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[Senate Hearing 112-575]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 112-575
 
                           ELECTRICAL OUTAGES 

=======================================================================

                                HEARING

                               before the

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                                   TO

        RECEIVE TESTIMONY ON WEATHER RELATED ELECTRICAL OUTAGES

                               __________

                             APRIL 26, 2012

                       Printed for the use of the
               Committee on Energy and Natural Resources

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76-330 PDF                       WASHINGTON : 2012 

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               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                  JEFF BINGAMAN, New Mexico, Chairman

RON WYDEN, Oregon                    LISA MURKOWSKI, Alaska
TIM JOHNSON, South Dakota            JOHN BARRASSO, Wyoming
MARY L. LANDRIEU, Louisiana          JAMES E. RISCH, Idaho
MARIA CANTWELL, Washington           MIKE LEE, Utah
BERNARD SANDERS, Vermont             RAND PAUL, Kentucky
DEBBIE STABENOW, Michigan            DANIEL COATS, Indiana
MARK UDALL, Colorado                 ROB PORTMAN, Ohio
JEANNE SHAHEEN, New Hampshire        JOHN HOEVEN, North Dakota
AL FRANKEN, Minnesota                DEAN HELLER, Nevada
JOE MANCHIN, III, West Virginia      BOB CORKER, Tennessee
CHRISTOPHER A. COONS, Delaware

                    Robert M. Simon, Staff Director
                      Sam E. Fowler, Chief Counsel
               McKie Campbell, Republican Staff Director
               Karen K. Billups, Republican Chief Counsel

                            C O N T E N T S

                              ----------                              

                               STATEMENTS

                                                                   Page

Bay, Norman C., Director, Office of Enforcement, Federal Energy 
  Regulatory Commission..........................................    21
Bilda, John, General Manager, Norwich Public Utilities, Norwich, 
  CT.............................................................    29
Bingaman, Hon. Jeff, U.S. Senator From New Mexico................     1
Blumenthal, Hon. Richard, U.S. Senator From Connecticut..........     3
Getz, Thomas B., Former Chairman, New Hampshire Public Utilities 
  Commission, Concord, NH........................................    23
Hoffman, Patricia, Assistant Secretary, Office of Electricity 
  Delivery and Energy Reliability, Department of Energy..........     8
Murkowski, Hon. Lisa, U.S. Senator From Alaska...................     2
Shaheen, Hon. Jeanne, U.S. Senator From New Hampshire............     7

                                APPENDIX

Responses to additional questions................................    41

                           ELECTRICAL OUTAGES

                              ----------                              

                        THURSDAY, APRIL 26, 2012

                                       U.S. Senate,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:54 a.m. in room 
SD-366, Dirksen Senate Office Building, Hon. Jeff Bingaman, 
chairman, presiding.

OPENING STATEMENT OF HON. JEFF BINGAMAN, U.S. SENATOR FROM NEW 
                             MEXICO

    The Chairman. First let me indicateSenator Shaheen and 
Senator Blumenthal have both spoken to me repeatedly about the 
importance of this hearing. They're much of the impetus for us 
having this hearing. I thank them for that.
    In late October 2011 an early snowstorm dropped as much as 
3 feet of snow on East Coast States resulting in widespread 
power outages. Only a month before that Hurricane Irene had 
done extensive damage to electricity systems in the same 
region. Today's hearing is going to look at these and other 
weather related events in order to inform the committee as to 
whether actions are necessary to improve preparation for and 
response to such events.
    We'll hear from the Department of Energy which has a 
significant role in gathering and communicating data during and 
after electrical emergencies.
    We will hear from FERC, who is conducting an investigation 
along with NERC on the outages that resulted from the October 
snowstorm in New England.
    We'll also hear from those who were on the ground in New 
Hampshire and Connecticut during the event and the ones that 
preceded it.
    Weather related outages are often almost entirely 
distribution level events. That does not mean, however, that we 
at the Federal level have no concern over these kinds of events 
or no role in helping to prepare for them or respond to them. 
We know that there have been many other weather related 
electricity system emergencies over the last few years.
    Tornadoes caused damage in Texas, Alabama and the Midwest. 
Hurricanes along the Atlantic and Gulf Coast, storm related 
damage in Washington State in the Northwest. All of these have 
cost lives and property and economic loss.
    It seems to me these kinds of events happen more frequently 
than they did in years past. But it is difficult to be sure of 
that since increases in reported outages may be caused by 
actual outages or may be caused by increased reporting.
    I'll be interested to hear how the reporting systems for 
these events work, and whether or not they can be improved.
    I also look forward to the recommendations of the witnesses 
for ways to improve our communication and response systems to 
these emergencies.
    Let me call on Senator Murkowski for any comments she has 
before we hear from our witnesses.

        STATEMENT OF HON. LISA MURKOWSKI, U.S. SENATOR 
                          FROM ALASKA

    Senator Murkowski. Thank you, Mr. Chairman.
    As you mentioned we're scheduled to hear testimony on grid 
reliability in light of the power outages that we saw in New 
England last October after a historic event there. Alaska has 
had its share of historic weather. We beat all of our snow 
records certainly in Anchorage and in many communities in South 
Central.
    The National Guard was called out to help uncover or dig 
out the community of Cordova. They got 18 feet in the course of 
a couple weeks there. I think they ended the winter at 25 feet 
of snow. So it's been a long, tough winter. The good news for 
us is that it's melting.
    But we are here to talk about what role we may have in 
dealing with power outages when we have these weather events. 
It does appear that many of New England's weather related 
problems last fall were at the local level. I am, perhaps, a 
little concerned that we may be blurring the lines between our 
proper Federal role in overseeing the bulk power system and the 
historic State role in maintaining the distribution system.
    I do understand that FERC working with NERC has an ongoing 
inquiry into the New England situation. There's a final report 
that's expected just about 4 weeks from now. Possibly we would 
have been better served with this hearing had we waited until 
that report was finalized because we could have seen what that 
Federal nexus is for a full committee hearing. But we would 
also have had the benefit of our grid regular's findings and 
recommendations.
    But we're here this morning. We must thoroughly examine our 
responses to storm caused outages so that we can plan better 
and prepare for the next emergency because we know that there's 
going to be another storm that comes our way that will drag 
down the power lines.
    New England got hit with a record storm only 2 months after 
Hurricane Irene. The Northeast got knocked again this week with 
a late spring snow. The problem that we face is whether we're 
talking hurricane, blizzard, tornado, whatever the act of God 
may be, we can't know for sure the extent and the challenges 
until it actually hits us.
    But in working to ensure the reliability of our Nation's 
grid there are some challenges that we can't foresee and for 
which we can take preventative action. I've spent considerable 
time this Congress asking both FERC and EPA to balance electric 
reliability needs with the suite of new Federal rules 
regulating power plant emissions. I'm now working on safety 
valve legislation so that the cumulative effect of these 
Federal regs does not threaten electric reliability.
    Today I'm hopeful, Mr. Chairman, we will have enough 
members before the committee to consider the two FERC nominees, 
Commissioner Norris and Mr. Clark. If they are approved by the 
full Senate I expect both Commissioners to uphold FERC's 
electricity reliability mandate, especially if another agency's 
regulations could adversely impact our Nation's grid.
    Commissioner Norris has told us that he has, ``encouraged 
EPA to consider the cumulative impact of their regulations.'' 
But unfortunately I don't think that that's good enough. Only 2 
weeks ago the President established a national interagency task 
force on shale gas development to ensure the Federal 
regulations are well coordinated and are not duplicative. I 
don't think that we need an executive order to get our agencies 
to work together. But perhaps we need one to maintain 
electricity reliability.
    At the very least, I do hope that FERC will immediately 
convene another technical conference to gather evidence 
regarding the cumulative impact of EPA's new power plant regs.
    So I look forward to the testimony that we will receive 
today and hope that we can learn from those who have gathered.
    Thank you.
    The Chairman. Thank you.
    As I indicated, both Senator Shaheen and Senator Blumenthal 
urged that we have this hearing and I know Senator Blumenthal 
would like to introduce one of our witnesses from Connecticut 
and Senator Shaheen introduce one of our witnesses from New 
Hampshire.
    Why don't you go right ahead, Senator Blumenthal and make 
any statement you'd like to make.

    STATEMENT OF HON. RICHARD BLUMENTHAL, U.S. SENATOR FROM 
                          CONNECTICUT

    Senator Blumenthal. Thank you. Thank you very much, Mr. 
Chairman. I want to thank you personally for having this 
hearing.
    I know that your leadership was instrumental and thank 
Senator Murkowski as well. But particularly Senator Shaheen, 
who has been a partner in this effort and who has been 
extraordinarily attuned to the challenges that her State of New 
Hampshire faced in the wake of these very unusual storms. I 
want to say at the very beginning that there are lessons here 
that can be learned by States across the country and I believe, 
strongly, by the Federal Government.
    I have two recommendations in particular that come from the 
experience of the Connecticut Norwich Public Utilities which is 
represented here today by John Bilda and will be a witness 
before you. He will tell you about the Norwich Utility story 
which is a success story. That's why there are lessons to be 
learned from it.
    While more than 800,000 consumers around the State of 
Connecticut after each of these two storms, Irene and then the 
October snow storm, suffered without power for days on end. 
Norwich restored power to 98 percent of their customers within 
48 hours of Hurricane Irene. So I'm really delighted that Mr. 
Bilda, who has a strong background in public utilities will be 
here today to talk a little bit about his first hand experience 
with restoring power in the wake of these catastrophic storms.
    I have two recommendations.
    I'm urging the committee to review the neutral assistance 
group process or shareholder owned utilities and enact measures 
ensuring that every State has ready access to an adequate 
number of line crews following a disaster. Part of this process 
is to prepare for the unexpected. The catastrophic 
eventualities that follow a hurricane or other natural disaster 
in terms of outages and a proper mutual assistance group 
procedure where line crews come from other States and are 
available in States that need them, I think, is absolutely 
essential.
    Then second, I'm urging that the Federal Energy Regulatory 
Commission provide clear direction and incentives for utilities 
to establish microgrids which is really part of smart grid 
strategy. Microgrids that will help ensure that at least a 
portion of the town or city has some electricity during the 
next big storm.
    After each of these storms, Mr. Chairman, I toured the 
State, day after day. What I found was senior citizens and 
families in shelters. There were more than 50 shelters in the 
small State of Connecticut.
    There were people who went to hospitals in the wake of 
these storms because they had no power at home. They needed the 
power in hospitals simply to run their oxygen supplying 
equipment, if they needed it or other essential medical 
equipment. In the wake of each of these storms there were real 
life threatening emergencies that existed because power was out 
in whole cities across swats of regions. Microgrids are really 
a very, very important step toward ensuring that there is power 
in at least part of towns to provide essential services.
    I want to be very blunt. We received strong aid eventually 
from mutual assistance groups after each of these storms. But 
it took time.
    That's why the process needs to be strengthened so that 
there are some guarantees and some specific arrangements as the 
Norwich Public Utilities was able to do through its reaching 
out and establishing those relationships. Through the 
organization that actually Mr. Bilda heads which is a regional 
group in the New England area. That kind of mutual aid was very 
important to the work that he did.
    On the issue of microgrids there is a real need for FERC to 
clarify and affirm that these microgrids are consistent with 
tariffs. I know this statement sounds highly bureaucratize and 
perhaps it is. But the fact of the matter is that our regional 
operating system has been as much an impediment to these 
microgrids by failing to clarify that they are consistent with 
the tariffs. It needs strong direction from the Federal Energy 
Regulatory Commission. I think that smart grids, microgrids 
that operate within a confined and discreet area are really 
part of our energy future.
    I would close simply by saying that we need policies that 
encourage self managed, vertically integrated designs that 
realize the investments that are being made right now. 
Northeast Public Utilities or I should say more correctly the 
CMEEC, which is the organization that it is a part of, has 
invested $40 million in the microgrid in its area. The benefits 
can be realized only if ISO New England cooperates and 
clarifies and affirms that it is consistent with tariffs and 
FERC's direction is absolutely necessary to pursue that end.
    These issues have much broader ramifications. We will be 
considering cyber security measures in the U.S. Senate, 
hopefully at some point this spring. One of the reasons for 
considering the cyber threats is the threat to our grids. One 
of the ways to make sure that we are protected is to make these 
microgrids serve parts of cities, parts of towns, regions that 
will offer even greater security if any of our grids, the major 
grids, are threatened and if outages occur.
    So I think that there are many broader ramifications to the 
outages that we suffered during these storms.
    Again, I want to thank you, Mr. Chairman, for having this 
hearing.
    Thank Senator Shaheen for her leadership.
    Thank you very much, Senator Murkowski, for being so 
receptive. I realize that the storms in Connecticut may seem 
tame to what you go through in Alaska. We can learn a lot from 
you as well. So thank you very much.
    [The prepared statement of Senator Blumenthal follows:]

   Prepared Statement of Hon. Richard Blumenthal, U.S. Senator From 
                              Connecticut
    Chairman Bingaman, Ranking Member Murkowski and members of the 
Committee, thank you for agreeing to hold today's hearing on weather 
related electrical outages. I appreciate the opportunity to say a few 
words about the impact two storms had on my home state of Connecticut 
with respect to grid reliability.
    Based on the experiences of Connecticut's Norwich Public Utilities 
that you will hear later this morning and my personal experiences 
traveling the state of Connecticut listening to constituents and first 
responders tell me about the apparent failures of the existing Mutual 
Assistance Group process for shareholder owned utilities, I urge the 
Committee to:

   review the MAG system and enact measures ensuring that every 
        state has ready access to adequate numbers of line crews during 
        a disaster;
   urge the Federal Energy Regulatory Commission (FERC) to 
        provide clear direction and incentives for utilities to 
        establish micro grids, thus ensuring at least a portion of a 
        town or city has some electricity during the next big storm.

    You will hear today from John Bilda, General Manager of Norwich 
Public Utilities, a municipally owned utility located in Norwich, 
Connecticut. The federal government can learn a lot from Connecticut's 
municipally owned utilities in the state which restored power to 98 
percent of their customers within 48 hours of Hurricane Irene.
    I've asked John Bilda to be here today because his utility served 
as a model for the rest of the state during Hurricane Irene and an 
October snow storm. In the days leading up to these unprecedented 
storms, and in the hours during and immediately after, John and his 
team were executing emergency response plans that had been years in the 
making. As a result, Norwich was literally a beacon of light in a sea 
of darkness in Eastern Connecticut. There are reports of residents from 
neighboring towns driving to friends' homes and businesses in Norwich 
because it was the only town to restore power. I visited Norwich 
personally, and received a briefing from John and his staff. They're an 
impressive group. How were they able to do this you ask? I'll let John 
tell his story but I'm incredibly proud to that John is with us today.
    A specific concern of mine during both storms involved these 
cooperative utility Mutual Assistance Groups or MAGs. MAG programs 
exist to support utilities in contracting for additional line and 
repair crews when in house manpower proved insufficient in the wake of 
a major outage. By providing an informal and ad-hoc network of regional 
utility-to-utility cooperatives, these groups typically function well 
in delivering the necessary crews in the aftermath of major storms. 
However, neither of these storms were typical, and I saw firsthand the 
shortcomings on the part of the MAG system that contributed to the 
incredibly and inexcusable slow pace of recovery in many parts of the 
state hit hardest by the storms.
    Not only did the system prove hopelessly inadequate in providing 
the necessary crews to fully implement the required restoration effort, 
the system itself remained opaque to many local and state leaders--an 
information deficit which further impaired nonutility clean-up and 
safety efforts. The failure of the MAG system, as experienced in 
Connecticut during the last two major storms, is of vital concern not 
only to my state but other states that may encounter similar system 
shortcomings.
    The federal government should also explore methods to encourage the 
development of micro-grids and other policies that allow important 
sections of towns to generate their own electricity even when 
transmission lines are down. While individual buildings may have 
generators, micro-grids would allow for a more efficient use of 
electricity generation facilities while increasing redundancy of power 
and reliability.
    We must ask, what can be done on a federal level to better prepare? 
Surely this won't be the last Hurricane Irene or the last time we face 
a massive snowstorm. Disaster dollar levels hit record amounts in 2011 
resulting from extreme weather events all around the country. We must 
review the mutual aid systems and suggest improvements to 
communications and allocation of resources so there is an adequate 
response from all electric utilities, whether in Connecticut or 
elsewhere.
    On August 26, 2011, in preparation for Hurricane Irene which would 
go on to devastate much of the Northeast approximately two days later, 
the state of Connecticut's Governor requested a pre-landfall emergency 
declaration from President Obama. All seven members of the Connecticut 
Congressional delegation supported this request which was immediately 
granted allowing for direct federal assistance to supplement state and 
local resources to prepare for what we knew was ahead. With the pre-
land fall emergency declaration granted, the state's exemplary 
emergency management personnel went to work mobilizing their teams, 
their equipment and their supplies around the state in order to meet 
critical emergency protection requirements before landfall. The hard 
working men and women of the state's Department of Emergency 
Management/Homeland Security, in strong coordination with local 
emergency management personnel should be commended for their swift 
action, quick thinking and commitment to the people of Connecticut. I 
would also add that the Administration was very cooperative in 
assisting state officials and the state's Congressional delegation in 
preparation for Hurricane Irene.
    With ample warnings and a State of Emergency declared by the 
Governor, Irene tore through Connecticut on August 28, 2011. And with 
strong winds and rains totaling more than eight inches in many parts of 
the state, the unprecedented storm left almost 800,000 customers 
without power in Connecticut alone. In East Haven, twenty homes were 
completely destroyed. The Wilbur Cross/Merritt Parkway, a major artery 
bisecting the state was closed from the New York State line to 
Interstate 91 in Meriden due to debris from the storm. The heavy rain 
and strong winds submerged a Bridgeport power substation and downed 
power lines from Stamford to Groton and from New Haven to Simsbury.
    At its peak, power was out to between 81 percent and 100 percent of 
customers for the state's largest electric utility. Five days after the 
storm struck, 172,000 customers in Connecticut were still without 
power; and a full seven days after the storm passed wasn't much better 
with more than 100,000 customers still without power. Yes, the storm 
was massive but we can, and we must do better.
    The power outages had, and still do have, significant ramifications 
for the small businesses forced to close for days, for the elderly who 
depend on electricity not only for their comfort but for their medical 
devices that require power and for anyone who was forced to live in 
darkness for days.
    Let me share with you a line from a letter I received from Suzette 
McKenzie Willard of Bridgeport, the owner of a home based childcare 
business. ``Dear Senator Blumenthal, as I sit down this morning to 
write you this letter, we still have no electricity; it is Friday, 
September 2nd, 2011, six full days since Hurricane Irene moved over our 
state''. She goes on to say, ``. . .the lack of electricity has 
significantly affected my ability to operate my business. . .I was 
forced to close the business for several days, thus losing vital 
income''. Ms. Willard is not alone in sharing those feelings. Again, we 
can and we must do better.
    As I traveled the state in the days and weeks following Irene 
meeting with state officials, first responders, mayors, residents and 
small business owners, I heard loud and clear the tremendous impact 
electric outages had on everyone. The loss of electricity for 
approximately 800,000 customers after the storm, and the more than 
100,000 customers still without power a full week later, left many 
wondering how this could happen even. ``How could this be'', my 
constituents would ask.
    But two months later, it happened again. On October 29, 2011, a 
severe winter storm again wreaked havoc on the state, and much of the 
Northeast. The storm dumped up to twenty inches of snow in some parts 
of Connecticut. Reports indicated that wind gusts as high as 38MPH 
added to the ferocity of the storm. The snow stuck to all objects, 
especially trees, which had not yet lost their leaves, and power lines. 
The weight of the wet snow, combined with soil still soaked from Irene, 
resulted in hundreds of thousands of trees being uprooted or losing 
limbs, devastating much of the electrical grid and blocking roads. At 
the highpoint, over 880,000 customers were without electrical power and 
power remained out in many areas for over a week. Complete restoration 
of power from this crippling storm took over ten days. These power 
outages and road blockages led to the closing of 480 schools in 95 
districts and a week later, 19 school districts were still closed. The 
State also suffered damage to fuel stations and communications 
capabilities, at one point, over 35% of Connecticut cellular telephone 
sites down.
    On October 31, 2011, President Obama issued an emergency 
declaration covering the entire State--all eight Connecticut counties. 
Officials opened over 58 shelters and 118 warming centers. Even ten 
days after the storm, 12 shelters and 46 warming centers remained open 
due to continued power outages.
    And once again, I was back on the road visiting some of the hardest 
hit areas including Simsbury, West Hartford, Seymour and Ridgefield. 
The stories I heard were devastating. The residents I spoke with and 
the business owners I met were once again forced to wonder, but how 
could this be? I was asked, ``how were we not better prepared'' for a 
storm of this magnitude and with ample levels of warning. I again 
applaud the state's emergency management personnel. They were 
prepared--as always--for this type of disaster. But many of the state's 
shareholder owner utilities were not.
    Thank you again for having me here today. These are important 
issues to discuss and I'm grateful for the opportunity to share 
Connecticut's experiences during Hurricane Irene and the late-October 
2011 snowstorm.

