sarbanes. Thank you very much.
Lucy with the football here.
Mr. Izzo, I would like to get your perspective on grid
resiliency. Particularly with the impacts of Hurricane Sandy,
my district--like, you know, yours and others--has been
impacted and continue to feel the effects of climate change,
rising sea levels, et cetera.
So could you talk about how PSEG has worked to build
resiliency, and do you have any additional recommendations on
how we can help empower sectors to build out that resiliency?
Mr. Izzo. Yes. So, we have invested north of $3 billion
over the past 12 years since Superstorm Sandy. And the range of
activities, some are as simple as literally lifting equipment
off the ground in areas that are now more subject to floods.
In other cases, what we have done is we have changed the
geometry, the electrical geometry, of the grid so that we can
feed customers from multiple directions in the event of power
being lost.
Clearly, whenever one undertakes actions like that, it is a
cost impact on customers. So, the number 1 thing Congress could
do is assistance programs, particularly for lower-income
populations as they experience these elevated costs due to the
physical improvements to the grid.
Mr. Sarbanes. Thank you very much.
Mr. Rush. The Chair now recognizes Mr. Kinzinger for 5
minutes.
Mr. Kinzinger. Thank you, Mr. Chairman.
Thank you all for being here.
I think the best way to address climate change is by
reducing not only our Nation's carbon emissions but that of the
rest of the world. The changes pose both short- and long-term
challenges that I believe can be addressed in two major ways.
First, we need diversity in our energy resources. Energy
diversity is energy security. This is comparative to one's own
personal investment strategies. When you are looking to invest,
you don't put all of your savings in one stock and let it ride.
You diversify your investments into various funds. Similarly,
this Nation cannot afford to put all its eggs in one basket.
Second, we need to support market-driven innovations to
develop new clean energy technologies that will put the U.S. at
the forefront of environmental technology. My district, the
16th District in Illinois, is a great example of what it can
look like. My district and really the whole State of Illinois
is home to a broad array of energy sources.
Nuclear generators provide the most abundant, clean, and
stable source on the planet, and my district's home to four
nuclear generating stations in addition to hundreds of wind
turbines, solar powers, geothermal sources, and others. These
diverse sources not only provide year-round, reliable clean
energy but have produced high-paying jobs for my constituency.
While some may say that the U.S. needs to be a leader on
reducing emission and combating climate change, I would say we
actually already are.
Since 2005, global emissions have increased by 20 percent,
while the growth rate of United States emissions has decreased
by more than the next 12 emission-reducing countries combined.
It is going take a major innovation and breakthroughs to not
only reduce our emissions here at home but also convey this
ability to others around the world.
All Americans want to be good stewards of their
environment, and this desire drives markets. Tesla doesn't sell
cars because of the sound system or you want to put solar
panels on their roof because they look good. It is just smart.
So, if there is one thing I noticed in each of the witness'
testimonies, it is that everyone either strongly supports
nuclear energy or at least recognizes that it is not reasonably
possible to achieve emissions reductions goals in the near term
without it.
So, Mr. Matheson, let me ask you. As you know, nuclear is
an important source of base load emission power for many co-
ops. Would it be possible to continue making sustained
emissions reductions if we don't maintain a strong nuclear
fleet?
Mr. Matheson. I think you can't do that, and I also think
you have a reliability concern if you don't maintain that fleet
as well.
Mr. Kinzinger. Yes, I think you are right.
Mr. Bear, your testimony shows that you are resource
planning for upwards of 40 percent renewable energy. Can you
talk about how much wind would you have to bring online that
replaces the premature closure of a nuclear plant?
Mr. Bear. We haven't looked at it that way because they are
not equivalent.
Mr. Kinzinger. But it does produce X amount of power, so in
theory, if you bring a plant offline, you have to bring, if you
are going to----
Mr. Bear. Depending on where it is, maybe 1.5 to 2.
Mr. Kinzinger. 1.5 to 2.
Mr. Bear. Two megawatts for every one you retire.
Mr. Kinzinger. OK. And as you may be aware, Vistra Energy
is slated to close four coal plants in Illinois by the end of
the year. This includes the Hennepin Power Plant, which is in
my district, as well as plants in Coffeen, Havana, and Canton.
It is my understanding your organization, the Midcontinent
Independent System Operator, and PJM must approve these
closures based on an analysis of whether they are needed for
grid reliability.
Is that accurate, and can you explain further your role in
this process?
Mr. Bear. So that is true. They submit a study to us, or a
request for us to study the retirement. We take a look at what
impact is from a liability standpoint on the grid and render
them a decision. If it has reliability consequences, we ask
them to wait until we can build a transmission line to solve
the problem.
Mr. Kinzinger. And is that review currently underway, and
how would closures like these affect reliability?
Mr. Bear. I can't answer your second question because we
are studying it, and that review is underway.
Mr. Kinzinger. Do you have a timeframe on that, by chance?
Mr. Bear. Probably 12 months.
Mr. Kinzinger. Not only am I concerned about reliability, I
am concerned about two more things: job loss and stranded
assets, or really, wasted assets. This closure means scores of
my constituents without jobs. It also means we have a usable
facility linked into the grid with no power being fed into it.
So, Mr. Matheson, given the reliability concerns, job loss,
and wasted asset factors, shouldn't there be some sort of
arrangement to convert these facilities to solar storage or
some type of facility before forcing them offline?
Mr. Matheson. I think you have got to think about all
potential possibilities to mitigate the impact of stranded
assets, and the ones you--those items you suggested shouldn't
be on the list.
Mr. Kinzinger. And do you see any needs for policy changes
on that front?
Mr. Matheson. Look, I think that we haven't had Federal
policy that is for stranded assets to this day. I am not sure
there is a Federal role in that, but I do think the
consideration of workforce impacts and community impacts on
plant closures is something that we should all care about.
Mr. Kinzinger. Excellent. I will yield back, Mr. Chairman.
Thank you.
Mr. Rush. The gentleman yields back.
The Chair now recognizes Mr. McNerney for 5 minutes.
Mr. McNerney. I thank the chairman, and I thank the
witnesses this morning. I appreciate your testimony.
I am sure you all watched in horror and dread the
California wildfire situation. The challenge is how do we
balance reliability with safety, given an aging infrastructure.
Mr. Izzo, you have had to confront the challenges
associated with extreme weather events. What lessons can we
learn as we expand electrification while also adapting to
climate change?
Mr. Izzo. Yes. So there is an element of adaptation that is
important. We are all paying the price for underinvesting in an
aging infrastructure. PSEG, for example, has transmission
towers that are approaching a hundred years old. We have gas
pipes that are in excess of 100 years old.
These are expensive improvements, but they must be made. We
seek to balance them with high investments in energy efficiency
and direct those investments in energy efficiency at those
populations that are most vulnerable to the increase in builds
associated with the more resilient infrastructure that we seek
to build.
Mr. McNerney. Do you see there is a role for the Federal
Government in assisting in this transition?
