U.S. GOVERNMENT PUBLISHING OFFICE

31–172 WASHINGTON : 2019

THE FISCAL YEAR 2019 DEPARTMENT OF ENERGY 

BUDGET 

HEARING 

BEFORE THE

SUBCOMMITTEE ON ENERGY 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FIFTEENTH CONGRESS 

SECOND SESSION 

APRIL 12, 2018 

Serial No. 115–117 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

(II) 

COMMITTEE ON ENERGY AND COMMERCE 

GREG WALDEN, Oregon 

Chairman 

JOE BARTON, Texas 

Vice Chairman 

FRED UPTON, Michigan 

JOHN SHIMKUS, Illinois 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

STEVE SCALISE, Louisiana 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

GUS M. BILIRAKIS, Florida 

BILL JOHNSON, Ohio 

BILLY LONG, Missouri 

LARRY BUCSHON, Indiana 

BILL FLORES, Texas 

SUSAN W. BROOKS, Indiana 

MARKWAYNE MULLIN, Oklahoma 

RICHARD HUDSON, North Carolina 

CHRIS COLLINS, New York 

KEVIN CRAMER, North Dakota 

TIM WALBERG, Michigan 

MIMI WALTERS, California 

RYAN A. COSTELLO, Pennsylvania 

EARL L. ‘‘BUDDY’’ CARTER, Georgia 

JEFF DUNCAN, South Carolina 

FRANK PALLONE, JR., New Jersey 

Ranking Member 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

MICHAEL F. DOYLE, Pennsylvania 

JANICE D. SCHAKOWSKY, Illinois 

G.K. BUTTERFIELD, North Carolina 

DORIS O. MATSUI, California 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

JERRY MCNERNEY, California 

PETER WELCH, Vermont 

BEN RAY LUJA ́ N, New Mexico 

PAUL TONKO, New York 

YVETTE D. CLARKE, New York 

DAVID LOEBSACK, Iowa 

KURT SCHRADER, Oregon 

JOSEPH P. KENNEDY, III, Massachusetts 

TONY CA ́ RDENAS, California 

RAUL RUIZ, California 

SCOTT H. PETERS, California 

DEBBIE DINGELL, Michigan 

(III) 

SUBCOMMITTEE ON ENERGY

FRED UPTON, Michigan 

Chairman 

PETE OLSON, Texas 

Vice Chairman 

JOE BARTON, Texas 

JOHN SHIMKUS, Illinois 

ROBERT E. LATTA, Ohio 

GREGG HARPER, Mississippi 

DAVID B. MCKINLEY, West Virginia 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

BILL JOHNSON, Ohio 

BILLY LONG, Missouri 

LARRY BUCSHON, Indiana 

BILL FLORES, Texas 

MARKWAYNE MULLIN, Oklahoma 

RICHARD HUDSON, North Carolina 

KEVIN CRAMER, North Dakota 

TIM WALBERG, Michigan 

JEFF DUNCAN, South Carolina 

GREG WALDEN, Oregon (ex officio) 

BOBBY L. RUSH, Illinois 

Ranking Member 

JERRY MCNERNEY, California 

SCOTT H. PETERS, California 

GENE GREEN, Texas 

MICHAEL F. DOYLE, Pennsylvania 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

PETER WELCH, Vermont 

PAUL TONKO, New York 

DAVID LOEBSACK, Iowa 

KURT SCHRADER, Oregon 

JOSEPH P. KENNEDY, III, Massachusetts 

G.K. BUTTERFIELD, North Carolina 

FRANK PALLONE, JR., New Jersey (ex 

officio) 

(V) 

C O N T E N T S 

Page 

Hon. Fred Upton, a Representative in Congress from the State of Michigan, 

opening statement ................................................................................................ 2 

Prepared statement .......................................................................................... 3 

Hon. Bobby L. Rush, a Representative in Congress from the State of Illinois, 

opening statement ................................................................................................ 4 

Hon. Greg Walden, a Representative in Congress from the State of Oregon, 

opening statement ................................................................................................ 5 

Prepared statement .......................................................................................... 7 

Hon. Frank Pallone, Jr., a Representative in Congress from the State of 

New Jersey, opening statement .......................................................................... 8 

WITNESSES

Rick Perry, Secretary, U.S. Department of Energy .............................................. 9 

Prepared statement .......................................................................................... 12 

Answers to submitted questions 1 ................................................................... 121 

SUBMITTED MATERIAL

Statement of 23 bipartisan Members of Congress ................................................ 74 

Letter to President Donald Trump from Members of Congress .......................... 77 

Statement of Representative David B. McKinley ................................................. 81 

Letter to Director Mick Mulvaney from Pacific Northwest delegation ............... 85 

Statement of the Utilities Technology Council ...................................................... 88 

Statement of the R Street Institute ....................................................................... 90 

Letter to President Donald Trump from Members of Congress .......................... 92 

Letter to President Donald Trump from the International Brotherhood of 

Teamsters ............................................................................................................. 94 

Letter to President Donald Trump from the United Mine Workers of America 96 

Letter to President Donald Trump from the International Brotherhood of 

Boilermakers, Iron Shipbuilders, Blacksmiths, and Forgers and Helpers ...... 98 

Letter to President Donald Trump from the Utility Workers Union of America .......................................................................................................................... 100 

Letter to Secretary Perry from the Energy Industry Trade Association ............ 102 

Letter to Secretary Perry from the Pennsylvania Public Utility Commission ... 107 

Letter to Secretary Perry from FirstEnergy 2

Response letter to Secretary Perry from PJM ....................................................... 113 

Letter from NEI to Chairman Walden ................................................................... 115 

1 The committee did not receive a response to Mr. Perry’s submitted questions 

for the record by the time of printing. 2 The information can be found at: https://docs.house.gov/meetings/IF/ 

IF03/20180412/108114/HHRG-115-IF03-20180412-SD049.pdf. 

(1) 

THE FISCAL YEAR 2019 DEPARTMENT OF 

ENERGY BUDGET 

THURSDAY, APRIL 12, 2018 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON ENERGY, 

COMMITTEE ON ENERGY AND COMMERCE, 

Washington, DC. 

The subcommittee met, pursuant to call, at 10:00 a.m., in room 

2123 Rayburn House Office Building, Hon. Fred Upton (chairman 

of the subcommittee) presiding. 

Members present: Representatives Upton, Olson, Barton, Shimkus, Latta, Harper, McKinley, Kinzinger, Griffith, Johnson, Long, 

Bucshon, Flores, Mullin, Hudson, Cramer, Walberg, Duncan, Walden (ex officio), Rush, McNerney, Peters, Green, Doyle, Castor, Sarbanes, Tonko, Loebsack, Schrader, Kennedy, Butterfield, and Pallone (ex officio). 

Staff present: Mike Bloomquist, Staff Director; Samantha Bopp, 

Staff Assistant; Daniel Butler, Staff Assistant; Kelly Collins, Legislative Clerk, Energy/Environment; Wyatt Ellertson, Professional 

Staff, Energy/Environment; Adam Fromm, Director of Outreach 

and Coalitions; Jordan Haverly, Policy Coordinator, Environment; 

Ben Lieberman, Senior Counsel, Energy; Mary Martin, Chief Counsel, Energy/Environment; Drew McDowell, Executive Assistant; 

Brandon Mooney, Deputy Chief Counsel, Energy; Mark Ratner, 

Policy Coordinator; Annelise Rickert, Counsel, Energy; Dan Schneider, Press Secretary; Peter Spencer, Professional Staff Member, 

Energy; Jason Stanek, Senior Counsel, Energy; Austin 

Stonebraker, Press Assistant; Hamlin Wade, Special Advisor, External Affairs; Everett Winnick, Director of Information Technology; Andy Zach, Senior Professional Staff Member, Environment; Priscilla Barbour, Minority Energy Fellow; Jeff Carroll, Minority Staff Director; Jean Fruci, Minority Energy and Environment Policy Advisor; Tiffany Guarascio, Minority Deputy Staff Director and Chief Health Advisor; Zach Kahan, Minority Outreach 

and Member Service Coordinator; Rick Kessler, Minority Senior 

Advisor and Staff Director, Energy and Environment; Jourdan 

Lewis, Minority Staff Assistant; John Marshall, Minority Policy Coordinator; Alexander Ratner, Minority Policy Analyst; Tim Robinson, Minority Chief Counsel; Tuley Wright, Minority Energy and 

Environment Policy Advisor; C.J. Young, Minority Press Secretary; 

and Catherine Zander, Minority Environment Fellow. 

2 

OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MICHIGAN 

Mr. UPTON. Good morning, everyone. So it has been 6 months to 

the day, Mr. Secretary, since you last appeared here and I certainly 

welcome you back. We all do. And at that October 12th hearing we 

talked about your efforts to refocus the Department’s limited budget resources to address what you see as the most pressing challenges. 

You outlined a number of priorities which included promoting 

the Nation’s energy security, strengthening the Nation’s national 

security and nuclear deterrent, spurring innovation, and yes, cleaning up the legacy Cold War sites. The proposed $30.6 billion budget 

that we are discussing today reflects those priorities. There is $15 billion for the National Nuclear Security Administration which would continue critical spending for DOE’s defense 

and national security programs at a level some $2 billion higher 

than the previous administration spending. The budget maintains 

about $5.5 billion dollars for the Office of Science and its fundamental and basic research programs which is the seed bed for innovation. That is up somewhat from the previous administration 

spending. And there is $6.6 billion for the Office of Environmental 

Management, the highest level in some 15 years. 

Concerning the various energy programs, the budget provides $2.5 billion which represents a substantial cut, overall, from the 

previous spending across these programs. And I would encourage 

you to continue working with the committee to identify additional 

authorities that you need to be more effective and I know that you 

will do that. 

We also need to recognize that as our energy systems, market 

mechanisms, and Federal and State environmental policies become 

more entangled, existing and emerging hazards to energy systems 

may have far more reaching consequences than we may be accustomed to. For example, a successful cyber attack on certain business systems would certainly undermine confidence in energy trading systems even if it doesn’t pose a threat to physical operations. 

A major cold event like January’s bomb cyclone can lead to severe shortages in power or energy when people need it most or, as 

testimony at our second modernization hearing this year noted, factors that lead to the decline in our Nation’s nuclear infrastructure 

can undermine long-term national security and the international 

leadership on nonproliferation and safety. 

So these energy policies and energy securities present serious 

challenges, no question, challenges that transcend our current market setup. It is essential for you as Secretary of Energy to survey 

energy and national security risks, to identify the implication of 

our existing energy policy and energy infrastructure, recommend 

appropriate action, and help us make more informed policy decisions. Your budget should provide the resources for you to do that 

work and your leadership should focus on tackling those large and 

consequential questions. 

I look forward to this morning’s discussions and would yield for 

an opening statement to the ranking member of the Energy Subcommittee, Mr. Rush from Illinois. 

[The prepared statement of Mr. Upton follows:] 

3 

PREPARED STATEMENT OF HON. FRED UPTON

It has been 6 months to the day since you last appeared here, Secretary Perry, 

and I welcome you back. At our October 12 hearing, we talked about your efforts 

to refocus the Department’s limited budget resources to address what you see as the 

most pressing challenges. 

You outlined several priorities, which included: promoting the Nation’s energy security, strengthening the Nation’s national security and nuclear deterrent, spurring 

innovation, and cleaning up the legacy Cold War sites. 

The proposed $30.6 billion budget we are discussing today reflects those priorities. 

There is $15 billion for the National Nuclear Security Administration, which would 

continue critical spending for DOE’s defense and national security programs at a 

level some $2 billion higher than the previous Administration’s spending. 

The budget maintains about $5.4 billion for the Office of Science and its fundamental and basic research programs, which is the seedbed for innovation. This is 

up somewhat from the previous Administration’s spending. And there is $6.6 billion 

for the Office of Environmental Management—the highest level in 15 years. 

Concerning the various energy programs, the budget provides $2.5 billion, which 

represents a substantial cut overall from previous spending across these programs. 

This has raised questions and concerns from Congress, which I am sure you are prepared to discuss today. 

The questions the budget raises are important. Examining spending priorities in 

an era of constrained budgets, identifying ways to get more out of each taxpayer 

dollar spent, focusing resources on the most essential and pressing problems are 

critical for successful Secretarial management. 

This Committee’s work on DOE modernization is intended to strengthen your 

ability as Secretary to manage and execute the Department’s missions. 

Our most critical modernization priority right now is to make sure the Department can confront the emerging threats to our nation’s energy security. 

This involves enhancing the Department’s cybersecurity and emergency response 

capabilities, which are needed for a wide range of emerging threats to our energy 

systems. 

Your new office to focus on cybersecurity and energy emergencies makes sense. 

It is responsive to concerns this Committee has raised over the years that DOE’s 

energy security functions were buried in programs with other priorities. 

While this action is a positive step, I think the Department and policy makers 

must do more to address emerging threats and other hazards to our energy systems—natural and man-made. 

This is why we are moving several bi-partisan bills to strengthen and clarify 

DOE’s cyber security and emergency authorities through the Committee process. 

And I would encourage you to continue working with the Committee to identify additional authorities you need to be more effective. 

We also need to recognize that, as our energy systems, market mechanisms, and 

Federal and State environmental policies become more entangled, existing and 

emerging hazards to energy systems may have more far reaching consequences than 

we may be accustomed to. 

For example, a successful cyber-attack on certain business systems could undermine confidence in energy trading systems, even if it doesn’t pose a threat to physical operations. A major cold event, like January’s ‘‘bomb cyclone,’’ can lead to severe 

shortages in power or energy when people need it most. Or, as testimony at our second modernization hearing this year noted, factors that lead to the decline in our 

nation’s nuclear infrastructure can undermine long term national security and international leadership on nonproliferation and safety. 

These energy policy and energy security present serious challenges—challenges 

that transcend our current market set up. It is essential for you, as the Secretary 

of Energy to survey energy and national security risks, to identify the implications 

of our existing energy policies and energy infrastructure, recommend 

appropriateaction—and help us make more informed policy decisions. 

Your budget should provide the resources for you to do this work. And your leadership should focus on tackling these large and consequential questions. I look forward to this morning’s discussion. 

4 

OPENING STATEMENT OF HON. BOBBY L. RUSH, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS 

Mr. RUSH. Good morning. I want to thank you, Mr. Chairman, 

and I want to welcome you, Mr. Secretary. And, Mr. Secretary, I 

really like how you entered into the room. You came over and 

shook hands on our side of the aisle, here, and your personal touch 

means a lot. And in this era of extremism on both sides, really, the 

human touch you exhibited means a lot to me and I want to thank 

you for it. 

Mr. Secretary, I look forward to working with your office to ensure that the Department moves the Nation’s energy policies forward in a way that benefits all Americans and, indeed, benefits all 

communities. History has shown all of us the importance of having 

people with different perspectives and different life experiences at 

the proverbial table when important and consequential decisions 

are initially being considered. 

So when I talk about having diversity in leadership positions at 

DOE, it is not just for the sake of having diversity. But rather, it 

helps to ensure that specific groups or communities aren’t being excluded whether it is intentional or not. When decisions are being 

made regarding which universities are awarded research grants, or 

which businesses can receive contracts, or even how a specific policy might impact a particular community, having a sense of diversity, having real diversity in demographics and in opinion, helps to 

make sure certain groups aren’t being left out. So, Mr. Secretary, 

I look forward to meeting with you soon to discuss your thoughts 

on this very issue and to see how we might be able to work together to make sure that the Department is providing aid and resources to all communities in a way that is sustainable regardless 

of the administration that is in office. 

Mr. Secretary, besides the objective of making sure the Department elects inclusive policies I also have strong views in regards 

to the fiscal year 2019 budget proposal that was put forth by the 

administration. Specifically, this budget proposal will cut the Office 

of Energy Efficiency and Renewable Energy by 70 percent from fiscal year 2018 levels with over $600 million of these reductions coming from energy efficiency programs. 

These proposed cuts are a nonstarter as far as I am concerned. 

They would severely and negatively impact low-income families 

throughout my home State of Illinois and the Nation by eliminating extremely popular and much-needed initiatives such as the 

Weatherization Assistance Program and the STAR ENERGY program. Additionally, the proposal would increase funding for the Office of Science, which funds the 17 national laboratories, by $869 

million from fiscal year 2018 levels, eliminating the Advanced Research Program Agency, slash, Energy, or ARPA-E. 

The budget proposal would also get rid of all DOE loan programs 

including the Title XVII innovative clean energy projects loan program and the Advanced Technology Vehicles Manufacturing loan 

program. Mr. Secretary, this fiscal year 2019 budget proposal reflects exactly the wrong vision for the nNation and it would take 

us backwards on critical issues like climate change, while also 

hampering American innovation and global competitiveness. 

5 

Mr. Secretary, again I want to thank you for being here and I 

look forward to working with you to address these important issues 

going forward. With that, I yield back the balance of my time. 

Mr. UPTON. The gentleman yields back. The chair would recognize the chair of the full committee for an opening statement, the 

gentleman from the good State of Oregon, Mr. Walden, for 5 minutes. 

Mr. WALDEN. Last time it was the great State of Oregon. 

Mr. UPTON. I know. 

Mr. WALDEN. I don’t know how we slid downhill. 

Mr. UPTON. Michigan is the great State. Oregon is a good State. 

OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF OREGON 

Mr. WALDEN. Oh, I see. 

I want to start of course by welcoming the Secretary and Mr. 

Vonglis, thank you both for being here. I believe it is the Secretary’s second visit before our committee and we appreciate that. 

We like regular visitors here. We don’t give, you know, Hilton 

Honor points or anything for your stays, but we do appreciate your 

being here and especially to discuss the fiscal year 2019 budget request from the President. 

As we have explored through the DOE modernization hearings, 

lots has changed at the Department of Energy over the 40 years 

since it was first created especially on the national security and energy front. And I know that is a passion of yours on cybersecurity, 

Mr. Secretary, and protecting our energy grid, our gas pipeline system and all from attack. Under your leadership, Mr. Secretary, the 

Department is undertaking a very ambitious set of reforms to 

strengthen our energy security, to reduce regulatory burdens, and 

to spur economic growth in America. Today’s hearing will provide 

you with an opportunity to update the committee on the progress 

made toward achieving those goals and to discuss how the budget 

request will help further DOE’s mission to advance the national 

economic and energy security of the United States. 

As we have discussed before, DOE and Congress must work cooperatively to adapt management and mission priorities to reflect the 

realities of today’s world. At my direction, Chairman Upton and 

Vice Chairman Barton have been working with Mr. Rush and others in terms of how do we organize the Department of Energy for 

the next generation. And we appreciate that work that is underway 

and we also appreciate the work of your team, Mr. Secretary, to 

give us counsel and guidance from time to time as we work on legislation here to strengthen the physical security and cybersecurity 

of the Nation’s electric grid and pipelines and streamline the process for reviewing LNG export applications. 

The Department of Energy has been a good partner and we appreciate the testimony and your assistance in fine tuning these 

bills. It is my expectation this constructive approach will continue 

to pay off as we dig deeper to address DOE’s core missions of nuclear energy, environmental cleanup, and mission-enabling science. 

The President’s fiscal year 2019 budget requests $30.9 billion for 

the Department to deliver on its commitments to the American 

people. Almost half that budget would go toward the Department’s 

6 

nuclear security mission, roughly a quarter would be spent on environmental management, the remaining amount would go toward 

DOE’s energy and science programs. I am pleased to see that the 

budget also includes funding to fulfill the Department of Energy’s 

legacy cleanup responsibilities including at the Hanford Site. 

Now it is located along the Columbia River, you and I both went 

there last August and I appreciated your doing that and touring 

McNary Dam as well. The cleanup work at Hanford requires deliberate, careful, and very clear oversight by the Department of Energy and we will continue to monitor the projects, particularly involving worker safety. 

As we talked before the hearing, Mr. Secretary, I would love to 

explore your views on what has happened recently there with some 

potential radiation emissions from dust and the effect on workers 

and the overall cleanup. While many technical and logistical challenges remain, we are beginning to see some progress and I trust 

your renewed focus on Hanford will accelerate the results of cleaning up that mess. 

I am pleased the budget includes funding to restart Yucca Mountain project—Mr. Shimkus also probably shares some happiness 

with that move—so the waste currently sited at Hanford and 

around the country will be permanently disposed of. That remains 

a big priority for this committee. We will get Yucca legislation to 

the floor. We passed it out here on a big bipartisan vote, we want 

to get it down to the President’s desk. 

This year’s budget request is notable in its emphasis on energy 

security, in particular in combating physical and cyber attacks to 

our nation’s energy infrastructure. As the sector-specific agency for 

cybersecurity for the energy sector, the Department of Energy must 

ensure unity of effort and serve as the day-to-day referral interface 

for the prioritization and coordination of activities across the government. 

As I said, I got a firsthand look at some of DOE’s testing capabilities and unique facilities and advanced tools during a recent 

visit to the Idaho National Laboratory in Idaho Falls. Mike Simpson, my colleague from Idaho, and I were there. Your experts are 

working to protect our economy and safety of our citizens from 

hackers who are waging a continuous cyber war on our critical infrastructure in this country. 

Just last month for the first time ever, the Department of Homeland Security and the FBI jointly issued an alert formally accusing 

the Russian government of a widespread hacking campaign targeting a wide swath of our energy infrastructure including our 

grid, pipelines, and nuclear facilities. I commend you, Mr. Secretary, for taking this threat as seriously as you do and for your 

efforts to improve the Department’s ability to detect and respond 

to these emergency threats. 

While the Department works to keep the lights on in the event 

of a cyber attack, it is also working to improve the resiliency and 

reliability of the electric grid in the face of a rapidly changing 

power generation mix. So, Mr. Secretary, we appreciate that. I will 

have questions for you about making sure that the Bonneville 

Power Administration remains a vibrant part of the Northwest inVerDate Nov 24 2008 14:18 Jan 18, 2019 Jkt 037690 PO 00000 Frm 00012 Fmt 6633 Sfmt 6633 I:\MY DOCS\HEARINGS 115\HEARINGS\115-117 CHRIS
7 

frastructure. I know the administration may have a different view 

on that but we will overcome that. 

So thank you, Mr. Secretary, delighted to have you here, and I 

yield back the balance of my time. 

[The prepared statement of Mr. Walden follows:] 

PREPARED STATEMENT OF HON. GREG WALDEN

I’d like to begin by welcoming Secretary Perry to his second appearance before 

the Energy and Commerce Committee to discuss the President’s Fiscal Year 2019 

Budget Request for the Department of Energy. As we’ve explored through our ‘‘DOE 

Modernization’’ hearings, a lot has changed since Congress created the department 

over 40 years ago—especially on the national security and energy security front. 

Under the Secretary’s leadership, the department is undertaking ambitious reforms to strengthen our energy security, reduce regulatory burdens, and spur economic growth. Today’s hearing will provide the secretary with an opportunity to update the committee on the progress made toward achieving the goals he set for the 

department, and to discuss how the budget request will help further DOE’s mission 

to advance the national, economic, and energy security of the United States. 

As we’ve discussed before, DOE and Congress must work cooperatively to adapt 

its management and mission priorities to reflect the realities of today. At my direction, Chairman Upton and Vice Chairman Barton have begun this work, and it’s 

starting to bear fruit. Over the last few months, the committee has held legislative 

hearings on bipartisan bills to enhance DOE’s emergency response capabilities, 

strengthen the physical security and cybersecurity of the nation’s electric grid and 

pipelines, and streamline the process for reviewing LNG export applications. DOE 

has been a good partner, contributing testimony and technical assistance to help 

fine-tune these bills. It’s my expectation that this constructive approach will continue to pay off as we dig deeper to address DOE’s core missions of nuclear energy, 

environmental cleanup, and mission-enabling science. 

The President’s FY 2019 budget requests $30.9 billion dollars for the Department 

of Energy to deliver on its commitments to the American people. Almost half of the 

budget would go toward the department’s nuclear security mission, roughly a quarter would be spent on environmental management, and the remaining amount 

would go toward DOE’s energy and science programs. 

I’m pleased to see that the budget also includes funding to fulfill DOE’s legacy 

cleanup responsibilities, including the Hanford Site, which is located just across the 

Columbia River from my constituents. The secretary and I toured Hanford together 

last year. The cleanup work at Hanford requires deliberate oversight by DOE and 

we will continue to monitor the projects, particularly when involving worker safety. 

While many technical and logistical challenges remain, we’re beginning to see some 

progress and I trust that Secretary Perry’s renewed focus on Hanford will accelerate 

these results. I’m pleased the budget includes funding to restart the Yucca Mountain project, so the waste currently sitting at Hanford, and around the country, will 

be permanently disposed. 

This year’s budget request is notable in its emphasis on energy security, in particular, combating physical and cyber-attacks to our nation’s energy infrastructure. 

As the sector-specific agency for cybersecurity for the energy sector, DOE must ensure unity of effort and serve as the day-to-day federal interface for the 

prioritization and coordination of activities across government. 

I got a firsthand look at some of DOE’s testing capabilities, unique facilities, and 

advanced tools during my recent tour of Idaho National Laboratory, where our experts are working to protect our economy and the safety of our citizens from the 

hackers who are waging cyberwar on our critical infrastructure. Just last month, 

for the first time ever, the Department of Homeland Security and the FBI jointly 

issued an alert, formally accusing the Russian government of a widespread hacking 

campaign targeting a wide swath of our energy infrastructure, including our grid, 

pipelines, and nuclear facilities. I commend the Secretary for taking this threat seriously, and for his efforts to improve the department’s ability to detect and respond 

to these emerging threats. 

While the department works to keep the lights on in the event of a cyber-attack, 

it is also working to improve the resiliency and reliability of the electric grid in the 

face of a rapidly changing power generation mix. Congress has provided the secretary with a variety of tools to address grid reliability, including Emergency Order 

authority under Section 202(c) of the Federal Power Act to avert a power crisis. 

While this authority has been rarely used in the past, DOE has already received 

8 

two requests within the past 12 months, including a potentially precedent-setting 

request involving struggling coal and nuclear plants in the Midwest. 

As I’ve stated before, I support an all-of-the-above approach, and feel strongly that 

a diverse generation mix is essential to our nation’s energy security. I look forward 

to continue working with Secretary Perry as he weighs these important issues. 

Mr. UPTON. The gentleman yields back. The chair would recognize the ranking member of the full committee, the gentleman from 

New Jersey, Mr. Pallone, for 5 minutes. 

OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW JERSEY 

Mr. PALLONE. Thank you, Mr. Chairman. 

Secretary Perry, welcome back. I hope you feel welcome, because 

judging by President Trump’s fiscal year 2019 budget, I think here 

in Congress we have more confidence in you and your Department 

than in the President. I say that because we recently passed a bipartisan omnibus appropriations bill that not only increased funding for many DOE programs above the President’s budget request, 

but also increased funding above 2017 enacted levels. 

And I am glad that Congress is going on record that it will not 

accept these severe cuts being proposed by the President. I don’t 

envy the position you are in today, having to defend a Department 

of Energy budget that slashes funding for clean energy research, 

walks away from popular efficiency programs that save consumers 

money, eliminates programs that fund cutting-edge energy research, and helps low-income families weatherize their homes. 

And this budget also slashes federal investments in DOE programs that help mitigate carbon emissions which are, as the 

science clearly shows, the main drive of climate change. The President’s budget proposes a particularly crippling 70 percent cut to 

DOE’s Office of Energy Efficiency and Renewable Energy and that 

office has succeeded in growing clean energy technology deployment, developing cost-saving energy efficiency programs, and promoting advanced vehicles and alternate fuels. If we put the brakes 

on clean energy research, development, and deployment, we risk 

falling behind countries like China that are prioritizing clean energy investments that are spurring new industries and creating 

jobs and this is not a way to grow and expand our economy, in my 

opinion. 

I am also very concerned about the budget cuts to efficiency programs. My frustration is compounded by the fact that this administration has been slow-walking the publication of four product efficiency standards that were completed over a year ago. I simply do 

not understand why you would block the completion of these standards which are cost effective and will save consumers money. The 

standards have also been fully negotiated. The U.S. District Court 

has ordered DOE to finally publish these standards, but the Trump 

administration is currently wasting taxpayer money to appeal the 

order. The law requires the DOE to publish these standards and 

it should be done immediately. 

The budget proposal also makes several misguided changes to 

the structure of the power marketing administrations, PMAs. It directs the Federal Government to sell off a large portion of the 

9 

transmission system in several PMAs; it also requires the PMAs to 

charge consumers for electricity based on the rates of comparable 

private utilities instead of simply recouping costs. And both of 

these actions, I think, are ill-conceived and will lead to higher electricity bills for those who purchase electricity from a PMA and that 

is clearly bad for consumers. 

Another proposal I find especially foolish is the President’s plan 

to abolish the Northeast Gasoline Supply Reserve which was 

launched after several gasoline shortages during Superstorm 

Sandy. The administration’s reasoning for this shortsighted proposal that the reserve, and I quote, has not been utilized since its 

establishment. By that logic, we might as well discard the Federal 

Government’s stockpile of smallpox vaccines because the vaccines 

have not been used since the stockpile was created. And I have introduced legislation to authorize the reserve. I would prefer to work 

with you, Mr. Secretary, to perfect and move that legislation, but 

I certainly will fight any attempt to eliminate the reserve. 

And, finally, I must address the recent request the Department 

received from FirstEnergy and Murray Energy to use section 202(c) 

of the Federal Power Act to keep the companies’ cash-strapped coal 

and nuclear plants operational. Mr. Secretary, judging by your recent statements and those of Assistant Secretary Walker, it sounds 

like you appreciate that section 202(c) is for serious grid emergencies as explicitly designed in the statute and not designed to 

bail out power plants that are losing money. 

So this request by FirstEnergy, in my opinion, is like calling 911 

because your credit card got declined. It has united Republicans, 

Democrats, energy companies and environmental groups, regulators, and consumers in opposition because it is clearly and simply 

not just inappropriate but, I think, illegal. 

So again thank you for testifying before our committee today. I 

know you were here before and, believe me, we appreciate the fact 

that you as a Cabinet member don’t hesitate to come here. Thank 

you. 

I yield back, Mr. Chairman. 

Mr. UPTON. The gentleman yields back. And I would just echo 

many of the positive comments from both sides of aisle that we do 

appreciate your presence here and your frequent visits to Capitol 

Hill and ability to reach out again to both sides. And, Mr. Secretary, you are recognized to give an opening statement and then 

we will proceed with questions. 

STATEMENT OF THE HONORABLE RICK PERRY, SECRETARY, 

U.S. DEPARTMENT OF ENERGY 

Secretary PERRY. Thank you, Mr. Chairman. And Chairman Walden, thank you for your comments. And Ranking Member Rush 

and along to each of you, it is my privilege to be back in front of 

you again. And, Mr. Rush, just as a side comment, I hope that we 

all can reflect a real civility and, frankly, brotherly and sisterly 

love as we go forward in this process. And it is my honor to get 

to serve this country once again in this role that I have today and 

it is a great privilege to be interacting with each of you as public 

servants. You all sacrifice to serve this country and I am greatly 

appreciative of that. 

10 

This budget represents a request to the American people through 

their representatives in Congress to fund the priorities of this Department. It underscores DOE’s commitment to stewardship, accountability, service; I hope that our interactions with you and 

other committees of Congress over the past year have underscored 

that commitment. Our DOE leadership team has appeared before 

congressional committees 23 times in 2017 and we are proud of the 

strong relationship that we have built on the Hill. 

When I first appeared before this committee last year, I committed DOE to advancing several key objectives. I noted that we 

needed to accelerate our exascale computing capability; to modernize our nuclear arsenal; to continue to address the environmental legacy of the Cold War; advance domestic energy production; better protect our energy infrastructure. This fiscal year 2019 

$30.6 billion budget request for the Department seeks to advance 

these and other goals. 

Mr. Chairman, DOE’s supercomputing and other advanced technology capabilities play a crucial role in combating threats to our 

energy and national security infrastructure. As this committee 

knows from its strong bipartisan support of the 21st Century Cures 

legislation, these supercomputing assets are also critical to finding 

cures for cancer, cardiovascular disease, and other health challenges. 

In the Precision Medicine Initiative section of the Cures Act, section 2011, you encouraged the Secretary of Health and Human 

Services to coordinate with the Secretary of Energy to identify and 

address the technology needs for the initiative. So last week I met 

with HHS Assistant Secretary for Health and the Surgeon General 

to discuss how we can work together to address these goals and 

further utilize our capacity to address similar health problems 

faced by American veterans. 

Mr. McNerney, you and I had talked about this with a little more 

specificity and I hope to be able to come up and sit down with you 

because I know that you have a very real interest in this particular 

area and I just think there is extraordinary opportunity here. 

On a parallel track, DOE has been working with the VA to utilize information from millions of cancer patients’ records to determine optimal treatment. We are now bringing these tools to bear 

on veterans’ health issues ranging from traumatic brain injury to 

suicide prevention, prostate cancer, cardiovascular disease; in addition, we recently announced a major RFP to accelerate our efforts 

to regain American leadership in supercomputing. The machines 

we will build and will deploy will be 50 to 100 times faster than 

any of our current computers and will hold immense potential to 

help to answer the most challenging questions in science and medicine and national security. 

Regarding national security let me say that the United States 

Government has no greater or more solemn duty than to protect its 

citizens. Because nuclear deterrents are critical to our defense, last 

year we promised a much-needed upgrading of our arsenal. This 

year we requested an 8.3 percent increase to align ourselves with 

the President’s Nuclear Posture Review and the National Security 

Strategy. We also focused on addressing the environmental legacy 

11 

left at the Department’s sites and this year we are requesting additional funds for that obligation. 

We also have a duty to advance American energy independence. 

Thanks to ingenuity, innovation, we are on the cusp of realizing 

that objective. In the coming years we will produce an abundance 

of energy from a diverse number of sources. Not only are we becoming energy independent, we are exporting to our friends, our allies, 

and our partners. Just last year we became a net exporter of natural gas and today we are exporting LNG to 27 countries on five 

different continents. 

And as our economy expanded and the energy development 

reached new heights, our environment became cleaner. From 2005 

to 2017, we led the world in reducing carbon emissions cutting 

them by 14 percent over that time. The lesson is clear, we don’t 

have to choose between growing our economy and caring for our environment and that is the heart of the new energy realism that I 

recently described. 

To drive further, energy innovations we are requesting continued 

funding for our energy program offices as well as more funding for 

research in fossil fuels and nuclear power including small nuclear 

reactors, the modular reactors. At the Department we have a duty 

to ensure our energy actually delivers to its place of use without 

interruption. Our national and economic security depend on a diversity of fuel sources and the ability to deliver electricity where 

and when consumers need it. 

My greatest focus as the Secretary of Energy is to ensure that 

our grid is not only reliable but that it is resilient. That is why last 

year I promised to step up our efforts to protect and maintain 

America’s energy infrastructure in the face of all hazards. The devastation caused by the 2017 hurricanes highlighted the importance 

of improving grid reliability and resilience in the face of natural 

disasters. We also need to protect it from manmade attacks including cyber attacks. So this year we have requested funding increases 

to strengthen cybersecurity as well as the Department’s cyber defenses. We are also seeking to establish a new Office of Cybersecurity, Energy Security, and Emergency Response which will be led 

by a new assistant secretary. 

Now since many of our nation’s greatest energy breakthroughs 

have come through the work of our national laboratories, we need 

to ensure their ability to innovate. Meeting the people driving our 

innovation agenda and imploring them to reach even higher are 

some of the reasons I am committed to visit each of our national 

labs. Thus far, I have visited 13 of those 17 labs and also visited 

other key DOE sites. At each site one thing was made abundantly 

clear, those who work for the Department are patriots committed 

to serving the American people. 

In the end it will be you, our elected representatives, who will 

decide how to best allocate the resources of our hardworking taxpayers. My pledge to you is that we will do our best to use those 

resources wisely and in pursuit of the vital goals that I have just 

outlined. Thank you and it is my privilege again to be in front of 

you and attempt to answer your questions. 

[The prepared statement of Secretary Perry follows:] 

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Testimony of Secretary Rick Perry 

U.S. Department of Energy 

Before the 

U.S. House Energy and Commerce Committee 

April12, 2018 

Chairman Walden, Vice Chairman Barton, Ranking Member Pallone, and 

Members of the Committee, it is an honor to appear before you today to discuss the 

President's FY 2019 Budget Request for the Department of Energy ("the 

Department" or "DOE"). 

It is a privilege and an honor to serve as the 141

h Secretary of Energy. 

This budget represents a request to the American people through their 

representatives in Congress to fund the priorities of this Department. 