    The Chairman. Thank you.
    Senator Shaheen, why don't you go right ahead and introduce 
whoever you'd like at this point and make any statement you'd 
like.

    STATEMENT OF HON. JEANNE SHAHEEN, U.S. SENATOR FROM NEW 
                           HAMPSHIRE

    Senator Shaheen. Thank you very much, Chairman Bingaman. I 
would like to echo Senator Blumenthal in thanking both you and 
Ranking Member Murkowski for convening the hearing today. As 
Senator Blumenthal said we started talking about our concern 
with what's happening with the reliability of our country's 
electricity grid after several weather related events last 
year, Hurricane Irene and then of course, the October snow 
storm that left about two million customers throughout New 
England without power, 315,000 of those in New Hampshire.
    Looking at the news on a regular basis, it doesn't take too 
long to figure out that it's, at least in my recollection, it 
seems like we're experiencing more frequent catastrophic 
weather related events. I think, Mr. Chairman, that you were 
going to be showing this chart from the Office of Electricity 
Delivery and Energy Reliability from the Department of Energy 
that really charts the increased weather disturbances since 
2000. They're significant with a significant impact on 
customers.
    So given what appears to be happening my concern and I know 
it's shared by Senator Blumenthal and by everybody on this 
committee, is that we look at ways in which we can encourage 
whether it's through better standards or through incentivizing 
innovation for new developments in protecting our electricity 
grid that we really need to look at how we can address these 
outages. Because it's no longer a situation where we think 
well, once in every 5 or 10 years we're going to get a 
significant weather event that's going to require being without 
power for a while. This has become a much more frequent 
occurrence and one in which, I think, we really need to look at 
how we can better prepare to respond to this.
    Now I'm really pleased that on our second panel this 
morning we have someone from New Hampshire who has spent most 
of the last 10 years chairing the Public Utilities Commission 
in New Hampshire. Tom Getz was Chairman of the PUC in New 
Hampshire from 2001 until 2011. He recently stepped down.
    I'm pleased to say that I appointed him to that position as 
Governor. He was reappointed again in 2007 by another Governor. 
So clearly it shows the excellent job that he did in that 
capacity. Before that he served as the Executive Director of 
our State's Public Utilities Commission.
    I think he has a number of accomplishments. But one of them 
that I really wanted to point out this morning is that during 
his time as Chair of New Hampshire's Public Utilities 
Commission, one of the things that he did was manage an effort 
to create the New England State's
    Committee on Electricity which is a regional committee 
approved by FERC to focus on resource adequacy and transmission 
planning. I think based on his experience he has a lot of 
expertise to share with us this morning.
    So I look forward to his testimony and am delighted that he 
is here.
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much.
    We have as our first panel Ms. Patricia Hoffman, who is the 
Assistant Secretary for the Office of Electricity Delivery and 
Energy Reliability at the Department of Energy.
    Please give us your views as to what we need to know on 
this subject. Then we'll have some questions.

 STATEMENT OF PATRICIA HOFFMAN, ASSISTANT SECRETARY, OFFICE OF 
  ELECTRICITY DELIVERY AND ENERGY RELIABILITY, DEPARTMENT OF 
                             ENERGY

    Ms. Hoffman. Good morning, Mr. Chairman and members of the 
committee. Thank you for the opportunity to appear before you 
today to discuss the Department of Energy's roles and 
responsibility during weather related electrical outages. DOE 
plays a vital role coordinating with other Federal agencies in 
the energy sector to prepare for and recover from such outages.
    With the increase of severe weather including the recent 
tornadoes in Texas and the Midwest and the approach of the 2012 
hurricane season, this discussion is especially timely and 
important.
    At the Office of Electricity Delivery and Energy 
Reliability our mission is to lead national efforts to 
modernize the electric grid, enhance the security and 
reliability of our Nation's energy infrastructure and 
facilitate recovery from disruptions to the energy supply. As a 
sector specific agency for energy under the Department of 
Homeland Security National Infrastructure Protection Plan our 
office works closely with Federal, State and local governments 
and industry to protect against and mitigate threats to the 
energy infrastructure whether they're caused by natural 
disasters, deliberate attack or human error.
    DOE is also the lead agency for Emergency Support Function 
12, also known as ESF12 for Energy, when activated by the 
Federal Energy Management Agency, FEMA, under the Disaster 
Relief and Emergency Assistance Act. In the event of an 
emergency we provide situational awareness. We coordinate 
response among Federal, State and local agencies and help 
facilitate restoration of energy systems.
    When we are activated we have a team of responders who 
specialize in energy infrastructure and can be quickly 
activated and deployed to the event's location. These 
responders provide situational awareness, facilitate clear and 
consistent communication with other deployed responders and 
provide subject matter expertise to help with restoration and 
identify where the Federal Government can possibly engage in 
restoration efforts. We maintain constant communication with 
our Federal partners including FEMA, the Department of Homeland 
Security, Transportation, Defense, EPA, as well as State 
agencies and energy companies affected by the event.
    Providing timely, accurate and situational assessments play 
a crucial role in helping other government agencies in industry 
prepare for and recover from power outages caused by these 
events. Reporting also allows the public to remain informed of 
the situation and plan accordingly.
    During a major energy outage the situation typically 
changes very rapidly and information can often become 
conflicting and incomplete. As the storm moves through an area 
the number of customers without power can jump quickly. 
Following a storm as utility crews restore power outage numbers 
can change hourly as repairs are made.
    With Hurricane Irene, for example, customer outages 
fluctuated dramatically over a 9-day period. Eighty percent of 
the customers in the Northeast were restored within 3 days.
    During outage events energy companies focus on their 
specific service territories. States and local governments 
focus on their specific jurisdictions. Our situations reports 
are a definitive source for obtaining a broad, clear 
perspective on outage locations, scope, potential duration, 
looking at the entire affected region. These reports provide 
responders with sound information to determine where Federal 
resources should be applied to facilitate faster recovery and 
restoration.
    DOE is keenly aware that the energy sector owns and 
operates a vast majority over our Nation's assets. 
Communication channels that we maintain with our private 
partners have been and continue to be invaluable when major 
outages occur. OE works closely on an ongoing basis with owners 
and operators of the energy infrastructure to communicate 
clearly and frequently about power outages and collaborating 
with them as they prepare for energy emergencies by conducting 
workshops, tabletop exercise and provide resources for energy 
assurance planning.
    We also work closely with industry groups such as the 
Edison Electric Institute on the importance of their members to 
provide timely, accurate and consistent data during recovery 
and restoration periods.
    I would also like to briefly highlight the findings from 
our assessment from our recent improvements made by the energy 
sector. Our 2010 report entitled, ``Hardening and Resiliency: 
U.S. Energy Industry Response to Recent Hurricane Seasons,? 
notes actions that industry has taken to harden their energy 
systems including replacing wooden poles with concrete or 
steel, strengthening pole with guide wires, elevating 
substations and control rooms, improving supply logistics. 
Companies have also deployed sophisticated sensors such as 
Phasor measurement units to evaluate the health of their 
systems and advance meters for outage management systems as 
well as other advanced technologies.
    Integration of these smart grid technologies can reduce 
restoration times by detecting the location and the extent of 
damage and isolating the problem to keep the grid operating 
during an emergency.
    Reporting timely, accurate and actionable information 
during emergencies is critical to helping Federal, State and 
local government agencies as well as the energy sector and 
Americans everywhere be more aware of the rapid evolving impact 
of severe weather events on the energy infrastructure and most 
importantly of all, remain safe.
    This concludes my statement. Thank you, Mr. Chairman for 
your time. I look forward to answering any questions you and 
your colleagues may have.
    [The prepared statement of Ms. Hoffman follows:]

Prepared Statement of Patricia Hoffman, Assistant Secretary, Office of 
   Electricity Delivery and Energy Reliability, Department of Energy
    Chairman Bingaman, Ranking Member Murkowski, thank you for the 
opportunity to appear before you today to discuss the Department of 
Energy's (DOE) role in managing weather related electrical outages. DOE 
plays a vital role, in coordination other Federal agencies and industry 
to prepare for and recover from such electric power outages. Given the 
recent increase of severe weather incidents, including the recent 
tornadoes in Texas and the Midwest, and the approach of the 2012 
hurricane season, this discussion is especially timely and important.
              doe's role, responsibilities and authorities
    The mission of the Office of Electricity Delivery and Energy 
Reliability (OE) is to lead national efforts to modernize the electric 
grid, enhance the security and reliability of the Nation's energy 
infrastructure, and facilitate recovery from disruptions to the energy 
supply. As the Sectorspecific Agency for Energy, under the Department 
of Homeland Security's National Infrastructure Protection Plan (NIPP), 
the DOE's Office of Electricity Delivery and Energy Reliability is 
responsible for collaborating with Federal, State and local 
governments, and the private sector to protect against and mitigate 
threats on the energy infrastructure, be they natural disasters, 
deliberate attacks, or human error. OE performs the functions required 
under DOE's authorities and Presidential Policy Directive (PPD)--8, 
National Preparedness, which is aimed at strengthening the security and 
resilience of the United States through systematic preparation for the 
threats that pose the greatest risk to the security of the Nation, 
including acts of terrorism, cyber attacks, pandemics, and catastrophic 
natural disasters. In addition, DOE is the lead agency for the National 
Response Framework's Emergency Support Function 12 (ESF-12), Energy, 
when activated by the Federal Emergency Management Agency (FEMA), under 
the Robert T. Stafford Disaster Relief and Emergency Assistance Act.
    In the event of an emergency, OE stands up its Emergency Response 
Center and has a team of responders that specialize in energy 
infrastructure who can be quickly activated and deployed to the 
location of an event. OE personnel then coordinate with deployed 
personnel, other DOE offices, and Federal, State and local agencies in 
responding to the emergency. OE provides situational awareness and 
facilitates the restoration of energy systems. In addition, OE may 
provide technical expertise to utility companies, conduct field 
assessments, and assist government and private-sector stakeholders to 
overcome challenges in restoring the energy system.
                reporting on energy emergency situations
    Reporting on emergency events plays a crucial role in helping other 
government agencies and industry prepare for and recover from energy 
outages resulting from these events. Reporting also allows the public 
to remain informed of the situation and plan accordingly.
    OE takes great care in providing timely, accurate reports and 
situational assessments. When a major energy outage occurs, there is 
often a surge of information. Because the situation changes rapidly 
during these events, there are sometimes conflicting outage reports and 
incomplete information on damage status. In such cases, we must review 
and sift through large amounts of data and information to make certain 
that reported information is relevant, trustworthy, and accurate.
    Through years of working closely with our Federal, State, local, 
and private partners in response to energy emergencies, OE has 
established proven procedures for evaluating and reporting outage data 
and situational assessments. OE maintains a team of trained staff at 
our DOE headquarters and field offices, which are prepared to assist in 
situational assessment, response, and reporting for any event. 
Procedures have been established for data collection, quality control, 
and reporting. These procedures are implemented for sudden events 
including unexpected severe weather (e.g., tornadoes, earthquakes, 
floods) as well as events such as hurricanes where we have the 
opportunity to pre-position staff and develop a timeline for data 
collection and reporting.
    OE personnel use a standardized process for data collection, 
assessment, quality control, and reporting. The process is documented 
and repeatable and uses data sources that are fully referenced. As a 
result, we are able to provide high quality reports quickly and 
efficiently.
    OE obtains data from a number of resources. Data on electrical 
outages are received through the OE-417 Form, ``The Electric Emergency 
Incident and Disturbance Report,'' which provides timely information to 
DOE when utilities experience electrical incidents. We also collect 
information on damage to the infrastructure directly from energy 
companies such as utilities whenever possible. Many energy companies, 
including larger utility companies, now provide real-time outage 
information on their websites. We also use an in-house software tool 
which allows us to monitor the Nation's energy infrastructure in near 
real-time and create geospatial maps of the Nation's energy assets and 
systems that combine data from numerous sources into a single 
geographic information system (GIS). This system is known as the 
Environment for Analysis of Geo-Located Energy Information (EAGLE-I).
    We also gather data and information from trained ESF-12 staff that 
have been deployed to the field, to FEMA, and to other locations during 
emergency events. These ESF-12 responders provide situational 
assessments and facilitate clear and consistent communication with 
other deployed responders. They also help to provide subject matter 
expertise to aid in restoration activities and identify where the 
Federal government can engage in restoration efforts if and when 
appropriate.
    OE reviews all of the collected information, determines what 
information is relevant and appropriate to report, and evaluates the 
quality of the data source, and the date and time it was generated. If 
we identify discrepancies, we resolve them by investigating the 
discrepancy and determining which information is correct and current.
    OE provides a situational assessment that includes State-by-State 
outage totals, the number and percent of customers without power, the 
scope of the damage within each State, utility restoration efforts, 
when restoration is expected to occur, whether any critical assets have 
been damaged, what response measures are being reported by ESF-12 
teams, and what is being implemented by the energy companies. This 
information is then compiled into Situation Reports that are time-
stamped and include references to all data sources. The Situation 
Reports are then made available to the public online (http://
www.oe.netl.doe.gov/emergency_sit_rpt.aspx). The Situation Reports 
provide a snapshot of a given point in time, and are shared with 
Federal agencies responsible for making critical emergency response 
decisions. OE considers these reports as the Federal Government's 
official report on the scope of the damage and status of restoration at 
a specific point in time. These situational assessments facilitate 
decision making surrounding Federal response efforts and provide a much 
needed national perspective to State and local government as well as 
the private sector.
    We recognize that actual outage numbers can change moment-to-moment 
during a given weather event. As a storm system moves through an area, 
the number of customers without power can change rapidly. Following a 
storm, as utility crews work to restore power, outage numbers will 
continue to change hour-to-hour as repairs are made. Figure 1* below is 
an example of customer power outages reported during Hurricane Irene 
and shows the rate of restoration over a nine-day period. As seen in 
the Figure, the majority of customers had their power restored within 3 
days.
---------------------------------------------------------------------------
    * Figure has been retained in committee files.
---------------------------------------------------------------------------
    Situation Reports provide a common frame of reference on the 
severity, scope, and location of the impact. These situation 
assessments combined with our subject matter experts support decision 
making on when and if there is an appropriate role for Federal 
involvement in the restoration process. For example, the Situation 
Reports are used by FEMA and the U.S. Army Corp of Engineers to help 
determine where supplies of water, ice, food and generators should be 
delivered.
    Because the energy sector focuses on their specific service 
territories during outage events, and States and local governments 
focus on their specific jurisdictions, OE's Situation Reports are a 
definitive source for obtaining a nationwide perspective on the outage, 
looking at the entire affected region and energy infrastructure as a 
system. The Situation Reports are considered a ``one-stop'' shop for 
energy infrastructure information.
    Because OE understands the energy infrastructure, we are often 
called upon to help evaluate if requests for temporary waivers of 
certain regulations are warranted. The most frequent types of requests 
are to temporarily suspend Clean Air Act fuel requirements, use of 
foreign flagged vessels under the Jones Act, and to allow the 
interconnection of one utility to another under Section 202(c) and (d) 
of the Federal Power Act. We work closely with and provide the 
necessary due diligence to assist Federal agencies with evaluations of 
the severity and duration of the event and work with them to determine 
if waiver requests are justified.
    DOE staff maintain constant communication with our Federal partners 
such as the Department of Homeland Security, including FEMA; Department 
of Transportation; Department of Defense; and the Environmental 
Protection Agency; State agencies in the affected area; and the energy 
companies impacted by the event.
    OE provides a common frame of reference on the location, scope and 
potential duration of an event. This common frame of reference is 
critical for determining appropriate response measures. It enables us 
to communicate the presence of any critical infrastructure assets so 
they can be established as a priority in the restoration effort. It 
also gives those leading the response efforts sound information to 
determine where the application of Federal resources can facilitate a 
faster restoration.
                            ongoing efforts
    DOE is very aware that the private sector owns and operates the 
vast majority of our Nation's energy assets. OE works closely with the 
owners and operators of the energy infrastructure, as well as State and 
local governments. Throughout the year, OE collaborates with these 
organizations to prepare for energy emergencies resulting from both 
weather-related and manmade emergencies. OE conducts workshops and 
tabletop exercises, provides resources and support for energy assurance 
planning, and facilitates relationship building across these 
organizations. The communications channels that these activities have 
fostered have proven to be invaluable when major outages occur.
    We regularly evaluate our procedures to identify opportunities for 
improvement. On an ongoing basis, OE gathers information from public 
sources such as media outlets and creates a summary of public 
information about current energy issues. To help stakeholders stay 
current on energy infrastructure events, OE publishes the Energy 
Assurance Daily (EAD) to report on developments affecting energy 
systems, flows, and markets. The EAD is available to the public online 
(http://www.oe.netl.doe.gov/ead.aspx).
    In an effort to continue improving communication and sharing of 
information, DOE works with industry groups such as the Edison Electric 
Institute, to emphasize the importance of providing timely, accurate, 
and consistent data by their members companies that is crucial during 
recovery and restoration periods. OE encourages industry to use 
terminology that is understandable to the response community and to the 
general public. We also stress the importance of company websites in 
providing continually updated information on those customers without 
power, locations and restoration times. I would also like to highlight 
the follow-up that OE has done with private sector companies to 
ascertain the improvements they have made over the past several years, 
particularly since the 2005 and 2008 hurricane seasons. An OE report 
titled ``Hardening and Resiliency: U.S. Energy Industry Response to 
Recent Hurricane Seasons,''\1\ notes that industry has undertaken 
numerous actions to harden their energy systems by replacing wooden 
poles with concrete or steel, strengthening poles with guy wires, 
elevating substations and control rooms, and improving their vegetation 
management practices and supply logistics.
---------------------------------------------------------------------------
    \1\ The report, ``Hardening and Resiliency: U.S. Energy Industry 
Response to Recent Hurricane Seasons'' is available at http://
www.oe.netl.doe.gov/docs/HR-Report-final-081710.pdf
---------------------------------------------------------------------------
    In addition, companies have taken innovative approaches to deploy 
sensors such as Phasor Measurement Units to determine the health of 
their systems. Companies are also making investments by installing 
composite poles, using infrared thermography to scan and identify 
problems on their transmission lines, and integrating smart grid 
technology.
    Advanced smart grid technologies can reduce restoration time 
significantly. For example, the Electric Power Board (EPB) of 
Chattanooga, a Recovery Act Smart Grid Investment Grant recipient, is 
installing automated feeder switches, fiber communications, and sensor 
equipment for distribution circuits that can be used to detect faults 
and automatically switch to reroute power and restore other customers. 
In April 2011, severe storms caused power outages for three-fourths of 
EPB customers--129,000 residences and businesses. Smart grid 
technologies installed earlier helped EPB reduce outage time 
significantly by clearly identifying the location and extent of the 
damage. EPB was also able to avoid sending repair crews out 250 times. 
In September of 2011, another storm knocked out power to 59,000 homes 
and businesses. EPB determined that its smart grid technologies, in 
that situation, prevented an additional 25,000 customers from losing 
power.
    In April 2011, Alabama suffered significant tornado damage. 
Southern Company, a Recovery Act Smart Grid Investment Grant recipient 
that has invested in smart grid technologies that improve outage 
communication and provide restoration notification during storms, had 
more than 412,000 customers without power as a result of the severe 
weather. Between Monday, April 27 and Wednesday, April 29, Alabama 
Power (a subsidiary of Southern) was able to restore power to over 
200,000 of its customers. By the following Monday, May 1, 95 percent of 
the affected customers had had their power restored. Two days later, on 
Wednesday, May 3, restoration was nearly complete at 99.9 percent.
                               conclusion
    Reporting accurate, timely, and actionable information during 
emergencies is critical to helping Federal, State and local government 
agencies, the private sector, and the general public be more aware of 
impacts to the energy infrastructure and helping to minimize the impact 
of hazards.
    As we move into the summer months, this year's hurricane season and 
beyond, we remain vigilant and focused on our vital roles and 
responsibilities in reporting quickly and accurately on energy outages, 
working with our partners on response and restoration efforts, and 
keeping the American public informed. Although we hope the recent 
forecast for a light 2012 hurricane season is an accurate one, we are 
prepared for this year's events and whatever they may bring.
    This concludes my statement, Mr. Chairman. I look forward to 
answering any questions that you and your colleagues may have. Thank 
you.

