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A LEGISLATIVE HEARING ON EIGHT ENERGY 

INFRASTRUCTURE BILLS 

HEARING 

BEFORE THE

SUBCOMMITTEE ON ENERGY AND POWER 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

SECOND SESSION 

FEBRUARY 2, 2016 

Serial No. 114–111 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

COMMITTEE ON ENERGY AND COMMERCE 

FRED UPTON, Michigan 

Chairman 

JOE BARTON, Texas 

Chairman Emeritus 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOSEPH R. PITTS, Pennsylvania 

GREG WALDEN, Oregon 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

Vice Chairman 

STEVE SCALISE, Louisiana 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

GUS M. BILIRAKIS, Florida 

BILL JOHNSON, Ohio 

BILLY LONG, Missouri 

RENEE L. ELLMERS, North Carolina 

LARRY BUCSHON, Indiana 

BILL FLORES, Texas 

SUSAN W. BROOKS, Indiana 

MARKWAYNE MULLIN, Oklahoma 

RICHARD HUDSON, North Carolina 

CHRIS COLLINS, New York 

KEVIN CRAMER, North Dakota 

FRANK PALLONE, JR., New Jersey 

Ranking Member 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

JANICE D. SCHAKOWSKY, Illinois 

G.K. BUTTERFIELD, North Carolina 

DORIS O. MATSUI, California 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

JERRY MCNERNEY, California 

PETER WELCH, Vermont 

BEN RAY LUJA ́ N, New Mexico 

PAUL TONKO, New York 

JOHN A. YARMUTH, Kentucky 

YVETTE D. CLARKE, New York 

DAVID LOEBSACK, Iowa 

KURT SCHRADER, Oregon 

JOSEPH P. KENNEDY, III, Massachusetts 

TONY CA ́ RDENAS, California7 

SUBCOMMITTEE ON ENERGY AND POWER

ED WHITFIELD, Kentucky 

Chairman 

PETE OLSON, Texas 

Vice Chairman 

JOHN SHIMKUS, Illinois 

JOSEPH R. PITTS, Pennsylvania 

ROBERT E. LATTA, Ohio 

GREGG HARPER, Vice Chairman 

DAVID B. MCKINLEY, West Virginia 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

BILL JOHNSON, Ohio 

BILLY LONG, Missouri 

RENEE L. ELLMERS, North Carolina 

BILL FLORES, Texas 

MARKWAYNE MULLIN, Oklahoma 

RICHARD HUDSON, North Carolina 

JOE BARTON, Texas 

FRED UPTON, Michigan (ex officio) 

BOBBY L. RUSH, Illinois 

Ranking Member 

JERRY MCNERNEY, California 

PAUL TONKO, New York 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

PETER WELCH, Vermont 

JOHN A. YARMUTH, Kentucky 

DAVID LOEBSACK, Iowa 

FRANK PALLONE, JR., New Jersey (ex 

officio) 

(II) 

(III) 

C O N T E N T S 

Page 

Hon. Ed Whitfield, a Representative in Congress from the Commonwealth 

of Kentucky, opening statement ......................................................................... 1 

Prepared statement .......................................................................................... 2 

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

opening statement ................................................................................................ 3 

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

New Jersey, opening statement .......................................................................... 4 

Prepared statement .......................................................................................... 5 

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

prepared statement .............................................................................................. 147 

WITNESSES

Ann F. Miles, Director, Office of Energy Projects, Federal Energy Regulatory 

Commission ........................................................................................................... 7 

Prepared statement .......................................................................................... 9 

Answers to submitted questions ...................................................................... 175 

Max J. Minzner, General Counsel, Federal Energy Regulatory Commission .... 19 

Prepared statement .......................................................................................... 21 

Tim Powell, Director of Land, GIS and Permits, The Williams Company, 

on behalf of the Interstate Natural Gas Association of America ..................... 50 

Prepared statement .......................................................................................... 52 

Edward Lloyd, Evan M. Frankel Clinical Professor of Environmental Law, 

Columbia Law School, on behalf of the New Jersey Conservation Foundation and the Stony Brook-Millstone Watershed Association ............................ 59 

Prepared statement .......................................................................................... 61 

Additional information submitted for the record 1

Bill Bottiggi, General Manager, Braintree Electric Light Department, on Behalf of the Northeast Public Power Association ................................................ 79 

Prepared statement .......................................................................................... 82 

Bill Marsan, Executive Vice President and General Counsel, American Transmission Company ................................................................................................. 89 

Prepared statement .......................................................................................... 91 

Tyson Slocum, Energy Program Director, Public Citizen, Inc. ............................ 113 

Prepared statement .......................................................................................... 115 

Jeffrey Leahey, Deputy Executive Director, National Hydropower Association 122 

Prepared statement .......................................................................................... 124 

SUBMITTED MATERIAL

H.R. 3021, the AIR Survey Act of 2015, submitted by Mr. Whitfield ................. 148 

H.R. 2984, the Fair RATES Act, submitted by Mr. Whitfield ............................. 151 

Discussion Draft, H.R. lll, a Bill to Amend Section 203 of the Federal 

Power Act, submitted by Mr. Whitfield .............................................................. 153 

H.R. 2080, a Bill to Reinstate and Extend the Deadline for Commencement 

of Construction of a Hydroelectric Project Involving Clark Canyon Dam, 

submitted by Mr. Whitfield ................................................................................. 154 

H.R. 2081, a Bill to Extend the Deadline for Commencement of Construction 

of a Hydroelectric Project Involving the Gibson Dam, submitted by Mr. 

Whitfield ............................................................................................................... 156 

1 Additional information submitted by Mr. Lloyd has been retained in committee files and also is available at http://docs.house.gov/meetings/IF/ 

IF03/20160202/104387/HHRG-114-IF03-Wstate-LloydE-20160202- 

SD088.pdf. 

Page

IV 

H.R. 3447, a Bill to Extend the Deadline for Commencement of Construction 

of a Hydroelectric Project Involving the W. Kerr Scott Dam, submitted 

by Mr. Whitfield ................................................................................................... 158 

Discussion Draft, H.R. lll, a Bill to Extend the Deadline for Commencement of Construction of a Hydroelectric Project Involving the Jennings 

Randolph Dam, submitted by Mr. Whitfield ...................................................... 160 

Discussion Draft, H.R. lll, a Bill to Extend the Deadline for Commencement of Construction of a Hydroelectric Project Involving the Cannonsville 

Dam, submitted by Mr. Whitfield ....................................................................... 162 

Letter of January 29, 2016, from David C. Sinclair, President, Advanced 

Hydro Solutions, LLC, to Mr. Whitfield and Mr. Rush, submitted by Mr. 

Whitfield ............................................................................................................... 164 

Statement of Clark Canyon Hydro, LLC, by Alina Osorio, Director, February 

2, 2016, submitted by Mr. Whitfield ................................................................... 166 

Statement of Hon. Ryan K. Zinke, a Representative in Congress from the 

State of Montana, February 2, 2016, submitted by Mr. Whitfield ................... 168 

Letter of February 3, 2016, from Jim Bradley, Vice President for Government 

Relations and Policy, American Rivers, to Mr. Whitfield and Mr. Rush, 

submitted by Mr. Whitfield ................................................................................. 170 

(1) 

A LEGISLATIVE HEARING ON EIGHT ENERGY 

INFRASTRUCTURE BILLS 

TUESDAY, FEBRUARY 2, 2016 

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON ENERGY AND POWER, COMMITTEE ON ENERGY AND COMMERCE, Washington, DC. 

The subcommittee met, pursuant to call, at 10:02 a.m., in room 

2123 Rayburn House Office Building, Hon. Ed Whitfield (chairman 

of the subcommittee) presiding. 

Members present: Representatives Whitfield, Barton, Olson, 

Shimkus, Latta, Harper, McKinley, Pompeo, Kinzinger, Griffith, 

Johnson, Long, Ellmers, Flores, Hudson, Upton (ex officio), Rush, 

McNerney, Tonko, Green, Capps, Doyle, Castor, Welch, and Pallone 

(ex officio). 

Also present: Representative Kennedy. 

Staff present: Gary Andres, Staff Director; Will Batson, Legislative Clerk; Allison Busbee, Policy Coordinator, Energy and Power; 

Rebecca Card, Assistant Press Secretary; Karen Christian, General 

Counsel; Patrick Currier, Senior Counsel, Energy and Power; Tom 

Hassenboehler, Chief Counsel, Energy and Power; A.T. Johnston, 

Senior Policy Advisor; Brandon Mooney, Professional Staff Member, Energy and Power; Dan Schneider, Press Secretary; Jeff Carroll, Democratic Staff Director; Rick Kessler, Democratic Senior Advisor and Staff Director, Energy and Environment; John Marshall, 

Democratic Policy Coordinator; Alexander Ratner, Democratic Policy Analyst; and Tuley Wright, Democratic Energy and Environment Policy Advisor. 

OPENING STATEMENT OF HON. ED WHITFIELD, A REPRESENTATIVE IN CONGRESS FROM THE COMMONWEALTH OF KENTUCKY 

Mr. WHITFIELD. I would like to call the hearing to order this 

morning. 

This is our second hearing in the Second Session of the 114th 

Congress. I want to take this opportunity to wish everybody on the 

committee and those in attendance a very happy and productive 

2016. 

This subcommittee has continuously examined legislation aimed 

at reducing red tape when it is standing in the way of economic 

development and development of energy infrastructure that would 

benefit this country. Projects that update and expand the Nation’s 

energy infrastructure will create jobs and lead to greater supplies 

of affordable domestic energy for our homes and businesses. AffordVerDate Mar 15 2010 10:04 Apr 29, 2016 Jkt 037690 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 F:\114THCONGRESS\114X111ENERGYBILLSAWAITSCANS\114X111ENERGYBILLSPEND
2 

able energy is very important because we are in a competitive 

world today. We are competing with other countries, and the price 

of electricity and energy goes a long way in determining where 

businesses locate and jobs are created. So, this is the unifying 

theme behind the eight bills that we are going to be discussing 

today. 

H.R. 3021 is the AIR Survey Act of 2015, which was introduced 

by Mr. Pompeo. It is an overdue measure to incorporate data collected through aerial surveys into the approval process for natural 

gas infrastructure. 

H.R. 2984, the Fair Rates Act, which was introduced by Mr. Kennedy, sets out a process to deal with those situations under the 

Federal Power Act in which FERC neither approves nor denies an 

electricity rate change such as when the Commission is deadlocked. 

A draft bill entitled ‘‘A Bill to Amend Section 203 of the Federal 

Power Act’’ would serve to address an oversight in the Energy Policy Act of 2005. That law amended Section 203 of the Federal 

Power Act which pertains to the sale, disposition, merger, purchase, and acquisition of certain utility assets and facilities. 

Along with these three bills making procedural changes, we also 

have before us five bills dealing with new hydroelectric projects on 

existing dams. Given the low cost and low emissions of hydropower, 

these projects ought to be among the least controversial issues of 

increasing the Nation’s electricity supply. 

However, the FERC-issued licenses for these projects have expired, or soon will expire, largely because of regulatory delays or 

unforeseen circumstances that have prevented construction. These 

bills extend the life of the license by 6 to 8 years, allowing these 

job-creating projects to move forward. 

The result of the passage of these eight bills will be more jobs, 

more energy for the American people at an affordable price, and I 

would urge all my colleagues to support them. 

So, that concludes my opening statement. 

[The prepared statement of Mr. Whitfield follows:] 

PREPARED STATEMENT OF HON. ED WHITFIELD

This subcommittee has continuously examined legislation aimed at cutting red 

tape where it is standing in the way of energy infrastructure that would benefit all 

Americans. Projects that update and expand the Nation’s energy infrastructure will 

create jobs and lead to greater supplies of affordable domestic energy for our homes 

and businesses. That is the unifying theme behind the eight bills we will discuss 

today. 

H.R. 3021, the ‘‘AIR Survey Act of 2015,’’ introduced by Mr. Pompeo, is an overdue measure to incorporate data collected through aerial surveys into the approval 

process for natural gas infrastructure. The bill would enable the Federal Energy 

Regulatory Commission (FERC) to accept such data in its application process under 

the Natural Gas Act, subject to any verification through ground survey data that 

FERC deems appropriate. Given the growing importance of natural gas in our economy, we will all benefit from a measure such as this that will help facilitate the 

construction of new natural gas pipelines. 

H.R. 2984, the ‘‘Fair RATES Act,’’ introduced by Mr. Kennedy, sets out a process 

to deal with those situations under the Federal Power Act in which FERC neither 

approves nor denies an electricity rate change, such as when the commission is 

deadlocked. These rate changes still take effect, but currently there are limited opportunities for the public to challenge them because FERC did not officially issue 

an order. This bill would create an administrative process for members of the public 

who wish to challenge such rate changes. 

3 

A draft bill entitled ‘‘A Bill to Amend Section 203 of the Federal Power Act’’ would 

serve to address an oversight in the Energy Policy Act of 2005. That law amended 

section 203 of the Federal Power Act, which pertains to the sale, disposition, merger, purchase and acquisition of certain utility assets and facilities. It raised the minimum monetary thresholds for FERC jurisdiction from $50,000 to $10 million for 

three of these subcategories, but not for acquisitions. This bill would raise the minimum for acquisitions to $10 million as well, thus avoiding FERC process for relatively small transactions. 

