“Oversight of FERC: Advancing Affordable and Reliable Energy for All Americans.”
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House Energy and Commerce Subcommittee on Energy U.S. House of Representatives
Follow its sittingsSpeaker 2
They shouldn't have to go through those kinds of struggles. In energy service territory across the Southeast, at least 30 transmission lines, 860 poles, and 60 substations went out of service. PGM reported nearly 21 gigawatts of generation was offline during hours of peak demand, including gas, coal, and oil. In comparison, wind, solar, and batteries were helping to make up the difference. NERC's report highlights key opportunities for us to respond to the reliability crisis.
First, we need to leverage load flexibility during times of grid stress, especially for emerging large loads such as data centers. Second, we need to streamline siting and permitting, particularly for transmission. And finally, we need to adapt grid planning to ensure that new resources can support essential reliability services such as voltage, frequency, ramping, and dispatchability. That is why Democrats and power providers have been calling out the Trump administration's actions over the past year, that have made our grid less reliable and more expensive. Secretary Bergham has required every wind and solar project on federal lands to get his personal sign-off.
So last year, only one got permission to build. Meanwhile, Secretary Wright has canceled funding for more than 300 energy projects across the United States, including a $1,800,000,000 loan to the Arizona Public Service to build out new transmission. That just doesn't make sense. This sabotage is making our grid less reliable, and it makes it harder for regulators and grid operators to do their job. But I have to say, for FERC, at least for the moment, you all stand in stark contrast.
I want to commend the commission for its recent bipartisan actions, including the development of colocation pathways in PJM. The commission worked quickly to bring new energy onto the grid, including through automation and artificial intelligence, tools to improve the interconnection. However, we need to pair these efforts with effective grid upgrades and transmission planning. I hope my Republican colleagues can finally get serious about working to upgrade America's transmission infrastructure. And we need to make sure that developers of all energy types have permitting certainty, and that the federal government can be a trustworthy partner.
The US grid is underutilized, on average using less than half of the existing grid capacity. We can build a smarter, more modern grid that adds load and lowers prices. But we need the right policy, and we need your regulatory support. The United States added over 18 gigawatts of energy storage in 2023, more than gas and wind combined. We already have 40 gigawatts of virtual power plant capacity deployed today, and we could reach 160 gigawatts by 2030, and that would be enough to meet 20% of peak demand.
So I'm glad to see a number of our commissioners highlight grid-enhancing technologies in their written testimonies, which could quickly increase the grid capacity by 15 to 20%. This is not your grandparents' electric system or era. There are incredible modern tools and efficiencies that can lower cost and provide the reliable power that we need in the years ahead. So let's tackle this together. There's a lot we can do together to deliver more energy and lower costs for neighbors.
I look forward to hearing your ideas. Thank you, I am back.
Speaker 1
Thank you very much. The gentleman yields back, and the chair now recognizes the gentleman from Kentucky, the chairman of the full committee, for five minutes for an opening statement.
Speaker 3
Thank you. Thank you, Mr. Chair. Thank you for all being here. I'd like to welcome you all and two of you, Chairman Sweatt and Commissioner Lacerte. This is your first appearance before us.
We're happy to have all five of you here testifying. The massive storms and deep freeze across the nation this week, this past week, reminded 100,000,000 Americans why energy and power is vital for the nation. The ability of our utilities to provide reliable, affordable power has been a continuing focus of this committee this year and over the past several congresses. Since we last heard from the commission in June 2024, the affordability and reliability issues surrounding the electric grid have become even more pressing. The need to preserve and expand generation in electric infrastructure to keep the lights on during peak demand remains as urgent as ever.
Reliability authorities just last week reported again that over half the nation has increased risk of blackouts when power demand spikes. Now we also must confront the unprecedented demand and the national security imperative of building AI in a growing economy. Growing affordability concerns add to challenges as years of the energy transition climate agenda have started appearing in household bills. The positive news is that some state and federal officials appear to be rising to meet the challenges, finding ways to preserve and bring on more dispatchable generation, connecting the most reliable generation faster, and finding ways to reconnect data centers and other loads faster as well. The Trump administration would be commended for using its statutory tools to drive change, whether by keeping power available during emergency, energy emergencies, or by various speed to take power initiatives, including those requesting FERC to take decisive action.
Testimony we received in previous hearings and national laboratory reports and research indicate that data centers connected responsibly can mitigate, if not lower, consumer bills. Today, I'd like to hear how the commissioners approach affordability while meeting the demand for growth. And we must not forget states are essential for citing and permitting the generation, transmission, and new loads in a way that maximizes economic benefits and protects consumer bills. I am looking forward to this hearing and how FERC works with the states and how those relationships are going. Thank you for being here today.
I would also like to note before I yield back that we have Cleric Argo who's sitting in the counselor seat. She's chosen to go work with the leader's office in his energy capacity. So we'll have a strong ally and friend in the leader's office from this committee. And we are really pleased with your hard work. And I know that we were able to find you and get bring you to this committee from your heart in Texas with the Texan of all Texans.
Maybe there are a few Texans in here. But maybe the Texan of all Texans, mister Fluger, and I'll yield to mister Fluger.
Speaker 4
Thank you, Mr. Chairman. Clara Cargill has done a great job on this committee. She is from my hometown, and, you know, one of the many things that she would do on this committee, also in a personal capacity in my office, is use fact to address any of the situations, which I think this hearing today will be great at. And I would ask her, what's the composition of the Texas electric grid right now? And she would get back to me as always with the facts.
And by the way, natural gas was the backbone of the grid last week when we had the cold snap. Clara, you work in such a great manner with professionalism, integrity, and character. You have made our hometown very proud, and you've made this committee very proud. Mister chairman, thanks for allowing me a couple minutes to speak.
Speaker 3
Thank you. And thanks for your service to this committee. Look forward to working with you and your role in the leader's office. So we look forward to continuing.
Speaker 1
I always wanna thank you for all your hard work because, you know, when you're sitting right next to someone and see all the work that you do during, especially very long subcommittees, really appreciate it. And you've all you haven't been. You've always been right there when we have our office meetings every week. You have the information that we have to have, and so the subcommittee is gonna miss you. So, mister chairman, I we're gonna have to do something about keeping people from going to the leader, the speaker's office, but gotta keep people right here.
But I yield back. Thank you, Miss.
Speaker 3
Well, thanks. And I did say Texan about tech. We do have no four on our side. I think at least two, maybe more on the other side of the house. We have some great Texans on the committee.
But I think you're the only one that has a town named after you. Pflugerville. There's a Pflugerville, Texas. So I will yield back, mister.
Speaker 1
chair. Chairman. The chairman yields back. The chair now recognizes the ranking member of the full committee, the gentleman from New Jersey, five minutes for an opening statement.
Speaker 6
Thank you, Chairman Ladder. I'd like to welcome all five commissioners to today's hearing. You have a difficult job ahead of you. Our nation's electric grid is in the middle of an affordability and reliability crisis. New Jerseyans are paying 15% more for power and 12% more for natural gas than they were a year ago.
One of FERC's most important responsibilities is to ensure, quote, just and reasonable prices. It's not working, and President Trump is making the electricity affordability crisis even worse. And this is not just a problem in New Jersey. Power prices have spiked across the country, and Trump's campaign promise to cut them in half has proven to be just another broken promise. Last year, utilities requested a record $31,000,000,000 in rate increases, double the pace of 2022, and prices nationwide are up 13% since Trump's inauguration.
The reasons are clear. Our nation's grid operators have proven themselves simply incapable of hooking up power to the grid fast enough, in part because their plans to expand the power grid are completely unfit for this day and age. I may clear, over the past year, my displeasure at PJM, New Jersey's grid operator. But while they're one of the worst offenders, they're not the only ones who have been, quote, asleep at the wheel. When new sources of cleaner and cheaper power are ready to hook up to the grid, President Trump has blocked them for bogus reasons.
Trump's war against clean energy defies logic, particularly at a time when data centers powering artificial tools are adding power demand at a pace we've not seen in over a generation. And I want to be clear. AI tools cannot be built upon the backs of American families' power bills. Data centers should be able to hook up to the grid, but they have to pay their fair share and ensure that they're not going to cause the grid to collapse. FERC's role must be to establish rules of the road that make that happen.
FERC must be the cop on the beat to ensure that big tech isn't fleecing the average American to fuel their ambitions. And FERC has the authority and the expertise to make this happen, but it's going to require the commission to stand up to a White House that is bending over backwards for companies that are interested in building data centers to the detriment of American families' monthly power bills. It's going to mean not discriminating against clean energy, no matter how much the White House may be pressuring you to do just that, and it's going to be acting transparently, quickly, and decisively. In the long term, the only way to deal with increased demand, no matter if it's from data centers, electric vehicles, or electrified home heating, is to build out the grid. And that is simply impossible while the White House wages a war on clean energy.
Now offshore wind projects that were on the verge of delivering power to the grid have seen their permits canceled. Hundreds of projects receiving funding from the Department of Energy had their funding illegally revoked, many simply because they were being built in a Democrat-run state. And potentially, clean energy projects on federal lands may never get off the ground because the White House has created an impossible bureaucratic nightmare for any company trying to build. These actions are an embarrassment to our nation. They truly are.
But they're also a threat to the pocketbooks and to the safety of American families across the country. So just last week, the North American Electric Reliability Corporation warned that a huge swath of the nation's grid would be at high risk for blackouts by the end of this decade. The winter storm that blasted New Jersey and much of the East Coast just over a week ago pushed us right to the brink. If Republicans have their way, the next winter storm might push us over the edge instead. And we just have to stop this madness.
It truly is madness coming from the White House. I hope to hear how FERC is working to ensure that Americans have affordable electricity and a reliable electric grid in the face of skyrocketing demand. But, again, I'll just repeat. We're not gonna have any progress here unless you, as independent commissioners, as an independent agency, stand up to the madness that's coming from President Trump. And I just hope that we can see you do that.
Otherwise, our prices will continue to go up. Our blackouts will continue will be worse. I just don't know where we're going here. I mean, the public does not find any of this acceptable. They want reliable power.
They don't want prices to keep going up. This was a major issue in New Jersey in the last election. And, fortunately, we have a governor now who has decided to freeze prices. And I think one of the reasons that people admire her so much is because of that, because they're just so concerned about these electricity prices. They just can't afford it.
So with that, Mister Chairman, I'll yield back. Well, thank you very much.
Speaker 1
The gentleman yields back the balance of his time. This concludes member opening statements, and the chair reminds members that pursuant to the committee rules, all members' opening statements will be part of the record. Again, we wanna thank all of our witnesses for appearing before us today to testify. Each witness will have the opportunity to give an opening statement, followed by a round of questions from our committee members. Our five witnesses join us from the Federal Energy Regulatory Commission are Chairman Laura Sweatt, Commissioner David Rosner, Commissioner Linda C, Commissioner Judy Chang, and Commissioner David LaSur.
And before we get started, just quick housekeeping. When you pull up that micro close, we'd appreciate it. And, also, you'll see the lights. You have five minutes. It'll be green for 4.
They'll go yellow for the last minute, and, we hope, when you hit that red, you can finish up. So, again, we appreciate you all for being here today. And at this time now, I recognize the chair of the FERC, chair of Sweatt, for your five minutes for an opening statement. Thank you.
Speaker 7
Thank you very much. Chairman Guthrie, ranking member Palon, chairman Lotta, ranking member Castor, and members of the subcommittee. Thank you for inviting us to testify about our critical energy mission on behalf of the American people. As many of you acknowledged this morning, FERC works for all Americans and across all party lines. My colleagues and I come from very diverse perspectives, but we are unified in the mission that Congress gave us to ensure reliable and affordable energy.
Before I get started today, I'd like to acknowledge and thank the emergency crews, grid operators, utility workers, linemen, and first responders for their hard work throughout the winter storms, and for their ongoing efforts to keep Americans safe. I'm honored to appear before you for the first time as chairman leading a full five-member bipartisan commission. I'd like to take this opportunity to share with you the three main principles that drive me as a leader. First, I'm driven by gratitude to be an American. I am thankful every single day for the benefits that this country has provided to my family.
As I shared at my Senate confirmation hearing last fall, I grew up the daughter of a Vietnamese refugee who left everything behind for the promise of a better life. My father was a civil servant who grew up in low-income housing in Brooklyn and dedicated over 40 years to the Department of War. I learned from my parents at a very young age to not take for granted anything that we have in the United States, including reliable and affordable energy. American ingenuity, hard work, and the dedication of tens of thousands of Americans in our energy workforce make our light, warmth, and innovation possible. Second, I've been a FERC lawyer for 15 years.
This is my third tenure at FERC. This means that I personally know the importance of maintaining and growing FERC's professional staff. Thanks to our partners in the administration, we are again hiring at FERC. And I'll plug on this very public platform that we really want people to apply. Please apply and join our mission at the FERC.
I also wanna emphasize that having spent my career litigating FERC cases, every single thing that I do is with legal durability top of mind, to give ratepayers and investors certainty in what FERC is doing. I wanna reduce the gears and millions of dollars spent litigating FERC decisions, with an eye towards ensuring as much as we can that we all have regulatory certainty, cost reduction, and infrastructure development. Third, I want all Americans to prosper. Energy is the foundation of our civil society, our national security, and our economic prosperity. FERC stands at a critical juncture in history.
This is domestically and in the world. We're in a global energy arms race created by the rise of technology, its tremendous load growth, and our push to onshore manufacturing and jobs. I want the United States to lead that race and our citizens to benefit from it. This is the moment to cement America's energy leadership. As chairman, I'm committed to guiding FERC through the monumental growth opportunity before us.
We're already working to streamline FERC processes, cut down connection times, and ensure efficient, durable infrastructure development and maintenance. I've been chairman for only a few months, but I'm proud of the strides this full bipartisan commission has made. We're continuing to explore whether we can simplify and optimize permitting by expanding our successful natural gas blanket authorization program to hydroelectric and liquefied natural gas facilities. And in December, as several of you mentioned, we directed the nation's largest grid operator to establish transparent rules to serve AI data centers and other large loads that are co-located with generation. These rules will safeguard reliability and protect consumers across the Mid-Atlantic, impacting over 67,000,000 Americans.
A big part of the prosperity I want for America is affordability, which is very personal to me. Growing up, I watched my parents struggle to pay the bills as they piled up. That experience drives my commitment to ensure that progress does not come at the consumer expense. I know that everyone at this table shares my commitment. I look forward to your continued support and partnership as we meet these challenges together.
Thank you, and I welcome your questions.
Speaker 1
Well, thank you very much. Commissioner Rossner, you are recognized for five minutes for your statement.
Speaker 8
Well, good morning, chairman Lotta, ranking member Castor, chairman Guthrie, and ranking member Pologne, as well as members of the subcommittee. It's an honor to appear before you today alongside my colleagues to discuss FERC's work to deliver affordable and reliable energy for all Americans and our commitment to upholding Congress' vision for a bipartisan, independent, resource neutral regulator. That is our mission. While it's simple to articulate, it's increasingly complex to execute. Energy demand is growing at a pace not seen in a generation.
Energy technologies continue to evolve, and innovation across our economy is reshaping how energy infrastructure is planned, built, and used by consumers. Furthermore, our energy systems face these pressures at a time when families and small businesses have been struggling with high prices, including their utility bills. While meeting this moment presents challenges, it also creates opportunities for us to modernize America's energy infrastructure. Upgrading our energy system is necessary to ensure that every family and business receives the reliable and affordable power that they depend on, and doing so is essential for our country's economic competitiveness and national security. Over the past week, WinterForm's Fern and Gianna reminded us of the importance of this work.
Thanks to the line workers, pipeliners, rig workers, and the rest of our energy sector workforce, the bulk electric and natural gas transmission networks performed well. But many systems were stressed near the limit. So let me now share some of the specific actions FERC is taking to realize the opportunities and address the challenges before us. First, we're accelerating new electric generation of all kinds. Building the energy resources needed to meet growing demand and reduce consumer reports was my top focus in 2024.
We implemented FERC's landmark order number 2023 generator interconnection reforms and fast tracked more than 50 gigawatts of shovel-ready power plants. Looking forward, I'm encouraging grid operators to deploy automation and artificial intelligence tools that have been shown to accelerate steps in the interconnection study process from years to weeks. Second, we're deploying forward-looking grid planning centered around reliability, affordability, and economic growth. This year, will be positioned to act on electric transmission providers' proposals to implement FERC order number nineteen twenty, which modernized the long term transmission planning process. When I arrived as a commissioner, this rule divided the commission along party lines.
My proudest accomplishment was working with colleagues to make the final version bipartisan and unanimous by incorporating more input from our state partners. Third, we are emphasizing predictability, speed, and legal durability for our infrastructure permitting. Since I last testified before this committee, FERC has issued 97 permits for hydropower and natural gas projects. In many instances, we are moving from NEPA review to permit issuance more than 30% faster than was typical during the last decade. And this is without compromising quality.
FERC's permits have routinely been upheld in court in recent years, and we continue to weigh the views of all parties in our order. For fourth, we are embracing innovative pathways to power data centers and other large loads, while protecting consumers. The commission took significant actions in December and January, implementing programs in PJM and SPP to pair large new loads with new generation. This pairing reduces how much these projects lean on the grid. It minimizes the need to construct additional, costly transmission upgrades.
It promotes flexible operations and helps ensure that new loads pay their fair share. Put simply, the goal is lowering costs, protecting grid reliability, and helping new customers and power plants get online faster. Fifth, we continue to enhance grid security and reliability through modernization and flexibility. It is essential that we continue to deploy twenty-first century reliability solutions, including advanced demand response, dynamic line ratings, predictive artificial intelligence, and emerging cybersecurity technologies. Last year, for example, FERC and NERC implemented enhanced power plant performance standards for extreme cold weather that have already proved essential in keeping the lights on during winter storms.
Sixth, we are staying laser-focused on affordability. In addition to the examples I've already mentioned, over the last 2 years, FERC has approved expanded competitive electric markets in the West and the Southeast, which will enable customers to access lower cost power. And in PJM, we approved a temporary price cap that saved consumers more than $12,000,000,000. It's my priority to deliver more examples like this in 2024. Finally, I will conclude my remarks by highlighting the value of our current commission's consensus-driven mindset.