    The Chairman. OK. Let me start by asking a few questions.
    We've got a chart that I think we were going to distribute 
around to folks called, ``Major Electric Power Disruptions.'' 
Have you looked at that chart?
    Ms. Hoffman. I need to see.
    The Chairman. OK. She's bringing it to you there.
    Do members of the committee have copies?
    Why don't you give them to folks here so everyone has got a 
copy?
    At any rate the clear conclusion from this is stated right 
below the chart itself. It says, ``Large scale electricity 
disruptions in the United States and Southern Canada have 
increased significantly since the early 1990s even as changes 
in electric power generation have been modest.''
    Do you agree with that conclusion?
    Do you folks keep track of this kind of thing yourself in 
your office in the Department?
    Is this something that is valid from your perspective?
    Ms. Hoffman. We do keep track of the different weather 
events and the impact of those weather events across the United 
States. Whether they're increasing significantly I don't have 
our data to give you that information today. Looking at this is 
the NERC information with respect to outages that you've 
presented here.
    But there has been stronger storms. There has been stronger 
tornadoes. There has been stronger snow storms.
    So there is some, you know, some at least indication that 
there are some stronger events occurring in the United States.
    The Chairman. Perhaps you could take this chart and review 
it after the hearing and see if there's anything in here that 
is questionable or misleading. If so, advise us of that or if 
you have better information we'd be anxious to see it.
    Ms. Hoffman. OK.
    The Chairman. Another issue is on reporting, particularly 
reporting of distribution level disturbances. The MIT Energy 
Initiative issued a study last December on the future of the 
electric grid. In that study they recommended the IEEE standard 
reporting metric for distribution level disturbances. They said 
that that should be followed uniformly throughout the industry.
    It is not today.
    Do you agree with that recommendation and do you have 
authority or the ability to try to see that that's implemented?
    Ms. Hoffman. So let me start off. If I understand the 
standard it's the IEEE 1355 standard which looks at the 
duration and frequency of outages in the United States. It's an 
index of system average interruption frequency.
    So it takes a look at the frequency, the number of 
customers interrupted as well as the duration. Then it makes it 
an index by dividing by the total customers in a service 
territory. What the IEEE standard did was it took that and 
broke it into two categories, major events and day to day 
events.
    So that is a standard that is looking at trying to really 
pull together how do we start doing some correlations with 
outage events and day to day events. So the reporting of that 
should be looked at as a standard across the industry for 
reporting. It is perceived that there is inconsistent reporting 
mechanisms at this moment in time.
    If we are going to move forward in correlating and looking 
at the impact as well as future investments that may be needed, 
we do need a standardized form to collect them.
    The Chairman. Is there any action you can take in your 
position to implement this recommendation and see to it that 
these distribution level disturbances are uniformly reported?
    Ms. Hoffman. We can use the information that is collected 
as following IEEE standard as one mechanism of making use of 
that information. We do not have enforcement mechanism nor do 
we have any requirements of enforcing that.
    The Chairman. OK. Alright.
    Senator Murkowski.
    Senator Murkowski. Thank you, Mr. Chairman.
    Ms. Hoffman, thank you for your comments here this morning. 
This is an interesting chart that the Chairman has shared. I'm 
curious about that.
    But I think we recognize that while we can have some pretty 
massive outages that are caused by weather and random weather 
patterns, we've also got the consequences of policy decisions. 
Those deliberate decisions that are made here in Washington. I 
have expressed a great deal of concern about this cumulative 
impact on reliability from this slew of EPA regulations that 
we're seeing that are coming out that impact and affect the 
energy industry that I don't believe are being adequately 
examined and considered.
    Now, last year DOE did do an analysis of resource adequacy. 
But it was actually Dr. Majumdar who testified. He said that 
the report actually came from the Office of Policy and 
International Affairs in producing the report, not your office 
which is the Office of Electric Deliverability and Reliability.
    It's further my understanding that not only did DOE fail to 
consider the entire suite of the new pending EPA regs that were 
forthcoming on the power sector, but they also did not consult 
with either the FERC or the NERC in that analysis.
    So a couple questions to you along this line this morning.
    First of all, why wouldn't it be the Office of Electricity 
Deliverability and Reliability that would head up this type of 
a review?
    Ms. Hoffman. The report was done from the Policy Office 
because the Policy Office was looking at the impact of any 
policy recommendations or policy statements on the 
administration. Our office tends to look at, I will say, 
emergency related events, energy events on the system. We do 
the modeling and the analytics with respect to emergency 
events.
    That's been our mission and our focus and looking at what 
is the technology to improve the energy infrastructure. Any 
potential impacts from weather or emergency events? Then how do 
we facilitate the recovery from those events.
    hat's been the focus and the mission of our organization.
    Senator Murkowski. So you are suggesting that you look at 
those or intermittent or random impacts to the power generation 
as opposed to what policy impacts may come from other agencies?
    I'm just trying to understand the difference here.
    Ms. Hoffman. We work within our department to look at 
policy events, but we do not have the lead responsibility from 
the policy in the Department of Energy.
    Senator Murkowski. So do you have any idea why FERC or NERC 
would not be considered in an analysis of what you're doing 
with a focus on the impact of regulations coming out of other 
agencies on the electricity sector and the reliability of that 
sector?
    Ms. Hoffman. I don't have the information to answer that.
    Senator Murkowski. Let me ask in another way then. Would 
your office, as the one that is tasked to look at the specifics 
of electricity deliverability and reliability, would you 
consider conducting an assessment of the cumulative impact of 
the regulations that are coming primarily out of EPA on the 
Nation's grid?
    Is that something that you would consider doing?
    Ms. Hoffman. We would consider doing or participating in 
any study or event that would be conducted either from the 
policy office, FERC, NERC or other agencies to the impact of 
reliability. Yes.
    Senator Murkowski. So you're saying you would participate, 
but you wouldn't take the lead?
    Ms. Hoffman. If Congress requests us to take the lead and 
do the action we will be glad to take that.
    Senator Murkowski. But the concern that I have and I 
continue to raise is that this seeming inability to assess the 
cumulative impact of our regulations on the reliability aspect 
of the electricity sector is something that I think is 
extraordinarily important. Whether we're talking weather or 
whether we're talking policy, we need to know and understand 
that we've got a system that is in one piece.
    I want to move very quickly. I mentioned, and it's public 
knowledge, that I've been working on safety valve legislation 
as it relates to our electricity reliability and the processes 
that we're dealing with.
    One of the underlying problems that we have with the 
reliability is clearly transmission congestion, our inability 
to build out the transmission at an adequate pace. I believe 
you made a statement last week in a briefing to staff that 
generation can be built in 3 to 5 years. But if we're lucky 
it's about 10 years for the transmission lines.
    Under the Utility MACT rule which requires compliance by 
2015, it does allow for an additional year or perhaps two 
depending on some circumstances. I don't view that as an 
adequate safety valve.
    So the question that I have for you this morning is this: 
Given this 10-year timeframe that you have indicated, is what 
we're facing as we try to build out transmission lines, doesn't 
a 3-year or even a 4-year or a 5-year window for compliance 
seem problematic given what we're dealing with with the 
timeframes that are involved here?
    Ms. Hoffman. Thank you for your question.
    I think what's going to end up having to be looked at is 
the case by case examples. There is flexibility in the system 
for extensions, for a fourth year extension. I believe a fifth 
year extension.
    But the timelines are going to have to and any concern that 
a customer may or an owner/operator may have with respect to 
meeting those timelines, I think should be brought to EPA 
immediately. Be very transparent in the type of solutions that 
are being looked at and their timelines requested.
    So that is probably going to be dealt with on a State-by-
State basis, specifically with EPA.
    Senator Murkowski. So if you had to identify what you would 
consider to be a reasonable amount of time, you're saying that 
it's more on a case by case basis as opposed to 3 years or four 
years. Four years is reasonable.
    Ms. Hoffman. I think it depends on the detail of the 
project and how far the project is along, what requirements are 
still necessary at the project. So I'm not going to do an 
average statement. I think that it's best to look at the 
projects specifically and address that project's need with the 
proper agencies involved.
    Senator Murkowski. Mr. Chairman, I am well over my time. I 
apologize for that. I also apologize I have an Appropriations 
markup that began at 10:30. So I'm going to have to excuse 
myself.
    I do wish that I was here for the other witnesses because I 
know that they have some interesting things to bring up as 
well.
    So thank you, Ms. Hoffman.
    The Chairman. Thank you.
    Senator Shaheen.
    Senator Shaheen. Thank you, Mr. Chairman.
    Ms. Hoffman, I was a little confused by your response on 
the charts that Chairman Bingaman passed around. Because he 
quoted the commentary based on at the bottom of the chart that 
says, Major Electric Power Disruptions. That's attributed to 
the North American Electric Reliability Corporation or NERC and 
to EIA.
    But the chart on the other side which I referenced earlier 
I have sourced as being your Office of Electricity Delivery and 
Energy Reliability. Is that your understanding?
    Ms. Hoffman. Yes. I just had not seen these charts before 
right now. So I apologize. I'm looking at this for the first 
time.
    Senator Shaheen. OK.
    Certainly I understand that these are only a period of 
about 10 years. But just looking at the data reflected in these 
charts it certainly looks like the number of weather related 
disturbances has increased pretty dramatically as have the 
number of households affected by those. Would you agree?
    Ms. Hoffman. It does look like that. But I will also say 
that prior to recently we did not have the outage management 
systems, the systems in place that can more accurately record 
some of the impacts to consumers. So it may be in the earlier 
years there may be some variances because of reporting that 
they didn't have the systems in place.
    So I can only look at it without the data.
    Senator Shaheen. Sure, that's only a snapshot.
    Ms. Hoffman. Yes.
    Senator Shaheen. I understand.
    Talking about the concern for data collection and the need 
for standardized data collection are you comfortable that that 
standardized system of data collection is currently in place 
now?
    Ms. Hoffman. I think we're heading in the right direction. 
Where we ultimately need to go is several layered type concept 
where utilities are first and foremost providing data to their 
consumers via the website and any text messaging and 
communications that are available. Because consumers need that 
actual information for safety of their customers so some of 
that entails the number of customers that are out.
    I think it is very important for customers to understand 
the extent of damage to the system. So whether you're talking 
damage to the transmission system verses damage to the 
distribution system because that will give a better 
appreciation of the time for restoration. So that is at the 
utility level that must occur first and foremost.
    Then from a State, regional, national perspective we need 
to be able to roll those numbers up to make sure that we get a 
regional perspective. Once again, I would go with the same 
philosophy.
    The number of customers that are out.
    The extent of damage to the transmission distribution to 
substation.
    The extent of flooding.
    Then the estimated timelines, if available, for 
restoration.
    So everybody has a situational awareness especially 
customers that may need additional support or may need to go to 
a different facility if the timeline is going to be longer than 
expected.
    Senator Shaheen. Is there a way to have the information 
reflect other potential issues with if it's transmission? I 
assume, at least my experience in New Hampshire, has been that 
most of our outages have not been the result of generation 
being down, but the result of transmission or distribution 
issues.
    Is there a way to reflect whether those lines are aged, 
aging lines? That that's the cause of the outage in addition to 
the weather emergency so that they don't have the same kind 
of--you talked about the report on the industry response to 
hurricane season and some of the updated technology that is now 
being used. Is there a way to reflect that kind of information 
also in that data? Does it do that now?
    Ms. Hoffman. It's a fantastic question. I think we're 
heading in that direction. That's what we need to continue to 
work toward is have a better understanding of assets and asset 
management health and age so that we actually can see if 
there's a correlation to say a feeder system, a part of the 
country where there may be more emphasis.
    The risks may be more. There may be more of a risk to a 
future hurricane or event of that part of the system going 
down. So that we actually can look at predictive measures or 
measures that we can take in advance of a system knowing that 
maybe there's been a lot of stress in this region of the 
country, especially when you've had back to back storms.
    When you've had back to back storms you've put an added 
stress on whether it's poles, trees. Then having another storm 
follow so closely after that can make certain elements weaker. 
So I think what it will allow us to do is to actually start 
saying, OK, how do we really want to take a harder look at 
investments and risk for different parts of the system whether 
it's putting guide wires, looking at reinforcing the poles, 
looking at strategies. Then be able to evaluate the cost impact 
and the impact to consumers.
    Senator Shaheen. I'm out of time. But Mr. Chairman, if I 
could follow up just on the question that you raised. That is 
who should be the entity that actually describes and prescribes 
those kinds of standards and data collection?
    Should it be FERC? Should it be NERC for us in the 
Northeast? Should it be the Department of Energy?
    Ms. Hoffman. The standard process, I mean, it's an IEEE 
standard. I think the standards there's various standard 
setting organizations that are very well placed and structured 
to developing the standards in the United States.
    Senator Shaheen. Maybe I wasn't clear.
    What I should have said is who should enforce those 
standards?
    Ms. Hoffman. I think the enforcement of the standards is 
going to depend on who has jurisdiction. So from a State 
regulatory point of view it's going to be the State Utility 
Commissioners and the State Regulatory bodies. From the Federal 
perspective it will be FERC and NERC.
    Senator Shaheen. Thank you.
    The Chairman. Senator Cantwell.
    Senator Cantwell. Thank you, Mr. Chairman. Thank you for 
holding this hearing. Certainly, you know, while you're talking 
about a lot of Northeast outages, the Northwest has had quite a 
few outages, too.
    As you know, over the past few years they seem to have 
multiplied. In January, we had nearly 300,000 customers across 
the Puget Sound region that were impacted. We're talking about 
outages lasting for many days. In fact I had one constituent 
who wrote me and said, ``As we stretch into the fifth day of 
power outages with temperatures dropping into the 20s in the 
evenings I know this is the first major outage that most of the 
rest of the people have experienced so far this year. But it's 
the worst. So my power has gone out over 5 times in the last 30 
days usually out for 24 hours.''
    So these are people who have been impacted many times. I'm 
certainly a big fan of what we've instituted, a new Doppler 
radar system that's state-of-the-art technology and now the 
rest of the Nation is implementing.
    It's giving us more predictability. We need to do a lot 
more as we were talking about during last week's hearing on 
just the rise in sea level. We need to have a more weather 
ready Nation.
    There are lots of things we can do to make sure that we 
have the information from a scientific perspective about what 
the impacts are going to be. Then how to actually plan for 
them. But you've got to have the information first. Then local 
governments, law enforcement, responders, everybody can develop 
the plan.
    But in this case, over the last decade, we have seen a huge 
increase in these outages due to extreme weather events. Some 
estimates show a strong investment in the grid--in smart grid 
and distributed generation, in back up generation and things--
that would help us basically diversify and build redundancy. 
Some people think that building that future system would cost 
somewhere between $17 and $24 billion a year over the next 20 
years.
    If you look at what that might actually reduce in estimated 
outages that are costing us somewhere over $40 billion per 
year.
    So how do you look at this issue from an investment 
perspective? I look at some of those numbers and say, geez, a 
10-year investment in modernizing the grid. Getting distributed 
generation and getting some of these other investments in 
place, would pay back over a short time period, the cost that 
it is taking us to deal with all these outages, to say nothing 
of the impacts that they're having on consumers.
    Ms. Hoffman. It's a very good point. With respect to the 
economic impact there is significant economic impact to the 
country during these events. I know that NOAA estimated that 
Hurricane Katrina was 105, let me check out my units right now, 
$105 billion in economic damage.
    So it is how do we look at financing investments in the 
infrastructure over time to minimize the impact to the economy 
and also minimize any sort of impact from these events. So what 
we--what I would look at is a continued, steady improvement in 
our infrastructure. Acknowledging if we have better data and 
information than we actually can fine tune where the technology 
improvements can get the biggest benefit or the biggest impact, 
the biggest bang for the buck.
    So what we really need to do is actually continue to 
collect the data and build the analytical capabilities so we 
can start developing those correlations and prioritize the 
investment in our infrastructure. So we can look at where do we 
get the most value from composite poles, from guide wires, from 
distributed generation and looking at mircrogrids. Where has 
the intensity of storms been increasing and look at should we 
be building the same and using the same technologies after a 
hurricane or should we be looking to place improved 
technologies on the system.
    Right now when we rebuild it is the same technology that's 
being put back on the system to the extent that the costs are 
equal. So it is an investment strategy that has to go hand in 
hand with the developing of rate structures and rates at the 
distribution level.
    Senator Cantwell. But do you think that that number 
analysis, like a 10-year time period for payback is--do you 
think that's realistic, doable? Do you think it could be done 
sooner? What do you think?
    I hear what you're saying. You want to do it smartly. You 
want to invest in the right technology. You want to see what 
matters.
    But I feel like because of that the reason why you're here 
today and we're having this hearing is because a lot of people 
are frustrated that not enough is happening at the State and 
local levels. So we want to see more action. We'd love your 
agency to play a more leadership role, but you're talking about 
doing this incremental analysis.
    I think what we have to get down to is some analogy, at 
least to maybe like weatherization and the investment we make 
in weatherization and the time period for payback. We have to 
start basically putting out there what we think, how quickly 
the investment will pay dividends to us. I think if we do, then 
we'll get much more aggressive results at the local level in 
pushing people to make these investments for us.
    Ms. Hoffman. I agree with your point. The discussion is how 
fast should we invest and at what level can the consumer, the 
economy, tolerate with respect to that investment. The money 
that's required is significant. So how can, how should we plan 
for the investments that are required and manage those funding, 
difficult funding situations?
    Senator Cantwell. I think from our State's perspective 
we've had two of these--what someone would call 100-year events 
back to back--doing devastating economic damage to the State. 
Now you start talking about all sorts of businesses and 
industries that are impacted. You look at the tornado that may 
have hit the Boeing facility in the Midwest. As you know, these 
are all issues of, if we are seeing more severe weather, how 
are we going to best prepare for it.
    I think a grid that's much more reliable and resilient is 
going to be a key part of that. So I thank the Chairman for 
this hearing.
    The Chairman. Thank you very much for your testimony. 
Unless there's additional questions why don't we go ahead to 
panel two? We'll dismiss you and thank you very much.
    Ms. Hoffman. Thank you, Mr. Chairman.
    The Chairman. If you do have any reaction to this chart 
that we gave to you we'd be anxious to hear that in the coming 
days.
    Ms. Hoffman. We'd be glad to be able to provide you a 
response.
    The Chairman. Alright. Thank you very much.
    Let me call forward the second panel.
    It's made up of Mr. Norman Bay, who is the Director of the 
Office of Enforcement of the Federal Energy Regulatory 
Commission. Let me just say since we've had very effusive 
introductions of the other two members of the panel. I want to 
say some effusive things about Mr. Bay.
    He is a distinguished former U.S. attorney in the State of 
New Mexico and a former professor at the University of New 
Mexico Law School and does a tremendous job at every position 
he fills. We're glad to have him here. So Mr. Bay is our first 
witness in this panel.
    Mr. Thomas Getz, who was previously introduced as the 
former chair of the New Hampshire Public Utilities Commission 
in Concord.
    Mr. John Bilda is the General Manager with Norwich Public 
Utilities in Norwich, Connecticut.
    Thank you all for being here.
    Mr. Bay, go right ahead.
    Yes, I think that's probably OK if the light is on. OK.
    Why don't each of you take about 5 minutes. Make the main 
points you think we need to understand. We will include your 
full statement in the record.
    Go right ahead.
    Yeah, I think that would be best if you could just 
summarize it. Let's be sure the recorder has got it the way she 
wants it there.
    Go ahead, please.

