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#SubEnergy Kicks Off ‘Powering America’ Series with Review of Electricity Markets

Jul 18, 2017
Committee begins comprehensive, long-term review of developments and challenges in the way we generate, transmit, and consume electricity

WASHINGTON, DC – The Subcommittee on Energy, chaired by Rep. Fred Upton (R-MI), today held its first hearing as part of its recently announced “Powering America” series. The Powering America series provides members the opportunity to explore electricity markets, learn more about electricity generation, distribution, and consumption, and the resiliency of the electric grid.

The nation’s electricity industry is undergoing a period of transformation due to technological innovation and market competition. At today’s hearing, members heard from a variety of industry stakeholders regarding current issues and developments across the electricity sector including efforts to maintain grid reliability, transmission planning, and efforts to ensure electricity markets promote efficient outcomes.

Chairman Upton listens intently as witnesses deliver their opening statements

“The nation’s electricity industry and system is undergoing a significant period of transformation. This transformation is affecting the composition of the country’s electricity generation mix, the way industry and regulators are approaching grid reliability, and how federal energy policies are interacting with state policies,” said #SubEnergy Chairman Upton. “Many of the recent developments and changes within the electricity sector are creating tremendous benefits for American consumers. Going forward we must strive to enhance the generation, delivery, and marketing of electricity in a way that continues to enrich the lives of all Americans.”

Joseph Kelliher, Executive Vice President of NextEra Energy, Inc., discussed why he believes electricity markets remain competitive today, commenting, “I believe our electricity markets are working well and are workably competitive. U.S. electricity markets are undergoing a fundamental transition driven primarily by economics, the result of low cost natural gas produced by the shale gas revolution combined with increased energy efficiency, lower demand growth, and low wholesale power prices. … This transition is likely to continue, producing an increasingly diverse and more reliable electricity supply. We should keep the consumer in mind.”

Tamara Linde, Executive Vice President and General Counsel at the Public Service Enterprise Group (PSEG), discussed the plight their current fleet of baseload nuclear plants face in today’s environment, testifying, “While the economic stress facing PSEG’s nuclear plants has a host of aggravating factors including significant additional regulatory costs imposed on nuclear plant operators by the Nuclear Regulatory Commission over the past 15 years, the proliferation of non-dispatchable renewable and demand-side resources enabled through federal and state tax policy, renewable portfolio standards and other regulatory treatments such as net-metering, the primary driver is a wholesale electricity market design that fails to adequately value and compensate these plants.”

Steven Schleimer, Senior Vice President of Government and Regulatory Affairs at Calpine Corporation, raised his concerns with the current state of electricity markets, stating, “Due to state policymaker actions to subsidize certain generation, competition is being threatened. A hybrid model, where states subsidize some generation but leave the remaining generation to rely on the market for their revenue, is unsustainable. A coordinated effort is needed between all the states, FERC, and market participants to develop solutions that allow states to pursue their policy goals while protecting the wholesale markets. Such an effort will require leadership and commitment to competitive markets, but if we have both, we will be able to develop solutions that ensure the continued viability of these markets.”

Chairman Walden delivers his opening statement

“American consumers have come to expect safe, reliable, and affordable supplies of power – regardless of how they receive their electricity. New market participants offering advanced technologies and innovative services are changing the face of the industry faster than many have expected,” concluded Chairman Walden. “As we continue our Powering America series of hearings, I look forward to learning more about the current state of this vital industry. At the end of the day, our goal is to serve the best interests of consumers and today’s hearing provided us with ideas to further that mission.”

A background memo, witness testimony, and an archived webcast can be found online HERE.