As such, it represents a commitment from all of us at DOE- that we will honor the 

trust of our citizens with stewardship, accountability and service. 

As Ronald Reagan reminded us in his First Inaugural, "We are a nation that has a 

government- not the other way around." 

When I appeared before this Committee last year, I committed to modernize our 

nuclear weapons arsenal, protect our energy infrastructure from cyber and other 

attacks, achieve exascale computing, advance strong domestic energy production, 

and address obligations regarding nuclear waste management and the Nation's 

nuclear legacy. 

This FY 2019 $30.6 billion Budget Request for the Department of Energy 

("Budget") delivers on these commitments. 

The Department's world-leading science and technology enterprise generates the 

innovations to fulfill our mission. Through our 17 National Laboratories, we engage 

in cutting-edge research that expands the frontiers of scientific knowledge and 

generates new technologies to address our greatest challenges. 

Our National Laboratories are doing outstanding work in many areas, and they have 

a rich history of innovation that has bettered the lives of millions across the globe. 

For example, in FY 2017, the National Laboratories won 33 of the prestigious R&D 

100 A wards, including technologies regarding new materials, protecting our 

environment, incorporating renewable energy reliably on to our electric grid, and 

sophisticated cybersecurity tools. These are but a few examples of the work the 
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National Laboratories have done just last year to push the boundaries of research, 

development, and commercialization. I have had the opportunity to visit many of the 

Laboratories over the past year, and witness first- hand this outstanding work done 

by the dedicated workforce across the nation. 

I am especially proud of how our National Laboratories, in working with the 

Department ofVeteran's Affairs and other federal agencies, universities, doctors, and 

researchers, are harnessing the power of our world-class supercomputers to improve 

the health of our veterans. This work is part of DOE's proud legacy in the 

biosciences, and as the initiator of the Human Genome Project. 

This Budget proposes over $12 billion in early stage research and development 

(R&D) that will focus the intellectual prowess of our scientists and engineers on the 

development of technologies that the ingenuity and capital of America's 

entrepreneurs and businesses can convert into commercial applications and products 

to improve the lives and security of all Americans. 

Restoring the Nuclear Security Enterprise 

The security of the United States and its allies is one of our primary DOE 

missions. 

The Budget fulfills the President's vision of rebuilding and restoring our Nation's 

security through robust investments in the Department's nuclear security mission. 

The Budget provides $15.1 billion for the National Nuclear Security 

Administration (NNSA), $2.2 billion or 16.7 percent above the FY 2017 enacted 

level. 

The Request makes necessary investments consistent with the February 2018 

Nuclear Posture Review (NPR) to modernize and rebuild a nuclear force and 

nuclear security enterprise; prevent, counter, and respond to nuclear 

proliferation and terrorism threats; and provide safe, reliable, and long-term 

nuclear propulsion to the Nation's Navy. 

The Budget includes $11.0 billion for Weapons Activities. This $1.8 billion 

increase over the FY 2017 enacted level supports maintaining the safety, security, 

and effectiveness of the nuclear stockpile; continuing the nuclear modernization 

program; and modernizing NNSA's nuclear security infrastructure portfolio in 

alignment with the NPR. 

The Budget includes $1.9 billion for our ongoing Life Extension Programs (LEP) 

and Major Alterations, a $580 million increase. Funding for the W76-1 warhead 

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LEP supports the Navy and will keep the LEP on schedule and on budget to 

complete production in FY 2019. An increase of$178 million for the B61-12 

LEP will keep us on schedule to deliver the First Production Unit (FPU) in FY 

2020 to consolidate four variants of the B61 gravity bomb and improve the safety 

and security of the oldest weapon system in our nuclear arsenal. 

The Budget also supports the Air Force's Long-Range Stand-Off program through an 

increase of$435 million from FY 2017 enacted for the W80-4 LEP, to deliver the 

first production unit in FY 2025 of the cruise missile warhead. We also increase 

funding by $23 million for the W88 Alteration 370 to provide the scheduled first 

production unit in FY 2020. The request includes $53 million for a replacement for 

the W78, one of the oldest warheads in the stockpile, by 2030. 

The Budget for Weapons Activities also increases investments to modernize our 

nuclear infrastructure. For example, we include $703 million, a $128 million 

increase from FY 2017, for construction of the Uranium Processing Facility 

needed to replace deteriorating facilities at the Y-12 National Security Complex, 

as well as $27 million for a Tritium Production Capability at Savannah River and 

$19 million for a Lithium Production Capability at Y -12. 

The Weapons Activities Budget request also includes $163 million, a $68 million 

increase from FY 2017 enacted, for NNSA collaboration with the Office of Science 

on the development of exascale computer systems, which I address below. 

In the NNSA's Naval Reactors program, the Department has the ongoing 

responsibility to provide militarily effective nuclear propulsion plants for Navy 

vessels and to ensure their safe, reliable and long-lived operation. The Budget 

provides $1.8 billion to support the safe and reliable operation of the Navy's 

nuclear-powered fleet and continuation of the Columbia-class submarine program, 

refueling of the Land-Based Prototype reactor, and the Spent Fuel Handling 

Recapitalization Project. 

Today, over 45% of the Navy's major combatants are nuclear powered. DOE's role 

in propulsion plants, spent fuel handling, and recapitalization is critical to the 

Navy's ability to conduct its mission around the globe. 

The Budget also includes $1.9 billion for the Defense Nuclear Nonproliferation 

(DNN) program to reduce global threats from nuclear weapons. This critical 

national security program prevents the spread of nuclear and radiological materials, 

advances technologies that detect nuclear and radiological proliferation worldwide, 

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and eliminates or secures inventories of surplus materials and infrastructure usable 

for nuclear weapons. 

The Budget continues termination activities for the Mixed Oxide Fuel 

Fabrication Facility project proposed in the FY 2018 Request, providing $220 

million for use toward an orderly and safe closure of the project. The Budget 

also includes $59 million for the continuation of preliminary design and the 

initiation of long-lead procurements for the Surplus Plutonium Disposition 

project in support of the dilute and dispose strategy. 

The Budget provides $319 million for Nuclear Counterterrorism and Incident 

Response, $47 million above FY 2017 enacted, to work domestically and around 

the world to improve our ability to respond to radiological or nuclear incidents, in 

conjunction with other agencies in a broader U.S. Government effort. 

Finally, the Budget includes $423 million for the federal workforce at the NNSA. 

This $35 million increase is essential to ensuring our world-class workforce of 

dedicated men and women can effectively oversee NNSA's critical national 

security missions. 

Securing against Cyber Threats 

Among the most critical missions at the Department is to develop science and 

technology that will ensure Americans have a resilient electric grid and energy 

infrastructure. Protecting this infrastructure means it has to be resilient and secure 

to defend against the evolving threat of cyber and other attacks. 

Unfortunately, cyberattacks pose an ever-increasing threat to the Nation's 

networks, data, facilities, and infrastructure. A reliable and resilient power grid is 

critical to U.S. economic competiveness and leadership, and to the safety and 

security of the nation. We need to understand the increasing and evolving natural 

and man-made threats and develop the tools to respond to those threats across our 

energy infrastructure. 

The Department is the sector-specific agency for the energy sector, and therefore, 

is the lead federal agency for the Emergency Support Function #12 that partners 

with the energy sector to ensure infrastructure security and resilience and to 

coordinate response and recovery. To elevate the Department's focus on energy 

infrastructure protection, the Budget Request splits the Office of Electricity 

Delivery and Energy Reliability, which totals $157 million, into two offices. Doing 

so will increase focus on grid reliability in the Office of Electricity Delivery (OE) 

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and cybersecurity in the Office ofCybersecurity, Energy Security, and Emergency 

Response (CESER). 

CESER will allow more coordinated preparedness and response to emerging 

cyber and physical threats and natural disasters and support the Department's 

national security responsibilities. To work toward this critical objective, the 

Budget provides $96 million for the CESER office to develop tools needed to 

protect the U.S. energy sector against threats and hazards, mitigate the risks and 

the extent of damage from cyberattacks and other disruptive events, and improve 

resilience through the development of techniques for more rapid restoration of 

capabilities. 

CESER will work in an integrated manner with private industry, as well as 

Federal, State, and Local jurisdictions and other DOE offices, to enable industry to 

enhance the resilience (the ability to withstand and quickly recover from 

disruptions and maintain critical function) and security (the ability to protect 

system assets and critical functions from unauthorized and undesirable actors) of 

the U.S. energy infrastructure. 

Also, in FY 2019, the Office ofNuclear Energy's budget includes $5 million for 

the Nuclear Energy Enabling Technologies (NEET) Crosscutting Technology 

Development (CTD) program to expand its nuclear reactor cybersecurity research 

to support development of intrusion-resistant systems and practices. Research will 

be conducted in four areas: cyber risk management, secure architectures, modeling 

and simulation, and supply chain cyber security assurance. NEET-CTD will also 

perform simulated cyber-attacks against existing and next generation control 

system architectures to verify attack difficulty and control efficacy, methods, and 

metrics. 

Securing against cyber threats means we must also protect against threats to the 

Department's own infrastructure in science, technology, and nuclear security. This 

Budget takes major steps to safeguard DOE's enterprise-wide assets against cyber 

threats. The Budget provides funding to secure our own networks, and increases 

funding for the Chief Information Officer by $16 million from the FY 2017 enacted 

level to modernize infrastructure and improve cybersecurity across the DOE IT 

enterprise. Funding for cybersecurity in the National Nuclear Security 

Administration is increased to $185 million to enhance security for our nuclear 

security enterprise. In the Environmental Management program, we provide $43 

million for cybersecurity to ensure the security at seven cleanup sites. This Budget 

provides the resources we require to secure our systems and our infrastructure. 

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Improving Grid Resilience 

As we protect our energy infrastructure from cyber threats, we also must 

improve resilience and reliability of the nation's electricity system. The 

Budget provides $61 million for Electricity Delivery to support transmission 

system resource adequacy and generation diversity, move forward with new 

architecture approaches for the transmission and distribution system to 

enhance security and resilience, and advance energy storage. The Budget 

supports research and development at DOE's National Laboratories to develop 

technologies that strengthen, transform, and improve energy infrastructure so 

that consumers have access to reliable and secure sources of energy. 

Advancing Exascale and Quantum Computing 

As I discussed last year, the Department's leadership in developing and building the 

world's fastest computers has faced increasingly fierce global competition over the 

last decade. Maintaining the Nation's global primacy in high-performance 

computing is more critical than ever for our national security, our continuing role as 

a science and innovation leader, and our economic prosperity. 

The Budget includes $636 million to accelerate development of an exascale 

computing system, including $473 million in the Office of Science (Science) and 

$163 million in NNSA. This unprecedented investment, which is $376 million-or 

145 percent-above the FY 2017 enacted level, reflects the Department's plan to 

deliver an exascale machine for the Office of Science in 2021 and a second 

machine with a different architecture by 2022. 

To achieve these goals, the Science/NNSA partnership will focus on hardware and 

software technologies needed to produce an exascale system, and the critical DOE 

applications needed to use such a platform. This world-leading exascale program 

will bolster our national security by supporting the nuclear stockpile, while also 

supporting the next generation of scientific breakthroughs not possible with today's 

computing systems. 

We will not, however, satisfy our need for computing advances with the 

achievement of exascale computing alone. The FY 2019 Budget Request also 

includes $105 million in quantum computing to address the emerging urgency of 

building our competency and competitiveness in the developing area of quantum 

information science. This early-stage, fundamental research will concentrate on 

accelerating progress toward application of quantum computing techniques and 

quantum sensing to grand challenge science questions. 

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Addressing the Imperative of Nuclear Waste Management 

As I mentioned to this Committee last year, we must move ahead in fulfilling the 

Federal Government's responsibility to dispose of the Nation's nuclear waste. The 

Budget includes $120 million, including $30 million in defense funds, to resume 

licensing for the nuclear waste repository at Yucca Mountain and implement a 

robust interim storage program. 

The Budget devotes $110 million for DOE to support the Nuclear 

Regulatory Commission (NRC) licensing proceeding for the nuclear waste 

repository at Yucca Mountain, including funding for technical, scientific, 

legal and other support. 

In addition, the Budget includes $10 million to implement a robust interim storage 

program to ensure earlier acceptance of spent nuclear fuel and accelerate removal 

from sites in 39 states across the country. Interim storage capability also adds 

flexibility to the system that will move materials from sites across the country to its 

ultimate disposition. 

By restarting the long-stalled licensing process for Yucca Mountain and 

committing to establishing interim storage capability for near-term acceptance of 

spent nuclear fuel, our Budget demonstrates the Administration's commitment to 

nuclear waste management and will help accelerate fulfillment of the Federal 

Government's obligations to address nuclear waste, enhance national security, and 

reduce future burdens on taxpayers. This also will increase public confidence in the 

safety and security of nuclear energy, thus helping nuclear energy to remain a 

significant contributor to the country's energy needs for generations to come. 

Fulfilling Legacy Cleanup Responsibilities 

The Budget also includes $6.6 billion for Environmental Management (EM), $182 

million above the FY 2017 enacted level, to address its responsibilities for the 

cleanup and disposition of excess facilities, radioactive waste, spent nuclear fuel, 

and other materials resulting from five decades of nuclear weapons development 

and production and Government-sponsored nuclear energy research. 

To date, EM has completed cleanup activities at 91 sites in 30 states and Puerto 

Rico, and is responsible for cleaning up the remaining 16 sites in 11 states-some 

of the most challenging sites in the cleanup portfolio. 

The Budget continues funding of $150 million to address specific high-risk 

contaminated excess facilities at the Y-12 National Security Complex and the 

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Lawrence Livermore National Laboratory. 

The Budget includes $1.4 billion for the Office of River Protection at the Hanford 

Site, for continued work at the Hanford Tank Farms and to make progress on the 

Waste Treatment and Immobilization Plant. This budget will continue progress 

toward important cleanup required by the Consent Decree and Tri-Party Agreement 

to include a milestone to complete hot commissioning of the Low Activity Waste 

Facility by December 31, 2023. The Budget also includes $747 million to continue 

cleanup activities at Richland, including continued K-Area decontamination and 

decommissioning remediation and the K-West Basin sludge removal project. For 

Savannah River, the Budget provides $1.7 billion, $287 million above enacted FY 

2017, to support activities at the site. This will include the Liquid Tank Waste 

Management Program, completing commissioning and beginning operation of the 

Salt Waste Processing Facility, continued construction of the Saltstone Disposal 

Unit #7, a start to construction of the Saltstone Disposal Units #8/9, and support for 

facilities that receive and store nuclear materials. 

The Waste Isolation Pilot Plant (WIPP) is essential for the disposition oftransuranic 

defense-generated waste across the DOE complex, and the Budget provides $403 

million to safely continue waste emplacement at WIPP. The Budget Request will 

continue WIPP operations, including waste emplacements, shipments, and 

maintaining enhancements and improvements, and progress on critical infrastructure 

repair/replacement projects, including $84 million for the Safety Significant 

Confinement Ventilation System and $1 million for the Utility Shaft (formerly 

Exhaust Shaft). These steps will increase airflow in the WIPP underground for 

simultaneous mining and waste emplacement operations. 

The Budget includes $359 million to continue cleanup projects at the Idaho site, 

such as the Integrated Waste Treatment Unit, and to process, characterize, and 

package transuranic waste for disposal at offsite facilities. It provides $409 million 

for Oak Ridge to continue deactivation and demolition of remaining facilities at 

the East Tennessee Technology Park, continue preparation of Building 2026 to 

support processing of the remaining U-233 material at the Oak Ridge National 

Laboratory, and support construction activities for the Outfall 200 Mercury 

Treatment Facility at the Y -12 National Security Complex. 

For Portsmouth, the Budget includes $415 million, $33 million above FY 2017 

enacted, to continue progress on the deactivation and decommissioning project at 

the Portsmouth Gaseous Diffusion Plant, safe operation of the Depleted Uranium 

Hexafluoride Conversion Facility, and construction activities at the On-Site Waste 

Disposal facility. At Paducah, the Budget includes $270 million to continue 

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ongoing environmental cleanup and depleted uranium hexafluoride (DUF6) 

conversion facility operations at the Paducah site. In addition, the FY 2019 Budget 

Request supports activities to continue the environmental remediation and further 

stabilize the gaseous diffusion plant. 

Together, these investments for Environmental Management will make significant 

progress in fulfilling our cleanup responsibilities while also starting to address our 

high-risk excess facilities at NNSA sites. 

Focusing Priorities on Core Missions 

The Budget continues to focus the Department's energy and science programs on 

early-stage research and development at our National Laboratories to advance 

American primacy in scientific and energy research in an efficient and costeffective manner. 

Also, in line with Administration priorities, the Budget terminates the Advanced 

Research Projects Agency-Energy, known as ARPA-E, and the Department's 

Loan Programs, while maintaining necessary federal staff to oversee existing 

awards and loans. Termination of these programs will save over $300 million in 

FY 2019 alone while significantly reducing financial risk to the taxpayer moving 

forward. 

Advancing American Energy Dominance 

The Budget requests $2.1 billion for the applied energy programs. Within these 

offices, the FY 2019 Budget focuses resources on early-stage, cutting-edge R&D 

conducted by the scientists and engineers at our 17 National Laboratories who 

continually develop the next great innovations that can transform society and foster 

American economic competitiveness and then on transitioning these breakthroughs 

to the private marketplace. 

The Budget consolidates programs focused on bringing technologies to the market 

in the Office of Technology Transitions, requesting a 23% increase from FY 2017. 

Through concerted effort and coordination with our labs, this will reduce costs to 

the taxpayer while at the same time providing a robust technology transfer program 

to transfer breakthroughs from the National Laboratories to the private sector. 

Nuclear Energy 

Nuclear energy provides 20 percent of our electricity base load, and 60 percent of 

our carbon-free generated electricity. The Budget provides $757 million for the 

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Office of Nuclear Energy to continue innovating new and improved nuclear energy 

technologies. The budget focuses funding on early-stage research and development, 

such as the Nuclear Energy Enabling Technologies program, that enables the 

research and development of innovative and crosscutting nuclear energy 

technologies to resolve fundamental nuclear technology challenges. 

The FY 2019 Budget includes $163 million for the Reactor Concepts 

Research, Development and Demonstration program. Within this total, $128 

million is for early-stage R&D on advanced reactor technologies, including 

$54 million for a new Advanced Small Modular Reactor R&D subprogram. 

This new subprogram is a one-time effort to fund cost-shared early-stage 

design-related technical assistance and R&D, the results of which are intended 

to be widely applicable and employed by nuclear technology development 

vendors for the purpose of accelerating the development of their advanced 

SMR designs. The Budget also provides $15 million within Reactor Concepts 

for early-stage R&D and pre-conceptual design work related to Versatile 

Advanced Fast Test Reactor concept. 

Within the Fuel Cycle Research and Development program, the Budget provides 

$40 million to support the development of one or more light water reactor fuel 

concepts with significantly enhanced accident tolerance. 

Finally, the Budget for Nuclear Energy also supports robust safeguards and 

security funding of$136 million-a $7 million increase-for protection of our 

nuclear energy infrastructure and robust infrastructure investments at INL 

facilities. 

Fossil Energy Research and Development 

The Fossil Energy Research and Development (FER&D) program advances 

transformative science and innovative technologies which enable the reliable, 

efficient, affordable, and environmentally sound use of fossil fuels. Fossil energy 

sources currently constitute over 81 percent of the country's total energy use and are 

critical for the nation's security, economic prosperity, and growth. The FY 2019 

Budget focuses $502 million on cutting-edge fossil energy research and development 

to secure energy dominance, further our energy security, advance strong domestic 

energy production, and support America's coal industry through innovative clean 

coal technologies. 

FER&D will support early-stage research in advanced technologies, such as materials, 

sensors, and processes, to expand the knowledge base upon which industry can improve 

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the efficiency, flexibility, and resilience of the existing fleet of coal fired power plants. 

The request also focuses funding on early-stage research that enables the next generation 

of high efficiency and low emission coal fired power plants that can directly compete 

with other sources of electricity in the market and provide low cost reliable power 24/7. 

Funding is also provided to support competitive awards with industry, National 

Laboratories and academia focused on innovative early-stage R&D to improve the 

reliability, availability, efficiency, and environmental performance of advanced 

fossil-based power systems. For example, the Advanced Energy Systems 

subprogram will focus on the following six activities: 1) Advanced 

Combustion/Gasification Systems, 2) Advanced Turbines, 3) Solid Oxide Fuel 

Cells, 4) Advanced Sensors and Controls, 5) Power Generation Efficiency, and 6) 

Advanced Energy Materials. While the primary focus is on coal-based power 

systems, improvements to these technologies will result in spillover benefits that can 

reduce the cost of converting other carbon-based fuels, such as natural gas, biomass, 

or petroleum coke into power and other useful products in an environmentallysound manner. 

Energy Efficiency and Renewable Energy 

The Energy Efficiency and Renewable Energy budget funds $696 million to 

maintain America's leadership in transformative science and emerging 

energy technologies in sustainable transportation, renewable power, and 

energy efficiency. Knowledge generated by early-stage R&D enables U.S. 

industries, businesses and entrepreneurs to develop and deploy innovative 

energy technologies and gives them the competitive edge needed to excel in 

the rapidly changing global energy economy. 

Energy storage is an important area of focus, and the Request includes $36 million 

for battery R&D as well as $90 million for a new "Beyond Batteries" R&D 

initiative. As part of grid modernization efforts, "Beyond Batteries" considers 

energy storage holistically, and focuses on advances in controllable loads, hybrid 

systems, and new approaches to energy storage, which are essential to increasing the 

reliability and resiliency of our energy systems. 

Advances in these areas, as well as in battery technologies, will allow for loads to be 

combined with generation from all sources to optimize use of existing assets to 

provide grid services, and increase grid reliability. The FY 2019 also invests in 

advanced combustion engines, and new science and technology for developing 

biofuels. The Budget funds research into the underpinnings offuture generations of 

solar photovoltaic technology, into the design and manufacturing oflow-specific 

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power rotors for tall wind applications, and on wind energy grid integration and 

infrastructure challenges. 

The Budget also funds early-stage R&D for advanced manufacturing processes and 

materials technologies. These efforts, combined with the research that leverages the 

unique high-performance computing assets in the National Laboratories, can drive 

the breakthroughs that will promote economic growth and manufacturing jobs in the 

United States. 

Leading World-Class Scientific Research 

The Department of Energy is the Nation's largest Federal supporter of basic 

research in the physical sciences, and the President's FY 2019 Budget provides 

$5.4 billion for the Office of Science to continue and strengthen American 

leadership in scientific inquiry. By focusing funding on early-stage research, 

this Budget will ensure that the Department's National Laboratories continue to 

be the backbone of American science leadership by supporting cutting-edge 

basic research, and by building and operating the world's most advanced 

scientific user facilities-which will be used by over 22,000 researchers in FY 

2019. 

We provide $899 million for Advanced Scientific Computing Research, an increase 

of $252 million above the FY 2017 enacted level. This funding will continue 

supporting our world-class high-performance computers that make possible cuttingedge basic research, while devoting $472 million in the Office of Science to reflect 

the Department's plan to achieve of exascale computing by 2021. This focused 

effort will drive the innovations necessary for computing at exascale speeds, 

resulting in computing systems at unprecedented speeds at Argonne National 

Laboratory in 2021 and Oak Ridge National Laboratory in2022. The FY 2019 

Request also supports quantum computing R&D and core research in applied 

mathematics and computer science, and high-performance computer simulation and 

modeling. 

The Budget also provides $1.8 billion for Basic Energy Sciences, supporting core 

research activities in ultrafast chemistry and materials science and the Energy 

Frontier Research Centers. We will continue construction of the Linac Coherence 

Light Source-II at SLAC National Accelerator Laboratory and the Advanced Photon 

Source Upgrade at the Argonne National Laboratory, and initiate the Advanced Light 

Source Upgrade project at the Lawrence Berkeley National Laboratory, and the 

Linac Coherence Light Source-II High Energy project at SLAC. The operations of 

the light sources across the DOE science complex and supporting research across the 

12 
24 


31172.013

Nation will ensure our continued world leadership in light sources and the science 

they make possible. 

The Budget also provides $770 million for High Energy Physics, including $113 

million for construction of the Long Baseline Neutrino Facility and Deep 

Underground Neutrino Experiment at Fermilab, $63 million above the enacted FY 

2017 level. We will continue to fund ongoing major items of equipment projects, 

and initiate three new projects at the Large Hadron Collider, the High Luminosity 

Large Hadron Collider Accelerator Project, and the High Luminosity ATLAS and 

CMS detector upgrade projects. By supporting the highest priority activities and 

projects identified by the U.S. high energy physics community, this program will 

continue cutting-edge pursuit to understand how the universe works at its most 

fundamental level. 

The Budget for the Office of Science provides $340 million for Fusion Energy 

Sciences, including $265 million for domestic research and fusion facilities and 

$75 million for the ITER project. For Nuclear Physics, the budget provides $600 

million to discover, explore, and understand nuclear matter, including $75 

million for continued construction of the Facility for Rare Isotope Beams and 

operations of facilities, including the newly-upgraded Continuous Electron 

Beam Accelerator Facility. For Biological and Environmental Research, the 

Budget includes $500 million to support foundational genomic sciences, 

including the Bioenergy Research Centers and to focus on increasing the 

sensitivity and reducing the uncertainty of earth and environmental systems 

predictions. 

Strategic Petroleum Reserve 

In addition to our nuclear security responsibilities, the Department of Energy 

ensures the Nation's energy security. The Strategic Petroleum Reserve (SPR), one 

component of that effort, protects the U.S. economy from disruptions in critical 

petroleum supplies and meets the U.S. obligations under the International Energy 

Program. The Budget includes $175.1 million, $47.5 million below the FY 2017 

enacted level, to support the Reserve's operational readiness and drawdown 

capabilities. The Request also includes a drawdown and sale of up to 1 million 

barrels of crude oil from the SPR to provide funding for Congressionally-mandated 

crude oil sales and emergency drawdown operations. 

The Budget continues the sale of SPR oil for the Energy Security and Infrastructure 

Modernization Fund authorized by the Bipartisan Budget Act of2015 to support an 

effective modernization program for the SPR. 

13 
25 


31172.014

Finally, as the Northeast Gasoline Supply Reserve (NGSR) is operationally 

ineffective and not cost-efficient as a regional product reserve, the President's 

Budget proposes to liquidate the NGSR and sell its one million barrels of refined 

petroleum product in FY 2019, resulting in an estimated $77 million in receipts. 

Power Marketing Administrations 

Finally, the Budget includes $77 million for the Power Marketing Administrations 

(PMAs). The Budget proposes the sale of the transmission assets of the Western 

Area Power Administration (W AP A), the Bonneville Power Administration 

(BPA), and the Southwestern Power Administration (SWPA) and to reform the 

laws governing how the PMAs establish power rates to require the consideration of 

market based incentives, including whether rates are just and reasonable. The 

Budget also proposes to repeal the $3.25 billion borrowing authority for W APA 

authorized by the American Recovery and Reinvestment Act of2009. 

Conclusion 

In conclusion, I reaffirm my commitment to ensure that the Department of Energy, 

along with its national laboratories, will continue to support the world's best 

enterprise of scientists and engineers who create innovations to drive American 

prosperity, security and competitiveness. The President's FY 2019 Budget Request 

for the Department of Energy positions us to take up that challenge and delivers on 

the high-priority investments I proposed to you last year. 

As we move forward over the coming weeks and months, I look forward to 

working with you and your colleagues in Congress on the specific programs 

mentioned in this testimony and throughout the Department. Congress has an 

important role in the path forward on spending decisions for the taxpayer, and I 

will, in turn, ensure DOE is run efficiently, effectively, and we accomplish our 

mission driven goals. Thank you, and I look forward to answering your questions. 

14 
26 

Mr. UPTON. Well, thank you, Mr. Secretary. At this point we will 

move to questions from both sides. We appreciate again your presence here. 

I want to first ask, going back to what Chairman Walden said, 

the great State of Michigan, one of the reasons why it is such a 

great state is because of the Great Lakes. And I would like to talk 

to you briefly about the Straits of Mackinac which you know that 

we both deeply care about. About a week and a half ago, we 

learned that two high voltage transmission cables that run under 

the straits near the Mackinac Bridge were destroyed by a ship’s anchor and was taken out of service. Enbridge’s Line 5 which carries 

not only crude oil, light crude, and also propane, also runs under 

the straits only a short distance away, was also struck by that 

same anchor and the pipeline was damaged. It was a near miss. 

It could have been catastrophic for sure. 

And even though the strike on Line 5 did not cause an oil spill, 

that is something we all worry about. Earlier, Governor Snyder 

and I reached an agreement with Enbridge who maintains that line 

to look at a number of options to replace that line. In my view, it 

needs to be directionally drilled in terms of a new line that needs 

to replace the existing line. I know that they are looking at a number of different options, and particularly with the events of the last 

2 weeks it prompts us to try and expedite that process even faster. 

A couple questions I have as I work with the governor’s office 

and others, can you help us in looking at a replacement for this 

line as it relates to the permitting that would be required and 

other efforts within the administration to replace that Line 5 with 

a safer option than we have today? 

Secretary PERRY. Yes. Well, the short answer is yes. But if I 

could just expand a moment, I think it is really important for us 

to recognize that our infrastructure not only in some cases as this 

one, I would suggest, is aging, but also the expansion of that infrastructure to be able to take advantage of this new energy resource, 

if you will. Twelve years ago there was a fellow traveling around 

the country making a pretty good living giving a speech about peak 

oil, and the world has so changed and America is in such a different position and being able to move those resources safely and 

efficiently is really important to the economy and to the national 

security of this country. 

Mr. UPTON. Well, you might remember that there was an 

Enbridge pipeline break a number of years ago and when that happened we actually passed the Upton-Dingell bill and it passed with 

maybe one vote against it in the Congress. We upgraded all of the 

safety standards and fines for new pipelines, and one of the provisions in that bill in fact was that any new pipeline built that goes 

underneath a body, a significant body of water, major river, et 

cetera, certainly the Straits of Mackinac, would have to be buried 

underneath that lake or riverbed and not be trenched or simply 

laid on the top. 

So what I have been pushing Enbridge to do, and I know the governor is on board as well, is to actually go underneath and use that 

technology that is available today so that we can get this thing replaced. One other question relating to that, can you ask your department of energy and reliability to actually study what would 

27 

happen if this line went out for some type of duration? It leads to 

a major refinery over in Detroit and then that oil is refined and 

wholesaled throughout the Midwest. And I would like to know 

what the impact might be particularly on the consumers, and if you 

could help us get that, that would be good. 

Secretary PERRY. I would be happy to do that, Mr. Chairman. 

Your common, or let me put it this way, I think our common sense, 

collectively, tells us that if we lose a major line to a refinery like 

that, that it is going to have a negative impact not only on the consuming public, but also I will suggest, and it is one of the things 

I think you are very wise to ask us to take a look at this, on the 

national security side of it. 

I don’t know where that fuel goes in its final stages, but you all 

have major military bases in that part of the country and it could 

have a negative impact on their ability to have fuel available for 

the security of this nation. 

Mr. UPTON. The last question I have is while we are talking 

about pipeline safety I want to turn to the recent news regarding 

cyber attacks on pipelines and as you know that there was a published report just in the last week or two as to a cyber attack on 

one of our pipelines here. I know that that is almost a daily occurrence. 

Why is it so important that DOE take a strong role in coordinating the federal response? You may know that I have a bill, H.R. 

5175, the Pipeline and LNG Facility Cybersecurity Preparedness 

Act, which would enhance DOE’s ability to coordinate pipeline security and emergency response. Can you work with us as we move 

that bill forward? 

Secretary PERRY. Yes, sir. Obviously, the world has really 

changed from the standpoint of, and it is not just a few times. It 

is thousands of times a day that there are bad actors out there 

whether they are nation states or whether they are just a single 

individual with ill intent in mind that are trying to penetrate into 

systems all across this country, some of them that could have catastrophic impact on our ability to deliver energy. 

It is the reason that we have asked for these additional funds to 

stand up this office that we refer to as CESER or Cybersecurity. 

I want to thank Joe Barton for the work that he has done on reorg 

to help us from the standpoint of modernizing the agency to look 

at the changes that have just happened, let’s say, in the last decade in this country relative to the new energy resources we have 

available, the infrastructure that we are going to need, and the security and resiliency of that infrastructure, obviously including the 

grid that is out there. 

Mr. UPTON. Thank you much. I would yield to the ranking member, Mr. Rush. 

Mr. RUSH. Well, thank you, Mr. Chairman. Mr. Secretary, again 

I want to thank you for agreeing to meet with me in the near future to discuss ways that we can ensure that the Department of 

Energy reflects the nation’s diversity not only within the mid-level 

staff levels, but also within the highest levels of the decision making process and positions. With your help, Mr. Secretary, I want to 

ensure that we have diverse perspectives structurally in the most 

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tutional Review Board, the Energy Advisory Board, the Senior Executive Service, now, and of course at the highest levels of the national labs. 

That said, Mr. Secretary, what is the justification for cutting the 

Office or Energy Efficiency and Renewable Energy by 70 percent 

from fiscal year 2018 levels? As you know, energy efficiency is one 

of the few issue items that enjoys widespread bipartisan support 

here in the Congress. Initiatives like the Weatherization Assistance 

Program are extremely popular not only with policymakers here, 

but really all across the country as it helps to conserve energy 

while also lowering utility bills for low-income families. Why is the 

administration proposing to cut or completely eliminate these critical programs? 

Secretary PERRY. Mr. Chairman, Ranking Member, thank you. 

Let me address, you asked two questions. On the focus on minorities and minorities at the DOE, I think we are focused on that. 

Twenty seven percent of our entire enterprise is made up by minorities. I think it is really important to bring to the committee’s 

attention that we also have a focus on small business contracting 

at the laboratories so that women-owned and minority-owned businesses have the expertise to be able to make their way through the 

myriad contracting issues that are there. 

One of the other things I am really proud of is that we have a 

program at the DOE to promote diversity in the STEM area back 

in both high schools and colleges to be able to get young diverse 

members of our society pointed in the right direction, engineering, 

math, science, technology, those, and I am really proud of what 

DOE is doing in that line. And I want to come and sit down with 

you in your office and talk more about this and the ways that we 

can do better. 

Let me shift over to the EERE and to your concerns. And I heard 

Mr. Pallone’s concerns as well dealing with EERE and the reductions there and I want to try to explain them in this way and then 

have one comment at the end of that. One of the things that we 

have seen is that as technology has become more mature, for instance, both solar and wind, and I try to remind folks that while 

I was the Governor of Texas we produced more wind energy than 

any other state in the Nation, passed up every state in the country 

and produced more wind energy than five countries and I am committed to having that diverse portfolio, but those are now becoming 

mature in the sense of their market, marketability and going to the 

market and being commercialized. 

So the dollars that have historically been spent to bring those up 

to the place where they can be mature, we don’t feel like those dollars need to be expended now. Are there other areas that we need 

to be focused on and yes, grid integration is a great example of it, 

energy storage, kind of beyond batteries, if you will. Another DOE 

area that we are focusing on is in hydrogen R&D. Those are early 

stage and that is where you are going to see us focused with the 

dollars. 

So, we will always have a give-and-take back-and-forth about are 

you spending enough here, are you spending enough there, and I 

respect that. As a former appropriator, as a former agency head, 

and then as a CEO as the governor, I really respect the authorVerDate Nov 24 2008 14:18 Jan 18, 2019 Jkt 037690 PO 00000 Frm 00034 Fmt 6633 Sfmt 6633 I:\MY DOCS\HEARINGS 115\HEARINGS\115-117 CHRIS
29 

izers, the appropriators, and the administrative or the executive 

side of this. I know what my job is, and my job is to work with you, 

which I will do on a daily basis to find that appropriate ground. 

But I will promise you this that where you appropriate and where 

you authorize we will work to make you very proud that we manage it absolutely the most efficient way that it can be. 

Mr. RUSH. I yield back, Mr. Chair. 

Mr. UPTON. The chair would recognize the gentleman from Oregon, a good state, Mr. Walden. 

Mr. WALDEN. We are a good state now, thanks. Thank you, Mr. 

Chairman. And, Mr. Secretary, again thank you for being here. Before I say anything we should also draw attention to the fact it is 

Mr. Walberg’s birthday today so happy birthday—from Michigan, 

the great State of Michigan. 