Mr. Izzo. As I mentioned earlier, it would be in a LIFT Act
or in the form of a LIHEAP type of program.
Mr. McNerney. Right. I couldn't agree more.
Mr. Dennis, you noted the importance of developing new
tools to assist utilities in containing isolated outages within
the grid, as well as keeping critical infrastructure
functioning while the rest of the grid can go down.
Can you expand on some of the new planning tools and
operational changes you would like to see?
Mr. Dennis. Certainly. I think we need to be planning for a
more distributed grid certainly that can isolate these kinds of
unique challenges. We also need tools and training to help
market operators and system operators understand how new
technologies, a more distributed system, a system that is more
categorized by variable renewable energy, is operated and how
it can be operated most efficiently and effectively.
Mr. McNerney. Thank you.
Ms. Palmer, you noted that a long-term need to consider
wholesale electricity markets and the bulk electric system will
be designed, planned, and operated in a future reliant on low-
and zero-carbon energy technologies. Can you expand on the
necessary modeling practices and market rules that must be
developed in order to capture the value of advanced energy and
grid services?
Ms. Palmer. Yes. So I think there are a number of options
out there that various groups are exploring with respect to
wholesale market design reforms, and I think that this is going
to be a subject of some ongoing discussion, but basically, when
you are in a situation where a lot of generators have zero
marginal cost, that may limit the number of hours in which
there are opportunities to earn revenues, and those hours would
occur when demand is really high and supply is scarce, and that
would create scarcity pricing that would be a potential source
of revenue. And the questions remain about whether those
scarcity events are going to overlap with the availability of
renewables and investment occurring. So, some more exploration
of those opportunities is important.
Alternatively, people think greater reliance--another group
of people think greater reliance on sort of a centralized
planning procurement approach would provide more assurance, and
that approach could overlap potentially with approaches like a
technology-neutral clean energy standard that would create
important value for those resources and lead to more
investment. So I think it is an ongoing discussion and
something people are paying attention to and will be advancing.
Mr. McNerney. So, it sounds like you think the Federal
Government's role could be some sort of renewable energy
standard and research money.
Ms. Palmer. Yes, definitely, yes.
Mr. McNerney. Thank you.
Mr. Izzo, again, according to NREL, today's commercially
renewable technologies are more than adequate to provide 80
percent of electricity generation in the United States by 2050.
Can you speak to the important role that the Federal
investment in climate-related research will play in helping
utilities decarbonize?
Mr. Izzo. Yes. So research and development will be an
instrumental part of any attempt to decarbonize our future.
Material science research in particular to help improve the
efficiency of solar conversion, material science research to
help improve the size of turban blades that can then capture
greater degrees of wind, and higher-capacity factors would all
be useful in future decarbonization, and, of course, advanced
fuel cycles in nuclear.
Mr. McNerney. Thanks. I spent a career developing wind
energy technology. I am pretty excited about offshore
development. What about the challenges that a project of that
magnitude gives in terms of the Federal Government's role in
helping?
Mr. Izzo. So, as you know, the challenges on offshore wind
are both technical as well as public policy. Something as
simple as the requirements to meet the Jones Act and the
limitations that puts on vessels that can be used to transport
these very large structures is going to increase the cost of
offshore wind in the Nation.
The depth of our waters is different from some of the
regions around the world where this has been done successfully.
So, there will be some technology modifications that will need
to be utilized as well.
Mr. McNerney. We will have to have floaters in California.
It's too deep out there.
Thank you, Mr. Chairman. I yield back.
Mr. Rush. The gentleman yields back.
The Chair now recognizes the gentleman from Ohio, Mr.
Johnson, for 5 minutes.
Mr. Johnson. Thank you, Mr. Chairman.
And thanks to our panel of witnesses here today testifying.
You know, many of my colleagues on this committee have
repeatedly and rightfully expressed concerns about top-down
Federal proposals such as the likes of the Green New Deal. Now
it is important to discuss how we can achieve emission
reductions, and that is a big debate, but I worry that these
types of approaches will cause electric rates to rise
astronomically, while our domestic economy stagnates in the
process, to say the very least.
Instead of a one-size-fits-all approach to these issues, we
need to ensure our laws and regulations foster competitive
markets that allow our innovators to innovate and to compete.
So, Mr. Bear, what role has MISO played and what role can
MISO play in the future in ensuring well-functioning markets,
competition, and the most cost-effective option for consumers?
Mr. Bear. Well, what we try to do is conduct a series of
studies to understand as the portfolio evolves and changes and
we bring more intermittent resources on the portfolio, what do
we need to make that portfolio reliable? What attributes need
to be there? Is it flexibility, is it frequency response, you
know, those kinds of things, and then understanding what those
attributes are, and as Ms. Palmer noted, pricing them
appropriately using different regimes so that they can be
compensated appropriately and they are there when we need them.
Mr. Johnson. So can you comment on how a proposal like the
Green New Deal might inhibit these possibilities?
Mr. Bear. I can't comment on that. We haven't studied how
that would inhibit what is going forward and what we are doing.
Mr. Johnson. OK. All right.
Mr. Matheson, electric cooperatives cover some of the most
sparsely populated and costly-to-serve areas of our country.
Many parts of eastern and southeastern Ohio are good examples
of where rural, hilly terrain can present some very unique
challenges for co-ops to deliver reliable electricity.
But they do, and in many ways these challenges are similar
to those inhibiting the rollout of successful, reliable, rural
broadband deployment as well. The economies are very, very
similar.
Mr. Matheson. Right.
Mr. Johnson. Can you speak to some of the challenges co-ops
have faced and have overcome in order to provide reliable cost-
effective electricity to rural America?
Mr. Matheson. Sure. And I know you visited co-ops in your
district. You know them well.
Look, I think that you laid the predicament really well. At
one level it is pretty simple. You have got these sparsely
populated areas, so the economics are very challenging just on
the revenue per mile. That was the case in the 1930s.
That is still the case today in terms of electrification,
and now it is the case in terms of broadband, as you suggested,
as well.
What do we do? What I think is interesting about the
cooperative movement is these are smaller utilities. Sometimes
you may think they are little slow to the action. Actually they
are really innovative, and the embracing of technology like
automatic meter infrastructure, the penetration of that across
all co-ops in this country is far higher than the utility
sector in general, which gives you greater telecommunication
capability to monitor how electric use is taking place at the
source.
And so I am impressed with how we have tried to within the
co-op family embrace this innovation in a way to make it work,
but every decision we make, as I said in my opening comment, we
have no shareholders. It all goes to the consumer, the impact,
for good or bad. It all goes to the consumers.
We are very careful about making good decisions, but that
doesn't mean we don't embrace innovation, and that is how we
try to take on that challenge in economic circumstance.