Along with these three bills making procedural changes, we also have before us 

five bills dealing with new hydroelectric projects on existing dams. Given the low 

cost and low emissions of hydropower, these projects ought to be among the least 

controversial means of increasing the Nation’s electricity supply. However, the 

FERC- issued licenses for these projects have expired, or soon will expire, largely 

because of regulatory delays or unforeseen circumstances that have prevented construction. These bills extend the life of the licenses by 6 to 8 years, allowing these 

job-creating projects to move forward. 

The result of the passage of these eight bills will be more jobs and more energy 

for the American people, and I urge all my colleagues to support them. 

[The proposed legislation appears at the conclusion of the hearing.] 

Mr. WHITFIELD. At this time I would like to introduce and recognize the gentleman from Chicago, Mr. Rush, and also wish you a 

happy new year, Mr. Rush. He is recognized for 5 minutes. 

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

Mr. RUSH. Thank you, Mr. Chairman. I wish you a happy new 

year, and I wish all those who are in this committee room a happy 

new year also. 

I want to thank you, Mr. Chairman, for holding today’s hearing 

on these eight energy infrastructure bills. Mr. Chairman, while I 

support the majority of these bills before us today, I do have some 

concerns that I would look forward to addressing as we move forward through the legislative process. 

In regards to the five bills extending the time period for expired 

hydropower licenses, I support each of these pieces of legislation. 

These bills would extend the construction time for hydropower 

projects across the country up to 8 years, and I commend my colleagues for sponsoring these important bills. 

Hydropower is a renewable source of energy that has received 

widespread, bipartisan support from those on this subcommittee. 

Allowing these projects to commence will help increase the Nation’s 

portfolio of clean, home-grown energy resources. 

Mr. Chairman, I also support very strongly my colleague Mr. 

Kennedy’s bill, the Fair Rates Act, which would provide the public 

with an opportunity to legally challenge rate changes approved by 

FERC essentially by new vote. 

Mr. Chairman, five times in the past 14 years rate changes have 

been approved by default due to the Commission being deadlocked 

during a vote. Even when these rate changes negatively impact 

consumers, the public currently has no legal recourse to challenge 

these cases, as a deadlocked vote is not legally viewed as in order. 

The Fair Rates Act would rectify this inequity by treating new rate 

changes, including those go into effect by default, as a FERC order 

that can be challenged administratively and, very important, by 

consumers. 

4 

Protecting consumers and average Americans should be a primary objective of all the bills this committee considers. While I 

support most of these legislations that we are considering today, I 

am not sure that the remaining two bills meet that same high 

threshold. 

Mr. Chairman, I look forward to engaging today’s witnesses on 

both H.R. 3021, the AIR Survey Act of 2016, and the bill that will 

amend Section 203 of the Federal Power Act. For both of these 

pieces of legislation, I want to make sure that there aren’t any unintended consequences that we are overlooking before we move forward in making these important policy changes. 

My biggest concern is with H.R. 3021, which will require FERC 

to give the same equal weight to aerial survey data that it does 

ground survey data in the prefiling process and avoiding completion of an application for construction of our natural gas pipeline. 

Mr. Chairman, I look forward to hearing from our expert panelists 

on the practical impact of this change in policy for both landowners 

as well as the impact on the environment. 

So, once again, Mr. Chairman, I applaud you for holding this 

timely hearing today and I look forward to hearing from all of our 

expert witnesses. 

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

Mr. WHITFIELD. Thank you, Mr. Rush. 

At this time I would like to recognize the gentleman from New 

Jersey, Mr. Pallone, for 5 minutes. 

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

Mr. PALLONE. Thank you, Mr. Chairman and our ranking member, for this hearing today on a number of bills addressing programs and projects administered by FERC. 

I am particularly pleased that the subcommittee is considering 

H.R. 2984, Representative Kennedy’s Fair Rates Act, which would 

greatly improve the process by which FERC votes are reconsidered. 

This small but significant change to the Federal Power Act would 

ensure that, if there is a deadlocked vote amongst Commissioners, 

there will still be recourse for eligible parties to seek a review of 

the rates that result from a de facto decision of the Commission. 

The need for this change became evident in the wake of a New 

England forward-capacity market auction in 2014. At that time, 

FERC had only four Commissioners and they split over the question of whether the auction results were just and reasonable. Since 

FERC didn’t disapprove the auction results, wholesale electricity 

prices in New England increased dramatically. So, while rates went 

up, none of the affected parties could challenge the decision or resulting rate increase and, therefore, no rehearing or judicial review 

was possible. 

There is an old saying, Mr. Chairman, that if you choose not to 

decide, you still have made a choice. And we should not deprive 

stakeholders of any recourse when a nondecision by FERC has real 

consequences for consumers, producers, and others. Representative 

Kennedy’s bill doesn’t favor one side or another. It merely provides 

those who want to challenge the outcome of an action the same 

5 

rights they would have if FERC made an affirmative decision. It 

is thoughtful and meaningful legislation that deserves to become 

law as soon as possible. 

Unfortunately, I can’t say the same about the AIR Survey Act of 

2015. It is a reckless and brazen effort to further strip landowners 

and resource agencies of their ability to participate meaningfully in 

the gas pipeline siting process. The bill directs FERC and agencies 

responsible for implementing Federal environmental laws not just 

to allow data collected by AIR to be used in gas pipeline certification activities, but it goes so far as to tell scientists and regulators to give it the same weight in the decision process as data collected on the ground. We should not categorically make a decision 

that photos taken thousand of feet in the air are as accurate in 

cataloguing endangered plants and animals as surveys on the 

ground, nor should we second-guess scientists and other trained 

professionals in State environmental offices or at the Army Corps 

as to how best to collect data related to their implementation of the 

Clean Water Act. 

Furthermore, this legislation is not needed. FERC already allows 

aerial data to be used in proceedings under Section 7 of the Natural Gas Act. The only reason to move the legislation is to 

shortcircuit meaningful environmental assessments and to get 

around the concerns of private landowners and in some cases local 

governments who have legitimately barred pipeline companies from 

surveying after those companies were caught acting illegally without proper authorization. It is a bad concept and a bad bill, and it 

should not move any further. 

Mr. Pompeo’s other legislative proposal is, on the other hand, 

something worth exploring. The committee print before us would 

add a $10 million threshold to trigger FERC review of a merger or 

consolidation, since under current law no such threshold exists. I 

am particularly interested in hearing from Mr. Slocum regarding 

the concerns he raised with this legislation because this is not a 

change that we should undertake lightly. I look forward to working 

with my colleagues to see if there is a way forward on this issue. 

Finally, I just want to say that I know of no major objection with 

regard to any of the five hydroelectric construction license extension bills before us. They have all bipartisan support, and I hope 

we will move quickly on them. 

I appreciate the chair and the ranking member for holding this 

hearing, and the witnesses. 

[The prepared statement of Mr. Pallone follows:] 

PREPARED STATEMENT OF HON. FRANK PALLONE, JR. 

I want to thank Chairman Whitfield and Ranking Member Rush for holding today’s legislative hearing on a number of bills addressing programs and projects administered by the Federal Energy Regulatory Commission (FERC). 

I am particularly pleased that the subcommittee is considering H.R. 2984, Rep. 

Kennedy’s FAIR Rates Act, which would greatly improve the process by which 

FERC votes are reconsidered. This small, but significant change to the Federal 

Power Act would ensure that if there is a deadlocked vote among the Commissioners, there will still be recourse for eligible parties to seek a review of the rates 

that result from a de facto decision of the Commission. The need for this change 

became evident in the wake of a New England Forward Capacity Market Auction 

in 2014. At that time, FERC had only four Commissioners and they split over the 

question of whether the auction results were just and reasonable. Since FERC didn’t 

6 

disapprove the auction results, wholesale electricity prices in New England increased dramatically. So, while rates went up, none of the affected parties could 

challenge the decision or resulting rate increase, and, therefore, no rehearing or judicial review was possible. 

There’s an old saying that ‘‘if you choose not to decide, you still have made a 

choice.’’ We should not deprive stakeholders of any recourse when a nondecision by 

FERC has very real consequences for consumers, producers and many others. Rep. 

Kennedy’s bill doesn’t favor one side or another, it merely provides those who want 

to challenge the outcome of inaction the same rights they would have if FERC made 

an affirmative decision. It is thoughtful and meaningful legislation that deserves to 

become law as soon as possible. 

Unfortunately, I cannot say the same thing about the Air Survey Act of 2015: it 

is a reckless and brazen effort to further strip landowners and resource agencies of 

their ability to participate meaningfully in the gas pipeline siting process. The bill 

directs FERC and agencies responsible for implementing Federal environmental 

laws not just to allow data collected by air to be used in gas pipeline certificating 

activities, but it goes so far as to tell scientists and regulators to give it the same 

weight in the decision process as data collected on the ground! We should not categorically make a decision that photos taken thousands of feet in the air are as accurate in cataloging endangered plants and animals as surveys on the ground. Nor 

should we second guess scientists and other trained professionals in State environmental offices or at the Army Corps as to how best to collect data related to their 

implementation of the Clean Water Act. 

Furthermore, this legislation is not needed. FERC already allows aerial data to 

be used in proceedings under section 7 of the Natural Gas Act. The only reason to 

move this legislation is to short circuit meaningful environmental assessments and 

to get around the concerns of private landowners and, in some cases, local governments who have legitimately barred pipeline companies from surveying after those 

companies were caught acting illegally, without proper authorization. It is a bad 

concept, a bad bill and it should not move any farther. 

Mr. Pompeo’s other legislative proposal is, on the other hand, something worth exploring. The committee print before us would add a $10 million threshold to trigger FERC review of a merger or consolidation, since, under current law, no such 

threshold exists. I am particularly interested in hearing from Mr. Slocum regarding 

the concerns he raises with this legislation because this is not a change we should 

undertake lightly. I look forward to working with my colleagues to see if there is 

a way forward on this issue. 

Finally, I just want to say that I know of no major objection with regard to any 

of the 5 hydroelectric construction license extension bills before us. They all have 

bipartisan support, and I hope we will move on them quickly. 

I appreciate the chair and ranking member for holding this hearing, and I also 

thank the witnesses for participating today. 

Mr. PALLONE. I would like to yield the remainder of my time to 

Mr. Kennedy. 

Mr. KENNEDY. Thank you very much, Mr. Pallone. I am grateful. 

And I want to thank the chairman and the ranking member for 

holding this important hearing. 

My constituents face the highest energy rates in the continental 

United States. So, today’s discussion about skyrocketing energy 

cost is, unfortunately, nothing new to my home State. 

But what happened to us 2 years ago after rates were filed with 

FERC should never happen, no matter how expensive or cheap 

your energy bill is. The Commission, which at that time was down 

to four Commissioners, deadlocked. The rates become effective by 

operation of law, precluding any avenue for administrative redress. 

As a result, any now protest of those rates were dismissed because, according to FERC and the Federal Power Act, there is no 

decision to rehear. That is unacceptable. But there is nothing my 

constituents could do to protest because of the flaw in the Federal 

Power Act. 

My bill, H.R. 2984, the Fair Rates Act, is a simple technical fix 

to ensure that scenario doesn’t happen again. It ensures all adminVerDate Mar 15 2010 10:04 Apr 29, 2016 Jkt 037690 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 F:\114THCONGRESS\114X111ENERGYBILLSAWAITSCANS\114X111ENERGYBILLSPEND
7 

istrative and judicial avenues for redress are available whenever 

new rates take effect, including in the advent of a deadlocked Commission. 

Today FERC once again is down only to four Commissioners, 

without a fifth so much as nominated, setting the stage for that 

event to play out again in the next weeks or in the month ahead. 

I appreciate FERC’s thoughts on the legislation and their work 

with both me and my staff over the past several years. 

I look forward to hearing from the witnesses, and particularly 

Bill Bottiggi, who was willing to come down to Washington to share 

his expertise with us. 

I yield back. Thank you. 

Mr. WHITFIELD. The gentleman yields back, and that concludes 

our opening statements today. 

So, we have two panels of witnesses. On our first panel we have 

two witnesses. I would like to welcome them first, Ann Miles, who 

is the Director of the Office of Energy Projects at the Federal Energy Regulatory Commission, and the other witness is Max 

Minzner, who is General Counsel, Office of the General Counsel, 

Federal Energy Regulatory Commission. 

I thank both of you very much for taking time to be with us 

today to give your thoughts and ideas about these pieces of legislation. 

Ms. Miles, I will recognize you first for 5 minutes for your opening statement. 

STATEMENTS OF ANN F. MILES, DIRECTOR, OFFICE OF ENERGY PROJECTS, FEDERAL ENERGY REGULATORY COMMISSION, AND MAX J. MINZNER, GENERAL COUNSEL, FEDERAL 

ENERGY REGULATORY COMMISSION 

STATEMENT OF ANN F. MILES 

Ms. MILES. Thank you. 

Mr. WHITFIELD. And be sure to turn the microphone on. 

Ms. MILES. Good morning, Chairman Whitfield, Ranking Member 

Rush, and members of the subcommittee. 

My name is Ann Miles, and I am the Director of the Office of Energy Projects at the Federal Energy Regulatory Commission. 

The Commission is responsible for siting infrastructure, including non-Federal hydropower projects, interstate natural gas pipelines and storage facilities, and liquefied natural gas terminals. 

I appreciate the opportunity to appear before you to comment on 

the five hydropower bills to extend commencement of construction 

deadlines and on the Aerial Infrastructure Route Survey Act of 

2015. 