Mr. Secretary, I want to start by talking about Bonneville Power 

Administration. I appreciate your most recent comments about respecting the will of the authorizers, which is what we are. So along 

those lines, this idea of selling off the electric transmission assets 

and abandoning cost-based rates proposal has been roundly rejected by virtually every member of the Pacific Northwest congressional delegation. It is the one idea—bad idea—that unites all of 

us in the Northwest. I am afraid this move could do nothing but 

harm my constituents, drive up electricity costs, hurt consumers 

across the region; so can you assure me the DOE will leave Bonneville alone unless Congress provides explicit authorization—that 

authorization word again there, Mr. Secretary. 

Secretary PERRY. Yes, sir. 

Mr. WALDEN. Thank you. Now moving along, as you know the 

Hanford Site is just across the river from many of my constituents. 

And not only are safe and secure operations a concern, and I appreciate your commitment not only to that and the lab nearby but also 

the help to do the cleanup here, the Committee right now is working with the GAO to identify some options for improving operational performance. Will you work with us on this as we develop 

findings? 

Secretary PERRY. Yes, sir. 

Mr. WALDEN. Thank you. Let me ask a broader question. As we 

look at modernizing the Department we are focusing on emergency 

and security issues, but also how the Department can better expend its limited resources. We are also cognizant of the Department’s vast technological capabilities which can help accelerate innovation across national security, energy, manufacturing, even 

medicine as you have referenced in your testimony, but we also 

have to watch our taxpayers’ wallets. Can you speak to your support of DOE’s science, technology, computing facilities and how best 

to enable innovation in the private sector while tentatively managing limited taxpayer resources? 

How are you going to balance all that because your labs are 

doing amazing work. It is phenomenal. And for our committee 

members, if you haven’t interacted with these labs we should figure 

out a way to do that and get some briefings. It is really terrific, 

the work that is being done there. So, Mr. Secretary, what can you 

tell us about how to balance all that and where you are headed in 

terms of the direction of the labs and, yes. 

30 

Secretary PERRY. Technology transfer is, I think, one of the real 

goals of this agency from the standpoint of working with the labs 

and we are consolidating the EERE’s tech-to-market functions over 

in the Office of Technology Transfer. And just as a bit of a background I have a fairly substantial amount of experience with that. 

We created some programs while I was the Governor of Texas, the 

Emerging Technology Fund which basically is taking a very, very 

early stage technology and getting it to the market. 

So I have had some experience of dealing with that as the Governor of Texas which, I am not going to say this is apples-to-apples, 

but the point is we have in place the Office of Technology Transfer 

and it is looking at how to coordinate best practices across the complex and to, whether it is agreement provisions and abilities to consider equities and licensing, there is a host of areas. 

And I don’t want to drill down all that deep, but the point is we 

are sensitive to one of our goals in a limited budget situation is to 

be able to help these technologies get to maturation, if you will, or 

at least to the point where they are ready to be commercialized in 

the private sector. 

Mr. WALDEN. All right, good. And in conclusion for my few minutes here, this work on reorganizing and modernizing the structure 

of your agency is something that I take seriously. It is a goal for 

our committee and I know Mr. Barton is leading that effort and 

working with Mr. Rush and others to get that done. 

So we take it seriously here, we want you to know that. We look 

forward to a partnership to look at how to reauthorize and modernize the agency. Our committee has a pretty good track record 

looking at other agencies, and like the FCC we reauthorized for the 

first time since 1990, your agency is one that goes back before that. 

And so we look forward to continuing to work with you on that effort and so we want to move forward. 

I will thank the chairman for this hearing and return the balance of my time. 

Mr. UPTON. The gentleman yields back. The chair recognizes the 

gentleman from New Jersey, Mr. Pallone. 

Mr. PALLONE. Thank you, Mr. Chairman. Mr. Secretary, how 

many LNG export applications to Non-Free Trade Agreement countries are currently pending before the DOE, if you will? 

Secretary PERRY. There is 19, correct? I think there is 19. 

Mr. PALLONE. Do you believe that—— 

Secretary PERRY. Let me, I will get you the—— 

Mr. PALLONE. Yes. I will accept that. And if you want to get back 

to me if you think it is slightly wrong, please do. Do you believe 

that the DOE should continue to have a role in approving the LNG 

export applications, yes or no? 

Secretary PERRY. Yes, sir. 

Mr. PALLONE. And does the EPA, now I am talking about the 

EPA, does the EPA play any role in DOE’s public interest determination process, yes or no? 

Secretary PERRY. I am sure they do, but I am no expert on how 

the EPA functions, sir. 

Mr. PALLONE. OK. Well, whether or not you agree that the U.S. 

Government should be promoting exports of American LNG that is 

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partment or maybe the Department of Commerce. But as you 

know, I think late last year EPA Administrator Scott Pruitt traveled to Morocco to pitch that country on buying LNG from the U.S. 

Obviously I am very concerned that that doesn’t fall within the 

EPA’s mission. Do you think that this falls within EPA’s mission? 

Secretary PERRY. Mr. Pallone, I am going to leave that up to you. 

I try to stay in my lane as best I can. So again as I shared with 

you, I don’t know what EPA’s statutory responsibility and authorizations are relative to promoting energy sales and/or what else 

might have been going on that I don’t know about on that trip. So 

I think it would be a little inappropriate for me to be making a 

public or private observation about that. 

Mr. PALLONE. All right. Well, let me just ask. I think I know 

your answer, but did you or your Department have any role in Mr. 

Pruitt’s Morocco trip? 

Secretary PERRY. Again there may have been some staff-to-staff 

level conversations that I am not privy to, but from the standpoint 

of Secretary-to-Secretary I don’t recall any conversations relative to 

an EPA trip to Morocco. 

Mr. PALLONE. All right, thank you. I just wanted to point out 

that when Administrator Pruitt testified before this committee late 

last year he used the phrase ‘‘core mission’’ many times and argued 

that he was working to take EPA back to focusing on its basic responsibilities. And I found it strange that Administrator Pruitt 

thinks that visiting foreign countries to promote the sale of fossil 

fuels from private companies falls within the EPA’s core mission. 

I don’t think it does. 

But let me ask you a second question, Mr. Secretary. I note that 

the Department has established a web page and email address to 

accept public comments and requests regarding emergency mustrun orders under the Federal Power Act, section 202(c). And I am 

supportive of efforts to expand public participation in government 

processes, however, I don’t see anything on that web page that indicates that these comments, whether as-is or redacted, will be 

posted for the public to see. 

If you want me to repeat this I will, but I am basically trying 

to get a commitment from you to posting the comments you receive 

on your website or at the very least providing this committee in 

real time the comments you received on this matter for all of us 

here to review. Is that something you can commit to? 

Secretary PERRY. Yes, sir. And I think we have a place for public 

comments because this 202(c) is just now being analyzed and I 

don’t think we even have a process in place yet for the public—— 

Mr. PALLONE. You do have on the website a page and email address to accept public comments and requests regarding the Federal Power Act section 202, but I just want to make sure that they 

will be posted for the public to see. That is what I am asking. 

Secretary PERRY. Yes, sir. We will. 

Mr. PALLONE. All right, thank you so much. I yield back. 

Mr. UPTON. The chair recognizes the vice chair of the Energy 

Subcommittee, the gentleman from Texas, the good State of Texas. 

Oh, Mr. Barton, I am sorry. Mr. Barton, I recognize Mr. Barton, 

the vice chair of the full committee. 

32 

Mr. BARTON. All right. Well, you sometimes are too many Texans, right? 

Mr. UPTON. Mr. Barton, whose picture is right above you on the 

right, is recognized for 5 minutes. 

Mr. BARTON. As Mr. Upton’s is right up there. 

First of all, welcome, Mr. Secretary. 

Secretary PERRY. Yes, sir. 

Mr. BARTON. I think you and I should acknowledge at the beginning that our basketball team got hammered by Mr. Upton’s team 

in the Sweet 16. 

Mr. UPTON. One point. 

Mr. BARTON. One, we got beat 27 points. My lord, they put it to 

us. So I know I can’t speak for Secretary Perry, but I wasn’t real 

happy that afternoon. 

Mr. UPTON. Thinking about Houston that was the three-pointer 

there. 

Mr. BARTON. Yes, the game before you barely won, you put the 

wood to us. Anyway, we are glad to have you, Mr. Secretary. 

Secretary PERRY. Yes, sir. 

Mr. BARTON. I am tempted to go down the rabbit hole that Mr. 

Pallone introduced about your colleague at the EPA, but I don’t 

think so. I will say on my own behalf that any Cabinet Secretary 

that encourages things that are of strategic interest to the United 

States of America in his overseas travels is not necessarily a bad 

thing. And I am glad to learn that Mr. Pallone agrees that there 

are limits to what EPA should be involved with. So in that sense 

it was a good exchange. 

I want to ask a few budget questions, but I am going to ask one 

policy question. You probably can’t read this. This is today’s business section of the Wall Street Journal. It says oil hits highest 

price since 2014. I am sure you read that before you came up here. 

And inside it has another article about Treasury bonds are beginning to inch up and tension in the marketplace over that. 

What, if anything, should the Department of Energy under your 

stewardship do with the Strategic Petroleum Reserve to try to, I 

am not going to say manage the market, but make sure oil prices 

don’t go too high in the near term, if anything? 

Secretary PERRY. Well, Mr. Chairman, I think one of the things 

that DOE needs to do and can do from the standpoint of making 

sure that there is a ready supply of energy, whether it is renewables, whether it is hydro, whether it is nuclear, whether it is coal, 

whether it is natural gas, the Strategic Petroleum Reserve, I think 

you bring up a really interesting opportunity for this body and for 

Congress and the administration to have, and obviously the public 

to have an open conversation about is the SPRO the way that it 

is structured today the proper structure? Is there enough, too 

much? Is the operation of it on a yearly basis, the cost of the upkeep of that in our best interest? 

I will leave that to all of us, collectively, to have that conversation. But it was put in place after World War II and there may be, 

and after the shortage of the ’70s when we saw the need for that 

really exploding, if you will. And I think the question now is that 

with the resources that the United States has with the new innovation, with the new energy portfolio that we have, does the Strategic 

33 

Petroleum Reserve need to stay in its current form? I am not ready 

to sit here and tell you I know the answer to that, but I think it 

is important the issue that you brought up that we need to have 

that conversation. 

Mr. BARTON. The GAO has done a study of the Strategic Petroleum Reserve and it basically says we need to do more study. You 

and I are going to meet next week and I think we are also going 

to have the staff begin to meet also with our friends on the minority side and that will be something that we bring up. 

I have a few quick just dollar questions since this is—— 

Secretary PERRY. I will try to give you yes or no answers, sir. 

Mr. BARTON. Yes. Do you support us funding Yucca Mountain, 

us, the government, funding Yucca Mountain? I hope you say yes. 

Secretary PERRY. The dollars that you all are going to appropriate we will spend efficiently and appropriately, yes. 

Mr. BARTON. OK, finally. We have a Northeast Home Heating Oil 

Reserve that I put into a bill with Congressman Markey back in, 

oh, about 10 years ago. We spend $10 million a year on it. It has 

never been used. Is that maybe something we could save a little 

money on? 

Secretary PERRY. Well, certainly, when you have dollars sitting 

in an account that is not being used it is—— 

Mr. BARTON. Something to look at. 

Secretary PERRY. Yes. 

Mr. BARTON. OK. And you have $159 million in your budget for 

something called Legacy Management. Do you happen to know 

what that is? 

Secretary PERRY. Yes, sir. Those are areas that older facilities 

that, on the cleanup side that is over in EM. 

Mr. BARTON. I am very proud that you knew what it was. 

Secretary PERRY. Yes, sir. The Cold War cost a lot of money as 

did the Manhattan Project. Still costing us a lot of money but it 

was worth it, sir. 

Mr. BARTON. Let’s see if we can save some money there. 

Thank you, Mr. Chairman. And thank you, Mr. Secretary. 

Mr. UPTON. The gentleman’s time is expired. 

The gentleman from California, Mr. McNerney. 

Mr. MCNERNEY. I thank the chairman. 

Mr. Secretary, I really appreciate your interest in veterans issues 

and particularly using science and computing power to make advances in PTSD and traumatic brain injuries and other veterancentric issues and I look forward to any collaboration—— 

Secretary PERRY. Yes, sir. 

Mr. MCNERNEY [continuing]. Between us in the future. There is 

two issues I want to bring up today. One is resiliency of the electric 

grid, especially in the face of the wildfires we had in California, 

and other threats that we are seeing and ARPA-E funding. Regarding resilience, does the DOE have any tools to help ensure resilience despite some of the gaps we have in our current law? Are 

there any tools that we can use that you can use to help us make 

our grid more resilient to these things in California and elsewhere? 

Secretary PERRY. Obviously the test grid, if you will, at Idaho 

National Lab is one of the resources that we have available where 

34 

we can literally go in and break that grid and to see what happens 

and how to address it. 

Mr. MCNERNEY. Well, what I am really thinking about is Federal 

tools to work between the DOI and the Forest Service to ensure 

rights of way so that brush can be cleared in Federal lands, those 

kind of things. 

Secretary PERRY. I am sorry. I was going down a different path 

here. 

Mr. MCNERNEY. Sure. 

Secretary PERRY. Let me get back to you. I don’t off the top of 

my head know that we have any resources available for that specific—— 

Mr. MCNERNEY. Or authorities. 

Secretary PERRY. Or authority, yes, sir. 

Mr. MCNERNEY. Thank you. 

Secretary PERRY. But I will get back to you. 

Mr. MCNERNEY. Well, the current budget proposal reduces fund- ing for resilience and reliability from $89 billion in 2017 to $61 billion in 2019. And we have seen an increase in some of these 

threats, wildfires, hurricanes, storms and so on, so that budget direction seems to be going the wrong way. I think we need increase 

in that so that is a point of recommendations. 

Secretary PERRY. Yes, sir. Mr. McNerney, I don’t want to quibble 

with you about the issue of is it a reduction of dollars or, one of 

the things that we have done, I believe, in that particular line item 

is that we bifurcated it. And that is where cybersecurity, and we 

split that historic line item up and are creating this new office of 

cybersecurity emergency response and that has an 8.3 percent, yes 

sir, I think that is right. It has a substantial increase over on that 

side and you may be seeing the EERE budget that is lower. 

But the commitment to resiliency and to reliability from my perspective has actually increased. And so let me come over and sit 

down with you and we can look at this a little closer to make sure 

that—I know what you want to do and I want to get to the same 

place that you are. I think the membership wants to get from the 

standpoint of making sure that we have the resiliency, the reliability in our grid. 

Mr. MCNERNEY. And of course then that applies to the whole 

country not just to California. 

Secretary PERRY. Yes, sir. 

Mr. MCNERNEY. Regarding ARPA-E, this program is designed to 

help keep the United States at the forefront of energy innovation. 

Energy innovation, I think that is a key element in ensuring our 

strong market position on energy issues. How determined is the administration in eliminating this program? 

Secretary PERRY. It shows up on the budget. I am a good enough 

historian to understand that we are going to do what the Congress 

wants to do on this. As a former CEO of the State of Texas I put 

some budgets forward from time to time that actually had zero line 

items in them. And—— 

Mr. MCNERNEY. That is kind of the same answer you gave 6 

months ago so. 

Secretary PERRY. Yes, sir. And that was not particularly well received by the appropriators. 

35 

Mr. MCNERNEY. OK. Mr. Secretary, do you support robust funding for fusion energy research and development? 

Secretary PERRY. Yes, sir. 

Mr. MCNERNEY. Thank you. Your predecessor was deeply involved in the negotiations for the Iran nuclear agreement. This administration has considered scrapping that agreement. Are you involved in those deliberations? 

Secretary PERRY. Well, being on the National Security Council, 

yes, sir, to some degree. I would not put myself as the lead negotiator, but certainly am involved with the conversations generally 

in rooms that we can’t be having conversations with here. 

Mr. MCNERNEY. Can you disclose your opinion on that? 

Secretary PERRY. Well, I think like any of our deals whether it 

is NAFTA, whether it is JCPOA, whether it is the negotiations that 

are ongoing with Saudi Arabia for a civil nuclear agreement, we 

need to get the best agreement that we can get. I think one of our 

main responsibilities is to, in the nonproliferation area is to make 

sure that the fewer individuals who have access to those types of 

materials that can be made into weapons we need to restrict that 

so. 

Mr. MCNERNEY. The agreement is already in place. 

Secretary PERRY. I understand that, but so is NAFTA and we are 

renegotiating NAFTA. So I think the administration’s point is can 

we re-engage and get a better deal. I don’t have a problem in the 

world with that no matter what it might be, whether it is NAFTA, 

whether it is JCPOA. We have people renegotiating LNG deals that 

they signed 3 years ago. 

Mr. MCNERNEY. I think the chairman is going to cut us off here 

so thank you. 

Secretary PERRY. I know. Yes, sir. Thank you. 

Mr. MCNERNEY. Thank you, Mr. Secretary. 

Mr. UPTON. The chair recognizes now the vice chair of the powerful Energy Subcommittee, Mr. Olson, from the great State of Texas. 

Mr. OLSON. I thank the chair. 

And, Secretary Perry, a big old Texas howdy. 

Secretary PERRY. Howdy. 

Mr. OLSON. It is great to have you back before the panel. As a 

personal note, I am glad you did not leave DOE for VA as was rumored. Houston Texans are happy to have your hat hang where it 

is hanging today. 

Secretary PERRY. Yes, sir. 

Mr. OLSON. I want to talk about section 202(c) of the Federal 

Power Act. I was one of the members of last Congress to lead an 

effort to amend section 202(c). That change was signed into law. 

The intent was limited. Talking about ‘‘continuance of war’’ or a 

‘‘sudden increase in demand for electric energy, or a shortage of 

electric energy,’’ there have been proposals to help failing coal and 

nuclear plants through section 202(c). I support coal and nuclear 

power and I believe we have to have a diverse grid. Hurricane Harvey showed that dramatically. 

In my district, as you know, NRG’s Parish power plant has four 

coal generators and four natural gas generators. Fifty inches of 

rain or more wiped out that coal, made it wet. They ramped up 

natural gas production at that facility. Forty miles south is the 

36 

South Texas Nuclear power plant in Bay City. That never had a 

flicker despite having the brunt of Harvey’s force. Could you please 

talk about your view of section 202(c) and the powers it gives you? 

Secretary PERRY. Yes, sir. And if I may, I would like to go back 

and just if I could very quickly clarify a conversation with Mr. Pallone where we talked about the email address on the 202(c) comments. And we have an address that is on our website that is the 

destination for correspondence for this and future applications. So 

it is not a formal comment period because there has been no formal 

comment opened up so I just wanted to clarify that. 

The 202(c) is in place and I think you did a very good job, Mr. 

Olson, of basically laying out why a 202(c) could be used in this 

case. When we look at national security in particular, if you are in 

New York City and Wall Street were to lose power, I think anyone 

would say that puts our national security in jeopardy. We have 

military bases in a lot of different places around the country that 

rely upon their energy from the grid. Losing power to that grid 

would put our national security at risk. 

So this administration looks at the national grid and the resiliency of it as well as the reliability of it as a national security 

issue. Having a very broad portfolio of renewables, of natural gas, 

of coal, of nuclear, of hydro, those are, we think, instrumental in 

being able to send the message across this country that whether it 

is in your private life or whether it is in your public life and I am 

talking about national security at that particular point in time 

versus why should anyone be put in the situation of having to 

choose between turning the lights on and keeping my family warm. 

And this administration believes strongly that if we don’t have 

a diverse portfolio and to try to keep these plants online obviously 

doing it with as much sensitivity as we can to the environment, 

and again in my opening remarks I made a comment that with 14 

percent decrease in carbon emissions in this country that is leading 

the world. So the innovation and the technology that we have coming out of this country, but it is imperative that we don’t allow political decisions to be made relative to our electrical, or excuse me, 

our power security in this country. 

Mr. OLSON. Yes, sir. One further question on India, I went there 

last week on a mission to talk about LNG being exported to the 

great nation of India and they were gushing, guess who is coming 

this week or the next couple days, Secretary Rick Perry. You get 

there and find out that Prime Minister Modi has a very aggressive 

plan to clean up their extremely dirty air and that is with renewables, mostly wind and solar. 

But the energy minister and their foreign secretary stated over 

and over that LNG natural gas is the economy of the now. The future is renewables. As you know, we have had a private contract 

between Cheniere and a company, a group called GAIL, there in 

India to export approximately seven metric tons of liquefied natural gas over the next 20 years. We agree that to make this viable 

and to make that transition they want to make they have to have 

better battery power, better storage and better power lines, and 

also make wind viable. So I want you to take that technology message to them. We are going to help you. And so any comments 

about your trip to India? 

37 

Secretary PERRY. Yes, sir. Two weeks ago, the first molecules of 

U.S. natural gas arrived at GAIL. I think the issue for them is to 

build out their infrastructure to be able to move that gas around. 

Not unlike, Mr. Chairman, what we have in this country. Yes, we 

are way ahead of them, but the point is if you are really going to 

be able to satisfy the economic needs and satisfy the national security needs of your people you are going to have to have the distribution system as well. 

So that is another area. U.S. pipeline technology, U.S. pipeline 

companies, I think there is a real opportunity in not just India, but 

India is obviously a huge market in our ability to deliver U.S. innovation, U.S. natural resources into that country are a great opportunity and that is the real driving factor of why we are headed that 

way. 

Mr. OLSON. Namaste. I yield back. 

Mr. UPTON. The chair recognizes the gentleman from California, 

Mr. Peters. 

Mr. PETERS. Thank you, Mr. Chairman. 

And I thank you, Mr. Secretary, for being here. I have the exact 

quote I will just read to you. When I asked you about the budget 

that was proposed by the President you said I didn’t write this 

budget, my job is to defend it which from time to time is counter 

to what I think is good. So I know you are here to do a job, but 

maybe we can—— 

Secretary PERRY. Yes, sir. 

Mr. PETERS [continuing]. Get some of your personal opinions on 

this. The budget makes cuts to the Office of Science which includes 

an important project named the International Thermal Nuclear Experimental Reactor which is sometimes referred to as ITER. Here 

is a program where the United States is one in an international 

partnership developing energy of the future by proving we can 

make fusion work. The U.S. contributes 9 percent of the project 

funding, but 80 percent of it is spent in the United States and we 

have access to one hundred percent of the intellectual property. 

And perhaps most important, when the technology is proven we 

can be part of the group that has ownership with monetizing capabilities instead of being a country that has to buy into the group. 

So with all these benefits, why does the budget cut contributions 

to ITER? 

Secretary PERRY. Mr. Peters, I think the basic messaging here on 

the reduction in that line item was, this is my observation just 

being a manager and having been in negotiations before, it was 

really poorly managed. And I think you know that. You all have 

been briefed on it. The previous management of ITER was very, 

very poor. They wasted a lot of money. 

And they have new management in there. Mr. Bigot came over 

and we sat down and discussed this. I was impressed with his 

focus, his understanding, his recognition of the poor management 

before. We have as a matter of fact out of your district a couple of 

projects that are being funded, the Solenoid, $75 million, and I 

think another aspect of the project that is ongoing that General 

Atomics is the deliverer, the manufacturer of, and we certainly 

support that and are funding that. 

38 

But with that said, if this committee and if Congress in a whole 

get comfortable along with obviously the administration, that it is 

headed in the right direction, we will make sure that the U.S. dollars that are expended there are expended properly and that there 

is good oversight and that we have the proper outcomes that we 

would be looking for. 

Mr. PETERS. I appreciate the comment about the management. 

That is fair. Now that we have improved that, I certainly hope we 

appreciate the leverage that we get out of this potential. 

Secretary PERRY. Yes, sir. Thank you. 

Mr. PETERS. And so just outside my district, San Diego Gas & 

Electric built and it runs the largest lithium ion battery in the 

world as part of its grid operations. It is proving that projects like 

this can be a valuable part of the grid particularly for resiliency 

and safety. How does the DOE budget ensure new technologies for 

grid resiliency can be implemented and tested properly? 

Secretary PERRY. And that goes right to the heart of our both Office of Science, Paul Dabbar, who is now the assistant secretary 

there I have great faith in his focus, and particularly we are supporters of, I have said before, the battery storage, the holy grail of 

electric power. I believe that. DOE and DOE labs working with private sector organizations like your constituents or right outside of 

your district are going to be key to that. So I am confident that 

what is happening in our national labs, the funding of those is appropriate to meet the needs of the battery challenges that face us. 

Mr. PETERS. Thank you. And just with respect to NAFTA, do you 

think that the disruption of NAFTA will have a negative impact on 

energy prices for Americans and supplies for U.S. energy companies who sell to Mexico and Canada, even the way we talk about 

it right now? 

Secretary PERRY. Not necessarily. I think generally speaking people are able to divorce the rhetoric with reality. For instance, Ray 

Washburne, who is the head of OPIC, he and I have had conversations with my counterpart in Mexico and private sector operators 

in the U.S. and their Mexican counter partners, if you will, to invest in Mexico’s energy infrastructure. So I feel confident. I think 

there is an extraordinary opportunity there. 

Mr. PETERS. I am going to run out of time. I appreciate what you 

say about rhetoric. I have got to tell you that NAFTA is so important—— 

Secretary PERRY. Yes, sir. 

Mr. PETERS [continuing]. To our country and to my district in 

particular and I understand the talk about improving it. I think we 

had more leverage when we were dealing with 11 other countries. 

We could offer more to Mexico. But I certainly don’t want to go 

backwards and some of the talk is, it looks like rhetoric is turning 

into policy and it concerns me. I just want to express that to you. 

Secretary PERRY. Mr. Peters, just as an aside, every time I see 

Ambassador Lighthizer I tell him we have got to get a deal. Get 

a good deal, but we have got to get a deal. 

Mr. UPTON. Mr. Latta? 

Mr. LATTA. Thank you, Mr. Chairman. And, Mr. Secretary, 

thanks very much for being with us again today. I really appreciate 

seeing you. And I think it is really important, because also in readVerDate Nov 24 2008 14:18 Jan 18, 2019 Jkt 037690 PO 00000 Frm 00044 Fmt 6633 Sfmt 6633 I:\MY DOCS\HEARINGS 115\HEARINGS\115-117 CHRIS
39 

ing your testimony about cybersecurity it is a big issue and in recent weeks we have read news stories about malicious agents working to undermine the safety and security of our nation’s energy infrastructure. According to the Department of Homeland Security, 

this includes Russian cyber attacks that have remotely targeted the 

power grid, energy, nuclear, and commercial facilities in critical 

manufacturing sectors. More recently, we have seen cyber attacks 

against the electronic communication systems of several American 

pipeline companies. DHS is still working to determine who is responsible for these specific attacks. 

And I believe from your response from the chairman of the subcommittee, the gentleman from Michigan, that you would agree 

that more needs to be done to address these attacks on our energy 

infrastructure. Is DOE working with DHS to identify the 

vulnerabilities that were exploited through these attacks and rectifying them and, if so, can you tell us what might be done and what 

is being done? 

Secretary PERRY. Well, there is nothing more essential to America’s national interest and for that matter our national security 

than our energy supply. The Department of Energy plays a very 

important role with that. We are the specific agency that deals 

with the energy side of particularly grid security, but we are also 

working with the other sectors, or not the other sectors but the 

other agencies as well, DHS, Department of Transportation, and 

DHS and Transportation Department leads cybersecurity support 

to pipelines. DOE works closely with them and other departments 

and we have some other stakeholders to protect the energy sector 

including the secure transport of our oil and gas. So we recognize 

the real challenges there. 

One of the reasons that we are asking for the additional dollars 

to stand up this office of cybersecurity that we refer to as CESER, 

C-E-S-E-R, is so that we can focus the resources, use our national 

labs, working with these other agencies of government, to assure 

the American people that we have done everything within reason 

possible to protect the American people from these cyber attacks 

that are only increasing in intensity and frequency. 

Mr. LATTA. Thank you. Given the nature of these threats, I believe it is more important than ever that Congress acts. That is 

why I have worked with my colleague, Representative McNerney, 

to introduce two bipartisan pieces of legislation to address the 

threat of cyber attacks. These two bills, H.R. 5239, the Cyber Sense 

Act, and H.R. 5240, the Enhancing Grid Security Through PublicPrivate Partnerships Act, was the subject of a legislative hearing 

held in this subcommittee last month. 

Under H.R. 5239, the Secretary of Energy would be directed to 

establish a voluntary cyber sense program to identify and promote 

cyber secure products intended for these in the bulk power system. 

And do you believe that this policy would help improve the safety 

and security of our energy infrastructure and address these 

threats? 

Secretary PERRY. It certainly on its face sounds like it. We will 

work with you in any way that we can to flesh out any details and 

information that we have privy to. 

40 

Mr. LATTA. I really appreciate that. Thank you. And along with 

Representative McNerney, I am also the co-chair of the Grid Innovation Caucus here in the House. The purpose of this caucus is to 

discuss the challenges facing the electric grid and to come up with 

ways that we can enhance its capabilities and securities. In addition to guarding against the threat of cyber attacks, will you go 

into more detail about other ways in which DOE is trying to improve the electric grid’s capabilities to protect it from these cyber 

attacks? 

Secretary PERRY. Yes, sir. We will work with you in—— 

Mr. LATTA. Well, I really appreciate it. Thank you very much, 

Mr. Chairman. I yield back the balance of my time. 

Mr. UPTON. The gentleman from Pennsylvania is recognized. 

Mr. DOYLE. Thank you, Mr. Chairman. 

Mr. Secretary, welcome back. 

Secretary PERRY. Mr. Doyle. 

Mr. DOYLE. Like many on this panel, I am greatly concerned by 

the premature closures of nuclear plants around this country. John 

Hanger who was former Secretary of the DEP in Pennsylvania and 

head of the Public Utility Commission in my state put it succinctly. 

He said there are now 18 nuclear units that have closed or are 

scheduled for closure in the last 5 years. Three are in my State of 

Pennsylvania, Beaver Valley I and II, and Three Mile Island. Those 

three nuclear units generated 22 terawatt hours of energy in 2017, 

all the wind and solar in Pennsylvania generated 4 terawatt hours 

in 2017. This is putting my State at the edge of a clean air climate 

disaster. 

Secretary Perry, I echo his concerns and would add that these 

nuclear plants not only provide good family supporting jobs, but 

also affordable, reliable, and greenhouse gas-free electricity. I just 

saw an interesting study that has come out by a think tank The 

Third Way that takes a look at the effect of these retirements of 

the nuclear portfolio and how it affects our ability to meet our climate change goals to reduce greenhouse gases below, 80 percent 

below 2005 levels by 2050. It would be virtually impossible for us 

to make that up, because as every nuclear plant retires even if we 

start greatly upping our renewables, they would have to make up 

for that loss before we start to add more carbon-free energy to our 

cycle. So I think it is a real problem. 

I know FirstEnergy recently filed this 202(c) request with your 

Department and I saw you quoted as saying that that may not be 

the most appropriate and efficient way to deal with this, but it is 

not the only way. And while I applaud your caution on the 202(c) 

request, I am curious what other options you think are on the 

table. Is this something that can be settled at DOE or in Congress 

or at FERC? What are the other ways that this might be dealt 

with? 

Secretary PERRY. Mr. Doyle, let me just say you are absolutely 

correct, very prescient in your observation about this country and 

the ability to deliver the energy needs with the premature in particular taking offline of coal and nuclear plants. I, like you, share 

a great concern about our ability to stay economically viable, but 

more importantly from a national security standpoint of taking 

care—— 

41 

Mr. DOYLE. And an environmental standpoint if we are ever 

going to meet our goals for climate change. 

Secretary PERRY. Absolutely. So to address the specific question, 

if you will recall, I want to say 6, 7 months ago, we put a 403 request in to the Federal Energy Regulatory Commission, to FERC, 

which we thought was an appropriate way to address this. They obviously did not. The 202(c) is an option. I would like to work with 

you and members of Congress on any other options that are out 

there that are reasonable that get the result of which we need in 

the result from my perspective is a diverse portfolio. And let me 

just add, I think it is really important for this country to have a 

nuclear, civil nuclear program in place. Too many previous administrations made some decisions that from my perspective put particularly the nuclear energy industry in jeopardy and we now see 

the results of that whether it was regulations, whether it was not 

supporting them in various—— 

Mr. DOYLE. Mr. Secretary, I would be happy to work with you 

on ideas to ensure that we keep our nation’s leading source of carbon-free power online. 

Let me ask you another question. Existing energy markets they 

don’t seem to consider the environmental attributes of nuclear 

power, but there are some States like New York and Illinois that 

have implemented strategies focused on ensuring that the environmental benefits of nuclear are recognized. Other States, including 

mine in Pennsylvania, are considering similar strategies, but I understand that some parties are proposing rule changes at PJM that 

could punish these States by making it more difficult for certain 

plants or units to participate in the markets. Do you think that is 

good policy? 

Secretary PERRY. I think any policy that restricts your diversity 

of your energy portfolio is not necessarily good policy. I think it is 

shortsighted. 

Mr. DOYLE. I see my time is up. Thank you, Mr. Chairman. 

Mr. UPTON. Mr. Shimkus? 

Mr. SHIMKUS. Thank you. Mr. Secretary, welcome. Since you appeared before us, our nation’s nuclear waste management has 

passed a few notable anniversaries. December marked the 35th anniversary of passage of the Nuclear Waste Policy Act of 1982 which 

formalized the Federal Government’s nuclear waste management 

program, as well as the 30th anniversary when Congress designated Yucca Mountain in Nevada the site as the location of our 

nation’s first repository. Of greater consequence, January 31st 

marked the 20th anniversary from the year in which DOE was legally required to take title to spent nuclear fuel for disposal at 

Yucca Mountain. Since then American taxpayers have been paying 

billions of dollars to manage spent nuclear fuel in 121 communities 

around the country. 

Secretary Perry, I would like to run through a few numbers with 

you quickly, and you probably know some of these and we can just 

kind of stick to the numbers because I have another question I 

want to get to. 

Secretary PERRY. Yes, sir. 

42 

Mr. SHIMKUS. As of the end of fiscal year 2017, what is the approximate amount rate payers paid into the Nuclear Waste Fund 

to construct/oversee our nuclear waste management program? 

Secretary PERRY. It is approaching $40 billion. I think it is about $37, $37.7 billion. 

Mr. SHIMKUS. And those are rate payers, people from states that 

had nuclear power that have paid in to solve this problem. 

Secretary PERRY. That is correct. 

Mr. SHIMKUS. How much did the value of the Nuclear Waste 

Fund increase during fiscal year 2017? 

Secretary PERRY. Almost $2 billion, I think $1.7 billion is the 

specific. 

Mr. SHIMKUS. That is the accrued interest on the base of the account. 

Secretary PERRY. Right. 

Mr. SHIMKUS. As of the end of fiscal year 2017, what is the total 

cumulative liability cost including future payments because Yucca 

Mountain is not yet open? 

Secretary PERRY. Just a touch over $34 billion. 

Mr. SHIMKUS. So that is payments that we are liable for because 

we are not complying with law. 

Secretary PERRY. That is correct. 

Mr. SHIMKUS. And you are saying then the $30-plus billion. 

Secretary PERRY. Yes. 

Mr. SHIMKUS. How much did American taxpayers pay in legal 

costs during the fiscal year 2017 because Yucca Mountain is not 

open? 

Secretary PERRY. $700 million. 

Mr. SHIMKUS. So for my colleagues, we move this bill, this an 

issue I am fighting with appropriators and budgeteers. This is 

money that taxpayers are paying that is really not on the books 

and it accrues to almost $800 million. What was the total increase 

in fiscal year 2017 in taxpayer liability in both actual payments as 

well as future projected liabilities? 

Secretary PERRY. That one grew substantially, $3.3 billion. 

Mr. SHIMKUS. If you break this total cost down to a daily cost to 

taxpayers that escalated during just last year how much are taxpayers liable for on a daily basis? 

Secretary PERRY. $9 million per day. 

Mr. SHIMKUS. That is a day. That is money that we could do, 

help our national defense, Title I programs, anything. That is just 

being paid because we are not complying with the law. So when 

people wonder why I get so focused, these are some of the reasons 

why. Last question in this area, how much was provided to the Department in fiscal year 2017—and I think I can add 2018 now— 

from the Nuclear Waste Fund for DOE to move forward with our 

Nuclear Waste Program and ultimately reduce our taxpayers’ legal 

payments? 

That is a zero, I am assuming. Not a one, it is a zero. 

Secretary PERRY. That is a zero. 

Mr. SHIMKUS. OK. And that is our liability as authorizers to 

push our appropriators to do what—— 

Secretary PERRY. And, I think, Mr. Shimkus, that is the reason 

that the administration requested $110 million for the legal process 

43 

to go forward, to be able to get the answer of whether or not this 

facility is in fact what you all in Congress have said it is. 

