Wires, Rates, and States: Permitting Transmission for Reliable and Affordable Power

Well, good morning, the subcommittee on energy will now come to order, and the chair recognizes himself for five minutes for an opening statement. Welcome to today's hearing and we thank our witnesses for Today, this today's discussion will be an important opportunity for our subcommittee's continued work to modernize the power sector and chart a path towards energy abundance affordability and economic growth. The witnesses before us will provide practical insights into why states need to maintain authority over permitting decisions as well as the engineering and affordability considerations utilities account for through their integrated planning processes. Throughout this congress, our subcommittee has received extensive expert testimony on key issues facing the electric system. We discussed the affordability challenges for American families. We've heard directly from NERC and our grid operators about the reliability crisis. We've also examined the need for reliable energy during winter storms, and power for future industries like AI and manufacturing. Demand for reliable energy is rising faster than at any point in history. Clearly, we need more generation, transmit and transmission, and a and a great deal more of it. Significant investment is flowing into the power sector. To protect rate payers, states, utilities and grid operators alike, must employ methodical planning practices to ensure investment is going to the most reliable and affordable infrastructure needed to keep the lights on, twenty four seven three hundred sixty five days a year but today's discussion doesn't occur in a vacuum for years policymakers and stakeholders have called for permitting reforms that make it easier to build in this country there is insurmountable evidence that certain federal authorities have been in incessant impediment to the timely construction of infrastructure energy projects of all stripes are heavily litigated challenged in court in fight in uphill battle against the seemingly endless regulations The situation for transmission is no different. Time and time again, transmission development is impeded by the weaponization of federal environmental permitting laws that extend project timelines and raise costs. At the end of the day, those costs are borne by the consumer and limit economic growth. However, the term permitting reform is grounded in the idea that we need to get the federal government out of the way not to add more bureaucracy. This brings us to today's topic, proposes to federalize transmission processes and usurp state authority to serve the interest of a few while placing the costs on all. Transmission planning across the country varies depending on market structures and regulatory models. What they have that they have all in common is an extensive bottom-up planning process to produce the most cost-effective and reliable options to connect generating resources to load centers. when approaching and when approaching a reliability challenge sometimes the solution is building more transmission sometimes that solution is building generation closer to the load and like all decision making processes some options are tossed aside the phones have big wires to connect to weather dependent resources often say that they're cheaper because no one pays for the sun to shine, or wind to blow simply put if there were if this was true utilities we'd already be doing it In reality, multi-state inter-regional transmission lines can come with billion dollar price tags and bring engineering complications that raise costs and undermine system reliability. We find ourselves in a reliability crisis because of the disastrous public policies that drive out base load power and increased reliance on intermittent resources. These policies ignore the reality of transmission costs stranded us since a prematurely retiring base load power and the need for backup during extreme weather events. just like we've seen during winter storm fern. At the end of the day, these costs are all placed into the utility bills of American households. The data speaks for itself. For the last two decades, utilities the utility spending on generation has plummeted because of abundant sheet natural gas while transmission and distribution spending have skyrocketed because of intermittent energy mandates permitting reforms is necessary but we need to correctly diagnose what issues are practically inhibiting efficient transmission development. I look forward to today's discussion to examine how states are best suited to examine those costs and weigh the pros and cons of transmission infrastructure, not Washington bureaucrats. With that, I yield back the balance of my time and recognize the General Lady from Florida, the ranking uh member of the subcommittee for five minutes for an opening statement.