I'm immensely proud that the vast majority of orders I voted on have been bipartisan and unanimous, including every single energy project permit. This consensus creates regulatory predictability and legal durability, and our work is stronger because it benefits from five sets of perspectives and experiences. I thank my colleagues for their collaboration, which I'm very confident will continue to deliver for our country. Thank you again for the opportunity to be here, and I look forward to your questions.
Speaker 1
Thank you. Commissioner Xi, you are recognized for five minutes for your opening statement.
Speaker 9
Chair Guthrie, ranking member Pologne. Chair Lata, ranking member Castro, members of the subcommittee. Thank you for inviting me and my fellow commissioners here today. While the five of us are here now, please let me also thank the hundreds of FERC staff who make the agency's work possible. They bring their talent and integrity to work every day, and their dedication furthers America's energy resilience.
It's especially poignant being here on the heels of winter storm Fern. With deep respect for the hardship so many went through and still are, I'm grateful that we saw the bulk power system largely hold. On a more personal note, over 1,000,000 homes and businesses lost power during the storm's peak, and I was in one of those homes. In a region with significant ice buildup, we heard crashes for hours as heavy limbs fell all around the house and neighborhood. I was so impressed by the restoration efforts as thousands of line workers worked extended hours in dangerous conditions to bring the region back online.
Thank you to my local utilities, AEP, and Appalachian Power, and to those in so many other states for your tireless efforts. When the heat and the lights go out during extreme cold, you focus quick on the practical details to keep your loved ones safe. Yet while I was waiting on power restoration, it wasn't lost on the energy regulator in me that these real-world concerns are why we strive to get the policy right, ensuring reliable and affordable energy. Reliability, keeping the lights on means heat, comfort, and medical care. It also means economic growth and enhancing national security.
And affordability means focusing on the real people paying the bills. These principles take on new urgency as stressors like winter storm Fern come on top of existing challenges from unprecedented load growth, aging and insufficient infrastructure, and how to get and keep key generators online. Growing electricity demand from AI, manufacturing, and other strategic sectors is a national opportunity. It's only a crisis if we don't rise to meet it. Addressing today's issues and building for the future call for innovation, expertise, legal strength, respecting the states' and different regions' needs, and price accountability to the customers we serve.
For reliability, energy infrastructure must match America's growing power needs. That means new generation, supporting our state partners, and strengthening investment signals through our market regulator role. It also means more pipes and wires to get our nation's abundant energy supplies to the people and businesses that need them. The commission must approve gas capacity, remove pipeline development barriers, and streamline the certificate process. Building out the electricity grid likewise requires new ways to get resources built and connected fast.
The commission is focused on potential solutions like co-located arrangements, BYO generation, and new methods to study large loads in the generators that serve them. Deployed well, these strategies can be both consumer-forward and help meet our national imperatives of speed to power and winning the AI race. My goal when I assess novel approaches is to encourage as much flexibility as responsibly possible, to harness new value adds. On affordability, I think especially of recent conversations with people and business owners very grateful for power during a historic storm, but also nervously waiting for the utility bills. Building the power systems our people and economy depend on is necessarily expensive, but we cannot neglect the customers who rely on dependable power and foot the bill.
So we should focus more on grid-enhancing technologies that help get the most out of existing systems and make new investments smarter. We must protect customers in our ratemaking and related areas. And we need to pay close attention to the electricity markets. Over time, well-functioning competitive markets have delivered billions of dollars a year in customer value through sharing resources across broader geographic areas, prioritizing lower-cost power, and enhancing grid stability. At the same time, electricity markets were not designed for the scale and speed of today's large load growth.
So here too, we need innovative and legally strong solutions to allocate costs fairly and address near-term challenges while ensuring our long-term frameworks are strong. Lastly, my pre-FERC experience as an appellate litigator and state lawyer means I always focus on how to send the legally durable investment signals that get steel in the ground. My mantra is striking the right balance between faster processes and doing our best work, so our orders stand up in court. A couple of examples. Last fall, the commission ended a policy that had tacked a months-long delay between when we issue certificates under the Natural Gas Act and when pipeline construction can start.
We're also streamlining our processes to advance the liquefied natural gas infrastructure. I'm optimistic that after considering all public input, the commission will speed reviews for certain LNG projects in a way that honors our statutes, strengthens America's global energy leadership, and gives regulatory certainty to deliver reliable, affordable energy at home and abroad. This is an exciting and sobering time. As a commissioner, I respect FERC's twin duties not to go beyond the authority Congress gave us and not to hesitate in using the power we do have in a time that demands decisive action. Thank you for the opportunity to testify, and I look forward to our discussion.
Speaker 1
Well, thank you very much for your opening statement. And Chair or Commissioner Chang, you are recognized for five minutes for your opening statement.
Speaker 10
Chair Lara, ranking member Castor, chair Guthrie, and ranking member Polon, and the members of this subcommittee, thank you so much for inviting me and my fellow commissioners to testify today. The country's energy sector is in the midst of a dramatic shift. After years of relatively flat demand, we are witnessing rapid growth, primarily driven by data centers, which in turn is driving major transmission investments and generation investments. While integrating and serving large loads is creating new challenges and exacerbating existing problems on the electric grid, it also presents an opportunity to modernize aging in the system in a manner that can simultaneously improve reliability and increase efficiency. To date, the system build-out has contributed to high prices to customers whose utility rates have already increased in recent years due to other factors.
Thus, as regulators, the commission has a responsibility to guide the industry's effort toward cost-effective and durable solutions that address these pressing challenges while protecting customers from adverse reliability and cost impacts. In assessing approaches to meet the needs of the current moment, I focus on three priorities. First, it's critical that we keep consumer protection at the forefront of our decision-making. Residents and small businesses across the country rely on the grid, and, traditionally, they are the captive ratepayers who bear the cost of system expansions or upgrades to deliver the necessary energy services. However, given that much of the new grid investments are driven by large loads, regulators, policymakers, and other stakeholders are raising legitimate concerns regarding the fair allocation of these costs among different customers.
Our state regulator colleagues have been at the forefront of addressing these consumer protection issues, and we must also act at the federal level to ensure that new large loads pay their fair share and do not shift costs to other customers. We have seen an increased trend toward requiring new loads to pay for the incremental generation and transmission investments they trigger. This basic principle, new large loads must cover their costs, should inform customer protection efforts and the commission, and I'm committed to making progress on that effort. Beyond cost distribution, I continue to focus on other regulatory tools that could protect consumers, including increasing data transparency for transmission projects, and expanding the use of advanced transmission technologies, which could make better use of our infrastructure. Second, the commission, state regulators, and policymakers should prioritize addressing the persistent bottlenecks that interfere with the timely construction of new electric infrastructure.
Of these bottlenecks, the commission plays a particular role in addressing the pervasive uncertainty faced by generators seeking to interconnect. In recent years, the commission has actively worked to get new resources online, including expanding front-end processes to enable interconnection of new generation. However, these efforts have been frustrated by the lack of available transmission capabilities, which create cost uncertainties and financing difficulties for these projects. This constraint perpetuates the scarcity condition that keeps prices high for customers and holds up our ability to serve new loads. Thus, it is imperative that we address this and other bottlenecks to ensure that the system can accommodate new loads and generation, which, in turn, will provide the regulatory certainty needed to support economic growth.
Third, to the greatest extent possible, we need to advance durable solutions instead of temporary fixes. The pace and volume of load growth are straining our existing regulatory processes. This is most visible in the PJM footprint, but it exists in various parts of the nation. The commission and regional transmission organizations have taken initial steps to alleviate some of the pressure on market rules and interconnection processes with some success. While some of these short term fixes respond to the immediate needs, I'm concerned that we will not meet the longer term challenges of this moment with only a series of temporary emergency fixes. Fortunately, we see great innovation coming from various regions of the country, including some filings that have already been approved by the commission.
These solutions are tailored to the industry's needs over the long term and developed through robust stakeholder processes. The commission also has acted, including the PJM, what we call the colocation proceeding, to initiate reforms where we see long term solutions for a problem we face. Going forward, I am optimistic that the commission, working collaboratively with states and stakeholders, will implement durable reforms that responsibly adapt to the dynamics of the marketplace. It remains my great privilege to serve on this commission, and I reiterate my commitment to serving the best interests of the American people. Thank you for the opportunity to testify, and I'm happy to answer any questions.
Thank you.
Speaker 1
Well, thank you for your opening statement. And, commissioner, you are recognized for five minutes for your statement.
Speaker 11
Chairman Lata, ranking member Caster, and members of the subcommittee. Thank you for the privilege of appearing in my first hearing as a commissioner on the Federal Energy Regulatory Commission. It is my honor to serve the American people by implementing FERC's statutory mandate to ensure just and reasonable rates for reliable electricity, site natural gas pipeline infrastructure, and LNG facilities, and licensed nonfederal hydropower facilities. Since this is my first time here as a commissioner, I'd like to share some of who I am so you can better understand my guiding principles while I'm at FERC. I was born and raised in South Louisiana along the Bayou Tarabone.
My father worked offshore in oil and gas exploration and production, and my mom worked as a secretary at a pipe yard. I know firsthand the impacts of the decisions here in the legislative branch, the decisions at FERC in the executive branch, and what they have on Americans in their daily lives. I grew up in the outdoors, hunting and fishing in the wetlands and inlets. I know these resources are a gift, and that we are charged with protecting and conserving our wildlife and the environment for our children and for future generations to come. I spent most of my professional life in public service.
I answered the nation's call when I volunteered to serve in the Marine Corps infantry, serving the invasion and occupation of Afghanistan. I served as a state cabinet secretary in my home state of Louisiana. I've held leadership roles in small and large federal agencies, including with the US Chemical Safety Board, leading outgoing transition from OPM from Trump to Biden, and then once again, incoming transition from Biden to Trump. My experience in the private practice in Houston at one of our nation's oldest law firms placed me in many of the production and transmission facilities that are impacted by our decisions at FERC and here on the Hill. I spent many sunrises and sunsets at refineries, plants, and transmission facilities, which power American homes, businesses, and lives.
I have worked with industry and special interest groups on both sides of the aisle to make our nation a better place to live, to work, and to raise a family. Our American energy workers have never failed to inspire me to be a better advocate and partner for better outcomes, and it has been a pleasure to work alongside them and be their trusted counsel. And now in our first 90 days at FERC, my fellow commissioners and I have approved over 200 orders ranging from tariff changes related to various RTOs and utilities, citing natural gas and nonfederal hydropower infrastructure and enforcement actions. For example, we have already voted to approve 12 major infrastructure projects, bringing more than 3,300,000 decatherms per day of natural gas transportation capacity to power generators, residential consumers, and industrial customers. To put that number in perspective, that's roughly enough natural gas to meet the electrical demand of 10 to 14 million average American homes.
To give further perspective, this is two to three times the household population of the state of Ohio, all in the first ninety days. As today is my first appearance in front of the House of Representatives, I would like to present you my priorities as commissioner. These priorities include ensuring a reliable grid at affordable rates, setting up America to win the artificial intelligence race, and ensuring our permitting decisions are completed swiftly, and that they're legally defensible. For more detail on my priorities, please see my written testimony that I provided before the hearing. I look forward to answering your questions in this important moment for America and for the energy sector.
Thank you.
Speaker 1
Well, thank you very much. I appreciate it, and thank you for your service for our country. This will conclude our witnesses' opening statements, and we're now moving to our question and answer portion from our members, and I will begin. This is probably gonna be the easiest question that you're gonna have to answer from anyone. Ask everybody the same question.
Do we have to have more or less energy produced in this country? Commissioner Chang?
Speaker 1
More. More. Well, thank you very much. Chairwoman, if I could start. It was something you had mentioned in your statement as you were presenting about having reliable and affordable energy in this country.
And one of the things that you brought up and you've mentioned was to attain regulatory certainty. And one of the things when I'm out across my district or talk to people across this country, the word certainty always comes up. How do we, how do you attain that regulatory certainty so not only do the agencies know what they're doing, but really the people that have to implement them out there in the companies so they have that certainty so they can go forward? Because we have to have more energy out there, how do we do that?
Speaker 7
Thank you for the question. That certainty is core to everything that we're doing, and it's something I thought about before even having the honor of assuming this position. And it's an answer on every level of what FERC does. We are taking a hard, holistic look at the open items at FERC. First of all, I shut down quite a few lingering dockets in my first meeting with the help of my colleagues here.
That's one way to eliminate certainty, uncertainty that has come from past administrations. Another way is to end the flip-flopping of FERC's regulatory paradigm and the uncertainty that's created by increasing regulation that has built up over the years that far exceeds what FERC's mission is under the law. So with that in mind, the entire agency now is looking at ways that we can clean up our regulations to provide more clarity to the people who we want to invest millions and billions of dollars into our power grid, into our pipelines. And probably the best example of that now is our looking to expand our very successful blanket program over natural gas pipelines to see if there are certain actions that we can take to make it much easier for our LNG facilities, for our hydropower projects, and for our pipelines to make the changes that they need without consuming a lot of resources at FERC and external litigation. And we're taking a hard look now at very meaningful comments filed by the industry to see what we can do to provide more certainty in that way.
Speaker 1
Well, thank you very much. Commissioner Rossner, you mentioned in your statement about moving along with 97 permits faster, safely. What what's going on out there? Why is all of a sudden you can do things, I think, from what the chair was just mentioning? But all of a sudden now, we've always heard about roadblocks that have been put in place that couldn't move forward.
What happened?
Speaker 8
Thank you for the question, chairman. You know, I'll say a couple of things. First of all, I'm a huge believer in bipartisanship and consensus-driven decision making. And, my commissioners and I, you know, I think we've been really executing on that. And, all first of all, all of our permit decisions since I've been there have been bipartisan and unanimous.
And so you asked about predictability. You know, bipartisan, unanimous decisions don't give anybody, you know, legal toeholds, things to ask a judge about. It really makes the answer better. You know, the other thing I'd say on the speed is we have been doing the NEPA reviews consistent with the fiscal responsibility act. One year for a shorter environmental assessment, two years for the environmental impact statement.
We've been following that and, in fact, beating it in many cases. And then what we've been doing is.
Speaker 1
ask you? You said you've been beating that in my, I only got about 42 seconds left. But how is it all of a sudden you're able to beat that and move things along?
Speaker 8
I think, you know, the staff is looking for clear consensus from the commission. The commission is looking at, you know, I'm looking at the statutes that Congress has entrusted us with, and we're giving clear direction to staff. We've had a lot of legal back and forth over the last decade, but the courts have given us some information about how to proceed on NEPA reviews where we're following the statute. We're looking at direct impacts, and then we save time by telling staff, start writing the order while you're writing the environmental document. And, you know, if there are comments in the record, we'll make changes.
But, you know, it's not rocket science. You know, if you have a consensus and the commission finds these projects in the public interest and agrees on it, that's how we move it forward.
Speaker 1
Well, thank you very much. My time is expiring. Have about five more pages of questions, I'll submit. And the chair recognizes the ranking member of the subcommittee, gentlelady from Florida, for five minutes for questions.
Speaker 2
Thank you, Mr. Chairman. And thanks again for your testimony. It's good to hear, you talk about affordability now because it is obviously getting to you all even though you're kind of a step away from elected officials, but it's good to hear that you understand that people are really undergoing a squeeze right now. Commissioner Chang, last July, FERC approved MISO's short-term one-time ERAs proposal to allow expedited generation interconnection planning. You talked about the bottlenecks.
I think one of the ways that we could lower prices and ensure reliability is to speed all of the resources that are just waiting in these bottlenecks onto the grid. In your concurrence, you noted the importance of guardrails to ensure projects are needed, supported by state entities, and sufficiently commercially viable to actually be constructed. Can you elaborate on the importance of the interconnection queue reforms required by FERC Order 2023?
Speaker 10
Thank you very much, ranking member, and thank you for that question. It's absolutely right. It's critical that FERC has been working with its stakeholders to create all the reforms necessary in the interconnection process. And this is multiple years of worth of work, making sure that we advance resources that are in what we call first ready, first serve. And we have, articulated in the order 2023, which accelerates the process and streamlines or tries to streamline the process of interconnecting generators.
And in that, we have also asked to use the cluster studies and increase the payment upfront to make sure that the resources that are well prepared and ready to go to be able to interconnect to the system. And you're seeing progress. We are in the midst of implementation and definitely have seen progress. And that's what I consider as long-term solutions. You know, we have made progress and made the necessary changes and reforms in the process.
But no matter how fast we can study the projects, the generation interconnection process, one of the bottlenecks I talked about in my opening statement, is the transmission system. So if the transmission system is not ready or if it's inadequate for interconnecting the generator and the load, that becomes the bottleneck. So I think it's time for the industry to turn its attention to make sure that we have a system that's ready for connecting both the large loads and the generators that's necessary.
Speaker 2
This isn't your testimony, but this is my editorial comment. Then it makes no sense in the world for the administration to be sabotaging grid modernization across the country, withholding grants and loans and things like that. Commissioner Rosner, you've also been focused on efficiencies. You've encouraged grid operators to deploy automation and AI tools to accelerate interconnection. Can you elaborate on this?
And what can the congress do to help?
Speaker 8
Thank you for the question, congresswoman. So I'm very passionate about this topic. So, interconnection. To do it safely, we do this study. Or the grid operator does a study to make sure these electrons, they don't really follow regular rules.
They follow these physical rules. We gotta make sure they're going in the right place, so a power plant can connect safely and not cause problems. The old way of doing that is that it was basically by hand. You know, it's an engineer, and they're running a model. About a year ago, one of our regions, MISO, in the Midwest, adopted this new software written by a company.
As far as I know, it was a PhD student from Pittsburgh that came up with this idea. What if these power flow studies could be faster? And so they adopted that. It's all open and transparent on MISO's interconnection working group website for all the geeks probably sitting behind me who wanna check it out. But the details are complex, but the results are simple.
What used to take MISO June to process one of these clusters of all the requests of new generators to connect to the system, now takes less than ten days. And they've done extensive public benchmarking. The results are accurate. You know, it's within, you know, point 0.1% or so, when you look across the cluster. And I just think it's great.
It's And
Speaker 2
Congress should do more to make sure that all RTOs and all planners have these tools?
Speaker 8
You know, I think I'd say very respectfully, anything congress can do to help industry move faster would be appreciated because we need electrons right now. And if this is something that congress thinks is important, you know, I would be excited to implement it. I also would, you know, when I talk, I go and meet all the boards and the CEOs of the grid operators and tell them about this. Why don't you adopt this? You don't need a FERC, you know, six-year rulemaking to do it.
