On May 4, 2023, the Senate Energy and Natural Resources Committee hosted all four FERC Commissioners for an oversight hearing to focus on reliability in the face of (1) cyber-attacks, (2) coal and natural gas plant retirements, (3) severe weather, and (4) subsidies, climate policies, and market signals that encourage more intermittent resources to come online.
During opening remarks, Committee Chairman Senator Manchin of West Virginia expressed his concern with electricity reliability and affordability, noting that more must be done to ensure Americans have power during extreme cold weather conditions. FERC Chairman Phillips echoed this concern, urging that the Commission continue to implement measures to protect against cyber and physical attacks and extreme weather events. FERC Commissioner Danly noted that electric markets are in a reliability crisis because, in his view, FERC has allowed state subsidies and policies to push more renewable resources onto the market, driving generators without subsidies to premature retirement, which impacts system stability. “If we don’t allow the market incentives to drive people’s actions, it is impossible to prevent reliability failure,” Commissioner Danly stated. FERC Commissioner Clements explained that Since Winter Storm Uri, FERC has made progress on several recommendations proposed by the North American Electric Reliability Corporation (NERC), including the new cold Weather Reliability Standards to improve extreme cold weather operations, preparedness, and coordination. Commissioner Clements also expressed her desire to see the industry improve the existing grid with grid-enhancing technologies and encourage the use of distributed energy resources and demand response. Lastly, FERC Commissioner Christie expressed his concerns that the United States is headed towards “catastrophic circumstances” because more reliable resources are retiring at a pace far too great than the industry can keep up. Commissioner Christie stated that the problem is not the addition of renewable resources, but the subtraction of dispatchable natural gas and coal.
During the hearing, several senators expressed concerned about the retirement of coal and natural gas plants. Senator Barrasso of Wyoming noted the decreased rate of new interstate natural gas pipelines in 2022 and how this might impact grid stability. Commissioner Christie explained that the sudden decrease is concerning, stating that the “arithmetic doesn’t work” if electricity demand is increasing exponentially, but supply is decreasing due to the retirement of dispatchable resources. In response to Senator Hoeven of North Dakota’s concerns about the accelerating retirement of coal and gas resources, Chairman Phillips stated that the Commission must keep “a careful eye” on this issue.
Senator Heinrich of New Mexico asked the Commissioners whether they intend to act on interregional transmission planning and cost allocation. Chairman Phillips responded that “it is important to take up a proposal on interregional issues. . . People are still hurting from the last economic crisis, when the bill goes up, people feel it.” Senator Lee of Utah asked whether customers should bear the costs of building transmission lines that they will never receive the benefits for. Commissioner Christie responded that in his view, the costs should be allocated to states receiving the benefit.
The hearing also covered grid enhancing technologies. Senator King of Maine stated that he hoped FERC will encourage technological smart grid enhancements before clearing new rights of way and expanding the grid with new infrastructure. Chairman Phillips responded that grid enhancing technologies are essential to planning and top of mind for the Commission in the coming years.
A link to the archived video of the hearing is available here.