Well, thank you, Mr. Chairman, and good morning, everyone. Electric bills are just way too high right now and Republican policies are making it worse, so it is very important that we work together on a, to chart a course correction uh as soon as possible. One of the most important things that Congress can do to lower electric bills and address the new demand for electricity is to modernize America's disjointed electric grid the grid is old it's inefficient and its modernization is stymied by too many outdated barriers. How old? Um, most power lines in the United States are fifty to one hundred years old, and many were not built to withstand the more frequent and intense extreme weather events. How inefficient? Typically, we are using only fifty pre fifty-three percent of the existing grid capacity, because the grid is built for peak energy usage, so we are not using what we already have. Uh, and you may have abundant power generation, a state or two away, but barriers keep it all disconnected. We should improve early planning to move power where it is needed, when it is needed. The planning, permitting, and payers are too complex, and Congress needs to address it. Plus, the increases in energy demand present an opportunity to build a modern electric grid and transmission system that meet the challenges of the twenty-first century, and benefit everyone. And the good news is that when you invest in transmission you save Americans money. For every one dollar invested in well-planned, long uh long-distance, high-capacity transmission, we get five dollars back in reliability and economic benefits. These benefits aren't just hypothetical. If everyone, if every region embraced robust transmission planning, like the Midwest, we could save every household in the United States over a hundred dollars on their annual electric bill. A robust transmission grid also makes our energy system more reliable. In its long-term reliability assessment released this year, NERC highlighted how transmission can help grid planners take advantage of geographic diversity during extreme weather like winter storms. NERC called on policymakers to streamline siting and permitting processes to remove barriers to transmission development. Utilities. We intend to spend about thirty five billion a year on transmission, however most of those investments occur in siloed local projects. Essentially no major inter-regional transmission projects have been planned and built in the last decade. They made up only two percent of new lines installed from twenty eleven to twenty twenty. Two years ago NERC recommended adding thirty five gigawatts of inter-regional transfer Studies show that inter-regional transmission could save customers billions of dollars a year. And smart transmission policy insulates consumers from uncertainty. If we all agree that AI data centers should pay their own way, then let's address that so that the higher costs are not forced on ordinary consumers. Well-coordinated transmission helps the power system adapt cost-effectively to future changes. And as our grid becomes more interconnected, it will be easier to bring low-cost generation online faster and get that electricity to where it is needed. Well-planned transmission must be a key part of our energy strategy, and Congress should pass thoughtful policies to reform the ways we plan, permit, and pay for it. It is clear what we need to do. In the near term, we must get more out of the existing grid, uh, that we've already paid for. We can pass policies that increase grid utilization and incentivize incentivize the deployment of grid enhancing technologies and virtual power plants. These are quick, ready to deploy, and proven solutions that have scaled, could unlock hundreds of gigawatts of capacity and save billions of dollars annually. On transmission, we should focus on targeted policy reforms, such as streamlining streamlining the backstop authority for interstate transmission lines, while providing guardrails to protect con customers, benefit local communities, and respect state authority. Congress should clearly establish the benefits of transmission. The cost of that transmission should then be allocated consistently among con customers who benefit. We've done this with the interstate highway system. There is no reason that we shouldn't replicate that. We have the know-how. We have the experts. We can do this. This is the United States of America. These are challenging issues, but this committee should be able to tackle complicated issues on a bipartisan basis. I look forward to hearing from our witnesses today as we work towards solutions that result in a more reliable, resilient grid that can deliver affordable energy to our neighbors back home. Thank you and I yield back.

Well, thank you very much. The gentleman yields back and the chair now recognizes the gentleman from Kentucky, the chair of the full committee, for five minutes for an opening statement.

Thank you, thank you, Mister uh Chair. Appreciate um the opportunity to be here and our witnesses for being here today. The American electric system is one of the most complex machines ever built. Uh, it delivers four point four trillion kilowatt hours of power year-round, twenty-four hours a day, seven days a week to our homes and businesses. Requires one point two one thousand two hundred gigawatts of generation, three thousand utilities, sixty-four thousand miles of high voltage lines and many millions more miles of distribution lines connecting to meters. While a few, with a few exceptions, amazingly this engineering marvel was permitted and built under the jurisdiction of state regulators, not the federal government. And while the Power Act establishes FERC as a rate regulator that oversees transmission to wholesale rates in interstate commerce, decisions about physical, electric, infrastructure has been a state responsibility under federal law. In today's hearing, we'll examine the long-standing role of states permitting process and how best to ensure transmission, permitting and construction is efficient, predictable and provides affordable and reliable power. Testimony from utilities, grid operators and state regulators before the committee, uh, this Congress has repeatedly underscored their critical role of bottom-up, integrated planning, which accounts for both generation and transmission and when deciding what and where to build. As a practical matter, this enables consideration works best for what works best for communities and states that is most affordable for rate payers in those areas. As we have heard and and throughout this year there's been a lot of discussion about replacing bottom-up integrated planning and state authorities with more federal control over what and where generation transmission should be built. Part of that, if you look back at the FERC issue order nineteen twenty, is make it easier to socialize cost of transmission for renewable energy thereb- undermining state planning. I I do appreciate the the comment on the the highway system. And as you can drive, gosh, you can go I ten, goes through North Florida from Jacksonville to m- to uh California, but everybody along the way uses the interstate as they go. So we just wanna make sure it's it's a issue for us that if power lines travel through a state but they don't draw off the power line, that it's not the local rate payers paying the cost of that. So those are some things that we have to work together to figure out where we go. Uh, we're going to need more transmission. Uh, I like the system that we have and where it's been built. We are also uh open, we're gonna be discussing where we go, and we're going to need more transmission. Well, we uh, we must build in a way that works for rate payers and for uh, taxpayers, and we need to ensure we have abundant energy. We have to generate it. So what we need to come out of this next few weeks is we need to generate, so we're gonna have to permit generation. We need to draw more electrons, we need to transmit more electrons. And so that's the discussion we'll have and I appreciate um the the the discussion and the words of doing it in a bipartisan way. Uh appreciate that and I yield back.