Mr. SHIMKUS. Yes. So the appropriation money is really to do the 

final adjudication with the Nuclear Regulatory Commission with 

you as an intervener with the State of Nevada to clarify the 

science. And that is the last part before we can then really start 

moving and addressing this. 

With my 30 seconds left, I won’t read the whole question but you 

have talked about the DOE and the great work it does. Obviously 

I am also very much engaged in the renewable fuel debate in this 

country. DOE has done a lot of good work on a study, I have quoted 

it before, the Co-Optima study. Are you familiar with it and what 

is your thoughts on it? 

Secretary PERRY. Say it again, sir? 

Mr. SHIMKUS. The Co-Optima study? 

Secretary PERRY. I am not. 

Mr. SHIMKUS. It is the high octane, it basically is addressing the 

high octane issue. We have a hearing tomorrow. 

Secretary PERRY. I will get up to speed on it and get back with 

you and have a conversation. 

Mr. SHIMKUS. Not a problem, I appreciate your time. Thank you. 

Secretary PERRY. Yes, sir. 

Mr. UPTON. The gentlelady from Florida. 

Ms. CASTOR. Thank you, Chairman Upton. Good morning, Secretary Perry. Yesterday in our Oversight Committee we had Bruce 

Walker, your Assistant Secretary of Electricity Delivery and Energy Reliability who gave us an update on restoration of the grid 

in Puerto Rico. And I think everyone was very heartened by what 

he had to say and what the Department is doing to build a more 

resilient grid, a more modern grid, tapping the expertise of our national laboratories and working with private sector partners and 

researchers there on the ground. 

And now Congress has provided the funds and overridden some 

of the language in the Stafford Act that says you have to just rebuild what was there, which if we did that that would not protect 

the taxpayers. So thank you and we will be watching for the modeling he said is necessary to do something very innovative there. 

But then we get the budget request. And I am very concerned 

about how anti-consumer the administration’s budget request is by 

eliminating our weatherization initiatives and energy efficiency initiatives that really help put money back in the pockets of consumers. This will hurt real people out there in the world. And then 

it is a budget request that sidelines science with devastating proposed cuts to clean energy research, smart grid R&D, and energy 

storage. 

And I think in doing this kind of budget request really cedes 

America’s leadership and it says to consumers you are going to 

have to pay more. And you know how competitive we are out in the 

world, it just doesn’t meet the challenges that we currently face 

with the cost of the changing climate and watching the transformation in the energy sector. 

The EIA has said wind, solar, and hydro now account for 18 percent of the energy generation in America. Solar is the fastest growing source of new energy worldwide because of its declining cost. 

44 

And yet, and you have said it yourself in testimony energy storage 

is the Holy Grail and yet what you said certainly doesn’t match the 

budget request because developments and innovations in energy 

storage are absolutely crucial for modernizing our electric system. 

The U.S. just hit a major milestone. We now have capacity to 

store 1 billion watts of power for an hour and while the U.S. is still 

leading in energy storage development, everyone says China is likely to pass us in the next 5 years. So it is very troubling your budget 

proposes to cut energy storage R&D by almost 75 percent. 

And let me read to you directly from your budget request, so 

folks, get a handle on this. You want to discontinue support for engagements with States, utilities, and storage providers for conducting grid-scale field tests and trials. Discontinue support for engagement with State and Federal regulatory officials on efforts to 

understand regional market barriers to energy storage deployment. 

Discontinue support to States and regional entities on procurement, commissioning, and techno-economic analysis of deployed 

systems. Eliminate support for new collaborative test bed and field 

trials. Discontinue support for development of enhanced tools and 

data to U.S. industry for development and use of grid-scale batteries. And this goes on. 

But why, you talk about energy dominance, but this is like waving white flags. Why would you propose such devastating cuts for 

a technology that would only increase the use of clean energy especially when our U.S. industries are in the fight of their life with 

China? So how do you explain that? 

Secretary PERRY. Ms. Castor, thank you for recognizing the great 

job that was done by particularly the private sector down in Puerto 

Rico. They were men and women who left their families for long 

periods of time. I was on a call yesterday with the subsector council 

and just said thank you as you have today. So thank you for recognizing that. 

Let me just briefly address your concerns here particularly on 

the issue of—and again I don’t want to go back over what I talked 

with Mr. Rush about, but we see a lot of the dollars that have 

flowed into this area before particularly on wind and solar as areas 

where they are being substantially more mature. The cost of those 

have gone down. I think each one of them 65 percent at least over 

previous year to date costs. So we have seen some substantial decreases in the cost of getting those technologies to the marketplace. 

And I think we are going through a shifting to battery storage 

and beyond batteries, if you will, which is a new focus in the fiscal 

year 2019 budget that we are going to be within EERE we are taking a holistic approach to energy storage. Early stage R&D is focused on controllable loads, on hybrid systems, new energy storage 

technologies, and again, this process is about finding the right balance and we are going to work with you to find that right balance. 

I not only recognize but respect your position here and you are 

absolutely correct. We have a huge challenge with China not just 

in this area but in a host of other ones. Supercomputing is one of 

them that I will suggest to you is at the top of that list. If we don’t 

get that one right we are in trouble. 

Mr. UPTON. Thank you. 

The gentleman from West Virginia, Mr. McKinley. 

45 

Mr. MCKINLEY. Thank you, Mr. Chairman. And thank you, Mr. 

Secretary, for particularly for your interest in preventing the premature closing of our country’s coal and nuclear power plants. 

But let me speak to a broader audience. This committee has held 

numerous hearings on this topic of grid reliability over the past few 

years. During that time, your last 10 years, 531 coal-fired units 

and 11 nuclear plants have been closed. Their output has been replaced with gas plants, but unfortunately only half of those plants 

have a firm supply for gas, meaning without a supply contract in 

a cold spell gas is understandably diverted from creating electricity 

for home residential heating. And according to NERC, in the past 

3 years America has experienced over 4,000 forced outages of 

power plants across America due to a lack of fuel. Ninety four percent of those outages were gas-driven power plants. 

So this should not, unfortunately, these statistics don’t give me 

the confidence that closing more coal units and nuclear power 

plants is a dependable option for national security. And you have 

been talking about national security throughout your presentation 

today. For example, nationally, in January, NETL reported without 

the resilience of coal the East Coast would have suffered severe 

electrical shortages, leading, likely, to widespread blackouts. 

And earlier this year, ISO concluded the possibility that power 

plants won’t be able to get the fuel they need to run is the foremost 

challenge to a reliable power grid in New England. According to 

PJM, the PJM’s market, it can also be shown that the demand for 

the grid could not have been met without coal. These are all quotes 

that are coming from major sources, major reliable sources. 

So taking these reports in consideration, can you just imagine 

what our grid stability was going to look like with dependability 

and resilience if we have fewer coal and nuclear plants? Mr. Secretary, you and I have had numbers of conversations about it and 

this committee has been saying all along that our fuel security is 

a national security issue. 

So, Mr. Chairman, I would like to submit for the record a series 

of documents, a letter that we have from 23 bipartisan members 

of Congress asking you to invoke 202(c). I have another letter that 

is written to the President, bipartisan support for some kind of implementation to save our aging coal and nuclear power plants. And 

we have four other letters of support from labor unions across the 

country and interest in saving and implementing 202(c). 

[The information appears at the conclusion of the hearing.] 

Quite frankly, Mr. Secretary, I believe it is time. You tried the 

403. Some form of 202(c) or some other emergency act is necessary 

if we are going to have national security. So I am calling on you 

to use whatever legal power you have so that we can meet the challenges that our manufacturers need and our communities need all 

across America with having a reliable grid system. 

So I would like to have your thoughts. Last Thursday I was with 

the President and he specifically said, I think in a crowd in West 

Virginia, I think we can work something out on 202(c). I know he 

has had conversations with you about that. Can you share the extent of not your private conversations, where do you think we are 

going with 202(c) or some component of that? Thank you. 

46 

Secretary PERRY. Mr. McKinley, I hope that your remarks have 

been televised and we can put them up because you have succinctly 

made the point for exactly what has to happen in this country from 

the standpoint of being able to protect the resiliency and the reliability of our electrical grid. And if you do not have sufficient coal 

and nuclear plants, the day is coming when particularly in the 

Northeastern part of the United States because of other restrictions 

that they have on energy flowing into that part of the world that 

the national security of this country is jeopardized. 

I don’t think that is appropriate in any way. Political decisions 

that put people’s lives in jeopardy are inappropriate and I think 

this President understands that. He has had multiple conversations with me and others in his administration to find a solution 

to that. That is exactly what we are working on today. There are 

a numberm, as you said 202(c) is one of those, there may be other 

options which we need to look at as well. 

Mr. MCKINLEY. Are we getting close to a decision? 

Secretary PERRY. Expedition is of importance. 

Mr. MCKINLEY. Thank you. Thank you, Mr. Secretary, and I 

yield back. 

Mr. UPTON. The gentleman’s time is expired. 

The gentleman from Maryland, Mr. Sarbanes. 

Mr. SARBANES. Thank you, Mr. Chairman. 

Thank you, Secretary Perry, for being here. Last October when 

you were here we talked about these ongoing threats to our national security, a little bit different from what you were just speaking about, which is the national security associated with maintaining a kind of diversified portfolio of energy sources. This is more 

about the cyber attacks that are coming in and we already know 

that there has been hacking attempts by the Russians against our 

elections last year. 

But we now know last month the Department of Homeland Security, FBI, publicly accused the Russian Government cyber actors of 

a multi-stage intrusion campaign that is going after the energy infrastructure. And I assume, I know that you view that as intolerable those kinds of attacks on our energy security framework, presumably. 

Secretary PERRY. Oh, absolutely. Yes, sir. 

Mr. SARBANES. And in the budget for fiscal year 2019 there is 

$96 million proposed for a new office to address cyber threats coming in against the energy sector and I appreciate that attention 

being given. I think we need a little bit more knowledge here in 

Congress to be able to respond appropriately to the proposal with 

respect to cybersecurity in combating these cyber threats. And last 

October you may recall I asked whether you would be willing to 

come and do a briefing on that specific topic. We haven’t had that 

yet so I would like to reiterate that request for a briefing. 

We can try to work with the committee. Obviously Congressman 

Latta, McNerney, and others have a real interest in this. I am sure 

the chairman does as well. So I just wanted to ask if you would 

be willing to work with the committee and our office to try to get 

that kind of a briefing together. 

Secretary PERRY. Yes, sir. We will work with the committee. 

47 

Mr. SARBANES. Thank you very much. I want to talk now about 

a proposed cut in the budget. It is a 70 percent cut to the Office 

of Energy Efficiency and Renewable Energy for fiscal year 2019. 

This program, the EERE program, as many colleagues of mine 

have been pointing out, has been a very smart return on investment for taxpayers, a net benefit of $230 billion when you look at 

what has resulted from it. 

I wanted to talk a little bit about what it means in my own district. One of the programs inside the EERE program or initiatives 

was the SunShot Initiative and that has been targeted for a 67 percent cut. This initiative was one where the Department of Energy 

would set a goal of capturing the potential of solar technology, 

which everybody acknowledges is critical in making solar electricity 

more affordable, by 2020. In Baltimore we actually worked with the 

Department of Energy to bring that potential to low-income homeowners so that all communities would be able to take advantage of 

low cost solar and energy. 

So it has meant a great deal to Baltimore. Over the last few 

years we have been able to put in 53 rooftop solar installations for 

low-income homeowners. There is 990 additional ones planned over 

the next 2 years and with DOE’s continued support the Baltimore 

Shines model, which is our local sort of version of the SunShot Initiative, if you will. This can really be a model across the country 

and we think can lead in terms of what it means to have diversified financing for low-income solar installation. 

So the basic question here is does your Department remain committed to the goals of the SunShot Initiative which seems to be like 

the terminology of it or the name of it is being pushed aside. It is 

hard to keep track of where your commitment is and the Department’s commitment is to this solar technology advancement is. And 

will you maintain the same commitment within the Solar Energy 

Technologies Office that has been a hallmark up to this point and 

further commit to making sure that low-income communities are in 

a position to take advantage of these low-cost energy and skilled 

job opportunities which are available within the solar technology 

industry? 

Secretary PERRY. Yes, sir. Mr. Sarbanes, let me work with you. 

I am not that knowledgeable with that specific program from a 

granular standpoint and I want to be able to give you an appropriate answer so I will follow up. 

Mr. SARBANES. I appreciate that. I think if you look inside the 

Department’s data on this it is quite impressive and we can help 

present some of that back to you as well. 

Secretary PERRY. Yes, sir. 

Mr. SARBANES. Thank you. 

Mr. UPTON. Mr. Kinzinger? 

Mr. KINZINGER. Thank you, Mr. Chairman. If I can get Mr. Flores’ attention for a second, yes, there you go. Thanks. 

Mr. Secretary, thank you for being here. As you may or may not 

know I have four nuclear power plants in my district which is the 

most of any in the country. It is eight reactors. Obviously that is 

many locations for spent fuel storage and so nuclear is extremely 

important not just for our domestic energy production, but one of 

the things last time you were here you and I talked a little about 

48 

was energy as a tool of national security and the importance of that 

and the role that that plays. 

Just this week you made the point that every molecule of American gas that goes into Europe is a molecule that they don’t have 

to get from Russia and be held hostage. I know you are aware the 

Russians are building or considering about 55 nuclear projects 

around the globe and for China that number is closer to 200 

projects. Does your sentiment about Russian natural gas apply to 

nuclear power as well, sir? 

Secretary PERRY. Yes, sir. It does. And I think it goes right to 

the heart of the agreement with Saudi Arabia that is being negotiated now, the 123 Agreement, in the standpoint of if we do not 

succeed in that effort the alternatives are China or Russia. Number 

one, neither of those countries care about nonproliferation, and the 

other one is we will lose the opportunity to develop our supply 

chain and our intellectual chain that will further put America at 

a disadvantage. And not just in the civil nuclear side, but sometime 

down the road on our ability to protect this country from a weapons 

standpoint. So this is a critical time in American history relative 

to supporting nuclear energy, civil nuclear energy. 

Mr. KINZINGER. Thank you. And I appreciate that your budget 

request prioritizes nuclear energy research, nuclear security, and of 

course Yucca Mountain. However, I remain deeply concerned about 

the state of our domestic nuclear industry as we have talked about. 

I have introduced legislation with my friend, Mr. Doyle, to make 

common sense reforms at the NRC to provide existing plants some 

relief, but without a strong domestic industry how do we expect 

American technology and, more importantly, safety culture and 

nonproliferation standards to compete with state-run power companies like Russia and China. So, overall, what is the DOE currently 

doing or planning to do to support our domestic industry and reaffirm our global leadership? 

Secretary PERRY. Well, obviously the administration is the message is clear not just on the nuclear side but coal as well and it 

is not just those two. This administration is committed to a broad 

portfolio of renewables of gas, of hydro, coal, and nuclear. 

Mr. KINZINGER. And while I believe that H.R. 1320 is part of the 

solution, there are several options to put the domestic nuclear industry on steadier ground and increase our global competitiveness. 

Can you elaborate as much as you can on DOE’s Light Water Reactor Sustainability Program which is looking at extending existing 

licenses from 60 to 80 years? 

Secretary PERRY. Yes, sir. We will continue to promote those 

technologies as best we can. We think that again this plays into the 

diverse portfolio and new technologies whether it is clean coal technologies, whether it is—I was on the West Coast at Livermore Lab 

2 weeks ago looking at technologies that are making our wind turbines more efficient. So there is a host of innovation rather than 

regulation is the real motto here from our perspective. 

And whether it is in the nuclear side of things, whether it is in 

the fossil fuels, whether it is in the renewables, the national labs 

and the dollars that you all are authorizing for these national labs 

will go a long way toward making America more competitive in the 

global energy marketplace. 

49 

Mr. KINZINGER. Thank you. And, lastly, do you believe that 

wholesale energy markets can do a better job at valuing the unique 

resource attributes of nuclear power, and if so how can DOE and 

Congress help to reform these energy markets? What role can we 

play in doing so? 

Secretary PERRY. Well, I think one of the roles that DOE needs 

to play in this is to rebalance that obviously previous to this administration coming into place there were some thumbs on the 

market and at least we should take that pressure off of the direction that those markets were headed. Obviously there were some 

political considerations in the previous administration that they 

were not fond of coal, they were not fond of nuclear, and both of 

those industries paid a price for it. They had their favorites in the 

arena and they supported those. What we are looking at is to rebalance, if you will, to take the thumb off of the market scale. 

But with that in mind, the more important issue is one of national security. Being able to know without a doubt that the energy 

supply will be there when we need it whether it is from a cyber 

attack that stops the transmission of gas somewhere, whether it is 

a hurricane that hits the, God forbid, not again, the northeastern 

part of this country, the national security side of this is even more 

important than the economic side of it. 

Mr. KINZINGER. Thank you, Mr. Secretary. I appreciate you being 

here and I yield back. 

Mr. OLSON [presiding]. Time has expired. 

Mr. Tonko for 5 minutes of questions. 

Mr. TONKO. Thank you, Mr. Chair. 

Welcome, Secretary Perry, and thank you for returning before 

the committee. Over the past year I haven’t agreed with all of your 

decisions or priorities. I thought the notice of proposed rulemaking 

was incredibly misguided, but overall, and it might surprise you to 

hear me say this, I think you have done a fine job as Secretary. 

Secretary PERRY. Yes, sir. 

Mr. TONKO. As far as I am aware there have been no major scandals or extravagant waste of taxpayer dollars. You have visited 

many national labs and it seems like you believe in the mission of 

the agency, all of which is more than I can say for some of your 

cabinet counterparts. 

With that said, I am concerned by a number of the proposed cuts 

in fiscal year 2019’s requests. Many of them have been mentioned 

already, EERE, the Office of Science, grid modernization programs, 

and the elimination of ARPA-E. In the past you have stated support for ARPA-E and DOE’s innovation budget. Last year you testified that energy innovation is a part of DOE’s core mission and I 

think you might agree that cuts of the magnitude that have been 

proposed are not good for the future of America’s global energy 

leadership. 

So I would encourage you to push back on OMB to ensure innovation continues to be a top priority of the agency. Specifically, now 

that Congress has appropriated fiscal year 2018 funding for programs that the previous request proposed eliminating, I expect we 

won’t see a repeat of last year’s impoundment of ARPA-E funds or 

a delay of weatherization funding to states which they are expecting on July 1. 

50 

But I want to focus on a different issue. Mr. Secretary, are you 

familiar with this recent National Energy Technology Laboratory 

report entitled, ‘‘Reliability, Resilience and the Oncoming Wave of 

Retiring Baseload Units’’? It is dated March 18th, or March 13th, 

excuse me, 2018 and it was posted on DOE’s website on March 

27th. 

Secretary PERRY. I am not an expert at it, but I am certainly familiar with it. 

Mr. TONKO. OK. Are you aware of any DOE political officials that 

discussed this report as it was being developed by NETL? 

Secretary PERRY. I am not. 

Mr. TONKO. Would you be willing to share any communications 

between DOE officials and NETL about the report with the committee? 

Secretary PERRY. I would be happy to. 

Mr. TONKO. Thank you. The reason I ask is because this report 

is cited numerous times in FirstEnergy’s section 202(c) request 

which was submitted just 2 days after the report was published on 

DOE’s website. I want to take issue with how the report represents 

the data to conclude coal made the grid more resilient during the 

bomb cyclone. 

I think most economists and grid operators agree on what happened. There was greater electricity demand, prices increased, and 

that allowed marginal power generators to come online. In PJM 

those are coal plants that under normal circumstances are not economically competitive. We saw electricity markets at work. When 

demand increased, more expensive generators could operate. This 

is evidence of coal’s cost, not its resilience. In fact, according to 

PJM, at times coal plants experienced higher failure rates than 

other resources. 

This notion that the only thing standing between us and blackouts is aging coal plants is just not accurate. What we might agree 

about, but I suspect for different reasons, is the premature closure 

of a significant amount of clean energy resources would be bad for 

air pollution as well as our short and long-term emissions reduction goals. If that is the case, we should look at what has been 

done by States, States such as my home State of New York, to preserve and compensate zero emissions generation. Or if you prefer 

an in-market solution, consider what New York’s ISO is working on 

to develop to price carbon within the market. 

These options are not without their flaws or opponents, but they 

do represent a serious path forward to address some of the issues 

you have been discussing this past year. But ultimately these are 

policy decisions for States or for Congress. Acting under the pretense of an emergency to justify unilateral agency action is not 

good for consumers or the people responsible for operating our grid. 

So, Secretary Perry, do you have any thoughts on the role or appropriateness of States taking action to support zero emission generators through clean energy standards or similar programs? 

Secretary PERRY. No, sir. I encourage States to get involved with 

making their states more competitive. I certainly did that when I 

was the Governor of Texas and we saw a reduction, almost 20 percent of total carbon footprint, over 60 percent of both CNOx and 

51 

SOx during that period of time. So the point is, states can have a 

real role in this. 

With that said, from my perspective this issue that we are facing 

and I recognize—and by the way thank you for your kind remarks. 

My wife doesn’t even agree with me all the time, so—— 

Mr. TONKO. OK. Well, I need to meet her then. 

Secretary PERRY. Yes, sir. I am going to show her this, if you 

don’t mind. But the point is that there are real national security 

implications here. And I will finish with this. As the Governor of 

Texas I brought in ERCOT, which is our big Electric Reliability 

Council that oversees our generation in Texas. And I think it was 

late spring of one year we had had a very hot summer, which we 

typically do in Texas, and we had had some brownouts. We were 

trying to manage the system. 

And I shared with them, I said, listen, you are the expert here, 

but I don’t want to get a phone call from citizens of this state because you weren’t prepared and you didn’t put in place the needed 

generation capacity to be able to deliver electricity to a city like 

Dallas that has had 15 straight days of 105-plus degree temperature and a grandmother has died. I said that is not a conversation 

that I am going to accept, and the same is true as the Secretary 

of Energy. 

And the administration is focused on making sure that we have 

the resiliency and the reliability of our grid, and I want to work 

with you. I will work with the states as well to find the solutions 

to this. But I don’t think we have time to be studying this anymore 

to the standpoint of oh, let’s just kick the can down the road. I 

think we are facing with these plants being scheduled, some of 

them prematurely, to come offline, I just don’t want a call from 

somebody in Upstate New York because the power has gone out because we didn’t have the political courage to put into place a strategy that made sure that a citizen of New York is never going to 

have to make the decision of whether or not we are going to turn 

the lights on or are we going to keep our family warm. 

Mr. TONKO. I have exhausted my time. I would just say that New 

York did make certain that they had their power supplies met and 

with zero emissions being the guiding force. So I think that is the 

difference here. 

But I yield back, Mr. Chair. 

Mr. OLSON. Time is expired. 

Mr. Griffith, 5 minutes for questions, please. 

Mr. GRIFFITH. Thank you, Mr. Secretary. I appreciate you being 

here. All my questions have gone out the window because of comments that have been made of recent or at least a lot of them have. 

You were very kind to the previous administration to say they 

put their thumbs on the scale when they were looking at various 

energy sources. In my district which has got natural gas, predominantly coal, we felt like it wasn’t a thumb on the scale, we felt like 

it was a boot on our necks. We had thousands of jobs lost, families 

disrupted, communities losing businesses left and right, hospitals 

closing down because they no longer had the big employer at the 

coal mine to pump in the insurance into the hospital and the 

money coming in there. It was devastating. 

52 

And so I was kind of surprised, one, that Mr. McKinley missed 

the NETL report in his detail. He kept going. I guess he had to 

have some time for questions and so he left that one out. But further that Mr. Tonko doesn’t understand. And he is a good man, but 

he doesn’t understand. It would be easy for people who were that 

desperate like a thirsty man in the desert who finally discovers an 

oasis to consume that NETL report and put out the request for 

202(c) relief within 2 days because the coal community has been 

desperate until you all have come along and not wanting to put 

your finger on the scale at all but wanting to make sure that there 

is an all-of-the-above strategy for the United States, and I thank 

you. Would you like to make any comment before I go on? 

Secretary PERRY. Go right ahead, sir. 

Mr. GRIFFITH. All right. So I appreciate that and I do have this 

to say although it is not your Department. He indicated that, the 

fact that we had to use the coal and it cost more that that was the 

markets at work. It is also Federal regulation. Because what we 

need to do is we need to look at the New Source Review rules, because when a coal-fired power plant and lots of other businesses 

that use coal for power go in and they want to make one little 

change, even if it makes that plant more efficient, they have to 

then comply with all kinds of regulations. 

I have a facility in my district which is not a power plant, another facility that I toured a number of years ago and they had a 

kink in their conveyor belt because at one time there had been a 

part of their paint shop on the end of the conveyor belt. They no 

longer had that paint shop or that painting capacity, I think it was 

lacquer, but they left the kink. And so we walked over the conveyor 

belt once and then we walked over it a second time where it just 

went out into empty space, and the owner said that because he had 

to meet those EPA regulations it was easier just to leave the kink 

in the conveyor belt than to make his process more efficient. We 

need to make some changes there and I hope you would agree with 

that even though I know it is EPA’s turf. 

Secretary PERRY. Right. Mr. Griffith, I think you bring in a very 

high level way what this administration is focused on. The President has given clear directives to people like myself, Scott Pruitt, 

Secretary Zinke from a regulatory standpoint that getting rid of 

regulations where the costs outweigh the benefits is one of the real 

goals. And it has been, I think, very successful to date. 

And the key here is having some common sense applied, being 

able to recognize that we have overregulated this country and those 

overregulations have cost this country a huge amount of jobs and 

untold wealth. 

So you were spot on from the standpoint of the single most important thing I learned as a governor that tax policy is important. 

You don’t overtax, but businesses know how to deal with that. It 

is when you have a regulatory environment that is strangled where 

you will lose your businesses. It is one of the reasons we were able 

to bring a lot of businesses out of California to Texas, no offense 

to anybody from California that is here. But the point is they were 

overregulating and businesses want to get out of that environment. 

So the regulation side of what you are talking about is incredibly 

important. It is not just about being able to address the national 

53 

security side of things, the issues that we talk about whether it is 

a 202 or whether it is some other avenue towards making sure we 

have a reliable portfolio, but the regulatory environment in this 

country has to be addressed. 

Mr. GRIFFITH. And I could not agree more. And I appreciate all 

the work that you all are doing in the administration to get this 

straightened out because it really has, I think, hurt our country. 

That being said, let me switch to more positive things. Ms. Castor complimented you on the testimony of one of your folks at the 

O&I subcommittee yesterday related to Puerto Rico. I think that 

they are doing great work down there and we appreciate it, but I 

think we can also use that as a test bed for other areas that might 

get isolated in a disaster and look at doing microgrids and other 

things that we can move this country forward to make sure that 

we have our grid resilient. We have a perfect example. We are 

going to spend a lot of money there anyway. Let’s spend it doing 

experiments to see how we can build the system for the rest of the 

country as well. 

And with that, I know you agree but I have to yield back. 

Secretary PERRY. Yes, sir. 

Mr. OLSON. Time is expired. 

Mr. Loebsack, 5 minutes for questions. 

Mr. LOEBSACK. Thank you, Mr. Chair. 

Great to see you again, Mr. Secretary. 

Secretary PERRY. Sure, thank you. 

Mr. LOEBSACK. We don’t have a lot in common, Iowa and Texas, 

but we do have wind energy in common. 

Secretary PERRY. I have spent a lot of time in your home state, 

sir. 

Mr. LOEBSACK. I am aware of that too. That is right. Seems like 

ages ago, but I am aware of that. Thank you. But I am happy 

about your support for wind energy. As you know that constitutes 

about 37, 38 percent of the electricity generated in the State of 

Iowa so it is really a great program. And thank you for coming 

back to this committee. I do appreciate the accountability that you 

demonstrate here. I think all of us do on a bipartisan basis. 

As you know of course my home State of Iowa does lead the Nation in biofuels production. It is an integral part of our economy, 

the farm economy, and right now the farm economy is suffering. 

We have concerns about trade issues too, we don’t need to get into 

that today. But that is certainly a bipartisan concern that we have 

in the State of Iowa, what is happening on that front. And I am 

sure that you are aware of the recent press reports about the waivers that the EPA has granted the small refineries to release them 

from their obligations under the Renewable Fuel Standard program 

including, actually, some of the Nation’s largest and most profitable 

refiners. 

And as you can imagine, the biofuels community has significant 

concerns about the apparent increase in the awarding of these 

waivers by the EPA and about the implications for the biofuels industry, the corn market and of course the farmers who depend 

upon the market and the workers in the industry, all the John 

Deere and a lot of other, the implement companies that are all related to this as well economically. And the small refinery waiver 

54 

process as you know requires the EPA to consult with the DOE and 

with you, the Secretary of Energy in particular, in review of the exemption petitions and unfortunately there is not a lot of transparency, if any, in this process. 

So I do want to ask you, has the EPA consulted with the DOE 

on their issuance of these waivers as required by law? 

Secretary PERRY. Yes, sir. I would suggest to you they have. I 

don’t know the intensity and that may be the wrong word, but the 

depth of those negotiations and what—I know that they use us as 

the agency to advise them about how this would impact the energy 

sector. So, but for clarity purposes, EPA is who hands out those. 

Mr. LOEBSACK. Right. But they are required by law to consult 

with DOE, with the Secretary of Energy, right? 

Secretary PERRY. But they do consult with us. Yes, sir. 

Mr. LOEBSACK. Does your office recommend that EPA adopt any 

small refinery waivers this year, and if so what waivers did you 

recommend? 

Secretary PERRY. Let me go back and get the details of that for 

you so that I can give you specific and correct information. 

Mr. LOEBSACK. Yes and I really do appreciate that because what 

I am going to ask you then, moving forward, just yesterday your 

counterpart at the USDA, Secretary Sonny Perdue, indicated that 

he believes the EPA is misusing the hardship waivers. And as you 

know our governor is in town today too and she is trying to get 

through to the President to talk to him about the RFS. 

Secretary PERRY. Yes, sir. 

Mr. LOEBSACK. Do you agree with Secretary Perdue that the 

EPA has misused the hardship waivers? 

Secretary PERRY. I can’t speak to that because I don’t know the 

details of the issue. If I could just add one side of the story, one 

of the things that we are working on is to find some other, it would 

be, number one, I know my Iowa corn farmers pretty well and they 

really don’t care where this ethanol goes as long as it gets to go 

somewhere. 

Mr. LOEBSACK. I just had a meeting with a number of them last 

weekend. 

Secretary PERRY. Yes, sir. And I respect that having been a 

former agricultural commissioner of the State of Texas. We are in 

conversations with my counterpart in Mexico and we were talking 

to him as late as this last month about being able to move U.S. 

ethanol into Mexico into their fuel mix because they are in the 

process of we understand that they are going to be mandating some 

ethanol. 

Mr. LOEBSACK. And I really appreciate that. And we have to keep 

in mind too that we are talking about a lot of production of corn 

here in the country and of course around the world and ethanol is 

obviously one use of that corn. There is no question. But we have 

to make sure in those NAFTA renegotiations that we don’t get our 

corn market in Mexico cut off as well. 

So I just have some questions. I don’t have time to go through 

them here, but I do want to submit these questions for the record 

having to do with the total number of refinery waiver applications 

that the DOE evaluated for the last 5 years. So a number of those 

and I would like to submit those for the record, Mr. Chair. 

55 

Secretary PERRY. So we will have them ready for you. 

Mr. LOEBSACK. And thanks for your time today. I appreciate it. 

And we look forward to your answers to our questions. 

Secretary PERRY. Yes, sir. 

Mr. LOEBSACK. Thanks, Mr. Secretary. I appreciate it. I yield 

back. 

Mr. OLSON. Thank you. 

Mr. Johnson, 5 minutes of questions. 

Mr. JOHNSON. Thank you, Mr. Chairman. 

Mr. Secretary, good to see you again. 

Secretary PERRY. Thank you, sir. 

Mr. JOHNSON. I sure enjoyed our trip down to Piketon a few 

months ago. 

Secretary PERRY. Yes, sir. 

Mr. JOHNSON. You and I had extensive discussions when we were 

there and, like you, I support an all-of-the-above energy policy and 

I know you believe that as well. My district in Eastern and Southeastern Ohio, and you and I have talked about that a little bit as 

well, is no stranger to the benefits of a diverse generation with our 

abundance of both coal and natural gas. Many of the coal plants 

in the 6th District of Ohio, along the Ohio River are not only a reliable source of power but they are the strong economic drivers for 

the communities in which they exist. The people rely on them there 

for good paying jobs. 

So I worry about the recent retirements and announced retirements of coal plants especially as Federal and State laws and regulations have played a major role in affecting these plants over the 

years. I know you have repeatedly expressed similar concerns and 

have pushed FERC on these issues. So my first question, are you 

satisfied with FERC’s work to date on this issue and do you believe 

FERC and the RTOs and the ISOs are taking the right approach 

to these issues? 

Secretary PERRY. Well, relative to the 403 that we sent up, I 

would have to be on the opposing side of, I wouldn’t have sent 

them our recommendations if we didn’t think they were correct. So, 

that is the only dealings that I have had with them to date. 

Mr. JOHNSON. Sure. 

Secretary PERRY. So my first experience of picking up that potato 

was it was pretty hot. 

Mr. JOHNSON. Yes, yes. Well, second question, you state that the 

fiscal year 2019 DOE budget will help improve grid resilience and 

support generation diversity. Can you provide examples on how 

DOE will work towards these objectives? 

Secretary PERRY. Well, obviously having grid diversity has to do 

with having resource diversity. One of our challenges is that in the 

course of the last decade the resources have changed drastically. 

You think back to 2005, just as Hurricane Katrina was coming into 

the Gulf Coast there was a fellow giving a speech about peak oil. 

Fast forward 10 years and the United States is in the process of 

becoming the number one oil and gas producing country in the 

world. I mean that literally happened in a decade, the explosion of 

renewables and the grid being able to manage all of that and so 

the technology to manage the grid. And I put that into the resiliency side and the reliability side. 

56 

So the challenges that are out in the world today and how quickly they came is a great testament to our national labs and the innovation that comes out of those national labs and our private sector working together in many cases. So the way we look at this is 

we have been blessed with a lot of resources. How you manage 

those resources both with innovation and with common sense, common sense part of this from my perspective is don’t restrict resources getting into your grid that could put your national security 

in jeopardy, for instance. 

So all of this is, it is quite a challenge, Mr. Johnson, as you 

know, but I am quite confident we are up to it and we will find 

the solutions that challenge us as a country. 

Mr. JOHNSON. Yes. Well, thank you, Mr. Secretary. 

Shifting gears just a little bit, when we were at Piketon, you and 

I, and I appreciate your support of all the stuff that is going on 

down at Piketon as well. I appreciate that very much. You have 

made reference to an Appalachian plan which relates to infrastructure to take advantage of our natural gas resources and other industrial resources in West Virginia and Ohio. Can you elaborate 

quickly what that vision looks like? 

Secretary PERRY. Yes, sir. As the Governor of Texas I used to fret 

greatly in August and September about a Category 5 hurricane 

coming up the Houston Ship Channel, Mr. Olson, and creating 

havoc in the petrochemical footprint in the State of Texas which 

would have negative effect all over this country. Having a duplication of that somewhere made a lot of sense to me and why not put 

it where the resource is which is in the Appalachian region. You 

are sitting on top of the Marcellus, the Utica. 

So if government will not be an impediment from a regulatory 

standpoint in particular, the private sector will come and fund 

that. This isn’t a matter of coming to Congress and saying hey, will 

you put millions of dollars into this. Just don’t get in the way. 

Mr. JOHNSON. There you go. 

Secretary PERRY. And help those States, West Virginia, Pennsylvania, Ohio, Kentucky, put that plan together. We are in the, I am 

not going to say nascent but we are in the early stages of conversation coordinating with those states, coordinating with other agencies to be able to lay out a plan hopefully before this year is out 

so that there is a clear opportunity for this country to have a duplication of that petrochemical footprint in the Gulf Coast of Texas in 

the Appalachian region. The economic impact would be stunning. 

More importantly, the national security side of it would be farreaching. 

Mr. JOHNSON. Makes perfect sense. 

Thank you, Mr. Chairman. I yield back. 

Mr. OLSON. The gentleman yields back. 

Mr. Schrader, 5 minutes for questions. 

Mr. SCHRADER. Thank you, Mr. Chairman. And thank you, Mr. 

Secretary, for being here. It is nice to have a normal and competent 

member of the administration before the committee here. 