As a member of the Commission’s staff, the views I express in 

this testimony are my own and not those of the Chairman, other 

than as specifically noted, or of any individual Commissioner. 

I will first comment on the hydropower extension bills, H.R. 

2080, H.R. 2081, H.R. 3447, the bill regarding Jennings Randolph 

Project No. 12715, and the bill regarding Cannonsville bill, Project 

No. 13287. Each of the bills seeks to extend the project’s commencement of construction deadline to a total of no more than 10 

years from the date the project license was issued. The last several 

8 

Commission Chairmen, as well as the current Chairman, have 

taken the position of not opposing legislation that would extend the 

commencement of construction deadline no further than 10 years 

from the date the licensing decision was issued. Because each of 

these bills provides for commencement of construction deadlines 

that do not exceed 10 years from the dates of the respective licenses being issued, I do not oppose these bills. 

I note that all bills, except for H.R. 2081, contain a reinstatement 

provision, should the period required for commencement of construction expire prior to enactment of the Act. Congress may want 

to consider including a reinstatement provision in H.R. 2081. 

Second, I will comment on the Aerial Infrastructure Route Survey Act, H.R. 3021. The bill would amend Section 7 of the Natural 

Gas Act to provide that data collected by aerial survey will be accepted in lieu of and given equal weight to ground survey data for 

the purpose of completing the Commission’s natural gas project 

prefiling process and for completing applications associated with 

Federal authorizations related to such projects. 

The bill provides that an agency may require that aerial survey 

data be verified through the use of on-the-ground survey data before project construction. Aerial surveys can be a useful tool for developing project routes and making initial determinations of resources that may be affected by a proposed project. 

Currently, Commission staff accepts aerial survey data, especially where ground access is not available during the prefiling or 

application review process. However, most project applications include ground survey data for a significant portion of the right-ofway. I do have some concern that waiting to verify large amounts 

of aerial data until late in the project development process or after 

issuance of a certificate could in some cases pose difficulties. 

For example, if it was not discovered until the preconstruction 

stage that a project might affect historic properties or endangered 

species, matters that can be difficult to determine with certainty in 

the absence of on-the-ground surveys, a project proponent might be 

required at a late stage to amend its approved route or to conduct 

additional mitigation, which could cause delay and additional expense. 

This concludes my remarks, and I would be pleased to answer 

any questions you may have. 

[The prepared statement of Ms. Miles follows:] 

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16 

17 

18 

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Mr. WHITFIELD. Ms. Miles, thanks very much for your opening 

statement. 

Mr. Minzner, you are recognized for 5 minutes. 

STATEMENT OF MAX MINZNER 

Mr. MINZNER. Mr. Chairman, Ranking Member Rush, members 

of the subcommittee, thank you for inviting me to testify here 

today. 

My name is Max Minzner. I am the General Counsel at the Federal Energy Regulatory Commission. Like Ms. Miles, I am also a 

staff witness and my remarks today don’t necessarily reflect the 

views of the Chairman or any specific Commissioner. 

I have been asked to testify today on two bills that would amend 

the Federal Power Act. One is a bill that would modify Section 203 

of the Federal Power Act to set a minimum threshold value of $10 

million on the merger or consolidation of facilities belonging to public utilities that would be required for FERC approval. 

And two, H.R. 2984, a bill that would amend Section 205 of the 

Federal Power Act, that would permit a party to seek rehearing 

and subsequent appellate review of any rate change filed under 

Section 205 that takes effect without Commission action. 

The first proposed bill would amend a provision of the Federal 

Power Act, Section 203, that requires public utilities to seek Commission approval before engaging a wide range of corporate transactions. In particular, this bill would change the Act so that utilities would only need prior FERC approval to merge or consolidate 

facilities, subject to the Commission’s jurisdiction, if the facility’s 

value was in excess of $10 million. In other words, mergers or consolidations of facilities with a value less than that amount would 

not need FERC approval. 

This bill would align this provision of the FPA with the other 

subsections of Section 203(a)(1) which regulate other transactions 

by public utilities, each of which already contains a $10 million de 

minimis threshold. In my view, the proposal to add the same de 

minimis threshold to Section 203(a)(1)(B) of the FPA could ease the 

administrative burden on Commission staff and the regulatory burden on industry without a significant negative effect on the Commission’s regulatory responsibilities. Transactions below that 

threshold are unlikely to impose a significant negative impact on 

competition or the rates of utility customers. 

Second, H.R. 2984 would permit rehearing and appellate review 

of changes to rates made under Section 205 when those rates take 

effect without Commission action. To change rates or other tariff 

provisions under Section 205, a public utility typically makes a filing with FERC and the Commission will take action on the proposal during a 60-day statutory time period. In very rare cases, the 

Commission has not acted on that filing within the time period, 

and the filing takes effect when the period expires. 

In my view, rehearing and appellate review are not currently 

available when a filing submitted pursuant to Section 205 of the 

FPA takes effect by operation of law. Appellate review is an important procedural avenue, though, for those who do not prevail before 

an administrative agency. Where review in the court of appeals 

may be challenging under this legislation because the appellate 

20 

court will not be able to rely on the Commission’s reasoning in the 

first instance, the possibility of a rehearing order or a remand from 

the court of appeals should reduce this difficulty and allow the 

court of appeals to effectively engage in review of the rate change. 

That concludes my prepared testimony. I look forward to your 

questions. 

[The prepared statement of Mr. Minzner follows:] 

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27 

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Mr. WHITFIELD. Mr. Minzner, thank you, and thank both of you 

for your testimony. 

At this time I recognize myself for 5 minutes of questions, and 

I yield my time to the gentleman from Kansas, Mr. Pompeo. 

Mr. POMPEO. Thank you very much, Mr. Chairman. Thank you 

for yielding to me as well. 

Ms. Miles, thank you for being here this morning. I wanted to 

ask you a couple of questions about H.R. 3021. 

Can you describe for me some of the benefits of having access to 

aerial route survey data for FERC? 

Ms. MILES. Well, aerial survey can be very useful in making general determinations or in some resource areas more specific determinations. So, certainly, for getting the route and initial determinations, yes, it can be useful. 

Mr. POMPEO. I appreciate that. 

Yes, I want to talk about a couple of concerns that you expressed 

and try to understand them, so that we might be able to make 

some changes to accommodate them, if we need to. 

In regard to endangered species, considering all the time and 

money spent to protect them, isn’t it safe to assume that we know 

where those habitats are? 

Ms. MILES. Not necessarily on a specific project. The details 

would be required for us as well as other Federal agencies who 

have responsibility for dealing with the species, the Fish and Wildlife Service, especially for pipeline projects. 

Mr. POMPEO. But isn’t it the case that the company that is intending to do this survey is going to do their best to identify that? 

That is, they don’t want to have big amendments at the end, either. They have an enormous financial incentive to get this right. 

Ms. MILES. Very understandable. As we are seeing and as I said 

in our projects so far, most companies, where they can have project 

access early, are gathering that data. We all want to do as much 

as we can during prefiling. 

Mr. POMPEO. Yes. Yes. No, that makes perfect sense, and when 

you have ground access, that is great. But in those instances where 

I think this is most important is the places where ground access 

is not available; it has been denied. And so, the only other option 

would be being very disruptive to the landowner, either eminent 

domain or something of that nature. This is a way to mitigate the 

impact to those landowners and still get the information that we 

all need to make sure that that certificate is properly granted. 

It seems to me we have struck the right balance here. Do you 

agree with that? 

Ms. MILES. I think on a narrower course of that, it would be. I 

am not sure the bill is specific about the areas where there isn’t 

access, there isn’t on-the-ground access. 

Mr. POMPEO. That makes sense. And the same thing with respect 

to historic sites, those are listed. Right? Most often, we don’t have 

to guess. I suppose there is a handful that are unknown, but that 

has to be the rarest of creatures. 

Ms. MILES. I am sorry, I missed what—— 

Mr. POMPEO. With respect to historic sites, you expressed some 

concern that a narrow survey might not adequately identify an hisVerDate Mar 15 2010 10:04 Apr 29, 2016 Jkt 037690 PO 00000 Frm 00032 Fmt 6633 Sfmt 6633 F:\114THCONGRESS\114X111ENERGYBILLSAWAITSCANS\114X111ENERGYBILLSPEND
29 

toric site. There is a registry of historic sites. I mean, that is not 

hard to figure out where they are. 

Ms. MILES. I think that many of those, though, will require onthe-ground work. Yes, there is a register of historic sites, but sometimes there are sites along the way that haven’t been identified. 

We know there are archaeological or cultural sites, but they 

haven’t been identified and they are not on the register yet. And 

so, it could take on-the-ground survey to get at that information. 

Mr. POMPEO. Yes, I just think about these companies that are 

trying to do this. They are going to try to get that right. They have 

the most vested interest in making sure that they do that right. 

And if they need a ground survey to do it, I am confident they will 

work through it. I just think it is important that they and FERC 

have access to this tool, so that we can be less disruptive to landowners as we are working our way through the process. 

Thanks for your testimony. 

Mr. Minzner, a question for you on the amendment to the draft, 

to Section 203. Tell me what the scale of the burden that this 

would relieve on FERC is. Can you give me man-hours? If we adjust these limits to the place that is proposed, tell me what benefits 

accrue to FERC in terms of reduced burden. 

Mr. MINZNER. Congressman, thank you for that question. 

Mr. WHITFIELD. Mr. Minzner, be sure and pull your microphone 

closer. Interestingly enough, we have people watching this on the 

Internet, and they have complained that they didn’t hear everything you said. 

Mr. MINZNER. Thank you, Mr. Chairman. 

And thank you for your question, Congressman. 

I don’t think I have an estimate of the number of man-hours that 

it would save the Commission. I do know that about 20 percent of 

the Section 203 applications that FERC considered in fiscal year 

2015 would fall below the statutory threshold, and therefore, would 

not have needed approval if this bill were in place last year. 

I can tell you that every filing that comes into the Commission 

under Section 203 otherwise looks at it closely and, if Commission 

action is required, a draft order is prepared for the Commission. 

And so, every filing is taken seriously and staff works on it intensively. 

Mr. POMPEO. Do you see any downside risk from creating parity 

between acquisitions and dispositions? Right, they are very similar? Do you see any burden or any downside to what we are proposing in just making parity as between those two types of transactions? 

Mr. MINZNER. Well, the value of the bill, of course, as you said, 

would bring parity between this provision of Section 203 and otherwise. It is, of course, a policy choice of how much oversight Congress wants these mergers to have at the Commission level. In my 

view, transactions that are below the de minimis threshold pose 

relatively limited risk to rates or competition. 

Mr. POMPEO. Great. Thank you very much. 

And thank you again for yielding, Mr. Chairman. 

Mr. WHITFIELD. At this time I recognize the gentleman from Illinois, Mr. Rush, for 5 minutes. 

Mr. RUSH. Thank you, Mr. Chairman. 

30 

Now, Ms. Miles, in your statement you note that, currently, 

‘‘most project applications include ground surveys for a significant 

portion of the right-of-way.’’ You also state that ‘‘waiting to verify 

large amounts of aerial data until late in the project development 

process, or after issuance of a certificate, could in some cases pose 

difficulties.’’ 

Are you concerned that policy change outlined in the AIR Survey 

Act of 2016 may impact, actually, the need to raise an additional 

cost for our pipeline projects rather than expediting these same 

projects? And can you explain your concerns? 

Ms. MILES. I think if it is carried out similarly to now, where the 

companies are doing the on-the-ground surveys where they have 

access, and in the majority of the cases companies do have access 

to a good bit of survey route and are able to do the on-the-ground 

surveys in the earlier stage of the certification process, as long as 

that continues, I think that is fine. As I said in my testimony, aerial survey data can be useful where there is not on-the-ground access, as long as there is the opportunity to verify that later in the 

process by actual on-the-ground surveys for the resource areas 

where it would be necessary. It is not necessary for all resource 

areas. 

Mr. RUSH. Thank you. 

Mr. Minzner, in your statement you cited serial mergers as a 

possible concern with the merger in Section 203 of the Federal 

Power Act. You state that, ‘‘The Commission would no longer have 

the authority to review and approve mergers valued at less than 

$10 million even in situations where the merger took place as one 

of a series of transactions that exceeded the limit in total.’’ 

However, you also state that you believe that FERC has other 

tools available to protect consumers and the public interest if circumstances such as what I describe would arise. Can you explain 

what are these other tools that the FERC has at its disposal that 

would help in the situation that I describe? 

Mr. MINZNER. Yes, Congressman. Thank you. 

The Commission has a range of regulatory tools that it exercises 

in its oversight of public utilities regulated under the Federal 

Power Act. For instance, if a utility gains market power and is in 

a situation where it has authority to charge market-based rates, 

the Commission can modify or eliminate that authority to charge 

market-based rates. 

To the extent that a public utility is operated in one of the Commission-approved organized wholesale electric markets, there are a 

range of Commission-approved mitigation measures that are designed to limit or eliminate the exercise of market power. And, of 

course, the Commission retains its enforcement authority to regulate misconduct that is a violation of Commission rule or order or 

rises to a level of market manipulation. 

Those are three examples of mechanisms that the Commission 

would have to regulate the exercise of market power or other misconduct, even in the absence of the merger authority. 

Mr. RUSH. Thank you, Mr. Chairman. I yield back. 

Mr. WHITFIELD. The gentleman yields back. 