Thank you. The gentleman yields back the balance of his time. The chair now recognizes the gentleman from New Jersey, the ranking member of the full committee, for five minutes for an opening statement.

Thank you, Chairman Lila. We're here today to talk about affordable and reliable power, something that has been seriously lacking since President Trump was inaugurated for his second term. I'm sure we all remember Trump's promise that he would cut electricity bills in half in his first year. Well, two thousand twenty-five is past and electricity prices have risen by as much as thirteen percent. And they're not likely to go down as a result of the Republicans' big ugly bill, which is expected to increase prices by another sixty percent. And just yesterday new inflation data showed that overall energy prices are up nearly eighteen percent over the last year republicans have spent the last few months scrambling to blame anyone but themselves for skyrocketing energy prices. But here's the truth, republicans are threatening the reliability and affordability of our nation's power grid, and we have to find a way to fix it. The reality is that we're simply not expanding our grid quickly enough, in an era of rapidly increasing power demand a critical way to keep power affordable for americans is to build. Yes. we need to build new power plants but we also need to ensure that the electricity from those power plants can actually move around the country to where it's needed if we don't have a big enough grid we can build all the generation we want but we simply won't be able to actually power anything with it during winter storm fern earlier this year there was ample available power in the great plains but it physically could not move to areas that needed power because of grid constraints and this led to price spikes in the mid atlantic in the southwest and texas that could have been avoided if we had a more efficient grid. It's always been important to ensure that transmission developers have the tools they need to enhance the backbone of our nation's power grid as efficiently as possible. But the challenges associated with AI data centers have firmly moved the build out of our grid from something that was simply a good idea to something that is national that's a national necessity. Our power grid faces unprecedented challenges. Unfortunately, Republicans have waged war on some of the cheapest sources of energy, just because Trump doesn't like how they look. The Trump administration has illegally thrown billions of dollars of investments, Democrats made in our power grid into jeopardy. Now, if those projects are built, they'll be paid for by higher monthly power bills for American families, just another way Republicans are increasing bills nationwide. Instead of encouraging utilities to invest in new low-cost sources of electricity, Trump's Department of Energy is forcing old inefficient and expensive power plants to stay on-line despite local grid operators and utilities often begging the administration to let the plant shut down and be replaced by more efficient and affordable sources of power. So I'm afraid the Republicans are trying to move us backward rather than forward. In two thousand five Congress recognized that the federal government should play a role in siting the most nationally important power lines. But unfortunately the new the law never worked. In the twenty-one years since it passed, not a single power plant has been built using these authorities. Surely now is the time for us to update the law to allow FERC to fulfill its intended purpose. And while we need to make it easier to build power lines, we must make sure that our process to plan them makes sense in the first place. Right now, grid planning processes are far too fragmented, utilities each exchange in piecemeal planning, resulting in customers spending a lot of money for an inefficient power grid. If we build out the grid in a smart way, it will improve reliability and affordability. So utilities and grid planners should be focused. on building more efficient and cost-effective power plants, even when those lines may cross over the territory of several different utilities, or may introduce competition that monopoly utilities would rather avoid. Finally, FERC should require utilities to engage in more efficient inter-regional grid planning and should determine who benefits from new power plans, new power lines, I should say, and therefore who is responsible for the cost. Frankly, these shouldn't be controversial concepts, uh planning smarter and make it easier to build the lines our nation needs. Should be common sense and should be bipartisan. But in any case, uh, I appreciate having this hearing today, uh, Mister Chairman. It's very important. Uh, yield back the balance of my time.