I would like to go back to Chairman Walden’s comments regarding the Power Marketing Administrations. As you might imagine 

that is a bipartisan issue in my part of the country. On page 14 

of your testimony you state budget proposes a sale of transmission 

57 

assets of the Western Area Power Administration, Bonneville 

Power Administration, and Southwestern Power Administration 

and to reform the laws governing how the PMAs establish power 

rates, et cetera. 

Frankly, as a member of Congress in the Pacific Northwest, very 

concerned about the administration’s continued insistence we sell 

off transmission assets at the Bonneville Power Administration and 

require them to sell power at market rates. Mr. Chairman, I guess 

I would like to enter into the record the bipartisan letter the Pacific Northwest delegation sent to OMB Director Mr. Mulvaney opposing this proposal in the 2019 budget. 

Mr. OLSON. Without objection, so ordered. 

{The information appears at the conclusion of the hearing.] 

Mr. SCHRADER. Thank you. The BPA is a nonprofit Federal 

wholesale utility and power marketer that receives no congressional appropriations. I repeat that, no congressional appropriations, and must recover its costs with revenues it earns like the 

private sector from selling wholesale power and transmission services. BPA provides approximately half the electricity used in the 

Pacific Northwest and operates three-quarters of the region’s high 

voltage transmission grid. Selling off these transmission assets 

would fragment the grid, be devastating to the region, and provide 

a meager one-time asset that would not have any long-term beneficial effects with regard to our economy. 

By requiring BPA to sell power at market rates would essentially 

be the death knell of BPA. BPA serves the public interest and has 

other obligations and as such BPA markets its power at cost. Historically, it has provided some of the lowest cost electricity in the 

Nation, natural gas having put some pressure on it obviously at 

this point. And that coupled with BPA’s increased court-mandated 

spill and fish recovery operations, which account now for a third of 

the rates that Pacific Northwest folks pay and that Treasury consequently does not have to pay, has put additional cost pressures 

on the agency and driven their costs up some. 

Requiring BPA to sell its power at market rates would drive 

them into the red, make them unable to meet their obligations to 

the Treasury, actually costing taxpayer money, strand the Federal 

Government with a very expensive, nonfunctioning asset and put 

fFederal taxpayers on the hook for the fish mitigation costs which 

come to the tune of almost a billion, or I think a little over a billion 

dollars a year. 

There has been overwhelming bipartisan, bicameral opposition as 

the chairman of the full committee testified to, opposition to the 

administration’s proposal. Eight members of this committee including my fellow Northwest colleagues, Ms. McMorris Rodgers and 

Chairman Walden, sent a letter to our budget committee this year 

that I referenced asking them to reject the proposal, yet once again 

it seems like we are here. 

So our region already produces some of the cleanest power that 

we have talked about, very affordable. We repay the Treasury with 

interest. So if you can explain to me what problem the administration is actually trying to solve with this proposal. 

Secretary PERRY. Mr. Schrader, let me just remark that maybe 

it is my best addition here would be I am reminded of a Kenny 

58 

Rogers song where he talked about you need to know when to hold 

’em and know when to fold ’em. 

Mr. SCHRADER. I understand and appreciate that response and 

appreciate your—— 

Secretary PERRY. Congress has been very clear about this issue. 

I will be more than happy to carry the message back. 

Mr. SCHRADER. Thank you very much, Mr. Secretary. Thank you 

for being here. 

Secretary PERRY. Yes, sir. 

Mr. OLSON. The gentleman yields back. 

Dr. Bucshon, 5 minutes of questions. 

Mr. BUCSHON. Welcome, Secretary Perry, from Southwest Indiana. 

Secretary PERRY. Yes, sir. 

Mr. BUCSHON. This committee has spent most of this Congress 

examining the country’s electrical grid and throughout our hearings experts have stressed to us the importance of a reliable and 

resilient electrical grid. There are many sources of energy that can 

power the grid. However, coal-fired electricity is one of the most reliable fuel secure and affordable energy sources. This was evident 

during the 2014 polar vortex and again most recently with the 

bomb cyclone. It was the reliable baseload power plants such as 

coal and nuclear that prevented blackouts in many regions of the 

country. 

Even with its reliability, coal-fired plants continue to retire at 

alarming numbers, and I know Mr. Johnson just mentioned this. 

Since 2010 more than one-third of the Nation’s coal-fired power 

plants have shut down or announced plans to close. That is the 

equivalent of shutting down the entire electricity supply for Indiana, Ohio, Illinois, and Kentucky. Thirty nine coal power plants, 

power generating units have been forced to close in my home State 

of Indiana alone. 

The 8th District of Indiana which I represent is home to all the 

coal mines in the State of Indiana which is responsible for more 

than 70 percent of the State’s energy. Without traditional baseload 

energy sources such as coal being properly valued in wholesale 

markets plants continue to be at risk of retiring, leaving many of 

my constituents at risk of losing their jobs, seeing higher electrical 

bills, and providing less reliable energy to power our homes. 

This is why I have introduced H.R. 5270, the Electricity Reliability and Fuel Security Act, which would create a temporary tax 

credit covering a small portion of the cost to operate and maintain 

existing coal-fired power plants. I believe the temporary tax credit 

which would last for 5 years is necessary to avoid more coal retirements while Congress, the administration, and grid operators work 

together to ensure the grid remains reliable and resilient. 

Secretary Perry, do you think that you would be supportive of 

this legislation and the other efforts that Congress, DOE, FERC, 

and the grid operators are taking to properly value coal to prevent 

more power plant retirements and provide our nation with a more 

reliable and secure grid? 

Secretary PERRY. Yes, sir. Mr. Bucshon, I think it is important 

that we put into place some processes that assure this country has 

a reliable and resilient grid and coal is going to be a part of that 

59 

and coal is going to be a part of the future energy supply of the 

world. By 2040, the estimate is at 77 percent of the energy produced in the world will still be fossil fuel, coal will be playing a 

major part of that. 

Our goal and our part to play in this is that U.S. coal imports 

are up 61 percent from a year ago, we are going to continue. When 

I go to India we are not just going to be talking about LNG. We 

are going to be talking about coal and clean coal technology that 

is developed in this country. We want them, they are going to burn 

coal and we want them to use our technology to be able to remove 

the emissions that are harming the environment in that part of the 

world and globally as well. 

So any reasonable approach to making sure that we have a reliable energy source in this country we are going to be working with 

and we certainly think your legislation is reasonable and heads in 

that direction. 

Mr. BUCSHON. Thank you very much for being here, Secretary. 

Secretary PERRY. Yes, sir. 

Mr. BUCSHON. Thanks for your work. 

Mr. Chairman, I yield back. 

Mr. OLSON. The gentleman yields back. 

The chairman calls upon the gentleman from Texas, Mr. Flores, 

for 5 minutes of questions. 

Mr. FLORES. Thank you, Mr. Chairman. Mr. Secretary, I think 

you and I are equally supportive of LNG and we recognize the incredible importance of LNG exports not only in terms of our balance of trade and economic opportunity, but also the geopolitical 

position that it places us in vis-a-vis some of the threats that we 

face around the world. 

I know that you have taken some good steps to improve DOE’s 

permitting process when it comes to LNG to clear the backlog of 

the applications that were pending that you inherited from the last 

administration, but I also understand that FERC is understaffed 

and that they are overwhelmed with their own backlog. Is there 

anything that you as the Secretary of DOE can do to help FERC 

with their backlog? 

Secretary PERRY. I would be more than happy to have this conversation with the chairman and we are more than happy to assist 

them in any way we can. 

Mr. FLORES. OK. It was my understanding you might be in a position to move some folks from Sandia temporarily to FERC to help 

with that. Anyway, if you can answer that supplementally for us 

that would be great. So, now with LNG out of the way, the next 

area that I am particularly focused on today is nuclear, particularly 

advanced nuclear technologies. The alma mater that you and I 

share, which I am pleased to represent, is a partner on some of 

DOE’s university engineering university programs. I understand 

that the administration is conducting a wide range in review of nuclear policy, but while we await the outcome of that broader review 

what are the most important policies that Congress can advance 

now in the short term, in the near term? 

Secretary PERRY. I am sorry? 

60 

Mr. FLORES. What are the most important policies that Congress 

can advance in the near term while we wait for the administration 

to finish its overall nuclear review policy? 

Secretary PERRY. Well, certainly I think that making sure that 

the resources are appropriate on this national nuclear policy review, and we have for too long, I guess, Mr. Flores, this country 

has kind of put nuclear, our arsenal on the back burner, if you will. 

Mr. FLORES. Right. 

Secretary PERRY. The mid ’90s and the Peace dividend and the 

world was going to live happily ever after and that is not the case. 

And we came to our senses, if you will, or the world became a little 

clearer in view and we saw that maybe we need to make sure that 

we have a nuclear arsenal that is modern. These things, they age 

just like any other infrastructure. Being able to modernize it, being 

able to look at new systems, whether it is delivery or whether it 

is the actual arsenal itself, is very much an important role that you 

in Congress are going to play from being able to fund it for one 

thing. 

Mr. FLORES. Sure. 

Secretary PERRY. We have a new administrator of the NNSA, a 

very capable individual who I think you will find very good to work 

with, very knowledgeable, and a good partner in this. 

Mr. FLORES. When we look at the nuclear technology of the future, advanced nuclear reactors and small modular reactors, any 

time you have a first-mover technology like that there are some 

challenges in terms of trying to help, that our nuclear innovators 

face in terms of trying to get them off the ground so that they can 

move forward and get it into a position to be a commercially viable 

power generation source. 

I would ask you if you would have your staff work with us so we 

can try to figure out what those challenges are and what Congress 

can do to develop the statutory framework to be able to address 

those challenges. 

Secretary PERRY. Yes, sir. We think SMRs are incredibly important going into the future, the application that they can play particularly in for our national security. If the concern is about keeping these devices secure, obviously being on a United States military base is as secure a site as you can have. So, SMRs are going 

to play a very, very important role in the diversity of our portfolio 

energy production-wise going forward. 

Mr. FLORES. OK. Well, thank you, Mr. Secretary. I have reached 

the end of my time. I do have additional questions that we will 

submit supplementally and I look forward—— 

Secretary PERRY. Yes, sir. 

Mr. FLORES [continuing]. To working with you as we address our 

nation’s energy policy. I yield back. 

Mr. OLSON. Time has expired. 

Mr. Cramer, 5 minutes for questions. 

Mr. CRAMER. Thank you, Mr. Chairman. 

Thank you, Mr. Secretary, for being with us again. Thank you for 

your excellent leadership at the very important agency. Before I 

drill down into what is most important to me today is specifically 

the fossil energy research and development budget, I want to associate myself with Mr. Peters’ comments about ITER. Even though 

61 

San Diego is a long ways from North Dakota, his point about 

leveraging that resource, I think was made well. And I also want 

to associate myself with the fact that I do feel like there is a greater confidence given recent changes in leadership. 

Secretary PERRY. Yes, sir. 

Mr. CRAMER. And I appreciate your attention to that and your 

vast knowledge of it, so thank you for that. With that, I do want 

to get to the more concerning topic for me and that is the administration seems to be sort of sliding away from a commitment to at 

least if not pilot scale, commercialization gap with demonstration 

projects in the fossil energy R&D, particularly as it relates to 

where I think the folks ought to be and that is carbon capture and 

utilization and storage of CO2 from coal-fired power plants. 

Now we know and we appreciate in North Dakota your role, your 

agency’s role in partnering with the Energy & Environmental Research Center at the University of North Dakota and some of our 

utilities, particularly Minnkota Power, in looking for some opportunity, testing some opportunity for Allam cycle or, and some of 

these technologies that will bridge, bridge coal, coal’s past, and 

coal’s future as a clean resource. But without the gap being filled 

or at least supplemented by the taxpayers, I don’t know that we 

can get there, quite honestly, and yet we need it so badly. 

Specifically, the administration’s fiscal year 2019 budget proposal 

moves away from the research and development of carbon capture 

in reducing its R&D roughly 75 percent relative to fiscal year 2018. 

And of course both in ’17 and ’18, the Congress itself has had to 

sort of step it up. So given the fossil energy R&D request as a 

whole was increased relative to the President’s request of fiscal 

year 2018, can you explain why the Department shifted so dramatically from carbon capture R&D? 

Secretary PERRY. Yes, sir. Here is my observation is that the fiscal year 2019 budget will not impact the current activities that the 

Department has funded up in your part of the world. Plain CO2 reduction, Regional Carbon Sequestration Partnership, that is going 

to continue on; a feasibility study on the Tundra project, that one 

is in that money stream for fiscal year 2019. The CarbonSAFE, SA-F-E, activities, those are funded as well. 

Additionally, on the carbon capture issue, last year in about May, 

I was in China for the Clean Energy Ministerial and we were able 

to get CCUS placed into that. Now obviously these are not dollars 

that are going to be spent in North Dakota and I understand that. 

But I think from the standpoint of the commitment of the agency 

to the carbon capture, utilization, sequestration—and actually yesterday Chairman Alexander in the Senate was talking about being 

able to find obviously using our national labs, using our universities that we have relationships with a use for carbon dioxide. 

And again there is no eureka moment here, but, those are the 

exciting technologies and opportunities that we think are out there 

in the future that we are going to be looking at funding and, I hope 

you know that our commitment is very strong to that. Senator 

Hoeven, my former governor colleague, he and I talked at some 

length yesterday about the opportunities that we can work on together with North Dakota and DOE. 

62 

Mr. CRAMER. In my remaining seconds let me, first of all, strongly encourage you and invite you to North Dakota as it now warms 

up and thaws out to come and see the work at the University of 

North Dakota. 

Secretary PERRY. Yes, sir. 

Mr. CRAMER. Secondly, I want to ask for your assistance in advocating with us for the 45Q tax credit which was slightly improved 

in the most recent bill but not very useful until we reconcile IRS 

and EPA rules so that it is more useful for these types of projects. 

It is essential. And then there is another credit, the refined coal 

credit that I think just has to be extended so we can build this 

bridge again between basic research and commercialization. We are 

at the cusp and we run the risk of losing all those opportunities. 

As you said, innovation not regulation is our motto. I like it. Let’s 

live with it. Thank you. 

Thank you, Mr. Chairman. 

Mr. OLSON. Time is expired. 

Mr. Green from Texas, 5 minutes for questions. Are you ready, 

Mr. Green? 

Mr. GREEN. Yes, Mr. Chairman. 

I want to welcome the Secretary. My other job is I am the ranking member on the Health Subcommittee and we just finished a 

hearing upstairs, Mr. Secretary. And you and I have known each 

other since we could actually play basketball in the state capital. 

I want to thank Chairman Upton and Ranking Member Rush for 

having this hearing today and Secretary Perry for taking the time 

to testify with us. 

DOE has many important missions in ensuring the adequate 

funding for the agencies essential. The President’s budget fiscal 

year 2019 is a 3.8 cut from the fiscal year 2018 enacted level. Much 

of these cuts hit clean energy programs, grid operations, and next 

generation energy technologies. I am concerned that these cuts in 

these programs could have grave consequences to the environment 

at a time when many nuclear plants are going offline. Currently, 

there are four planned deactivation of nuclear plants in Ohio and 

Pennsylvania which generate 40 million megawatts of electricity, 

and PJM, more than all the power from wind and solar combined 

in PJM. 

FirstEnergy Corporation recently filed a 202 request stating that 

immediate aid was needed for all coal and nuclear plants within 

PJM, not just their own. I have worked with many of my colleagues 

on this committee over the decades to updates to the Federal 

Power Act throughout the years including changes to the section 

202(c). The current request concerns me in many ways. Section 202 

has been used in the past for immediate crises from the California 

energy crisis in 2000 to the East Coast blackouts in 2003. The 

mechanism has historically been used on a short-term basis. 

At a Bloomberg event recently, when asked to define an emergency you responded that you flip a light switch on and nothing 

happens. I agree with that characterization. Can you elaborate on 

that quote and what is in your mind and constitutes an emergency 

that justifies the use of 202(c)? 

Secretary PERRY. Yes, sir. I think the observation is a very simplistic one that I use, but I think it cut right to the core. When you 

63 

have a use for your energy, whether it be a Wall Street financial 

institution, whether it be at the Federal Reserve and the computers 

that are there, whether it is on a military base to secure this country’s liberties and freedoms, or if it is in your home and you have 

an all-electric home and it is a chill factor of minus 20 in the 

Northeast somewhere and you call for that power and it is not 

there that is an emergency. 

And that is exactly the point that I was trying to make in a very 

simplistic approach, but I think it did make the point that if you 

don’t have this electricity, if you don’t have this reliable source, 

then we have a real challenge and a real problem in this country 

and that is the reliability and the resiliency issue of this grid. And 

being able to guarantee to the American people that that will be 

there is one of our roles, you as a United States Congressman and 

me as the Secretary of Energy. 

So from my perspective, having a diverse portfolio is one of the 

things that we did in your home state over the course of the, particularly in the 2000s when they deregulated the energy market 

and we had this diverse, we developed more wind energy than any 

other state in the Nation, the gas that came online, the other incentives that the state, and I think Mr. Tonko was talking about 

giving states some of this responsibility and I totally agree with 

that. 

But my point is the time for study is over, again from my perspective. We have got to act on this because I don’t want to wake 

up next winter with a polar vortex that is bigger than the one that 

we had before and having taken some nuclear plants and some coal 

plants offline and not having that energy available to protect the 

citizens’ safety and/or their security. 

Mr. GREEN. Can you elaborate on the potential tools at DOE you 

feel could be better suited to securing a valuable emissions-free nuclear plants, for example? 

Secretary PERRY. Yes, sir. Well, this one is going to be a bit of 

a bank shot, but I think it makes the point, Gene, that we are in 

the process of, previous administrations, not just the last administration but if you go all the way back probably 20–25 years, previous administrations have not put into place, didn’t respect the 

nuclear power industry. I think they overregulated them. They put 

a lot of cost on them through regulations. The last administration 

took away our ability to process high-assay uranium for the purposes of civil nuclear. That was started by the administration before the Obama administration but they shut that down and then 

the private sector has no place for that fuel. 

My point with all of this is we are at a critical place here today 

that if we don’t send some messages whether it is making a good 

agreement with the Saudi Arabians to help them develop their civil 

nuclear program so that American contractors are going to have 

the supply chain to do that, that our universities don’t have the incentives to put young men and women into the nuclear engineering 

field, all of that is going to come to a head and we are going to be 

at a critical position and I think it is sooner than we realize. 

And if we don’t have a civil nuclear program that is robust, it 

will soon have an impact on our ability to keep our weapons programs at the place because we won’t have the intellectual capaVerDate Nov 24 2008 14:18 Jan 18, 2019 Jkt 037690 PO 00000 Frm 00069 Fmt 6633 Sfmt 6633 I:\MY DOCS\HEARINGS 115\HEARINGS\115-117 CHRIS
64 

bility coming up through our national labs to do this. You bring up 

an incredibly important issue, Mr. Green. 

Mr. GREEN. Well, reliability is really important, like you said, 

when you turn on the light switch and they can’t or the air conditioner or the heater, most of our problems in Texas when it gets 

real warm in the summer. Back we were joking yesterday, without 

air conditioning and elevators there would not be a Houston, Texas 

because of the heat from, literally, 1st of May to the end of September. 

While I disagree with the recent notice of public review directed 

to FERC in the section 202 filing, I do think it is important we look 

at planned retirements across the country. While not rising to the 

level of immediate emergency, this is an issue both DOE and Congress should address putting forward. Obviously in Texas we have 

two nuclear power plants. Now we have an abundance of natural 

gas, and of course producing more wind power that was created 

during your administration when you were governor than any 

other State in the Union. So, and hopefully we will do some solar. 

But in the Northeast they don’t have the ability to do that oftentimes with wind or solar so it is basically older production whether 

it be coal or nuclear power. And that is why we need to see how 

we can do it because those folks, we don’t want those folks freezing 

in the dark. But anyway I want to follow what the Department of 

Energy does and hopefully our committee will work with you on 

making sure that reliability is important, but we also need to see 

as best we can how we get it done. 

Secretary PERRY. Yes, sir. 

Mr. OLSON. My friend’s time is expired. 

I will call upon the gentleman from Oklahoma for 5 minutes for 

questions. 

Mr. MULLIN. Man, Texans do stick together. No, I am kidding. 

Anyways, hey, thank you, Mr. Chairman. 

Mr. GREEN. Well, Mr. Chairman, Oklahoma also steals football 

players from A&M and University of Texas and my alma mater 

University of Houston. 

Mr. MULLIN. No, we don’t steal. We recruit better. I mean obviously they want to go to, you know, a climate that they can live 

in. Anyway, hey, thank you. 

And, Secretary Perry, I want to remind you of a time you met 

my son in Leader McCarthy’s office. My boy wasn’t very big at the 

time and he was talking to you. He was kind of like most little 

boys, he was looking around and you grabbed him by the shoulders 

and you set him on the chair and you said, young man, look at me 

in the eyes when you talk to me. And I had told my son that since 

the day he was born, and I really appreciate that. That meant a 

lot. 

Secretary PERRY. I hope I did it in a very respectful way. 

Mr. MULLIN. Oh, you did a hundred percent, but that is how we 

raise our kids. We are in Oklahoma too, and you look him in the 

eye and if he is not looking you in the eye I had probably thumped 

him in the head. It is just, that is called respect. So I appreciate 

that. That meant a lot to me. 

65 

I want to talk to you obviously about Yucca Mountain and DOE’s 

requirements. Can you summarize DOE’s legal requirements pertaining to Yucca Mountain’s licensing application? 

Secretary PERRY. Yes, sir. This body as authorizers and the appropriations process has, and I think the President’s budget, $110 

million for the licensing to go forward. And I look at that as a way 

to get following the law. The law says that we will do this. There 

is an additional $10 million in that appropriation request for temporary storage as well. 

Mr. MULLIN. Is DOE required to create the Office of Civil Radioactive Waste Management to manage all these activities? 

Secretary PERRY. Yes, by law. 

Mr. MULLIN. In your last organizational chart for DOE was this 

office included in it? 

Secretary PERRY. I can’t answer that. You may know the answer 

to that. 

Mr. MULLIN. Yes, I do, obviously. The answer to that is no. And 

as you alluded to a while ago, you are required by law to have that. 

Can you explain maybe why it was left out? 

Secretary PERRY. Well, here would be my stab at that is that just 

because it is not named and doesn’t have a line item does not mean 

that its duties are not covered in the agency. 

Mr. MULLIN. Do you know who is covering that then? And I say 

that because we really aren’t seeing any—— 

Secretary PERRY. Can I get back with you and answer these 

questions after I have had some time to dig down into it and get 

you the proper answers? 

Mr. MULLIN. Yes, absolutely. 

Secretary PERRY. Yes. 

Mr. MULLIN. Because what I am trying to fish for here is if it 

is from the appropriation process, if that is why the office isn’t 

manned, if that is why the duties of that office aren’t being done, 

then for the Committee’s purpose we need to know and we need to 

know what is keeping it from happening. And like I said, if it is 

from the appropriation perspective we also need to know what it 

is going to take to do that. 

I think Mr. Shimkus alluded to how much it was costing the taxpayers right now just from the lawsuits that are taking place from 

the storage that we are supposed to taking care of as the United 

States Government and so I want to be able to help you. I want 

to work with you on it. So if you could please get back to my office. 

Secretary PERRY. Yes, sir. 

Mr. MULLIN. Let us know how we can help you because that was 

really the line of the questions what I was going to, and I will actually yield back the remainder of my time. 

Mr. OLSON. Thank you to my friend from Oklahoma. 

Mr. Walberg, 5 minutes for questions, sir. 

Mr. WALBERG. Thank you, Mr. Chairman. 

And thank you, Mr. Secretary, for always being open to be here 

and answer the questions. Thank you for the energy you put into 

being the Secretary of Energy as well. It is encouraging for those 

of us in the northern climes to know that that is actually happening. 

66 

I have the privilege of representing the energy district of the 

State of Michigan. Over 30 percent of all energy produced in Michigan is produced in my district. It is a fleet of all-of-the-above and 

some of that fleet sits right on one of the Great Lakes, Lake Erie, 

and so we are definitely concerned with cybersecurity. The challenge is not only that we are able to turn the lights on at any time 

but the environmental issues that go on thinking of the proximity 

there in the Great Lakes. 

You recently formed the new Cybersecurity, Energy Security, and 

Emergency Response office. I think that certainly shows that you 

believe that elevating cybersecurity functions to a Senate-confirmed 

assistant secretary level will help intergovernmental and interagency communications and multidirectional information sharing 

with the Department of Energy’s ability to appropriately and quickly address cyber-related emergencies, and I thank you for that. 

My concern is the sustainability of the Department of Energy’s 

leadership on this important issue. Cybersecurity was not a surpassing concern back in 1977 when the Department was organized. 

It certainly is today. In my bill with my colleague and Ranking 

Member Rush, H.R. 5174, we specify functions related to cybersecurity and emergency response that we believe should be specifically led by a Senate-confirmed assistant secretary. Will you work 

with us to ensure that we can elevate that, Secretary, to law? 

Secretary PERRY. Yes, sir. 

Mr. WALBERG. I appreciate that. Over the past 7 months you 

have had a lot of experience in dealing with emergency action in 

your Department. During appearances before the Committee in 

January, your Deputy Secretary and Undersecretary for Energy 

said that expectations for DOE’s emergency response exceeded its 

authorities, if I recollect correctly. From your experience to date, do 

you think there may be some additional tools or authorities DOE 

could use to help improve the ability of the agency’s deployment of 

resources in an emergency? 

Secretary PERRY. Yes, sir. I think it is always a thoughtful conversation to have to discuss with Congress and other agencies to 

make sure, we complement when we need to complement. But if 

there is a direct line of authority that it is very clear, very precise 

so that no one gets confused about particularly during an emergency situation who is in charge. 

Mr. WALBERG. I appreciate that and we would definitely want to 

work together with you on that. We want to examine things like 

surge funding or some other mechanism to enable DOE to have access to resources so the Department can respond more rapidly. So 

we hope that you can work with us on that. 

Secretary PERRY. Yes, sir. Thank you. 

Mr. WALBERG. Thank you, Mr. Chairman. I yield back. 

Mr. OLSON. The gentleman yields back. 

The gentleman from South Carolina, Mr. Duncan, for 5 minutes. 

Mr. DUNCAN. Thank you, Mr. Chairman. 

And, Mr. Secretary, thank you for being here. I just want to lend 

my support at the outset here for the Nuclear Waste Policy Amendments Act that Chairman Shimkus and Markwayne Mullin from 

Oklahoma have mentioned. Getting Yucca Mountain back on track 

is imperative because we have a lot of waste sitting around this 

67 

country and some of that is sitting at a place you visited back in 

February. 

And I want to thank you for visiting the Savannah River Site 

and Savannah River National Laboratory this year. SRS is an integral part in the Department of Energy’s industrial complex responsible for environmental stewardship and cleanup, waste management, and disposition of nuclear materials, along with a lot of other 

missions, ongoing missions that Savannah River Site has and I 

thank you for recognizing the important role of SRS through the 

DOE’s fiscal year 2019 budget. I believe it provided for about $1.7 

billion, $287 million above enacted 2017 levels. 

I am on the Cleanup Caucus and we are concerned about environmental management and cleaning up the tank farms at sites 

like Savannah River Site, Hanford, and others. And the South 

Carolina Department of Health and Environmental Control describes the liquid waste management at SRS as the single greatest 

environmental risk in South Carolina. There are more than 30 

years of nuclear weapons material that has been produced in South 

Carolina sitting in those tank farms and the ongoing environmental management efforts are there. 

We also have the ability through the Defense Waste Processing 

Facility at SRS to vitrify that high level nuclear waste, turn it to 

glass so that it no longer poses a threat to leakage through those 

tanks and into the ground and aquifers. So the DOE’s fiscal year 

2019 budget requests an additional 74 million for SRS cleanup programs from the 2016 levels, emphasis on the liquid tank waste 

cleanup project. 

What are DOE’s top cleanup priorities for the site and how is 

your particular attention as Secretary going to facilitate tangible 

cleanup progress in South Carolina? 

Secretary PERRY. Obviously we have a court-mandated requirement that we are very sensitive to in making sure that we have 

the resources to be able to do that. We have had the discussion 

substantially over the last year since I have been at DOE over the 

issue of how to deal with the plutonium and clean that up. 

While I was out there I saw some good progress that is being 

made from the standpoint of the vitrification process that is going 

on there and the tanks that are going to be used to store that, 

being able to move the plutonium out of South Carolina. And we 

are already doing that with the D&D process, but to get that substantially more robust to be able to move that waste out of there 

on an expedited schedule is obviously high on our priority list, if 

not the highest priority there. 

Mr. DUNCAN. Well, I appreciate that, Mr. Secretary. And whether 

it is at Hanford with their waste facility trying to vitrify the waste 

that is coming out of their tank farms, ultimately this high level 

radioactive waste needs to go to Yucca Mountain and right now the 

vitrified waste is sitting on a concrete slab under a metal building 

at Savannah River Site. It is actually down in the concrete as you 

saw. 

Secretary PERRY. Yes, sir. 

Mr. DUNCAN. Let me shift gears but stay at Savannah River Site 

because we have the MOX facility down there. We are under obligation under the Non-Proliferation Treaty with countries like RusVerDate Nov 24 2008 14:18 Jan 18, 2019 Jkt 037690 PO 00000 Frm 00073 Fmt 6633 Sfmt 6633 I:\MY DOCS\HEARINGS 115\HEARINGS\115-117 CHRIS
68 

sia to do something with the Nation’s plutonium that is coming out 

of the nonproliferation aspects and I believe the MOX facility at 

SRS is the right thing to do with that plutonium. Currently, we are 

committed to rid the world of about, I think, enough plutonium to 

make 17,000 nuclear weapons. 

So I would love to see the continuation of construction at the 

MOX program and eventually completion. We have already spent 

a ton of money down there and I truly believe we can bring more 

efficiency to the project and it can be completed in a third of time 

and for almost half the additional cost than what the NNSA predicts. You indicated in your testimony that the 2019 budget continues termination activities for the MOX but provides $220 million 

for use toward orderly, safe closure for the project. What do you envision for the future of this site, the MOX facility, and if not MOX, 

what do you determine to be the most efficient and effective way 

to remove the plutonium from South Carolina? 

We didn’t ask for the plutonium to come there. It is stored on 

site. It is not a long-term storage facility. It was brought there in 

order to be turned into mixed oxide fuel to be used in nuclear reactors around the country. That is what the purpose was. 

Secretary PERRY. Yes, sir. 

Mr. DUNCAN. We spent a lot of money. Where are we going from 

here? 

Secretary PERRY. Yes, sir. And I will try to be as brief as I can. 

The issue on the reason that got started was an agreement with 

the Russians. The Russians have unilaterally walked away from 

that agreement. They said they would come back to the table if we 

met certain requirements and you know what those are, and they 

are unacceptable. They are asking us to do things that this country 

is not going to do to come back and sit down at the table. 

So the way I look at that is they have walked away and we have 

to look at our options. This is a facility that is obscenely over budget. And again I don’t want to rehash and relitigate all these numbers, but the fact is there is an alternative and the alternative is 

dilute and dispose which we are using now as a matter of fact shipping plutonium out of South Carolina to WIPP at this particular 

point in time. We think that is—— 

Mr. DUNCAN. The EPA has said that WIPP is not an acceptable 

site. Yucca might be. The thing is, Russia has walked away but the 

facts of the matter are we have plutonium sitting in South Carolina that has come out of that nonproliferation agreement. WIPP 

is not going to be ready. Yucca, we are struggling around here to 

fund that. MOX is absolutely the right facility and I would love to 

sit down with you and talk with you about that at some point. 

Mr. Chairman, thanks for the leniency and I yield back. 

Secretary PERRY. You are on. 

Mr. OLSON. The time is expired. 

Mr. Long, 5 minutes for questions. 

Mr. LONG. Thank you, Mr. Chairman. 

And thank you, Secretary Perry, for being here today. 

Secretary PERRY. Yes, sir. 

Mr. LONG. Texas A&M University, where is that located? 

Secretary PERRY. Where is it located? 

Mr. LONG. Yes. 

69 

Mr. OLSON. College Station, Texas. 

Secretary PERRY. It is, some would say that—— 

Mr. LONG. I don’t believe I yielded to you, did I? 

Secretary PERRY. Some would say it is of the epicenter of the 

world, but we will just leave it at it is in Brazos County, Texas. 

Mr. LONG. College Station, Texas? 

Secretary PERRY. In the city of College Station. 

Mr. LONG. And that is the only campus? 

Secretary PERRY. No, sir. It is the main campus. 

There are—— 

Mr. LONG. I didn’t ask you about the main campus. I said where 

is it located? 

Secretary PERRY. Oh, it is in College Station, Texas on Highway 

6 and it goes both ways. 

Mr. LONG. That is the only campus? 

Secretary PERRY. It is the only main campus. 

Mr. LONG. Where are the other campuses? 

Secretary PERRY. The other campuses are—— 

Mr. LONG. Outside of this country, I will cut to the chase. 

Secretary PERRY. They are in a lot of different places. John Dalton—— 

Mr. LONG. Like Qatar? 

Secretary PERRY. And there is one in the country of Qatar right 

out of Doha. 

Mr. LONG. I was in Qatar 10 days ago. 

Secretary PERRY. Yes, sir. 

Mr. LONG. And walked in and they are all Aggie there, trust me. 

Secretary PERRY. Sure. 

Mr. LONG. They are very, very happy with their affiliation and 

the students are doing great. Your picture was right there on the 

wall as I walked in and they are Aggie through and through. So 

I was pleased to see your picture on the wall when we went in and 

toured Texas A&M in Qatar just the other day. 

Speaking of universities, I would like to speak about another university. In recent hearings with your senior Department of Energy 

leadership I asked about the Department of Energy’s support of the 

University of Missouri’s MURR Nuclear Reactor. The MURR reactor trains nuclear engineers, some of who are funded through Department of Energy’s Nuclear Energy University Program. 

Private companies in coordination with the University are seeking approval to produce lifesaving medical isotopes in partnership 

with the National Nuclear Security Administration, NNSA. And 

the University is currently studying a partnership with the NNSA 

to convert the reactor to use low-enriched uranium instead of highly enriched uranium or HEU. I have got to tell you I was disappointed to see that the Integrated University Programs were 

defunded in your fiscal year 2019 budget, but I hope you see the 

value in these activities as we do at the University of Missouri. 

Will you please talk about the importance of our nuclear research 

infrastructure and how the Department of Energy supports this 

critical work particularly in its university programs? 

Secretary PERRY. Yes, sir. I think you are making reference to 

the research reactor there at the University of Missouri and it is 

in medical isotopes and the manufacture of medical isotopes and 

70 

there are a number of places across the country that we are 

partnering with that. It is for precision medicine for some of the 

things that we talked about with Mr. McNerney. On our ability to 

practice precision medicine these facilities are really going to be 

important. 

Mr. LONG. They are very important. 

Secretary PERRY. We want to work with you and—— 

Mr. LONG. All right, thank you. With the ever-increasing cyber 

threats to the grid, I am pleased that the steps have been taken 

to create CESER, the Office of Cyber-, Energy Security, and Emergency Response and I look forward to that office getting up and 

running. In your opinion, since your confirmation has the electric 

grid become more or less responsive to cybersecurity threats? 

Secretary PERRY. Well, I think the threat has increased but that 

shouldn’t shock anyone. I think the threat potential is greater 

today than it was a year ago. Are we more resilient? I can’t answer 

that with great definition. What I think is that we are exposed in 

certain areas. We need to be all hands on deck. That is the reason 

we are asking for the cyber office to be stood up. 

With that said, our national labs are making some, I think, good 

inroads in both the defensive and offensive ways to deal with those 

that would attack our electrical grid. 

Mr. LONG. Let me ask you one more question and I will be about 

out of time at the end of this probably, but the fiscal year 2019 

budget calls for $96 million in funding for the CESER, or for 

CESER. Can you explain a little bit about the program and how 

this money will be used to ensure we are securing our grid from 

the continuous cyber threats that we face? 

Secretary PERRY. Well, the focus is on the cyber threats from 

both state actors, and we are talking about a year ago, Russia with 

Petya. We saw the impact on that. We have seen what has happened in Ukraine with two attacks on their power grid. The Iranians are who attacked the Aramco Electrical or their control panels. So nation state attacks are very real. As late as this last week 

we had conversations about, what can we expect with the Syrian 

issue. Should we be on more heightened alert? And I would suggest 

to you yes. 

So the issue is this Office of Cybersecurity, our national labs 

working with the private sector, working with universities, I don’t 

think it has ever been more important for us to be able to maintain 

the national security of this country relative to our grid, both as 

we have talked about at length here today about the resources to 

be able to keep the power to that grid, but also to protect that grid 

from cyber attacks is as important as it has ever been in our country’s history. 