At this time I recognize the gentleman from Texas, Mr. Olson, 

for 5 minutes. 

31 

Mr. OLSON. I thank the chair. 

And welcome to our friends from FERC. 

I am going to talk about natural gas and pipelines. The questions 

will be mostly for Ms. Miles, but, Mr. Minzner, if the spirit so 

moves you, please answer if you feel comfortable. 

There has been big change in the last decade. Our electric grid 

relies heavily on natural gas. If the President’s Clean Power Plan 

survives in court, that trend will continue and accelerate. 

Gas is critical as a baseload power. It is immune to weather, and 

it is critical for ramping up and down wind and solar on our grids. 

But gas can’t keep the lights on without a robust pipeline system. 

And that is why this committee examines legislation designed to 

make the permitting process more reasonable. 

My first question is for you, Ms. Miles. It is a broad one on the 

pipeline landscape. I have a few specifics about siting. 

First, what trends do you see in pipeline construction and what 

does this tell you about the future of natural gas? 

Ms. MILES. We have seen a tremendous increase in the workload 

before us, both for natural gas pipelines as well as for liquefied 

natural gas facilities, at least doubling in the number of projects 

that are before us, in some cases tripling in the capacity that would 

move through those pipelines, and similar increases in interest in 

liquefied natural gas projects. 

Mr. OLSON. Mr. Minzner, care to comment, sir? 

Mr. MINZNER. Nothing to add to Ms. Miles. 

Mr. OLSON. That is oK. That is fine. 

Again, Ms. Miles, as FERC is a lead agency for siting natural gas 

pipelines that cross across State lines, you all are responsible for 

sending the schedule and coordinating all the various environmental permits, is that correct? 

Ms. MILES. Yes, that is correct. 

Mr. OLSON. Would you prefer to review those various permits, 

like Clean Water Act permits and all the other boxes that need to 

be checked, done concurrently on the order they are submitted as 

opposed to successively? Do you prefer that, concurrently as opposed to successively? 

Ms. MILES. The more that we can work at the same time in gathering information and reviewing that information, working together 

on our environmental documents, yes, that is a good thing. 

Mr. OLSON. Concurrently versus successive, oK, great. 

Are you aware of any situations where a State agency, acting 

pursuant to a Federal delegated authority, has failed to meet the 

schedule established by FERC? Anytime this happened, a State 

agency not meeting your schedules? Are you aware of that? 

Ms. MILES. I am sorry, I am not prepared to answer that today, 

but I would be happy to get back to you on it. 

Mr. OLSON. Thank you. 

Mr. Minzner, I would ask you to swing at that one, sir. 

Mr. MINZNER. I also don’t know the answer to that question, but 

I would second Ms. Miles’ comment, to the extent that we can collaboratively with other agencies, that is an important and valuable 

thing for us to do. 

Mr. OLSON. Final question about LNG. I have heard that FERC 

has slipped past in some deadlines recently on some LNG export 

32 

terminals. As you all know, the first export of LNG to scheduled 

to happen later this month, maybe early March, at Sabine Pass in 

Louisiana, right next to Texas, my own State. 

With a weak Commander-in-Chief, the best tool we have to hurt 

OPEC, Iran, ISIS, and Russia is taking their money from our energy, getting on the global market, selling our natural gas to our 

allies. 

What is FERC doing to address the energy exports in a timely 

manner, to make sure we get that energy on the market now and 

hurt OPEC, hurt Russia, hurt ISIS, and hurt Iran? 

Ms. MILES. As with all the projects before us, both LNG and 

pipeline projects, we work to expedite them as best we can. Well, 

for LNG projects, they are required to use our prefiling process. We 

think that is a very good opportunity for all the agencies, tribes, 

as well as the company, to look at what issues and what information is needed. So that when the application is filed, it is a complete application and we are able to go as quickly as we can to our 

environmental analysis of the project. 

Mr. OLSON. Yes, please, please expedite because another project 

right across the river from Sabine Pass is having some problems 

moving forward with the permitting process. So, please, please do 

that, because, then, that is the biggest tool we have to battle the 

guys who don’t like us, again, OPEC, ISIS, Iran, and Russia. 

I yield back. Thank you. 

Mr. WHITFIELD. The gentleman yields back. 

At this time the Chair recognizes the gentleman from California, 

Mr. McNerney, for 5 minutes. 

Mr. MCNERNEY. I thank the chairman, and I thank the witnesses 

this morning. 

Ms. Miles, what, if anything, would be missed by relying on aerial surveying in lieu of ground surveys? 

Ms. MILES. I think the issue that we have is we need to make 

sure that we and the other agencies who have Federal permits that 

need to be carried out have the information they need in order to 

do that. For some resource areas, as I have said, it may require an 

on-the-ground survey. So, it can be done sequentially with an aerial 

survey first, as long as the data is collected before the certification 

or at least before construction occurs. 

Mr. MCNERNEY. Well, in your opinion, can ground surveying be 

completely eliminated in any conditions? 

Ms. MILES. I do not believe right now that ground surveys in 

some instances could be eliminated. 

Mr. MCNERNEY. Although in your experience, though, there are 

some common causes for delayed—or what are some of the common 

causes for delays in construction time, start times? 

Ms. MILES. The certificates that are issued will include requirements for the company to get any outstanding permits. I don’t have 

data across the board, but in some projects we are needing to do 

water quality certification, have that certification from the agencies 

or Endangered Species Act consultation completed. 

Mr. MCNERNEY. Well, are there any areas in which FERC can 

help improve the permitting, licensing, and construction processes? 

Ms. MILES. I think what we are trying to do is to work during 

the prefiling. In pipelines, also, it is not a requirement that compaVerDate Mar 15 2010 10:04 Apr 29, 2016 Jkt 037690 PO 00000 Frm 00036 Fmt 6633 Sfmt 6633 F:\114THCONGRESS\114X111ENERGYBILLSAWAITSCANS\114X111ENERGYBILLSPEND
33 

nies use the prefiling process, but we do encourage the large pipelines to do so, and they have been doing it routinely. It is during 

that prefiling process that both we and the companies are working 

with not only us, but the other agencies that are involved. Many, 

many agencies are cooperating agencies with us in our environmental document, and that is a very valuable thing to do. 

Mr. MCNERNEY. I mean, so you are saying that the value is in 

the pre-application process, the work together cooperatively to find 

some of the hotspots and fix those beforehand. But what is the difference in terms of ultimate time between the initial application 

and the licensing if you take into account the time, the pre-licensing time? 

Ms. MILES. As long as the application that is filed is complete, 

then we are able to move quite quickly to the environmental document. I am not quite sure—— 

Mr. MCNERNEY. I mean, ultimately, if you want to get a permit, 

how much time do you save by going through a pre-permitting 

process as opposed to just going into it and wrestling with FERC 

during the permitting process? 

Ms. MILES. Our experience is that most projects move more 

quickly if they have used the prefiling process. There are some that 

it is not necessary on, where there aren’t a lot of issues. But, where 

there are, it is a valuable thing to use. 

Mr. MCNERNEY. OK. Thank you. 

Mr. Minzner, you mentioned that FERC has tools to protect consumers and the public interest if a serial merger is taking place. 

How often does FERC use those tools and have they ever been used 

when reviewing actions under Section 203? 

Mr. MINZNER. Well, our primary tool, when looking at actions 

under 203, is, in fact, the merger authority. The broad set of tools 

I referred to involves FERC’s overall authority of the rates, terms, 

and conditions of the services of public utilities. 

One of the goals of the Section 203 and the merger approval is 

to ensure that a merger does not have an effect on competition or 

rates. That is one mechanism that FERC carries out its statutory 

mission to ensure that electric rates are just and reasonable. 

The other tools are other mechanisms. The Commission is constantly looking at the rates that are filed by electric utilities that 

operate in Commission markets. It has an active program of reviewing the market-based rates. It is also continually looking at the 

mitigation efforts in the organized wholesale markets. So, it is 

something the Commission does routinely as it is looking at the behavior of public utilities. 

Mr. MCNERNEY. Can you answer briefly how many enforcement 

actions did FERC take in 2015? 

Mr. MINZNER. I am not aware of the number of enforcement actions the Commission has taken in 2015. We will have to get back 

to you with that. 

Mr. MCNERNEY. Thank you, Mr. Chairman. 

Mr. WHITFIELD. At this time the Chair recognizes the gentleman 

from Illinois, Mr. Shimkus, for 5 minutes. 

Mr. SHIMKUS. Thank you, Mr. Chairman. 

34 

I just have one issue. It is on, I think, the last bill noticed. Hopefully, I will be here for the second panel for Mr. Marsan’s testimony. 

But I want to weave the story about language of law, congressional intent, and, then, obviously, agency implementation, or lack 

thereof, which is a thing that we always talk about here and that 

our public always harasses about, because we have the language of 

law. We have Members who are present in the Conference Committee. We have the record, but, then, somehow through agency or 

Commission activities, things don’t handle. And then, you fall into 

litigation and lawsuits and all this other stuff. 

So, let me go back to the 2005 energy bill. Again, Mr. Marsan 

has it, I think, properly identified in his testimony. He is on the 

second panel. And I was lucky to serve on the Conference Committee for the passage of that bill, led by at that time Chairman 

Barton. 

The sole purpose of one of the revisions was to update the pricing of the cost of doing a project from decades ago to a $10 million 

threshold where, if it is under that, Commission involvement was 

not needed. We upped that dollar amount to what they needed to 

be, based upon $10 million. So, I think the original threshold was 

$50,000 40 years ago. That was the intent. That is what we did. 

The law was passed. 

Now it seems that on the equation line there is a debate about 

purchases versus divestitures, and that our argument would be 

that the intent of the legislation in the 2005 energy bill was to set 

a new threshold for a dollar amount when the Commission should 

be involved. We don’t think you all are doing that. That is why I 

think we have the last bill in this series of bills listed for the hearing, to address that. 

We sought to address this issue in H.R. 8 last year, and we appreciate that we are staying committed, this committee, to make 

this simple fix once and for all on this piece of standalone legislation. We are just trying to really, unfortunately, fix something we 

don’t think needs to be fixed, based upon Commission reading into 

intent of the language of law that was never meant to be intended 

by those who served on the Conference Committee. 

Do you understand the weaving of the question and do you have 

any comments to that? 

Mr. MINZNER. Yes, Congressman. I am not aware of any published legislative history in 2005. 

Mr. SHIMKUS. Well, I can tell you what it is. 

[Laughter.] 

I was there. Some of us were there. 

Mr. MINZNER. Yes, you are correct that, prior to that legislation, 

Section 203 contained a $50,000 figure that the Commission had 

interpreted through its regulations as applying to all the provisions 

of Section 203. As a result of the change in EPAC 2005, and the 

statute was broken into subsections, three of which contained a $10 

million figure, and the one that we are discussing today currently 

does not. You are correct, the Commission has interpreted that as 

not imposing any de minimis threshold for mergers and consolidations. Obviously, this would add that provision into the statute and 

put us in a situation where the same financial threshold applies to 

35 

all provisions under Section 203, which was the case prior to EPAC 

2005. Then, of course, it was $50,000 rather than $10 million. 

Mr. MCNERNEY. Thank you. That is, actually, a great answer because I think, in answering that, you identified the problem. Three 

of the provisions were accepted under the $10 million, and the 

Commission by themselves decided that one did not. We would 

argue that it was always the congressional intent for $10 million 

to be that. So, I would hope that our colleagues would ask questions as we move this forward and get this fixed in an area that 

we probably shouldn’t have needed to fix. 

With that, Mr. Chairman, thank you, and I yield back. 

Mr. WHITFIELD. The gentleman yields back. 

At this time the Chair recognizes the gentleman from New York, 

Mr. Tonko, for 5 minutes. 

Mr. TONKO. Thank you, Mr. Chair. 

Ms. Miles and Mr. Minzner, thank you for being here today. 

Ms. Miles, at what point during the natural gas pipeline application process are data from surveying used? 

Ms. MILES. The data that is gathered would be used in our environmental document. 

Mr. TONKO. So, your prefiling? 

Ms. MILES. Once the application is filed, we would be looking to 

make sure that we have all the data that we need to analyze the 

issues that have been raised. And then, that would be analyzed in 

that document and made available to the public to comment on it. 

Mr. TONKO. OK. Thank you. Today is FERC able to accept aerial 

survey data? 

Ms. MILES. Yes, we are. 

Mr. TONKO. And what about the Army Corps of Engineers or any 

of our State environmental agencies? 

Ms. MILES. I am not able to speak for them. I understand that 

they do accept it differently, but I have not experienced that. So, 

I am not able to speak for them. 

Mr. TONKO. OK. I appreciate that. I understand that FERC is 

the coordinating agency on these projects, but it seems to me that 

this bill is really about the data that other agencies, including nonFederal agencies, are willing to accept as they work on their studies as part of the application process. I think it would be important 

to hear from those agencies also. 

Ms. Miles, this bill allows aerial data to be verified by ground 

surveys after the fact, is that correct? 

Ms. MILES. Yes, after the certification would be issued, then 

where there is a need to verify the data by ground survey, that 

would be done then, before construction could begin. 

Mr. TONKO. OK. 

Ms. MILES. And the license would spell that out. I mean, the certification would spell out exactly what is needed for which resources. 

Mr. TONKO. OK. And do you foresee the potential for problems 

or delays if an agency decides that it needs this data to be verified 

much later in the process? 