Well, thank you very much. The gentleman yields back the balance of his time. And this concludes member opening statements. The chair reminds members that presumed to committee rules, all members' opening statements will be made part of the record. The subcommittee thanks our witnesses appearing today and taking the time to testify for the subcommittee. Each witness will have the opportunity to give an opening statement, followed by a round of questions from our members. Our witnesses today are the Honorable Tony Clark, former AFER Commissioner and Executive Director National Association of Regulatory Utility Commissioners. Mister Randy S. Howard, the General Manager of Northern California Power Agency. Mister Rob Gramlich, the President of Grid Strategies. Mister Michael Skelly, the CEO and Co-founder of GridUnited. Mister Clay uh Rickard, the Senior Vice President of System Planning, the Southern Company. And the Honorable Mark Christie, the former uh Chairman and Director, Center of Energy and Law at the William and Mary Law School. Again, we appreciate you all being uh before us today and just a quick uh thing if you pull those mikes up close when you uh speak, that'd be great. And also, just again, you probably heard about the lights, uh, you each have five minutes. Four minutes uh will be green, the last minute will be yellow, and if you could wrap up when it turns red that'd be great. So again, we appreciate you all for being here, and Mister Clark, you are recognized five minutes to give your opening statement.

Thank you, Mister Chairman, uh, Ranking Member Castor, and appreciate also the attendance of Chairman uh, Guthrie and Ranking Member Pilon. It's a pleasure to be with you here today. Uh, my name is Tony Clark. I'm Executive Director of NARUC, the National Association of Regulatory Utility. commissioners and i'll be testifying in that capacity but will also be drawing on my experience uh for about sixteen years as a regulator either at the state or federal level about twelve of those years at the north dakota public service commission and a little over four at at FERC uh i'll briefly summarize my testimony there are really five main points that i make in it um the first is that on the issue of of planning regional planning inter-regional planning things like that from a a uh uh a scenario planning standpoint within and across regions states are generally um supportive of the concept of of planning it now why is that it's because state commissions depend on uh a set of facts in front of them to make decisions about what is the best mix of resources for customers so more data and more information that can form that process is a good thing now i say this even while acknowledging that there are sometimes questions about the outer limits technically of for jurisdiction in planning matters and sometimes our members may litigate some of those points, but conceptually the idea of planning, providing information to regulators, I think is a sound concept that's generally uh supported by our members. Um number two, given FERC's prescribed jurisdiction over many parts of the of the grid, states believe that the these planning exercises should build upon and work in harmony with state public policies and decisions um with regard to to planning. federal planning that doesn't build upon state decision runs the risk of of uh contravening the decisions that are made in states and can sometimes result in plans that lead to transmission plans that may be a sub-optimal answer to what the best resource is for customers states have the responsibility given our authority of ensuring that transmission distribution and generation work together to result in the lowest cost retail bill and it's states at the end of the day, who have Um, number three. States are generally supportive of common sense federal permitting reform to the degree that federal permitting reform is defined as as reforming some of those federal statutes that have uh in some cases blocked needed transmission projects and pipeline projects. Um, state commissioners have more interest in this than probably anyone, because we can see how certain investments may be able to result in lower costs for consumers. And so, once a need is established, getting that built is important. And there have been instances where federal laws have made it very difficult for the federal permitting agencies to get that done. And and so, reform of that kind I think is generally well supported by states. Um, but this leads to point number four. Uh, state commissions are generally opposed to permitting reform if it's defined as further preemption of state authority over uh these permitting decisions. We believe that that federal preemption of state authority can lead to a number of bad outcomes. Number one is with regard to that affordability issue, because that assessment of need and comparing transmission projects to other potential investments is very very important. And that by necessity has to be done at the state level because of the retail rate setting authority that we have. And number two, from a landowner access to their permitting authority standpoint, we believe that uh transmission and other projects can be much more effectively cited in a way that doesn't lean on eminent domain and condemnation by having a local permitting authority that can work through those issues, as opposed to having those decisions made here in Washington. And then finally, I would say as a general matter, uh point number five, state commissions are concerned with just the general trend greater federalization of electricity policy. Many of the cost drivers that are now showing up in in folks' retail bills are things that are beyond the oversight of state commissions, but legally have to be passed through. Transmission charges are largely a federal responsibility. Wholesale charges for generation capacity, largely a federal responsibility, especially if you're in an ISO or an RTO. Even things uh with the distribution grid where states have more authority are being greatly impacted. by decisions that are made in Washington DC about investments that need to be made on the distribution grid. So all of these things can combine to create retail bill pressure, and we think the general trend towards making dec- taking decision making from those who oversee directly the retail bill to other officials elsewhere further up the chain um is a concerning trend. Thank you.

Thank you very much. And, Mister Howard, you are recognized for five minutes for your opening statement.