Mr. Johnson. I think you make a very valid point. Those co-
ops are very, very innovative. There is a lot of innovation in
rural America. You know, I am often reminded, in the late
1800s, early 1900s, Dayton, Ohio, was a rural area. Two bicycle
tinkerers with no college education figured out how to master
the power of flight, and they did it out in the middle of a
field. It is unbelievable, and we are missing a lot of that.
And so what one final question. Why do you think co-ops
have been able to overcome these challenges? Is it their
ability to share experience amongst cooperatives, the
obligation to serve all their customers? Why have they been so
successful, do you think?
Mr. Matheson. I think those are two important factors, but
I will give you the most important, I think, is that we are
consumer owned, and so--and the consumers are the owners of the
co-op.
So the consumers are driving the decisions, and they live
with those decisions, and that consumer, bottom-up approach has
created a very localized approach across the co-op network in
this country in terms of how we make these decisions. I think
that has been a real success factor for us.
Mr. Johnson. A lot can happen when you have a need-to
motivation versus a want-to motivation.
Mr. Matheson. Right.
Mr. Johnson. I thank you.
And I yield back.
Mr. Rush. The gentleman yields back.
The Chair now recognizes Mr. Tonko, my friend from New
York, for 5 minutes.
Mr. Tonko. Thank you, Mr. Chairman.
And thank you to our panel of witnesses, including my
former colleague, Congressman Matheson. Good to see you all,
and thank you for your input.
Mr. Izzo, many utilities are making commitments to 80
percent or more emissions reductions, but they all caution that
achieving that last 20 percent will be difficulty and will
require technology developments and breakthroughs. Earlier you
shared the carbon-pricing riddle with this subcommittee, and
very cleverly stated.
How important is setting a clear and rising price on carbon
today in order to achieve commercialization of new innovative
technologies, some of which might be appearing 20 to 30 years
into the future?
Mr. Izzo. I think--thank you for the question.
I think it is vitally important. Most of these investments,
whether it is offshore wind, battery storage, or solar farms,
are multi-decade, capital-intensive investments, and one
pretends to understand the economics for literally 20 to 40
years out into the future.
And when you do that kind of a discounted cash flow
analysis, having some predictable price on carbon will just
give tremendous clarity and, therefore, motivation for people
to make those investments. And, where there are investments,
creativity and entrepreneurship will follow.
Mr. Tonko. Thank you.
And, Ms. Palmer, same type of question. What do you think
the role of carbon pricing, a sound carbon price, plays in
terms of spurring innovation and investment the technologies
will require?
Ms. Palmer. I think it is extremely important, Congressman.
The prior examples that we have of pricing include the Title IV
program to price SO2 emissions in this economy, and
I think we see several examples there of innovative approaches
that were developed when power generators were faced with a
price associated with emitting SO2, and they found
creative ways to reduce those emissions.
So, I think similarly here, when we provide that incentive,
there will be all aspects of the sector will be looking for
ways to reduce. So it is really important.
Mr. Tonko. I would imagine just engaging in the economywide
outcome with carbon pricing----
Ms. Palmer. Yes. That is--yes, that is----
Mr. Tonko [continuing]. Takes some of the--provides the
flexibility so that we don't have to really project which
sector is going to produce the results we require, I would
think.
Ms. Palmer. Exactly. And, you know, the innovations that
are happening related to electric vehicles are spilling over
into the power sector, and the climate challenges touches on
all of our uses of energy. So I think it is important to try to
get an economywide price to see those.
Mr. Tonko. Thank you.
Mr. Bear, MISO includes some renewable-rich geographies.
Many of them are also far from major load centers. My
understanding is, within MISO, several transmission projects
have been planned and completed to integrate more renewable
resources.
Would ambitious State or Federal clean energy targets
require additional interregional and regional transmission
development, and if so, to what degree?
Ms. Palmer. Sure. And thanks for your question.
So to the first part of your question, we did put a $3
billion portfolio in place. It has been incredibly successful,
about a three-to-one benefit-to-cost ratio. We were able to
lower prices for consumers, and it is almost complete at this
point.
We do need another portfolio that is regional to move
forward and balance out what we have got. As we sort of
decentralize the resources that are on the grid, we are going
to have to change the way the grid is configured and how it
works and make sure that we can move all of the attributes
where we can move them to keep reliability high.
Mr. Tonko. And what sort of timespan would you imagine will
be required in order to meet the goals?
Mr. Bear. It will probably take 8 to 10 years to get
something like that done.
Mr. Tonko. OK. And, Mr. Izzo, again, to the infrastructure
issue. And I heard you speak to it with my--with earlier
questions from my colleagues.
But the new grid infrastructure that is needed in order to
meet the utilities goals to reduce emissions, what order of
investment are you anticipating, and again, what sort of
timespan?
Mr. Izzo. And, again, that will vary by region in the
country. In some of the more urban areas, it can be as
expensive as in some of the rural areas, not because of the
distance between the customers but because of the
undergrounding of the resource.
And the investments that we are making are more from an
adaptation point of view as opposed to enabling the
introduction of renewables, and the comment I made earlier is
that we have spent over $3 billion since Superstorm Sandy, and
we anticipate that could be an additional two in years to come.
Mr. Tonko. Thank you very much.
With that, Mr. Chair, I will yield back.
Mr. Rush. The gentleman yields back.
The Chair now recognizes Mr. Bucshon for 5 minutes.
Mr. Bucshon. Thank you, Mr. Chairman. And thank you all,
witnesses. Sorry, I had another hearing that was important--as
important as this, but I looked through your testimony.
Carbon capture utilization and storage, in my view, is
essential for the energy sector to provide customers with
affordable and reliable electricity. However, as a developing
technology, increased research and development is continually
going to be essential, which is why I was pleased to see the
Department of Energy select Prairie State Generating Company
for a $15 million project supporting the design of a carbon
capture system.
While located in Illinois, it provides electricity to
Hoosiers across my district, through the Wabash Valley Power
Alliance and the Indiana Municipal Power Agency.
Congressman, can you maybe talk about why you think that--
how investment in carbon capture can help ensure both grid
reliability and affordability?
Mr. Matheson. Well, it maintains a real reliable source, if
you will. These base load facilities are an important part of
our grid functions today. I get that the grid is changing, but
I think that--and I think I heard in testimony from other
witnesses, as you--as you go higher and higher in percentage of
intermittent resources, it creates greater challenges to the
grid.
And I think having a base load supply is important. I
think, if we are going to move to a carbon constrained world,
then we have got to figure out a way to do carbon capture so
that coal and natural gas can be an important part of our
resource mix.
Mr. Buschon. Right. I mean, from my perspective,
practically, to try to get to a carbon-neutral environment,
that has to be part of the mix. That is why I support ongoing
research and development, not only in renewables and across the
energy sector, but I think sometimes right now, at least, we
are a little shortsighted, maybe, in trying to say that we
don't need to continue to innovate in the fossil fuel space,
for example, which I support innovating and developing
technology across all of the inputs, potentially in the future
to a carbon-neutral environment. I wanted to get that there.