Mr. LONG. Thank you. And thanks for being here today. It has 

been a long hearing and I am sure you are kind of tired. And I 

yield back. 

Mr. OLSON. Time is expired. 

The gentleman from Massachusetts has 5 minutes for questions, 

Mr. Kennedy. 

Mr. KENNEDY. One more to go, Mr. Secretary. Thank you. Thank 

you for your patience. Thank you for spending so much time with 

71 

us and I will echo the comments of our colleagues, thank you for 

being so accessible, grateful that you are here. 

As our nation makes the transition from a 20th to 21st century 

energy economy we know that innovative sources of power will be 

an important part of that generation mix. Wind power is a steadily 

growing portion of the energy sector that provides clean power to 

millions of Americans and creates thousands of jobs across our 

country. Your home State of Texas, Mr. Secretary, during your tenure as governor wind power resources and energy grew by leaps 

and bounds. It is my understanding that according to ERCOT, 

wind made up 17 percent of the fuel mix in 2017. 

So I wanted to ask you, I think, a pretty general question to 

start. Do you agree, Mr. Secretary, that wind energy is an important part of our nation’s power sector? 

Secretary PERRY. Yes, sir. 

Mr. KENNEDY. So despite this growth, and I appreciate the answer, we have only one offshore wind project coming online in the 

United States. Other nations such as the U.K, Germany, and 

China have developed these projects in their own waters. My home 

State of Massachusetts proposes to be a leader in this effort. In my 

district we have made significant investments in Fall River and in 

Dartmouth and just across the border, the district in New Bedford, 

to become a national leader in offshore wind. Just recently, the Department of Interior announced proposed sales of two areas off the 

coast of Massachusetts to develop offshore wind. 

Yet, unfortunately, Mr. Secretary, America risks being left behind as our allies and peers lead the growth of an industry that 

remains largely dormant here despite the potential to boost the 

economy and create jobs. Even more concerning, I know you have 

already touched on this a bit, is this year’s budget request from the 

Trump administration that included a 72 percent cut in the DOE 

Office of Energy Efficiency and Renewable Energy. 

I am not going to make you comment on that again. I think you 

have been pretty clear about where you stand on that cut. But I 

do want to ask you how DOE is going to continue to support research and development of offshore wind. 

Secretary PERRY. Mr. Kennedy, we discussed, this is an industry 

that is becoming mature. And so the private sector, the states, if, 

in my home state one of the reasons we had that big wind energy 

growth was that the state invested in the CREZ lines. We didn’t 

subsidize the specific projects, but we basically said we are going 

to build these lines if you all will commit to building all these 

farms out. They did and you know what the results are. So I think 

not only the state but the private sector has the place to play this. 

Here is what I will tell you that the DOE is going to continue 

to play a role in this, this is important. And again we were in 

Livermore this last week and the technology that is coming out of 

there, and this is on again rotor technology that makes these turbines substantially more efficient so that, then that gets commercialized and goes into the private sector where it makes it even 

more of a commercialized product in the market and more competitive. 

Mr. KENNEDY. More viable. 

72 

Secretary PERRY. So my point is we are going to continue to be 

a partner, maybe not as big as we were when wind and solar was 

more in its infancy, we are shifting over to batteries and beyond 

battery to hydrogen fuels and some of the more immature but may 

have great potential energy sources in the future. So I am a big believer in wind and I hope that Massachusetts and other states that 

want to see a diverse portfolio, I don’t think it is a good idea to 

have Russian molecules of gas in Boston Harbor. But if you can’t 

get it from the West you are going to get it from somewhere and 

I think that is another debate or discussion that we can have into 

the future about how we make sure that this entire country has 

got an infrastructure that will allow for all of our citizens to enjoy 

this energy revolution that is occurring in America. 

Mr. KENNEDY. And, Mr. Secretary, I appreciate that. I would 

agree with you it obviously gets complex as you try to look at the 

local resources and the voices of the local community. We do have 

a vibrant local community that is, I think, ready and willing to 

make this investment in coordination with our Federal Government partners, DOI, DOE, and I would ask just for you to keep it 

on your radar and as we to be a partner as we have seen and as 

we saw under your stewardship in Texas to see the growth of wind 

industry there. 

Just to finish this to make sure that the point is clear and I 

think it is, in 2017 the Clean Energy States Alliance, a coalition 

of state energy agencies, released three reports on the future of offshore wind in the Northeast, the reports which were actually partially funded by DOE that projected that offshore wind projects in 

the Northeast have the potential to add more than 35,000 jobs in 

the region. 

My colleagues, Niki Tsongas and Bill Keating, just introduced a 

bill that would create a grant program to support offshore wind job 

training including partnerships with colleges and universities and 

nonprofits and unions and local governments. Investment in that 

wind energy is more than just a clean energy future especially in 

my district, sir. It represents jobs, economic development, opportunity, education, and a whole new industry base and expertise 

that is homegrown. 

I know the DOE mission is to ‘‘ensure America’s energy security 

and prosperity by addressing its energy, environmental, and nuclear challenges through transformative science and technological 

solutions.’’ So I would hope that you would continue to focus on 

how we can partner with you, understanding there has got to be 

a private sector component to this and a state component to this. 

Secretary PERRY. Yes, sir. 

Mr. KENNEDY. But I think we have seen there is a willingness 

to do so and we are going to need your help. 

Secretary PERRY. And, Mr. Kennedy, one of the things that I will 

offer you and to make the introduction, the university in Texas 

that probably has as good of wind energy history and experience 

and expertise is Texas Tech in Lubbock, Texas. And getting the 

states to work with each other that may be a great opportunity. 

There used to be a real good Boston to Austin connectivity so Boston to Lubbock might be OK too. 

73 

*The information has been retained in committee files and can be found at: https:// 

docs.house.gov/meetings/IF/IF03/20180412/108114/HHRG-115-IF03-20180412-SD049.pdf. 

Mr. KENNEDY. I appreciate that, sir. As long as we aren’t talking 

football we are in good shape. 

Secretary PERRY. Yes, sir. 

Mr. KENNEDY. Thank you, sir. 

Mr. OLSON. Time has expired. 

Seeing that no further members wishing to ask questions, I 

would like to thank Secretary Perry for coming this afternoon. And 

I trust, sir, that the proceedings you talked with before did not 

happen here today. You know what I am talking about, correct? 

Secretary PERRY. That is correct. 

Mr. OLSON. And you are cleared now to depart the pattern with 

a proud, loud Aggie whoo. 

And before we conclude I would like to ask unanimous consent 

to submit the following documents for the record: Letters from the 

Utilities Technology Council; a statement from the R Street Institute; three letters to the President from Members of Congress; a 

letter to the President from the International Brotherhood of Teamsters; a letter to the President from United Mine Workers of America; a letter to the President from the International Brotherhood of 

Boilermakers, Iron Shipbuilders, Blacksmiths, and Forgers and 

Helpers; a letter to the President from the Utility Workers Union 

of America; a letter to Secretary Perry from the Energy Industry 

Trade Association; a letter to Secretary Perry from the Pennsylvania Public Utility Commission; a letter to Secretary Perry from 

FirstEnergy *; a response letter from PJM to Secretary Perry; a letter from NEI to Chairman Walden. 

Without objection, so ordered. 

[The information appears at the conclusion of the hearing.] 

Mr. OLSON. Pursuant to committee rules, I remind members that 

they have 10 business days to submit additional questions for the 

record and ask that the witnesses submit their response within 10 

business days upon receipt of the questions. Without objection, the 

subcommittee is adjourned. 

[Whereupon, at 1:21 p.m., the subcommittee was adjourned.] 

[Material submitted for inclusion in the record follows:] 

74 


31172.015

Ql:llll9f£1Ui nf flJC 'Jlbtifeb Jljfufe!l 

lttnid!illghm, :0(1!: 2ll515 

The Honorable Mick Mulvaney 

Director 

Febi'Uary 9, 2018 

U.S. Office of Management and Budget 

725 17th St., NW 

Washington, D.C. 20503 

Dear Director Mulvaney: 

We write in advance of release of the President's Fiscal Year 2019 Budget Request to urge you 

to exclude any provision that would adversely affect the rates or operations ofthe Bonneville 

Power Administmtion (BP A). BP A is working aggressively with its customers, Northwest 

regional stakeholders, the fedeml dam operators and others to address the critical competiveness 

challenges tile agency is facing. We fear that budget proposals that would increase rates and 

risks are unproductive- and ultimately threaten the interests of federal taxpayers. 

As you recall, last year's budget proposed divesting BPA's transmission assets. The Northwest 

delegation concluded this proposal would harm individuals and businesses, divert capital needed 

for further infrastructure investment in the Northwest, and undermine regional utility 

coordination. For these reasons, we Jed efforts in Congress to oppose that proposal. It is our 

hope that this proposal will not be included in the FY 2019 Budget Request. 

In addition, past budget requests have proposed changes in the rate structure ofBPA, shifting 

fmm cost-based to market-based rates. While tllis proposal may seem attractive given the 

electric industry's shift toward market structures, it would be costly for both ratepayers and 

taxpayers. Today, BPA's rates are above market prices. Tile Northwest is committed to bending 

BPA's cost curve and taking steps needed to make BPA the provider of choice when contracts 

are due in 2028. If market rates were imposed, No1thwest public power utilities would see no 

value in continued BPA service. The consequence would be to leave the federal goverrunent 

l1olding non-economic assets, as well as financial responsibility for fish mitigation costs that 

approach $1 billion per year. There would also likely be legal challenges to the proposal since 

the current power contracts explicitly included cost-based rates. 

The entire BPA system-both the capital investment and operation and maintenanc(}-is fully 

paid for by the users of the system. Divesting these assets to the highest bidder, or changing the 

rate structure, will merely jeopardize the consistent reven\le that BPA sends to the Treasury each 

year. Furthennore, these changes would lead to certain mte increases for consumers, imposing 

increased costs on families and economic development. 

PAINTED ON RECYCUO PAPER 
75 


31172.016

We urge you to work with us collaboratively to address SPA's competitive challenges rather 

than pursuing unsound budget initiatives that could cripple the Nmthwest. 