Good morning, Committee Chair Guthrie, um Committee Ranking Member Pallone, Subcommittee Chair Lata, and Ranking Member Castor, and members of the subcommittee. Thank you for the opportunity to testify. My name is Randy Howard. I am the General excuse me, General Manager of Northern California Power Agency, which serves approximately seven hundred thousand customers through sixteen public utilities. and communities across northern and central California. I'm also here today on behalf of the Transmission Access Policy Study Group, or TAPS, which represents municipal utilities, cooperatives, and other transmission-dependent utilities serving communities in thirty-nine states. For public power and other transmission-dependent utilities, transmission is not an abstraction. It's how we keep hospitals running, water systems operating, and community safe and affordable every hour of every day. Your hearing title, wires, rates and states, captures exactly the balance Congress must strike. First, wires, we do need more transmission. Load is growing in many regions driven by industrial development, data centers and electrification. Generation is changing in location and operating characteristics. A strong, well-planned transmission system is essential to the reliability and to accessing least cost resources but transmission is not just about building lines faster. Done wrong, it can raise costs without delivering benefits, and that brings me to the second point, rates. Transmission is paid for by our customers. Every dollar of unnecessary transmission cost shows up in electric bills. especially for public power utilities that answer directly to local communities. That is why speed alone is not success. Permitting reforms must reinforce rather than bypass regional planning, alternative analysis, and cost discipline. If permitting shortcuts allow projects to leapfrog, planning scrutiny, consumers may pay for infrastructure that is not the most efficient, or cost-effective solution. Congress can help by ensuring that any special federal permitting ref pathway is tied to participation in regional planning and a clear demonstration that a project is the best solution among all the reasonable alternatives. And third, states. States have historically led transmission siting and permitting, and that should continue. States are closer to the local conditions, the community concerns, and environmental trade-offs. Broad federal preemption risk are more, or not less, controversy, and litigation and delays will be a big part of any preemption. That said, there are real federal bottlenecks, particularly when projects cross federal lands or require multiple federal approvals. Congress can improve the coordination, the modernization, environmental review, and establish clear timelines without displacing states' authority. Let me emphasize three additional points that are often overlooked. First, inclusive joint ownership works. When public power and cooperatives are meaningful joint owners of transmission projects, projects are better planned, sighting outcomes improve, financing costs decline, and customer risk is reduced. Second, grid enhancing technologies can help, but incentives matter. Grid enhancing technologies can increase the capacity and reliability at a lower cost in many situations. But mandatory shared saving incentives risk creating windfalls and driving up rates. A better approach is baseline expectations, transparency, and carefully targeted incentives. Third, something that's not talked about enough, but supply chain realities are constraints. Large transformers and other critical equipment now have procurement timelines measured in years. Permitting reform alone cannot overcome these limitations. In closing, permitting modernization is important, but the ultimate goal is reliable and affordable power for our customers. That means focusing on smart transmission, projects that come out of transparent regional planning, respect state leadership, evaluate alternatives, and protect consumers through established Federal Power Act standards. NCPA and TAPs stand ready to work with the subcommittee as you consider reforms that accelerate the needed infrastructure while safeguarding the ratepayers. Thank you and I look forward to your questions.

Thank you very much for your statement, and Mister Gramlich, you are recognized for five minutes for your opening statement.

OK, thank you, Chairman Latta, Ranking Member Caster, Chairman Guthrie and Ranking Member Pallone, distinguished members of the subcommittee. Thank you for the opportunity to testify and for the mandatory civics lesson for my two of my kids sitting behind me. My name is Rob Gramlich. I am founder and president of Grid Strategies, a consulting firm providing research on the US transmission grid and power markets. Uh, I would like to explain today the importance of transmission to consumers, uh, and suggest some actions Congress can take. First and foremost, uh, transmission can be a part of a strategy to reduce electricity bills. The grid is congested. Uh, congestion costs have doubled in recent years, meaning wholesale power prices are rising because of limited delivery capacity. It's like dozens of straights of Hormuz all around the grid. We see grid constraints, uh, also in the increasing time and cost of connecting new loads and generation. A few years back, Uh, in fact, when I testified in this committee maybe five years ago, it was all wind and solar in the queue, and that's probably what you heard screaming about high congestion costs and interconnection. Well, guess what? It's a very, uh, different portfolio now. It's more diversified. And if you're a gas plant or a new large load or anything else trying to connect to this grid, you're saying the same thing that they were saying five years ago. The interconnection costs and timelines are extreme. And that's because the grid is congested. Benefit cost ratios are very high, typically right now for transmission, uh because of the the congestion. If you unlock that that congestion, you can flow more power to consumers. Transmission also supports reliability, perhaps more than any other single option. Transmission lines themselves typically have ninety-nine point eight five percent reliability or availability across all voltage levels, far higher than any generation source. And then what we see in severe weather, events. We see this time and time again when there is a polar vortex or other type of severe weather. You have tens of gigawatts that are moving from region to the uh one region to the next, that is, when there is enough capacity, but often there is not enough capacity, and so lights go out because of insufficient inter-regional transmission. Uh, transmission also f- supports US global economic competitiveness in an electronic era. China, Southeast Asia, India, uh other leaders and competitors in technology recognize the importance of of grid capacity. uh They are building at far higher rates, faster rates than we are. China was building eighty times more high voltage transmission than we were in this country in the last decade and that's continuing into this decade. Planning uh can achieve the efficient scale. Larger lines deve- deliver much more power for less money. They're a massive in economics jargon, massive economies of scale in transmission. The cost per megawatt delivered is a quarter as as much for seven sixty-five KV lines versus the smaller two thirty KV lines, while also requiring a quarter as much land to li- to deliver the same amount of power. So we wanna minimize impact on communities and land use. We want the larger lines, which means you have to proactively plan for all the purposes together to get those efficiencies for consumers and efficient land use. There's a lot of talk about data centers and on-site generation, uh and islanded or off-grid types of uh solutions because a lot a lot of the new technology companies want speed to power, they want it yesterday, the grid is too slow, utilities are too slow, et cetera. Well, if you really ask them, every single one of those customs customers would far prefer to be attached to the grid. They want grid access, yes they'll do some other things in the interim, but only as a pathway to get full grid network access and if you connect those loads to the grid, you have to bolster the grid not just locally,