Ms. MILES. As I said in my testimony, there are some cases 

where it has the potential to delay or add additional expense if 

36 

there is more analysis or perhaps even a rerouting of the pipeline 

at a later date. 

Mr. TONKO. Thank you. And when a natural gas pipeline application is finalized and submitted, about how long does it take for 

FERC to make a decision on any given project? 

Ms. MILES. I am sorry, could you restate the question, Congressman? 

Mr. TONKO. Sure. When a natural gas pipeline application is finalized and submitted, about how long does it take for FERC to 

make its decision on a project? 

Ms. MILES. That does vary from project to project, but our record 

shows that we have issued about 92 percent of our projects within 

1 year from the filing of the application. 

Mr. TONKO. So, pretty much an average of perhaps less than a 

year? 

Ms. MILES. Yes. 

Mr. TONKO. And since 2005, FERC has authorized a lot of natural gas pipeline infrastructure, over 10,000 miles of interstate 

transmission pipeline. Am I right in that assumption, in that fact? 

Ms. MILES. I would need to check that fact. 

Mr. TONKO. OK. This bill is a solution, I believe, in search of a 

problem. FERC is able to process applications currently at an appropriate speed while allowing for public discussion and thorough 

environmental review. My fear is that a transition to primarily aerial surveying would alter that dynamic and it would promote expediency at the expense of property owners’ rights. So, with that, I 

think we should be somewhat concerned with these proposed 

changes and err on the side of property owners and their rights. 

I thank you both again for your testimony today. 

With that, Mr. Chair, I yield back the balance of my time. 

Mr. WHITFIELD. The gentleman yields back. 

At this time the Chair recognizes the gentleman from Ohio, Mr. 

Latta, for 5 minutes. 

Mr. LATTA. Well, thank you, Mr. Chairman, for today’s hearing, 

and thank you very much to our witnesses for being with us today. 

We appreciate your testimony today. 

I know some of the questions, it is kind of like it might sound 

a little bit redundant, but we are just kind of asking, not quite asking the same questions the same way, but just with a little bit different twist. 

Ms. Miles, I would ask you the first few questions. Do you think 

that the changes in H.R. 3021 work to balance environmental concerns while allowing FERC to more effectively fill its mission as 

the lead agency under Section 7 of the Natural Gas Act? 

Ms. MILES. I think the changes, as I have said, the changes, we 

are accepting aerial survey data at present. However, the companies are tending to do on-the-ground survey when they have access, 

and that is the key. 

Mr. LATTA. So, when you are saying you are accepting it right 

now, FERC doesn’t have any objection right now for allowing aerial 

surveys for that information to come before you then? 

Ms. MILES. We do not. 

37 

Mr. LATTA. OK. Would FERC object to a State agency using aerial survey data to issue a conditional Clean Water Permit when it 

is required for a FERC certificate? 

Ms. MILES. I am not able to speak for the other agency. 

Mr. LATTA. OK. And does FERC have any reason to oppose H.R. 

3021? 

Ms. MILES. I don’t think there is a reason to oppose. We have 

mentioned what could possibly be a problem if we get a majority 

of the survey data through aerials late in the process. 

Mr. LATTA. OK. Thank you. 

Mr. Minzner, if I could turn to you, regarding the Fair Rates Act, 

in those situations when filings have taken effect under Section 

205 without a Commission order, how does the Commission handle 

the rehearing requests of those parties that have sought rehearing? 

Mr. MINZNER. Under the current structure of the Federal Power 

Act, my view and the stated view of the Commission is that rehearing does not lie. So, the rehearing conditions are simply dismissed. 

That has happened twice. So, rehearing is just not acted on. 

Mr. LATTA. If the Commission dismisses these rehearing requests, what recourse do the parties have? Can they appeal the decision to the court of appeals? 

Mr. MINZNER. Our position is, under the current version of the 

Federal Power Act, there is no opportunity for rehearing if the 

rates take effect as a matter of law. And because rehearing is a 

prerequisite to appellate review, there is no appellate review, either. 

Mr. LATTA. Thank you. 

And you note in your testimony that the Fair Rates Act would 

have significant benefits. Please explain on these benefits, particularly with respect to the parties seeking rehearing before the Commission and, also, parties seeking a redress in the court of appeals. 

Mr. MINZNER. Rehearing and appellate review are important 

ways where individuals and entities that have not succeeded at the 

administrative stage could seek review of administrative action. It 

is an important procedural protection, and the primary benefit is 

that it would allow individuals who disagree with the action of the 

agency to seek redress in the court of appeals. 

Mr. LATTA. Thank you. 

Mr. Chairman, I am going to yield back the balance of my time. 

Mr. WHITFIELD. OK. The gentleman yields back. 

At this time the Chair recognizes the gentlelady from California, 

Mrs. Capps, for 5 minutes. 

Mrs. CAPPS. Thank you, Mr. Chairman, for holding this hear 

and, also, to today’s witnesses for your testimonies. 

We all agree that we need to ensure a regulatory landscape that 

successfully addresses energy needs across this Nation. But decisions we make regarding our Nation’s energy infrastructure could 

have both positive and negative impacts on our local economies, on 

public health, and environmental safety. 

Some of these impacts have been seen, unfortunately, negatively 

in my District. Some of you may know that in May of last year an 

oil pipeline ruptured near the coast in my District, resulting in a 

spill that both polluted the land and the adjoining water. This oil 

fouled our beaches, and they are key for recreation and tourism in 

38 

the area, marred the pristine landscape, threatening the health of 

local plants and animals as well as the economy of the region. 

Questions about the safety of local seafood forced fisheries to close, 

resulting in lost wages, uncertainty in this industry, which is critical to the economy and culture of California’s central coast. 

Now cleanup efforts have remediated much of the immediate impact and fisheries have reopened, but we still have no idea what 

the long-term impacts will be. While I know that the AIR Survey 

Act that we are discussing today is focused on natural gas pipelines, the fact is that extraction, storage, and transportation of fossil fuels, whether oil or natural gas, this is a dirty and dangerous 

business. 

The ongoing Aliso Canyon natural gas leak just south of my District is a clear example of this danger. Not only is the methane 

from this leak significantly increasing the region’s greenhouse gas 

emissions, it is leading to adverse health impacts and it is forcing 

the relocation of nearby residents. 

So, we must prioritize the health of our constituents, the safety 

of the environment, make sure we are working to ensure these priorities. One way to do that, of course, is to continue the push toward adopting clean renewable energy. And while we do that, we 

must also ensure that we are doing all we can to ensure safest 

practices for the development and operations of our Nation’s energy 

infrastructure until we can fully replace fossil fuels. 

Utilizing all the tools available to us when making decisions regarding public health and environmental safety makes a great deal 

of sense. However, I have several concerns regarding the replacement of one method with another when they may be fundamentally 

unable to produce the same results. 

My question to you, Mrs. Miles, it touches on what many have 

been asking about, but I want to zero-in on the detail. Are aerial 

surveys able to identify all of the same details as ground surveys? 

For example, would aerial surveys be able to unequivocally state 

whether endangered or threatened species are present or if the 

landscape is a seasonal wetland, something of this nature? 

Ms. MILES. Thank you, Congresswoman. 

As I said, aerial surveys are not able to identify some particular 

resources in the detail that is needed to do an analysis and make 

a finding. Some of those that we have found that is the case to be, 

endangered species, cultural resources, and it could be wetlands 

also. 

Mrs. CAPPS. Thank you. 

You know, my fear is that the language in this bill requires different survey methods to be given equal weight and allows for one 

method to functionally replace the other, regardless of equivalency. 

Furthermore, while I appreciate that this discussion addresses one 

aspect of the energy infrastructure development, it is only the beginning of a much larger conversation we must have in this committee regarding not only pipeline siting, but also pipeline safety 

and supporting renewable energy technologies. 

Mr. Chairman, I do look forward to continuing to work with you 

and other efforts to improve our Nation’s energy infrastructure. 

Thank you very much, and I have no further questions. I will 

yield back. 

39 

Mr. WHITFIELD. The gentlelady yields back. 

At this time the Chair recognizes the gentleman from West Virginia, Mr. McKinley, for 5 minutes. 

Mr. MCKINLEY. Thank you, Mr. Chairman. 

Director Miles, if I could focus back on the five hydroelectric 

projects, there doesn’t seem to be any real issue with those. So, I 

just wanted to look a little bit more. Is this common to seek an extension? How common is that to occur for an extension under the 

Section 13? 

Ms. MILES. I don’t have any statistics on it, but we do get some 

requests. 

Mr. MCKINLEY. So, I am curious whether this is becoming more 

problematic. Do we need to do some things here to streamline the 

process to do that? You don’t have any opinion on that then? 

Ms. MILES. No. The one thing that I do see that is happening is 

we are issuing a lot more licenses for original construction of hydropower at existing dams. Years ago, 10 years ago, we were doing 

all relicensing. 

Mr. MCKINLEY. Right. 

Ms. MILES. So, there is a lot of interest now in adding hydropower at existing dams, so there are more projects out there to go 

through the task of getting to construction. 

Mr. MCKINLEY. Director, if we didn’t pass this, what would happen to the license? Would they have to start all over again? 

Ms. MILES. Well, we would be required to terminate that license. 

It would expire. They would have to begin again. If the data is 

available and current enough, we would try to use as much as we 

possibly could, but we would need to go through the process with 

another public comment period. 

Mr. MCKINLEY. So, essentially, it would delay the hydroelectric, 

it would delay the whole project, would it not? 

Ms. MILES. It would delay construction, yes, to go through that 

process. 

Mr. MCKINLEY. And I can remember about 3 years ago we had 

a representative of FERC here talking about, if we didn’t start replacing some of the coal-fired power plants, particularly in the MidAtlantic, that we were going to see some rolling brownouts by next 

summer, mid-2017. So, I think it is very imperative that we keep 

moving to try to make that replacement as long as it is available. 

I thank you for your testimony and I hope people will consider 

without any more question pushing these five projects. 

Thank you very much. I yield back the balance of my time. 

Mr. WHITFIELD. The gentleman yields back. 

At this time the Chair recognizes the gentleman from Texas, Mr. 

Green, for 5 minutes. 

Mr. GREEN. Thank you, Mr. Chairman and the ranking member, 

for holding the hearing. 

I want to thank our witnesses for being here. 

Ms. Miles, it is clear from today’s hearing that FERC has a lot 

on its plate. Currently, natural gas exports, pipelines, the LNG, 

and hydropower liability all fall under FERC. In addition, if the 

House passed H.R. 8, it would expand FERC’s permitting authorities to most of these sectors. 

40 

In your position as Director of the Office of Energy Projects, most 

of these issues fall in your office. Has the increased activity of the 

last few years affected your office? Have you required additional 

experts or have you been able to make do with the existing personnel? 

Ms. MILES. We regularly review our resources to make sure they 

match with our tasks before us, and we discuss with the Chairman 

any needs for additional. We also use our contracting availability 

to help us with the peaks and valleys that are an inevitability of 

applications for pipelines, LNG, and hydropower projects. 

Mr. GREEN. OK. We are on the horizon of another appropriations 

season. Does the Office of Energy Projects posses the resources to 

handle additional responsibility and activities or do you anticipate 

additional needs? 

Ms. MILES. I think we are managing as we are able, and that is 

something that I talk about with our Chairman. It comes in as our 

budget requests. 

Mr. GREEN. OK. FERC occupies such a unique role of coordinating with all the Federal agencies and State. Can you identify 

for us the top challenges facing the projects your office handles? 

What slows down the projects the most? 

Ms. MILES. As I have said before, I think one of the most important things for the gas projects, and, actually, for the hydro projects 

also, is using our prefiling process, that it can be extremely valuable if everyone is active during that time. 

The other thing that is very important is that the information 

that is needed for us to move forward and for other agencies also 

to do their permitting is collected during that prefiling stage. So 

that when the application is filed, it is complete and we are able 

to notice and go right to our environmental document. 

Mr. GREEN. Let me follow up on that. Is there a particular Federal agency or State agency that doesn’t respond as timely? Because I know prefiling helps a lot, but it still can be slowed down 

by agencies not getting back the information for you. 

Ms. MILES. Right. I think we work really well to bring all the 

agencies to the table during this prefiling time and have regular 

conversations with them. Things vary from project to project in different parts of the country. So, I can’t speak to any one in particular. 

Mr. GREEN. OK. I know from Texas, obviously, we always have 

a lot of natural gas pipelines and cross-border with Mexico because 

we are actually selling more gas to Mexico. I was just wondering 

if it was a particular problem. 

As you know, this can be challenging and potentially when dealing with State and local officials that possess different points of 

view than the Commission or the applicants. What remedial steps 

can FERC take as the coordinating agency if State and local officials do not cooperate in a timely fashion? 

Ms. MILES. Well, we try to work with them. If someone is not 

able to come to the table, to bring them to the table, so they do 

participate. If not, we certainly make sure they understand how to 

participate in the process. And then, we keep the process moving 

along. 

41 

Mr. GREEN. So, is there any problem with any individual State 

that they may not get back with you as quick as they can or participate? 

Ms. MILES. I can’t speak to any in particular agency that that 

is the case. On one project every now and then we will have to 

work a little harder at it. 

Mr. GREEN. And could the same be said about a Federal agency, 

because you have to also coordinate all the Federal agencies along 

with the State? 