I have every coal mine in the State of Indiana, by the way,
just so people know where my district is. And I am from the
Midwest. My dad was a coal miner. But I do understand the
challenges to all of these industries. But let's not be
shortsighted and not continue to innovate.
Mr. Bear, I appreciate your work to ensure that we have a
reliable grid 8,760 hours of the year. This is incredibly
important, especially require Hoosiers and other Americans in
the Midwest who have experienced the intensity of a polar
vortex. However, I am concerned that the wholesale power market
does not adequately price the resiliency attributes of base
load power. Would you agree? And if so, how do you suggest
addressing that issue? Does that make sense?
Mr. Bear. It makes perfect sense.
Mr. Bucshon. We don't really address the value of having
that consistency and reliability that base load provides.
Mr. Bear. That is a fair comment. One of things that we are
trying to do is understand how much of that we need and where
we need it and then how to price it based on value.
As was noted by several panelists, marginal cost pricing,
which we have used for a long time now, is not going to get us
where we need to go.
Mr. Bucshon. Yes. I appreciate that. Because that is the
other thing that I--I am concerned about, about reliability and
stability of the electrical grid. We have seen in the European
experience where they have had some issues there and the cost.
I am in rural America. I have a lot of rural areas that
have--we will just say low-income individuals or--and also
seniors on fixed incomes across all of our districts and across
the United States. And so I think, if we get too far ahead of
ourselves here, the cost can inhibit the ability of these
citizens, particularly the low-income citizens and seniors on
fixed incomes, to be able to afford their electricity and their
power.
I am going to ask Ms. Palmer this last question, because I
heard a comment that she just made about electric cars. And
this is an interesting subject for me, because one of the
things I think we fail to realize sometimes is what the
environmental impact of the entire lifecycle of a technology
is.
And so in my district, for example, if you have an electric
car--which I support, it doesn't put out any emissions--but
when you plug it into the wall, about 80 percent of the
electricity generated comes from a coal-fired power plant.
So can you explain to why you think--you know, I realize
you decrease emissions, but I just am not convinced that that
particularly will change much, the overall lifecycle of carbon
emissions with the battery--the development of the batteries
and what it costs to do that, when you plug it in, how the
power is generated. Just quickly, because I am out of time.
Ms. Palmer. Yes, I think it is important to move towards a
largely substantially decarbonized grid, either through
adoption of clean technologies, more carbon capture and
storage. And in that situation, the power that you are using to
charge the battery would be clean. So I think the two kind of
have to happen in tandem.
Mr. Bucshon. OK. I guess--I am out of time, but I guess my
point is that electrical cars--going to electric cars alone is
not going to solve our problem.
I yield back.
Ms. Palmer. No, but they are more efficient, yes.
Mr. Rush. The Chair now recognizes Mr. Veasey for 5
minutes.
Mr. Veasey. Thank you, Chairman Rush, for holding this
hearing, and I would like to thank the witnesses also for being
here. I think this has been a really fascinating discussion, as
we talk about ways we can reduce emissions in the power sector.
As you know, the power sector is responsible for about 20
percent of our Nation's energy use and greenhouse gas
emissions. And if we are going to make meaningful progress on
tackling climate change, we must, of course, work to reduce
these emissions through cleaner energy, and we should also look
at barriers to clean energy deployment.
As part of the deregulation in my home State of Texas, many
consumers, since the early 2000s, have had the ability to
decide who they buy electricity from. Allowing consumer choice
has not only created some of the lowest retail prices in the
Nation of 11.5 cents, compared to the Nation average of about
12.5 percent, it has also allowed for consumers to seek out
cleaner sources of energy.
Of course, this change, along with other market
improvements in Texas, has allowed renewable energy to also
rapidly grow and has seen the State decarbonize faster than any
other State in the Union.
According to recently released data from the U.S. Energy
Information Administration, Texas is the leader in electric
sector decarbonization. In 2013, we closed about a third of our
coal plants in the State of Texas. At the same time, Texas led
the Nation in adding renewable power capacity. Specifically,
Texas leads the Nation in wind generation capacity with nearly
25 gigawatts, which is more than a quarter of the Nation's
total.
Texas still added more wind and renewable generation than
any other State last year. In fact, Texas has enough wind
capacity to rank number five globally if we were a country. And
some people do think that we are a country. And the other
thing, too, that I think is always fascinating, that I like to
brag about up here, is that if we compare the energy mix of the
grid in Texas to that of the European Union, that Texas
actually produces more renewable energy on our grid than they
do in the EU. So, furthermore, the State indicates another 21
gigawatts of solar projects and 30 gigawatts of wind projects
are in the pipeline.
And so my question today is for Ms. Palmer of Resources for
the Future. Can you speak to the benefits of a competitive
market like ERCOT provides, in terms of reducing barriers for
renewable energies to compete on the grid?
Ms. Palmer. Certainly, Congressman.
So I think you identified some of them in your opening
remarks, about the ability for people to select their energy
supplier not solely based on price but also based on these
other attributes.
And I believe a lot of the clean energy development that is
happening, as Mr. Dennis referred to, is actually coming from
those sorts of opportunities. Particularly, large companies are
interested in doing this, and their ability to do so in a sort
of integrated way where they are pointing to the actual sources
in their local area, is enhanced and actually made possible by
having more competitive markets.
So I think it is not going to answer the problems that we
have, but it is certainly going to provide another avenue by
which clean energy development can be encouraged.
Mr. Veasey. Thank you very much.
I would like to now turn to Jeff Dennis of Advanced Energy
Economy.
In your testimony, you mentioned that Federal leadership in
wholesale electricity markets provides a near- and long-term
opportunity to lower consumer costs, expand consumer access to
advanced energy, and reduce emissions.
Specifically, what role does Congress have to make sure
consumers in any State have a choice and access to cleaner
sources of energy?
Mr. Dennis. Well, Congress' role certainly in overseeing
the regulation of the wholesale markets is critically
important, to make sure that all resources that are technically
capable of providing services are allowed to do so and that
those market barriers are reduced.
I think Congress certainly has a role in looking at how
competition in those markets gives consumers across the board
the opportunity to make the choices we just talked about, to
choose advanced energy, particularly now that advanced energy
is not only a great choice for folks who have sustainability
goals and other things, but is also the least-cost resource on
the grid.
Mr. Veasey. Thank you very much. Appreciate the panel for
being here today.
Mr. Chairman, I yield back.
Mr. Rush. The Chair now recognizes Mr. Flores for 5
minutes.
Mr. Flores. Thank you, Mr. Chair.
I want to echo the comments that Mr. Veasey had regarding
Texas. I do consider it its own country.
Anyway, we are the country--as you heard before, we are the
country's largest producer and consumer of electricity, and our
State has a robust market that is open to both buyers and
sellers of electrons. And, since the establishment of a
competitive electricity market in 2002, Texas now leads the
U.S. in wind production, and Texas also leads in adding
renewable capacity and clean-burning natural gas.