You could do it right now.
Speaker 1
Thank you very much. The gentleman yields back. The chair now recognizes the gentleman from Kentucky, the chair of the full committee, for five minutes for questions.
Speaker 3
Thank you very much. I'm gonna try to get each of you a question, so I'll go try to go quick. So chairman Sweatt, the tech industry wants power connections to the grid, and they want it fast. Do you think FERC and its stakeholders can provide timely solutions to help meet this demand?
Speaker 7
Absolutely. Thank you for the question. That is my number one priority, to ensure that we can provide what the data centers need to connect so that we can protect American data.
Speaker 3
Yeah. What's the best thing? May I know, we've got just a few minutes. Like, the single thing you think would be the biggest impact?
Speaker 7
Within FERC's jurisdiction, we can do everything in our power to make the markets, and the transmission owners have clear rules for large loads and potentially associated generation to connect to the grid as quickly as possible.
Speaker 3
Okay. Thank you. And I'll move on. So, mister Lacerte, mister Rosner, I'll let mister Lacerte go first. Did you have an answer to the question yet?
I know we're early in this, anyway. But the administration has requested the FERC to connect large loads and address affordability. Are there innovative solutions or approaches you're thinking about that ensure both in this very dynamic environment? Large loads and affordability. What are you thinking about?
Speaker 11
Absolutely. I think this is a matter that's pending before us, but I can speak generally about my core principles. I think that we need to provide as much flexibility as we can to the states, to the RTOs, and to the generators and to the loads themselves so that we can come up with innovative solutions that work for them. And I think that you can see a step in that direction with our December PJM order, which allowed co-location. We gave some flexibilities, but we made sure there were consumer protection safeguards within there.
We wanna give these powers, but with these new flexibilities comes great responsibility, from the generators, from the loads themselves, from the RTOs. And I think the president bringing the people together with a bipartisan panel of governors over the past couple of weeks is a step in the right direction. I think more people at the table that we can separate our differences and focus on what we agree on, I think that's gonna move the needle. And also, acknowledging that every region is different. Every region has a different balance of power.
They have a different generation mix. And acknowledging that and dealing with the delicacies of state rights is gonna be paramount. We look forward to dealing with this in the early part of the year.
Speaker 3
Okay. So, mister Roger, just kind of a brief answer on that. That was a good answer. I'm not, but I wanna get to another and just to kind of follow-up on that.
Speaker 8
Yeah. Yeah. Thank you, chairman. So first of all, I agree with the colleagues here. I mean, I think, a lot of our work has been focused on putting all the options on the table and making them legal so the industry has choices.
And what that's meant, the new innovation here at a very high level has been what are ways to get new generation paired with new loads on the grid faster. And so we made colocation, which is, you know, when you plug a power plant right into a data center, there are fewer transmission wires and substations and all the other things that take a long time and a lot of money to build. And that kind of arrangement can minimize the impact on regular homeowners. They're just not on the grid, they don't charge people.
Speaker 3
Thanks. I'm probably gonna have to get to my next question. I appreciate that. So Miss C and Miss Chang, so you talk, so Miss Lezer talked about states and states' rights. So, Miss C, first, and then Chang, would each of you talk about the experience and expertise states bring to the table to ensure power systems meet demand and provide affordable, reliable power?
So the role of the states in this.
Speaker 9
Thank you, Congressman. I love that question. As a former state lawyer, I think it's critical to remember the important and complementary roles that the states play. They bring a lot of expertise to their region. They understand what's necessary to respond to the particular dynamics in their states.
They have frontline responsibility for resource adequacy, for determining the composition of the power generators within their region. We have great respect for what they do, and I think it's important when we are doing our role to make sure that we are respecting that, that we are working cooperatively with the states, that we are a forum to bring them together to discuss best practices. Their role is so important, and we cannot do our role well without being strong partners with our state party.
Speaker 10
Thank you for that question. Yes. As a former energy policy person at the state level, I completely concur. The states play a significant role, and this is the moment we absolutely, at the commission, have to work with our state counterparts to meet the challenge of the day. The states bring a lot of, the states are already at the forefront of solving some of these problems.
They are already leading the efforts in making sure that the utility bills are affordable for consumers. And they are also dealing with many of the states that are already dealing with interconnecting large loads and the processes associated with that. So I think it's time, again, that we collaborate with our state partners in solving the problem. Thank you.
Speaker 3
Thank you. I don't have enough time for another question, so I will yield back 5 seconds.
Speaker 1
Well, thank you very much, Mr. Chairman. And the chair now recognizes the gentleman from New Jersey, the ranking member of the full committee, for five minutes for questions. And also, the members have probably heard the bells have gone off, and so the first vote of the day is occurring. If I could just say real brief what we're gonna do, we're gonna take a brief recess after the gentleman asks his questions, and we will reconvene 10 minutes after the second vote is called. So the gentleman from New Jersey is recognized.
Speaker 6
Thank you, chairman. FERC currently has a proposal before that would create federal rules of the road for data centers or any other large, concentrated sources of electricity demand wanting to connect to the power grid. Back in December, ranking member Castor and I wrote to the commission, demanding that as you develop a framework to allow data centers to hook up to the grid, that you ensure that they do not unfairly impose costs upon American families and small businesses. So I just wanted to ask each of you, just yes or no, if you will commit to prioritizing energy affordability in all your decisions this year? And I'll start with the chairwoman.
Speaker 6
Thank you. Commissioner Rossner? Yes. Commissioner C? Yes.
Commissioner Chang? Yes. And Commissioner Lacerte? Absolutely. Thank you.
Obviously, we're gonna be watching and holding you to the standard. Commissioner Rosser, let me ask you a question. At the start of the year, you laid out a number of your 2026 priorities, including accelerating generator interconnection via new technologies, implementing regional transmission planning reforms, and improving load forecasting. So my question is, can you explain briefly how these priorities will help keep electricity affordable and reliable?
Speaker 8
Thank you, ranking member Polon. So it's really simple. In many parts of the country, we have a scarcity of supply, and that's showing up as high prices. And what we need to do to lower those prices is we need to build. And as we're doing that, we've had a number of tech companies come and testify back at FERC's hearing room, and they've said, we'd like to go fast, we'd like to pay for it.
And so my view is we should let them. And at the same time, you know, while many of the permitting decisions on where to build and the permits for the power plants are state decisions, what we can do at FERC is make sure our processes under the Federal Power Act go as fast as possible. And so that means when we're looking at safely connecting new generation to the grid, let's use automation and AI to actually speed that up, and help get those power plants studied and connected faster. Let's make sure we're planning for the right transmission system, so you can connect new generators to the grid. Just, this past year, we got some results back from a fast track of a new natural gas plant in PJM that got an upgrade cost of over $1,000,000,000 to connect that plant to the grid in PJM.
And what that cost was really all about was a lack of transmission. It was over 100 miles of 345,000 volt transmission lines that were needed to get a natural gas plant on the grid. The and it wasn't just gas. It was batteries, too. It was all sorts of dispatchable generation that, while not all of them get billion dollar costs, they got many, many over $100,000,000.
And what that says to me is the grid is really congested. We need to invest in the grid. The other place where I think there's a huge opportunity is on the low forecasting side, where I don't say that's as a skeptic. I think in some cases, our forecast might be too low. But what we need to do to unlock action is to make sure that people believe in the forecast so that we can start planning.
And so anything, either a point too high, too low, if we get the forecast better, that's going to unlock new investments. And so, for me, you know, I'm really committed to work with colleagues here to use the authorities that congress has entrusted the commission through the federal power act to make sure we're doing everything we can to get new generation connected to the grid, that we're working with our state partners to make sure that the costs go to the right people. Thank you for the question.
Speaker 6
I guess I thank you. I guess I have a minute. Let me ask Commissioner Chang that whatever time is left. You mentioned in your opening statement the importance of making sure we're creating long-term solutions rather than ad hoc fixes. Can you just talk briefly about the importance of addressing issues like interconnection timelines in a way that works for everyone, and not just a small subset of generation resources or types of customers?
I only got 45 seconds.
Speaker 10
Yes. I think that's fine. Fundamental principle of FERC's work is nondiscriminatory access to the transmission system. So I think, you know, with all of the work we're doing on the interconnection processes and improvements in that and the regional transmission planning process, we uphold that principle. And that means it's open access for all resources to participate in the wholesale market.
Thank you.
Speaker 6
Thank you. I don't wanna hold up Chairman Latti's attendance record. I read about your attendance record. I yield back, Missus Gray.
Speaker 1
The gentleman yields back. And as mentioned by the chair, we will take a brief recess, and we will reconvene 10 minutes after the last vote is called. Well, good morning again. The subcommittee will come back to order. And at this time, I'm going to recognize the vice chair of the subcommittee, the gentleman from Texas, for five minutes for questions.
Thank you very much. The chair now recognizes the gentleman from Texas, the vice chair of the subcommittee, for five minutes for questions.
Speaker 5
Thank you, Mr. Chairman. Commissioner C, I'm gonna come to you. I was pleased to see your September statement calling for the need to modernize the review process of LNG facilities, of which I have three in my district. Under the commission section three authorities, in my opinion, case-specific authorizations for routine adjustments to existing facilities are kind of unnecessary and probably could be improved. The commission recently issued a notice of inquiry on authorizations for certain activities at liquefied natural gas plants.
Did I mention I have 3 of those in my district? And, anyway, when does the my question is, when does the commission anticipate issuing a notice of proposed rulemaking for a blanket natural gas act section three authorization program? And how could something similar to a blanket certification process for these facilities benefit our ability, US ability, to permit energy and structure in a timely manner going forward? Your thoughts.
Speaker 9
Thank you, Congressman. Those concerns are one of the reasons that I was really proud to be able to champion that effort, and I'm very grateful to my colleagues for their hard work for us to be able to move that effort forward. It's important for us, of course, to do this in a procedurally appropriate way to get all public input. So we've done that at the first stage right now. Our staff is hard at work analyzing it so that we can move forward as expeditiously as we can.
My focus here, as it is in all things, is to get that balance right between speed when we need changes quickly, and making sure we're doing it in a legally durable way. So I'm doing everything I can as a commissioner. I'm working with wonderful colleagues to move that quickly. But to your broader point of how important this is to our infrastructure needs, I think when it comes to LNG exporting facilities, there's a really important role for us to play in speeding up the needed infrastructure. The supply of natural gas is not the problem for our country.
The concern is the lack of infrastructure. So when it comes to domestic natural gas pipelines and exporting infrastructure, that's both in my view. We can and should do both of those. We should do them faster. And it's really important, because when it comes to being able to meet our commitments to allies, when it comes to exporting LNG, that's critical for our national economy and for national security.
So I am personally committed, and I know that my colleagues are also working very hard on this issue, and I'm really encouraged by the progress we're making internally.
Speaker 5
Well, I appreciate that. I was waiting for you to hear something about how this helped our allies. If not, I was gonna ask you that question, so thank you. Commissioner Ross, I'm gonna come to you. Over the last several years, we have seen duplicative efforts between FERC and FMSA regarding LNG safety standards.
It's my understanding that FEMSA is working to develop these standards, and I believe that they are the rightful regulator of these standards. How can FERC work with other agencies to remove some of these duplicative efforts that ultimately just wind up slowing down the development of infrastructure? Your thoughts?
Speaker 8
Well, thank you, Vice Chair Webb, for the question. Am aware that FHMSA is working on an updated set of safety regulations and that they hope to publish it, I believe, this year. And, again, my philosophy is, you know, we gotta make sure things are safe. And so, you know, on a bipartisan basis, we have been ensuring that that happens at FERC. And as my understanding, again, is FEMSA is working on that updated regulation.
And, you know, I think as a lead agency for safety, under the statute, my hope is that they can lead us in that area.
Speaker 5
Any thoughts on other agencies that we could do the same process with to keep them duplicativeness? Is that a word?
Speaker 8
You know, I think, when I think about doing the work of the commission, our piece of that work, generally is narrow on some projects. So look, for example, I know you asked about LNG, but hydropower, for example. We recently approved a pump storage project, at our meeting, this winter, and it took about seven years from application to permit. But the FERC process took about two years to do the environmental document. That's what the statute tells us to do.
The other pieces of that Clean Water Act took the state three years. National Historic Preservation Act took six years of consultation. And I for me, I don't wanna say that those aren't important parts. I think they are very important, those other responsibilities that other agencies have under the Clean Water Act and National Hydropower Act. But, you know, as a person working on FERC who's very focused on every electron, every molecule we can get our hands on, when we have processes that go out three, four, five, six, or even more years, you know?
I wonder sometimes whether that's really prioritizing that process. You know? Put differently, under fair power, we make decisions in 60 days, and we do it very carefully. And we respect the statute, and, you know, sometimes the deadlines.
Speaker 5
Well, thank you. My time's up, and I would add that it doesn't prioritize Americans as well. I yield back.
Speaker 1
Well, thank you very much. The gentleman's time has expired. The chair now recognizes the gentleman from California's 50th district for five minutes for questions.
Speaker 14
Thank you, Mr. Chairman. I wanna thank all of you for the work you're doing. I'm sure you sense how this has become a really sort of in the center of a lot of conversations that are really important, and what you're doing is really critical. Mister chairman, I wanna start by asking NAMS consent to add to the record an article called, can expanding transmission reduce electricity costs, by Travis Fisher of the Cato Institute and Nick Loris of the Conservative Coalition for Climate Solutions?
Speaker 14
So one of the things we talk about a lot here is, interregional transmission, or we're just kinda stuck here. And I think one of the issues that my Republican colleagues often raise is that they think that the costs can't be allocated fairly. Recently, my colleagues wrote a letter opposing some planned transmission lines in the Midwest on the basis that costs were not reasonable, and they wrote, quote, the energy permitting reform act of 2024 contains provisions to standardize the definition of transmission benefits for cost allocation. Under that bill, only widely agreed-upon benefits would count toward cost sharing, and contentious items like state-specific climate policy benefits would not be included. I agree with that.
I would like to get to that point. Mister Roser, you've been around here for a little while. How do we get to that point where cost allocation that happens routinely within regions can happen in the same way and the same confidence as interregional high voltage transmission can?
Speaker 8
Congressman Peters, thank you for the question. I'll say a couple of things. First of all, one of the ways that we worked on transmission cost allocation under order nineteen twenty a and b was to give the state regulators a much bigger voice from the beginning of the process. So they get to see the model runs. They get to set the scenarios.
They get to decide what their region should consider. And that, I think, is very important to getting more consensus. And we're seeing that process unfold in a really positive way. In the PJM region, in the Mid Atlantic part.
Speaker 14
Of that, I'm talking about interregional transmission. I understand. So I wanna take that consensus that you developed and figure out a way to get that to work across regions.
Speaker 8
Exactly. And where I agree with you. Where I think you could apply that same model is to interregional. And I think we see really big benefits from interregional. I think NERC, Congress' direction, did a study that identified 35 gigawatts of transfer capability for reliability.
And, there was a separate study that identified the cost of inaction on interregional at $12,000,000,000 a year.
Speaker 14
I think I understand that. So is this something that Congress needs to lay out? Do we need to lay out criteria for you, or is this something FERC could identify?
Speaker 8
What I would say is this, is FERC has spent a lot of time on regional transmission. We have not spent nearly as much time on interregional. And so I think if this is a priority for congress, I would welcome your direction, and, that's my answer.
Speaker 14
I think it's a priority for congress. So that's my request. I don't believe that there's a dispute about the importance of getting this right. I think there's a dispute about how to get it right. So if you could help us with that, I think it'd be greatly appreciated.
Speaker 14
Let me ask you another question. We have this concept of national interest quarters, where the Department of Energy is supposed to lay out the map for where interregional transmission is supposed to go. We never produced any lines. We provided backstop authority. I helped write what Senator Manchin added.
It never produced any lines. I think it's time to do something different, and I wonder whether that is an authority you think FERC should hold rather than the Department of Energy.
Speaker 8
And that doesn't sound like it's meeting the moment to me. And so I think if Congress wanted to give FERC more tools to do siting more efficiently while maintaining the very important role that states play, you know, I think that could be something that I'd be delighted to provide input on.
Speaker 14
Let me pick on Commissioner C. Is this something where you can see, maybe a different rather than the government drawing a bunch of proposed lines for interregional transmission, maybe something where we could let the market define that, let those be the national quarters of interest, and let FERC permit them without worrying about the Department of Energy. Would that be a better system?
Speaker 9
I think it's certainly when it comes to interregional transmission, I am more focused on cooperation as opposed to mandates. I think we have seen a lot of good results in recent winter storms, even some the past couple of weeks, of neighboring regions helping other regions. So I do think that there is room for that sort of cooperation so that we can see some of those.
Speaker 14
What about the involvement of the Department of Energy? Is that necessary, or is this something FERC could handle?
Speaker 9
Congressman, I would defer to Congress when it comes to the assignment of responsibilities to DOE and to FERC.
Speaker 14
Alright. Well, I appreciate your, we have some more questions for the record, but I will submit those in writing. Thanks again for being here.
Speaker 1
Thank you very much. The gentleman's time has expired and yields back. The chair now recognizes the gentleman from Alabama's 6th District for okay. I'm sorry. The general from Georgia's 12th district.
Speaker 15
Good. Thank you, mister, thank you, chair Lauder, for holding this hearing with the Federal Energy Regulatory Commission, and thank you for your testimony today. Ensuring reliable and affordable energy is critical to the mission of the Federal Energy Regulatory Commission. I'm glad to have this opportunity to discuss how this impacts my home state of Georgia. Commissioner Lassert, the state of Georgia is accomplishing what many areas of the country seem to be struggling with.
We're moving with speed to power data centers, hyperscalers, and advanced manufacturing, while also balancing affordability for all customers. This is just not a talk. We have the results to prove it. For example, after announcing a three-year freeze to base rates, Georgia Power recently received approval from state regulators to move forward with 10,000 megawatts of generation to keep up with Georgia's rapid growth. It's because of this very growth that customers will experience rate stability for years to come.
Georgia Power committing to customer savings of at least $102 for the average retail customer beginning in 2029 after the rate freeze. I believe that Georgia's vertically integrated market structure is a big part of this success story. I know the states want to keep delivering on our shared goals of speed to power and affordability. Also, know that your commission is working on several rules that are designed to address many of these issues in other parts of the country. Commissioner Lacerte, do you think it's possible for other parts of the country to benefit from the example and success that we're seeing in the Southeast?