Mm-hmm.

but around the region. Action i- in Congress is needed. What you might say, well um, you know utilities are are great organizations and companies are taking care of this problem, why is Congress even, why are you even having this hearing? Action is needed because the fragmented grid we inherited cannot deliver what modern society needs from the power system. We have uh three thousand owners of transmission around the system. That's how the industry grew up. Uh, and yet in the eastern and western interconnection, they are two physically uh synchronous machines. They are single machines from Maine to Louisiana to North Dakota down to Florida. Uh, and yet it's almost all managed at the local level. So we're not saying federal takeover, I certainly not, but we're saying more federal coordination or just fix the federal coordination that exists, the federal backstop siting that exists in law since the two thousand three blackout congress put federal backstop in the two thousand five act it's broken it doesn't work as chairman Pilon mentioned so uh just uh fixing some of these federal authorities uh and clarifying some other things cost allocation gets uh a lot of discussion what's being discussed in the senate really just defines what the benefits are so we don't litigate for ten years over those those terms and with that my time's up thank you very much for the opportunity

well thank you very much and mister skelly you are recognized for five minutes for your opening statement

Thank you very much. Thank you, uh, Chairman Latta, ranking member members of the subcommittee. Uh, thanks for the opportunity to talk about the urgent need to build out America's grid. My name is Michael Skelly, and I'm one of the founders and CEO of a company called GridUnited based in Houston, Texas. And we develop large multi-state transmission lines, typically uh hundreds of miles long. We focus on connecting the grids that Mister Gramlich referred to. We have several grids in the country and we work on connecting the two, uh, because that's one of the best ways to get a more reliable grid, uh, a more secure grid, and a grid that can take advantage of all the resources, uh, that we're blessed with in this country. And our days are spent, uh, working with landowners, with communities, with state regulators, county officials uh with grid operators with the supply chain and with uh utility partners to put together these large uh ambitious projects and like almost all transmission that gets built we are utterly generation agnostic uh we don't check what kind of electrons would go on to our wires uh as with all types of transmission the grid is kinda open to all and if you connect a generator the electrons will flow and so um we are uh open to whatever type of generation uh might connect to the grid because we're connecting the grid as part of a a network system many many of you all on the subcommittee are uh represent areas where we're active and take a great interest in our projects and we appreciate that interest and uh Thank you for your interest in this topic. So, let me just talk for a moment about one of the big projects that we're doing called North Plains Connector. This line goes from Bismarck, North Dakota uh to Cold Strip, Montana. And we connect the eastern grid with the western grid. And when you connect these two grids, you get a much more uh efficient system, cheap power can flow in one direction, to the other and you also get a more reliable system. You've heard references to big uh uh weather induced events when one region of the country is short on power and the other region needs it our lines can help uh solve that and this is typical of other transmission when you build transmission that's bigger than the weather you can help solve some of the reliability challenges and meet new load growth that we that we very much want to meet. Um, our uh projects, we we uh on North Plains Connector, we have brought together uh ten different utilities, uh including some of the uh uh cooperatives that that Mister Howard referenced in in his remarks. Um, and we bring put the projects together and then utilities come and participate alongside of us. So, why do why does this the transmission grid matter so as i was writing this testimony sunday night i i checked in with the grid prices around the country this is a dangerous obsession i might warn you uh but in most of the midwest power prices were around three cents uh in the east the mid-atlantic they were fifty percent higher at four and a half cents uh in the west they were negative in many places because we had too much power at that time and in new england they're around five cents so these price disparities which are not atypical show the need show you that something is wrong with the system if we don't have a infrastructure that can make markets work uh then we're gonna be paying uh too much so what are the solutions these you'll you'll you've been hearing a lot about them but uh the first big solution that we gotta work on is permit reform It takes far too long uh to get projects done and our world, it's it's it we live in a world where it's not death by a thousand cuts, it's death by a thousand delays. And it just takes too long to get through processes. And we need processes that uh respect the the different layers of government, but that also help us work towards a decision. And the other issue that we need to focus on is cost allocation, because we can come up with ways to measure the benefits of new projects and the costs of new projects and we have ways we do this at a regional level we can do this at a inter-regional level to come up with projects that are beneficial to the grid as a whole, and we can come up with machi- mechanisms to determine who benefits and who should pay. Thank you very much.