Today, residential consumers in Texas pay some of the
lowest electricity costs in the country at 11.8 cents per
kilowatt hour. On the other hand, California residential
consumers, by comparison, pay nearly twice as much, at almost
20 cents per hour.
At this time I would like to ask unanimous consent to
insert for the record a Dallas Morning News editorial entitled
``California's energy nightmare shows us why Texas must trust
the free market.''
Mr. Rush. With no objection, so ordered.
Mr. Flores. This editorial clearly lays out the absolute
failure of a government-sanctioned monopoly. California does
mandates through its monopoly, Texas does markets. And where is
the consumer being better served?
I am sympathetic to those that are currently impacted by
the weather changes in California, but it should be noted that
the root of the problem results from a monopoly utilities
mismanagement of their infrastructure and the adjacent
vegetation, under the watch of State regulators.
Now we see the consequences that our friends in California
are facing today: PG&E's announcement late yesterday that up to
1.8 million will face a power shutoff because the bankrupt
utility cannot manage the fire danger posed by its outdated
equipment and infrastructure.
The carbon emissions from the California fires last year
were equal to the emissions from the California power sector
last year. So, as the committee's majority continues to
contemplate a chaotic decarbonization of our economy, I hope
that they seriously consider flexible market solutions over
mandates so that the mistakes of the past are not repeated.
Texas is a great example of the superiority of market-based
solutions to increase the use of renewable power sources. This
committee would be well served to consider expansion of market-
based solutions versus ineffective and costly mandates.
For Mr. Dennis, there are some places in the country with
significant market barriers limiting deployment of more
efficient generation. I am the largest residential solar power
producer in Brazos County, Texas, and I have also implemented
demand-side restrictions to peal another 42 percent off my
usage of grid power. But some States still ban homeowners from
putting solar on their roof. Some other areas also ban
manufacturers and large businesses from generating their own
renewable electricity, or access to new technologies is limited
because many consumers in America are limited to a monopoly to
purchase their electricity.
So, Mr. Dennis, should we accept the status quo where
certain consumers of electricity are worse off simply because
of their geographic location?
Mr. Dennis. We certainly shouldn't accept a status quo of
consumers not being able to access the energy that they desire,
certainly. And we see instances where innovative new services
are more difficult to provide or are barred by State policies
or utility policies that limit their access to the grid.
So certainly there are a range of policy approaches that
both Congress and the States can take to address those issues.
But certainly we have seen and the example of--the great
example of Texas that you mentioned, in terms of the ability of
consumers to choose more advanced energy, is a powerful one.
And there are other tools as well. Certainly, improving
utility planning and ensuring that the low-cost benefits of
advanced energy are recognized.
Mr. Flores. When we look at the fact that electrons flow
freely across State borders--they are not identified as State 1
electrons or State 2 electrons--is interstate commerce
inhibited by prohibitions of new entrants, new products and
services, and new forms of transactions from one State to
another?
Mr. Dennis. I think they can be, certainly. In instances
where new technologies are able to provide a range of services
across that sort of wholesale and retail divide that we have
traditionally thought about the electricity grid, there can
certainly be barriers that inhibit those kinds of services.
Obviously, all of these things depend on the particular
physics of a local area.
Mr. Flores. Sure.
Mr. Dennis. But in general that could happen.
Mr. Flores. Should this committee consider legislation to
improve access to more innovative technologies and lower-cost
advanced energy across all regions of the country?
Mr. Dennis. I think this committee should consider a range
of options to continue to empower consumers to choose clean and
advanced energy.
As I mentioned in my testimony, 71 percent of the Fortune
100 and 43 percent of the Fortune 500 companies have clean,
sustainable energy goals and want to purchase more advanced
energy.
There are a range of options that States and utilities can
give those entities, as well as residential consumers and
others. And those should all be considered as we think about
decarbonizing the electricity grid.
Mr. Flores. And I appreciate your answers today. And I have
a couple of other questions to submit for the record. I will
ask you to follow up separately. Thank you.
Mr. Dennis. Thank you, Congressman.
Mr. Rush. The gentleman yields back.
The Chair now recognizes Mr. Schrader for 5 minutes.
Mr. Schrader. Thank you very much, Mr. Chairman.
Ms. Palmer, we have got a lot of talking points these days
about the best way to get to zero carbon emissions at the end
of the day. And one side of the aisle is always about
innovation, innovation, innovation, the other is about
regulatory approaches, carbon pricing, et cetera.
Are they mutually exclusive, or could we work together to
come up with something, with a little bit of the regulatory
framework that enhances, hopefully, getting there and at the
same time making sure that the innovation, so that the
different industries can actually all contribute to reducing
our carbon emissions?
Ms. Palmer. So, Congressman, I think it is important to do
both, actually. I think putting a flexible approach in, such as
a price on carbon, will provide incentives to folks to
innovate, both folks who are in the energy supply business and
also folks who produce supplies for them and other--energy
storage people.
But, as has been mentioned previously at this hearing, we
are pretty certain that we can get to the 80 percent
decarbonized goal now. But the technologies that we really need
to get to the 100 percent goal, which is an important goal, are
probably largely yet to be created. And so we need to put
resources into doing that. And so I think it is important to do
both.
Mr. Schrader. So question for--maybe a followup question to
you and maybe Mr. Izzo, too, frankly.
You know, the idea of just pricing carbon would seem to
tacitly admit that we are going to still have a lot of carbon
production as a result of different energy sources in this
country.
What about putting a lot of money into research and
innovation, to go far an all-of-the-above, carbon capture,
carbon reduction, renewable approach and allow the market to do
its innovation? In other words, instead of putting money on one
side of the equation, we put it on the other side of the
equation too, and then set a zero emission standard for some
point in the future that is, you know, reasonable, given your
comments.
Ms. Palmer. Right. So I think that you can kind of do all
of those things together. So one of the virtues of the price on
carbon is it does encourage reducing carbon emissions, and
moving towards the goals that the committee is talking about
would ideally probably happen through a price that goes up over
time. And so that is going to increasingly discourage the
carbon emissions, but it also creates in the interim a source
of revenue, some of which could be devoted to doing the types
of research that will be required to get to our goals.
Mr. Schrader. Mr. Izzo, comment?
Mr. Izzo. Yes. I would invest on both sides of the
equation. I was benefited by being up at MIT yesterday where
there is some exciting work going on a technology they call
SPARC. There is $120 million worth of private capital being
placed into fusion technology because of belief that Congress
will do something about carbon. But that research was
predicated on some DOE funding for basic material science in
magnetic technology.
So I think it is both the allure of the market and the
investment potential associated with being the least-cost
supplier of carbon-free energy, combined with the R&D in some
fundamental science areas.
Mr. Schrader. Inherent in all of this, I think, is having
Congress set some standards. Right now we are at the mercy of
one executive order versus another executive order. And I don't
care if you are in the transportation sector or the power plant
sector, or whatever, there is no certainty in the marketplace.