Ms. MILES. Yes, many, many of the Federal agencies and State 

agencies who are carrying out Federal authorizations are cooperating agencies with us in our environmental document. That is a 

very good way to have a simultaneous look at effects on all resources. So, we encourage that, and most agencies are very interested in doing that. 

Mr. GREEN. OK. Thank you, Mr. Chairman. I yield back. 

Mr. WHITFIELD. The gentleman yields back 16 seconds. 

At this time I recognize the gentleman from Virginia, Mr. Griffith, for 5 minutes. 

Mr. GRIFFITH. Thank you, Mr. Chairman. 

Ms. Miles, I have listened to your testimony in regard to H.R. 

3021, the Pompeo bill. I think what you are saying makes a lot of 

sense. I like aerial surveying in the first place, but I do think that 

some of my friends on the other side aisle have raised some issues, 

and you have touched on it a little bit as well in regard to being 

able to identify everything on the ground. You have indicated that 

there ought to be something before construction, if we use an aerial 

survey, because you can’t spot salamanders and certain small creatures or understory plants necessarily. You might spot areas that 

look like they might have that growth, but you can’t do it. 

Is there anything in the bill that we need to change to make sure 

we get to where you want? I want to see the aerial surveying be 

equal, at least in the initial stages, as you have indicated you are 

fine with. But is there anything in the language that is currently 

proposed that we ought to change or look at in order to assure that 

we are also making sure that we don’t overlook some important ecological asset? 

Ms. MILES. I am not looking at the bill this moment. 

Mr. GRIFFITH. Yes, ma’am. 

Ms. MILES. We would be happy, staff would be happy to work 

with the committee on that. 

I think the one thing that I have commented on is that, where 

ground access is available, currently, we are finding that the companies—and they want to also—are providing that data. So, that 

is an important point. 

Mr. GRIFFITH. And I agree with that. It is also good if you are 

trying to figure out where you want to a line. I think it is quick. 

Particularly, you may see some problems if you are looking at 

siting a gas pipeline, that you can do that sometimes a lot faster 

in the air than you can on the ground. So, there are advantages 

and disadvantages, I suppose, to both. 

In regard to H.R. 2984, Ms. Miles, I am not going to ask you to 

comment, the Fair Rates Act. I would just have to say to Mr. Kennedy that I have a lot of constituents who are willing to dig coal, 

42 

ship it to you by train or truck. We can lower your electric prices. 

We don’t even need FERC action. What we may need is a little 

EPA action. But if we were allowed to, we could take care of your 

high rates for you. 

Mr. KENNEDY. You are a good man, my friend. 

[Laughter.] 

Mr. GRIFFITH. With that, Mr. Chairman, I yield back. 

Mr. WHITFIELD. Thanks, Mr. Griffith. 

At this time I recognize the gentleman from Vermont, Mr. Welch, 

for 5 minutes. 

Mr. WELCH. Thank you very much, Mr. Chairman, and thank 

you for being here and helping us. 

I want to just talk a little bit about the Kennedy bill. It seems 

like it is just our linguistic mistake that there can be no appeal 

when the statute essentially was designed to give the ratepayers 

an opportunity to appeal. Are there any policy reasons that would 

suggest that what the Kennedy bill is proposing would in any way 

interfere with the capacity of FERC to carry out its responsibilities? I guess I will ask you that, Mr. Minzner. 

Mr. MINZNER. Well, the bill is aimed at a situation that, while 

it has occurred, is relatively unusual. It has not been a common occurrence that rates have changed without a Commission order. 

Mr. WELCH. No, I get that, but it happens. So, the way it is 

working around here is that a lot of times we don’t get the new 

person appointed, so we can have a two-two situation, not just in 

FERC, but otherwise. The problems we have in trying to get a person confirmed, or the Senate has, shouldn’t be the ratepayer problem, I think is the point of the bill. 

What I am asking you is that, if this bill were passed, and, then, 

it meant that if it were a two-two decision, ratepayers would be 

able to do what they are now entitled to do if it were a three-two 

decision or a five-zero decision. Would that in any way compromise 

the responsibilities of FERC? 

Mr. MINZNER. I think the only difficulty I foresee with the bill 

is one of reviewability or administrative functionality at the court 

of appeals. Right now, when an action goes up to the DC Circuit, 

they review the Commission order and they review the action. The 

DC Circuit may have a more difficult challenge if there is nothing 

to review from the Commission, but—— 

Mr. WELCH. I don’t understand it. If there is a two-two decision, 

there is a two-two decision, right? 

Mr. MINZNER. That is not exactly right, Congressman. There is 

no Commission action because it is two-two. It is not a situation 

like you might see from the U.S. Supreme Court where there is an 

actual opinion with two votes on either side. Here it just takes effect and there isn’t a decision, and that would be the difficulty in 

administrative review. The court of appeals wouldn’t have anything 

to look at. I do think that is a difficulty that could be overcome, 

if you were concerned about that. 

Mr. WELCH. Right, by writing a decision or having the two write 

their decision and the two write theirs. So, there would, then, be 

something to review. 

Mr. MINZNER. When it has happened in the past, there is simply 

no Commission order. There is nothing on either side. 

43 

Mr. WELCH. No, I get that, and I think the effort here is to try 

to provide that opportunity. Because it just seems kind of bizarre, 

whichever side of the case you are on, that you have got a statutory 

right to appeal unless it is deadlocked at two-to-two. So, all right. 

Let me just go on to the second thing. Anyway, Mr. Kennedy, 

thank you for that legislation, which I hope we can all support. 

The Supreme Court decision on demand response, from my point 

of view, is a tremendous tool that is going to help FERC try to help 

ratepayers keep their costs down. Can you talk, Ms. Miles, I guess, 

a little bit about that, or Mr. Minzner, and how you see that as 

being a useful tool for FERC in trying to address ratepayer concerns? And that is commercially and individual. 

Mr. MINZNER. Sure, I can answer that question. The Supreme 

Court largely agreed with the Commission’s argument that there is 

Commission jurisdiction to allow demand response to participate in 

the wholesale electric markets, and that is something the Commission has done in the past. In my view, demand response can be an 

effective tool at helping keep rates down by allowing the opportunity to avoid paying high-priced energy at peak times. 

Mr. WELCH. Right. Our largest utility, Mr. Chairman, Green 

Mountain Power, is a strong supporter of demand response, and 

our utility users seem to be very happy with it. That includes some 

of our major companies. So, keep up the good work on that. 

Mr. MINZNER. Thank you. 

Mr. WELCH. Thank you. And I yield back, Mr. Chairman. 

Mr. WHITFIELD. The gentleman yields back. 

At this time the Chair recognizes the gentleman from Ohio, Mr. 

Johnson, for 5 minutes. 

Mr. JOHNSON. Thank you, Mr. Chairman, and I want to thank 

the panel for being with us today as well. 

I represent a District in eastern/southeastern Ohio that borders 

the Ohio River, the Muskingum River. We have got a lot of hydropower potential there. 

I want to kind of take off on something that Representative 

McKinley said. Given that so many projects miss the 2-year and 4- 

year statutory deadlines, often due to issues that are beyond the 

project’s control and the applicant’s control, perhaps it makes sense 

to update the Federal Power Act to either provide FERC with 

greater discretion on setting those deadlines, maybe more flexible 

deadlines, or to increase the number of years that an applicant can 

have to commence construction. Does FERC have an opinion on 

that? 

Ms. MILES. Speaking only for myself, given that, however, the 

Chairman and former Chairmen have said up to 10 years was all 

right, if FERC had that authority to just do it itself, then folks 

would not need to come to Congress. 

Mr. JOHNSON. Right, right. OK. Well, that is good to know because we certainly need to work that because, with the plethora of 

Federal regulations and environmental studies and all kinds of 

things that applicants have to go through, it has lengthened out 

these project timelines to get all of this stuff approved. So, I appreciate that. 

Ms. Miles, as you are aware, the committee is keenly interested 

in supporting new energy infrastructure projects. One of the opporVerDate Mar 15 2010 10:04 Apr 29, 2016 Jkt 037690 PO 00000 Frm 00047 Fmt 6633 Sfmt 6633 F:\114THCONGRESS\114X111ENERGYBILLSAWAITSCANS\114X111ENERGYBILLSPEND
44 

tunities we see is in the hydropower sector, specifically adding generation to existing nonpowered dams. We have some of those in 

Ohio. That is what we are talking about as part of today’s hearing. 

So, these low-impact, renewable, and clean energy resources— 

that is what they are—are important. Yet, we continue to hear of 

problems getting projects approved, financed, and built, particularly in comparison to other energy projects. 

So, what is your view on these opportunities with hydropower 

adding power generation to existing dam structure and what is the 

reason we have not seen more of these type projects built? 

Ms. MILES. My view is that there is a lot of hydropower potential 

in the U.S. at existing dams. I think the Department of Energy has 

issued reports to that effect. 

Mr. JOHNSON. What is the holdup? 

Ms. MILES. I think that we have worked very hard with the other 

agencies who need to issue permits on those projects to be able to 

move them through the process expeditiously while being thorough 

and fair in addressing all resource areas. 

Mr. JOHNSON. Do you see it as a FERC issue? Is it a Corps issue? 

Is there anything that FERC can do and, more importantly, is 

there anything Congress can do that would help move these 

projects along more quickly? 

Ms. MILES. I think that the issue is really trying to work through 

these things simultaneously or everybody working at it together. 

That does vary, depending on agencies that we are working with 

at some of these projects. 

Mr. JOHNSON. Let me make sure I understand what you are saying. So, you are saying that—and I am paraphrasing—so, you are 

saying that sometimes these projects become serial agency to agency to agency rather than parallel agencies—— 

Ms. MILES. Correct. 

Mr. JOHNSON [continuing]. Moving things along collaboratively? 

How do we solve that problem? 

Ms. MILES. Well, we have been working with the other agencies 

where we—— 

Mr. JOHNSON. So, you do think it needs to be solved? 

Ms. MILES. That is an issue. Frankly, I mean, we have worked 

with the Corps of Engineers quite a lot on this. We have a Memorandum of Understanding for how we will work together, and we 

are in the process right now of working further with them on how 

to have our processes work well together. 

Mr. JOHNSON. But it is clearly still a slow process. 

And my time is up. I am going to have to yield back. 

Is it safe to say you agree that we need to do better collaboration 

between the agencies to parallel these things where we can? Is that 

what I am hearing you say? 

Ms. MILES. Yes. 

Mr. JOHNSON. OK. 

Ms. MILES. At projects where that is not happening now, yes. 

Mr. JOHNSON. All right. Thank you very much, and I yield back. 

Mr. WHITFIELD. The gentleman yields back. 

At this time the Chair recognizes the gentleman from Texas, Mr. 

Flores, for 5 minutes. 

Mr. FLORES. Well, thank you, Mr. Chairman. 

45 

Ms. Miles, we talked a few minutes ago about the electricity 

rates of the Northeast being among the highest in the country. Can 

you tell me why that is? What is the reason for that? 

Ms. MILES. I can’t speak to that. Do you want to speak to it? 

Mr. MINZNER. I can speak to it only in the most general sense. 

The electric rates vary across the country for a wide range of reasons. I don’t think there is a specific reason. 

Mr. FLORES. What would the top two or three reasons be? 

Mr. MINZNER. It is really a mix of the location, generation, and 

load across the country. So, it is, frankly, the intersection of supply 

and demand of energy. 

Mr. FLORES. OK. So, part of it could be the fuel sources that they 

are restricted to use, correct? I mean, Mr. Griffith sort of touched 

on this a few minutes ago. If there were more infrastructure to get 

natural gas pipelines in the Northeast, they could have naturalgas-fired electricity generation. Wouldn’t they be better off? 

Wouldn’t that solve a lot of the rate issues? 

Mr. MINZNER. I am not sure I can speak specifically to that. 

Mr. FLORES. Ms. Miles, can you speak to that? 

Ms. MILES. I can’t, either. 

Mr. FLORES. Well, I was going to say I can answer it for you. The 

answer is yes. And so, I think that is the reason the aerial survey 

bill is very important to look at. I do agree you have got to have 

ground surveys as well, but I think the aerial surveys help with 

the initial siting, and so forth. 

This is something I think you need to take a look at. How can 

the Northeast, how can New England be helped with their electricity rates? And the best thing is for better infrastructure. So, I 

would ask you to think about that as you are going through your 

permitting planning process in the future. 

Thank you, Mr. Chairman. I yield back. 

Mr. WHITFIELD. The gentleman yields back. 

At this time the Chair recognizes the gentleman. Mr. Barton, did 

you want to ask questions? 

Mr. BARTON. No. 

Mr. WHITFIELD. OK. Mr. Hudson of North Carolina is recognized 

for 5 minutes. 

Mr. HUDSON. Thank you, Mr. Chairman, and thank you for holding this important hearing. 

Thank you to our panel for participating. 

I am proud to be a cosponsor of Representative Pompeo’s bill to 

amend Section 203 of the Federal Power Act, as well as Representative Kennedy’s Fair Rates Act. I am also glad to see Representative Foxx’s bill move forward regarding the Kerr Scott Hydropower 

Project in Wilkes County, North Carolina. These are common-sense 

bills, and, Mr. Chairman, I appreciate your bringing them before 

this subcommittee. 