Sincerely, 

~~~ Member of Congress 

£:::/:/:}:'r 

Member of Congress 

.. **~lJd:~ Def!t~kt . ·-;., 

Member of Congress 

¥)u£~ Dan ou 

Member o Congress 

CZ::rw~ Member of Congress 

Peter 

~· A. DeFazto 

Member of Congress 

Member of Congress 

Member of Congress 

~~- Kurt Schrader 

Member of Congress 

bJ.])I.JfP..t. ..c za~:De!Bene 

Member of Congress 
76 


31172.017

Dave Reichert 

Member of Congress 
77 


31172.022

«nngress nf tlte l~niteil ~fates 

fthtslJinghm, !10! i:!D515 

The Honorable Donald J. Trump 

President of the United States 

The White House 

1600 Pennsylvania Avenue, NW 

Washington DC 20500 

Dear Mr. President, 

February 21, 2018 

We write to express our concern regarding the preservation of our nation's fuel-secure 

generation capacity and threats to the resiliency of the nation's electric grid. We must 

ensure that the grid provides affordable, reliable, and resilient electricity on a dally 

basis. As a matter of both national and economic security, the electric grid must have the 

resiliency to respond to extreme circumstances. 

Fuel-secure baseload generators, primarily coal and nuclear, are under duress. An alarming 

number of coal and nuclear plants have closed prematurely and more are closing at a fast 

rate. This is especially true In the competitive, so-called merchant markets. The rate of 

plant closures has a compounding effect on grid resiliency- the ability to operate through 

an emergency or extreme conditions - by placing undue risk of severe consequences on the 

system. 

Our nation's nuclear and coal plants are predominantly Immune to short-term fuel supply 

disruptions, which makes them resilient Evidence of how integral they are to the U.S. was 

demonstrated in 2014 when the Polar Vortex overstressed the grid, and many generation 

sources were unable to respond to power needs because of fuel supply disruptions. When 

the grid in much of the U.S. narrowly avoided operational failure, It was fuel-secure 

baseload power plants and not variable sources of electricity or those with Interruptible 

fuel supplies that provided a resilient source of electricity. 

A major factor putting coal and nuclear plants at a disadvantage are federal and state 

subsidies to intermittent power providers, making them artificially competitive. 

Additionally, government mandates for purchases of certain forms of electricity and 

excessive regulations on nuclear and coal providers negatively Impact those resources' cost 

competitiveness. Adding to those headwinds, grid operators (Regional Transmission 

Organizations~ RTOs) fail to create market rules that fairly compensate fuel-secure 

baseload generators for the resiliency they provide the grid. Coal and nuclear generators 
78 


31172.023

maintain adequate fuel on·site to ride through an extended emergency, and do so without 

being compensated for that. 

Beyond the risk Injected Into the electric grid carried over from the previous 

administration, there are national economic concerns at play too. if anti-resiliency bias 

within the RTOs' pricing models persists, thousands of workers and their families will be 

negatively affected. For generations, nuclear and coal have provided well-paying jobs in 

communities across America. Further plant closures will have huge negative economic 

effects, rippling across entire regions and drive up electric prices for ratepayers. Without 

your immediate help, these Industries will not be able to provide the good jobs and the 

resilient electricity supply our nation currently has. 

Mr. President, we are asking you to safeguard the grid's fuel security and direct the 

Secretary of Energy to exercise his Section 202{c) emergency powers under the Federal 

Power Act. We also request the Department of Energy evaluate the announced and 

expected retirement of additional fuel-secure baseload generation units and the potential 

national security and economic ramifications. Gambling with the reslllency of the electric 

grid Is unnecessary and puts the safety of all Americans at risk. 

We applaud the extraordinary efforts you have already made to help tum our nation's 

struggling economy around, especially for mlddleclass workers. We hope that you will 

recognize the Immediate severity of this Issue and will take appropriate action to safeguard 

the electric grid's resiliency. 

Thank you for your leadership, and your efforts to ensure that our nation has a safe and 

resilient electric grid. 

Sincerely, 

~~r:?:.~ Mitch McConnell 

U.S. Senate Majority Leader 
79 


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Steve Stivers 

Member of Congress 

~~ Member of Congress 

~~ Member of Congress 

v~{)~ 

Alexander ~-X.~ X. Mooney 

Member of Congress 

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Member of Congress 

~ Member of Congress 

Member 

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H. 

!'~ Morgan Griffith 

Member of Congress 
80 


31172.025

6?1/.J.:J<. 

Member 

Bob Gibbs 

of Congress 

{d~h~ 

!f;i.~ Member of Congress 

Member of Congress ~~ Member of Congress 
81 


31172.018

Rep. David B. McKinley, P.E. (WV-01} 

Opening Statement, Energy Subcommittee Hearing, DOE Secretary Rick Perry 

4/12/18 

Mr. Chairman thank you for holding this hearing. 

This committee has held numerous hearings over the past four years to examine all aspects of 

how American electricity is generated and priced into the competitive markets. After hearing 

testimony from industry experts and government officials, we are no closer to solving the 

complex question of how to provide a secure and resilient grid. We know recent severe 

weather along with cyber and physical threats, pose enormous challenges to grid reliability and 

resilience. The American consumer should not have to worry about the next cold weather 

event or cyber-attack. 

I believe it is time for Secretary Perry to invoke his authority under Section 202(c) of the Federal 

Power Act or any other emergency authority the President or Secretary of Energy may have. 

We believe 202c provides the appropriate mechanism to protect the grid. The law gives 

authority to the Secretary when emergency conditions exist such as a shortage of electricity 

due to various reasons. The law also states, "or other causes" that threaten the availability of 

electricity. I believe there are important "other causes" which haven't adequately been 

addressed by FERC and the !SO's and RTO's. 

Our electrical generation system and grid are changing very quickly, as these changes evolve we 

need to make sure these changes do not have unintended consequences. The rapid rise of 

natural gas electrical generation has proven to be a fantastic asset and something I will 

continue to support. However, as quickly as this resource develops, I'm afraid we are 

overlooking the potential downside associated with being too reliant on one fuel source. 

Especially a fuel that is dependent upon pipeline infrastructure that many states refuse to allow 

to be built. 

In testimony on January 18th of this year, before the Senate Energy and Natural Resources 

Committee, Gordon van Welie, President and CEO of ISO New England stated, "we've known 

for several years that when it gets cold New England does not have sufficient natural gas supply 

infrastructure to meet demand for both home heating and power generation". Now is the time 

for this administration to act. 

There are three very good reasons for Secretary Perry to invoke 202c. America faces an 

immediate national security threat of a cyber-attack focused on our electric generation industry 

and energy delivery systems. Our coal and nuclear fleets provides the resource capacity 

cushion needed to mitigate a potential attack, and a secure fuel source in case a cyber threat is 
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31172.019

successful. Prematurely retiring these plants would be detrimental to our fuel security. This 

alone, is reason enough to invoke 202c. Second, the wholesale electricity markets are broken 

and have failed to mitigate the market distorting effects of tax subsidies and renewable fuel 

mandates implemented by states. Finally, it is the proper role of the Secretary of Energy to 

implement lawful policies to protect our grid and to protect the economic wellbeing of all 

Americans. 

America faces a national security threat of a cyber-attack focused on our electric generation 

industry and energy delivery systems. Two years ago, our office hosted a cyber security 

seminar in Fairmont, WV. One industry expert who spoke was Joe McClelland who is FERC's 

cyber security expert. In subsequent meetings with my staff, Mr. McClelland discussed 

unclassified information about ongoing cyber-attacks on our pipelines. 

Just last week an article outlines recent attacks on energy infrastructure. Additionally, "last 

month, investigators at the Department of Homeland Security and FBI warned energy 

companies of a year's long Russian hacking campaign that also targeted firms in the nuclear" 

industry. Pipeline compressor stations are prime targets. A successful attack on one 

compressor station can affect several natural gas power plants and grid reliability and 

resilience. Out of an abundance of caution, Secretary Perry should use 202c in his judgment to 

best meet this immediate emergency and serve the public interest. Prematurely retiring coal and 

nuclear plants would be detrimental to our fuel security needs. 

In testimony before this committee we also heard from industry and government experts on 

the national security aspects of our nuclear power industry. A strong commercial nuclear 

industry is critical. Three nuclear industry components are intertwined with each other. The 

United States' nuclear weapons program, the Navy's nuclear propulsion program and reactors, 

and the nation's commercial nuclear industry. We heard from one witness who said, "The ability of the 

US to lead in nuclear safety, security and nonproliferation efforts is significantly lessened as commercial 

activity erodes". 

Finally, in a March 2018 CRS Report on physical grid security, they state, "it has not necessarily 

reached the level of physical security needed based on the sector's own assessments of risk. 

Bulk power physical security remains a work in progress." 

The wholesale electricity markets are broken and have failed to mitigate the market distorting effects 

of tax subsidies and renewable fuel mandates implemented by states. Dozens of witnesses have 

testified, hundreds of studies and millions of articles have been written about the market distorting 

features of our tax code. We have also heard from the !SO's and RTO's saying, "the markets are 

working", while ignoring the impact of these subsidies and tax policies have on the wholesale electricity 

market. It seems the only competition that is relevant in their minds is natural gas versus coal, the 

playing field is not level. 
83 


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On a per-megawatt-hour basis, in FY 2013 solar received $231 of support and wind received $35, while 

natural gas and petroleum received 67 cents and coal received 57 cents, a factor of 405 times to one! 

And we are to believe this is a fair market? From a witness before this committee, "Artificially 

promoting the development of wind and solar actually raises the true cost of electricity generation, 

because it is currently much cheaper to produce electricity (all things considered) through coal and 

natural gas plants, rather than new wind and solar". 

P JM this Monday, acknowledged the short comings of their market and the distorting effects of 

subsidies by filing with FERC a plan to properly compensate base load power generators for the value 

they provide to the market. "Left unaddressed the subsidies will crowd out efficient, competitive 

resources .... we seek the appropriate balance that respects state policy while avoiding policy impacts of 

a state's subsidies on the market as a whole and on other states." 

Critics say that invoking 202c is a bailout for the coal industry. This is not correct. The reason 

coal is at an economic disadvantage is due to conscious policy decisions made by Congress and 

state legislatures around the country. These politicians have distorted the market to such an 

extent that secretary Perry correctly stated, "We don't have a free market in that industry and 

I'm not sure you want one." Temporarily invoking 202c will give the markets and regulators the 

time needed to correct their policy decisions. A policy where all fuel sources are treated fairly 

and valued for the security they bring is the outcome we seek. 

It is the proper role of the Secretary of Energy and President Trump to implement lawful 

policies to protect our grid and to protect the economic wellbeing of all Americans. Congress 

also has a role in asking for policies to be implemented. In this regard, 23 members of Congress 

signed a bipartisan letter to President Trump asking that 202c be invoked. A second bipartisan 

letter with four additional members of the House "urge immediate action" by the President to 

keep Ohio's only two nuclear plants open. 

In a time where it is the policy of this administration to achieve energy dominance, Americans 

had to worry about their lights staying on during the recent Cyclone Bomb weather event. In 

addition, American's had to import Russian LNG just to make sure they remained warm during a 

relatively minor weather event. We were put into this situation by the shortsighted policies by 

New England politicians. What happens the next time? 

In January of this year, ISO New England published a report detailing the crisis they face. 

• Fuel-security risk-the possibility that power plants won't have or be able to get the fuel 

they need to run, particularly in winter-is the foremost challenge to a reliable power 

grid in New England. 

• The region is vulnerable to the season-long outage of any of several major energy 

facilities 
84 


31172.021

ISO-New England recently asked FERC to keep Exelon's Mystic Generating station online, saying 

their retirement could put electricity reliability at risk. The early retirement of units 8 and 9 at 

the plant would pose an "unacceptable fuel security risk to the region during the winter 

months," ISO-NE said in a memo. We cannot agree more. The same should be done nationwide. 

The shortsighted renewable policies implemented by some states has led to 73 gigawatts of 

electricity being imported from Canada, equivalent of 70-120 power plants. Each of the power 

plants replaced by the Canadian power were an economic driver in their communities. Each 

plant provided essential tax revenue to support the local government and services. In my state, 

one such plant provides 30% of the local tax revenue. If this plant is closed due to unfair 

competition and bad policy decisions made on the national level, it will threaten hundreds of 

West Virginian's economic security. 

Conclusion 

I urge Secretary Perry to exercise the powers granted to him via section 202c for a temporary 

two-year period. This will allow the markets and policy makers the time needed to come up 

with a correct and fair solution addressing national security and past bad policy. Once we 

prematurely retire nuclear and coal fired plants we potentially put our economy in jeopardy. 

Once a plant closes it will not come back. A time out during this rapidly changing time, is a wise 

thing to do. 

We have been warned about potential problems on the immediate horizon, but because of our 

polarizing politics our institutions have been unable to respond to the challenge. There were 

those who said the Titanic was unsinkable, experts after the fact said we were not creative 

enough to imagine 911, now we should not foolishly put our grid at risk. Please invoke 202c to 

help all Americans. 
85 


31172.026

<rruugren.a of tl1e l!tnitell ~tafe.a 

tmunl!ittgfon, lilQr 2US1S 

The Honorable Mick Mulvaney 

Director 

Febmary 9, 2018 

U.S. Office of Management and Budget 

725 17th St., NW 

Washington, D.C. 20503 

Dear Director Mulvaney: 

We write in advance of release of the President's Fiscal Year 2019 Budget Request to urge you 

to exclude any provision that would adversely affect the rates or operations of the Bonneville 

Power Administration (BPA). BPA is working aggressively with its customers, Northwest 

regional stakeholders, the federal dam operators and others to address the critical competiveness 

challenges the agency is facing. We fear that budget proposals that would increase rates and 

risks are unproductive- and ultimately tlU'eaten the interests of federal taxpayers. 

As you recall, last year's budget proposed divesting BPA's transmission assets. The Northwest 

delegation concluded this proposal would harm individuals and businesses, divett capital needed 

for further infi'astructure investment in the Northwest, and undermine regional utility 

coordination. For these reasons, we led efforts in Congress to oppose that proposal. It is our 

hope that this proposal will not be included in the FY 2019 Budget Request. 

In addition, past budget requests have proposed changes in the rate structure of BPA, shifting 

from cost-based to market-based rates. While this proposal may seem attractive given the 

electric industry's shift toward market stmctures, it would be costly for both ratepayers and 

taxpayers. Today, BPA's rates are above market prices. The Northwest is committed to bending 

BPA's cost curve and taking steps needed to make BPA the provider of choice when contracts 

are due in 2028. If market rates were imposed, Northwest public power utilities would see no 

value in continued BPA service. The consequence would be to leave the federal govemment 

holding non-economic assets, as well as financial responsibility for fish mitigation costs that 

approach $1 billion per year. There would also likely be legal challenges to the proposal since 

the current power contracts explicitly included cost-based rates. 

The entire BPA system-both the capital investment and operation and maintenance-is fully 

paid for by the users of the system. Divesting these assets to the highest bidder, or changing the 

rate structure, will merely jeopardize the consistent revenue that BPA sends to the Treasury each 

year. Furthermore, these changes would lead to cetiain rate increases for consumers, imposing 

increased costs on families and economic development. 

Pf\!NTEO ON RECYCLEO PAPER 
86 


31172.027

We urge you to work with us collaboratively to address BPA's competitive challenges rather 

than pursuing unsound budget initiatives that could cripple the Northwest. 

Sincerely, 

~=~ Member of Congress 

~~4f::}~ Member of Congress Member of Congress 

---) n 02~ (;;ftW4-\ Den! mer 

Member of Congress 

¥w~:~ Dan ous 

Member o Congress Member of Congress 

~~ Kurt Schrader 

Member of Congress 

~w~ ~Pn!~L~ Member of Congress Member of Congress 
87 


31172.028

Dave Reichert 

Member of Congress 
88 


31172.029

Utilities 

Technology 

Council'" 

The Honorable Fred Upton 

Chairman, House Energy and 

Commerce Committee Subcommittee 

On Energy 

2138 Rayburn House Office Building 

Washington, D.C. 20515 

I

. ~~~~ ~~~: s:~e;~ : 1

1 :~~~:;:~~ :;::ington, DC 20036 

www.utc.org 

April 12,2018 

The Honorable Bobby Rush 

Ranking Member, House Energy and 

Commerce Committee Subcommittee 

On Energy 

2188 Rayburn House Office Building 

Washington, D.C. 20515 

Re: April 12 Subcommittee on Energy Hearing on the Fiscal Year 2019 Department of Energy Budget 

Dear Subcommittee Chainnan Upton, Ranking Member Rush, and members of the House Energy and 

Commerce Committee Subcommittee on Energy: 

I am writing on behalf of the Utilities Technology Council (UTC) regarding the Subcommittee on 

Energy's Aprill2, 2018, hearing on the Fiscal Year 2019 Department of Energy (DOE) Budget. 

Established in 1948, UTC is the global association representing energy and water providers on their needs 

related to deployment of reliable and resilient Information and Communications Technology (ICT) 

systems. Electric, natural gas, and water providers use ICT networks as the backbone for the 

infrastructure that delivers safe, reliable, and secure energy and water services. These networks are 

essential for reliability, safety, resilience, and security. 

UTC applauds the Subcommittee on Energy for holding this important hearing. With Secretary of Energy 

Rick Perry overseeing a modernization and reorganization of the Energy Department, this is a timely 

discussion. As the energy and water industry's voice on ICT networks, our members are particularly 

interested in the Energy Department's focus on cybersecurity. In February, Secretary Perry created the 

Office ofCybersecurity, Energy Security, and Emergency Response (CESER) in an effort to elevate the 

agency's analysis of energy infrastructure protection. 

The Department of Energy also plays a key role in relation to the Electricity Subsector Coordinating 

Council (ESCC), a public-private partnership with the mission of coordinating efforts to prepare for 

national-level incidents or threats to critical infrastructure. UTC participates in ESCC discussions as an 

invited guest Recent events, including last year's devastating hurricane season and the ongoing threat of 

cyberattacks on energy infrastructure, have demonstrated the importance of the ESCC and placed a 

particular spotlight on the need for resilient communications systems for utility service restoration, 

especially if the lights are out for an extended period. 

Utilities build, maintain, and use their own communications systems (known as "private networks") for 

day-to-day reliability, grid modernization, and storm response. These networks were essential to bringing 

electricity back online in Texas and Florida and other areas hit during last year's hurricane season. As the 

energy and telecommunications industries converge, the ESCC has highlighted the need for cross-sector 

collaboration ·with the communications sector. Additionally, the ESCC has a working group focused on 

studying the communications needs of electric utilities should they have to operate the grid in a degraded 
89 


31172.030

Utilities 

Technology 

Council'" 

1129 20th Street NW ! Suite 350 ! Washington, DC 20036 

202.872.0030 Phone ! 202.872.1331 Fax 

www.utc.org 

state. They are also looking at technology that would be needed should communications be rendered 

inoperable by a "black sky" event. 

As members of this Subcommittee focus on infrastructure issues, we encourage you to consider the need 

for federal dollars to be dedicated to researching and developing technologies that would ensure utilities 

have resilient communications systems to recover from black sky events. In addition, sector specific 

agencies, such as DOE and the Department of Homeland Security, as well as regulatory agencies 

including the Federal Energy Regulatory Commission and the Federal Communications Commission 

(FCC), should be encouraged to understand the cross-sector interdependencies that exist so solutions can 

be developed to address these interdependencies. Finally, the FCC should be required to consider the 

impact to grid resilience as it sets spectrum-allocation policies, such that the needs of critical 

infrastructure owners and operators are adequately weighted. We have also expressed these sentiments to 

members of the Subcommittee on Communications and Technology, which has oversight of the FCC. 

UTC thanks the Subcommittee for holding this hearing. We appreciate the opportunity to submit this 

letter and look forward to working with all of you going forward. 

Sincerely, 

Joy Ditto 

President, CEO of the Utilities Technology Council 
90 


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April 11, 2018 

The Honorable Fred Upton 

Chairman, House Energy and Commerce 

Committee Subcommittee on Energy 

2138 Rayburn House Office Building 

Washington, D.C. 20515 

Dear Chairman Upton and Ranking Member Rush, 

The Honorable Bobby Rush 

Ranking Member, House Energy and Commerce 

Committee Subcommittee on Energy 

2188 Rayburn House Office Building 

Washington, D.C. 20515 

We are writing to express a deep concern over FirstEnergy Solutions Corp's ("FirstEnergy") request for the Secretary of 

Energy to declare that an emergency condition exists in the PJM Interconnection, L.L.C. ("PJM") pursuant to Section 

202{c) of the Federal Power Act.' Invoking 202(c) would not only abuse an emergency statue for industrial policy 

purposes, it would also cost customers billions with no clear benefit. Further, it would cripple the competitive market 

mechanism that drives long-term innovation to the benefit of millions of American families and businesses. 

Indeed, FirstEnergy's request is the antithesis of economic conservatism, as it is the embodiment of bad governance and 

unwarranted government intervention into the marketplace. For this reason, former GOP FERC commissioner Nora 

Brownell has correctly referred to the request as a "real tragedy" for a capitalist society."' 

PJM, its independent market monitor and other independent experts agree3 that no emergency condition exists in PJM. 

On the contrary, it uses a robust process to screen for reliability impacts of announced plans for generator retirements.4 

For over a decade, PJM and the other regional transmission organizations and independent system operators have 

demonstrated a strong institutional commitment to ensure sufficient resources exist to maintain bulk system reliability. 

With respect to FirstEnergy's request, PJM has stated: "[w]e repeatedly disagree with [FirstEnergy] on the fundamental 

assertion that there is an emergency."5 

The foremost expert on PJM's markets is its independent market monitor ("monitor"). The monitor has found that PJM's 

markets work well and bring the benefits of competition to households and businesses, but that out-of-market 

interventions "threaten the viability of competitive markets."6 The monitor stresses that PJM's markets do "not need 

rules to support specific technologies or power plants" but, rather, have areas for continuous improvement in PJM's 

market design conducted through the proper regulatory channels.7 

1 William S. Scherman and Rick C. Giannantonio, 11Request for Emergency Order Pursuant to Federal Power Act Section 

202(c)," March 29, 2018. https://statepowerproject.files.wordpress.com/2018/03/fes-202c-application.pdf. 1 Ari Natter, "The U.S. May Not Declare a Power Grid Emergency After All," 8/oombergMarkets, Apri19, 2018. 

https://www.bloomberg.com/news/articles/2018~04~09/the~u~s~may~not-declare-a-power-grid-emergency-after-all. 

3 Numerous independent experts have noted that power plant retirements in PJM and other competitive wholesale 

markets are an indication of natural market evolution. For example, the technical lead of the Energy Department's 2017 

study on grid reliability noted that as a root cause of retirements, competition worked as intended. See these and 

additional comments here: https://www.utllitydive.com/news/si!verstefn-if-id-written-the-doe-grid-studyrecommendations/506274. 

4 The steps PJM takes to evaluate the reliability effects of generator deactivations are listed here: 

http://www.pjm.com/p!annlng/services-requests/gen-deactivations.aspx. 

5 Kelsey Tamborrlno, "All eyes on Perry after FirstEnergy move," Politico, March 30, 2018. 

https://www.polltico.com/newsletters/morning~energy/2018/03/30/al!-eyes-on-perry-after-firstenergy-move-154378. 

6 "State of the Market Report for PJM," Monitoring Ana!ytics, LLC, March 9, 2017, p. 1. 

http://www.monitoringanalytics.com/reports/PJM State of the Market/2016/2016-som-pjm-secl.pdf. 7 Devin Hartman, ''The Market Advantage: A Q&A with Joe Bowring," R Street Shorts No. 40, June 2017, p. 2. 

http :l/2o9ub0417chl21g6m43em6psi2i. wpengine.netdna-cdn.com/wp-content/uploads/2017/06/RSTREETSHORT 40.pdf. 
91 


31172.032

FirstEnergy claims that emergency conditions warrant intervention to protect portions of the 65 million people within 

the PJM footprint.' However, leading customer trade groups unequivocally oppose such misguided energy paternalism. 

PJM customers are deeply concerned that this action will impose billions in direct costs to them with no tangible 

benefit.9 If the Department of Energy inappropriately uses 202{c) or any other mechanism to bail out an uneconomic 

company in FirstEnergy, it will only serve to trap precious resources in an uncompetitive environment. 

There is no grid emergency simply because the grid is in transition. Since 2011, market signals have facilitated over 

20,000 megawatts of coal plant retirements in PJM as developers continue to build new, low-cost generation that drives 

out higher-cost plants. 10 Experts at the Brattle Group note that PJM has "passed this stress test with surprising 

robustness and no evident threat to reliability." 11 The result has been healthy reliability metrics and lower costs for 

millions of American families and businesses owners in the regionY· 

When economic fundamentals shift abruptly, as they have this decade, and it causes turnover in the composition of 

supply, markets generate substantial economic returns for producers and consumers alike. Markets provide incentives 

for electricity suppliers to reallocate their resources consistent with dynamic economic conditions, which is sorely 

lacking under the regulated-monopoly model. We stress that the observance of rapid turnover in PJM's generation fleet 

indicates market success and the type of dynamism that will fuel economic growth in the future. 

If Congress and the Trump administration want to act, they should remove heavy-handed regulations where the costs 

outweigh the benefits and those that obstruct companies from making market-driven efficiency improvements. 

Furthermore, Congress should eliminate subsidies such as targeted tax credits. Picking winners and losers stifles 

competition and innovation and misallocates labor and capital toward companies that receive preferential treatment. 

layering more favoritism on top of existing favoritism only makes matters worse. let's end the practice. 

Sincerely, 

Devin Hartman 

Electricity Policy Manager 

R Street Institute 

1212 New York Ave. NW #900 

Washington, DC 20005 

202-525-5717 

Dhartman@rstreet.org 

Nick loris 

Herbert and Joyce Morgan Research Fellow 

Heritage Foundation 

214 Massachusetts Avenue1 NE 

Washington, DC 20002 

202-608-6204 

Nick.loris@heritage.org 

8 Scherman and Giannantonio, 2018, p. 12 https://statepowerproject.files.wordpress.com/2018/03/fes~202c-appHcation.pdf. 

9 We have spoken with leading consumer trade groups and many individual large consumers representing major manufacturers, 

tech companies, retail businesses and others in the PJM footprint. 

"Hartman, 2018, pp.l-2. http://2o9ub0417chl21g6m43em6psi2i.wpengine.netdna-cdn.com/wpcontent/uploads/2017/06/RSTREETSHORT 40. pdf. 

11 Johannes P. Pfeifenberger et at., "Response to U.S. Senators' Capacity Market Questions," The Srattle Group, May 5, 2016, p. 10. 

http://files.brattle.com/files/7294 brattle open letter to gao -

response to u.s. senators%E2%80%99 capacity market guestions.pdf. 12 See re!iabl!ity metrics in various annual reports by the North American Electric Reliability Corporation. See also various cost-toload estimates from PJM and the monitor's annual reports. 
92 


31172.033

Ql:nngres.s nf flye l!tniteb ~fates 

mnnltittgtnlt, ll« 20515 

President Donald J. Trump 

The White House 

1600 Pennsylvania Ave, NW 

Washington, DC 200SO 

Dear President Trump, 

February 15,2018 

We write to urge immediate action to support clean American electricity generation in the form 

of nuclear power. Rapid changes in the energy sector over the last decade, most notably the 

discovery of large amounts of natural gas and the corresponding advancements in drilling 

technology, have driven down the price of electricity generation from gas-fired power plants 

and undercut baseload generation at nuclear power plants. 

Nuclear power is abundant, reliable, inexpensive, carbon free, and relatively immune from 

unpredictable conditions that can disrupt the delivery of other fuels. From a national security 

perspective, nuclear energy is a key component of our national nuclear strategy. Premature 

closure of America's nuclear power plants threatens our competitive edge in this field. Without a 

commitment to nuclear power, nuclear technology development will decline and the Nation's 

technical advantage in this sector will rapidly erode. Our commercial nuclear energy industry 

and the United States' nuclear weapons complex complement each other to ensure our great 

Nation maintains the best nuclear talent and technology in the world. According to a report by 

the Global Nexus Initiative, if current trends continue, the U.S. will cede its lead in the nuclear 

power market to Russia, China, and India in the coming decades. 

The Energy Futures Initiative, which is led by Former Secretary of Energy Ernest Moniz, 

recently released a report that stated that a commercial atomic power sector is necessary to keep 

uranium-processing technology away from terrorists and other bad actors. Additionally, it will 

support nuclear-powered Navy vessels. The U.S. needs companies and engineers that can both 

build and run nuclear enterprises. The U.S. Navy's reactors require supplies and qualified 

engineers, and American nuclear scientists fill vital national security roles, it said. According to 

the report, a "shrinking commercial enterprise will have long term spillover effects on the Navy 

supply chain, including lessened enthusiasm among American citizens to pursue nuclear 

technology careers." 

Unfortunately, recent news reports reveal that Ohio's only two nuclear power plants appear 

headed for premature closure. The Davis-Besse and Perry nuclear power plants in northern Ohio 

are important components to the regional economy and to America's energy security. These 

high-performing plants are economic engines that provide good-paying jobs both at the plants 

and through a far-reaching supply chain. These jobs support thriving communities and generate 

critical tax revenue that fund essential services. Northeast Ohio's Port Clinton News-Herald 

reported that public schools in Perry stand to Jose $2.3 million in funding if the Perry nuclear 

PNNT£0 ON RiCYCUC PAP£A 
93 


31172.034

power plant closes. In addition, Ohio's two nuclear power plants produce 90 percent of the 

state's carbon-free electricity. 

We urge you and your Administration to step in and offer immediate assistance to prevent these 

critical generators from closing prematurely. A robust nuclear energy enterprise is a key enabler 

of the Nation's nonproliferation goals and supports both the fleet modernization plans of the U.S. 

Navy as well as the global strategic stability and deterrence value of nuclear weapons. We ask 

that your Administration work with Ohio and other states with nuclear power facilities in 

financial distress to harmonize federal and state policies affecting the design of organized 

electricity markets. Specifically, we believe that these markets should appropriately value 

attributes including reliability, supply diversity, greenhouse gas emissions, and relative national 

security importance. Time is of the essence. 

Sincerely, 

~·-~- '~r ... ~~ 7/ - Member of Congress 

~~ Member of Congress 

CC: Hon. Rick Perry, Secretary of Energy 

Elf1fr 

Member of COngress 

~~ Member of Congress 
94 


31172.035

INTERNATIONAL BROTHERHOOD OF TEAMSTERS 

JAMES P. HOFFA 

General President 

25 louisiana Avenue. NW 

Washmgton, DC 20001 

February 20, 2018 

President Donald J. Trump 

The White House 

1600 Pennsylvania Avenue NW 

Washington, D.C. 20500 

Dear Mr. President: 

KEN HALL 

General Secretary-Tre~Htu er 

202 624.6800 

v;ww.teamstewrg 

On behalf of the 1.4 million members of the International Brotherhood of 

Teamsters, I urge your immediate action to secure our nation's baseload power 

plants and the long-term security and resilience of the electric grid. The Teamsters 

represent individuals employed in virtually every occupation imaginable, both 

professional and non-professional, private sector and public sector. Baseload coal 

and nuclear power plants directly employ more than 154,000 workers, produce 

major infrastructure projects that put Americans to work, and support a resilient 

and dependable electric grid. 

Baseload power plants have long been the dependable work horses of the electric 

system, providing energy and ancillary services to customers 24 hours a day, 365 

days a year. With significant on-site fuel reserves, they provide the resilience 

required to keep electricity flowing under all adverse circumstances. Unlike other 

energy resources, their operation is not subject to interruption by factors such as 

extreme weather events or attacks on infi·astmcture. Our national security, and the 

economic base of communities across the nation, is dependent on maintaining 

these plants to support a resilient supply of affordable electricity. 

However, numerous baseload power plants have permanently shut down in recent 

years, and many more are expected to close prematurely in the very near future. 

Once they are gone, they are gone for good. Baseload generation is under serious 

threat from market-distorting subsidies and mandates, regulations that target these 

resources and markets that don't value resilience. 
95 


31172.036

Pr~sident Donalc! J. Tnunp 

February 20, 201E 

J;>age2 

We are at a crisis point. Fuiiher decline in the number of plants will not only 

:impact the grid and national security, it will cost valuable jobs and discoura'ge 

.industrial development opportunities nationwide, This is an outcome the. Teamsters 

and America simply can't. afford. 

Unless corrective actions are taken, including new mechanisms that recognize 

baseload attributes and ensure appropriate compensation for providing the 

resilience and dependability benefits, the long~term viability of these baseload 

plants along with the.jobs and community economic benefits they bring is in peril 

I mge you to direct Secretary Perry to use his eme1~gency authority to save our 

nation's valuable baseload power plants. 

Sincerely, 

~/!~. 

ames P. Hoffa 

General President 

International Brotherhood of Teamsters 
96 


31172.037

President Donald J. Trump 

The White House 

1600 Pennsylvania Avenue, N.W. 

Washington, DC 20500 

Dear President Trump: 

February 20,2018 

The imminent closure of dozens of coal-fired power plants is a crisis that needs to be 

addressed right away. As you know, a recent Department of Energy (DOE) proposal to correct 

electricity markets to properly value baseload energy sources would have prevented these 

closures while ensuring grid reliability and resilience. Unfortunately, the Federal Energy 

Regulatory Commission (FERC) rejected the proposal. 

However, the Commission's inaction does not mean the problem has gone away. The 

plants in question will not re-open once they are offline. They will be added to the hundreds of 

coal-fired plants that have closed for good in recent years. The warning sians for the coming 

crisis have been on the horizon for years. It is no longer a far-off possibility: FERC's own 

projections show that 20,650 MW of coal capacity will close by 2020. 

The American power grid is fueled by a diverse mix of resources, including natural gas, 

wind, and solar power. However, at its con:, the grid relics on bascload sources like coal and 

nuclear power. Without these baseload sources, the grid becomes instantly wlnerable to extreme 

weather events, natural disasters, fuel supply chain disruptions, and terrorist attacks. 

The closure of additional coal-fired plants means our grid will fl1ce a crisis scenario -· 

possibly very soon. Such a crisis nearly took place in 2014, when the polar vortex stretched the 

natural gas supply beyond its limits and communities across the country faced electricity 

shortages and extreme spikes in price for available fuel. The scenario would have been deadly, 

but baseload power resources were able to supplement natural gas pipeline constraints and 

provide adequate power to distressed areas. 

That was four years ago. The situation is now even more dire. Coal-fired plants can store 

weeks' worth of fuel on-site and therefore do not have the same supply chain vulnerabilities as 
97 


31172.038

etherresources such as natural gas. But the availability of these stockpiled resources is 

diminishing by the day. 

Coal mining, transportation, and related electric power generation accountf()r more than 

800,000 direct and indirect jobs, many in. economically distressed regions of the nation. We 

cannot afford to lose these good middle-class jobs; or the coal mines and power plants that 

provide the bulk ofeommunityuixbases supporting essential services such as education, 

firefighters and police. 

In addition; any .more plant closings will only exacerbate the looming crisis with respect 

to the pensions of more than 107,000 current and future retired miners and surviving spouses. 

Coal industry bankruptcies over the last several years- caused by the premature plant closings 

and utility fuel switching -have elimil)ated more than $100 million in annual contributions to. 

the retirees' pension pian. Any further bankruptcies .ofcontributing !lmployers will cause the plan 

to collapS<:. 

FERC's inaction leaves few options to stave offSerious problems for our electric grid and 

economic disaster for hundreds oftho11sands ofour nation's energy workers, retirees and those 

who live in .their cotnmimities. I urge you to take the necessary steps to prevent the closure of 

additional coal-fired power plantS. 

. The security and .stability of our power grid is at risk, along with thousands ofjobs in 

already hard-hit parts of our nation. Emergency action-~- is only way to prevent further 

deteriorat1on of our country's reliable and affurdable energy supply. 

Sincerely, 

Cecil E. Roberts 

cc; Rick Perry, Secretary of Energy· 

Levi Allen, International Secretary"Treasurer 

Intemational.Executive Board 

Regional Directors 

Department Heads 
98 


31172.039

International Brotherhood of 

BOILERMAKERS • IRON SHIP BUILDERS 

'(83 State Avenue 

NBWTON':B~ dONES IXt&RU4Tlmtll.t.li'IUt$ltlf:m' 

SUlTE570 

915,371-2640 FAX: 91~281~8101 

President Donald J. trump 

The WhiteHouse 

1600 PennsylvanlaAvenue, NW 

Washington, DC 20050 

Dear President Trump, 

February 21,2018 

BlACKSMITHS •· FORGERS & HELPERS 

Xansa41 City, ICfiliSas 8610Hi!811 

wtLLIAM:T. CREEDEN -~TIOl'tAJ.tliiQU'lTAAY·~tl'llUt 

StJITE.l565 

913~371 .. 2640 FAX: 9;3,281·810~ 

On behalf of the Iilternational Brotherhoqd ofBoilennake~ Iron Ship Buildei:s1 Blacksmiths, 

Forgers and Helpers. (Boilermakers), I write to urge action by your administration, through the 

Depariment QfEnergy (DOE), to use emergency poWers to avoid. the imminent closure ofcritical 

Colli an<l O\lclear. power plants. Hundreds of coal-fueled generating plants have clQsed over the 

past several years due. tolower11at\lral gas prices and stringent EPA regulations~ Some nuclear 

l)l1its are at risk because they cannot recover their costs UI\de.r current electricity market rules, 

leaving some states struggling to ensure their economic viability. 

Recently, the Federal EnergyRegtilatol:y Commission(FBRC)rejecteda proposed rut~; by DOE 

to provide full cost recovery for cmrl and nuclear units operating in competitive power nwkets. 

This rule would have helped lo ensure. fuel diversity and resilience. of the electric power grid by 

correcting competitive electricity marketS in the way that power producers are compensated. · 

DOE's proposed rule recognized .that haseload coa1.and nuclear plants provide unique benefits to 

the electric grid due to the security of their "on the ground" fuel supplies and their inherent 

stability and reliabil!ty, 

Dnforttiilately, the lackof actitm by FERC has now left too mll.!ly of these coal and nuclear 

power plants vulnerable to imntinent re.tirement. These plant cl()$ures will certainly .result in 

further strain on the electric grit:! and reliability -not to mention the detrimental effects on the 

communities that these plants Siljlport through a str<lng tax .base .and steady employment, 

including thousands of highly-skilled Boilennakers who construct and maintainthese.coal and 

nqclear UI\its. 

Too many baselo!ldpower plants have already closed in rect~nt years. The premature retirement 

of many more due to outdated market rules will futther undermine electric .reliability, affecting 

consUI!\e!Jl, manufacturing industries, and high-tech businesses. Once these baseload power 

plants close,.they do not reopen. 
99 


31172.040

Prpsident J?t?n~l.d J. Trump 

Februaryll,2018 

Pnge2 

FERC's refusal to address this problem as proposed by DOE has left few alternatives and, fn our 

view, requires immediate, corrective action by DOE. 

I urge yoU: to direct DOE Secretary Perry to use.his emergency authority to inte.rvene in this 

sedo.us situation to prevent the further closure of coal and nuclear baseload generators. 

Sincerely, 

Newton B. Jones 

International President 

cc: Hon. Rick Perry, Secretary, Department ofEnetgy 

U.S. International Vice Presidents 
100 


31172.041

0. MICHAEL LANGFORD 

PRESIDENT 

STEVEN VANSLOOTEN 

EXECUTIVE VICE PRESIDENT 

MICHAEL COLEMAN 

SECRETARY-TREASURER 

JOHN DUFFY 

VICE PRESlDENT 

EXECUTIVE BOARD MEMBERS 

ISH 

February 20,2018 

President Donald J. Trump 

The White House 

1600 Pennsylvania Ave, NW 

Washington, DC 20050 

Dear President Trump, 

The hard~ working men and woman who work in our nation's power plant<; need your help- and they need your 

help now. Last month, the Federal Energy Regulatory Commission (FERC) rejected a proposed rule by the 

Department of Energy (DOE) that would have corrected competitive electricity markets to appropriately value 

attributes uniquely provided by fuel-secure baseload generators • predominantly critical coal and nuclear power 

plants. FERC's failure to timely address the pressing need to fix America's electricity markets will have 

devastating consequences for our economy, our power grid, and our national security. 

Most alarmingly, power plant closures will be immediate and irreversible. Largely because of punitive regulatory 

pressures against coal and nuclear power, approximately 60,000 megawatts of fuel~secure baseload power plants 

have closed over the last several years and many more are slated for premature closure in the near future. 

Unfortunately, the improved regulatory environment witl not stop those closures from happening. Electricity 

market rules simply do not value the reliability and resiliency attributes that fue1~secure baseload generators 

provide the grid. 

The imminent closure of these plants will have far~reaching effects. First and foremost, the nation's power grid 

needs fuel~secure baseload power. Coal and nuclear fuel are abundant, reliable, affordable and not vulnerable and 

unpredictable conditions or emergencies that can disrupt the delivery of other fuels. Coal-fired power plants can 

stockpile several weeks• or months' worth of fuel on site; nuclear generators store enough fuel to last months or 

even years. 

In the case of an extreme weather emergency, a coordinated attack or any significant disruptions to the fuel 

delivery infrastructure, fue1~secure base load generators are the only ones capable of continuing operations. If fuel· 

secure baseload plants continue to be fotced to retire, our power grid is likely to become overloaded or fail in the 

event of a sudden, extreme increase in demand. 

This is not merely a hypothetical situation: the 2014 polar vortex stretched the country•s natural gas pipeline 

system well past its capabilities, resulting in skyrocketing prices and fuel shortages. These shortages during 

extreme cold temperatures could have been deadly, if not for fuel~secure base load power plants that essentially 

carried the grid through the extended emergency. Many of the generators that were running ful!~ out have since 

retired. 

Experts agree. The North American Electric Reliability Corporation (NERC), which is responsible for 

establishing reliability standards for our grid. described the tenuous situation well in comments it provided to 

Secretary Perry1s proposal. NERC said "Coal and nuclear generation generally have the unique attributes of low 

outage rates, high availability rates, and, with on-site storage, low fuel supply sensitivity necessary to provide 

secure and stable capacity to the grid. While their current benefits and potential are significant, non~synchronous 
101 


31172.042

generation and Iiatul'al gas-tired facilities do not cwtently replace the secure capacity provided by-coal and 

nuclear .g~n~ration.'• 

PERC's failure to approve the DOE proposal to properly value ihe relia_bility anq resilie!JCY attributes uniquely 

i>rovided by fuel-secure basefoad generators could soon prove to be a catastrophl~; mistake. We do not have the 

luxwy of kicking the can any farther down the road. Without immediate action to. Stop the imminent closui'e of 

fuel-secure base load generators, our coui1try will find itself confronted with a crisis that.could have been 

prevented. This _is not a quesiion of if, but when. 

lurge the White Ho_use to direct DOE Secretary Rick Peny to .use .tire emergency powers. under his authority to 

stop the coming closures of at!ditional.coal and nuclear plants acroSs· the country. This is th~ only way to prevent 

the impending-disaster; The coUJltl)' cannot afford further delays. DOE must act right. awaY. 

Sincerely, 

D. Michael Langford 

National President 

Uiility Workers Union of America, AFL-.CI() 

CC: Hon. Rick .Perry, Secretary of' Energy 
102 


31172.043

VIA COURIER 

The Honorable James Richard Perry 

Secretary of Energy 

U.S. Department of Energy 

1000 Independence Avenue, S.W. 

Washington, DC 20585 

March 30,2018 

US Department of Energy 

MAR 3-2 ~~iB 

Electricity Delivery and 

Energy Reliability 

Re: Joint Request of the Energy Industry Trade Associations for Notice-andComment Procedures Regarding the March 29,2018 Request of First Energy 

Solutions for an Emergency Order Pursuant to Section 202(c) of the Federal 

Power Act 

Dear Secretary Perry: 

The Advanced Energy Economy, the American Council on Renewable Energy, the 

American Forest & Paper Association, the American Petroleum Institute, the American Wind 

Energy Association, the Electric Power Supply Association, the Electricity Consumers Resource 

Council, the Independent Petroleum Association of America, the Interstate Natural Gas 

Association of America, the Natural Gas Supply Association, and the Solar Energy Industries 

Association (collectively, "Joint Industry Commenters") hereby respectfully submit this joint 

request that the Secretary of Energy establish notice-and-comment procedures with respect to the 

March 29, 20 I 8 request (the "March 29 Request") of FirstEnergy Solutions ("FE Solutions") for 

issuance of an order pursuant to Section 202(c) of the Federal Power Act (the "FPA").l In the 

March 29 Request, FE Solutions asks the Secretary to require PJM Interconnection, L.L.C. 

("P JM") to pay certain nuclear-powered and coal-fired generators "cost-based rates that provide 

for full cost recovery .... "2 As was well-documented in the recent proceeding before the 

Federal Energy Regulatory Commission ("FERC") initiated by the Secretary's October 10, 2017 

proposed rulemaking on grid resilience pricing, 3 such action would have far reaching 

implications for the PJM markets and for a broad spectrum of parties, including those 

represented by the Joint Industry Commenters. It is, therefore, imperative that all stakeholders 

be afforded notice, and a meaningful opportunity to be heard, before any favorable action is 

taken on the March 29 Request. 4 

16 U.S.C. § 824a(c)(2017). 

March 29 Request at 31. 

3 See Grid Resilience Pricing Rule, Notice of Proposed Rulemaking, 82 Fed. Reg. 46,940 (Oct. I 0, 

20 17) (the "October I 0 NOPR"). 

Naturally, the Joint Industry Commenters would not object to the Secretary's rejection of the 

March 29 Request without notice and comment. 
103 


31172.044

The Honorable James Richard Perry 

March 30, 2018 

Page2 

The purported problem prompting the March 29 Request is the same one that was the 

subject of the Secretary's October 10 NOPR.5 On January 8, 2018, FERC issued an order 

terminating that rulemaking and initiating a separate proceeding in order "to examine holistically 

the resilience of the bulk power system."6 FERC held that none of the participants in the 

rulemaking, including FE Solutions, which filed extensive comments, had demonstrated that 

existing tariffs were unjust and unreasonable or that the proposed cost-based rates for select 

generators were just and reasonable. 7 FERC also relied on "extensive comments" from PJM and 

other system operators which identified no "past or planned generator retirements that may be a 

threat to grid resilience."& By its March 29 Request, FE Solutions is asking the Secretary to 

second-guess FERC' s expert findings on a record substantially less developed than that in the 

FERC proceeding. This is particularly problematic where the proposed remedy is concerned, 

because Section 202(c) of the FPA unambiguously requires that any compensation required by 

the Secretary be "just and rcasonable."9 FE Solutions is also asking the Secretary to disregard 

the Department of Energy's own regulations, which clearly state that "economic factors relating 

to service ... generally will not be considered as emergencies unless the inability to supply 

electric service is imminent."10 As recognized in the FERC proceeding and as discussed below, 

there is no imminent threat. 

Even leaving aside the merits and assuming arguendo that the March 29 Request 

identifies a valid problem, FE Solutions's own conduct in response to the Commission's 

January 8 Order belies claims that there is any immediate problem requiring issuance of an order 

before affected parties have a meaningful opportunity to be heard. Specifically, FE Solutions did 

not avail itself of the opportunity to request rehearing of the January 8 Order within the 30 days 

prescribed by the FPA 11 and waited nearly three months to file the March 29 Request. It would 

be manifestly unreasonable and unfair to both other interested parties and the Secretary for FE 

Solutions to demand that the Secretary act without hearing from interested parties, including 

P JM, after having failed to exercise its right to request rehearing before FERC and waited nearly 

three months before challenging FERC's order through the March 29 Request to the Secretary. 

It is also telling that the most immediate considerations underlying FE Solutions's 

March 29 Request are that FE Solutions: (I) "likely will file for bankruptcy by the end of March 

20 18"; and (2) has "already submitted notice to P JM that it would deactivate its nuclear 

2017). 

10 

11 

See Grid Resilience Pricing Rule, Notice of Proposed Rulemaking, 82 Fed. Reg. 46,940 (Oct. 10, 

Grid Reliability & Resilience Pricing, 162 FERC ~ 61,012 at P 1 (2018) (the "January 8 Order"). 

See id at PP 14-16. 

!d. at P 15. 

16 U.S.C. § 824a(c) (2012). 

10 C.F.R. § 205.371 (2017). 

See 16 U.S.C. § 825/(a) (2012). 
104 


31172.045

The Honorable James Richard Perry 

March 30,2018 

Page 3 

assets ... in 2020 and 2021."12 Notwithstanding FE Solutions's assertions to the contrary, these 

considerations both underscore the lack of urgency in this case. First, the near-term effect of a 

bankruptcy filing will be to decrease, not increase, the financial pressures on FE Solutions 

inasmuch as actions to collect pre-petition debts will be stayed, giving it a "breathing spell" 

while it reorganizes.l3 While the bankruptcy filing may be an unwelcome event for FE 

Solutions and its stakeholders, that event only serves to lessen the immediacy of any alleged 

problem facing society arising from threatened retirements of its facilities. Second, threatened 

retirements that will not occur until 2020 and 2021 can hardly be said to present an issue so 

immediate as to justify denying affected parties the opportunity to comment and depriving the 

Secretary ofthe benefit of those parties' input.14 