Well, thank you very much for your opening statement, and Mister uh Rickard, you are recognized for five minutes for your opening statement.

Thank you, Mister Chairman. Chairman Lada, Ranking Member Caster, Chairman Guthrie, Ranking Member Palone, and distinguished members of the subcommittee, thank you for the opportunity to testify today uh on behalf of Southern Company. My name is Clay Rickard, and I'm the Senior Vice President of System Planning, where I lead both generation and transmission planning. My job is to design the least cost, most reliable system for all customers. I appreciate the invitation to testify today to share Southern Company's story as an example of a region that is using smart planning to rapidly build generation and transmission to meet rising demand while making sure growth is benefiting everyone especially existing customers. The Southeast is experiencing unprecedented growth, and our electric utilities are moving quickly to continue delivering affordable and reliable power. Today, the demand for power across our electric service territories has culminated in twenty-three thousand megawatts of contracted or late stage load. Beyond that, there are over seventy-five thousand megawatts in our queue, which, combined with what is already contracted, is more than double the size of Southern's existing system. The growth is real, and it is why Southern's operating companies are currently taking on one of the largest expansions in any utility in history bringing more than ten thousand megawatts of diverse new dispatchable resources online, including over four thousand megawatts of batteries. We're also making substantial investments to enhance our grid by building over seven hundred and fifty miles of new line, reconducting or rebuilding over thirteen hundred megawatt thir thirteen hundred miles of existing line, and installing grid enhancing technologies, or GETs. And we are accomplishing all of this without any delays in our generator interconnection queue process. In short, we are relentlessly executing to make sure the energy is there when it is needed by our customers. Just as important in meeting this growth is doing it in a way that benefits our customers, through smart planning and robust contracting We're making sure that new large customers like data centers pay their full share and that costs are not passed on to families and small businesses. With this policy in place, we have committed to multi-year rate freezes in Alabama and Georgia and further committed to customer savings of at least one point six billion in Georgia due to the results of the revenues from these large customers. We are proving that growth done right can benefit everyone. This success is due to our vertically integrated, state-regulated market structure and our long-term integrated resource planning or IRP process, which determines the least cost, most reliable energy solution for our customers. This transparent and orderly process enables us to holistically plan our system under the careful oversight of our commissioners who hold us accountable for reliability and affordability and they are best positioned to understand the energy needs of their states. In addition to evaluating all forms of generation, demand response, energy efficiency, and power from other regions transferred across inter-regional lines, our IRP process also includes long-term transmission planning designed to deliver the lowest cost, most reliable power for all customers. We run thousands of simulations to make sure that we are designing the most optimal grid for our customers. Our planning process does not prejudge outcomes. If a project makes sense for our customers, we will evaluate it. We also evaluate whether we have sufficient inter-regional transfer capability to import power from our neighbors. Importantly though, we have never been transmission constrained during a peak event. We evaluate inter-regional lines as an option, and our experience at this is that these lines have not been economic compared to other solutions. If those lines were the least cost, most reliable solution for our customers, we would build them. Congress can do two things to enable transmission and energy infrastructure. First, Congress can enable growth and protect customers by allowing state processes that deliver reliable affordable power like our state-regulated IRP process, to continue working. While we recognize that there are areas of the country that experience challenges building transmission and discussions about potential solutions are taking place we respectfully request that Congress avoid actions that would disrupt the least cost reliability-based planning system that is working well in the Southeast. Second, Congress can expedite critical energy infrastructure development, including transmission, by passing permitting reform, including changes to NEPA, the Clean Water Act, and judicial review in order to provide more certainty in the permitting and construction process. These changes would unlock transmission, especially in areas of the country that struggle with transmission development. Thank you for the opportunity to testify before this subcommittee today. I look forward to your questions and explaining more about how Southern Company's holistic planning process is delivering growth and benefiting customers in the Southeast.