   STATEMENT OF NORMAN BAY, DIRECTOR, OFFICE OF ENFORCEMENT, 
              FEDERAL ENERGY REGULATORY COMMISSION

    Mr. Bay. OK.
    So we have engaged in a joint study with NERC looking into 
the October 29th through 30th, 2011 snowstorm in the 
Northeastern United States. We're about a month away from 
issuing our report. I think it's important to note, as the 
committee has recognized, that most of the customer outages 
around 95 percent were caused by damage to distribution 
facilities, the lines that deliver electricity to individual 
homes and businesses and that are regulated by the States 
rather than FERC.
    Numerous affected States therefore have launched their own 
inquiries into the event. I commend their efforts. Although 
primarily a distribution level event the storm also caused 
transmission line and substation outages approximately 70 
transmission lines, a number of which are BPS or bulk power 
system elements, subject to FERC approved mandatory reliability 
standards, experienced sustained outages. That simply means an 
outage of more than 10 minutes in duration.
    FERC and NERC launched their joint study to determine the 
causes of the transmission in BPS facility outages and to 
recommend steps that utilities could take to improve their 
performance in maintaining grid reliability during a future 
large snowstorm or other similar weather event.
    So we've gathered a lot of data. We've done a number of 
interviews. We have worked with the State and public utility 
commissions in affected States.
    We've done some outreach to them. We have done site visits. 
We're moving closer toward finalizing our report.
    Before we finalize it, of course, we'll be doing more 
outreach to the State PUCs to get their feedback and their 
input. We'll be doing some outreach to trade associations as 
well.
    While it's premature to discuss our findings and 
recommendations at this time, I would like to note the key 
issues that we're analyzing.
    First, we're analyzing the effects of the storm on the 
specific transmission lines and substations that experienced 
outages. Which lines and substations were forced out of 
service. For what reasons and how long it took to restore those 
facilities.
    Second, we are analyzing how these outages affected the BPS 
as a whole. How the BPS performed during and immediately after 
the storm.
    Third, we are analyzing the affect of these facility 
outages on customers. We have already concluded that most of 
the customer outages were caused by distribution system damage.
    Fourth, we are analyzing the role that compliance or lack 
of compliance with FERC approved, mandatory reliability 
standards, particularly the Transmission Vegetation and 
Management Reliability Standard, FAC003-1, played in the 
transmission outages.
    Finally, in light of what we have learned we are 
considering making several recommendations on how utilities can 
improve vegetation management and other practices to reduce 
transmission outages during snowstorms and similar weather 
events. Although the effects of the transmission and substation 
outages on the BPS and on customers were mild compared to the 
serious distribution system outages, there is room for 
improvement in these areas.
    So in conclusion I want to thank the committee again for 
this opportunity to testify today on FERC's study of the 
October 2011 snowstorm's effects on transmission and BPS 
facilities. We look forward to providing the committee and 
affected State governments a copy of the report when it is 
completed.
    [The prepared statement of Mr. Bay follows:]

  Prepared Statement of Norman Bay, Director, Office of Enforcement, 
                  Federal Energy Regulatory Commission
    Mr. Chairman, Ranking Member Murkowski, and members of the 
Committee: Thank you for inviting me to testify today. My name is 
Norman Bay. I am the Director of the Office of Enforcement of the 
Federal Energy Regulatory Commission (FERC or the Commission). I appear 
before you as a staff witness, and the views I present are not 
necessarily those of the Commission or any individual Commissioner. My 
testimony addresses FERC's inquiry into the effects of the October 29-
30, 2011 snowstorm in the Northeastern United States on transmission 
and Bulk Power System (BPS) facilities. Commission staff is conducting 
this inquiry jointly with the North American Electric Reliability 
Corporation (NERC). The inquiry team has made substantial progress, but 
we are still about a month away from finalizing our report, so I am 
unable to share specific findings and recommendations at this time. I 
am, however, happy to discuss with you the nature of our inquiry and to 
speak generally about some of the key issues the inquiry team is 
analyzing.
    The Committee is well aware of the severe nature of the October 
snowstorm and its harmful effects throughout the Northeast. To briefly 
summarize, the snowstorm dropped record amounts of heavy, wet snow 
across the Northeast when trees had not yet lost their leaves. These 
circumstances caused large numbers of trees to fall on distribution and 
transmission lines, resulting in widespread power outages. More than 
three million customers from Pennsylvania to Maine lost power, tens of 
thousands for more than a week. The storm caused significant economic 
impact in the affected states.
    Most of these customer outages--around ninety-five percent--were 
caused by damage to distribution facilities, the lines that deliver 
electricity to individual homes and business and that are regulated by 
the states rather than FERC. Numerous affected states, therefore, have 
launched their own inquiries into the event, and I commend their 
efforts. Although primarily a distribution-level event, the storm also 
caused transmission line and substation outages. Approximately seventy 
transmission lines (a number of which are BPS elements subject to FERC-
approved mandatory Reliability Standards) experienced sustained 
outages. FERC and NERC launched their joint inquiry to (1) determine 
the causes of these transmission and BPS facility outages and (2) 
recommend steps utilities could take to improve their performance in 
maintaining grid reliability during a future large snowstorm or other 
similar weather events.
    FERC and NERC have gathered a significant amount of data, primarily 
from the utilities responsible for maintaining the transmission lines 
that experienced outages. We conducted site visits to view affected 
transmission lines in Connecticut, Massachusetts, and New Hampshire. We 
met with key executives of Northeast Utilities, whose subsidiaries had 
the most transmission line outages. We have also talked with staff from 
the relevant state commissions, and we will be presenting state 
commission staff with our preliminary findings and recommendations 
before finalizing the report.
    While it is premature to discuss our findings and recommendations 
at this time, I would like to note the key issues we are analyzing. 
First, we are analyzing the effects of the storm on the specific 
transmission lines and substations that experienced outages--which 
lines and substations were forced out of service, for what reasons, and 
how long it took to restore those facilities. Second, we are analyzing 
how these outages affected the BPS as a whole--how the BPS performed 
during and immediately after the storm. Third, we are analyzing the 
effect of these facility outages on customers; as noted, we have 
already concluded that most of the customer outages were caused by 
distribution system damage. Fourth, we are analyzing the role that 
compliance (or lack of compliance) with FERC-approved mandatory 
Reliability Standards, particularly the Transmission Vegetation 
Management Reliability Standard (FAC-003-1), played in the transmission 
outages. Finally, in light of what we have learned, we are considering 
making several recommendations on how utilities can improve vegetation 
management and other practices to reduce transmission outages during 
snowstorms and similar weather events. Although the effects of the 
transmission and substation outages on the BPS, and on customers, were 
mild compared to the serious distribution system outages, there is room 
for improvement in these areas.
    In conclusion, I want to thank the Committee again for this 
opportunity to testify today on FERC's inquiry into the October 2011 
snowstorm's effects on transmission and BPS facilities. We look forward 
to providing the Committee, and affected state governments, a copy of 
the inquiry report when it is completed.

    The Chairman. Thank you very much.
    Mr. Getz, go right ahead.

   STATEMENT OF THOMAS B. GETZ, FORMER CHAIR, NEW HAMPSHIRE, 
            PUBLIC UTILITIES COMMISSION, CONCORD, NH

    Mr. Getz. Thank you, Mr. Chairman. I'm very pleased to be 
here this morning and have the opportunity to discuss New 
Hampshire's experience with weather related electrical outages. 
I want to thank Senator Shaheen for her kind introduction.
    I'll highlight some points from my written testimony.
    First, for New Hampshire the defining event in terms of 
weather related electrical outages was the December 2008 ice 
storm. At that time 430,000 customers out of 690,000 business 
and residential customers, that's nearly two-thirds of all 
customers, were affected. Outages lasted up to 14 days. There 
were over 100, or there were over 1,000 field crews in the 
responding to that storm at its peak. There were $150 million 
in reported damages from that storm.
    Now that storm affected more than 4 times as many customers 
as any previous outage in State history. The previous high 
point had been approximately 100,000 customers during a 
snowstorm in 1996. But since December 2008 there have been 3 
additional extreme weather events.
    In February 2010, a wind storm with gusts in excess of 60 
miles per hour over a wide swath of Southern New Hampshire 
caused outages to 360,000 customers. Restoration from that 
event took 6 days.
    In August 2011, Tropical Storm Irene moved up the East 
Coast, as you well know. From a New Hampshire perspective the 
storm lessened in intensity as it moved northward and veered 
off its originally anticipated course. But nevertheless 160,000 
customers lost power from that event. Restoration took 4 days.
    Most recently, of course, in October 2011 with the 
Nor'easter, more than 300,000 customers in New Hampshire 
suffered outages. The restoration took 6 days.
    Now the 4 events are distinguishable in terms of the cause. 
But the results were the same in that ice, wind, wet snow, all 
brought trees and branches in the contact with power lines 
causing widespread outages.
    Now the obvious question from customers and from the public 
was an issue that we focused on in our After Action Review of 
2008 were the electric utilities doing everything they should 
be doing in terms of paying sufficient attention to vegetative 
management? Now the issue of vegetative management is not a new 
one, as the committee well knows. The Northeast blackout from 
August 2003 that resulted in 50 million people losing power in 
the U.S. and Canada prompted Congress to pass the, as part of 
the Energy Policy Act of 2005, refinements to the way that the 
Federal Energy Regulatory Commission and NERC handled 
reliability standards.
    At that time reliability standards made mandatory and 
enforceable. Once NERC was authorized as the electric 
reliability organization for the United States they submitted 
102 proposed reliability standards including a Transmission 
Vegetation Management Program that they've recently updated in 
a filing to FERC that was made in 2011. It's designed to 
minimize encroachment from vegetation located adjacent to 
rights of way.
    Just as Congress conducted a reappraisal in the aftermath 
of the blackout in August 2003 states, took a look at their 
policies with respect to vegetation management. In New 
Hampshire we approved new reliability enhancement programs that 
increase funding and annual spent by electric distribution 
utilities on tree trimming and encouraged shorter trim cycles, 
larger trim zones.
    I would also like to note that I think it's important to 
observe in this context that the nature of preparedness was 
affected greatly by the events of 9/11. After 9/11 I think 
working relationships among utilities and commissions and State 
emergency management agencies was heightened. In New Hampshire 
then Governor Shaheen created an Advisory Council on Emergency 
Preparedness and Security which advises the Governor on issues 
involving State ability to respond to natural and human caused 
disasters.
    PUC personnel, myself included, were trained in incident 
command system, part of Homeland Security's approach to 
national incident management system. It is in that role that 
the PUC intersected with the U.S. Department of Energy's Office 
of Electricity Delivery and Energy Reliability described by 
Assistant Secretary Hoffman.
    Nevertheless the ice storm with its unprecedented scope and 
intensity greatly strained capacity of utilities to respond and 
revealed a number of system processes. The ice storm after 
action review that we conducted focused on a number of issues. 
I see my time is close to out.
    So let me just summarize that we concluded that the tree 
trimming was not an issue creating to the number of outages at 
that time. That utilities were following established protocols. 
That the protocols themselves were appropriate.
    But I wanted to make 3 general observations before I close.
    One is a public expectations of utility and government 
action are understandably high in this regard because it 
involves fundamental issues of public health and safety.
    I'd also like to say that extreme weather events are 
affecting large numbers of customers and coincident with what 
Senator Blumenthal mentioned, I think there's an emerging issue 
of competition for resources, especially when you see large 
events moving up the coast absorbing resources as they move. I 
think I have not seen a real problem as of yet because the 
utilities have worked together for a long time. But it's an 
issue that could bear some regional and perhaps some national 
attention.
    The third thing and last is that the interconnected grid is 
a complex structure with overlapping jurisdiction from a number 
of entities. I'd like to say that I was very encouraged by 
Director Bay's comments in his written testimony which I had a 
chance to go through. It seems that they're taking all the 
appropriate steps in terms of process in taking a look at the 
transmission system as opposed to the distribution system.
    So with that, I'd be happy to answer any questions I could.
    [The prepared statement of Mr. Getz follows:]

