On April 10, Sen. Mary Landrieu convened her first Federal Electric Regulatory Commission (FERC)-related oversight hearing as Chair of the Senate Energy & Natural Resources Committee. The hearing, entitled Keeping the Lights On — Are We Doing Enough to Ensure the Reliability and Security of the US Electric Grid?, drew a standing room crowd to hear testimony from two FERC Commissioners, the North American Electric Reliability Corporation (NERC) CEO, and representatives from state regulators, industry, trade associations, labor, and the environmental community. The hearing covered two major topics: (1) physical and cyber security issues involving the bulk power system; and (2) economic and regulatory concerns about the reliability of the generation supply in wholesale electric markets. Chairman Landrieu won praise from both sides of the aisle for quickly convening a timely and important hearing.
TESTIMONY FROM FERC CHAIRMAN, NERC CEO, AND MORE
The witnesses on the first panel included:
On the second panel, witnesses included:
- Philip Moeller, FERC Commissioner;
- Michael Kormos, Executive Vice President-Operations, PJM Interconnection;
- Nicholas Akins, Chairman, President, and CEO American Electric Power;
- Thad Hill, President and Chief Operating Officer, Calpine;
- Jim Hunter, Utilities Director, International Brotherhood of Electrical Workers; and
- Cheryl Roberto, Associate Vice President, Clean Energy, Environmental Defense Fund.
INDUSTRY RISKS AND RESPONSES, OTHER THEMES
The witness testimony and hearing questions centered on the following themes:
- Electric industry response and the actions being taken to incorporate lessons learned from the attack on Pacific Gas & Electric’s Metcalf substation in April 2013.
- The ongoing DOE Inspector General investigation into the potential leak to the press of sensitive information regarding government studies of the vulnerabilities of the bulk power system, and the April 9 Management Alert that the DOE IG has issued to FERC. The IG’s initial management alert concludes that “at least one electric grid-related presentation created by Commission staff should have been classified and protected from release at the time it was created.”
- FERC’s March 7 order directing NERC to develop and file by June 5 new physical security reliability standards for the most critical elements of the bulk power system.
- The existing statutory authority of FERC and NERC to develop and enforce reliability standards for physical and cyber security under Section 215 of the Federal Power Act.
- The stress on the reliability of the electric grid during the peak conditions caused by extreme cold weather and polar vortex conditions during the winter of 2014.
- The revolutionary changes to the generation fuel supply mix being brought about by market forces related to shale gas production.
- Gas-Electric convergence and the dependence of electric supply on gas transportation infrastructure.
- The cumulative impact of EPA regulations, and the extent of impending coal unit retirements, which are widely believed to have been underestimated by EPA.
- The need for greater FERC and industry input to EPA regarding the potential grid reliability consequences of EPA rulemakings, and the need for mitigating reliability safety valves.
The oversight hearing showcased Senator Landrieu’s bipartisan style of leadership and her teaming with Ranking Member Murkowski. It also demonstrated the substantive attention to detail of the committee and staff.
If you have questions about the topics covered at today’s hearing, or any of the emerging developments in electric reliability matters, please contact one of Van Ness Feldman's electric practice professionals.
Van Ness Feldman has established an Electric-Gas Coordination working group and closely monitors developments related to the nation’s increasing reliance on natural gas for generation of electricity. For assistance or additional information, please contact Greg Junge or Evan Reese.
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