And that prohibits businesses more than anything else, in my
experience as a businessperson, from making those leaps into
various investment areas.
So if we can get, you know, my opinion, Congress behind
some regulatory framework that is market-based and encourages
an all-of-the-above strategy to get to zero, that would
actually maybe give everyone that certainty of going forward,
and you guys can make the investments you need. MISO can do
what it needs to do. I mean, it just, to me, makes a lot more
sense. And so hopefully we will have opportunity to do some of
that going forward.
I yield back. Thank you very much.
Mr. Rush. The Chair thanks the gentleman.
The Chair now recognizes the gentleman from Virginia, Mr.
Griffith, for 5 minutes.
Mr. Griffith. Thank you very much, Mr. Chairman.
I am so excited by the conversation that was started by my
friend Mr. Schrader, because--and I tell my constituents this
all the time--we may disagree on how to get there, but most
folks are coming here trying to solve problems. And I have to
agree--I am a big believer that we need to have parity in our
research dollars coming out of DOE and other places, because we
are going to continue to use the carbon-based fuels, and we
have got to figure out ways to do that. And doing research on
all of this so that we can get to this number, not just by
saying we are going to eliminate the carbon-based fuels--oil,
natural gas, coal--but by figuring out how we can do it
cleaner.
Another colleague brought up carbon capture and
sequestration. I will tell you, there is some great research
going on out there. And just in my district, we have MOVA
company that is now going to a prototype at Virginia Tech with
panel bed filtration, which separates out through different
filter processes individual pollutants. I am looking here at
the screen, because there is a video--soon to come to a theater
near you--that shows how they can take out with different
filters NOx, SOx, flash, and carbon dioxide.
And what they are planning on doing with it is, by having
these separate panels, they can then take that product, because
they are not getting it all filtered into one big box that then
has to be separated. Each one of the filters would have a
specific item that it filtered out, so you could then sell the
CO2, you could sell the NOx, the SOx, and the flash,
or do what you want to do. Arsenic is another one that they
have mentioned in the past. That is a fantastic way to go, but
we have got to have the research to do it.
And it is a way that we can get to zero, perhaps by 2050,
but not just by saying we are going to eliminate the use of our
carbon-based fuels.
We also have one that is having surprising effects that is
already going into use. And they started off looking for ways
that they could separate rare earth from the coal in central
Appalachia. And so what they have done is they have got these
different things--and DOE has funded a lot of this and
continues to fund some research in that area--but what they are
doing is, is that they are going to, by figuring out how to
separate it, they have now licensed that technology some steel
mills--I have to watch my accent, because it comes out ``still
meals''--but steel mills in India. Because India has coal. They
have dirty coal. They don't have much else to use in the way of
fuels. And if we think they are going to eliminate the use of
coal and bankrupt their industries--not going to happen.
But this technology that we have developed here, they have
figured out can be used--they don't have rare earth, but they
can separate the dirty coal from the higher--utilization of the
higher--the better carbon and lower the carbon footprint at
steel mills in India.
This is where research can have a dramatic impact on moving
our country forward and helping the rest of the world. Because
if we don't move it forward with affordable research and
affordable technology, we can do everything we want to, it is
not going to affect the climate or the atmosphere if we don't
take care of making sure that it is affordable for the rest of
the world to use as well. And if we can make a little profit
along the way, that is even better.
All right. Sorry about that diatribe, but I just got so
excited listening to my colleague, and there are a lot of
things we can do in a bipartisan fashion.
All right. Another former colleague, Mr. Matheson, let me
just say thank you, first off--I guess that was originally
going to be first off, but I got all wound up--for supporting
my New Source Review Permitting Improvement Act. This is an
important issue, and if adopted, would help provide much-needed
certainty from any--including your members.
Now, if you could briefly tell us what the--what
differentiates--and I know, but let's tell the public back
home--electric cooperatives in rural, oftentimes low-income
areas, from the investor-owned utilities.
Mr. Matheson. Well, it is a different business model, first
of all. We are owned by the consumers we serve. We are not
owned by shareholders. And so we are also governed by our
consumers. They elect the board of directors of each co-op. And
so it is a different business structure. And we also have a
different footprint in terms of the communities we serve. It is
much lower revenue per mile.
I made some of these statements in my opening comments,
where it is--the utility average for revenue per mile or people
per mile is four times as much for the other utilities than it
is for us.
So we have a sparsely populated group that we serve, and
that was challenging back in the 1930s. That is why rural
America--the for-profit utilities wouldn't go to rural America.
Even with Federal subsidies they wouldn't. And that is why
cooperatives formed back then. And those challenges continue
today.
And so that is really--those are some of the key
distinctions, I would say, between the--and it doesn't mean we
don't get along with our brethren across the electric sector,
both the municipals and the investor-owned. We actually have an
excellent working relationship. But those are some of the
distinctions for electric cooperatives.
Mr. Griffith. And you all don't have the ability to go out
and research things like the MOVA technology or the separation
of the coal. You just want what is affordable, and it is up to
us in the Federal Government to come up with a way that we can
have research parity that gets you a cheap product so that you
can provide it to your customer. Isn't that correct?
Mr. Matheson. I agree. But I will say, we have had success
as a national association receiving grants from DOE. We do
participate in those research projects.
Mr. Griffith. Very good. Thank you so much.
I yield back, Mr. Chairman.
Mr. Rush. The gentleman yields back.
The Chair now recognizes Ms. Barragan for 5 minutes.
Ms. Barragan. Thank you, Mr. Chairman.
OK. Mr. Bear, do you think the Federal Energy Regulatory
Commission, as it is currently constructed, is an ally or an
obstacle to getting to 100 percent clean energy, and are there
reforms you would suggest?
Mr. Bear. I would say there are a lot of reforms that we
would suggest. I touched on some of those in my testimony,
where we need to rethink how we think about the electric
energy, how we think about reliability, in terms of using just
basic capacity as a homogenous commodity. We need to move away
from that and start thinking about the attributes, that we need
to operate a system with a lot of intermittent resources on it
because it is very different.
We need to look at availability metrics, as opposed to
reserve margins and things like that, because it is every hour
that matters now, not the peak hour or the peak day. So I think
there are some pretty significant shifts that need to change on
that front.
The other key area, I would say, is pricing. Location
marginal pricing is something that has been very good for
rationalizing excess. But in terms of rewarding and
incentivizing the attributes we need, I don't think it works.
And so we need to move over to more value-based pricing.
Ms. Barragan. Ms. Palmer, do you want to add anything?
Ms. Palmer. Yes. I think that flexibility will be very
important. I also think that the role of the demand side, in
terms of customers, is going to become increasingly important.
And so I think that the FERC is going to have to find ways
to work with the States on this issue, because it is not really
jurisdictional to them. But creating opportunities for
resources on the customer side of the meter to play both in the
ancillary services markets but also to face more--excuse me--
time differentiated prices that will help accommodate the
variable renewables will be important.