  Prepared Statement of Thomas B. Getz, Former Chair, New Hampshire, 
                Public Utilities Commission, Concord, NH
    From October 11, 2001 until February 1, 2012, I served as Chairman 
of the New Hampshire Public Utilities Commission. In that role, I had 
the responsibility to ensure that public utilities provided safe and 
adequate service at just and reasonable prices.
    My focus this morning is on my experience in New Hampshire during 
the past several years with electrical outages from four separate 
extreme weather events, each of which far surpassed any previous storm 
in state history in terms of the number of customers who experienced 
electrical outages. I am hopeful that New Hampshire's experience with 
these events will prove useful to your consideration of weather related 
electrical outages.
    In December 2008, approximately 430,000 customers, nearly two-
thirds of New Hampshire's 690,000 residential and business electric 
customers, were without power, some for as long as 14 days, as the 
result of an unprecedented ice storm that affected 211 of the state's 
256 municipalities and land grants. The effects of the ice storm were 
concentrated in the southern part of the state and also heavily 
impacted northern Massachusetts. The '08 Ice Storm, which saw up to an 
inch of ice accumulation on power lines and tree limbs, caused in 
excess of $150 million in reported damages. Storm recovery was highly 
labor intensive, with over 1,000 field crews working during peak 
restoration hours, due to the sheer number of downed lines and broken 
poles and the resulting need to rebuild entire sections of some 
distribution lines.
    In February 2010, a wind storm with gusts in excess of 60 mph over 
a wide swath concentrated in the more densely populated southern 
portion of New Hampshire caused outages to 360,000 customers. 
Restoration took six days, much less than experienced during the '08 
Ice Storm, largely because the damage was more sporadic and did not 
require rebuilding of lines.
    In August 2011, Tropical Storm Irene moved up the east coast 
affecting 12 states, the District of Columbia and three Canadian 
provinces, leaving about 7 million customers without power. The storm 
diminished somewhat in intensity as it moved northward towards New 
Hampshire and veered from the originally anticipated course. 
Nonetheless, 160,000 customers lost power and torrential downpours 
caused flooding in the northern and western parts of the state. 
Restoration took four days, involved in excess of 800 crews and was 
aided in part by favorable summer weather conditions.
    In October 2011, an early season snowstorm, or Nor'easter, dropped 
more than two feet of wet, heavy snow on trees still in full foliage. 
As a result, more than 300,000 customers in New Hampshire and 
approximately 2 million customers in New England suffered electrical 
outages. Restoration took six days and involved nearly 1,000 crews.
    Prior to these four very different events, the single largest 
outage in New Hampshire occurred during a snow storm in December 1996, 
affecting roughly 100,000 customers. While the four events were 
distinguishable in terms of meteorological causation, the results were 
the same in that ice, wind and wet snow all brought trees and branches 
into contact with power lines, causing widespread outages. The obvious 
question in such instances, the one asked by customers and public 
officials, and the one that was a primary focus of the New Hampshire 
Public Utilities Commission's After Action Review of the '08 Ice Storm 
is: Are the electric utilities paying sufficient attention to 
vegetation management?
    The issue of electric utility vegetation management is not a new 
one as the Committee knows. On August 14, 2003, a tree in northern Ohio 
made contact with a high voltage transmission line causing the line to 
trip off and triggering a cascading event that affected 50 million 
people in the U.S. and Canada. In response, Congress passed the Energy 
Policy Act of 2005, which authorized the Federal Energy Regulatory 
Commission to create an electric reliability organization (ERO) and 
provided that reliability standards would be mandatory and enforceable. 
One outcome of that effort was the certification by the Federal Energy 
Regulatory Commission (FERC) of the North American Electric Reliability 
Corporation (NERC) in July 2006 as the ERO for the United States. Among 
other things, NERC, as part of 102 proposed reliability standards filed 
in 2006, adopted a Transmission Vegetation Management Program. More 
recently, in December 2011, NERC filed a revised transmission 
vegetation management standard with FERC designed to minimize 
encroachment from vegetation located adjacent to rights-of-way.
    Just as Congress conducted a reappraisal in the aftermath of the 
August '03 blackout, individual states took a close look at the status 
of vegetation management practices. As a result, in New Hampshire the 
Public Utilities Commission (PUC) approved reliability enhancement 
programs that increased the funds annually spent by electric 
distribution utilities on tree trimming, and encouraged shorter trim 
cycles and larger trim zones.
    It is also worth observing in this context the impact of 9/11 on 
the working relationships among electric utilities, public utilities 
commissions and state emergency management agencies. In New Hampshire, 
in response to 9/11 then-Governor Shaheen created an Advisory Council 
on Emergency Preparedness and Security, which advises the Governor on 
``issues involving the state's ability to respond to natural and human-
caused disasters, and the preparation and maintenance of a state 
disaster plan.''
    The PUC has been an integral member of the Advisory Council from 
the outset, with a particular focus on critical infrastructure. PUC 
personnel, including myself, were trained in the Incident Command 
System, part of the U.S. Department of Homeland Security's National 
Incident Management System, which takes an all-hazards approach to 
natural or manmade disasters. In this role, the PUC intersects with the 
U.S. Department of Energy's Office of Electricity Delivery and Energy 
Reliability, which, through its Infrastructure Security and Energy 
Restoration mission, is responsible for coordinating the protection of 
critical energy assets and assisting state and local governments in 
executing the Emergency Support Function 12 Energy (ESF-12) established 
under the National Response Framework.
    The PUC works closely with the state Division of Homeland Security 
and Emergency Management (HSEM) during an extreme weather event because 
of the critical nature of the electric system infrastructure to public 
health and safety. Prior to the opening of the state Emergency 
Operations Center (EOC), HSEM, PUC and electric utility personnel 
monitor weather reports as a storm approaches and communicate among one 
another in order to make preparations for response and recovery.
    In an extreme weather event, the restoration of power is an end or 
goal in itself and the means for accomplishing other subsidiary goals. 
In the early hours of storm response, situational awareness is key to 
informed decision making by utilities and government officials. For 
example, it is necessary to identify the location and nature of 
outages, and ascertain estimated times of restoration at least 
preliminarily, and to coordinate closely so that state officials can, 
among other things, identify whether hospitals and other critical 
health and safety facilities are affected, and make decisions about 
closing and opening roads, determining where to open shelters, and 
determining whether to close schools.
    The '08 Ice Storm After Action Review, which has served as a 
template for state and utility management in terms of lessons learned 
and corrective action, concentrated on a broader set of issues than 
vegetation management. The review included emergency preparedness and 
response, emergency planning, outage management systems, weather 
forecasting, resource procurement, resource deployment, restoration 
prioritization, and communications, as well as technical issues 
relating to system protection and line construction and loading, and 
the feasibility of overhead to underground conversion. At the time, the 
'08 Ice Storm was viewed as a high impact, low frequency event. That 
may still be regarded as an accurate assessment when narrowly limited 
to icing situations but the practical reality is that three other high 
impact events have occurred in the interim.
    I think it is fair to say as a general matter from a New Hampshire 
perspective that, through actual hands-on experience, both state and 
local officials and utility management have become more adept at 
planning for, responding to, and recovering from extreme weather events 
that cause widespread electrical outages. As a specific matter, I offer 
no opinions on the actions of New Hampshire's electric utilities during 
the October '11 Snowstorm inasmuch as the PUC's after action review of 
that event is still underway. I do, however, offer some observations 
drawn both narrowly from the impact of the four extreme weather events 
in New Hampshire and broadly from the impact of the most recent event 
regionally.
    First, public expectations of utility and government action are 
high when it comes to electric service and all that such service 
entails. New Hampshire is a heavily forested state so it is reasonable 
to expect that extreme weather events will damage trees, which will in 
turn damage power lines, especially distribution lines. Distribution 
lines are most at risk because they tend to run along streets and roads 
in close proximity to trees, which is a different case from higher 
voltage transmission lines where wide rights-of-way are the norm. At 
the same time, in addition to the traditional power-related amenities 
of heat and light, the public is more interconnected and reliant on 
electricity for connectivity for work, recreation and social 
interaction than in years past. Coincident with this heightened 
connectivity are heightened expectations. Electric utility customers 
today are seeking information on a virtually real-time basis about the 
cause of outages, the geographic extent of outages, the location of 
crews assigned to repair outages, and the timing of restoration. Public 
officials have corresponding expectations of utility management, as 
well as the expectation that utilities will avail themselves of state-
of-the-art weather forecasting and modeling tools, outage management 
systems, and communications media.
    Second, extreme weather events affecting large numbers of customers 
create a competition for resources, particularly in the form of line 
crews and tree crews, which has the potential for negative 
consequences. During the four recent events in New Hampshire, crews 
were brought in from around the U.S. and Canada to assist in 
restoration efforts. The various New Hampshire utilities relied on 
mutual aid arrangements with other utilities, affiliated companies, 
cooperative arrangements, and contracts with independent line and tree 
crews. Utilities in New Hampshire and throughout the region have a long 
history of working together and sharing crews. Extreme weather events 
that cover a large geographic area and a long time frame, however, tend 
to absorb resources quickly, making crew acquisition increasingly 
challenging. Moreover, especially in the context of a storm that is 
accurately forecasted and that follows a predictable path, the 
incentive is growing for a utility to tie up resources early in order 
to respond timely to its customer needs. Inasmuch as these weather 
events cross state boundaries and often involve multi-state companies, 
a regional approach among state regulators and policymakers to working 
with utilities could go a long way to staving off potential negative 
consequences.
    Third, the interconnected electric grid is a complex structure that 
crosses state boundaries and is subject to shared jurisdiction 
involving state and federal agencies. Furthermore, utility ownership is 
divided among public and private entities, the latter of which may 
involve a number of affiliates and subsidiaries of larger multi-state 
or multi-national corporations. As a general rule, state utility 
commissions have jurisdiction over the distribution of electricity 
while FERC has jurisdiction over the transmission of electricity. On a 
related note, NERC has responsibility for the bulk power transmission 
system and the New England Independent System Operator, Inc., a 
regional transmission organization (RTO), operates the region's 
transmission system on a daily basis, manages wholesale markets and 
oversees regional planning. The jurisdictional boundaries between the 
bodies and among the states, however, may not be bright lines and is 
complicated by the reality that a number of utilities do business in 
multiple jurisdictions.
    As noted in the PUC's '08 Ice Storm After Action Review, while 
technically the utility industry differentiates between two systems, 
i.e., distribution and transmission, in practice there is a sub-
transmission system, which operates similarly to a transmission system 
by delivering power to distribution substations. Sub-transmission 
systems may operate at voltages associated with FERC regulation but in 
New Hampshire the sub-transmission system, forming an important part of 
the backbone system, operates primarily at 34.5kV, which is associated 
with state regulation. Also, NERC authority with respect to the bulk 
power system is not fully congruent with FERC jurisdiction. The 
complexity of the system, the multiplicity of actors, and the 
differentiation of regulatory roles both by geography and voltage level 
raise the same challenges faced in the organizational design of every 
large corporation or agency. Specifically, because of a natural 
tendency toward subunit orientation resulting from specialized 
jurisdictions, communications among the states and between the states 
and FERC, NERC or the RTO can be challenging. When the respective 
regulatory missions are incongruent, a variety of integrating 
mechanisms, such as task forces or teams, can be used to ensure that 
regulatory bodies are working together and not at cross-purposes.
    In closing, I have been asked on more than one occasion whether the 
high numbers of outages experienced in recent years in New Hampshire 
were less a consequence of the particular storms or more the result of 
a lack of tree trimming or proper pole and line maintenance by the 
utilities. Based on the increased emphasis on vegetation management 
since 2003, and the evidence collected as part of the extensive '08 Ice 
Storm After Action Review, I am persuaded that the high numbers of 
outages are linked to extreme weather and not to utility imprudence. I 
have also been asked about the likelihood that such storms will 
continue. Public Service Company of New Hampshire indicates that many 
New England weather experts believe that the cluster of recent storms 
is part of a pattern that could last several years. As a practical 
regulator, it was my position that utilities should be prepared at all 
times to respond to a variety of extreme weather events, which is why 
budgets for storm response have been increased over time and mechanisms 
have been approved to consider utility recovery of expenditures in 
excess of budgeted amounts in appropriate circumstances.
    Regulation often requires a balancing of competing policy 
objectives, of exercising regulatory oversight but avoiding counter-
productive micro-management. Electric utilities have been highly 
regulated entities for a century as an economic matter because they 
historically operated as a natural monopoly and as a matter of public 
health and safety because they were so affected with the public 
interest by virtue of the fundamental and pervasive service that they 
provide. Accordingly, it is proper to look closely at the performance 
of utilities to determine whether they are acting prudently and to hold 
them accountable to meeting reasonable standards. That is the course 
the PUC has followed in New Hampshire with respect to weather related 
electrical outages as exemplified by the After Action Review of the '08 
Ice Storm and continued through subsequent extreme weather events. It 
is also an appropriate course for FERC and NERC to follow with respect 
to regional events that impact the electric transmission system.

    The Chairman. Thank you very much.
    Mr. Bilda, go right ahead, please.

   STATEMENT OF JOHN BILDA, GENERAL MANAGER, NORWICH PUBLIC 
                     UTILITIES, NORWICH, CT

    Mr. Bilda. Good morning, Senators. Thank you for asking me 
to summarize my written testimony before you here today.
    My name is John Bilda, General Manager of Norwich Public 
Utilities, a municipally owned natural gas, water, sewer and 
electric utility serving Norwich, Connecticut and surrounding 
communities. Norwich Public Utilities was established in 1904 
by forward thinking city leaders, who believed that owning and 
operating a municipal utility was in the community's best 
interest. We are governed by a 5 member board of utility 
commissioners appointed by the Norwich City Council, who are 
responsible for ensuring the utility is acting in the best 
interest of its consumers.
    Our Board Chairman, James Sullivan, is also here with me 
today in the audience.
    I am here to discuss our experience with electric 
restoration efforts following disaster events, specifically our 
response to Tropical Storm Irene. We deal with diverse 
emergencies and have an aggressive system in place to maximize 
reliability including a routine tree trimming program. Our 
system inspection program includes infrared inspections and 
pole integrity examinations. We invest in new technology to 
advance our ability to provide service.
    We deployed 32 miles of high band width, fiber optic 
communication lines that link the entire city communication 
network including our ability to monitor and operate substation 
connections with the transmission system. Since we own this 
asset we don't have to rely on third party telecommunication 
operators for this critical communication component.
    We work with city departments and emergency first 
responders to maximize resources, improve communications, 
eliminate unnecessary redundancies and streamline processes.
    We relocated and upgraded the city's Emergency Operations 
Center to our Utilities Operations Center placing important 
stakeholders in one location ensures consistent and effective 
communication during emergencies.
    Internally we have a positive working relationship with our 
unionized work force. We negotiated changes in job descriptions 
for our underground construction crews and cross trained them 
to work as support staff for our electric line crews. We can 
now double our restoration capacity, in house, by pairing line 
crews with construction crews.
    When a major disaster affects Norwich electric distribution 
system we can expand our work force internally before relying 
on outside mutual aid. Our employees live in our community. 
Possess local and institutional knowledge of the system which 
makes a marked difference in an emergency.
    We are members of Northeast Public Power Association or 
NEPPA, which supports our request for mutual aid when needed. 
NEPPA has a mutual aid system where New England based, public 
power systems support each other in times of need. As the 
current President of NEPPA, I can tell you that although the 
system works well, we are constantly looking at ways to improve 
its effectiveness including further leveraging technology to 
quickly and efficiently fulfill mutual aid requests.
    The system works because of the good faith and mutual 
understanding created over the years amongst public power 
communities. In short all NEPPA members know that they are no 
more than a few hours away from the assistance to restore power 
to their community.
    When the regional electric transmission lines go down or 
are damaged no amount of crews can help us restore the power. 
We receive our electricity through transmission lines 
controlled by the independent system operator and transmission 
owners. One strategy we initiated to keep the lights on in 
Norwich when the transmission lights go down was to build a 
microgrid.
    In an emergency our microgrid can supply a significant 
portion of normal power to our community. We want to expand 
this system but are facing regulatory hurdles at ISO New 
England that affect our ability to bring new assets online. I 
understand FERC's Office of Enforcement has been asked to 
review our scenario and issue their assessment on the use of 
microgrids so our system can operate with regulatory certainty.
    So in conclusion we proactively develop policies that 
enable us to employ our own resources first to rapidly restore 
power.
    We can further expand our work force uses NEPPA's well 
coordinated and effective public power mutual aid system.
    Additionally we have taken steps to protect our community 
from prolonged power outage due to situations outside of our 
control.
    As a public power system we value our men and women 
employees and have a successful business model that places our 
communities' needs first.
    Again, thank you for allowing me to speak here with you 
this morning.
    [The prepared statement of Mr. Bilda follows:]

   Prepared Statement of John Bilda, General Manager, Norwich Public 
                         Utilities, Norwich, CT
    Good morning Senators, thank you for asking me to testify before 
you today. My name is John Bilda, and I am the General Manager of 
Norwich Public Utilities, a municipally owned utility located in 
Norwich, Connecticut. We are a four service utility company, providing 
natural gas, water, sewer, and electricity to the people of Norwich and 
the surrounding communities. Norwich Public Utilities was established 
in 1904 by forward-thinking Norwich city leaders who believed that 
owning and operating a municipal utility company was in the best 
interest of the entire community. We are governed by a five member 
Board of Utility Commissioners who are appointed by the Norwich City 
Council. Our commissioners are responsible for ensuring the utility is 
consistently acting in the best interests of our customers and the 
community.
    I am here today to discuss our experience with electric restoration 
efforts following disaster events, specifically, our response to 
Tropical Storm Irene in August of 2011. When Irene was making her way 
up the east coast, all of New England was preparing for the worst. 
However, we at Norwich Public Utilities had been preparing for this 
type of event for many years. Because we are a four service utility 
company, we regularly deal with diverse weather and non-weather related 
emergencies. We plan for circumstances that cause service interruptions 
to any or all of the utility services we provide. It is our job and 
responsibility to ensure that when an event impacts our customers, we 
act immediately and do what is necessary to control the situation and 
restore services as soon as possible.
    We have an aggressive system in place designed to maximize 
reliability. Preventative system maintenance, a key component in our 
operating budget, is designed to ensure operational reliability. We 
understand a small investment in preventative maintenance will help 
avoid larger expenses later during emergency situations. For example, 
our vegetation management program is constant. In addition to routine 
tree trimming throughout our service territory, through close community 
ties with our customers, we respond to individual requests to examine 
and remove trees and brush that interfere with power lines. We have a 
very comprehensive system inspection program in place that includes 
infrared inspections and pole integrity examinations. We invest in new 
technology to advance our ability to provide service. Over the last 
several years, we have been mapping our territory using advanced 
Geographic Information System (GIS) technology. This allows us to 
prioritize and respond to outages more efficiently.
    Part of our planning also requires building relationships with 
various entities that are crucial in aiding us in our mission. These 
entities include employee bargaining units, other municipal 
departments, first responders, city and local officials, and industry 
peers. Most importantly, it is critical to build a solid relationship 
among employees. From these relationships come a wide variety of 
resources and a strong sense of collaboration.
    We have worked with various city departments and emergency first 
responders to develop a process to maximize inter-departmental 
resources, improve communications, and operate efficiently by 
eliminating unnecessary redundancies and streamline processes. We were 
instrumental in relocating and upgrading the City of Norwich's outdated 
Emergency Operations Center to our Utility Operations Center. By doing 
this, we centralized all major stakeholders involved in emergency 
response--fire, health, police, public works, etc.--and provided a 
state-of-the-art GIS and outage management system, equipment, and 
technical support needed to maintain the Operations Center during an 
emergency situation. Placing important stakeholders in one location 
ensured consistent and effective communication. Additionally, we 
developed plans with public works staff and first responders to work in 
cooperation with restoration crews. Rather than operating independently 
of each other, first responders work seamlessly with us to ensure 
safety while public works crews coordinate their efforts to open roads 
in support of our crews' need to restore service.
    We also deploy 32 miles of high bandwidth fiber optic communication 
lines. These lines link the entire municipal communication network, 
including our ability to monitor and operate our substation connection 
with the transmission system. Since this is our asset, we do not need 
to rely on a third party telecommunications operator for this critical 
communication component.
    Just as important as external relationships, we have developed a 
positive and constructive working relationship with our internal, 
unionized workforce. We currently have four crews of three electrical 
line workers who maintain all of the electric distribution lines in 
Norwich. Since we are a natural gas, water, and sewer company, we also 
have four underground construction crews. Twelve years ago, we 
negotiated with our construction unions to change the job descriptions 
of our underground crews and cross-trained them to work as support 
staff for our electric line crews. We can now effectively double our 
restoration capacity by pairing two electric line crews with two 
underground construction crew members in a supporting role, turning 
four, three person crews into eight four, person crews. We have 
regularly utilized this cross training model that has enabled our crews 
to develop the capabilities and competencies necessary to work safely 
and proficiently. When a major disaster affects Norwich's electric 
distribution system, we are now able to expand our work force for 
recovery efforts before relying on outside mutual aid crews. Our 
employees are highly valued, dedicated, and very skilled. They live in 
our community and possess local and institutional knowledge of the 
system. They are aware of the needs of the citizens and businesses of 
Norwich. That dedication and local knowledge makes a marked difference 
in an emergency situation, just as it does in normal operations.
    There are times, however, where we require mutual aid. Tropical 
Storm Irene was one of those instances. We are fortunate to be a part 
of the public power fraternity and members of the Northeast Public 
Power Association or NEPPA, which supports our requests for mutual aid. 
NEPPA is the regional association representing 79 not-for-profit, 
consumer-owned electric utilities in the six New England states of 
Massachusetts, New Hampshire, Vermont, Connecticut, Rhode Island and 
Maine. NEPPA has established a mutual aid system where public power 
systems throughout New England can support each other in times of need. 
The system divides New England into four regions each with a mutual aid 
coordinator. Each coordinator is responsible for organizing mutual aid 
within their region as well as organizing their individual member 
companies' response to other regions in need of assistance. During the 
Storm Irene event, NEPPA reached out to the abundant and similarly 
operated public power mutual aid programs in other regions and, within 
24 hours, crews from North Carolina and Indiana were headed into 
northern New England. As the current President of NEPPA, I can tell you 
that even though this system works quite well, we are constantly 
looking at ways of improving our effectiveness. We are working on a 
project right now that will improve the system even more by leveraging 
technology to fulfill mutual aid requests more quickly and efficiently.
    It is important to note that this public power mutual aid system 
works because of the good faith and mutual understanding created over 
the years amongst public power communities. I have a personal 
relationship with many of the general managers of the NEPPA member 
utilities. We have sent our crews all over New England and the east 
coast to respond in times of need. In short, all NEPPA members know 
they are no more than a few short hours away from the assistance they 
need to restore power to their community.
    Even though Norwich Public Utilities does not own regional or 
``bulk'' transmission lines, we are considered a part of the regional 
or bulk power system, subjecting us to Section 215 of the Federal Power 
Act. Section 215 created mandatory and enforceable federal reliability 
standards for the bulk power system. The bulk power system is comprised 
of transmission lines, power plants, and, in some cases, distribution 
utilities. The bulk power system is under the regulatory jurisdiction 
of the Federal Energy Regulatory Commission (``FERC.'') These standards 
do not prevent blackouts, as storms cannot be prevented, but rather 
they try to prevent unnecessary blackouts. They do this by empowering 
the North American Electric Reliability Corporation, or NERC, to set 
mandatory and enforceable standards for the bulk power system that can 
result in fines of up to $1 million a day if they are not met. These 
standards are approved by FERC. As the concept of a bulk power system 
suggests, when regional electric transmission lines are damaged, 
restoring power is often outside our control.
    There is one emergency where no amount of crews can help us restore 
power. That is when the regional electric transmission lines are 
damaged. As an electric distribution company, we receive our 
electricity through inter-and intra-state regional transmission lines 
that are not under our control; but that of the independent system 
operator and the transmission owners. In recent years, we proactively 
initiated strategies to keep the lights on in Norwich, even when the 
transmission lines serving our city go down.
    As part of a larger, more comprehensive and integrated ``smart 
grid'' strategy, our wholesale electric supplier, the Connecticut 
Municipal Electric Energy Cooperative or CMEEC, constructed 16 
distributed generation assets designed to provide 2.5 megawatts of 
power each, based on our dispatch needs--which can be used during 
emergencies. Norwich Public Utilities also owns a 20-megawatt 
combustion turbine that is used to provide power during an emergency. 
Collectively, all of our self-owned distributed generators can supply a 
significant portion of normal load (i.e., demand) should the need arise 
in an emergency (this is especially important considering the fact that 
water treatment and wastewater treatment assets in our municipalities 
cannot function without electricity.) With this effort, we have 
achieved much of the ``micro grid'' and ``smart grid'' visions as 
originally published in the Energy Independence and Security Act 
(``EISA'') of 2007, and as adopted by FERC.
    We are seeking to expand this system, but we are facing regulatory 
hurdles at ISO-New England that are impacting our ability to bring new 
assets online and to preserve the existing ones. All power in New 
England is managed through ISO New England, which determines the terms, 
conditions, and costs of power and related services in documents called 
tariffs. The existing tariffs in place at ISO-New England are unclear 
about whether and when the use of such ``micro grid'' and ``smart 
grid'' designs are permitted. Distributed generation systems allow 
utilities to manage load on both a demand and supply basis, and thus, 
transmission costs on high-demand days, saving customers money when it 
is needed most. However, ISO-New England's current policies limit or 
discourage such self-managed, vertically integrated designs, making it 
difficult and uncertain to realize the benefits for this investment. We 
have requested FERC's Office of Enforcement to review our scenario and 
to issue their assessment to ensure consistent federal policies 
regarding the use of micro grids so that our system can operate with 
regulatory certainty. Until this issue is resolved, our strategic 
investment, made to actively manage customer load on a demand and 
supply side basis consistent with EISA and FERC, save our customers 
money, and ensure reliability in emergencies, will not be realized or 
expanded. We maintain an active and positive working relationship with 
the ISO-New England and FERC on these outstanding issues, and are 
hopeful we will receive a positive assessment.
    In conclusion, we have proactively developed policies that enable 
us to rapidly expand our electric restoration crews employing our own 
resources first. We can further expand our workforce by utilizing a 
well-coordinated and effective mutual aid system through NEPPA and all 
public power utilities throughout New England. Additionally, we have 
taken steps to help protect our community from prolonged power outages 
due to situations outside of our control. As a public power system, we 
value our employees and have a successful business model that places 
our community's needs first.
    Again, thank you for allowing me to speak with you today.

