WASHINGTON, DC - The Subcommittee on Energy, chaired by Rep. Fred Upton (R-MI), today held its second hearing as part of its recently announced “Powering America" series. Last week, #SubEnergy kicked off the series with a review of electricity markets. Today, subcommittee members heard from all seven Regional Transmission Organizations (RTOs) and Independent Service Operators (ISOs) to get their take on the status of wholesale electricity markets.
#SubEnergy Chair Upton listens to witnesses deliver their opening statements
“Americans have come to expect that electricity will always be available when it’s needed, and it is the role of the grid operators to make sure that this expectation is always met," said #SubEnergy Chairman Upton. “RTOs and ISOs play a vital role in the delivery of power from the generator to the consumer, but it’s a role largely outside the public’s view. By operating and dispatching the transmission system 24/7, the grid operators must ensure that supply and demand is continually kept in balance."
Members and the panel of witnesses discussed the evolving state of electricity markets, protecting the grid against both physical and cyberattacks, and the shifting ways electricity is being generated and consumed across the country.
Representatives from all seven RTOs/ISOs listen to member opening statements
Nick Brown, President and CEO of Southwest Power Pool, discussed the challenges of wind power generation and what needs to be done to successfully integrate it into markets, commenting, “Such rapid and substantial integration of wind into our system comes with many challenges, including dramatic swings in wind output of 10,000 MW in less than 24 hours, and significant and sudden loss of wind generation due to icing and uncertainties inherent to wind forecasting. … Successful integration of wind and other renewable and variable energy resources is dependent on enabling transmission infrastructure, consolidated balancing authorities, and effective market processes."
Keith Casey, Vice President of Market and Infrastructure Development for the California Independent System Operator Corporation, discussed some of the challenges with the transformation of the electric grid, stating, “Notwithstanding the success of the California ISO’s markets and infrastructure development processes, there remain significant challenges to enable the transformation of the electric grid. Two significant challenges are 1) to maintain resources needed for essential reliability services during the transformation of the electric grid and 2) to ensure the infrastructure needed to access a more diverse set of resources across the West to satisfy state renewable portfolio standards.
Richard Doying, Executive Vice President, Operations, for Midcontinent Independent System Operator, Inc., spoke to the dramatic changes in electricity generation in the MISO region, commenting, “In the MISO region, which has historically been heavily reliant on coal-fired electricity generation, the impacts have been noticeable. For example, while coal-fired generation supplied 76% of the region’s electricity production as recently as 2005, that figure has fallen to just 46% today. Conversely, while gas supplied just 7% of the region’s energy in 2005, it supplies about 27% today. And renewable, which were essentially at 0%, are at 8% and growing rapidly today."
Gordon van Welie, President and CEO at ISO New England, echoed Mr. Doying’s comments on the transformation in the way electricity is generated, stating, “New England has made many operational and market-based changes to meet the needs of the region. However, we are fully immersed in a major transformation of how electricity is produced and consumed in New England. Market forces and public policy decisions are impacting both operations and markets, and require solutions in order to fully realize their reliability, economic and environmental potential."
Craig Glazer, Vice President of Federal Government Policy at PJM Interconnection, LLC., spoke to the importance of ensuring market-based solutions when it comes to the shift in sources of electricity generation, stating, “At PJM we believe that market-based solutions are a preferable means to address these issues rather than regulators or legislators guessing as to the ideal energy mix for the future, picking winners and losers and potentially creating new ‘stranded costs’ to be paid by customers if those regulatory guesses don’t pan out."
Bradley C. Jones, President and CEO at the New York Independent System Operator (NYISO), discussed NYISO’s efforts to protect the grid against cyberattacks, “As the systems that control and monitor the power grid become more advanced and interconnected, the scope of physical and cyber security concerns expands. … The NYISO implements the cyber and physical security standards as part of a layered “’defense in depth’ posture that seeks to defend its critical infrastructure assets from incursions… For just one example, we conduct annual desk-top Grid-Ex cyber attack simulations to test our coordinated response capability with grid operators and our partners in national security and law enforcement."
Cheryl Mele, Senior Vice President and Chief Operating Officer at the Electric Reliability Council of Texas (ERCOT), Inc., also discussed efforts to protect the grid against physical and cyberattacks, commenting, “ERCOT maintains a dedicated and integrated cyber/physical security organization and an established strategy for prevention of security breaches - and for response and resilience if they occur…Cyber-threats are fast moving and increasingly sophisticated. Because of these characteristics, information sharing is key in assessment and response… In addressing these modern and ever-evolving threats, ERCOT remains committed to collaboration with relevant government agencies, the industry, and national labs to enhance its and the industry’s security posture."
Chairman Walden delivers his opening statement
“Even though many Americans may not understand the complexities of wholesale electricity markets, one thing most Americans do understand is their electricity bill that arrives in their mailbox each month. The goal of this committee, and I think of the grid operators, is to make sure that consumers are always coming out as winners. If we keep this goal in mind when making important policy decisions, I am confident that the U.S. electricity system will continue to thrive and flourish and meet the needs of all Americans," concluded full committee Chairman Greg Walden (R-OR).
A background memo, witness testimony, and an archived webcast can be found online HERE.