Ms. Barragan. And, Ms. Palmer, there has been a lot of talk
about electric vehicles, especially on the other side, about
maybe they are not as great as other options. You were starting
to have an answer.
Did you want to maybe have a little more time to explain
why electric vehicles are worth investing in?
Ms. Palmer. Oh, yes. Well, I think that there is sort of a
simultaneous movement that is happening in the energy systems.
And one is moving towards a largely decarbonized electricity
sector, the goals that the committee has set forth in this
discussion.
And part of that--part of what is going to happen there is
the introduction of more intermittent renewables.
And--but also it is become increasingly important, as we
have had substantial success in decarbonizing the electricity
sector relative to past, is the transportation sector is
becoming a larger share of carbon emissions.
And so there may be various alternative ways to get to a
decarbonized transportation system, but a lot of modeling
suggests that electrification of transport and buildings under
current cost conditions and expected cost improvements is going
to be the way to do that. And so making it possible to
electrify vehicles--(a) they are highly efficient, and (b) you
are getting rid of not only carbon emissions but also other
emissions associated with vehicle operations that are
important.
Ms. Barragan. Thank you. When I served on a city council,
one of the popular policy options for power communities was to
purchase clean energy solutions with something called CCAs,
Community Choice Aggregation providers. This allows local
governments to purchase cleaner electricity from alternative
suppliers on behalf of residents and businesses. Currently only
a handful of States, including California, allow for CCAs.
Mr. Dennis, in your testimony you talked about the
importance of reforming utility business models and consumer
choice. Can you speak to the role that CCAs could have
nationally in accelerating our country to 100 percent clean
energy?
Mr. Dennis. Certainly. I think opportunities for
communities to increase their ability to choose clean energy
can have an important role in taking advantage of, you know,
the cost reductions I talked about, that clean energy is really
now the most affordable resource on the grid.
We see different kinds of models. I think, you know--not to
steal Mr. Matheson's thunder, but certainly we see
cooperatives, places like Holy Cross Energy in Colorado, that
are really taking advantage of technology in that way, to work
one on one with their consumers that are asking them for this
and make these kinds of changes.
So certainly CCAs is one option. I don't think it is the
only option. But it certainly provides an interesting model
that other States and even Congress can look at.
Ms. Barragan. Right. And I know it has been mentioned
before, the situation in California with the rolling blackouts
and the fires. I would be remiss if I didn't mention that we--
you know, first of all, I think it is unacceptable that we are
dealing with this by having these rolling blackouts. I talk to
people every day who tell me about them having to move and the
hardships it causes and obviously the risk and the concern. It
is unacceptable.
And I am hoping that, when we develop this plan of going
100 percent by 2050, we are taking a look at the energy grid,
how can we avoid this, and making sure we are holding those
accountable who are not investing in proper maintenance and
under investment.
So with that I yield back. Thank you.
Mr. Rush. The gentlelady yields back.
The Chair now recognizes the gentlelady from Colorado, Ms.
DeGette, for 5 minutes.
Ms. DeGette. Thank you so much, Mr. Chairman. Thanks so
much for letting me waive onto the committee for this important
hearing.
And if I would have known my friend and our former
colleague on this committee, Jim Matheson, were here, I would
have come over a lot earlier.
But I wanted to come over to talk about some legislation
that I have been working on. As we all know, and I am sure you
have been discussing this today, to avoid the worst effects of
the climate crisis, we have to cut carbon emissions in half by
2030 and then to net zero by 2050.
And so, while I have been talking to Xcel Energy and lots
of other people about this, we know we need to eliminate the
carbon emissions, but we don't yet have the full technology to
do that, to a zero percent. Wind and solar are critical, and we
need to increase their use dramatically. But without
breakthroughs in technology, those two sources alone will not
get us to the zero percent.
And so I think we all agree we need innovation and
technology to provide the reliable electricity that we have
come to expect.
So here's what the legislation I expect to be introducing
in the next few weeks will do. And I am hoping--I still hope we
can do it on a bipartisan basis.
But what it does--part of what it does is it encourages the
development of the widest possible array of technologies to
produce emission-free electricity. And it sets us on a course
to having affordable, reliable, and 100 percent emission-free
electricity by 2050.
So I want to ask this panel some general questions that I
have been thinking about in working on the bill.
Mr. Dennis, I wanted to ask you, since spurring innovation
is the goal of this hearing and also of my bill, I wanted to
ask you about some of the advances that we have had in energy
technology that have helped bring down the cost of solar and
wind energy. Were those technological advances driven by the
private markets alone, or did Federal policy play a role in
driving the development of the technologies we have today?
Mr. Dennis. Well, certainly a mixture. Federal policy
certainly played a role in terms of we had long-term tax
incentives for investments in these technologies. We had
research and development. DOE had a lot--had and has a long-
time effort around wind and solar as well.
Ms. DeGette. Right.
Mr. Dennis. So it is a combination.
Ms. DeGette. It is a combination. So you need both private
and Federal policy. So what I want to ask, as we try to develop
these technologies in the next few decades, is it fair to
expect that new clean energy technologies will be invented in
time to bring us this affordable, reliable net zero electricity
by 2050 without a change in Federal policy? Or do we need a
Federal change?
Mr. Dennis. We need a Federal change. We need the Federal
Government to set the direction. And as you mentioned as well,
and as many others have mentioned, R&D is going to be
important, too.
Mr. DeGette. Thank you.
Dr. Palmer, the legislation I have been working on would
in, among other things, establish a clean energy standard that
gradually increases until we are generating 100 percent of our
electricity using zero emitting technologies.
And so what it does is, it is designed to reward investment
in clean energy technologies without adding to the size of the
Government.
And I would like to ask you, it is my understanding that a
clean energy standard by its design would help keep electricity
prices low compared with other carbon pricing mechanisms.
Would you agree with that?
Ms. Palmer. Yes, Congresswoman.
So traditionally, approaches--approaches that apply a
direct price on carbon are going to create a source of revenue,
and that will pass through in the effect that it has on
consumer prices of electricity, as long as that revenue is not
used to offset the increase in electricity rates.
So a clean energy standard, on the other hand, provides an
incentive to produce electricity from clean sources by
rewarding that and creating a demand for that attribute in a
marketplace. And so that will have a lower impact on
electricity prices.
And, you know, with the carbon pricing approach, often it
has been proposed that the money be dividend back to
households. And that could mitigate or would, actually--
particularly for low-income groups--largely mitigate the impact
on residential consumers. But a clean energy standard would
make a more broad-based mitigation of that impact.
Ms. DeGette. Thank you.
Finally, what we are trying to do this with bill that I am
doing is to drive innovation and accelerate the use of new
technologies. Some people have--some of my colleagues have
worked on similar measures, but they are not addressing
deployment of the new technology.