    The Chairman. Thank you all very much for your testimony.
    Let me ask a few questions and then defer to Senator 
Shaheen.
    Let me ask you the same question I asked Ms. Hoffman about 
this recommendation from the MIT Energy Initiative Study on the 
future of the electric grid. They recommended there that the 
IEEE standard reporting metric for distribution level 
disturbances should be followed uniformly throughout the 
industry.
    I guess I'd be interested in any of you telling me whether 
you agree with that recommendation. If it should be followed 
uniformly throughout the industry how do we get that done?
    Mr. Bilda. Those standards are the one that Norwich follows 
and we submit that cooperatively to the State for reuse of work 
comparing ourselves on the national level with those standards 
right now. How that gets expanded across the Nation, something 
that would put everyone on a level playing field.
    The Chairman. Right. But my question is how should it get 
expanded across the Nation? Should we have FERC doing this? 
Should NERC do this?
    Mr. Getz, you're an expert on these matters having been at 
the State level. I know we love to keep our separate 
jurisdictions when we talk about energy distribution and 
transmission. But I think we need to find ways to keep those 
separate jurisdictions from interfering with getting to the 
right result. I'd be interested in your views as to how we 
could do that.
    Mr. Getz. I guess I'd say two things in that regard.
    First of all uniformity across the States in a number of 
areas including reporting like that is critical on a State 
level, on a regional level and a national level. It seems to me 
the most direct route to implementing a standard like that 
would be through the NERC's Reliability Standards that they 
would consider it and then submit to FERC.
    The Chairman. Do you know if they are considering that?
    Mr. Getz. I do not.
    The Chairman. Mr. Bay, do you have any information on this?
    Mr. Bay. I don't know whether NERC is considering that 
specifically. But under the Federal Power Act, section 215, 
FERC's jurisdiction and thus NERC's jurisdiction in turn, would 
not extend to distribution. So I'm not sure presently that 
either FERC or NERC would have the legal authority to require 
the reporting or certain kinds of reporting with respect to 
distribution related outages.
    The Chairman. So Congress would have to change the law in 
order for us to have any kind of authority to require uniform 
reporting?
    Mr. Bay. That would be my understanding. I would want to 
consult with the Office of General Counsel, obviously, at FERC. 
But as section 215 right now has a carve out with respect to 
the mandatory reliability standards when it comes to 
distribution. So the reliability standards do not apply to 
distribution.
    The Chairman. Let me ask also, Mr. Bilda, you obviously put 
in place a whole series of best practices. I would characterize 
them as in your utility which you're to be commended for. What 
can be done at the Federal level to try to ensure that the same 
kinds of best practices are implemented nationwide?
    Mr. Bilda. In terms of the NERC standards a component of 
the NERC standards require a culture of compliance. That's 
something at least at the local level which makes the local 
utilities or public power very successful because of the 
culture of a small organization can be developed to meet those 
culture of compliance.
    Expanding that, you know, through NERC, through the rest of 
the utilities, you know, may be a way in which, you know, some 
of the responses where they may not have been as rapidly as 
public power may be improved.
    The Chairman. I guess on just as a follow up. I'm not real 
clear on what concrete action that you described there. I think 
expanding the culture of compliance is a good idea. I don't 
have any problem with that.
    I just don't know. Is there some concrete action that you 
think ought to be taken by someone in either the FERC or NERC 
or Congress or anybody else?
    Mr. Bilda. I really can't speak to that right now. I can 
speak to what works real well in Norwich.
    The Chairman. OK.
    Mr. Getz, did you have a comment on this or not?
    Mr. Getz. Only to say that you do run into the issue that 
Director Bay spoke to is when you've crossed over the line into 
distribution level requirements that are currently outside the 
scope of FERC jurisdiction. There would be some additional 
action would have to be taken.
    Other than that it's through voluntary organizations like 
NARUC, regional organizations, that I've been a part of that 
you can encourage some commonality and uniformity. But to go 
beyond that would require perhaps some Congressional action of 
some sort.
    The Chairman. Senator Shaheen.
    Senator Shaheen. Thank you.
    I want to pursue this a little bit more because Mr. Bay you 
pointed out that currently FERC does not have the authority to 
regulate standards for distribution. The question that I have 
is should it?
    Mr. Bay. I think that's quintessentially the policy 
decision that Congress will have to resolve because there is--
--
    Senator Shaheen. Oh, very diplomatically put.
    Mr. Bay. As Mr. Getz points out historically there has been 
that divide between transmission, Senator Shaheen, and 
distribution. So the question is, you know, if Congress wants 
more data at the distribution level, you know, what if anything 
should Congress do.
    I should footnote my answer, my previous answer with one 
remark and that is I don't know whether DOE has some separate 
authority that allows it to collect that information and 
whether there's something there that you could build upon. That 
I don't know. So I'm only speaking on behalf of FERC.
    Senator Shaheen. OK.
    Tom, I'm going to call you Tom for purposes of the 
questioning here. Should FERC have that responsibility or 
should some entity have the authority to say these are 
standards that should be followed with respect, not just to 
transmission but also to distribution?
    Mr. Getz. I certainly think there should be some 
distinguish between reporting and actual standards, so 
certainly to collect and report at a national level from 
distribution level utilities makes a lot of sense. Whether 
you're going to enforce the standards at the distribution level 
I think there may be a legal issue involved in doing that. But 
setting some minimum standards as a general matter makes a lot 
of sense.
    As a policy matter I think you'd have to, again with any of 
these things, recognize to the extent that there might be 
regional differences, an issue we've always faced at NARUC. But 
requiring that some of these IEEE types of standards are 
minimums for utilities across the country, I think, is a very 
sound policy move.
    Senator Shaheen. Mr. Bilda, recognizing that you have 
incorporated a lot of, as you pointed out the IEEE standards 
and are following some best practices that are commendable. How 
do we get others? If we don't have some sort of enforcement 
mechanism, some umbrella way to say to all distribution 
companies this is what you have to do.
    How do we get other companies to do the kinds of proactive 
improvements that your company has taken on?
    Mr. Bilda. I think in Norwich's case, you know, the 
accountability lies right with the community for us to perform. 
So I would expect as customers continue, you know, to 
experience maybe prolonged outages that may, you know, drive 
more accountability into some kind of standards cause the 
accountability for our organization is held right at the local 
level in terms of the standards and of the reliability of our 
system.
    Senator Shaheen. Sure. For a co-op I can understand how 
that helps to drive policy. It's harder when you're dealing 
with an investor owned utility and consumers have no choices 
for where they're going to get their power.
    So how does that play into decisions about how to ensure 
reliability?
    Any of you want to respond to that? I mean, as the former 
chair of the Public Utilities Commission, how should Public 
Utility Commissions look at that issue when it comes to 
reliability? Is that a requirement that you can make for 
companies within your regulatory authority?
    Mr. Getz. Certainly a State commission can look at those 
issues and either through an adjudication or a rulemaking 
require that the regulated utilities take those kinds of 
actions.
    Senator Shaheen. How common is that?
    Mr. Getz. In terms of the New Hampshire example after 
December 8 ice storm for instance. We took a look at a whole 
list of issues that came out of the storm in terms of, you 
know, going down to the issue of trim zones and trim cycles and 
how much is spent. So there are those opportunities. We took 
some of those actions.
    But I think from State to State there's usually an 
initiating event like a major storm that prompts, kind of, a 
follow up action.
    Senator Shaheen. My time is up, Mr. Chairman.
    The Chairman. Why don't you go ahead and complete any 
additional questions you have? I don't have any more questions. 
So, go ahead.
    Senator Shaheen [presiding]. OK. Just to follow up on this 
issue of data collection and reporting.
    One of the things that we're considering or will be 
considering soon in Congress is a cyber security bill. I don't 
know if anybody heard the report on public radio this morning 
talking about one of the systems in our country that is most at 
risk for cyber attacks is our electric grid. We've been focused 
primarily on weather this morning but clearly there is the 
potential for a cyber attack to also take down an electric 
grid.
    Do you see that, I guess, Mr. Bay, I'll ask you this 
question? Do you see that that issue should be treated 
differently than weather related emergencies with respect to 
requirements for data collection and reporting and best 
practices or should we be treating everybody the same? Given 
that, how do we resolve the issue of what happens at the 
distribution level?
    Mr. Bay. I think that's a good question. It's also a 
difficult question as good questions often are.
    The difficulty is that, again, our jurisdiction relates to 
elements of the bulk power system. So if you're talking about 
the local utility that serves retail customers we don't have 
jurisdiction over them nor does NERC. So that the reliability 
standards won't apply to them as well.
    But clearly there is an issue there to the extent that 
there is a concern that a cyber attack could be launched at a 
local utility just as it could be launched at an element of the 
bulk power system.
    Senator Shaheen. Right. I assume that could happen in a 
major metropolitan area in a way that would have a significant 
impact on the country. Is that?
    Mr. Bay. I would assume that that is possible. There are 
many large utilities that suffer or not, that serve a retail 
customers in large metropolitan areas.
    Senator Shaheen. Yes, Tom, did you want to respond to that?
    Mr. Getz. Yes, thank you. I read Richard Clark's book 
several years ago and it kept me up at night about the cyber 
war.
    Senator Shaheen. Right.
    Mr. Getz. I think in terms of requirements of utilities I 
think in what we're talking about in terms of weather related 
outages from a legal perspective we're looking at what's the 
extent of the interstate commerce cause? What can the 
jurisdiction be when you get down to the distribution level? 
With terms to cyber security I think, you know, there may be a 
broader entree from a legal perspective because it's ultimately 
a national security issue.
    I also have a concern, a practical concern, from the 
State's level. It's an issue I had raised as a member of 
NARUC's Critical Infrastructure Committee that small States, 
especially, may not have the wherewithal to be really looking 
at issues of cyber security and make sure that the utilities 
are complying, are doing more than self certifying.
    So to the extent that there is, can be, a Federal response, 
a congressional response, so I think it's very important in the 
area of cyber security.
    Senator Shaheen. Thank you.
    You talked about in your testimony finding after the 
snowstorm in October of last year that the utilities had 
complied with their requirements to trim vegetation in a way 
that was appropriate. That there was nothing inappropriate 
about their actions. So given that, are there other things that 
they ought to be looking at to be more responsive in weather 
related emergencies?
    You mentioned, Mr. Bilda, cross training for your crews so 
that they could work both line and construction. Are there 
other technologies that we ought to be incentivizing our 
utilities to use in a way that will make them more efficient in 
responding in emergencies?
    I'll ask you, Tom, if you would answer that first and then 
maybe Mr. Bilda you could talk a little more about other 
technologies that you're looking at that you think might be 
able to allow you to better respond.
    Mr. Getz. Yes, Senator.
    First of all I'm going to reemphasize this point about 
distribution lines and trees along distribution lines. It's a 
very different situation from transmission lines that normally 
have wide rights of way and the likelihood of fall-ins is 
somewhat small. Distribution lines through neighborhoods 
there's always that tension between the aesthetics of a lovely 
neighborhood and reliability and how much tree trimming.
    So there's always going to be that vulnerability to a lot 
of outages from distribution levels from trees.
    But having said that there are a number of things we 
pointed out in 2008, the importance of state-of-the-art outage 
management systems for utilities to have so that they can know 
more clearly, more directly where the outages are. So then, 
because there are some utilities, a number of them, who don't 
really have below the transmission level, a really robust smart 
grid type of approach to knowing where the outages are in 
responding to them.
    There's also a real need for better communications from 
utilities to local emergency management directors to the 
public. As, you know, there's a heightened expectations of the 
public. They want virtually to know in a real time way, you 
know, what's the cause of the outage? When is my power coming 
back? So I think, you know, more focus on social media is a way 
of communicating that to customers is a very important thing as 
well.
    Senator Shaheen. Mr. Bilda, are there other technologies 
you're looking at?
    Mr. Bilda. Yes, we actually have a GIS system, a Geographic 
Information System, in place on our community that the utility, 
our utility, operates on behalf of the city. That's linked 
directly with our Outage Management System. In the event of 
Storm Irene, when all this was working together in the city's 
Emergency Operations Center, we could actually coordinate where 
trees were down through public works and map all that and do 
all the prioritization work from the office so that our crews 
were dispatched as efficiently and effectively as possible.
    Having said that, we are and a recipient of a DOE smart 
grid grant, of which we're maybe about 60 percent complete in 
the deployment of AIM metering which provides not only 
information out to the customers, but a whole bunch of 
information back into the utilities. We had some portion of 
that integrated in with the GIS and the Outage Management 
System where we were receiving meaningful and helpful 
information in terms of determining what's going on in the 
field without having to roll a truck.
    Senator Shaheen. Wow.
    Did I understand you to say that with respect to the 
microgrid you have a proceeding that is pending before Mr. 
Bay's office?
    Mr. Bilda. Yes. There are, without traveling into too many 
details, we have asked. I understand we have asked through 
CMEEC, the Connecticut Municipal Electric Energy Cooperative, 
for some maybe, clarity in terms of conforming with a tariff 
that exists at ISO New England. So that, you know, our efforts 
to dis-ploy distributed generation out in our community and 
other municipal electric communities in the State of 
Connecticut to not only reduce demand, capacity demand during 
peak days and transmission demand during peak days, while at 
the same time providing for an emergency backup when other 
events occur.
    Senator Shaheen. Just so that I am very clear on what 
you're talking about. When you're talking about a microgrid 
exactly what are you talking about?
    Mr. Bilda. The deployment and dispatch of, in our case, 
they're small, two and a half megawatt generators that we've 
strategically located next to loads. That, you know, we can 
operate these generators and meet the need of the load while 
reducing the amount of energy that we take physically from the 
grid or the transmission system.
    So it's a very, very localized generation system that, you 
know, the electrons physically flow just in the wires in the 
city of Norwich.
    Senator Shaheen. Where does the generation come from for 
the distributed?
    Mr. Bilda. It's from a, what they call a, RICE unit, a 
Reciprocating Internal Combustion Engine, that runs on 
environmentally high clean diesel with SCR emission equipment 
installed on them.
    Senator Shaheen. OK.
    So, Mr. Bay, without going into the particulars of this 
particular proceeding, can you talk about what the concerns are 
with respect to allowing this kind of microgrid to be used 
throughout the system?
    Mr. Bay. I think the general concern, Senator Shaheen, that 
CMEEC has is whether the use of that microgrid or the 
distributed generation is perhaps inconsistent with the tariff 
in place with ISO New England. Again, without getting into the 
details, I can tell you that we are aware of this issue, that 
we have been meeting with CMEEC and indeed have a meeting 
scheduled with them in the next few days.
    So we're having, I think, some productive discussions with 
them.
    Senator Shaheen. Good.
    This is just a sort of a general question. But as Mr. Getz 
and Mr. Bilda were talking about the recommendations for what 
could be done to respond more quickly in emergency cases, they 
talked about technology, the cross training. To what extent are 
we seeing utilities adopting those kinds of new technologies?
    Are there ways that we can incentivize this kind of 
activity? If there are concerns about the regulation side, are 
there ways that we can incentivize to help our utilities be 
able to be more responsive in these kinds of emergencies 
because, you know, while I appreciate what Ms. Hoffman said 
about not having full data, it certainly appears that we're 
going to be experiencing more and more of these kinds of events 
and given the high public expectations we need to figure out 
better, how to respond to them.
    So I don't know, Mr. Bay, if you want to respond to that?
    Mr. Bay. I'm a little bit out of my realm right now just 
because I'm with the Office of Enforcement not with the Office 
of Energy Policy and Innovation. We're in the Office of Energy 
Market Regulation.
    But I can tell you, Senator, that FERC actually has 
different incentives in place for new technology. For example 
there are transmission rate incentives. There are other 
incentives that can be given for new forms of technology that 
incent the utility through a higher rate of return to adopt and 
to use those technologies.
    I also know that in practice some of these innovations are 
making a difference. For example, there's something known as a 
phase angle regulators which are pars which are now being used 
by a number of utilities. Those are very helpful for system 
operators in terms of being aware of or having greater 
situational awareness.
    So things are happening as Mr. Bilda and Mr. Getz 
indicated. I think those are positive developments.
    Senator Shaheen. Thank you.
    Tom or Mr. Bilda, do either of you want to respond?
    Mr. Bilda. If I could add?
    Senator Shaheen. Sure.
    Mr. Bilda. If I could add to that though. If there isn't 
some kind of incentive or some kind of subsidization or some 
kind of value proposition in the ISO market or in some kind of 
market, you know, the microgrids or the distributed generation 
will not expand and flourish at all.
    Senator Shaheen. Tom, I'll give you the final word here.
    Mr. Getz. Thank you.
    The incentives that we apply at the State level is we 
doctor our investigations, bring the utilities in over the 
years, you know, going back to the Northeast blackout. We 
created these reliability enhancement programs, made it clear 
that the utilities could recover their investments.
    We made it clear that budgets could be increased and to the 
extent that storms outside of what were expected might incur 
costs. There's an opportunity for them to come back in. So at 
this point it's almost on an annual basis that we're looking at 
what happened the previous year.
    What was spent? Where are the capital budgets? Where are 
the O and M budgets?
    You're seeing the utilities respond after storms and in 
some respects leap frogging one another in different ways in 
terms of their reporting systems, their outage management 
systems. So at that level, I think, from New Hampshire's 
perspective, I've been very encouraged.
    Senator Shaheen. Good.
    Thank you all very much for your testimony and for being 
with us this morning. Obviously these are issues that we need 
to continue to work on. But appreciate your insights.
    At this time I'll close the hearing.
    [Whereupon, at 11:30 a.m. the hearing was adjourned.]
                                APPENDIX