Speaker 11
Thank you, Congressman. I wanna thank you for that question. I know Georgia is certainly an outlier in excellence, and it starts from the outstanding Public Service Commission, Public Utilities Commission that you have there. You've got a lot of great public servants there that have moved the needle in so many different ways. The rest of the country could certainly learn from the state of Georgia, especially on interconnection efforts that they've undertaken.
I know, they've certainly had a past former NABRUC president there, commissioner Pridmore, that certainly has moved the needle. I think, like the great American poet Toby Keith has said, we need a little less talk and a lot more action. I think the state of Georgia has definitely taken that mantle.
Speaker 15
Good. Thank you. Chairman Swift and Commissioner Rosner, FERC maintains permitting authority for interstate natural gas pipelines but has a very limited and targeted role in permitting interstate transmission lines. Some policymakers and advocates have called for permitting parity between how pipelines and transmission lines are treated. However, this parity argument fails to consider the fundamental differences between the bulk power system and the interstate natural gas pipeline network.
Chairman Switt and Commissioner Rosner, can you talk about the nuances between pipelines and electric transmission systems in terms of resource planning, engineering, and cost allocation considerations, and how might a state's visibility into their own electric infrastructure better inform state permitting authority compared to federal takeover?
Speaker 7
Thank you for the question, sir. Well, the bulk electric system is probably the most complex machine that humans have ever built. And by that nature, it is incredibly different from the pipeline system, which is a common-carriage system. When it comes to permitting large interstate transmission projects, there are considerations of states who very respectfully have choices over the resource mix that they allow or do not allow to be built in their states. For example, many states prohibit the production of coal power plants.
Others allow it. Those types of choices will very much change the cost of electricity in the states. And when you have an interregional transmission line, the cost of electricity is then mathematically spread across people with very different political and environmental views. When it comes to a pipeline in comparison, from the wellhead to the LNG export terminal or wherever the pipeline is going, the interests are shared among the pipelines and the shippers. All of them are trying to get gas out of the ground and move it pursuant to FERC's mission to ensure plentiful supply of natural gas at reasonable prices.
And so the interests are much more aligned when it comes to the pipeline system versus the electric system.
Speaker 8
I'll be very brief and fast. I think we need to do both quickly. And so, you know, I know congress has given some responsibility on the natural gas side, given them a separate set of authority on a backstop basis on the transmission side. My perspective is we really need the electrons. We need molecules too, and we need a natural gas grid and a power grid that are both ready to accept those.
And so defer to congress for how best to do that.
Speaker 1
Thank you. The gentleman's time has expired, and the chair now recognizes the gentleman from New Jersey's 8th District for five minutes of questions.
Speaker 16
Thank you, chairman. Over the past year, this committee has talked a lot about the rapid deployment of AI data centers and their impact on our constituents' energy bills. In New Jersey, my constituents saw their energy bills increase by 15%. Without meaningful policy and oversight of industry and grid managers, this issue will only get worse. In December, FERC announced the development of a rule that focuses on colocating power generation in the PJM region.
This rule found that PGM's tariff that governs colocation of generation with loads was, quote, unjust and unreasonable because it lacked clarity on the rates and conditions that would apply to colocation agreements. Commissioner Rosner, just a top-level overview for the folks at home. This rule requires PJM to revise its tariff to provide more clarity for data center customers looking to co-locate energy generation, to revise its tariffs and behind the meter generation rules, and requires PJM to submit a report regarding reliability concerns. Is that correct? That is.
Thank you. And, commissioner Rosner, why did the commission decide to pursue a rule on colocating energy generation?
Speaker 8
Thank you for the question, Congressman. The reason was, and I'll just speak for myself, but I think it's largely consistent with the commission's order, which is a unanimous order. Look. We have this challenge where people wanna connect new generation and new loads, in this case, data centers quickly. And the approach that we took in that PJM order, which I'll be very high level about because it's still a pending matter, is that let's put all the options on the table.
Let's make sure all the options from front of the meter to behind the meter are all legal so that we can take advantage of flexibility, so we can take advantage of people bringing their own generation, so we can take advantage of when you co-locate a resource, you have to build less infrastructure, and that might be faster. But, also, let's make pathways for if you wanna be on the front of meter, let's do it fast, let's make that faster too by letting you connect on an interim basis.
Speaker 16
Appreciate it. And, chairman Sweat, is colocating energy generation with large loads such as data centers an effective way to bring down energy costs for residential repairs?
Speaker 7
Thank you for the question. As with this issue and every other issue before us, I always go back to the statute that Congress has authorized FERC, and we must ensure that the rates that come out of our commission are just and reasonable. So considering the rates that American consumers paid was top of mind in our negotiations, and we all across this table came up with a solution that we thought best safeguarded Americans in providing the direction that we did to PJM in December.
Speaker 16
I appreciate that. That's why last month, Congressman Kassar and I introduced the PRICE Act, a bill that would require data centers to bring their own renewable energy so that ratepayers aren't footing the bill for data centers and their communities. And I think a diverse group of stakeholders would agree that data centers colocating their own energy generation, requiring new rules and clarity around tariffs, are a good thing. But it's essential that we're holding grid managers to the highest standards to ensure that they're doing everything they can to make sure AI data centers are actually held accountable for the resources they use. The companies that are building these data centers are some of the biggest companies in the world.
Without proper guardrails, everyday consumers could end up subsidizing their infrastructure. Grid managers and FERC must ensure that these billion-dollar corporations are paying for the full cost of the strain they create. Chairman Sweat, how does FERC plan to ensure that these large, highly profitable entities are responsible for the full cost of their demand?
Speaker 7
Thank you for the question. Since I've been at FERC for the past few months, we have received a multitude of filings that facilitate the connection of large loads and data centers from these giant billion-dollar corporations that you were mentioning. And from my experience in every order that we have approved, those data center builders are perfectly willing and volunteer to pay for all of the costs associated with connecting them to the grid. Many of them are looking for solutions and opportunities to bring their own generation to reduce the strain on the grid that their connection brings. And so it's very top of mind for us, and I think that it's something that actually everyone is unified on across the table here, and with the entities who are looking to connect and build in our country.
Speaker 16
Appreciate that. And lastly, is the commission committed to strict oversight of grid managers and to putting residential consumers first?
Speaker 7
The commission rates that come out of our jurisdiction are, in general, across the country, about 1/3 of what consumers pay. The other portions are the cost of producing power locally, and also state programs. For the one-third of the bill that FERC is responsible for, we are absolutely committed to protecting consumers.
Speaker 1
Thank you. The gentleman yields back. The chair now recognizes the gentleman from Alabama, the sixth district, for five minutes for questions.
Speaker 17
Thank you, Mr. Chairman. Commissioner Lacerte, if you look at the data over the last 20 years or so, utility spending on transmission distribution has greatly outpaced spending associated with fuel and generation. It's largely due to the state renewable portfolio standard laws that require much more transmission to connect remote and distant resources like wind and solar to populated areas. At the same time, the shale gas boom has lowered generation and fuel costs. Given these trends, to what extent are the rising transmission and distribution costs, particularly in states with aggressive clean energy mandates, contributing to higher retail electricity prices and affordability challenges?
Speaker 11
That's a fantastic question, and I'm thankful that you asked it. I think the days of FERC approving projects without affordability and reliability are in the past. I think every question that has been posed before the current version of FERC, we have to ask those two questions of it. I think as we're looking at transmission, I think we can acknowledge that more transmission is needed in this country, but it has to be thoughtful and well-planned transmission. It has to be a transmission that is needed.
It has to be a transmission that is the best bang for the buck for the consumer. As we're looking to build out transmission, we also have to look at the pipelines. I think we're woefully inadequate in our pipeline capacity in this country. You know, I had the public American Public Gas Association in my office last week. And the American Public Gas Association is responsible for 430 communities across the US that own and operate their retail gas distribution entities.
And I wanna quote one of the letters they sent to us recently. Nearly 95% of the 1,000 public or community-owned natural gas systems in the United States are captive to a single pipeline. One pipeline. That's the only rate they have. If we build more capacity for pipelines, that's going to drive prices down.
Americans are hungry for that. The municipal governments are hungry for that, and we aim to give that to them.
Speaker 17
Along the same line, from 2000 to 2019, new investments went up 400%, went from 9,100,000,000 to a little over 40,000,000,000. And one of my concerns is, and this committee knows this, I'm very focused on securing our own supply chain of processed and refined critical minerals and rare earth elements, which you have to have to do these build outs. They're used in power sensors and actuators, transformers, and cables. Cable costs have nearly doubled since 2019, with transformer costs up 75%. So how much of the cost increase for electricity that the ratepayers are paying is because of price increases for materials like copper and aluminum and electrical steel and addition to components like transformers and the other components that you need?
Would
Speaker 11
Absolutely. Congressman, that's a great point. I think that the cost of materials has gone up over the past administration. I think that, it's more expensive now to build out a transmission, but prices generally, are gonna go up. And I think that the time to tackle some of these issues is now. We have to be thoughtful with our resources and our supply chains to make sure we're giving the biggest bang for the buck for the goods.
Speaker 17
We've closed about 300 hydrocarbon facilities around the country, most of them coal, and their plans to reduce coal capacity from 100 down to 159 gigawatts from 318 gigawatt peak in 2011. And while I'm concerned about those plants being shut down, there may be an opportunity there in regard to power generation for our refining processes. And what I wanted to ask you is are the transmission lines from those shuttered, coal fired plants still intact? I think a very quick answer.
Speaker 17
Okay. I think it makes sense for us to look at going back onto those facilities, the brownfields, maybe use small modular reactors. We're still gonna have some issues finding, building turbines and boilers and the other infrastructure needed. But what are your thoughts on that, about locating SMRs on those facilities? Because the transmissions are still aligned, that would meet the power needs of the facilities we need, maybe even data centers, but it could also increase the baseload power for local residents.
Speaker 11
I think retrofitting older power generators, older power plants with new technologies is absolutely the right approach. I think that American innovation is the way that we're gonna succeed and the way that we're gonna progress toward the next generation. And I think all options need to be on the table. I think that's a common-sense approach, and it deserves due diligence.
Speaker 17
Real quick. We've got some collaborative effort from the other side of the aisle on reforming, on permitting, on NEPA in particular, to that we think would improve the efficacy in of environmental reviews and better enable infrastructure build out to unlock America's energy potential. Have any of these been addressed in recent permitting legislation that you would think was satisfactory?
Speaker 1
Thank you very much. The gentleman yields back. The chair now recognizes the gentlelady from Virginia's 4th district for five minutes for questions.
Speaker 18
Thank you, Chairman Ladd and Ranking Member Castor for this very important hearing today, and I wanna thank the FERC commissioners for being here. As others on the committee have noted, one of FERC's primary roles is to ensure that electricity rates are just and reasonable. And that mission and the work of FERC is more important than ever as we confront the surge in electricity prices that threaten the financial stability and security of millions of Americans. Last year, electricity prices increased by 13%, far outpacing a year-over-year inflation rate of 2.7% and wage growth of approximately 3.8%. In other words, power costs are rising faster than both paychecks and the price of other everyday necessities, placing an increasing strain on American households.
As FERC continues to address energy efficiency, we must ensure that the projects approved by the commission benefit all ratepayers without placing undue harm on historically disadvantaged communities who have for too long borne the brunt of the impact of electric energy projects. Chairman Sweatt, in your opening, you said that you want all Americans to prosper. And one of the contributing factors to whether people prosper is public health, and the impact that their community and their environment has on their health. So while it is important to expedite the interconnection of new energy sources to the grid, we need to do so in a way that balances that fact and doesn't place further burden on communities that have historically faced the brunt of pollution and negative health outcomes from reliance on fossil fuels. FERC finally stood up its Office of Public Participation nearly five years ago, decades after a statutory mandate to do so.
How does OPP ensure that disadvantaged communities and tribes have an opportunity to ensure that the commission takes their needs and legacies of pollution into account?
Speaker 7
Thank you for the question, and I appreciate your service as a born and raised Virginian who still lives there. FERC has a statutory mandate under the Administrative Procedure Act to meaningfully consider any comments that we receive when we are engaging in certain actions, and that very much includes the comments of the tribes and any disadvantaged communities who participate in our dockets. And when we receive those, our staff pours over them to ensure that we meaningfully look at them and engage whenever possible. We also have prefiling options for many of our larger energy projects where staff reaches out, and OPP does play a role in that, in educating the communities, and also helping them understand how they participate in FERC dockets if they would like to.
Speaker 18
Well, and I'm glad to hear about the outreach because I was also a regulatory lawyer for 20 years. And I can tell you that the energy companies, they have high powered lawyers that make sure they know when to comment. But average citizens who have a project built in their backyard often don't find out about it until it's way too late. And I represent many of those communities who, you know, particularly Charles City County, which is a locality that is overly burdened by energy projects. And usually, by the time the community finds out about it, it's too late for them to have any meaningful converse comment or influence on the citing of that project.
And we've seen an impact on their health outcomes. They have some of the lowest health outcomes in the Commonwealth. And we've seen an impact on cultural sites and historic sites. And I think even the companies in Virginia have recognized that it is far better for them to get that community engagement up front. And so any efforts that FERC can take to ensure that community input happens on the front end, and not so far down the path that it's too late to have an impact, is better for FERC.
It is better for the company trying to build that plant, and it is much better for the community that has to share the burden of that plant. And so, with that, I'll have to submit the rest of my questions for the record. But I thank you for your answer.
Speaker 1
Thank you very much. The general a yields back the balance of your time, and the chair now recognizes the gentleman from Ohio's 12th district for five minutes for questions.
Speaker 19
Thank you, chairman. Thank you all for being here today. My first question is for Commissioner C. Opponents of LNG exports often claim that exports hit record highs during times of peak domestic demand, therefore raising natural gas prices for consumers. However, recent data can end that argument once and for all.
During winter storm Fern, daily US LNG export demand fell 20%, redirecting the LNG feed gas supplies to the domestic market. Commissioner, you have called for FERC to modernize the review process for LNG facilities. Do you agree that LNG exports provide flexibility and act as a balancing tool for the US natural gas market?
Speaker 9
I do, Congressman, and thank you so much for that question. I think when it comes to natural gas on the domestic side and, internationally in our exports, we don't have a supply problem. We have a plentiful supply. The problem we have is constraints of getting it where it can do the most good. So that's why it's critical for us to focus on streamlining infrastructure development in all areas, including when it comes to LNG exports.
Our exports play a critical role in our national economy and for national security. And it's important for us, as we have a statutory responsibility, to license LNG export facilities and changes there, to do that in an efficient and legally durable way as we can. So I'm committed to doing that and working well with my colleagues as we continue in that effort.
Speaker 19
Very good. Thank you. Madam Chair, my next question is for you. Thank you for being here. Miss what?
When opponents claim that LNG exports rise domestic prices, they ignore the factors that actually increase natural gas costs for consumers, such as the lack of pipeline capacity. During the storm, regions with pipelines to deliver natural gas have significantly lower prices than areas with constrained capacity. In fact, on 01/26/2026, the Monday after the winter storm Fern, Northeast winter gas prices were 2.4 times higher than the Appalachia supply. FERC has taken important actions to address constrained pipeline capacity, like repealing order 871 and examining cost thresholds for blanket approvals. Can you discuss what other FERC action FERC is considering taking to expedite the construction of needed energy infrastructure projects?
And how will these actions help deliver affordable, reliable energy to our constituents?
Speaker 7
Thank you for the question. I also am very concerned about Northeast prices. And one thing that was really shocking for me coming out of the storm was in the Northeast during Fern, 40% of generation came from fuel oil or diesel. And that's simply because we don't have enough gas infrastructure to bring gas to New England. So I fully agree with you.
That's why we are looking to wholesale across the board, take a hard look at our permitting actions. And when it comes to pipelines in particular, we are trying to streamline our NEPA process. Congress and the Supreme Court, together, have taken action over the past year that makes our mission much easier. But now I believe that it is on FERC to have the tools that the Supreme Court and Congress have given us to now really do some self-assessment inside of the building of what FERC does in its environmental analyses under NEPA that are no longer required by the law. And as Congress has said, FERC is an economic regulator, not an environmental regulator.
And so, in my view, if there are things that we are doing that exceed what is required by law, those are things that slow down infrastructure permitting and development that are unnecessary.
Speaker 19
Thank you. Thank you. A follow-up to that. Pipeline capacity, LNG exports are critically important to gas producers in the district that I currently represent across the Utica and Marcellus shale. So I greatly appreciate the commissioner's attention to these issues.
I don't share. I think I'm gonna run out of time. So, well, I'm gonna try it. Generation and load interconnection timelines do not match the speed that is needed to serve new, large loads. Currently, if a large load has on-site generation or supplies its own power, that generation is studied as if 100% of the power is injected into the grid instead of serving the load.
Similarly, a large load is studied as if it will withdraw all its generation needed from the grid. I'm gonna run out of time. So, I apologize. I will submit these questions, and we'll follow up. Thank you very much.
Madam, mister chair, may you be back?
Speaker 1
Thank you very much. The gentleman yield is back, and the chair now recognizes the gentlelady from Colorado's 1st District for 5 minutes for questions.
Speaker 20
Thank you so much, Mr. Chairman. Mister chairman, this is a critical moment for America's power grid. Both energy bills and electricity demand continue to skyrocket, as we've been discussing. Today, recent reports show that electricity prices are up 13% just since President Trump took office. And so all of us are focused on keeping the grid both reliable and affordable, as reflected in the title of this hearing.
So I want to ask our panel today. We'll just go down. And the question I want to ask you, we talk about this a lot in this committee, in this subcommittee. Do you believe in all of the above policies and a diversity of generation resources? Commissioner Chang?
Speaker 20
Thank you. And different chairman Sweatt? Yes. And, Commissioner Rosner? Yes.
And Commissioner Lacerte?
Speaker 11
Yes. Not only do I believe it, it is required by the Federal Power Act.
Speaker 20
Yes. You're right. It's also required by law. Now so I wanna talk about the importance of a diversity of generation resources, because everything has a role.
Speaker 20
Play, some of the newer technologies like wind, solar, advanced nuclear, geothermal, and of course, energy storage. I want to get that on the record because unfortunately there's been some concern in this administration about whether they in fact do support an All of the Above strategy, even though they give lip service. The administration has made it very clear that in practice they do not, because they've killed hundreds of clean energy projects representing billions of dollars in investments over the past year. Projects that were approved at every level simply because they were renewable energy projects. Now, in its long term, so that's it.