To get to my questions, I would like to build on the line of questioning my colleague Mr. Johnson raised dealing with hydroelectric 

power. Ms. Miles, you note in your testimony that FERC has generally taken the position of not opposing legislation that would extend the commencement of construction deadlines no further than 

10 years from the date that license in question was issued. So, because each of the hydro bills before us today provides for comVerDate Mar 15 2010 10:04 Apr 29, 2016 Jkt 037690 PO 00000 Frm 00049 Fmt 6633 Sfmt 6633 F:\114THCONGRESS\114X111ENERGYBILLSAWAITSCANS\114X111ENERGYBILLSPEND
46 

mencement of construction deadlines that do not exceed 10 years 

from the dates the respective licenses were issued, is it true that 

FERC does not oppose any of these bills? 

Ms. MILES. Yes, we do not; I do not. 

Mr. HUDSON. Thank you. 

Historically, hydropower has played a primary energy storage 

role with hydro pump storage currently providing 97 percent of energy storage in the U.S. What is your view on the energy storage 

and pump storage in particular? 

Ms. MILES. Pump storage does provide considerable grid scale 

storage, and it can be very valuable. We have noticed an increase 

in applications for pump storage projects, especially in areas where 

there is a lot of wind and solar projects. 

Mr. HUDSON. Well, what are the market issues that need to be 

addressed to support development of new pump storage and what 

can FERC do, either by itself or working with State PUCs and the 

ISOs, RTOs? 

Ms. MILES. I am not really able to speak to market issues. Our 

primary responsibility is to analyze the projects that come before 

us in a very thorough, fair, and scientifically sound way, and to 

have a process that allows us to do that. 

Mr. HUDSON. I appreciate that. 

Have there been any issues working with State PUCs and others 

that could be addressed or better handled, either through your 

agency or things that we could do to support that? 

Ms. MILES. The State PUCs typically are not involved with us as 

we do the environmental review and licensing of those kinds of 

projects, action on those kinds of projects. 

Mr. HUDSON. OK. Would you agree that FERC has a significant 

level of expertise and experience in analyzing environmental effects 

of hydro projects under its jurisdiction? 

Ms. MILES. Yes. 

Mr. HUDSON. Does FERC currently employ biologists and other 

scientific experts to provide guidance on analyzing the environmental effects of hydro projects? 

Ms. MILES. Yes. Our resources, we have experts in each resource 

area that we analyze. 

Mr. HUDSON. What is the number and experience of the staff administering the licensing and regulation of hydro projects, the 

number of PhDs, master’s degrees, et cetera? 

Ms. MILES. I can’t give you the specific number, but many of our 

staff have master’s degrees; some have PhDs. 

Mr. HUDSON. And if you could provide us that list? 

Ms. MILES. The list of which do? Certainly. 

Mr. HUDSON. That would be great. And master’s degrees, just 

what the expertise levels are. 

Ms. MILES. Certainly. 

Mr. HUDSON. That would be great. 

Regarding the FERC hydropower licenses generally, do you agree 

that the licensing processes could be shortened if the Commission 

had the ability to set enforceable deadlines and coordinate the 

other Federal and State approval involved? 

Ms. MILES. I didn’t come prepared really to testify on—I think 

you are getting at H.R. 8. However, I have spoken in the past that 

47 

enforceable deadlines can be a valuable, can be—I am going to 

move back and say I didn’t come prepared, but we would be happy 

to answer questions. 

Mr. HUDSON. OK. I would appreciate that, if you can provide us 

with an answer. 

Ms. MILES. Sure. 

Mr. HUDSON. All right. Mr. Chairman, that exhausts my line of 

questioning. I would yield back. Thank you. 

Mr. WHITFIELD. The gentleman yields back. 

At this time the Chair recognizes the gentleman from Mississippi, Mr. Harper, for 5 minutes. 

Mr. HARPER. Thank you, Mr. Chairman. 

And thanks to you, witnesses, for being here. 

Just to comment, Ms. Miles, I believe you addressed it earlier 

with Mr. Johnson, but just as a side note, it is my understanding 

that four new hydro projects have been approved in Mississippi, 

and we appreciate FERC’s diligence in those matters. 

Mr. Minzner, you state in your testimony that the legislation to 

amend Section 203 of the Federal Power Act could ease the administrative burden on the Commission staff and the regulatory burden on the industry without a significant negative impact on the 

Commission’s regulatory responsibilities. Can you please elaborate 

or briefly expand on these potential benefits of the legislation? 

Mr. MINZNER. Thank you, Congressman. On the burden side, certainly every 203 filing requires review by Commission staff and action by the Commission through some sort of order. A de minimis 

threshold would mean that, for those falling below the $10 million 

level the Commission would not need to take that action. And similarly, on the side of industry, they would not need to make the initial filing, which would ease their burden. 

In terms of the effect on the regulatory program, the filings that 

come in for mergers or consolidations of smaller facilities, those 

below the $10 million, are ones that are less likely to impose potential consequences on rates or on competition. 

Mr. HARPER. Great. Thank you. 

With the interest of time, Mr. Chairman, I will yield back. 

Mr. WHITFIELD. The gentleman yields back. 

At this time I want you all to know we are not trying to discriminate against Mr. Kennedy. He is a member of the Energy and 

Commerce Committee, but he is not a member of this subcommittee. Even though we are considering one of his bills today, 

he has patiently waited until everyone else has asked questions. 

So, at this time we will recognize Mr. Kennedy for 5 minutes. 

Mr. KENNEDY. Mr. Chairman, thank you very, very much. I appreciate the opportunity to join you and squat in on the Energy 

and Power Subcommittee. 

I appreciate the kind words from my colleagues on the other side 

of the aisle on the offer for both purchasing of coal, Mr. Griffith, 

very well noted. Thank you. And to the rest of my colleagues as 

well, thank you. 

Mr. Minzner, a couple of questions for you, sir, to begin with. 

You mentioned in your testimony that Section 205 of the Federal 

Power Act includes a 60-day clock for review in which FERC will 

take action. Can you discuss what requirements the Commission 

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has within those 60 days and does FERC have an affirmative requirement to actually act? 

Mr. MINZNER. The statute does not require the Commission to 

act. However, the Commission typically does take action on the filing by approving it, denying it, or requesting additional information from the utility. The consequences, though, if the Commission 

does not act in that time period, is the rates do take effect. 

Mr. KENNEDY. And I know you are well aware, obviously, of what 

happened in New England in 2014 with that Capacity Auction No. 

8 done by the Commission. You mentioned in your testimony and 

response to questions that that is an exceedingly rare occurrence. 

Does that only occur when there are four Commissioners present 

or has it happened when there is an even number—or excuse me— 

an odd number of Commissioners as well? 

Mr. MINZNER. Rates have taken effect not solely as a result of 

a two-two split of the Commission. In fact, under the Federal 

Power Act, the situation you mentioned, ISO New England, I believe is only the second time that I am aware of that it has happened as a result of a two-two split. It has happened under other 

occasions, though. 

Mr. KENNEDY. Can you just shine some light on what those other 

occasions, if you can recall what those other occasions were? 

Mr. MINZNER. We don’t know the reason for all of them. On one 

occasion, the Commission stated that the rates took effect inadvertently because of Commission failure to act. 

Mr. KENNEDY. OK. Given that the Commission is currently down 

to four Commissioners, what tools does the Commission have to 

avoid a deadlock on any rate change filed across the country? I realize that most changes are noncontroversial and unlikely to result 

in a deadlock anyway, but this outcome is certainly, obviously, not 

impossible. Before we can, hopefully, get this bill across the finish 

line, what options are available to FERC to provide proper access 

to administrative and judicial review for ratepayers? There is, as 

you are well aware, an auction set to take place in New England 

next week. Given the fact that there are four—another Commission 

has noticed his intent to retire; no other nomination is currently in 

the pipeline—what, if any, tools does FERC have to make sure we 

don’t end up in the same place? 

Mr. MINZNER. I know the Commission staff and the Commissioners are very dedicated to working collaboratively to reaching 

outcomes that can have the support of the majority of the Commissioners. I think certainly the Commission has endeavored to do 

that in the past and has effectively managed to reach a majority 

vote on almost every occasion. 

Mr. KENNEDY. But there is nothing—and I appreciate that and 

I understand that—but has there been any specific policy change 

internal to FERC where, with four Commissioners, in the advent 

of a hearing having to go through with four Commissioners, and 

that notice being put forth, that there would be some sort of review? Provided that this bill doesn’t make it to the President’s desk 

by the time that those Commission results are near, do the auction 

results need to be certified? 

Mr. MINZNER. In my view, under the current version of the Federal Power Act, if the Commission does not act as a result of a twoVerDate Mar 15 2010 10:04 Apr 29, 2016 Jkt 037690 PO 00000 Frm 00052 Fmt 6633 Sfmt 6633 F:\114THCONGRESS\114X111ENERGYBILLSAWAITSCANS\114X111ENERGYBILLSPEND
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two split or otherwise, there would not be rehearing or appellate 

review available under the current statutory framework. Other 

than working to reach consensus and a majority vote, I am not 

aware of other internal policy changes. 

Mr. KENNEDY. OK. Thank you. I yield back. 

Mr. WHITFIELD. The gentleman yields back, and that concludes 

the questions for the first panel. 

Ms. Miles and Mr. Minzner, thank you for being with us. We 

look forward to working with you, as we continue our efforts on all 

of this legislation. 

At this time I would like to call up the witnesses on the second 

panel, if you all would come and have a seat. 

I know that Mr. Kennedy is going to be introducing one of our 

witnesses. So, I will call on him to make that introduction at this 

time. 

Mr. KENNEDY. Thank you, Mr. Chairman. 

Mr. Chairman, I am pleased to introduce a fellow member of 

Massachusetts that has come down on relatively short notice to 

join us here today, Mr. Bottiggi, who runs the Braintree Power 

Plant, a municipal power plant, who has a deep knowledge in how 

our energy systems work in Massachusetts, how our capacity markets work, and the intricacies surrounding the increase of cost that 

we have seen in recent history in Massachusetts. He is one of the 

few people I have found, Mr. Chairman, on this planet that can actually explain this in language that people understand, for which 

I am eternally grateful. 

So, we are grateful to have you here. I look forward to your testimony and the light that you can shine on how things are working 

and how they are not working in Massachusetts and across the 

country. 

Thank you. 

Mr. WHITFIELD. Well, thank you very much for that introduction. 

I will at this time introduce the other members of this panel. 

First, we have Mr. Timothy Powell, who is the Director of Land, 

GIS and Permits at the Williams Company. 

We have Mr. Edward Lloyd, who is the Evan Frankel Clinical 

Professor of Environmental Law at Columbia University School of 

Law. He is here today on behalf of the New Jersey Conservation 

Foundation and the Stony Brook-Millstone Watershed Association. 

We also have Mr. Bill Marsan, who is the Executive Vice President and General Counsel and Corporate Secretary of the American Transmission Company. 

We have Mr. Tyson Slocum, who is the Energy Program Director 

of Public Citizen, Inc. 

And then, we have Mr. Jeffrey Leahey, who is the Deputy Executive Director for the National Hydropower Association. 

We thank all of you for taking time in your very busy schedules 

for being with us today. I am going to call on each one of you, and 

you will be given 5 minutes for your opening statements. Be sure 

and pull the microphone close, and make sure the microphone is 

on. 

Mr. Powell, we will recognize you first for your opening statement for 5 minutes. 

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STATEMENTS OF TIM POWELL, DIRECTOR OF LAND, GIS AND 

PERMITS, THE WILLIAMS COMPANY, ON BEHALF OF THE 

INTERSTATE NATURAL GAS ASSOCIATION OF AMERICA; EDWARD LLOYD, EVAN M. FRANKEL CLINICAL PROFESSOR OF 

ENVIRONMENTAL LAW, COLUMBIA LAW SCHOOL, ON BEHALF OF THE NEW JERSEY CONSERVATION FOUNDATION 

AND THE STONY BROOK–MILLSTONE WATERSHED ASSOCIATION; BILL BOTTIGGI, GENERAL MANAGER, BRAINTREE 

ELECTRIC LIGHT DEPARTMENT, ON BEHALF OF THE 

NORTHEAST PUBLIC POWER ASSOCIATION; BILL MARSAN, 

EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL, 

AMERICAN TRANSMISSION COMPANY; TYSON SLOCUM, ENERGY PROGRAM DIRECTOR, PUBLIC CITIZEN, INC., AND JEFFREY LEAHEY, DEPUTY EXECUTIVE DIRECTOR, NATIONAL 

HYDROPOWER ASSOCIATION 

STATEMENT OF TIM POWELL 

Mr. POWELL. Thank you, sir. 

Mr. Chairman, Ranking Member, and members of the subcommittee, my name is Tim Powell, and I am the Director of Land, 

GIS and Permits for the Williams Companies. I am also appearing 

today on behalf of the Interstate Natural Gas Association of America, the industry association representing the interstate natural gas 

pipeline industry. 

Mr. Chairman, I appear today to support House Resolution 3021, 

introduced by Representative Pompeo and cosponsored by Representatives Mullin, Schrader, and Meeks, which endeavors to address a permitting challenge facing jurisdictional pipelines, which 

I shall explain. We thank the committee for including a version of 

that language as part of H.R. 8. 

FERC has long served as the lead agency for considering pipeline 

applications, pursuant to the Natural Gas Act. In Section 313 of 

the Energy Policy Act, this committee and this Congress instructed 

Federal and State agencies involved in the process to cooperate 

with the FERC and comply with the permitting schedule established by the Commission. 