                   Responses to Additional Questions

                              ----------                              

   Responses of Patricia Hoffman to Questions From Senator Murkowski
    Question 1. During the FERC's Technical Conference on November 30, 
2011, there was testimony by The Honorable Betty Ann Kane of the Public 
Service Commission of the District of Columbia and Ms. Debra Raggio, 
Vice President, Government and Regulatory Affairs, Assistant General 
Counsel, GenOn Energy, Inc., about the difficulties created by the 
conflict between an environmental order or orders applicable to the 
Potomac River Generating Station in Alexandria, VA and the need for 
that station to provide service to a nearby substation and/or otherwise 
to the electric system in and around Washington D.C. (See, e.g., FERC 
Technical Conference Transcript 11-30-11 pp. 324, 325, 333-337).
    Please provide a summary of your office's role, and that of the 
Department of Energy more generally, in resolving that controversy. 
Please also provide a timeline of Departmental attention to the issues 
in that matter and detail the time that elapsed between the time when 
the problem came to the attention of the Department and the time when 
the controversy was resolved.
    Answer. On August 24, 2005, in response to a decision by Mirant 
Corporation to cease generation of electricity at its Potomac River 
generating station, the District of Columbia Public Service Commission 
(DCPSC) requested that the Secretary of Energy issue a Federal Power 
Act (FPA) section 202(c) emergency order requiring the operation of the 
generating station in order to ensure compliance with reliability 
standards for the central D.C. area.
    DOE has used section 202(c) to address various emergency 
situations, such as orders issued to allow generators in ERCOT to sell 
power to affected utilities in the aftermath of hurricanes Rita and 
Ike. Those orders were issued in a matter of hours by the Department 
acting upon it own motion without consultation with any other Federal 
or state agencies, The Mirant situation was fundamentally different in 
that the plant had ceased operation in response to a federally-
authorized State agency action concerning violations of Federal 
environmental law, and there were no emergency events that presented an 
immediate threat to continuity of electric service in D.C. DCPSC's 
petition presented only a general claim that reliability was 
compromised without particular evidence or analysis. Faced with that 
situation, the Department conducted an independent reliability 
analysis, and began a process of consulting with the U.S. Environmental 
Protection Agency (EPA), and the Virginia Department of Environmental 
Quality (DEQ) on the environmental issues. The Department's analysis 
revealed that the real issue was not the immediate need for the plant's 
generation, but for its potential availability in view of limited 
additional transmission capacity to bring electricity into D.C. from 
elsewhere.
    Upon completion of analysis, the Secretary made a determination 
that without the operation of the generating station there was a 
reasonable possibility an outage would occur that would cause a 
blackout in the central D.C. area. Therefore, on December 20, 2005, the 
Department issued a Federal Power Act section 202(c) emergency order 
requiring Mirant to operate the Potomac River generating station. The 
process DOE undertook in response to the DCPSC's petition included 
close collaboration and coordination with EPA, and the DEQ.
    The order required Mirant to operate in a manner to reduce the risk 
to reliability, but not with unnecessary exceedances of required air 
quality standards. The expiration date on that order was October 1, 
2006, but it was extended until February 1, 2007. On January 31, 2007, 
DOE issued a new section 202(c) emergency order to Mirant with 
substantially the same terms as the earlier order. That order expired 
July 1, 2007, pursuant to its terms.
    Set forth below is a timeline of relevant actions. Pertinent 
documents are available online at http://energy.gov/oe/does-use-
federal-power-act-emergency-authority.

   August 19, 2005--the DEQ issues a letter asking Mirant to 
        take immediate steps to ensure protection of human health and 
        the environment in the area surrounding the generating station, 
        up to and including potential shutdown of the facility.
   August 24, 2005--Mirant shuts down all five generating units 
        at the generating station.
   August 24, 2005--the DCPSC files an Emergency Petition and 
        Complaint with both the United States Department of Energy (DOE 
        or Department) and the Federal Energy Regulatory Commission 
        pursuant to the FPA.
   August 2005 through December 2005--DOE conducts an 
        independent analysis of the electricity reliability situation 
        in D.C. and analyzes the generating station's role in ensuring 
        a sufficiently reliable supply of electricity to that area, 
        particularly given the lack of transmission capacity into D.C. 
        DOE's analysis is conducted by the Department's Oak Ridge 
        National Laboratory.
   December 20, 2005--Order No. 202-05-3 is issued. It orders 
        Mirant to generate electricity at its Potomac River generating 
        station pursuant to the terms of the order.
   January 18, 2006--DOE issues a notice of the emergency order 
        (published in the Federal Register on January 20, 2006, 71 FR 
        3279) in which it commits to preparing a Special Environmental 
        Analysis (SEA) pursuant to the Council on Environmental 
        Quality's Regulations Implementing the Procedural Requirements 
        of the National Environmental Policy Act of 1969 (NEPA), 40 
        C.F.R. 1506.11. The SEA is issued on November 22, 2006, with 
        comments due by January 8, 2007.
   Order No. 202-05-3's original expiration date was October I, 
        2006. Because the transmission redundancy problems continue in 
        the absence of the completion of two new 230 kV lines in the 
        process of being constructed by Pepco (the DCPSC regulated 
        local utility), and because the SEA is not yet completed, two 
        short-term extensions of the emergency order are issued pending 
        consideration of the required SEA and review of comments 
        thereon. The first extension, Order No. 202-06-2, is issued on 
        September 28, 2006 with an expiration date of December l, 2006. 
        The second extension, Order No. 202-07-l, is issued on November 
        22, 2006, and with an expiration date of February l' 2007.
   June 1, 2006--EPA issues an Administrative Compliance Order 
        (ACO) pursuant to Section 113(a)(l) of the Clean Air Act (the 
        ``Act''), 42 U.S.C. Sec.  7413(a)(l). EPA's order requires that 
        the plant take steps to limit emissions while meeting the 
        requirements of DOE's order.
   June 2, 2006--DOE issues a letter order to Mirant ordering 
        it to operate in accordance with the terms of the ACO.
   January 31, 2007--Order No. 202-07-2 is issued. DOE 
        considered the environmental impacts of the Mirant order based 
        on the completed SEA and extended the emergency order until 
        July 1, 2007.
   July 1, 2007--DOE order expires per its terms.

    Question 2. Please identify the Departmental employees by position 
who led the effort or otherwise spent more than 20 professional hours 
attending to it.
    Answer. Numerous DOE personnel were involved in various stages of 
the Mirant emergency order process, from the initial consideration and 
analysis through administration of the order. The personnel most 
closely involved were appointees and career DOE officials from the 
Office of Electricity Delivery and Energy Reliability and the Office of 
the General Counsel. The Assistant Secretary for Electricity Delivery 
and Energy Reliability and the General Counsel participated 
substantially in the emergency order process.
    Question 3. Please outline your recommendations for improvements to 
the process undertaken in that case, and your recommendations for 
expansion or reform of the Department's authority to strengthen and 
streamline the Department's ability to protect electric reliability in 
the face of conflicts such as were present in the Potomac River case 
and similar issues or conflicts that may be present more generally in 
light of recently-issued and pending EPA regulations that may affect 
electric generating units.
    Answer. DOE has used section 202(c) to address various emergency 
situations, six times since DOE's creation in 1978, most of which did 
not impact environmental laws. For example, in the aftermath of 
hurricanes Rita and Ike emergency orders were issued to allow 
generators in ERCOT to sell power to hurricane-affected electric 
utilities. As provided under section 202(d) of the Federal Power Act, 
operating pursuant to 202(c) orders provided the generators the ability 
to sell outside of ERCOT, while protecting them from being subject to 
FERC jurisdiction based on those emergency sales. Because of the 
urgency of the situation, those orders were issued in a matter of hours 
by the Department acting upon its own motion without consultation with 
any other Federal or state agencies.
    The Mirant situation in 2005 was fundamentally different in that 
the plant had ceased operation in response to a State agency letter 
concerning environmental violations. The D.C. Public Service Commission 
petitioned DOE to issue an emergency order to maintain reliability, but 
provided only a claim that reliability was compromised without any 
evidence or analysis. Faced with that situation, the Department began 
the process of consulting with the U.S Environmental Protection Agency 
(EPA) and State of Virginia on the environmental issues, and conducting 
a reliability analysis.
    Thus the process DOE uses in issuing 202(c) emergency order can 
vary considerably based on the factual situation and whether other 
Federal or State laws are impacted. Flexibility is essential and the 
Department is leery of developing a formal process that may expedite a 
decision to issue an emergency order in a given instance, but prove an 
unnecessary hindrance in another.
    However, the Department can work to ensure it continues to have 
fast and ready access to appropriate experienced staff, and as need be 
expert consultants, that are able to understand and converse in the 
various electricity generation, electricity transmission, electricity 
reliability, and environmental areas of expertise that would be needed 
in any future requests for use of DOE's emergency authority under sec. 
202(c) of the Federal Power Act. This should include periodic meetings 
with relevant staff at other Federal agencies, such as EPA, so that 
agency staffs are familiar with each other and the legal authorities 
that would be used.
    Question 4. Please also outline to the extent now possible the 
Department's plans for responding case-by-case to controversies of this 
type that may arise as a consequence of the EPA MATS Rule, the Cross-
State Air Pollution Rule, the Clean Water Act 316 (b) Rule and any 
other similar rule that may be relevant to the Department's analysis 
and plans. In responding to the foregoing questions, please refer to 
your answer to Senator Murkowski during the hearing concerning the 
ability of the Department of Energy and/or EPA to respond case-by-case 
to conflicts between the maintenance of electric reliability and 
compliance with environmental rules applicable to generating units.
    The cumulative effects of EPA regulations on electric reliability 
have been a much-discussed topic in recent months. FERC convened a 
Technical Conference, discussed above, to examine this issue. 
Commissioner Norris testified before the Committee that he ``encouraged 
EPA to consider the cumulative impact of their regulations.''
    The DOE Office of Policy and International Affairs published a 
report on this issue, Resource Adequacy Implications of Forthcoming EPA 
Air Quality Regulations, on December 1, 2011. However, FERC and NERC 
were not consulted. Moreover, the report assessed resource adequacy 
only, not electric reliability, and only considered the impact of EPA's 
Utility MACT rule and Cross State Air Pollution Rule (CSAPR). The 
forthcoming Cooling Water Intake-316(b) Clean Water Act Rule and Green 
House Gas New Source Performance Standards were not assessed.
    Your office was consulted for this report, but did not take the 
lead in producing it. In response to my question, ``why wouldn't it be 
[OE] that would head up this type of a review?'' you stated the 
following:

          ...Our office tends to look at, I will say, emergency-related 
        events, energy events on the system, and we do the modeling and 
        the analytics with respect to emergency events and that's been 
        our mission and our focus, in looking at what is the technology 
        to improve the energy infrastructure, what is the any potential 
        impacts [sic] from weather or emergency events, and then how do 
        we facilitate the recovery from those events. And that 's been 
        the focus and the mission of our organization.

    Answer. Upon receiving a request for a Federal Power Act (FPA) 
section 202(c) order, the Department investigates to determine if the 
request does constitute an emergency under DOE's authority, including 
verifying any claims about electricity reliability made in the request. 
In cases where a generator's need to operate under a possible section 
202(c) order may conflict with its ability to comply with an 
environmental regulation it is subject to, the Department engages with 
the EPA, as well as the relevant state environmental authorities, to 
identify the terms and conditions to operate under a 202(c) order that 
are necessary for the generator to address the emergency situation that 
has been verified earlier while still complying with environmental 
statutes. If the occasion should arise where it becomes necessary for 
the Department to issue a 202(c) order before EPA can establish an 
Administrative Compliance Order (ACO) with the generator, the 
Department could issue a subsequent order amending the original order 
to incorporate the operating and environmental mitigation conditions of 
EPA's ACO.
    Question 5. Does OE only assess electric reliability in response to 
emergency events post hoc?
    Answer. The Office of Electricity Delivery and Energy Reliability 
(OE) assesses electric reliability on an as-needed basis with several 
of its initiatives in accordance with its mission. Reliability analyses 
are an important part of OE's work to achieve a reliable and secure 
electric grid through planning, preparedness and analysis.
    For nearly a decade, OE has been heavily engaged with the 
electricity sector in efforts to ensure there is a more reliable and 
secured electric grid as part of DOE's designation as the Sector-
Specific Agency (SSA) for the energy sector. The SSAs were created 
under Homeland Security Presidential Directive 7 (HSPD-7) and were 
tasked to enhance the protection and resilience of the Nation's 
critical infrastructure, as well as with strengthening national 
preparedness and ensuring timely response and rapid recovery of 
critical infrastructure in the event of an attack, natural disaster, or 
other emergency.
    In its SSA role, OE engages with the electricity sector on numerous 
issues, including the preparedness of the sector to address reliability 
threats from geomagnetic disturbances. Additionally, OE designs and 
facilitates regional energy assurance exercises to help state and local 
participants evaluate their assurance plans. Participants at these 
exercises included representatives from state energy offices, public 
utility commissions, governor's offices, and the electric industry. 
Working through these and similar activities, OE can assess reliability 
of the grid and its related restoration capability prior to actual 
emergencies.
    In addition to working with states and other stakeholders on energy 
assurance and preparedness initiatives, OE also provides technical 
assistance to states, regions and other federal agencies. This 
technical assistance includes request for reliability assessment 
resources and general impact information due to new technologies, 
regulatory changes and resource planning. Through this assistance, OE 
helps facilitate the reliability assessments by states and regions and 
can then leverage this information to address any potential reliability 
emergencies identified at a regional or local level.
    In its analytical role, OE also investigates the impact of new 
technologies and the ability of the grid to adapt to such technologies, 
e.g., variable generation, cycling of conventional generation. These 
analyses provide insights into potential reliability issues that may 
arise as new technologies are integrated into the electric system, 
allowing OE to further investigate mitigating measures to avoid such 
reliability issues, e.g., frequency response and other operational 
controls.
    Moreover, through its Presidential Permit and Export Authorization 
Programs, OE considers the impacts on electric reliability of requested 
permits for the construction, connection, operation and maintenance of 
facilities for the transmission of electric energy at international 
boundaries or the export of electricity to a foreign country, 
respectively. Through these programs, OE assesses grid reliability to 
ensure that there is no negative impact on the sufficiency of 
electricity supply or an impediment to electric sector planning before 
issuing export authorizations and Presidential permits to avoid 
emergencies that might arise without such a preventative assessment.
    Under the Energy Policy Act of 2005, DOE is required to generate a 
triennial congestion study which evaluates the grid system and 
identifies geographic areas where transmission congestion is inducing a 
variety of possible adverse impacts, which may include reliability 
problems. Development of the congestion studies has been assigned to 
OE. OE examines many kinds of transmission-related studies and data 
sets to identify geographic areas experiencing transmission congestion. 
The findings of DOE's congestion studies, and public comments on such 
studies, may lead to decisions by the Secretary to designate certain 
geographic areas as National Interest Electric Transmission Corridors. 
OE also currently facilitates broader interconnection-wide transmission 
planning to address not only potential congestion issues, but also 
generation, transmission, and resource needs to avoid future 
reliability problems.
    Yet another example is the implementation of the Department's 
Federal Power Authority section 202(c) emergency authority. Should a 
situation arise that may warrant a DOE emergency order under that 
authority, OE may need to conduct a reliability assessment. If so, OE 
works closely with the regional reliability coordinators that are part 
of the North American Electric Reliability Corporation (NERC), 
independent system operators (ISOs) and regional transmission operators 
(RTOs), and local electric utilities as need be. Under the Federal 
Energy Regulatory Commission's (FERC's) oversight, NERC has the 
responsibility for monitoring and assessing bulk power electric grid 
reliability and enforcing reliability standards. OE leverages the work 
and expertise of these organizations, as only the nation's grid 
operators and planners will have the detailed data needed to assess 
electric grid reliability.
    Question 6. Can OE effectively perform its mission without 
prospectively assessing the reliability of the electric grids?
    Answer. Assessing reliability requires access to large amounts of 
specific data concerning a local or regional electric grid and its 
operation. NERC conducts its reliability assessments through extensive 
use of data taken on a ground-up basis by its utility industry members 
and then rolled up through its regional reliability coordinators. Much 
of the data is only known by the grid and generation operators 
themselves, and can involve confidential business information. Not 
being part of the utility industry with ready access to the data that 
so often can be customized to a local situation, state and Federal 
government agencies can only go so far in conducting their own 
comprehensive reliability assessments and must therefore rely on 
partnerships with NERC, the reliability regions, and grid operators 
such as Regional Transmission Organizations (RTOs) and Independent 
System Operators (ISOs). That is why OE works closely with the 
appropriate reliability authorities to assess reliability on an as-
needed basis.
    That said, as the energy Sector-Specific Agency (SSA), OE engages 
in preparedness activities with the electric sector as well as 
implement its Presidential Permit and Export Authorization Programs. 
Both functions involve certain types of reliability assessments. 
Additionally, should a situation arise that may warrant use of its 
Federal Power Authority section 202(c) emergency authority, OE would 
conduct a reliability assessment as part of its consideration on 
whether to take emergency action. OE also developed an in-house 
Geographic Information System (GIS) software platform that allows OE to 
monitor the Nation's electric infrastructure system in near-real time 
as part of its emergency response responsibilities for the energy 
sector.
    Question 7. In light of the public call for assessment of 
cumulative impacts of EPA rules, would you recommend to the Secretary 
that your office conduct a study on the cumulative impact of these four 
regulations-Utility MACT, Cross State Air Pollution Rule (CSAPR), 
Cooling Water Intake 316(b) Clean Water Act Rule, and Green House Gas 
New Source Performance Standards--on electric reliability?
    Answer. Only two of the regulations have been finalized, and the 
proposed status of the remaining rules makes assessing their impacts 
challenging and the results only speculative at this time. When 
sufficient details are known regarding the final version of the 
regulations, a cumulative assessment of the corresponding potential 
impacts may provide valuable insights regarding the range of 
reliability impacts that may result. Many other organizations, i.e., 
RTOs/ISOs, policy research groups, and other government agencies, are 
already conducting similar analyses. The Department is leveraging the 
results of these studies to avoid duplicate efforts. Should such an 
occasion arise where it becomes appropriate and necessary for the 
Department to conduct its own cumulative assessment, OE would make a 
recommendation to the Secretary accordingly.
    Responses of Patricia Hoffman to Questions From Senator Barrasso
    Question 1. On December 8, 2011, I asked Dr. Majumdar at his 
confirmation hearing about the impact of the Environmental Protection 
Agency's regulations on the reliability of the electric grid. In 
response, Dr. Majumdar committed to me ``to put together a team ...to 
help the utilities, and all the PUCs, and the stakeholders to make sure 
that the grid remains reliable.'' Please update me on the progress of 
this initiative.
    Answer. Since Dr. Majumdar's testimony on December 8, 2011, an 
internal DOE-wide team meets periodically to report on and coordinate 
their individual efforts in monitoring grid reliability relating to the 
EPA rules. Part of this effort includes technical assistance to help 
utilities, state public utility commissions and other stakeholders in 
their compliance efforts. At the Winter 2012 National Association of 
Regulatory Utility Commissioners (NARUC) Meeting and the 2012 National 
Electricity Forum, both in February, as well as on its website, the 
Department announced the availability of such technical assistance. 
Thus far, technical assistance has been provided to a few states, upon 
their request.
    In addition to technical assistance, the Department's efforts 
include continued coordination with EPA and the Federal Energy 
Regulatory Commission (FERC) as well as discussions with industry 
groups, planners and reliability organizations. For example, in 
February DOE, FERC, and EPA, with the nation's regional transmission 
operators/independent system operators (RTOs/ISOs) met to hear both 
what their plans are to monitor and address any possible reliability 
impacts from generators in their region as they implement the EPA final 
Mercury and Air Taxies (MATS) rule issued in December 2011, as well as 
any early insight the RTOs/ISOs have on potential reliability problems 
in their respective footprints. We are also, through publicly available 
information, monitoring the announcement of power plant retirements and 
the status of power plants expecting to retrofit.
    Question 2. On March 20, 2012, Regina McCarthy, Assistant 
Administrator for Air and Radiation at the Environmental Protection 
Agency (EPA), testified before the Senate Subcommittee on Clean Air and 
Nuclear Safety. Ms. McCarthy stated that EPA had not conducted an 
assessment of the cumulative impact of all of EPA's regulations, 
including proposed regulations that have not yet been made final. How 
can the Department of Energy assess the impact of EPA's regulations on 
the reliability of the electric grid if EPA has not conducted an 
assessment of the cumulative impact of its regulations?
    Answer. Assessing the electric grid reliability impacts of EPA's 
recent suite of regulations-MATS, Cross State Air Pollution Rule 
(CSAPR), Cooling Water Intake 316(b) Clean Water Act Rule, and Green 
House Gas New Source Performance Standard-is challenging given the 
current status of the regulations. Thus far, only two of the 
regulations have been finalized. Any assessments of the remaining 
rules, which have only been proposed, would yield results that are 
speculative at this time. Many other organizations, i.e., RTOs/ISOs, 
policy research groups, and government agencies, are already conducting 
similar analyses. The Department is leveraging the results of these 
studies to avoid duplicate efforts. Should such an occasion arise where 
it becomes appropriate and necessary for the Department to conduct its 
own cumulative assessment prior to the remaining rules becoming final, 
the Department's results would offer potential boundaries for the range 
of reliability impacts, rather than definitive impacts that would 
result from the suite of regulations.
    Question 3. As Assistant Secretary for Electricity Delivery and 
Energy Reliability, do you believe EPA should conduct an assessment of 
the cumulative impact of all of its power sector regulations, including 
proposed regulations that have not yet been made final? If not, why 
not?
    Answer. As Assistant Secretary for the Department of Energy's 
Office of Electricity Delivery & Energy Reliability, I cannot speak to 
how EPA should assess its power sector regulations. However, it is the 
Department's understanding that, as EPA proposes and finalizes 
additional regulations, its administrative regulations require that 
each proposed/finalized rule be considered in concert with all other 
effective regulations.
    Question 4. As Assistant Secretary for Electricity Delivery and 
Energy Reliability, do you believe EPA should issue any additional 
final rules affecting the power sector, including the pending coal ash 
regulations, before an assessment of the cumulative impact of EPA's 
regulations is completed? If so, why?
    Answer. As Assistant Secretary for the Department of Energy's 
Office of Electricity Delivery & Energy Reliability, I cannot speak to 
how EPA should release its power sector regulations, in accordance with 
its statutory directives.
                                 ______
                                 