A different issue is the Long Term Reliability Assessment released just last week by NERC, begging regulators and policymakers to remove barriers to generation and transmission development. So let's make sure we have agreement here, too. Yes or no, should FERC and Congress support the building? This is not a trick question. Okay? Should the Congress and FERC support the building of generation and transmission?
Commissioner Chang? Yes. Commissioner C? Yes. Chairwoman Sweatt?
Speaker 7
Well, as a FERC regulator, Congress has specifically said that do you support generation.
Speaker 20
Yeah. But do you support the building of the transmission? Are you not going to answer that? That's yes or no?
Speaker 11
Yes. I support it. And I believe the chair was acknowledging the state's role in these activities.
Speaker 20
I follow up. I do too. I was just asking her if she supports that. It was not a trick question.
Speaker 20
But what I do wanna say is Donald Trump's war on clean energy is making it virtually impossible to do that. Let me give an example. Last year, FERC approved an interconnection plan to let projects, including several gas fire plants, expedite the process by which certain types of generators could interconnect to the grid, essentially to cut the line. My understanding is when PJM, one of the Northeast Regional Transmission Organizations, ran this FastPass project, it initially selected 51 projects that would bring 11.8 gigawatts of capacity to the grid. But now, just a few months later, a number of those projects dropped out because of transmission constraints on the power grid, thus sharply decreasing the expected power being brought online.
So, commissioner Chang, I want to ask you. It seems that this illustrates that one-off ad hoc solutions to expedite interconnection studies are not silver bullets. Could you talk briefly about the role that adding more transmission plays in adding generators and more sources of power demand to the grid?
Speaker 10
Thank you for your question. As I suggested in my opening statement, it is absolutely right that, you know, we need to do all the reforms that we have already done on the interconnection of generation. But just because we speed up certain generators in the interconnection, the front end of the process, it doesn't mean they can actually just connect to the grid without the grid's capability being enhanced. So we need to pay our attention now to making sure that the grid can actually handle both the interconnecting load and the generation, so that we can bring up all the data centers and other large loads to the system.
Speaker 1
The gentlelady's time has expired and yields it back. The chair now recognizes the gentlelady from Tennessee's 1st District for five minutes of questions.
Speaker 13
Thank you, mister chairman, and thank you to the witnesses for being here today. You know, I wanna discuss the critical role that FERC holds to ensure our pipelines, interstate transmission, and hydroelectric dams remain reliable and keep prices just and reasonable. I'd like to highlight one of FERC's responsibilities mandated by section four of the Natural Gas Act. This section requires that rates charged for interstate pipeline services be just and reasonable. In my district, which is East Tennessee, these services, a natural gas subsidiary has filed a FERC section four case for a 123% rate increase, even though FERC has stated during the testimony stage of this case that there is only justification for a 36% rate increase. Natural gas consumers must pay the higher rate until the case is litigated or a reasonable and just compromise settlement is reached.
This case is particularly important for my district because this company serves as the only interstate natural gas pipeline that literally traverses Tennessee and is the sole supplier for many of my constituents in the industrial manufacturers. So with that in mind, I would like to submit this letter from chairman Terry Lewandowski of the processed gas consumers group for the record, Mr. Chairman.
Speaker 13
Thank you. So this goes to commissioner C first. By statute, FERC must maintain that rate increases meet a standard of just and reasonable. In general, does FERC's approach of a case change if a pipeline has captive industrial taxpayers?
Speaker 9
ratepayers. Congresswoman, our core mission is to make sure that we are ensuring just and reasonable rates. And so when we are doing that role, we are engaging that analysis. Of course, I can't speak to that particular matter that's pending before us. Mhmm.
But we are committed to looking very closely at the record to make sure that any increases are, in fact, justified.
Speaker 9
A lot of factors there, and many of the critical ones, as you mentioned, are the people who are ultimately paying those rates. Okay. We are very concerned about all of those factors.
Speaker 11
Yes, ma'am. I also can't speak to something before us, but I can tell you, as I previously mentioned, very concerned about captive pipelines. We need to build more capacity in our country. We need more pipelines in our country. It's gonna drive prices lower.
It's gonna protect the consumers.
Speaker 13
Yeah. Thank you, sir. Chairman Swift, when FERC reviews the facts of a rate increase case, how do you ensure that cases are processed in a timely manner and the rate increase is just and reasonable?
Speaker 7
Thank you for the question. I have, myself, litigated several FERC pipeline rate cases. I am very aware of how long they have taken in the past and the burden on both sides, both time and resources to litigate them. And with that in mind, I am taking a hard look at what we can do to make our processes more efficient. Congress could also have a role in limiting any litigation exposure to FERC decisions.
Speaker 13
I've already thought about that. Most of Tennessee is served by TVA through co-ops and municipal utilities, but the Kingsport area where I live sits in the PJM region. And some utilities in that market build and plan their own long-term generation or relying on the PJM capacity market, which has helped protect customers as PJM prices have spiked. So as a PJM waste changes to that market, it's important that these utilities can keep making those long-term investments. So, chairman Sweat, how will the commission ensure that utilities can continue planning and building the generation they need to keep up with the growing electricity demand in their territories?
Speaker 7
Thank you for the question. With every matter that comes before us, we take a hard look at the record that is filed and all of the evidence on it, to see what is the right result and how to protect consumers to ensure that they pay just and reasonable rates. So I can commit to you that my colleagues and I will take a hard look at any filing that involves a utility trying to build more generation. Okay.
Speaker 13
Commissioner LaSert, to what extent did rising load forecast, data center growth, and extreme weather risk factor into FERC's decision making to modernize this blanket certificate program?
Speaker 11
That's a great question. I know large loads, forecasting, and growth are at the top of our minds.
Speaker 11
We immediately tackle these issues as priorities for us upon coming to the FERC. I'd like to see more of a consensus on load forecasting. A little bit more of a standard deviation than I'd like, and it's hard to plan when there's so much disagreement on how much load we're going to need in the future.
Speaker 11
But regardless, we're gonna need more generation. We're gonna need more transmission. We need more pipelines. So all of those things are gonna be necessary for us to be successful, but we need to coalesce around some certainty in what our load's gonna look like. And it's gonna look different today than it looks three months from now, as it looked three months ago.
But these are challenges before us that we have to meet.
Speaker 1
Very much. General lady's time has expired and yields back. The chair now recognizes the general lady from California's 7th district for five minutes for questions.
Speaker 22
Thank you very much, Mr. Chairman. And I wanna thank all the commissioners for being here today, and thank you for the important work that FERC is doing to keep the lights on and try to bring down the cost of electricity. Now FERC doesn't directly regulate retail utility rates, but you do have an indirect role in determining what Americans pay for their bills. Commissioner Chang, can you explain very briefly how utilities recoup capital costs from their customers?
Speaker 10
Sure. Thank you very much for your question. Without getting too technical about this, utilities make capital investments. I should say, investor owned utilities make capital investments, and the return on and of those capital are passed directly to customers. And slightly different accounting works for municipal or public power resources.
So, in a nutshell, the amount of investments made are directly passed on to the captive ratepayers of those jurisdictions. Okay.
Speaker 22
So after the Trump administration illegally canceled billions of dollars in grant funding for grid resiliency projects, the capital cost of those projects will not be borne by those utilities, and that means those costs will be passed on to the ratepayers, which means higher utility bills. Is that correct, Commissioner Chang?
Speaker 10
In general, the capital investment dollars have to come from somewhere. If it's not coming from rate payers, then it has to come from some other sources. So some unless capital projects are canceled, they are going straight to rate payers.
Speaker 22
Okay. Commissioner Chang, you've expressed support for advanced transmission technologies that can make bigger, more efficient use of the grid. I share your enthusiasm for some of these technologies. I'm particularly hopeful that distributed power plants and advanced conductors can help free up more capacity quickly and cheaply. As many of you have emphasized, we need more power as fast as possible.
And at the same time, we have to get a handle on rising costs. But the current back order for gas turbines is now stretching out to $20-30, and the cost of a new gas plant has skyrocketed two or three times what it used to be. On the other hand, a distributed power plant can be deployed in less than 6 months for less than a million dollars. So what can FERC and Congress do to help encourage the use of these and other advanced transmission technologies?
Speaker 10
Thank you for your question. I'm also a big supporter of advanced transmission technology. My view on that is, you know, broadly speaking, the US is at the forefront of technology for all industries, and it should be so as well for transmission technologies. And, you know, I don't really take a prescriptive view on what specific technology needs to go on specific projects. Mhmm.
On the other hand, I feel like using advanced transmission technology to squeeze more out of our existing and new system is a no brainer, and utilities should take advantage of what best technologies are available, and they should move forward from pilot projects to really broad adoption of advanced technologies with the purpose of bringing down costs for consumers.
Speaker 22
Okay. Thank you. Chair Sweatt, there are a lot of questions with regard to the appropriate federal role in supporting and improving the interconnection process for large energy loads. How do you view FERC's role in this?
Speaker 7
Thank you for the question. FERC has jurisdiction from Congress over the bulk electric system. So large loads can have many options and flexibility in the way that they connect to the electric system, both from the state jurisdictional and the federal jurisdictional level. So as someone who adheres very religiously to the statutes Congress has provided, we are committed to allowing and facilitating large load connection within our jurisdiction in a way that ensures that consumers pay just and reasonable rates.
Speaker 22
Okay. Now I only have about 15. But, commissioner Rosner, do you share the same view? I may have.
Speaker 8
Yes. To I think the commission has jurisdiction over connecting large load to the transmission system. And so we've had an approach where, this winter, we've tried to make that more efficient.
Speaker 1
The general lady's time has expired and yields it back. The chair now recognizes the general lady from Iowa's 1st district for five minutes for questions.
Speaker 23
Thank you, Chairman Ladd and Ranking Member Castor for holding this legislative hearing on reliability and affordability. And I also wanna thank our witnesses for your time today with us. The electricity industry is in a state of sustained change. Must work harder than ever to meet these evolving challenges with innovative and proactive solutions. In Iowa, we know that reliable, affordable, abundant, sustainable energy, and we know what it means.
While winter storm Fern brought dangerous conditions to much of the country, Iowa experienced even colder temperatures than usual, and it's cold. Yet our utilities kept the lights on and the heat flowing. That's because we're invested in a resilient grid and a diverse resource mix. When other states were struggling, Iraq crews were helping them to recover. And as our witnesses said, tremendous thanks to all of those who were keeping the lights on and keeping the transmission lines up and running.
We're at a time of fundamental change, which all of you have mentioned during this hearing. The question before us is how do we solve evolving challenges in the near, medium, and long term. We must accelerate infrastructure deployment, ensure adequate generation capacity, modernize transmission planning, and do it all while keeping energy affordable for families and businesses, and keeping up with the maintenance required by our aging grid. The American people are counting on you at FERC to get this right. They need confidence that when they flip a switch, the lights will come on, and that the electricity bills, most importantly, won't break the family budget, which you all have mentioned as well.
Innovation, not regulation, should drive our energy future. Mister Rosner, you had mentioned vast, increasing and accelerating energy demand, and you also mentioned the number of projects and plants that have been brought online while you've been a commissioner. Is that in keeping with what happened during the years 2021 through 2024? The I mean, were we adding capacity between 2021 and 2024?
Speaker 8
I don't think I don't have the backward looking number with me, but I'd be happy to provide it in the record. What I can tell you is that last year, we approved a number of fast-track processes that are going to connect about 50 gigawatts worth of new generation to the grid.
Speaker 23
And would you say that adding that capacity is going to help keep electricity prices affordable?
Speaker 23
Thank you. Commissioner Rosner and Commissioner C, so I'm gonna ask you both, and hopefully won't run out of time. Load forecasting, which, Mister Lacerte, just mentioned, and who bears the risk of load forecasting? So PM, PJM just released their annual forecast. They cut their February peak forecast by 4.4 GW.
While that's a 2.6% reduction from last year's estimate, PGM increased their long-term ten-year forecast significantly. These aren't small numbers. A 4 gigawatt swing affects billions of dollars in capacity procurement and infrastructure spending that ratepayers have to pay. And those forecast changes happen every year, as assumptions get updated. When RTOs procure capacity or approve infrastructure based on load forecast that later gets revised downward, who pays for that mismatch?
Right now, it's 100% taxpayers. And one of the things mentioned, Commissioner Alsert mentioned, consensus on load forecasting. So sharing some of that incomplete or erroneous forecasting. So is there any mechanism at FERC or at the RTO level to true up the cost when forecast proved too high? Are we just accepting that rate payers will have to pay for whatever gets built based on today's best guess about tomorrow's load?
Speaker 9
Congresswoman, I think when it comes to accurate load forecasting, that gets at one of the really important issues in front of us. There are real concerns if we both underbuild and overbuild the system. If we underbuild, the lights don't come on, as you mentioned. But if we overbuild, ratepayers are paying for capacity that is not necessary. We need to get that right.
It's challenging right now because we're in a new moment with data centers and other large load growth. So there's a lot of developing consensus and best practices about how we get more certainty when it comes to load forecasting. We had a very helpful technical conference last summer with a lot of experts on reliability, talking about best practices, and making sure we can do more to firm up those numbers. Because you're absolutely right. We can't have perfect certainty.
I wish we could, but we can do better.
Speaker 8
Yeah. I agree with my colleague. And, you know, I would just say that load forecasting is about getting more confidence in the decision, and that's important for getting agreement on the build. To your question about, you know, what do we do if we over or overbuild? You know, in places where we have markets in the country, we often have these things called adjustment auctions.
They have various different names, but, basically, it's an opportunity to buy or sell, more based on increased precision of the knowledge of the future. The other thing I'd just say, though, is the point you made.
Speaker 1
The general lady's time has expired. And if you would want to, submit that in writing. We'd greatly appreciate it. I'll submit.
Speaker 1
I do. Yeah. The chair now recognizes the gentleman from Texas' 33rd district for five minutes for questions.
Speaker 25
Thank you, Mr. Chairman. I think that everyone here knows that right now families are really facing high electric costs, a lot because of the weather, but also because of delays in connecting new generation and storage to the grid. And interconnection queues are now measured in years, not months. And those delays have real costs that show up on people's utility bills. As you know, in Texas, we take a little bit of a different approach to how that works.
And ERCOT allows generators to connect to the grid more quickly through what is often called a connect-and-manage, or energy-only interconnection model. And these projects can come online sooner, accept some curtailment risk, and rely on operational management instead of waiting for every transmission upgrade to be built first. And that has allowed Texas to connect to large amounts of new generation faster than other regions. And in many cases, that has increased supply and helped put downward pressure on electricity prices. And so I wanna ask you as it relates to federal interconnection policy and accounting for speed and real-world outcomes.
And I wanna start with you, Commissioner Rossner. Your testimony states that accelerating new electric generation is essential to reducing consumer costs, and that interconnection delays directly contribute to higher bills. As you know, ERCOT connects generation faster than any other region by allowing projects to interconnect before the major network upgrades are built. From an affordability perspective, do you agree that getting lower cost supply online sooner, even with some curtailment, is better for consumers than waiting years for full deliverability?
Speaker 8
Thank you for the question, Congressman. And, you know, I will say it is amazing what Texas has done. You know, I think that the pace of growth in Texas is really stunning. And I think the question you're asking about how what are the things that are enabling that, that connect and manage policy, is something that I spent a lot of time thinking about as a commissioner here. You know, what I would say is this, is that it's quite clear that we need more options on the table.
The current weight to connect new generation to the grid is, on average, between four and five years. Our ideal, pro forma rules that we implemented in order 2023, get it down to a year and a half. I think it should be even less than that. And I think there's opportunities in the connect and manage type system that are quite, you know, there's real evidence that they're gonna push the ball forward and would be delighted to keep working on them.
Speaker 25
Do you think there's anything more that FERC can do to ensure that order 2023 is implemented in a way that actually enables that outcome in other regions, rather than preserving delay under a different label?
Speaker 8
Well, I think it'd be good for us to get those models fully implemented around the country. I think we're at the very tail end of compliance with that rule. And, you know, what I would say is this, is that, you know, from concept to implementation, it's taken us about six years to do order number 2023. One of my focuses is on what can we get industry to do without regulation. And so I have written extensively about interconnection automation.
That's one thing they could do. Another thing the industry can bring us, and, in fact, one region has brought something perhaps similar to connect and manage filed it at FERC. When the industry reaches consensus and brings filings to FERC, that can move a lot faster.
Speaker 25
Right. Right. Exactly. Miss Shank, I wanted to ask you before time expires. I know that you also emphasize persistent interconnection bottlenecks that perpetuate scarcity conditions, that help keep prices high for customers.
And Texas faster interconnection has helped reduce scarcity by increasing supply with developers, not captive ratepayers that are having to bear the risk. And from a consumer protection standpoint, isn't that preferable to a system where delays keep prices high, and costs are ultimately borne by taxpayers?
Speaker 10
That's right. I think, again, you know, if the bear one of the barriers is to not have adequate transmission capabilities, and if that becomes a barrier for interconnecting load and generation, we need to focus on making sure that the transmission grid is ready and available. And related to your question about connect and manage in ERCOT, I think it is a plausible path if there is a well planned and well ID a good idea of how to finance the transmission upgrades necessary. And ERCOT has that in place. It's more of a timing issue of connecting and managing because there is already a plan for transmission upgrade and a way to pay for that transmission upgrade.
And I think in the FERC jurisdictional markets, I think we put the transmission upgrades process upfront because we wanna make sure that in jurisdictional markets, the generators interconnecting to the grid are actually paying for the upgrade costs that they trigger. So there's a slight difference. But as long as there's a planned process to pay for and upgrade the system, I think connect and manage is a plausible path forward.
Speaker 1
The gentleman's time has expired, and the chair now recognizes the gentleman from Oregon's 2nd district for five minutes for questions.
Speaker 24
Thank you, Mr. Chair. Thanks to the panel for being here. Chair Sweat, there were some discussions some years ago about, maybe even more recently than that, our national security being at risk because of Chinese developed transformers. Is that risk now behind us?
Speaker 7
That risk is the reason that I personally am prioritizing the ability for Americans to build, connect, operate data centers in our country within our geographic and electric barriers, to ensure that not only are we protecting our data and sheltering it from our foreign adversaries, which is paramount to maintaining our national and economic security, but we also would have the added benefit of more American jobs in building, generating, and running those data centers.