Well, thank you very much for your opening statement, and Mister Christie, you are recognized for five minutes for your opening statement.

OK. Chairman Latta, Ranking Member Caster, uh, I'm gonna recognize Chair Guthrie and Ranking Member Pallone, thank you all for the honor of appearing uh in front of you again. I've spoken in front of you as a former FERC Commissioner and Chair, and prior to that I spent seventeen years as a Virginia Utility Commissioner, so I'm speaking to you from the perspective of somebody who's been both a federal and a state regulator of the very issues we're talking about today. Um, state regulators want to build transmission. I personally voted for well over a hundred transmission projects in Virginia. uh, state regulators wanna build transmission, the premise that they don't and they have to be overwritten, I think is totally false premise. There's four points I wanna make in in summary uh for you. First of all, we need to build transmission. I mean as a state regulator who voted for a lot of transmission, we need transmission. But transmission is very costly. It's been one of the fastest growing parts of consumers' monthly bills. And transmission ought to be built to serve consumers, with all due respect, not to serve transmission or generation developers. It ought to be built to serve consumers. That's my first point. Second point I wanna make. Transmission should not be considered in a vacuum. Transmission is part of the entire utility system, which has three major elements. Transmission is only one of them. The other two elements are generation and distribution. And all of those should be planned together as a process of what's called integrated resource planning. To produce a document with another acronym in this business, IRP. State regulators have been doing this for decades. I sat on a lot of IRP proceedings. And so, state regulators are in the position of balancing the needs, whether the transmission solution is the best, whether the generation solution is the best, whether the distribution upgrades might be the best, that's that's all of what goes into integrated resource planning. State regulators do that. Third point I wanna make, which is based on the previous two. So-called backstop citing authority is based on a false premise. The premise is that state regulators, number one, don't wanna build transmission, so when they say no, uh a federal agency like FERC ought to swoop in and say yes, you're gonna build it anyway. The false premise is number one, the state regulators don't wanna build transmission, they uh we do, when I was a state regulator I'd say we, state regulators do wanna build transmission. The premise of saying well let's give FERC backstop sighting authority so they can override a st- a state utility commission that says no first of all why'd the state commission say no? In all likelihood they said no because hundreds of people came out and didn't want the project built, so it's you're really overriding people that state more than you're overriding the utility commission, which is inclined to say yes. Secondly, backstop siting authority violates the very principle that the utility system is the transmission's not in a vacuum. It's part of all three elements, generation, transmission, distribution. And all three ought to be considered and planned comprehensively. And when you slice out one part like transmission and say, if the state says no to a project, we're gonna take it to FERC, and let them override the state. And I can tell you, FERC h having been there, FERC does not have the local expertise to to be doing uh permits for literally hundreds of transmission projects across this country. Fourth point. And I know that's not the the big issue today, but but it's been proposed up here. Any proposal to do like a mandatory inter-regional transmission mandate where you f- you tell FERC to enforce uh, pick two regions, pick two RTOs, and there has to be like X percent of transmission built. Again, you're taking transmission in a vacuum instead of looking at it the way it ought to be looked at which is it's a utility asset just like generation assets, just like distribution assets, and it should not be the subject of an a priori mandate that says we're gonna pick a number in order to be built. If y- if you're really concerned about consumers mandating literally tens of billions or hundreds of billions of dollars worth of transmission which is very costly, to be built through some mandatory inter-regional mandate is not gonna serve consumers. It is not gonna serve consumers. And I would add this point. Almost all the transmission that's that's built in America, certainly in the RTOs, is going into what's called rate base. The utilities, the transmission owners are getting formula rate treatment, of course. They're getting dollar for dollar recovery, plus they're getting a profit on it called ROE, consumers pay every nickel. So if you're concerned about consumers, that's not the way to go. So, he, my final conclusion on this is we need transmission. Transmission is costly. It needs to be built to serve consumers with reliable power. If you put consumers first, we'll build the transmission we need along with other utility assets. Thank you again, Mr. Chairman. I'm, enjoy being here.