    Responses of Thomas B. Getz to Questions From Senator Murkowski
    Question 1. Although FERC's report on the New England outages has 
yet to be finalized, Mr. Bay from the Commission has testified that 
approximately 95 percent of the customer outages were caused by damage 
to the distribution facilities.
    Do you agree with that assessment? If so, what is it that you're 
asking the federal government to do? What steps has the State of New 
Hampshire taken in response to the October snowstorm?
    Answer. Based on my personal experience during the October 2011 
Nor'Easter, Mr. Bay's assessment that around 95 percent of customer 
outages were caused by damage to distribution facilities appears 
reasonable insofar as it relates to New Hampshire. I am not in a 
position to express an opinion on his assessment as it may apply to 
other states in New England.
    In my testimony to the Committee, I pointed out that the 
interconnected electric grid is a complex structure that crosses state 
boundaries and is subject to shared jurisdiction involving state and 
federal agencies. I also expressed my view that the Federal Energy 
Regulatory Commission and the North American Electric Reliability 
Corporation, especially with respect to extreme weather events that 
impact the electric transmission system, should work cooperatively with 
the states, look closely at the performance of utilities to determine 
whether they are acting prudently, and hold utilities accountable to 
reasonable standards. I understand from Mr. Bay's testimony that FERC 
and NERC have conducted a joint inquiry into the October 2011 
Nor'Easter and are finalizing their report.
    The State of New Hampshire is conducting an After Action Review of 
the Nor'Easter and is expected to issue a report in June.
    Question 2. NERC is incorporating risk-based assessments into all 
its reliability standards in a system-wide transition.
    What are utilities doing to apply risk-based assessments at the 
distribution level?
    Answer. In New Hampshire, for instance, the electric utilities 
apply risk-based assessments at the distribution level as part of 
vegetation management. Specifically, they identify for removal so-
called ``hazard trees'' that are adjacent to distribution lines but 
outside of trim zones or rights-of-way and which, due to size, age, or 
disease, pose a risk to a line.
    Question 3. Do utilities have a tendency to undervalue risk outside 
their own service territory?
    Answer. I do not have sufficient information to offer an opinion on 
this question as a general proposition.
    Question 4. Should NARUC play a role in fostering cooperative risk 
assessment?
    Answer. NERC issued a white paper on April 20, 2012, entitled Risk-
Based Reliability Compliance Monitoring. Among other things, the paper 
points out that as NERC has evolved ``greater emphasis has been placed 
on incorporating risk-based concepts in all endeavors to more 
efficiently utilize resources and focus on the significant risks of the 
electrical sector.''
    The white paper also quotes from NERC's Strategic Plan, approved in 
February 2012, its vision:

          ``To be the trusted leadership that ensures and continuously 
        improves the reliability of the North American bulk power 
        system (BPS) by implementing relevant standards; promoting 
        effective collaboration, cooperation, and communication around 
        important risks to reliability; and utilizing expertise from 
        the industry to produce outcomes that improve reliability.''

    NERC recognizes the critical importance of collaboration, 
cooperation and communication, as well as the value of utilizing 
outside expertise. Correspondingly, NARUC encourages its members to 
``actively participate in the development of and casting of informed 
votes on pertinent reliability standards applicable to the bulk 
electric system.'' See, Resolution on Increased Public Utility 
Commissions Participation in NERC' Standard Development Process, 
Adopted July 27, 2005. As greater emphasis is placed on incorporating 
risk-based concepts, NERC and NARUC should work together to ensure that 
such concepts are applied appropriately.
                                 ______
                                 
     Responses of Norman C. Bay to Questions From Senator Murkowski
    Question 1. You noted that a full 95 percent of the problems appear 
to have been at the local distribution level.
    By what process does FERC decide to open an inquiry of this nature? 
How do you work with NERC in this process? Would the Commission have 
opened an inquiry absent Congressional interest?
    Answer. Since February 2011, FERC and NERC staff have conducted 
three ``inquiries,'' into (1) the February 2011 ``Cold Snap'' gas and 
electric outages in Texas, New Mexico and other areas of the Southwest; 
(2) the September 2011 blackout of San Diego and other areas in 
southern California, Arizona and Baja California, Mexico; and (3) the 
Northeast Storm Damage electric outages of October 2011. These 
inquiries are factintensive examinations of complicated events. They 
require large commitments of time and resources from staff of the 
Commission, NERC and affected Regional Entities, as well as from the 
registered entities and other companies and persons from which inquiry 
staff has gotten information. FERC, NERC and the Regional Entities 
cannot conduct an inquiry into each event, so we try to focus and use 
our resources wisely. While no two events are the same, the Commission 
and its staff consider the totality of circumstances, including the 
following major factors in deciding whether to conduct inquiries:

          a. The scope, seriousness, and magnitude of the event, 
        including the number of people affected, size of the impacted 
        area or number of States, duration of the outage, economic loss 
        and megawatts shed;
          b. Whether timely dissemination of lessons learned from the 
        event could improve reliability of the bulk-power system and/or 
        the interstate natural gas pipeline network, and help prevent 
        future, similar events;
          c. Whether the event affects entities subject to the 
        Commission's jurisdiction or raises jurisdictional questions 
        for the Commission;
          d. Whether the event implicates emerging issues that affect 
        the Commission, such as the natural gas/electricity 
        interoperability issues raised by the February 2011 Cold Snap 
        event;
          e. The level of interest of the public and elected officials 
        in the event;
          f. Staff resources and skills needed to conduct the inquiry; 
        and
          g. Whether federal expertise or leadership would be helpful.

    The Commission and its staff have opened consultation with NERC and 
applicable Regional Entity management and staff on whether an inquiry 
was appropriate on the day of these events or very shortly thereafter. 
These consultations continue on an ongoing basis from the establishment 
of the scope of an inquiry through its conclusion. Staff from the 
Commission and NERC have worked together cooperatively and fruitfully 
in each of these inquiries, along with staff from the Regional 
Entities, as appropriate.
    Question 2. Given that you are still analyzing the role of FERC's 
Vegetation Management Reliability Standard in this outage, please 
comment on vegetation management generally. NERC has petitioned FERC to 
accept new vegetation Management Reliability Standards, and that 
petition is currently pending before FERC.
    Answer. As noted above, proposed Reliability Standard FAC-003-2 is 
pending before the Commission. As part of the Commission's rulemaking 
process, the Commission expects to issue a Notice of Proposed 
Rulemaking with a comment period to follow. After the comment period, 
the Commission will issue a final rule.
    Question 2a. What are the critical differences between the new and 
old standards?
    Answer. NERC states in its petition requesting approval of proposed 
Reliability Standard FAC-003-2 that it has seven requirements compared 
with the four requirements in the currently-effective Reliability 
Standard FAC-003-1. According to NERC, the proposed Reliability 
Standard ``improves reliability by maintaining a reliable electric 
transmission system by using a defense-in-depth strategy to manage 
vegetation located on transmission rights of way (``ROW'') and by 
minimizing encroachments from vegetation located adjacent to the ROW, 
thus preventing the risk of those vegetation-related outages that could 
lead to Cascading.'' (NERC Petition at 1.) The NERC petition contains a 
table identifying requirement-by-requirement differences between the 
current and proposed Reliability Standards, which is reproduced 
below.\1\
---------------------------------------------------------------------------
    \1\ In the NERC table, the abbreviation ``TO'' refers to 
Transmission Owners, ``ROW'' refers to rights of way, and the 
parentheticals containing the letter ``R'' refer to requirement numbers 
in the current and proposed Reliability Standards, respectively.

------------------------------------------------------------------------
  Requirement in Existing  FAC-003-1   Improvements in Proposed  FAC-003-
               Standard                            2 Standard
------------------------------------------------------------------------
Requires a document that includes      Requires documented vegetation
 vegetation management objectives,      management maintenance
 approved procedures, and work          strategies, procedures,
 specifications. (R1)                   processes, or specifications
                                        that will prevent encroachment
                                        into the Minimum Vegetation
                                        Clearance Distance (MVCD) (R3)
------------------------------------------------------------------------
Requires a document schedule for ROW   Requires vegetation inspection of
 vegetation inspections (R1.1)          100% of applicable transmission
                                        lines at least once per calendar
                                        year. (R6)
------------------------------------------------------------------------
Requires documentation of a            Requires vegetation be managed
 ``Clearance 1'' value based on TO      such that no encroachments into
 assessment of situation and risk       the MVCD (as established by the
 (R1.2 and R1.2.1)                      Gallet Equation) occur,
                                        regardless of whether or not
                                        they result in a sustained
                                        outage. (R3, parts 3.1 and 3.2)
------------------------------------------------------------------------
Requires documentation of a            Requires vegetation be managed
 ``Clearance 2'' value based on IEEE    such that no encroachments into
 standard. (R1.2.2.1, and R1.2.2.2)     the MVCD (as established by the
                                        Gallet Equation) occur,
                                        regardless of whether or not
                                        they result in a sustained
                                        outage. (R1 and R2)
------------------------------------------------------------------------
Requires documentation of mitigation   Requires corrective action to be
 measures to address locations on the   taken in cases where a TO is
 on the ROW where the TO is             constrained from performing
 restricted from attaining specified    vegetation work. (R5)
 clearances. (R1.4)
------------------------------------------------------------------------
Requires documentation of a process    Requires TOs, without any
 for communicating imminent threats     intentional time delay, to
 where vegetation conditions could      notify the control center
 lead to a transmission line outage.    holding switching authority for
 (R1.5)                                 the associated applicable line
                                        when the TO has confirmed the
                                        existence of a vegetation
                                        condition that is likely to
                                        cause a Fault at any moment.
                                        (R4)
------------------------------------------------------------------------
Requires the creation and              Requires the TOs annual
 implementation of an annual            vegetation management plan be
 begetation management plan, as well    executed such that no vegetation
 as a process for documenting and       encroachments occur within the
 tracking the execution of the plan.    MVCD. (R7)
 (R2)
------------------------------------------------------------------------

(NERC Petition at 4.)
    The NERC petition also proposes to add definitions of ``Right-of-
Way (ROW),'' ``Vegetation mspection,'' and ``Minimum Vegetation 
Clearance Distance (MVCD)'' to the NERC Glossary of Terms. The proposed 
Reliability Standard eliminates the currentlyeffective requirement 
concerning ``appropriate'' qualifications for personnel involved with 
the design and implementation of Transmission Vegetation Management 
Plans (TVMP), which is not reflected in the NERC table above.
    Question 3. Had they been implemented last year, would CL&P been 
subject to the new standards? How would the new standards have affected 
vegetation management prior to this outage had they been applied?
    Answer. Assuming proposed Reliability Standard FAC-003-2 was 
implemented in 2011, FAC-003-2 would apply to CL&P because it is 
registered with NERC as a ``Transmission Owner'' and proposed 
Reliability Standard FAC-003-2 applies to Transmission Owners.
    As discussed in response to the question above, proposed 
Reliability Standard FAC-003-2 differs in a number of ways from the 
currently-effective Reliability Standard FAC-003-1. The Commission is 
still analyzing these differences and cannot determine at this time the 
effects the proposed standard might have had if it had been applicable 
prior to the outage. It is unlikely, however, that it would have made a 
significant difference since most of the lines that were rendered 
inoperable by the storm were distribution facilities that were not 
subject to the current standard, and would not have been subject to the 
proposed standard as well.
    Question 4. Has your Vegetation Management Reliability Standard 
been litigated? Do you see a nexus between litigation and increased 
systemic risk?
    Answer. No, we are not aware of any litigation involving 
Reliability Standard FAC-003-1, the currently-effective Transmission 
Vegetation Management Program Reliability Standard. The Commission 
approved the currently-effective standard in 2007 in the Commission's 
Order No. 693. Approval of Reliability Standard FAC-003-1 was not 
challenged in federal court. NERC has submitted to the Commission a 
number of Notices of Penalty involving alleged violations of 
Reliability Standard FAC-003-1. However, these Notices of Penalty 
involved negotiated settlements and no entity has petitioned for 
Commission review of a Notice pertaining to FAC-003-1. While the 
Commission has instituted a review of a single Notice involving a 
violation of FAC-0031, the review relates to the penalty assessed for 
the violations covered by the Notice, not whether a violation of FAC-
003-1 occurred.
    As Reliability Standard FAC-003-1 has not been litigated, we cannot 
say whether there is a nexus between litigation and increased systemic 
risk.
                                 ______
                                 
      Responses of John Bilda to Questions From Senator Murkowski
    Question 1. Is Norwich Public Utilities subject to NERC's 
Vegetation management standards? If not, is NPU subject to Connecticut 
state standards? How do they contrast?
    Answer. Norwich Public Utilities is registered with NERC (ID 
#NCR07038) as a Distribution Provider and Load Serving Entity. There 
are no NERC vegetation standards at the distribution level that apply 
to Distribution Providers and Load Serving Entities. The State of 
Connecticut Public Utility Regulating Authority (PURA) does not have 
vegetation management standards for electric distribution systems.
    Question 2. Why did some utilities handle the storm better and 
restore power more quickly than others?
    Answer. I can only comment on what worked well for Norwich Public 
Utilities in terms of storm response and system damage restoration. 
Norwich Public Utilities credits its performance to a flexible, cross 
trained, highly valued workforce; very effective communication and 
planning with the communities first responders, public works, and City 
Government; and technology leveraging with geographic information 
systems, outage management systems, and NPU owned fiber optic 
communication system.

                                    

      
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