Speaker 24
I'm not sure what that does about the risk, but I'm gonna submit my questions later. Commissioner Lesser, you say in your press release on January 14 concerning the Snake River Complex, with which I am extremely familiar, that you are happy that the EIS was issued. But then you state that you think more efficiency needs to be found. No surprise given it's been 23 years while we waited for that damn relicensing to occur. Twenty-three years.
So I agree with you. More efficiencies need to be found. You say in the relicensing process, can you share with what some of those might be?
Speaker 11
That's a great question. I think, obviously, the Supreme Court ruled the 7th Circuit in a unanimous decision that we need to do better with NEPA reforms and NEPA review. And while that was aimed at the judiciary, we need to take that into account in the executive branch too. We need to take a look back and pair off what our focus has been that is not statutorily required. And we need to focus on the mandates given by congress and get the job done with the assignment that has been given.
And we haven't done a great job of that in the past. But FERC is a small part. On our counterparts in the States, as Commissioner Robert Rosner stated earlier, they take too long with some of these decisions. And the Snake River is a prime example.
Speaker 24
Can we stop the I'm very familiar with that. The conditions imposed by the state of Oregon cost $3,400,000,000, and it will cost more, maybe as much as 1,000,000,000 over the next life of the license. So I get it. The question, though, is what can FERC do, if anything, when it comes to the imposition by a state? Actually, you can start with a federal agency if you like, but let's start with the federal agency.
Can you guys do anything with the condition imposed on a license by a federal agency?
Speaker 11
I think we could work better with our federal counterparts to determine what the priorities are, to identify bottlenecks, and to come to common sense solutions. FERC is an independent agency. That doesn't mean we can't cooperate and work better with our sister agencies. I think there are improvements that can be made there, and I hope that we can come to some common sense solutions.
Speaker 24
What I'm most concerned about is the state, any state. Oregon is a great example, though, of dragging its feet. I understand there may be a tool now that we can use. Thank goodness for that. But then imposing extraordinarily expensive conditions, and I'm just not clear on exactly where you guys fit under the power act when it comes to trying to control those conditions. Because the truth of it is, these are being imposed to get rid of dams.
That's the whole idea. I wanna know what you, what your commission has the power to do to try to help prevent that, those incredibly important power generating assets from being destroyed through conditions.
Speaker 11
Yeah. I think that's a great question. I think it's one that FERC has struggled with for many decades. I think there is a delicate balance here with the states that we can make improvements on, but I would also implore Congress to take action to make permitting reform more durable for all. You know, the Snake River is the lifeblood of many states as it relates to electrical generation.
Speaker 24
I'm going to these all of these questions are extraordinarily important given that they cross the kind of the spectrum of energy generation. I probably should ask all of you this question, but we don't have time. The challenge that we seem to face right now is one that's existential as to affordability and also as to the AI race, which you have had occasion to remark upon in earlier questions. Your thoughts, are we gonna have to give up one for the other, or do we have a path?
Speaker 11
Nope. Giving up one or the other is unacceptable. We need to have a balance. We need to have a balanced approach. We can do both, and we must do both.
Speaker 1
Thank you. The gentleman yields back the balance of his time. The chair now recognizes the gentlelady from New York's 14th District for five minutes for questions.
Speaker 26
Thank you, Mr. Chairman. And I'd like to thank all of our FERC commissioners for joining us here today. Chairman Sweatt, FERC's mission includes assisting consumers in obtaining economically efficient energy at a reasonable cost. Correct? Yes.
And, to achieve this mission, FERC sets the rates that utility companies must pay for transmission of wholesale energy. Correct?
Speaker 7
We litigate right filings at FERC to determine what outcome is just and reasonable.
Speaker 26
Great. And then after that, public utility commissions determine rates that utility companies charge people on their monthly utility bills.
Speaker 7
It's my understanding that public utility commissions and state policies make up at least one-third of utility bills that consumers pay.
Speaker 26
Yes. Yes. So about one third, as you mentioned. And one of the things that I know unites all of us here is that, increasingly, Americans are struggling to pay those utility bills. In 2024, more than a third of households skipped out on necessities to pay an energy bill, and close to a quarter of households kept their homes at hazardous temperatures to avoid the cost of heating or cooling.
Yet the energy utilities charging Americans are among some of the most powerful and profitable industries on earth. Take Consolidated Edison or ConEd, which is the utility company that serves New York and my constituents in Queens and the Bronx. ConEd is one of the largest privately owned energy companies in the country. And, in their most recent history, we have seen incidents of gas explosions, power outages, apartment buildings that are exploding after gas leaks. And in 2018, a short circuit at Con Ed power plant in Astoria shut down all of LaGuardia Airport for several hours.
Yet despite these crises, Con Ed is growing their utility bills on New Yorkers and raked in almost $2,000,000,000 in profits in 2024. So, naturally, many of our folks here in New York are asking, why is Khan Ed profiting off the energy market while they are dealing with unreliable and increasingly unaffordable energy? So I want to break this down for them. Utilities collect what they spend on operating expenses, like salaries and office space, from our bills. And if a utility company spends $100 on operating expenses, it collects $100 back, spread out across all the bills people pay to that utility, but they don't get any profit.
Instead, companies like ConEd make an average 10% profit through a return on equity for making physical upgrades to the transmission grid. So if a utility spends $100 on physical upgrades, they would collect $110 on our bills, with $100 paying for the wires and poles and $10 going to profits. It collects these profits from increases in our utility bills. The more they spend on physical infrastructure, the more profit they stand to make. But as I outlined with CONEX history in New York City, those upgrades aren't translating to more actually more reliable service for constituents.
There are these projects that are being named as outlays. In some ways, people are questioning if these investments are actual upgrades to our system, or are they just stated outlays that are labeled as upgrades. But it's FERC that sets the rates of these profits for transmission system investments. So, chairman Sweatt, what is the average return on equity that FERC has set for utilities like?
Speaker 7
ConEd? Well, I've, as someone who has litigated rate cases at FERC, I'm very familiar with the contours of various rates, but different utilities have different structures. I'm happy to work with your staff, and our commission staff, to answer any specific questions you have about
Speaker 26
Specific utilities. Currently, it does seem like the rate averages approximate around 10% for transmission utilities. I mean, they could be higher. They could vary. But does 10% sound about right in terms of an overall average?
Speaker 26
Okay. Well, going back to FERC's mission, do you believe that this model of a set return on equity is the most economically efficient model for everyday Americans?
Speaker 7
We are taking a hard look at everything that impacts everyday Americans. And I can tell you from personal experience that we have very heated debates at this commission. From all of my colleagues sitting here, it's a race to lower any bill that we can. So, Mhmm. We are happy to work with you and your staff on any suggestions you may have on how we can accomplish our shared goal.
Speaker 1
I'm sure the general lady will submit her questions to the commission. So thank you very much. Thank you. The chair now recognizes the gentleman from Texas 11th District for five minutes for questions.
Speaker 4
Thank you, Mr. Chairman. Chairman Sweat, I'll start with this real world example we just had during winter storm Fern, which I think was a good real world test and an example, across different states that we can kinda compare and contrast. But, the results, I think, were pretty clear that areas with sufficient pipeline capacity and access to domestic natural gas experienced lower prices than those that didn't, and the reliability factor was indeed higher there as well. In the Northeast, the limited pipeline capacity meant that power plants couldn't get enough natural gas when demand peaked. And as a result, grid operators had to burn oil and rely on imported energy to keep the lights on.
But meanwhile, states closer to natural gas production in the Appalachian Basin saw much lower prices, and that this was not a shortage of energy, but a failure to move it when it was needed. Price data during the storm showed that consumers in New England, Connecticut, and New York paid between 115% and nearly 300% more for natural gas than they did in places like Northeastern Pennsylvania. And those price differences indeed worsened as the storm intensified. So my question is, how is FERC approaching the timely permitting of interstate gas pipelines needed to serve demand and lower cost for Americans everywhere?
Speaker 7
Thank you very much. That's a very important question that we are all unified in looking at how we can develop more infrastructure to reduce costs for Americans. As my colleagues have said today, when it comes to specific pipeline applications that come before us, as Congress has required under the Natural Gas Act, we have to take a hard look at whether or not an individual application is required by the public convenience and necessity. And a big part of that analysis is whether the pipeline will bring economic benefits to the public, and in many cases, that would come in the form of lower costs on utility bills.
Speaker 4
Let's kinda pull on that there a little bit more. You know, how is FERC working with states that block pipelines? And how are you balancing the affordability mission when you have states like New York that actually kill pipeline projects?
Speaker 7
That is a $100000000000 question. Well, effectively, under the regime that Congress has created and the Clean Water Act, states have the ability to veto a project if they do not give a certification. And that is a problem that FERC simply cannot work around. And if Congress saw fit to change that, we would be happy and ready to implement any directives.
Speaker 4
Is it your belief that having those pipelines and the capacity to deliver the natural gas lowers prices?
Speaker 7
Well, I think, as you very wisely stated at the beginning of your comments, the proof is in the pudding. The fact that areas that don't have enough gas are paying maybe 300 times what they should, as you said, is unacceptable. That is not a just and reasonable rate for Americans.
Speaker 4
So these states are basically saying to their own constituents, we don't care. You're gonna pay up to 300% more when demand peaks, and we don't have the capacity to deliver what you actually need. That's a sad reality that we're living in. But, you know, let's talk about dispatchable energy. In New England, more than 40% of power generation came from fuel oil during the coldest period of this storm.
And despite aggressive policies intended to reduce fossil fuel use, we still saw those numbers. Similarly, New York relied heavily on natural gas, on nuclear, and dual fuel generation to maintain that reliability. So, maybe talk us through, and is it fair to say that without access to dispatchable fuels, particularly natural gas, many regions would face reliability challenges, and maybe talk us through the reliability challenges specifically that you see.
Speaker 7
Thank you for the question. Using the storm that impacted millions of Americans, I think, is a great paradigm to look at this. If you look at the peak demand of the country, if we combine them all together, and that was overseen by our office of electric reliability at FERC, who worked around the clock. 42% of the power provided and that kept Americans warm during Fern was gas across the country, and coal was 23%. Nuclear was 14%, and petroleum was 4%.
If you put all those numbers together, over 75% of the power that kept our grid reliable during Fern came from dispatchable generation.
Speaker 7
FERC has no ability to choose a generation mix that is squarely within the state's purview under the Federal Power Act. We accept the generation and the market design as it comes to us.
Speaker 4
I was talking about the reliability piece, the r. But yes, thank you for that, because that's where I was getting at. You read my mind, and I yield back.
Speaker 1
Well, thank you very much. The gentleman's time has expired. And the chair now recognizes the gentleman from Massachusetts' 14th District for five minutes for questions.
Speaker 12
Thank you, chair. I'm glad my friend from Texas raised the New England grid during winter storm Fern. I was there representing 800,000 people who were there. It was cold. Let's talk about what happened in New England and how this administration's weighing in. So first of all, what happened during winter storm Fern and the stress it put on the New England grid, on the Massachusetts grid, is not an outlier event.
We're seeing that winter peak demand forecasts are gonna be increasing by about 36% over the next decade. So we better prepare for this. And we have been. We had the transmission line between Massachusetts and Canada Hydro Quebec, which has been a significant wind. Took way too long to build those transmission lines.
But what happened during this storm was that line shut off, and it shut off because despite contract claims, Hydro Quebec needed all the power for Canadian consumers, because it was pretty cold up there too. You know what didn't shut off was the wind. What happens during a winter storm off the Cape Cod Islands is the wind blows really hard. And, actually, looking at the analysis of that storm, those turbines would have been rotating at absolute peak capacity during the beginning part of the storm and during the middle part of the storm. During the actual central thrust of that storm, they would have automatically shut off because the wind would have been blowing too hard.
They want to maintain the structural integrity of the turbines. It would have generated tremendous amounts of electricity for my constituents, lowering costs, relieving stress on the grid. Here's the problem: the Trump administration keeps on canceling permits. And I hear the frustration from my Republican colleagues about permanent uncertainty for natural gas, about the Keystone pipeline. How can they possibly be silent when the Trump administration is acting in an arbitrary and capricious manner to upend states' ability to diversify their energy portfolios like Massachusetts is doing for precisely the scenario we saw with winter storm firm.
The Trump administration is now 0 for 5 in court. I mean, how many judges need to tell this administration to stop breaking the law before they simply allow my constituents to access reliable, affordable electricity? Miss C, you had mentioned in your written testimony how important it is to have, quote, legally durable signals that get steel in the ground. Is that right?
Speaker 12
Would you agree that we also want legally durable signals that get steel in the water?
Speaker 9
I think my role as an economic regulator is to make sure that we have the best options available.
Speaker 12
So just ground, not water? Mhmm. Do we want legally durable signals that get steel where steel belongs?
Speaker 9
As chairman Sweat mentioned, we are not responsible for the generation makeup of different.
Speaker 12
But you just wrote right here how important it is to promote legally durable signals that get steel on the ground. You don't agree that we should also be promoting legally durable signals that get steel on the water.
Speaker 9
My focus is on the areas within FERC's jurisdiction, and I do believe in the importance of legally durable signals.
Speaker 9
For infrastructure and for the energy to deliver reliable and affordable power to all.
Speaker 12
I mean, you're kinda torturing the answer. It's, do you want legally durable signals or not? Because if FERC is not supposed to be is supposed to be resource agnostic, presumably, it is the position of FERC that regardless of where the generation is coming from, water, the ground, deep in the ground, up in the sky, you want the legally durable signal. Yes?
Speaker 9
Congressman, when we have issues and matters in front of us, yes, I agree. It is important for us to act in a legally durable way.
Speaker 12
Commissioner Rosner, in our last ninety seconds here, given the rising demand that New England is expected to see in the coming years, we should be adding significant generation capacity to ensure reliability and affordability outside of offshore wind. Offshore wind is one part of a necessary portfolio. Do you think it would be helpful if states like Massachusetts overturn moratoriums on new nuclear power generation to unlock that clean, affordable, and reliable baseload power?
Speaker 8
I think what's obvious from that winter storm is that there were strengths in a diverse set of resources. And so from my perspective as a FERC commissioner, you know, we don't have the ability to tell states what to build. But what I would say to Massachusetts and any state is we need the electrons. And electrons don't wear fuels. But if you can get us more electrons, that would be great.
Speaker 1
Thank you. The gentleman yields back the balance of this time. The chair now recognizes the gentleman from South Carolina 7th district for five minutes for questions.
Speaker 27
Thank you, mister chairman, and thank you, commissioners, for being here today. Energy demand is obviously increasing. We see that. We hear that from our constituents. And I think it's really critical that our regulatory system supports reliable, affordable power, while promoting efficiency and modernizing the grid itself.
At the heart of this, I've heard a lot of talk today about permitting and permitting reform and oversight processes that are disciplined, predictable, and focus on outcomes rather than unnecessary delays. And I think it also requires, to commissioner Lacerte's perspective, what he talked about earlier, was a strong federal and state partnership with FERC and state utility regulators working in lockstep to plan infrastructure, allocate cost fairly, and, of course, most importantly, to the people that we represent, keep the lights on. Chairman Sweatt, the seven-county Supreme Court decision I think was remarkable in a way because it was, one, unanimous. So, in a body like ours that oftentimes has several different ways to view any particular issue. When you see a unanimous Supreme Court decision, it kind of raises your eyebrows a little bit.
But the court held that the court should afford substantial deference to an agency as to the scope and contents of environmental impact statement. How has FERC changed its NEPA practice in response to the Seven Counties decision? And to piggyback on top of that, what is left to do, to come in line with that decision?
Speaker 7
Thank you very much for the question. Thankfully, the seven county decision allowed FERC, in my opinion, to realign our emissions analyses with our statutory responsibility as a primarily economic regulator charged with encouraging the development, plentiful supply of natural gas at reasonable prices per Congress' instruction. So what does that mean when the rubber hits the road? Now we no longer analyze the indirect emissions from upstream production or from downstream combustion. That in itself has cut down the time that is necessary for environmental review from the staff in the building.
It cuts down what applicants have to analyze, and that was a huge move in itself. Thanks.
Speaker 7
That process? I'm happy to get with our staff and see if we can quantify those numbers for you.
Speaker 27
Please do. I mean, we like, I mean, I'd love, I'm just curious about that. Think it's kind of remarkable.
Speaker 7
We also no longer use GHG emissions as a basis to require a much more resource-heavy environmental impact statement rather than staff performing an environmental assessment, because that used to be a trigger for that much longer analysis. We no longer do that after seven county. We also no longer use the FOD's social cost of carbon metric, which the commission was employing in its NEAP analyses for several years.
Speaker 27
Thank you for that. Commissioner Rosner, our FERC's blanket certificate program allows certain projects to complete routine limited-scope actions under set cost and notice requirements, either through automatic authority or a prior notice process. In June, 2025, FERC issued a NOI and temporarily raised the prior notice cap. How would permanently increasing these cost thresholds and expanding eligibility so more projects qualify for expedited authorization improve permitting efficiency and meet rising energy demand?
Speaker 8
Congressman, thank you for the question. The commission's existing blanket program for section seven, as you mentioned, was temporarily adjusted up, and we're considering a final rule. We're also considering the same for hydropower projects and LNG projects. You know, the way this stuff works fundamentally is, you know, these routine changes that we really understand the environmental impacts. It doesn't take as long to fully adjudicate those.
And so, you know, these programs have worked well. I'm really excited to expand it to other energy sources like hydropower and look forward to working with colleagues and chairman Sweatt to finalize those rulemakings.
Speaker 27
And, commissioner Waug, I got you here with my limited time left. You recently sent a letter to all six grid operators requesting information on how to improve load forecasting. In South Carolina, we're vertically integrated. Other places are different, obviously. What we're seeing across the country is the rapid development of data centers, general demand anyway.
Large energy users have made the process difficult, to say the least. How do you view the role of effective load forecasting to inform efficient planning?
Speaker 1
Ready to vote again. Thank you very much. Gentlemen's time has expired and yields back. The chair now recognizes the general lady from Washington's 8th district for five minutes for questions.