For the foregoing reasons, the Joint Industry Commenters respectfully request that the 

Secretary establish notice-and-comment procedures before taking any favorable action on the 

March 29 Request. Specifically, the Secretary should provide for publication of a notice of the 

March 29 Request in the Federal Register and establish a comment period of at least 60 days. 

Such a comment period would be consistent with the requirements of Executive Order 12866, 

which states that "each agency should afford the public a meaningful opportunity to comment on 

any proposed regulation, which in most cases should include a comment period of not less than 

60 days."15 

Thank you for your consideration of this matter. 

Greg W ctstone 

President and CEO 

Todd Foley 

Very truly yours, 

Senior Vice President, Policy & 

Government Relations 

AMERICAN COUNCIL ON RENEWABLE ENERGY 

1600 K Street, N.W. 

Washington, DC 20006 

202-777-7581 

wetstone@acore.org 

12 See March 29 Request at 8 (footnote omitted). 

Malcolm Woolf 

Senior Vice President, Policy 

ADVANCED ENERGY ECONOMY 

1000 Vermont Avenue, N.W., 3'd Floor 

Washington, DC 20005 

(202) 380-1950 

mwoolf@aee.net 

13 In re Robinson, 764 F.3d 554, 559 (6th Cir. 2014) (quoting H.R.Rep. No. 95-595, at 340 (1978), 

1978 U.S.C.C.A.N. 5963, 6297). 

14 FE Solutions also fails to acknowledge that those retirements cannot occur until PJM reviews 

their potential reliability impacts, and that, to the extent reliability impacts are identified, PJM has 

authority to take steps to address them. 

15 Regulatory Planning and Review, Exec. Order No. 12866, 58 Fed. Reg. 51,735, 1993 WL 

13149641, § 6 (Sept. 30, 1993). 
105 


31172.046

The Honorable James Richard Perry 

March 30,2018 

Page 4 

Jerry Schwartz 

Senior Director 

Energy and Environmental Policy 

AMERICAN FOREST & PAPER ASSOCIATION 

1101 K Street, NW, Suite 700 

Washington, DC 20005 

(202) 463-2581 

Jerry_ Schwartz@afandpa.org 

Amy L. Farrell 

Sr. Vice President, Government & 

Public Affairs 

Gene Grace 

Senior Counsel 

AMERICAN WIND ENERGY ASSOCIATION 

1501 M Street, N.W., Suite 900 

Washington, DC 20005 

(202) 383-2521 

afarrell@awea.org 

Nancy E. Bagot 

Senior Vice President 

ELECTRIC POWER SUPPLY ASSOCIATION 

1401 New York Avenue, N.W., Suite 950 

Washington, DC 20005 

(202) 628-8200 

NancyB@epsa.org 

Joan Dreskin 

Vice President & General Counsel 

lNTERSTA TE NATURAL GAS 

ASSOCIATION OF AMERICA 

20 F Street, N.W., Suite 450 

Washington, DC 20001 

(202) 216-5900 

jdreskin@ingaa.org 

Todd A. Snitchler 

Group Director, Market Development 

AMERICAN PETROLEUM INSTITUTE 

1220 L Street, N.W. 

Washington, DC 20005 

(202) 682-8457 

Snitch1erT@api.org 

John P. Hughes 

President & CEO 

ELECTRICITY CONSUMERS RESOURCE COUNCIL 

1101 K Street, N.W., Suite 700 

Washington, DC 20005 

(202) 682-1390 

jhughes@elcon.org 

Susan W. Ginsberg 

Vice President, Crude Oil & 

Natural Gas Regulatory Affairs 

INDEPENDENT PETROLEUM 

ASSOCIATION OF AMERICA 

1201 15th StreetN.W., Suite 300 

Washington, DC 20005 

(202) 857-4728 

sginsberg@ipaa.org 

Patricia Jagtiani 

Executive Vice President 

NATURAL GAS SUPPLY ASSOCIATION 

1620 Eye Street, N.W., Suite 700 

Washington, DC 20006 

pjagtiani@ngsa.org 
106 


31172.047

The Honorable James Richard Perry 

March 30, 2018 

Page 5 

Abigail Ross Hopper 

President & CEO 

SOLAR ENERGY INDUSTRIES ASSOCIATION 

600 14th Street, N.W., Suite 400 

Washington, DC 20005 

(202) 682-0556 

ahopper@seia.org 

cc: Bruce J. Walker, Assistant Secretary, DOE Office of Electric 

Delivery & Energy Reliability 

Patricia A. Hoffman, Principal Deputy Assistant Secretary, 

DOE Office of Electric Delivery & Energy Reliability 

The Honorable Kevin J. Mcintyre, Chairman, FERC 

The Honorable Cheryl A. LaFleur, Commissioner, FERC 

The Honorable Neil Chatterjee, Commissioner, FERC 

The Honorable Robert F. Powelson, Commissioner, FERC 

The Honorable Richard Glick, Commissioner, FERC 

The Honorable Kimberly D. Bose, Secretary, FERC 
107 


31172.048

COMMONWEALTH OF PENNSYLVANIA 

PENNSYLVANIA PUBLIC UTILITY COMMISSION 

400 NORTH STREET, HARRISBURG, PA 17120 

Via Overnight and Electronic Mail 

The Honorable Rick Perry 

Secretary of Energy 

U.S. Department of Energy 

1000 Independence Ave. S.W. 

Washington D.C. 201585 

the.secretary@hg.doe.gov 

Ms. Catherine Jereza 

Deputy Assistant Secretary 

Office of Electricity Delivery and Energy 

Reliability 

U.S. Department of Energy 

1000 Independence Ave. S.W. 

Washington D.C. 201585 

Catherine.jereza@doe.gov 

AprillO, 2018 

Mr. Bruce Walker 

Assistant Secretary 

Office of Reliability and Energy Reliability 

U.S. Department of Energy 

1000 Independence Ave. S.W. 

Washington D.C. 201585 

bruce.walker@hg.doe.gov 

Re: Motion to Intervene and Protest of Pennsylvania Public Utility Commission 

Dear: Secretary Perry, Assistant Secretary Walker and Deputy Assistant Secretary 

Jereza: 

The Pennsylvania Public Utility Commission (P APUC), by and through its 

undersigned counsel, files this Motion to Intervene and Protest in the proceeding 

involving the March 29, 2018 Request for Emergency Order Pursuant to Federal Power 

Act Section 202(c) by FirstEnergy Solutions Corp. (FES). 
108 


31172.049

I. PROCEDURAL BACKGROUND 

On March 29,2018, FES sent a letter (Request) to U.S. Department of Energy 

(Department) Secretary James Richard Perry, formally requesting that Secretary Perry 

invoke his emergency authority under Federal Power Act (FPA) Section 202(c), 1 to find 

that an emergency condition exists in the PJM Interconnection (PJM) territory that 

requires immediate intervention. In the Request, FES seeks relief under Section 202(c), 

whereby the Secretary would order "certain existing nuclear and coal-fired generators" to 

contract with PJM for energy, capacity, and ancillary services to "maintain the stability of 

the electric grid." 2 Further, FES requests that Secretary Perry order PJM to "promptly 

compensate at-risk merchant nuclear and coal-fired power plants for the full benefits they 

provide."3 FES served the Request on numerous affected parties. 

II. MOTION TO INTERVENE 

The P APUC is the agency charged with the responsibility for regulating electric 

utility rates and service within the Commonwealth of Pennsylvania, pursuant to the 

Public Utility Code. 4 In this role, the P APUC has authority to represent the interests of 

Pennsylvania electric consumers in proceedings before federal courts, the Federal Energy 

Regulatory Commission (FERC) and other federal agencies including the Department. 

1 16 U.S.C.S. § 824a (c). 2 FES Letter at 1. 3 ld. at I. 4 66 Pa. C.S. § 101 et seq. 

2 
109 


31172.050

Pennsylvania is centrally located within the Mid-Atlantic Region of the United 

States and possesses significant amounts of fossil fuel generation, as well as renewable 

generation. Pennsylvania is a major consumer of electricity with its industrial, 

commercial, and residential load and is one of the country's largest producers of natural 

gas, primarily from the Marcellus Shale formation. Growing development of this fuel 

source has made natural gas plentiful and economically attractive. This, in tum, has 

greatly accelerated a shift away from coal-fired generation toward gas-fired electric 

generation, along with construction of gas-fired electric generation, including combustion 

turbines. 

The P APUC has a vested interest in ensuring that adequate generation exists to 

meet the current and future needs of its residents and the region. In this regard, the 

P APUC has been an active supporter of electric wholesale capacity markets and the 

initiatives advanced by the FERC and PJM, the regional transmission organization, to 

incentivize the continued development of new generation in the Mid-Atlantic region. 

Moreover, the P APUC has a significant and direct interest in this proceeding that is not 

adequately represented by other parties. 

IfFES' Request is granted, prospective payments made pursuant to an Emergency 

Order would almost certainly be recovered from consumers throughout the PJM region, 

including millions of ratepayers in the Commonwealth of Pennsylvania. The P APUC 

opposes the Request because, contrary to the assertions made therein, no foreseeable 

reliability risk exists. We reserve the right to supplement this preliminary pleading to 

3 
110 


31172.051

explain, in detail, what effect the Request would have on Pennsylvania's ratepayers and 

competitive market. 

Ill. PROTEST 

The PAPUC protests FES' Request as legally and factually insufficient under 

Section 202 (c), and further, contends that the damage to electric wholesale markets and, 

by extension, retail customers far outweighs the speculative benefits advocated by FES. 

In support of its Protest, the P APUC avers as follows: 

• The overwhelming evidence presented in letters filed by numerous 

parties to this proceeding demonstrates that no "emergency 

condition" exists to justify the extraordinary provisions of Section 

202(c) of the FPA. Additionally, the allegations are altogether too 

remote to be actionable. FES' nuclear units are not scheduled for 

deactivation until May 31, 2020, for one unit, and May 31, 2021, for 

3 other units at two plant sites. Wholesale market prices and market 

structures in future years may depart substantially from current 

market prices and structures. In the absence of credible evidence, 

FES' Request fails as legally and factually adequate to justify the 

relief it requests. 

• FES' Emergency Order Request seeks unprecedented and overbroad 

relief. FES threatens the efficient functioning of organized 

competitive wholesale electricity markets by providing de facto cost 

of service treatment to coal and nuclear generation without adequate 

justification. 

• Reliability is not at credible risk, as PJM's recent filings 

demonstrate. Moreover, if reliability concerns do arise, PJM has 

adequate processes for addressing those concerns. 5 

• Resilience and reliability are complex topics that are currently being 

examined within the PJM stakeholder process. These processes 

should be permitted to go forward, rather than coopting these 

5 Reliability Must Run (RMR) protocol in PJM Manual 14D, pursuant to which PJM may request a unit to 

operate past its desired deactivation date. 

4 
111 


31172.052

processes through the Department's action vis a vis Section 202(c). 

PJM has an ongoing stakeholder process to address market design 

improvements, and is currently examining several energy, capacity, 

and ancillary market reforms, in addition to grid resiliency6 issues. 

FES should not be permitted, through this Request, to circumvent 

the thorough stakeholder process currently established in PJM to 

elevate their self-serving interests over those of other competitive 

suppliers, technologies, utilities and end-use customers. 

• If granted, the Request may unnecessarily raise energy costs for 

consumers and directly undercut the tremendous economic 

advantage to the United States from abundant natural gas deposits. 

• FES, through its Request, is seeking to insert itself into matters of 

state jurisdiction as it relates to resource adequacy, resource 

selection criteria and state energy policy. These are matters 

established by the Governor and the Pennsylvania General 

Assembly/ as implemented through the PAPUC, and other 

departments within the Commonwealth of Pennsylvania. 

The PAPUC respectfully urges the Department to give all interested parties 

sufficient time to present their responses to the FES Request before the Department rules 

on the Request. The P APUC supports and concurs in the Trade Group request, filed 

March 30, 2018, seeking a 60-day comment period. 

IV. SERVICE OF DOCUMENTS 

The P APUC designates the following persons to receive service and 

communications on its behalf in this proceeding: 

6 Grid Resilience in Regional Transmission Organizations and Independent System Operators, Docket 

No. AD18-7-000, Order issued January 8, 2018. 7 66 Pa.C.S. §§2801 et seq. and §§2201 et seq. 

5 
112 


31172.053

James P. Melia 

James A. Mullins, 

Pennsylvania Public Utility Commission 

400 North Street, Harrisburg, PA 17120 

Tel: 717-787-1859; 717-787-5978 

jamullins@pa.gov 

jmelia@pa.gov 

V. CONCLUSION 

For the foregoing reasons, the PAPUC respectfully requests that the Department 

grant the PAPUC's Motion to Intervene, accept its Protest, provide all interested parties 

60 days to file comments on the Request and reject FES' Request for relief under Section 

202 (c) of the FPA. 

Dated: April10, 2018 

6 

Respectfully submitted, 

Is/ James A. Mullins 

James A. Mullins, 

Pennsylvania Public Utility Commission 

400 North Street, Harrisburg, PA 17120 

Tel: 717-787-5978 

jamullins@pa.gov 
113 


31172.054

March 30, 2018 

The Honorable James Richard Perry 

Secretary of Energy 

United States Department of Energy 

1000 Independence Avenue, S.W. 

Washington, DC 20585 

2750 Monroe Boulevard 

Audubon, PA 19403-2497 

Vincent P. Duane 

Sr. VP General Counsel, Law, Compliance 

& External Affairs 

610.666.4367 

610.666.4281 FAX 

Vincent.duane@p!m.com 

Re: FirstEnergy Solutions' Request for Emergency Relief under Section 202 of the Federal Power Act 

Dear Secretary Perry: 

PJM Interconnection, LLC (PJM) respectfully seeks to submit this response to the above-referenced 

request filed by FirstEnergy Solutions and affiliates (FES) on March 29, 2018. While the PJM system 

presently is reliable by all measures, PJM will refrain, at this time, from responding to FES' assertion that 

an "emergency condition" will arise should certain FES nuclear plants and potentially certain FES coal 

plants retire in upcoming years as announced or threatened by the company. t 

PJM will not use this opportunity to express agreement or disagreement with several major points of 

argument advanced by FES; nor will we correct at this time several misstated facts presented by FES. 

Instead, PJM simply points out to the Secretary two very obvious and objective facts that relieve the 

Department from the need to take precipitous, immediate action to address FES' request 

First, whether FES' actions create a reliability concern that may threaten the stable and reliable operation of 

the grid, much less constitute an emergency within the meaning of Section 202(c) of the Federal Power 

Act, is a question that will be answered by a proscribed, detailed and regularly employed process found in 

Part V of the PJM Tariff. Consistent with the PJM Tariff, over the next 30 days, PJM will undertake a 

thorough analysis of its system to determine whether the announced retirements would present systemic 

adequacy issues or any local reliability issues, such as insufficient voltage support. Should any such 

finding result, the P JM Tariff provides an additional 60 days to work with FES and a range of tools 

available, including ordering transmission system upgrades and, if necessary, offering full cost of service 

compensation under Part Vofthe PJM Tariff to induce assets to remain temporarily on-line. Ultimately, 

PJM could also join FES in its instant request should other remedial options prove insufficient 

Second, PJM can state without reservation there is no immediate threat to system reliability. Indeed, the 

FES units that announced their expected retirement earlier this week, by their own disclosures, will remain 

operational in most cases until through May 2021. Moreover, these announcements are not binding - FES 

1 Curiously, the request purports to seek relief for the entire FES merchant fleet- and somehow on behalf of others- relief for all 

other coal and nuclear units in PJM, totaling over 80 generation units. PJM will evaluate the question of impaired reliability or an 

"emergency condition" based on actual facts- announced retirements- not on the company's general dissatisfaction with the 

PJM markets or its competitive position therein. Nor will PJM evaluate the impact of closure of other companies' plants unless 

or until owners of such plants raise the matter with P JM. (W01537511} 

610.666.8980 1 www.pjm.com 
114 


31172.055

Page2 

can elect to rescind this notice, or should assets be sold, a subsequent purchaser likewise may decide to 

continue to operate the units. But even assuming these units do in fact close as of the dates announced, 

PJM, FERC, and the Department of Energy will have ample time before then to take measures, which at 

the extreme might include the kind of relief sought in the instant request. 

PJM therefore respectfully requests that the Secretary allow PJM's FERC-accepted process to unfold in an 

orderly manner and refrain from taking unnecessary, extraordinary and precedential immediate action as 

sought by FES. PJM will commit to sharing publicly (to the maximum extent possible), and in any event to 

the Department of Energy, our findings resulting from our 30-day process for evaluating the system 

implications of FES' announced retirements. 

Thank you for considering PJM's perspective and suggestions. 

Sincerely, 

Vincent P. Duane 

cc: Mark Menezes, DOE 

Bruce Walker, DOE 

Sean Cunningham, DOE 

Patricia Hoffman, DOE 

Catherine Jereza, DOE 

tw'"'"" )610.666.8980 1 www.pjm.com 
115 


31172.056

MARIA KORSNICK 

President and Chief Executive Offlcer 

1201 F Street NW, Suite 1100 

Washington, DC 20004 

P: 202.739.8187 

mgk@neLorg 

nei,org 

Aprilll, 2018 

The Honorable Greg Walden 

Chairman 

Committee on Energy and Commerce 

2123 Rayburn House Office Building 

Washington, DC 20515 

Dear Mr. Chairman: 

NUCLEAR 

~I ENERGY INSTITUTE 

Our nation's nuclear power plants deliver benefits that go far beyond a reliable and resilient electrical 

grid. Nuclear energy contributes to a strong economy, a cleaner environment, and national security. Yet 

today we are at risk of losing much of what nuclear energy delivers. 

FirstEnergy Solutions has announced plans to shut down several electricity generation facilities, 

including four nuclear reactors at three sites- two reactors each in Ohio and Pennsylvania.' These four 

reactors join eight others that have already announced plans to shut down, and another six that have 

permanently closed over the past five years. The announcement of these additional nuclear retirements is 

further proof that the industry has reached an inflection point in the debate over market reforms to 

recognize the value of the nation's largest and most resilient source of emissions-free energy. The 

simple fact is that nuclear energy's many benefits are not being recognized by the markets in which they 

operate. We are therefore writing to request that immediate action be taken to prevent the closure of 

these four nuclear power reactors and to more fully recognize the benefits that nuclear energy delivers to 

our nation. 

As demonstrated by the recent announcement that Exelon' s Three Mile Island reactor will prematurely 

shut down in September 20192

, once a deactivation decision is made, the plant owner ceases investment 

in capital investments, including fuel. Moreover, refueling outages must be planned a year in advance. 

Thus, in the case ofTMI and theFirstEnergy Solutions plants, without urgent action, it will be too late 

to reverse these decisions and allow for continued operation. 

Nuclear energy accounts for nearly 20 percent oftbe electricity generated in the United States. And 

regardless of what you value in our electricity system, nuclear energy delivers. Our nation's 99 nuclear 

power reactors have an unmatched combination of attributes that are central to a clean, modern electrical 

grid, but that are under-valued or not valued at all in most electricity markets. 

For example, if you value system resilience and low electricity prices, you should value that nuclear 

plants operate around the clock for up to two years between refuelings, providing valuable fuel security, 

1 See https:llwww.fes.com/conten1ffes/homelrestructuring.html 2 http://www.exeloncorp.com/newsroom/exelon-to-retire-tlrree-mile-island-generating-station-in-2019 

NUCLEAR. CLEAN AIR ENERGY 
116 


31172.057

The Honorable Greg Walden 

Aprilll, 2018 

Page2 

reliability and price stability to our electricity markets. Losing these and other nuclear power reactors 

would imperil the resilience of the grid and drive up costs to consumers. A recent Department of Energy 

studi showed the PJM electricity system was heavily reliant on these and other economically 

challenged plants to provide generation during the bomb cyclone event this winter. Even with these 

plants helping to provide power, electricity prices soared above $200 per megawatt hour as natural gas 

prices spiked. Managing severe cold weather events without these nuclear plants will be costlier as the 

system becomes increasingly dependent on generation that depends on "just-in-time" fuel deliveries and 

lacks firm fuel supply capabilities. 

In addition, multiple studies have made clear that when nuclear plants shut down, electricity prices riseeven under normal weather conditions. For example, the Brattle Group4 found that New York would 

save customers a billion dollars a year by acting to preserve nuclear plants. Providing financial support 

for nuclear power plants facing premature closure decisions will cost consumers far less than any of the 

alternatives. 

If you value clean electricity generation, you should value nuclear energy as our nation's single-largest 

source of carbon-free generation, representing nearly 60 percent of all zero-carbon electricity. In 

addition, nuclear energy generation emits no sulfur dioxide, nitrogen oxides, mercury, and particulate 

emissions. The four nuclear reactors announced for closure generated more non-emitting electricity last 

year than all of the wind and all of the solar produced in PJM combined. If these reactors close, carbon 

emissions will increase over 20 million metric tons, the equivalent of putting over 4 million additional 

cars on the road. It simply won't be feasible to replace all or even most of the lost clean energy 

generation with renewables; the increased fossil fuel generation that would replace the lost nuclear 

generation would wipe out more than 25 years of progress toward a cleaner electricity system. 

If you value national security and global influence, you should be concerned that the U.S. leads the 

world in nuclear energy generation, but has seen its civil nuclear leadership erode as Russia and China 

have captured an increasing share of the global market.5 For several decades, our strong domestic 

nuclear industry has helped the U.S. enforce the world's highest standards for nuclear safety and 

nonproliferation. American influence is strengthened through the century-long relationships built when 

the U.S. engages in nuclear commerce with another nation, and other nations seek us out as commercial 

partners in part because we operate the safest and most efficient nuclear power plants in the world. 

Unfortunately, other nations will be increasingly less likely to look to the U.S. for nuclear products and 

services if we let our operating nuclear fleet continue to shrink 6 

And finally, if you value well-paying, long-term jobs, you should know that losing these and other 

reactors would have dire consequences for the communities that host the plants. For example, closure 

would mean the loss of over 3,000 full-time jobs for the Ohio and Pennsylvania employees who work at 

the four plants, as well as thousands more jobs in the surrounding communities that are supported by 

their economic activity. This translates into the loss of millions of dollars in taxes and negative impacts 

3 h!tps://www.netl.doe.gov/research/energy-analysis/search-publications/vuedetails?id=2594 

4 http://files.brattle.com/system/news/pdfs/000/001/046/original/comments_on_the_new_york_dps_(2).pdf 

5 https:l/static l.squarespace.com/staticl5 8ecl23cb3db2bd94e057628/t/59947949f43b5 Saf66b0684bll5029026047 49/EFI+nuclear+paper+ 17+ Au g+20 17. pdf 6 https://csis-prod.s3·.amazonaws.com/s3fs~pub1icflegacy _ files/filesfpublication/130719 _ WnHace_RestoringUSLeadershipNuclearEnergy_ WEB. pdf 
117 


31172.058

The Honorable Greg Walden 

Aprilll, 2018 

Page3 

to the GDP of each state. The economic hardships faced by other communities where nuclear plants 

have already shut down should both alarm and motivate state and national leaders to act. 

The announcement by FirstEnergy Solutions demonstrates the urgency for federal policymakers to act in 

markets where nuclear energy is undervalued. All appropriate options should be explored to prevent the 

premature closure of nuclear plants and preserve the nuclear energy option. It is past time for the federal 

government to ensure proper valuation of nuclear energy's many attributes in electricity markets and to 

take other measures to preserve nuclear energy for our nation's future. 

As the trade association for the nation's largest source of emissions-free energy, NEI urges 

policymakers to pursue long-term sustainable reforms to market rules that will correct widely 

acknowledged flaws that unfairly disadvantage nuclear plants, without interfering with state planning 

processes and regions (such as MISO) where federal markets are functioning. We have advocated in 

prior comments to PERC for "cost-of-service compensation for nuclear generation units, at least until 

other market structures are put in place that appropriately value the resiliency attributes that nuclear 

generation units provide."7 Accordingly, a Section 202(c) remedy for nuclear resources that are facing 

premature retirement can provide a necessary bridge before longer-term reforms can be enacted. In 

developing longer-term reforms, federal policymakers should consider narrowly tailored action, 

including supportive tax policies (including expanded production tax credits and investment tax credits), 

inclusion of nuclear energy in federal energy procurement goals and mandates, market design changes 

that allow all resources to set price, and recognition of nuclear energy's non-emitting attributes 

consistent with recognition provided to other non-emitting resources. The policy tools discussed above 

have long been used to support other components of our nation's "all of the above" energy portfolio; 

policymakers should now do the same for nuclear energy. And when considering these policies, we 

encourage you to work closely with states and FERC to ensure that any federal proposal makes sense for 

energy producers and consumers throughout the nation. 

There is still time for policymakers to act. Leaders in New York and Illinois crafted solutions that 

recognize the contribution the states' nuclear plants make to maintaining clean air for their citizenry. 

The state of Connecticut has also acted to level the playing field for all sources of clean energy, 

including nuclear, to support the state's electricity needs. Federal policymakers should avoid interfering 

with these state programs which, like renewable portfolio standards, protect a valuable state interest in 

protecting the environment. But while state policy actions have been essential in preserving nuclear 

assets, it is imperative that federal policymakers assure federal policies appropriately value nuclear 

energy's attributes, to ensure it continues making important contributions to America's energy, 

environmental, national security and economic interests. 

Sincerely yours, 

Maria Korsnick 

' https://www.nei.orwresourceslletters-filings-comments/nei-comments-ferc-grid-resiliency-rulemaldng 
118 


31172.059

MARIA KORSNICK 

President and Chief ExeroUve Officer 

1201 F Street NW, Suite 1100 

Washington, DC 20004 

P: 202.739.8187 

mgk@nei.org 

nei.org 

April II, 2018 

The Honorable Rick Perry 

Secretary of Energy 

U.S. Department of Energy 

1000 Independence Avenue, SW 

Washington, DC 20585 

Dear Mr. Secretary: 

NUCLEAR 

~I ENERGY INSTITUTE 

Our nation's nuclear power plants deliver benefits that go far beyond a reliable and resilient electrical 

grid. Nuclear energy contributes to a strong economy, a cleaner environment, and national security. Yet 

today we are at risk of losing much of what nuclear energy delivers. 

FirstEnergy Solutions has announced plans to shut down several electricity generation facilities, 

including four nuclear reactors at three sites- two reactors each in Ohio and Pennsylvania. 1 These four 

reactors join eight others that have already announced plans to shut down, and another six that have 

permanently closed over the past five years. The announcement of these additional nuclear retirements is 

further proof that the industry has reached an inflection point in the debate over market reforms to 

recognize the value of the nation's largest and most resilient source of emissions-free energy. The 

simple fact is that nuclear energy's many benefits are not being recognized by the markets in which they 

operate. We are therefore writing to request that immediate action be taken to prevent the closure of 

these four nuclear power reactors and to more fully recognize the benefits that nuclear energy delivers to 

our nation. 

As demonstrated by the recent announcement that Exelon's Three Mile Island reactor will prematurely 

shut down in September 20192

, once a deactivation decision is made, the plant owner ceases investment 

in capital investments, including fuel. Moreover, refueling outages must be planned a year in advance. 

Thus, in the case ofTMI and the FirstEncrgy Solutions plants, without urgent action, it will be too late 

to reverse these decisions and allow for continued operation. 

Nuclear energy accounts for nearly 20 percent of the electricity generated in the United States. And 

regardless of what you value in our electricity system, nuclear energy delivers. Our nation's 99 nuclear 

power reactors have an unmatched combination of attributes that are central to a clean, modern electrical 

grid, but that are under-valued or not valued at all in most electricity markets. 

For example, if you value system resilience and low electricity prices, you should value that nuclear 

plants operate around the clock for up to two years between refuelings, providing valuable fuel security, 

1 See https://www.fes.com/content/fes/home/restructuring.html 2 http://www .exeloncorp.com/newsroom/exelon-to-retire-three-mi lc-island-generating-station-in-20 19 

NUCLEAR. CLEAN AIR ENERGY 
119 


31172.060

The Honorable Rick Perry 

Aprilll, 2018 

Page 2 

reliability and price stability to our electricity markets. Losing these and other nuclear power reactors 

would imperil the resilience of the grid and drive up costs to consumers. A recent Department of Energy 

stud/ showed the PJM electricity system was heavily reliant on these and other economically 

challenged plants to provide generation during the bomb cyclone event this winter. Even with these 

plants helping to provide power, electricity prices soared above $200 per megawatt hour as natural gas 

prices spiked. Managing severe cold weather events without these nuclear plants will be costlier as the 

system becomes increasingly dependent on generation that depends on "just-in-time" fuel deliveries and 

lacks firm fuel supply capabilities. 

In addition, multiple studies have made clear that when nuclear plants shut down, electricity prices riseeven under normal weather conditions. For example, the Brattle Group4 found that New York would 

save customers a billion dollars a year by acting to preserve nuclear plants. Providing financial support 

for nuclear power plants facing premature closure decisions will cost consumers far less than any of the 

alternatives. 

If you value clean electricity generation, you should value nuclear energy as our nation's single-largest 

source of carbon-free generation, representing nearly 60 percent of all zero-carbon electricity. In 

addition, nuclear energy generation emits no sulfur dioxide, nitrogen oxides, mercury, and particulate 

emissions. The four nuclear reactors announced for closure generated more non-emitting electricity last 

year than all of the wind and all of the solar produced in PJM combined. If these reactors close, carbon 

emissions will increase over 20 million metric tons, the equivalent of putting over 4 million additional 

cars on the road. It simply won't be feasible to replace all or even most of the lost clean energy 

generation with renewables; the increased fossil fuel generation that would replace the lost nuclear 

generation would wipe out more than 25 years of progress toward a cleaner electricity system. 

If you value national security and global influence, you should be concerned that the U.S. leads the 

world in nuclear energy generation, but has seen its civil nuclear leadership erode as Russia and China 

have captured an increasing share of the global market. 5 For several decades, our strong domestic 

nuclear industry has helped the U.S. enforce the world's highest standards for nuclear safety and 

nonproliferation. American influence is strengthened through the century-long relationships built when 

the U.S. engages in nuclear commerce with another nation, and other nations seek us out as commercial 

partners in part because we operate the safest and most efficient nuclear power plants in the world. 

Unfortunately, other nations will be increasingly less likely to look to the U.S. for nuclear products and 

services if we let our operating nuclear fleet continue to shrink. 6 

And finally, if you value well-paying, long-term jobs, you should know that losing these and other 

reactors would have dire consequences for the communities that host the plants. For example, closure 

would mean the loss of over 3,000 full-time jobs for the Ohio and Pennsylvania employees who work at 

the four plants, as well as thousands more jobs in the surrounding communities that are supported by 

their economic activity. This translates into the loss of millions of dollars in taxes and negative impacts 

'https://www.netl.doc.gov/researchlenergy-analysis/search-publications/vuedctails?id~2594 4 http ://files.brattle.com/system/news/pdfs/000/00 l/046/original/comments _on_ the_ new _york_ dps _.(2).pdf 5 https://static l.squarespace. com/staticl58ec 123cb3db2 bd94e0 57628/t/5994 794 9f4 3 b5 5affi6b0.684b/ 1502902604 74 9/EFI+nuclear+paper+ 17 +Aug+ 20 17. pdf 6 https·//csis-prod.s3 amazonaws com/sJfs-public!legacy_ftles/fi!cs/pub!icationJl30719 _Wallace_ RestoringUSLeadershtpNuclearEnergy _ WEB.pdf 
120 


31172.061

The Honorable Rick Perry 

Aprilll,2018 

Page 3 

to the GOP of each state. The economic hardships faced by other communities where nuclear plants 

have already shut down should both alarm and motivate state and national leaders to act. 

The announcement by FirstEnergy Solutions demonstrates the urgency for federal policymakers to act in 

markets where nuclear energy is undervalued. All appropriate options should be explored to prevent the 

premature closure of nuclear plants and preserve the nuclear energy option. It is past time for the federal 

government to ensure proper valuation of nuclear energy's many attributes in electricity markets and to 

take other measures to preserve nuclear energy for our nation's future. 

As the trade association for the nation's largest source of emissions-free energy, NEI urges 

policymakers to pursue long-term sustainable reforms to market rules that will correct widely 

acknowledged flaws that unfairly disadvantage nuclear plants, without interfering with state planning 

processes and regions (such as MISO) where federal markets are functioning. We have advocated in 

prior comments to FERC for "cost-of-service compensation for nuclear generation units, at least until 

other market structures are put in place that appropriately value the resiliency attributes that nuclear 

generation units provide."7 Accordingly, a Section 202(c) remedy for nuclear resources that are facing 

premature retirement can provide a necessary bridge before longer-term reforms can be enacted. In 

developing longer-term reforms, federal policymakers should consider narrowly tailored action, 

including supportive tax policies (including expanded production tax credits and investment tax credits), 

inclusion of nuclear energy in federal energy procurement goals and mandates, market design changes 

that allow all resources to set price, and recognition of nuclear energy's non-emitting attributes 

consistent with recognition provided to other non-emitting resources. The policy tools discussed above 

have long been used to support other components of our nation's "all of the above" energy portfolio; 

policymakers should now do the same for nuclear energy. And when considering these policies, we 

encourage you to work closely with states and FERC to ensure that any federal proposal makes sense for 

energy producers and consumers throughout the nation. 

There is still time for policymakers to act. Leaders in New York and Illinois crafted solutions that 

recognize the contribution the states' nuclear plants make to maintaining clean air for their citizenry. 

The state of Connecticut has also acted to level the playing field for all sources of clean energy, 

including nuclear, to support the state's electricity needs. Federal policymakers should avoid interfering 

with these state programs which, like renewable portfolio standards, protect a valuable state interest in 

protecting the environment. But while state policy actions have been essential in preserving nuclear 

assets, it is imperative that federal policymakers assure federal policies appropriately value nuclear 

energy's attributes, to ensure it continues making important contributions to America's energy, 

environmental, national security and economic interests. 

Sincerely yours, 

Maria Korsnick 

7 https://www .nei .org/resources/Ietters-filings-comments/nei -comments-ferc-grid-resiliency-rulemaking 
121 


31172.062

GREG WALDEN, OREGON 

CHAIRMAN 

ONE HUNDRED FIFTEENTH CONGRESS 

FRANK PALLONE, JR., NEW JERSEY 

RANKING MEMBER 

(:ongrr~~ of tbe llntteb ~tate~ 

J!,lou!5e of l\eptt!5entatibe!5 

COMMITTEE ON ENERGY AND COMMERCE 

2125 RAYBURN HousE OFFICE BuiLDING 

WASHINGTON, DC 20515-6115 

The Honorable Rick Perry 

Secretary 

U.S, Department of Energy 

1000 Independence Avenue, S.W. 

Washington, DC 20585 

Dear Secretary Perry: 

Ma]Oil\V !202) nfi..-2927 

Mlnrlr!ty (202\225-3641 

June 14,2018 

Thank you for appearing before the Subcommittee on Energy on Thursday, April 12,2018, 

to testifY at the hearing entitled "The Fiscal Year 2019 Department of Energy Budget.» 

Pursuant to the Rules of the Committee on Energy and Commerce, the hearing record 

remains open for ten business days to permit Members to submit additional questions for the record, 

which are attached. Also attached are Member requests made during the hearing, To facilitate the 

printing of the hearing record, please respond to these questions and requests with a transmittal 

letter by the close of business on Thursday, June 28, 2018, Your responses should be mailed to 

Kelly Collins, Legislative Clerk, Committee on Energy and Commerce, 2125 Rayburn House 

Office Building, Washington, DC 20515 and e-mailed in Word format to 

Kc!!y.Collins@mail.house,gov. 

Thank you again for your time and effort preparing and delivering testimony before the 

Subcommittee, 

Sincerely, 

cc: The Honorable Bobby L. Rush, Ranking Member, Subcommittee on Energy 

Attachments 
122 


31172.063

Attachment !-Additional Questions for the Record 

The Honorable .Fred Upton 

L In the DOE's FY 2019 Request you are seekingftindingfot anew office known as the 

"Office ofCybersecurity, Energy, Security, and Emergency Response". Ea:tlier this year, 

this Committee held a hearing where we discusse<i the role and responsibilities .of this new 

office, 

a. Will you elaborate more on how this office will help enhance ihe resilience and 

security of U.S. energy infrastructure? 

2. The DOE FY 2619 budget request includes $2.1 billion for applied energy programs 

focusing on early-stage res.earch and development taking place. at the national labs. 

a. What is the DOE doing to m.ake sure.that the technologies developed and knowledge 

gained by our national labs. is being trarJsferred to the private sector for 

implementation? 

3. The FY18 Omnibus included language directing the Department to puttogether a plan to 

demonstrate multiple reactor designs over the next decade .. A strong focus on fully backed 

by the Department's resources are important to making Ai,nerican advanced nuclear a 

reality. 

a. As you develop this long-term strategy, how can the. Depa:ttment work 

collaboratively with. industry to ensure promising new reactor designs come to the 

commerCial market? 

4.. What is the Administration's plan to assure nuClear material needs for advanced reactor 

designs will be aligned with the expected need? For example, is the Department considering 

reestablishing a U.S.-owned enrichment <;i;lpability and, if so, how does the Department plan 

to financially support this capability? 

5. Secretary Perry, as the former governor of Texas, I'rri confident you understand theneed.to 

manage limited budgetary resources in the most efficient manner. One DOE problem that is 

petsistently identified by external reviewers and stakeholders. is the micrqmanagement of 

DOE's funding. The resulting atomization of DOE funding consequently reqUires "spending 

more money to manage money." 

6. In March, DOE's National Energy Technology Laboratory (NETL) released a study finding 

that the continued retirement offossil fuel power .plants could have an adverse impad on the 

nation's ability to meet power generation needs during severe weather events, such as the 

"bomb cyclone" we experienced earlier this year: 
123 


31172.064

a. Are you concerned that we are overestimating. the nation's. ability to .respond tp 

weather events if the current pace of coal and nuclear plant retirements continues? 

Are the needs more pressing ln some regions than others? 

7. Parts of the United States participate in competitive wholesale energy ml\i"kets, where energy 

generation :resources offer bids to supply electricity to .meet consumer demand. However, in 

some wholesale energy markets, certain generation resources such as coal and nuclear are 

struggling to recover costs- which is resUlting in early retirements of power plants. 

a. Can wholesale energy markets do a better job at setting energy prices? 

b. What are the benefits of a diverse. generation mix? 

8. In2014.FERCbegan to examine. the issue of how non·market actions, .events, and 

t;ircumstances can influence wholesale electricity prices. Since then, FERC has initiated 

numerous "price formation" rhlemakings. on various topics. Several years have.now passed 

and some have said that FERC is addressing "price formation" issues too slowly. 

a. Should FERC be .. expediting these. proceedings iii light of recent announcements of 

plant closures? 

9. The Department's August 201T"StaffReport on Electricity.Marketsand Relia,bility" 

acknowledges, cost-competitive energy storage "will be Critical" to balance the grid under 

high levels of variable renewable energy. New low cost systems ate currently being 

pioneered at the national labs, but,are not yet commercially viable. 

a. Historically, the Department's. research programs have. hf!d the greatest impact .when 

resources are focused on very clear, specific goals. 

b. Given the Deparhnerit's focus on "doing more with less," would setting this type of 

technology goal ensure scant federal dollars are being efficiently utilized to meet 

goals important for u,s. innovation leadership? 

l 0. Itis my understanding that current res.earch on energy stor;1ge technology is more focused 

on trarisportation·uses, is that correct? 

a. If so, how can we boMer efforts to. improve innovative grid-scale energy storage 

technologies? · 

1 L The Administration's FYT9 budget proposallatgely moves away from the research and 

development ofcarbon capture, reducing its R&D roughly 75percent relative to FY18, 

a. Given the fossil energy R&D request.as a whole was increased relative to the 

President's request in FY18,, can you explain the. Department shift from carbon. 

capture R&D? 

2 
124 


31172.065

b. Given Congress' efforts on the 45Q tax credit, shouldn't R&D. be focused more on 

bringing carbon capture, utiliz~tion, and storage (CCUS) teclmologies to the 

commercial market? 

The Honorable Pete Olson 

1. Mr. Secretary, have you seen any trends in "predatory investment" in the United States by 

companies(with .the backing of a stateclevel actor) in greenfield projects in the energy, 

chemical, defense· of technology sectors? Is this a mattetthe Department of Energy is 

actively following? 

2. Do you believe the tJ. S. government process for vettingsensitive:foreign acquisitions of 

assets in the U.S. under CFIUS should include greenfield investments? 

The Honorable H. Morgan Griffith 

1. The Consolidated Appropriations Act of2018inc1tided l~mguage inSecticin 431 Policies 

Relating to Biomass Energy that directed the Secretary of Energy; Secretary of Agriculture 

<1nd the Administrator of the Environment<~! Protection Agency to establish clear and simple 

policies that retiect the carboti-neutraiity of forest bioenergy and recognize biomass as a 

renewable energy source provi~ed the use of forest biomass does not ca1,1se the conversion 

of forests to non-forestuse. 

Please update the committeepfthe Agency's progress on this Congressional directive .. 

The Honorable Bill Flores 

1, As the administration cohducts a widecrange review of nuclear policy, what are the most 

important policies Congress sho1.1ld consider and advance now, in the near term? 

2. Please provide some examples of targeted DOE policy andprograrnriiatic changes to .address 

ftrst-mover challenges with nucle<~r innovators. 

3. It is my understanding that steps have been taken to improve DOPsreview of LNG export 

applications to clear the backlog inherited from the prior administration. I alsq understand 

that FERC is facing staffing challenges to clear their own backlog. Is the DOE taking any 

steps to help FERC in this issue? 

J 
125 


31172.066

The Honorable Bobby L. Rush 

L What is the plan for moving forward with.the Minorities in Energy Initiative, which was 

designed to increase minority participation within the agency, as well as within the broader 

energy sector? · 

a. What are the level of resources devoted to thisinitiative, including funding and 

personnel? 

b. What are the. programs currently being funded within the. Minorities in Energy 

Initiative and what ate the levels of funding for each of these programs? 

c~ What are the objectives of this initiative and how will those objectives be measured? 

d. What is the timeline for reaching those objectives? 

2. What are the plandor the Office ofl:iconomic Impact and Diversity moving forward? 

a. What are level of resources devoted.to this department, including funding and 

personnel? 

b: Who is leading the OIED department and what is their background working on 

issues of diversity and inclusion? 

c. What are the objectives of this department and how Will those objectives be 

measured? 

d. What is the time line for reaching those objectives? 

3. What is. the percentage .or number of minorities in dedsion"making and h:~adetship positions 

within the Secretary's office? 

4. What is the percentage or number of mmorities on theinstitutioniil Review Board? 

a. How many members make up the Institutional Review Board in total? 

b. How many members ofthe Institutional Review .Board are African American? 

c. How many members ofthe.Jnstit[ltional Review Board are L.atino? 

d. How many members of the Institutional Review Board are women? 

5. What is the percentage or number of minorities on the S¢cretary of Energy Advisory Board? 

a H<?w many members make up the Secretary of Energy Advisory Board in total? 

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b. How many members of the Secretary of Energy Advisory Board are African 

American? · 

c. How.man:y nierilbets of the Secretary of Energy Advisory Board are Latino? 

d. How many members of the Secretary of Energy Advisory Board are women? 

6. What is the percentage or number of minorities that make up the Senior Executive Service? 

a. How many members of the Senior Executive Service are there in total? 

b. How many members ofthe Seriior Executive Service are AfricaJ1 American? 

c. How many members of the SetriorExecutive Service are Latino? 

d. Bow many members of the Setrior Executive Service are women? 

7, How much money, in tptal do liars, does the Office of Science dole out in the form of 

research grants, scholarships, and other funding t() schools and universities? 

8. What are the list of schools and universities that has received funding over the past I 0 years 

from yout department,. as well as the amounts distributed to each institution? 

9. What is the percentage of funding that has gone to Min(lrity Serving Institutions in<;luding 

Historkally Black Colleges and Universities and Hispanic Serving Institutions over the 

past10 years? 

10. How inany minority directors. are there of the 17 national labs?. 

a. How many Afrkan American dir(;:ctors are there of the 17 national labs? 

b. How many Latino directors are there of the 17 national labs? 

c. How many women directors are there ofthe 17 national labs? 

11. What is the approximate dollar amount of contracts that the 17 national labs dole out to 

private companies and vendors? 

12. Is there a goal or objective to.includea percentage of minority contractors and vendors for 

all ofth~ lab coritra~,:~s? 

13. What percentage of these 11ationallab contracts are given outto rtrinority Gontractots and 

vendors? 

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14. Is th!:lre a plan in place to increase minority participation for contracting and vending 

opportunities with the national labs? 

a. Please specify What that plan entails. 

b. What resources, in fl)rtding and personnel, Will be devoted to carrying out the plan to 

increase minority participation for contracting and vending opportunities with the. 

national labs.? 

c, What is the timelin!) for reaching these objectives? 

The Honorable Paul Tonko 

I. Last year, GAO informed Congress that the Administration had co11111litted an illegal 

impoundment of funding for ARP A·E in FY20 17. In 'the FY20 18 omnibus appropriations 

bill, Congress>rejected the Administration'.s request to eliminate ARPA-E. In fact, Congress 

aCtually increased fun<:ling. 

a. Now th.at Congress had made its support for the program clear, do you commit to 

fund projects through the ARP A-E program for FY2018, as intended by Congress 

and required by the law? 

2. Similar to ARP A-E, in the FY20 18 omnibus appropriations bill, Congress rejected the 

Administration's proposal to eliminate the Weatherization Assistance Program (WAP), and 

increased funding fodhe program. On-tirn'e delivery of weatherizatil.l!1 funds to States is 

Ct'\lcial to providers on the ground. Most States expect this funding on July !st. 

a. Will you ensure that WeatherizationState.grantees will receive WAP funds .in a 

timely manrier this year? 

3. Earlier this year, DOE announced the creationofthe Office ofCybersecurity, Energy 

Security, and Emergency Response, I am not necessarily opposed to this reorganization, but 

I would like to understand how it might affect DOE functions in the future, including the 

existing programs that will remain Within the Office of Electricity (OE). 

a. What will be the split of current Office of Electricity staff (full-time equivalents) 

going to each of the two .offices? 

b. Cybersecurity is an important issue that deserifes to be elevated; but it should not be 

done at the expense of other critical programs. Are you committ.ed to. ensuring that 

there are suffidenttesources and. personnel for Office;ofElectricity programs, such 

as grid modernization, microgrids, and energy storage, which. are. also essential for 

improving grid reliability? 

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c. What was the justification for ariy proposed FY20 19 cuts to these non"cyber OE 

programs? · · 

4. In JMuary 2017, DOE released the "Energy Innovation Portfolio Plan FY2018-FY2022" 

report. 

a. Does. this report still reflect the research priorities and plan of the agency? 

The Honorable David Loebsack 

Secretary Perry, as I indicated to you at the hearing. There needs to be .much more transparency and 

public accountability in the Renewable Fuel Standard (RFS) progtarri with respect to the small 

refmery waiver exemptions. The Department of Energy (DOE) is required under the provisions of 

the Clean Air Act to evaluate the applications for a waiver arid provide a recommendation to the 

Administrator of the Environmental Protection Agency (EPA) on whether to grant the waiver or 

not. Please provide responses to the following questions regardingDOE'srole in evaluating the 

applications for waivers from the 2016 and 2017 obligations under the RFS. 

1. What is the total number of refinery waiver applications that DOE evaluated in each year 

from2013 through 2017? 

2. For each year from 2013 through 2017, how many waiver applications did the DOE 

recommended that EPA grMt waivers for? 

3, How many waiver applications did the DOE recommend that EPA not grant waivers for? 

4. What is the total volume of biofuel obligation represented by those waivers for each year 

2013 through2017? 

5. What is the DOE process for confirming that each applicant falls beneath the 75,000 gallon 

throughput capacity? 

6. What offices at DOE are engaged in the Malysis of each application? 

7. Is any part of the analysis contracted to a non-governmental entity? 

8. If so, which non-governmental entities were involved (please specify for Which years)? 

9. If non-governmental entities were used, What criteria was used to select the entities to ensure 

1) they possessed the necessary technical knowledge to determine disproportionate 

economic harm given the intricacies of the petroleumrefining markets, biofuels markets, 

RIN markets, and RFS provisions; and 2) what was.done to confirm that no conflict of 

interest existed? 

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Attachment.2-,-Member Requests for the Record 

During the hearing, Members askedyou to provide additional information for the .record, andyou 

indicated! hat you would provide that information. Foryow convenience, descriptions ofjhe. 

requested information are provided below. 

The Honorable Fred Upton 

l. rn regard to the En\:lridge Line 5 pipeline, can you. ask your department of energy and 

reliability to actually study what would happen if this line went out for some type of 

duration? Particularly on the consumers. 

The Honorable John Shimkus 

I. Are you familiar with the Co~Optima.study and what are your thoughts on it? 

The Honorable. Mark\vayne Mullin 

l. Can you explajn why the Office of Civil Radioactive Waste Management was left out of 

your last organizational chart for DOE? And who. is. covering that? · 

The. Honorable Frank Pallone, Jr. 

L How many LNG export applications to NoncFree Trade Agreement countries are currently 

pendingbefbrethe DOE? 

The Honorable John P. Sarbanes 

l, Does your department remain committed to the goals of1he SunShot Initiative? 

2. Will you maintain the same commitment within the Solar Energy Tethilologies Office that 

has been a hallmark up to this point and further commit to making sure that Iow~income 

communities are in aposition to take advantage of these low-cost energy .and skilled job 

opportU!lities which are available wiihin the solar technology industry? 

The Honorable Jerry McNerney 

1. In regard to the resiliency of the ejectric grid, especially in face of the wildfires we had in 

California, does.the DOE have tools to help ensure resilience despite some of the gaps we 

have in olir current law? 
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The Honorable Pau] Tonko 

1. Please share w:ifh the Committee any communications ])(:tween Department of Energy 

officials and National Energy Technol()gy Laboratory personnel regarding the "Reliability, 

Resilience and the Oncoming Wave of Retiring Baseload Units" report 

The Honorable David Loebsack 

1. Does your office recommend that EPA adopt any small refinery waivers this year, and ,if so 

what waivers did you recommend?