So I wanted to ask you, Mr. Izzo and Anderson, briefly, if
we seek to foster clean energy innovation without giving power
companies a reason to deploy technologies, do you think they
will be adopted universally in time to bring the emissions to
net zero by 2050?
Why don't we start with you, Mr. Izzo.
Mr. Izzo. Yes. I do not. I think a hallmark of utility
service has been universal access. And that would be true in a
renewable world as well.
Ms. DeGette. Thank you.
Mr. Anderson, briefly.
Mr. Anderson. I agree with that statement. I would just say
that, as technologies are emerging, that we are developing
programs to train people to work on them, to maintain them. But
I agree with the essential point that he just made.
Ms. DeGette. Thank you.
Thank you very much, Mr. Chairman. I yield back.
Mr. Rush. The gentlelady yields back.
And that concludes the witness questions.
And I want to thank--the Chair stands corrected.
The Chair now recognizes Mr. Walberg for 5 minutes.
Mr. Walberg. Thank you, Mr. Chairman.
Just spoke to my Michigan bankers, and they said let's keep
the energy on and any way we can power to our rural areas, that
is great. Thanks to the panel for being here.
Let me cut to the chase here.
Mr. Anderson, in your testimony, you mention the UWUA's
Power for America Training Trust, P4A, and its partnership that
we have, I appreciate the fact that--with Consumers Energy in
my district in achieving the first Department of Labor-
certified apprenticeship program in renewable energy.
I had a chance to talk with some of the students and the
excitement they have with realizing that they are on the ground
floor of a future that is going to be very special.
You know, I personally support an all-of-the-above plan. I
hope we do the research necessary to make sure that we keep all
of that base energy there, but we have to expand and develop as
well.
So that program is great. I applaud you for that.
The apprenticeship program is important. It supplies skills
for the future as well as the present--wind, solar, better
technologies, energy sectors as well as present sector.
So let me ask you, as technology changes, it is essential
that jobs evolve with then.
Can you elaborate a bit more on the demand for skilled
trade training to meet the needs of our ever-changing energy
sector?
Mr. Anderson. Yes, absolutely. Thank you very much for the
question, Congressman, and for your appreciation of our program
there. We train people to do everything from climb utility
poles to work on gas appliances and now how to build and
operate brand-new technologies.
These are programs that we are developing and have
developed literally from scratch. There have not been
previously apprenticeship programs that broad over that many
technologies, and we have had to invent it as we go along. And
there will be more of that.
We are already in the process of thinking about how we can
develop apprenticeship programs so that people can operate and
maintain zero-emission vehicle infrastructures as that gets
built out. We are also looking to expand what we do in wind
energy to not just be onshore wind farms, but also as offshore
towers are built, we want to train people, apprentices, to go
out and work on those towers as well.
The technology will not shop changing. That is for sure.
Ten, 15 years ago, there will be things coming online we
haven't even imagined yet. And our goal at that time, I am
sure, will be to develop new programs to train people to work
on those things as well.
So we are using that program and programs that we want to
build like that to evolve our workforce, evolve our training
programs, and adapt to the changing energy systems.
Mr. Walberg. Of course, we have to be more resolved in
encouraging students to think about those careers, whether it
is climbing a pole or climbing one of those towers made in my
district for the wind turbine, working on those tuning--how you
tune those big blades and all of the rest. This is something
that we have to excite our young people with.
Mr. Anderson. Oh, absolutely.
Actually, to the point about the blades, we are in the
process of figuring out how we are going to build at least part
of a wind tower right there on that facility. One of the main
threshold questions you have to ask an apprentice is, can you
climb that? It is very high, right?
There are people who don't get over that threshold, right?
But for many people, that is very exciting, right? It is a
thing that they can hardly imagine doing previously.
And yes, it is having that gets overlooked. People rush off
to do, you know, college tracks or whatever, and that is
appropriate for some people. But I am proud to say that many of
the members who work in these industries make more money than I
do. Those are very good jobs, and they are definitely a pathway
to the middle class for sure.
Mr. Walberg. And beyond.
Thank you.
Mr. Bear, and also Mr. Matheson as well and Mr. Izzo--I
won't ask a question of whether you are related to Tom Izzo,
the great hockey coach at Michigan State. I wish you were. We
could talk about that.
I think it is clear that our Nation's energy grid needs to
be resilient, and there is a real concern that it won't be if
we don't plan carefully.
Can the three of you give me your perspective on how the
transmission grid needs to change to support these significant
changes in the power system?
Mr. Bear, we will start with you first.
Mr. Bear. Sure. Thank you. Appreciate the question.
I think that, in looking at the grid, we are doing a lot of
studies now to understand at different levels of renewable
penetration what the implications are. And it comes from a
couple different dimensions. You know, one, what do we need
from a resource standpoint on the grid to make sure that we can
maintain reliability, in terms of attributes, flexibility, for
example, frequency balancing, stability balancing, those kinds
of things.
We are also trying to understand what we need to price
those mechanisms so that they are rewarded appropriately. And
we have sort of a pricing scheme that reflects the underlying
system conditions at all times.
And then, third, we have got to look at the transmission
system itself, because I think the grid needs to be much
different to balance much more--larger penetrations of
renewables as we go forward.
Mr. Walberg. OK. Mr. Matheson.
Mr. Matheson. I think Mr. Bear hit the high points. I think
one thing we should keep in mind when--to the extent there is a
transition, we should also do no harm, you know.
Our electric grid--while it is aging, we haven't invested
enough--it is actually functioning remarkably well. We have
99.99 percent reliability across this country. It is a
substantial investment with a great history. So let's make sure
as we look at transitioning, we don't mess up what has been a
pretty reliable thing over a long period of time.
Mr. Walberg. I am going to let Mr. Izzo respond to that as
well.
Mr. Rush. The final witness.
Mr. Izzo. So I would echo those comments. The regional
transmission organizations, whether it is MISO or PGM, do a
fine job of modeling for 15-year periods in advance, the
reliability of the grid. FERC does a good job of creating an
efficient and effective regulatory system to encourage
investment.
I would just point out that it should not be the burden of
the utility consumer or the transmission owners to create the
infrastructure that are needed to connect the renewables to
load centers. That really should be a generator lead. That
should be the responsibility to fully reflect the cost of the
supply option being selected in the location where it is being
selected.
Mr. Walberg. Thank you.
And thank you, Mr. Chairman.
Mr. Rush. That concludes the witness questioning.
I would like to thank our witnesses for their participation
in today's hearing. And I will remind Members that, pursuant to
committee rules, they have 10 business days to submit
additional questions for the record to be answered by the
witnesses who have appeared. I ask each witness to respond
promptly to any such questions that you may receive.
The Chair now asks for unanimous consent to enter into the
record the charts and the submissions by my colleague from West
Virginia, Mr. McKinley, that were omitted because of technical
difficulties.
Without objections, so ordered.
That concludes the subcommittee hearing, and at this time
the subcommittee is adjourned.
[Whereupon, at 1:20 p.m., the subcommittee was adjourned.]
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