Speaker 28
Thank you, mister chairman, and thank you to all of the commission for being here today. As you all know, the West is undergoing quite a transformation in the development of wholesale markets. My region, I'm in Washington State. I'm in the Pacific Northwest. My region is excited by the prospect of the day ahead electricity market where power can be traded in a marketplace, not just in real time, but up to 24 hours in advance when it's needed.
And when surging demand growth and increased threats like severe winter storms are straining the grid or predicted to strain the grid, a more nimble and efficient grid, of course, is what we are all after in order to have affordable and reliable power. So if done right, a well crafted, well organized market can increase efficiency and lower costs and help trade states transition to cleaner energy. But, as utilities and energy marketers choose to join either Kaiso's eDam or SPP's Markets Plus or stay out entirely, these decisions about where utilities and with whom utilities will trade power are going to create boundaries between these two markets. And we're already seeing this divide. And these markets seem, which is what they're called, have the potential to cause some serious inefficiencies that could lead to the benefits of either market being really diminished.
So it's especially important, in this case, especially for me and my constituents to get this right. At this point, utilities in our state are split. And these seams are going to be a real challenge. So, Chair Sweatt, first question is for you. Just as the head of the commission setting agenda items and proceedings is addressing the challenge of making this fragmented system and these seams work on your agenda.
Speaker 7
Thank you for the question. It's on my agenda because it's important to people who are under our jurisdiction. Yes. I'm very aware of how fragmented the West is, and it is very geographically and from an engineering perspective, very different from the rest of the country. And we at FERC stand ready to evaluate any proposals that entities in the West would like to make.
Speaker 28
I appreciate that. And the fact is that all the different entities, even just in my district, are split in which way they're going. And so I guess my next question is, I'm glad it's on the agenda. I didn't ask you where it is on the agenda, because that might put you on the spot or might be very difficult to answer. But can you just tell me what your next steps are?
We've got to figure out how to make this transition and the grid work and make sure that the seams are seamless.
Speaker 7
Well, as with other proceedings, we stand in a receptive posture to evaluate any proposals that the regulated entities would like to bring to us. So when your constituents decide what they would like to do, if that is something that comes within FERC's purview, then we will evaluate the proposal to ensure that it results in just and reasonable rates.
Speaker 28
Okay. So as I'm getting back to my constituents, I should ask, for example, Bonneville to be in touch with you, the public utilities to be in touch with you, to also have Seattle City Light, for example, in touch with you, to maybe convene and have a technical conversation about how to do this, just to, if they request that, they can get that from you?
Speaker 7
We are happy to work with you and your staff to provide whatever information or help you need. Okay.
Speaker 28
And then can you tell me, just as we look for what's coming down the road, so they request this and you're willing to oblige to help, can you talk about what actions can take and has at your disposal to ensure dependability?
Speaker 7
And reasonable rates as you're maneuvering through this new landscape? So, in the context of SIEMS, our office of electric reliability has a vast amount of staff that are constantly monitoring the grid from a reliability perspective, and SIEMS presents a very unique issue when it comes to reliability. So we are constantly monitoring in the office of enforcement from a rate perspective and the office of reliability from a reliability perspective. We are looking at the whole country all the time, and I know that seems our specific focus so that we ensure that they are functioning properly within our jurisdiction.
Speaker 28
Thank you. I appreciate your attention to the issue. I know it's really important. I look forward to having further conversations, maybe about how you've resolved these issues in other places or even with all of you. And, I'll keep tracking this issue along with the utilities in my district.
Yield back.
Speaker 1
Thank you very much. The gentleman yields back, and the chair now recognizes the gentleman from Florida's 15th district for five minutes for questions.
Speaker 29
Thank you, mister chairman, and thank you to the Federal Energy Regulatory Commission for appearing before our committee today. The United States is seeing an unprecedented rise in energy demand. Our energy infrastructure must be prepared to meet the moment, as advances in artificial intelligence and manufacturing continue to progress. Last week's winter storm underscored the importance of a secure and resilient electric grid. Energy security is an essential part of our national security.
And as our grid faces cyber and physical threats, as well as natural disasters, my home state of Florida frequently experiences those types of events. My priority is addressing these challenges and ensuring the continuous flow of safe, reliable, and affordable energy to consumers. Chairman Sweatt, thank you for your leadership at the FERC. Strengthening cybersecurity of our critical infrastructure has long been a priority of mine, and I am particularly interested in the work of FERC's Office of Energy Infrastructure Security. Could you tell us a little bit more about the role of this office and the work that it does to support FERC's mission of energy reliability and affordability?
Speaker 7
Thank you very much. That's a very important question. We affectionately refer to that office as OIS in the building. They are our they're looking at everything from an eagle eye view, but they're also on the ground. And what they do, I think, is very special.
They ensure that FERC is in coordination with the three-letter agencies across the government so that, one, we are informed of the threats, and we are educated on how to address them. And with that information, OICE has the flexibility to go into specific utilities where we identify particular threat vectors that are critical to the grid at large because of the information that we have from our partners. And they can actually go into utility, identify a threat, work with the utility to make them understand where their vulnerabilities are, and show them how we can solve them at FERC, or we can work with them together with best practices from other agencies. So, we keep learning and gathering, and then going in on the ground and trying to improve our electric security across the country. And with that information, they also work with the Office of Electric Reliability that helps make more permanent standards for cybersecurity that are applicable across the country.
So, we have a collaborative best practices approach combined with a more permanent regulatory approach.
Speaker 29
You just touched on something that I would like to hear a little bit more about, because I believe it is so critical to the success of not just your work, but other agencies who are protecting our critical infrastructure, and that is your partnerships with other federal agencies. Would you elaborate for us a little bit about which are some of those three-letter agencies that you work with, and why you believe that collaboration and those partnerships are helping to strengthen our critical infrastructure?
Speaker 7
Thank you. So as a country, we are facing attacks potentially every day from foreign adversaries, and those are across the board. And that includes our infrastructure. So the three-letter agencies I'm referring to are largely in intelligence gathering, and also, DOE is one of them as well. And in order to solve these problems and to defend our country as a whole, we need the best and biggest amount of information that we can get.
And so that collaboration is very important.
Speaker 29
And a related question. As you're working with some of our other government stakeholders and agencies to be sure that you're getting that threat landscape and the most current information, are you also working in partnership with private stakeholders to help them elevate their security posture, particularly as it relates to those cyber and physical threats?
Speaker 7
Yes. Absolutely. Our office, our OIS office, reaches out to private utilities, but it's also a two-way street. They are now becoming aware of our capability to help them. And so oftentimes, utilities will approach FERC staff for help, and we go back and forth.
Speaker 5
Gentlemen, yields back. The chair now recognizes the gentleman from New York for five minutes.
Speaker 30
Thank you, Mr. Chair. And, I thank our commissioners for being here today on what is it, a very important topic. Chairman Sweat, what do you see as the role for enhanced long-term planning processes that accurately account for growing demand as well as increasing risks from extreme weather events, and maintaining an affordable and truly reliable electricity system?
Speaker 30
Sure. What do you see as the role for enhanced long-term planning, in regard to accurately accounting for growing demand?
Speaker 7
Thank you. Given that we're meeting the prospect of historically escalating demand, long-term planning is incredibly important.
Speaker 30
So I'd like to dig into a few areas where improved planning could benefit our electricity system. We cannot efficiently plan our electric infrastructure if we aren't able to accurately forecast just how much energy will be needed. Electricity load forecasting methods, which have historically been based on incremental and predictable growth, may no longer be applicable to today's increasing large load demands. We need an accurate forecast to ensure that infrastructure is built at the right scale and speed to meet future demand while also protecting against overbuilding infrastructure and causing unnecessarily higher electricity prices. So, commissioner Rossner, in September, while serving as acting chair, you asked the regional grid operators about their methods for forecasting large loads.
Can you tell us why you felt that was important? What were the big takeaways from that inquiry?
Speaker 8
Thank you, Congressman Tonko, for the question and for highlighting this important issue. It's really simple. Better data, better decisions. And one of the, and I say that not to be a skeptic. You know, I think the demand for electricity is large and growing.
But whether we're a point high or a point low, we're just getting it right is what's important. And so, this commission grappled with the same question on when we were connecting, overseeing the process of connecting new power plants to the grid. We had lots of people getting in line. They were trying to figure out where the cheapest and most effective place to connect was, but all those people in line jammed the process. And so one of the reforms we did was, alright, we're gonna make you pay a deposit.
And so I wrote to all the grid operators and said, hey, are you using objective, quantifiable criteria like a financial deposit before you count? And, also, are you talking to your neighboring grid operators or even their neighbors about what they're seeing, and making sure that we don't have the same request everywhere? Not because we don't want to serve every request, but because we need to plan more accurately. And so that is what it was all about. And I've begun to see some results.
PJM recently revised its load forecast based in part on using more objective quantifiable criteria like deposits and facilities agreements and the like.
Speaker 30
Well, I thank you for that. And NERC's recent 2025 long term reliability assessment recognizes that large loads inherently add volatility to load forecast. There's a lack of historical data on gigawatt-scale interconnection requests. There are challenges with utility information sharing and risks of double counting projects across regions. Between the national labs and the Energy Information Administration, the federal government has great expertise in energy system modeling, analysis, and data collection.
So, commissioner Rasser, do you think there's more we can do at the federal level to support states and regions in their efforts to improve their forecasting tools?
Speaker 8
Absolutely. I think the national labs and the energy information administration have made huge contributions to understanding what the future energy system and the needs associated with it are. I would also just say that this is not rocket science. You know, it's like you go to buy a car. If you make a deposit, they're gonna hold the car for you.
It's kind of the same idea here. I think we can figure this out. But I also do feel very strongly on your point about modeling that, you know, there are a lot of uncertainties here. There's a lot of new technologies coming into play, and getting our arms around that is really important.
Speaker 30
Thank you. And, commissioner, you were also supportive of FERC order 1920, which was approved by the commission with bipartisan support in 2020. Can you speak a bit about the importance of that order and how long-term transmission planning is foundational to an affordable and reliable electric system? I know you were quizzed about that a bit ago, but you were only given five seconds. So can you embellish that, please?
Speaker 8
Well, here are five more. So, you know, getting the transmission system based on some on demand, future demand, and where we think that future generation will be, it's critical. And we see frequently, even today, even last year, power plants of all types trying to get connected to the system. They can't. They get hit with these upgrade costs of hundreds of millions to billions of dollars because we don't have enough transmission to connect them.
And that's true for natural gas, and for batteries, and for any other source.
Speaker 30
Yeah. Well, I say it's important for us to really improve that long term planning because this administration's position on demanding uncompetitive coal-fired power plants that can continue operating at great expense to the American people. It's just not necessary. We need good sound planning. And with that, Mister Chair, I yield back.
Speaker 5
The gentleman yields back. The chair now recognizes the airport from New York for 5 minutes.
Speaker 31
Thank you very much, Mr. Chairman. I represent Western New York in the Southern Tier, a region with access to some of the nation's most abundant natural gas resources. Yet families and businesses are paying electricity rates roughly 50% higher than the national average, while facing growing reliability risks. That disconnect isn't about a lack of supply, innovation, or federal authority. It's the product of state policies in New York that block infrastructure, restrict options, and take energy decisions out of the hands of consumers.
And that's why I've championed legislation called the Energy Choice Act, because states shouldn't be allowed to ban lawful energy sources or replace consumer choice with one size fits all mandates. Energy policy should expand options, affordability, and reliability, not shut off energy choices by government decree. We see the consequences of losing that balance in New York's all-electric mandate for new homes and buildings, and governor Kathy Hochul is pushing new residential and commercial construction to electrify, at the same time restricting firm generation and pipeline infrastructure. Electrification may be a policy goal, but common sense must still apply. Growing electric demand has to be matched with generation.
Transmission and fuel security or reliability will suffer, and costs will rise for consumers. Chairwoman Sweat, how does FERC assess reliability risks when states mandate electrification but restrict the infrastructure needed to support it?
Speaker 7
Thank you for the question. FERC is in a reactive posture. We can only take the markets as they come to us. And as the Federal Power Act designates, states are solely.
Speaker 7
Ones who determine where generation is sited, what type of generation is built, whether or not they give the Clean Water Act permits to pipelines who wanna run through them, and FERC can only take those matters as they come to us.
Speaker 31
Thank you. We don't have to speculate what happens when policy gets ahead of reliability. We've seen it. In December 22, winter storm Elliott showed how essential fuel diversity and firm generation are during extreme weather emergencies. When systems failed and the power went out, more than 60 people in my community lost their lives.
It was a stark reminder that reliability is not an abstract concept. It's a matter of public safety. Chairwoman,
Speaker 31
Is FERC working to maintain reliability and fuel diversity when states like New York restrict firm generation and infrastructure, especially during extreme winter conditions?
Speaker 7
I'm very sorry about the people who lost their lives in your state. That's unacceptable. From our perspective, we are regulating the reliability of the bulk electric system. So we do everything we can within our jurisdiction to monitor the grid and do whatever we can to reach out to the utilities if they are in crisis. And so within our jurisdiction, which unfortunately does not extend to the distribution system and the retail system in states, we do everything that we possibly can.
Speaker 31
Thank you very much. If fuel diversity and firm generation are critical to winter reliability, pipeline infrastructure is not an optional item. Yet despite receiving federal approval from FERC, New York State has repeatedly weaponized its federally delegated Clean Water Act section 401 permitting authority to block the Constitution Pipeline. Now just last week, the New York State Department of Environmental Conservation again denied key permits and reaffirmed its opposition to the Constitution Pipeline, signaling that even projects that clear the federal review process can effectively be killed at the state level. And that is just not a policy degree disagreement.
It undermines the certainty that federal approvals are supposed to provide, especially for infrastructure that would deliver firm fuel to regions with sustained winter demand. Commissioner C, generally speaking, how does the pipeline bottleneck in the Northeast impact the energy reliability and affordability in the region?
Speaker 9
Congressman, I think it's really telling that you started with some of the stressors we've seen from recent winter storms because we've increasingly had a gas and electric system that were built separately, but they are so interdependent. Upwards of 40% of the electricity sector is powered by natural gas. So that makes it incredibly important. We can't get molecules where they need to go without increased capacity. So in matters like the one you're talking about, that's an open filing in front of us.
I know I'm committed to look very closely at the record to make sure that we can do everything within our jurisdiction to move forward needed infrastructure when it meets the statutory mandate of promoting plentiful natural gas supplies in the public interest.
Speaker 31
Thank you very much. Reliability is an ideological. Bad policy raises costs and increases risks. Energy policy should prioritize affordability and reliability, and not government mandates that undermine the systems that people depend on. And with that, mister chairman, I'm out of time, and I will yield back.
Speaker 1
Well, thank you very much. The gentleman yields back. And if we could, we'll just stand at ease for a couple of minutes till other members come back in from the vote. So, thank you. Well, I'll.
Speaker 1
Okay. Really? Yep. Yeah. The keys came in.
Yep. Okay. The subcommittee will come back to order, and the chair will recognize the gentleman from Ohio's 6th District for five minutes for questions.
Speaker 33
Thank you, chairman. Federal law is clear. States cannot block critical natural gas projects, period. Over the last decade, Democrat governors have continuously violated the Natural Gas Act and put our national security at risk while our communities bear the cost. Our constituents cannot afford rising energy costs held hostage by brain-headed out of state politicians playing games with the energy grid.
From your perspective, how has state action impacted natural gas development and grid reliability in the United States? For me personally, in Ohio 6, we're very rich in the Utica and the Marcellus shale. I spent the last 6 years on public surfaces building this. I've actually been involved in building three gas-generated power plants, two in Lordstown and one in Wellsville. We have a cracker plant in Menlo Park, Pennsylvania.
It's the biggest cracker plant outside of Texas. The problem that we're having over there right now is Governor Hochul. She refuses to have the constitutional pipeline go into the Menacca cracker plant and feed that beautiful plant with the necessary natural gas that is needed. So now we are frantically trying to build a pipeline from the House 6 in the Manacca. So would one of you like to speak on this?
Speaker 7
I will, sir. Thank you for the question. The Mountain Valley Pipeline is a good example of the situation that you're raising here, which is sometimes it takes an act of Congress to build a pipeline. And that's because the permits in our system of federalism enable the states to effectively veto a project, and FERC cannot do anything about that.
Speaker 33
So what type of things do you think FERC could give suggestions to Congress to write a quality bill that perhaps could get bipartisan support? So if we could expand the natural gas pipelines inside the Continental United States, add time for all the above energy that are friendly friends on the opposite side of the aisle, think that could happen. Because when you see this happen where I have a cracker plant that was 12 and a half billion dollars of construction, we have the proposal for a Belmont cracker plant, which is another 14,000,000,000 billion dollars of construction, and we could actually turn this into the energy hub for the whole world. The natural gas in Ohio is enough to supply the earth's needs for four or five hundred years. Any suggestions to ask members over here that we could do some quality work and get bipartisan support on?
Speaker 7
Absolutely. As an initial matter, FERC staff stands ready to provide technical support to you and any other members on how to craft legislation. But it's clear that the Clean Water Act probably needs to be revised to put some type of limit on the ability to effectively veto a project, a federal project.
Speaker 33
Do you think that's something that Lee Zeldon could actually be involved with and help us navigate those waters and the pitfalls and the little landmines that could happen as far as addressing that?
Speaker 7
I do not want to speak for Lee Zeldon, but I can answer any questions on behalf of FERC and myself.
Speaker 33
Well, the office will definitely reach out. And with that, I yield my time back to the chair.
Speaker 1
Well, thank you very much. The gentleman yields back, and the chair now recognizes the at large member for North Dakota, the general lady, for five minutes.
Speaker 32
Thank you, Mr. Chairman. Appreciate you calling this committee today, and thank you all for being here. A lot of things I want to go over. First of all, I want to set the record straight for a minute. There's a lot of blame that's been made in this committee on Republican policies driving up energy costs.
The other boogeyman for increased energy costs is the big tech companies. This chart clearly shows what's going on here. You can't really tell the difference between the grades, but the state in this chart that has the lowest energy costs is the state of North Dakota. And that is because we have, in a very principled way for decades, followed simple fundamentals that you provide low cost and reliability. Those are your drivers.
Cost and need drive the investments in the system. And when you do that over time, you get a result like this. What happens when you don't do that, you get the results in the blue states. Those states have very aggressive goals. You know this.
These are also the states that have risk of running out of power and where you have risks of not having enough gas in your pipelines to meet demand when the weather gets cold, like, in the winter storm fern. So this is just, like, the facts of the system. It's a, and I just wanted to point that out. You all know this. I'm saying this more to colleagues on the other side of the aisle who continually blame us for the rising costs.
Secondly, I wanna just highlight. I couldn't bring up that you can take No. No. There'll be one more map. I wanna highlight.
You are also very familiar with these maps. These are the maps of the NERC reliability assessment. This map up here is what drove me to run for congress. After twelve years as a state utility regulator, seeing the policies that we're taking, occurring all over our country, and the really, step by step dismantling of our power grid and our systems, I decided I need to take my expertise, come here, and try to fight for just common sense energy policy. That's it.
It shouldn't be partisan. Just this is the fundamental need in our country, it provides a baseline for everything we do. And so I urge you all to focus on this, because this has gotten worse. We're getting worse. We have more parts of the country at high risk and elevated risk of not having enough power to meet demand, and that's today or in the very near future.
That is before we even talk about meeting the ever-growing appetite of AI, which is also a very serious national security issue. So whatever help you need, whatever tools you need to focus on this, consider me as an ally. I want to help you in any way that I can. Okay. So I have a few questions, and I'll submit more online.
But, commissioner say, see, you said that the electricity markets are not designed for today's challenge. I agree with you. We have to change things. So, Chair Sweatt, could you just briefly outline some of the things that you think Congress can do to allow you all to do your work faster?
Speaker 7
Thank you for the question. There are several things, several items raised today that Congress could help with. First of all, as we just discussed, when it comes to permitting federal projects, either putting a timeline on state analysis or inability to effectively veto projects when it comes to things within their jurisdiction, but fully respecting the state's rights, which I do personally. That would be very helpful. Across FERC's jurisdiction, limiting the amount of litigation that can happen.
Perhaps if there were a clock on when or how you could appeal a FERC decision, that would certainly give more certainty to market participants, because as someone who personally knows, some of these cases can be appealed for decades. That would certainly be helpful.
Speaker 32
And I'll invite you guys to send all of us all five of you send ideas. I'll ask a question of that nature. Chair Sweat, you mentioned one of the things that I'm really excited about that you're going through, like all of the FERC rules and regs, looking at where you've kind of exceeded your authority, your jurisdiction, and also things that just don't make sense. Can you just briefly say what's the timeline on that? And can you provide a report to us when you've completed that work?
Speaker 7
I am happy to provide any information that you and your staff would like. The timeline is the entirety of my tenure. As long as I have the honor of having this job, I am going to be looking with a critical eye. When I entered the building, there was a huge backlog of very difficult items that had not been acted on by the commission for a multitude of reasons. There was not a quorum, and we cannot act unless we have a majority vote.
Or some items don't have statutory deadlines. Some were simply too hard to reach a consensus on. And I prioritize right away trying to clear that backlog. That's one way, and I will continue to do so as we work through things.
Speaker 32
Okay. My time has expired. I have a few other questions I'll submit online, and look forward to ongoing collaboration with all of you and some of our big challenges here. Thank you.
Speaker 1
The gentleman lady's time has expired, he goes back. The chair now recognizes the gentleman from Ohio's first district for five minutes for questions.
Speaker 34
Thank you, mister chairman, and thank you all for being here. This is obviously a hugely important topic for the American people, businesses, our farmers, in large part because of the utility bill. So I just wanna start there, I wanna pick up where my colleague, miss Ocasio Cortez, had left off, which was taking on this question of utility cost versus utility profits. And most Americans wouldn't know how much power you all have in terms of adjusting down the profit margin in order to adjust down somebody's utility bills. And so as people are looking for someone to help, someone to save them from the high cost of these electric bills, look no further.
Right? And, miss Hwet, you made, I think, a really important comment about the heated debate that you all are having around this question. And I wanted to ask you as follow-up, what does that debate look like, and how quickly can the plane get landed so that we can provide real relief for ratepayers? I mean, this seems like something you're passionate about. I'm just wondering if I could get you to talk a little bit about this process, in a way where people back home will say, oh my gosh.
Maybe somebody's going to help.
Speaker 7
Thank you for the question. And to be clear, the heated debate we're having is a contest to see who can save rate payers more money among my colleagues. So every time we have a docket come before us, every single one of them has raised, well, could we lower this or can we lower that? And this, how is this gonna pass through to the consumer? So, they all raise very intelligent questions because we have such.
Speaker 34
The question about the profits, because you do have the power to adjust the profits for each company, to say the two, folks, we're gonna adjust this down a little bit so that we can increase or decrease what folks are being charged. How quickly can that happen?
Speaker 7
Well, we look at every single rate that comes before us, we do look at what rate of return the utility has, and that can help Americans. But like I said, that's only one-third of the bills that people get for utilities.
Speaker 34
Very, very excited for that one third of the bill to go down, because you are seeing these companies rack up record profits while folks are really struggling. And it's not just families. It's my small business. It's my farmers. I've got two and a half minutes, so I just wanna ask about AIs.
I just wanna encourage you to keep pushing, get these rates down. I have a bill protecting families from AI data center energy costs, and so this gets at what many of my communities are facing. I've got a community in the region, Wilmington. They're looking at a data center. The data center is coming in.
They're, you know, they're asking for all this tax money, and utility bills are likely to go up like they have everywhere else. What can you tell them that you all are doing to ensure that this company, it's an Amazon company, pays the full amount of their energy costs?
Speaker 7
Every agreement that we've approved at FERC, since my tenure at least, has provided for the data center to cover the full cost of the upgrades that are necessary for them. Anecdotally, I meet with data centers also, and many of them across the country are actually willing to subsidize local ratepayer utility bills by providing even more to the system.
Speaker 34
That is where Congress has to require it, because I do agree that they have the cash to do it. We have to, I think, come together in a bipartisan way to say, have to pay for the entirety of the costs. Otherwise, it's going to end up back on the ratepayers. In this bill, that hopefully gets marked up and passed, I think it's very bipartisan, is the push to get families, farmers, small businesses included in these conversations. Can you talk a little bit about how you do that now?
Speaker 7
Well, that is not in FERC's jurisdiction to have community engagement for a potential deal that may be at the retail level. But we from what I've talked to the data centers about, most of them are starting to show that they understand it's very important to have the community behind them, and I am very encouraged that will continue to be part of their approach.
Speaker 34
Just in my last couple of minutes, seconds here, that's not been our experience. I understand that has happened in other places, in Ohio or at least in Wilmington. Our experience is they've come in. They're signing NDAs with people, politicians, elected officials, and they're bypassing community and getting tax cuts to come in, and set up these data centers, which will cost people a lot of money for a few jobs. And, ultimately, I think we have to get to a place where they pay for everything.
No cost data centers. Thank you, and I yield back.
Speaker 1
Well, thank you very much. John, you yield back. And the chair now recognizes the gentleman from Texas' 12th District for five minutes of questions.
Speaker 21
Thank you, mister chairman, very much, and I want to thank all the commissioners for being here today. It's been a very interesting and educational hearing. I'll start with Chairwoman Sweat, since you are an honorary Texan surrounded by Texans, not only at home, but on your staff as well. You've been on this, you've been a staffer yourself at FERC before, and have been in private practice at a very distinguished firm, certainly an expert. So safe to say that you are an expert on both the industry and the regulating agency you run.
What are the biggest opportunities you see to improve FERC as we move forward?
Speaker 7
Thank you for that question. I am very proud of the agency that we are representing. It is my third time. It's come a long way, and we're moving faster.
Speaker 7
I do feel actually a maternal instinct toward the agency, so it could be my third child in a way, but it predates me. That said, just we've made a lot of strides at FERC to improve everything that we're doing, and I personally have tried to improve FERC's morale, just to tell everyone there that they're appreciated, and the administration is really appreciative of the mission that we do for the American people. Having support from the outside would also improve the agency's morale, but I think we're at a good place, and we're changing every day. That said, having more certainty on the gray areas of our jurisdiction from Congress, for example, in permitting, which we keep coming back to, that would really help us realize our missions more efficiently.
Speaker 21
Right. Thank you. And do you anticipate achieving the timeline for FERC rulemaking on data center colocation and fast track interconnect for data centers to be completed by the 04/30/2026 deadline, as requested by Secretary Wright?
Speaker 7
That is a historic problem that takes all of the minds to solve. I'm very grateful to the secretary for making his priorities public and giving us the opportunity to open a docket and collect that information. That said, we've gotten over 300 sets of very substantive comments, and we have to comply with the Administrative Procedure Act, which means work staff must analyze and respond to every single comment that we have. Otherwise, we will be overturned on appeal. So we are moving as efficiently as we can to ensure that we come up with a thoughtful and durable answer for our country.
Speaker 21
Thank you. Commissioner Rosner, I had a hard hitting question for you. Since you praised Texas and what we're doing there, kinda eased up a bit. But no, during your time as chair, FERC recently approved what seems to be a record amount of natural gas projects. What recommendations do you have or best practices that we and Congress can help with to make such speed and success more permanent?
Speaker 8
Well, thank you for the question, and the Texas grid is really quite impressive. You know, I'll say a couple things. First of all, I think having a bipartisan consensus among commissioners helps us do our work more rapidly. And it also helps ensure that, you know, as we get the benefit from the five sets of perspectives and experiences in these orders, makes them more legally durable. And so, you know, I think one thing is, you know, just go, colleagues.
Let's keep doing what we've been doing. You know, I think we've talked a lot with many members of the committee about opportunities for more certainty on the things that touch either our jurisdiction or things that are related that other agencies or other entities have roles in. And so I think what I would say succinctly is, you know, whatever sort of all of the above permit reform that congress thinks is appropriate, I would be really excited to implement as a commissioner. But should that not happen, also be very excited as a commissioner to work within the statutes you've entrusted us to, find efficiencies wherever we can. Thank you.
Speaker 21
Thank you. And I think we all agree. Everybody on the committee, every one of y'all certainly wants the grid to be reliable. We all wanna save ratepayers' money. Commissioner C, seeing what happened last week with winter storm Burn, as some of my colleagues, you know, pointed out one or more wind.
Well, the wind wasn't blowing in Texas, and the sun wasn't shining. And so we were not completely. We were very dependent on natural gas. So I think over 1.7% of our grid was by natural gas. And seeing that the New England grid was generating 25 to 30% of its power from oil, what do you think should be done to expand the natural gas pipelines in New England?
Speaker 1
If I could just interrupt for a second. The gentleman's time has expired. You can answer that, we've given everybody about fifteen seconds over. If you'd like to respond in writing, we would be the easiest and best for you.
Speaker 9
Can certainly respond more in writing, but I think we need more infrastructure. I think that's the message that's come out of the hearing today.
Speaker 1
Thank you very much. The gentleman's time has expired, and the chair now recognizes the gentleman from California's 15th district for five minutes for questions.
Speaker 35
Thank you, Mr. Chair. Thank you, commissioners, for being here today. Two years ago, President Trump pledged to cut electricity bills by 50%. Under his watch, the opposite has happened. Prices rose 13% last year.
Just recently, ahead of winter storms last week, natural gas prices jumped 25%. For the average American family, this translates to an extra $1,000 a year just to keep the heat on. We must move past rhetoric and toward real solutions that lower costs for the people we represent. Commissioner Chang, I wanna thank you for your response to the letter that I sent to each of you regarding data centers. You noted that while large loads are an opportunity to modernize our grid, we must protect customers from higher prices as part of the equation.
With that in mind, what specific cost allocation frameworks do you think will effectively protect consumers from rising costs associated with these new large loads, like data centers?
Speaker 10
Thank you for your question, Congressman. Yes, the captive customers have always been the ones that pay for system upgrades. And as we enter into this new phase where large customers are coming in, such as data centers, we've talked about it all day today, is that we have an opportunity to upgrade the system for everyone, not just for the data centers, but for everyone. And I think we need to take that opportunity very seriously. And we also have an opportunity to do that, to increase the capability of our grid while keeping the rates flat for everyone.
But we also run the risk at this moment where if additional upgrades are actually only to benefit certain large customers but not benefit local customers, those costs should not be shifted to existing captive customers. So I think as we evaluate approaches to cost allocate system upgrades or, on principle, same thing for generation upgrades, you know, we need to think about how to allocate those costs fairly.
Speaker 35
Thank you for that. Commissioner, Rosner, I was glad to see your testimony highlight the importance of order number 1920, a rule which was bipartisan and unanimous. California's grid operator, Cal ISO, submitted its first compliance filing under this order in December, and I'll be watching the outcome closely. Without getting into the specifics of any active filing, can you describe the importance of ensuring that RTO filings strictly comply with the reliability and affordability mandates of orders 1920 and 1920a?
Speaker 8
Thank you for the question, Congressman. And, what I'd say is this is, I really look forward to working on compliance with order number nineteen twenty with my colleagues on the commission. Although, as an individual commissioner, I do not set the timeline for moving that forward. But what I can say is this, about 1920 is that this is the kind of rulemaking that brings states in at the ground floor, to take a 20 year forward look. It doesn't require them to select anything.
Take a twenty year forward look, give input to your transmission utility about what kind of projects you see, how the scenarios should run, and then agree among the region on how to share the costs. And, you know, we've had a lot of struggles with this over the past decade or two. I believe that order number 1920 corrects a lot of the gaps and will help us get a set of transmission that's gonna enable us to connect all of the above energy system to the grid, meet things like new demands, whether it's a data center or electric vehicles or whatever states and regular people wanna pursue, that we have that available to them in an affordable way. Thank you.
Speaker 35
Thank you for that. Your testimony also highlights that twenty-first century reliability solutions include demand response. I am actively working on a legislative proposal to expand real-time energy data access, in part to improve such programs. How critical is expanded access to real-time data for this, for the success of demand response programs, and how would this help lower costs for families?
Speaker 8
I would agree with you that it is critical. And so having access to the data is needed in many parts of the country. And the way it works is this, the cheapest megawatt is the one you don't use or the one that you're willing to not use. And so what I like about demand response is there is a lot of flexibility in setting up programs that work for regular consumers or small businesses or even large businesses so that they can respond to prices and they can be in control of their consumption. It's just smart and, you know, in many and it's voluntary, and I think it's another tool at lowering high costs.
Speaker 1
Thank you very much. The gentleman yields back, and the chair now recognizes the gentleman from Pennsylvania's 13th district for five minutes for questions.
Speaker 36
Thank you, Chairman Lott and Ranking Member Castor, for holding this important hearing and to our witnesses for being here for this long day. As we have discussed within this committee, and as you are no doubt aware in your roles, ensuring that every American has affordable and reliable energy has become, unfortunately, increasingly complicated in recent years. Between the premature retirement of dispatchable baseload power and the increased demand on the grid that AI centers and advanced manufacturing present, we're seeing challenges to the reliability across this country. When you consider all these factors and add in extreme weather like we're experiencing over the past week, this puts even more pressure on the grid. It has become clear to me why the head of the NERC has labeled the current reliability crisis as a five-alarm fire.
In your role as a regulatory body charged with ensuring reliability in our bulk power system, I want to discuss what you see as a path forward so that we can recognize the opportunity of both AI and advanced manufacturing while still keeping energy affordable. In the development of AI, and as US companies work to capture leadership in that role, we have seen many proposed projects, which would be incredibly energy intensive. However, many of these projects are in their very early stages, and some will likely never come to fruition. Commissioner Lacerte, what role can FERC play in establishing guidelines for when and how energy demand from a new project is considered as part of a load forecast?
Speaker 11
I think that's a billion dollar question. I think, we got a good start with Lunar 1920, and I think that's gonna require a 20 year look at transmission planning and cost allocation. One of the things we can do better is partnering with our states to encourage generation. I think the generation problem here is a key cog in this wheel, and I think that's a responsibility of the states. And I think one of the things that Congress can do is properly incentivize the energy mix that we've talked so much about here today.
You know, natural gas has carried the load through this winter storm. I think natural gas is plentiful, and we're geologically blessed across our country. I think that we need more capacity to drive those natural gas pipelines forward, to put steel on the ground, to power our generators, to power industry, and to come forward with a real modernization of our grid. I think a diverse grid is important. A proper energy mix is important, but baseload power is carrying the day now more than ever here in our country.
We need to properly incentivize it. We need to reduce those hurdles that we've put in front of it. We can't play these games that we have in the past, as it relates to the blocking and tackling of what we do with energy.
Speaker 36
So you call it a billion-dollar question, and I agree. But what are the risks and downsides when a load forecast accounts for demand that is unlikely to ever actually materialize, or when the demand arises that a forecast fails to account for?
Speaker 11
Absolutely. I think, as our colleagues have stated here today, when that load forecast is inaccurate, two things are going to happen. On the downside, you know, if it's too high, the consumers are going to pay the bill. And you see that, I think we need better forecasting. We need better data.
Think we have a better consensus on what those lower forecasters are gonna be, so they can properly plan. Without the forecast being accurate, we're always gonna hit.
Speaker 36
Our miss our mark. We have seen many large load customers like the new data centers enter into proactive contracts with either existing or new generation sources to meet those energy demands. This provides predictability both for the grid and for the generator, especially as it relates to agreements between large loads and existing manufacturers. These deals can serve as a signal for generation sources to plan for the long term and make needed upgrades and investments. Chairman Sweatt, how can FERC ensure that existing generators are not disadvantaged in entering into long-term deals with large load as compared to load that partners with new generation?
Speaker 7
Thank you for the question. As Congress has instructed us, we have to do everything in a nondiscriminatory manner. So that includes looking at existing generation and new generation in the same way. So if those agreements come before us, then we will consider the merits of all of them, and ensure that we have a just and reasonable result.
Speaker 36
I have one additional question. I respect your time for being here today. I will submit that as a question for review. Again, I thank you for your intellect. I thank you for your thoughtfulness.
I thank you for your leadership. And what we and I come from an energy rich section of Pennsylvania with great resources of Marcellus Shale, I thank you for recognizing that. And with that, Mister Chairman, I yield.
Speaker 1
The gentleman yields back. And seeing no further members wishing to ask questions, first, the subcommittee would like to thank you all, especially through two vote series today. We appreciate your patience, really do. So thank you very much for being with us. Members may have additional written questions for you, and I'll remind members that they have ten business days to submit additional questions to the record, as all witnesses do their best to submit responses in ten business days upon receipt of the question.
I ask unanimous consent to insert in the record the documents included on the staff hearing documents list. Without objections to order, and without objections, the subcommittee is adjourned. Thank you.
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