However, the permit process followed by some Corps of Engineer 

Districts and corresponding State agencies, pursuant to their Clean 

Water Act responsibilities, can cause them to fail to meet the 

FERC schedule, resulting in permit delays. This is most notable in 

the agency’s deeming they have insufficient field survey data to initiate their review. These processes are not required by the Clean 

Water Act and could be modified to better conform with the FERC 

schedule. That is the goal of this legislation. 

Often, the first time an affected landowner has face-to-face contact with the company is when an agent is knocking on their door 

and asking that landowner to sign a form giving the company permission to begin performing field surveys. These data are used to 

support the NEPA review, identify the least-damaging alternative, 

determine constructability, and obtain other permits and approvals, such as those required by the Clean Water Act. 

Many landowners elect to participate in the process, but some 

elect to exercise their right to deny permission. In my experience, 

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Williams receives approximately 70 to 80 percent survey permission prior to the certificate filing. 

For various reasons, the remaining landowners either delay survey approval or outright deny it. Williams and other INGAA member companies fully respect each landowner’s right to decide if and 

how they participate in the project. The problem is that some Corps 

of Engineer Districts and State agencies with 401 water quality 

certification responsibility will require an applicant to conduct up 

to 100 percent full survey in order to deem a permit application 

complete. In other cases, the Corps and responsible State agency 

will begin processing applications, but will not make a decision 

without 100 percent field survey. This approach is not required 

and, indeed, in some cases the agencies will accept the best-available data and move forward with condition permit decisions. 

If any agency is to require a percentage of field survey beyond 

which the company can obtain in order to deem an application complete, the company is placed in a classic Catch-22 situation. The 

FERC process anticipates that companies will submit applications 

for Federal approvals prior to or concurrent with the application for 

a certificate. Typically, the time between a certificate filing and an 

order is around 1 year. This is the same timeline that an agency 

administering the 401 water quality certification has to act once 

they deem an application complete. These two timelines can only 

align if the 404 application is deemed complete and runs in parallel 

to the certificate proceeding. 

The solution is to direct all other agencies involved in issuing 

Federal authorizations to accept data gathered by means other 

than on-the-ground surveys. If the agency elects, any permits 

issued based on remote sensing could be conditioned upon ground 

survey verification once access has been obtained. This is an important point and bears emphasizing. 

If the agency deems it necessary, no ground disturbance would 

occur on remote-sense tracks prior to verifying that data by on-theground survey. Non-field-survey data-gather methods may include 

satellite photography, sensors attached to fixed-wing aircraft, helicopter aerial photography, previous mapping, or by studying the 

area from accessible locations. 

The proposal solution has a number of obvious benefits. It allows 

pipeline companies and regulators to assess likely impacts and 

make informed decisions, aligns the certificate proceeding with 

other Federal reviews, and allow FERC to effectively fulfill its lead 

agency mandate while minimizing the adversarial relationship between landowners and the pipeline company, when agencies require more ground survey than property owners want to provide. 

In summary, Mr. Chairman, we believe the legislation being discussed is a win/win for all involved in the permitting process and 

we urge its adoption. 

[The prepared statement of Mr. Powell follows:] 

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Mr. WHITFIELD. Thank you very much. 

Mr. Lloyd, you are recognized for 5 minutes for your opening 

statement. 

STATEMENT OF EDWARD LLOYD 

Mr. LLOYD. Thank you, Mr. Chairman and Ranking Member, and 

members of the committee. 

I take a different view than the last witness. Unfortunately, I 

don’t think the aerial surveys are going to solve the problem that 

we all want to solve. Scientists for the New Jersey Conservation 

Foundation have looked at 1,000 plant and animal species in New 

Jersey that would have to be surveyed under the Endangered Species Act and other rare and specified species. We found that less 

than 1 percent of those species can be identified with aerial surveys. 

So, the problem is that, if we begin to rely on aerial surveys, especially in the prefiling process, we are going to have to go back 

and verify. To me, at the end of the day, it is going to delay the 

process, not expedite it. 

I think all of us want the best data we can have. The problem 

is that aerial surveys, by and large, are not going to get us the data 

that we need to do the proper analysis by the agency. Of the 1,000 

species we looked at, there were only 1 percent that actually could 

be identified by aerial surveys. So, it means we are going to have 

to go on the ground and ground-truth it. 

If we don’t do it upfront, it could lead to having to revisit it. If 

we go to verification, then we have to revisit those surveys, and we 

may have to change the pipeline route. It is not efficient for any 

of us. 

So, we would suggest that the aerial surveys are really not solving a problem and, in fact, may create more delay and drain more 

resources from the agency. 

The other thing I wanted to mention is the impact on landowners. In New Jersey we have already experienced the use of aerial surveys. We have had a number of complaints from landowners 

that they have been disturbing, especially in rural areas, livestock 

and the peaceful privacy of homeowners. So, aerial surveys can 

have unintended negative consequences for homeowners, and I 

think we have to be very careful about how quickly we want to authorize those aerial surveys in place of the ground surveys, which 

give us much better data and, in fact, I think the data that is needed for the agency. 

Finally, I just want to mention what we have seen, as this committee has heard this morning, a proliferation of pipeline proposals. 

There are now 80 pending proposals before FERC. We would highly 

recommend that FERC begin to look at these, instead of as individual pipelines, look at these on a regional basis. 

I think a programmatic environmental impact statement is one 

way to address that, where, again, it would save agency resources 

if we look at these pipelines together on a programmatic basis. 

Then, there may be additional individual pipeline analyses we need 

to do, but the programmatic EIS would enhance our decisionmaking process, would enhance FERC’s ability to make these analyses, and it would save resources for the companies and for FERC. 

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Thank you, Mr. Chairman. 

[The prepared statement of Mr. Lloyd follows:] 

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[Additional information submitted by Mr. Lloyd has been retained in committee files and also is available at http:// 

docs.house.gov/meetings/IF/IF03/20160202/104387/HHRG-114- 

IF03-Wstate-LloydE-20160202-SD088.pdf.] 

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Mr. WHITFIELD. Thank you. 

Mr. Bottiggi, you are recognized for 5 minutes. 

STATEMENT OF BILL BOTTIGGI 

Mr. BOTTIGGI. Chairman Whitfield, Ranking Member Rush, and 

members of the committee, thank you for inviting me to speak at 

today’s hearing. I also wish to extend a particular thanks to Congressman Kennedy for his work bringing attention to the problems 

with the forward-capacity market in New England and for inviting 

me to speak today. 

I am Bill Bottiggi, the General Manager of the Braintree Electric 

Light Department. Braintree Electric is a nonprofit municipal utility owned by the residents of Braintree, Massachusetts. Our service 

territory is limited to just the town of Braintree, and we have been 

providing highly reliable electric service at the lowest reasonable 

rates since 1892 to the residents and businesses in Braintree. 

Braintree Electric belongs to the Northeast Public Power Association, NEPPA, which represents municipal utilities in six New 

England States. I am testifying on behalf of NEPPA, but my views 

today are my own. 

Braintree Electric also belongs to the American Public Power Association, which I am on the board of directors. These remarks are 

also a top priority of the American Public Power Association and 

the 48 million customers that they serve. 

My remarks today will be focused on the forward-capacity market and the Fair Rates Act, H.R. 2984. Deregulation. In the 1990s 

in New England, in Massachusetts, deregulation of electric utility 

markets occurred, transitioning the historically vertically integrated utility markets, the utilities, to a centralized competitive 

market for wholesale power. The belief was that forcing investorowned utilities to sell their generation assets would result in the 

private development of new high-efficient generation in a competitive market, driving down the cost of electricity. 

Thousands of megawatts of generation, all natural gas, was built 

in the early 2000s. Surprisingly, though, the existing generation 

which was purchased from the investor-owned utilities did not retire as expected, and that created a large surplus of generation in 

New England. 

The primary revenue stream at the time—this was before the 

forward-capacity markets started—was payments for the electricity 

that the generators produced. With a surplus of generating capacity, some plants were not running frequently enough to provide 

their owners with the revenue they needed to cover their fixed 

costs. As a result, there were several bankruptcies. A lot of the new 

plants declared bankruptcy because they had the high debt service 

to cover, and they weren’t getting the revenue they needed to cover 

that. 

So, ISO New England recognized the markets were not working 

and implemented the forward-capacity market, starting in 2007, 

with FERC approval. Unlike the energy market, where power 

plants bid their marginal cost into ISO New England, and the ISO 

called them the cheapest units to run first, these markets provided 

capacity payments to the generators in exchange for having a physical resource available to run, for just being there. 

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Capacity prices were set, and are still set today, based on the 

need for new generation. With a surplus of generation capacity, 

prices stayed low, capacity prices stayed low from the first auction 

held in 2007 through the seventh auction held in 2013. It is a forward auction, so that seventh auction is taking place starting in 

June of 2016 for 1 year. 

Meanwhile, municipal utilities—Braintree Electric is one of 

them—were carved out from deregulation in the 1990s, and we 

were allowed to self-supply our own generation. We were left 

vertically integrated. We didn’t have to sell our power plants. We 

were allowed to provide our own capacity to our own customers. 

Self-supply allowed municipal utilities to build generation. That 

way, we could cover our own capacity needs. Braintree Electric 

built 115 megawatts of quick-start, gas-fired oil backup generation 

in 2009 under this self-supply provision, giving us price certainty 

for our capacity for a long time in the future. 

This provided us and other municipal utilities with our ability to 

cover our own capacity cost. So, we weren’t dependent on the forward-capacity auction, which creates a lot of variability in capacity 

cost, as you have seen in my written testimony. 

Unfortunately, as our needs for capacity have grown, in the future, currently, we are unable to self-supply from capacity. In 2013, 

ISO New England petitioned the FERC, who removed the right for 

municipal utilities like Braintree Electric to provide their own capacity, their own self-supply. They thought we exerted too much 

buyer-side market power. 

So, where are we today? In 2014, the eighth forward-capacity 

auction was held, and that was the first auction where new generation was needed. That big surplus that was created at the start of 

deregulation was gone. Part of that was Vermont Yankee, Brayton 

Point, Norwalk Harbor, and many other older plants finally were 

retiring for reliability reasons and environmental reasons. 

These retirements in that one auction cycle totally 4300 

megawatts of electricity, and only 1500 megawatts of new generation cleared that auction. So, that created an imbalance, driving up 

the cost-to-capacity payments to an administrated cap by ISO New 

England to $15 a kilowatt month. As a reference, previous to that, 

it was $3 a kilowatt month. So, prices jumped in one auction fivefold, from $3 to $15, which is what Congressman Kennedy referenced has happened in that auction, Forward-Capacity Auction 

No. 8. 

Some believe the closure of Brayton Point manipulated the market, causing the shortage of capacity, driving up capacity payments 

for all generation, including the fleet of plants, in addition to 

Brayton Point, that was also owned by that same company. 

All told, capacity starting in 2018 will cost New England consumers $4 billion a year, up from $1 billion a year in 2016. So, 

from 2016 to 2018, prices are quadrupling. That translates into $21 

a month on the average residential electric bill, just for the capacity portion, not all the other components that have gone up as well. 

This dramatic increase demonstrates how dysfunctional the market is and should have presented an opportunity for the FERC to 

investigate the last-minute closure of Brayton Point. As we have 

been discussing earlier today, due to FERC’s vacancy, the one ComVerDate Mar 15 2010 10:04 Apr 29, 2016 Jkt 037690 PO 00000 Frm 00084 Fmt 6633 Sfmt 6633 F:\114THCONGRESS\114X111ENERGYBILLSAWAITSCANS\114X111ENERGYBILLSPEND
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missioner vacancy, they were unable to investigate because they 

had that two-two tie in the vote, and it was ordered a rule of law 

and the rate was enacted. 

So, the Fair Rates Act is an important piece of legislation because it would make the same administrative review procedures 

currently approved by the Commission applicable to rates that just 

take effect by law, by operation of law. Many of us would like to 

see an investigation into what happened in the eighth forward-capacity auction, and those in public power would like to see the capacity markets fundamentally reformed, including our right to selfsupply, so we could provide our own generation to our own customers. 

However, this, while it is a narrow step, is a critical first step. 

This bill will ensure that, if the FERC is deadlocked again in the 

future over questionable rates, the problem does not reoccur in 

New England or other regions. With this Act, ratepayers will now 

have an avenue to challenge unfair rates. 

In conclusion, I want to thank Congressman Kennedy for introducing the bill and the committee for holding this hearing on what 

can be a confusing topic, a confusing subject, on behalf of Braintree 

Electric, NEPPA, and APPA, and myself. I hope the committee will 

continue to examine mandatory capacity markets throughout New 

England and the rest of the country. 

Thank you, sir. 

[The prepared statement of Mr. Bottiggi follows:] 

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Mr. WHITFIELD. Thank you. 

Mr. Marsan, you are recognized for 5 minutes. 

STATEMENT OF BILL MARSAN 

Mr. MARSAN. Thank you. Mr. Chairman, Ranking Member Rush, 

and members of the subcommittee, thank you for the opportunity 

to testify today in support of legislation to amend Section 203 of 

the Federal Power Act and make the law work as intended. 

I am Executive Vice President/General Counsel to American 

Transmission Company. We construct, own, and operate electric 

transmission property in Wisconsin and the upper peninsula of 

Michigan, as well as hold ownership interest in transmission property in California. 

ATC is a transmission-only utility which was formed in 2001, 

when other utility companies transferred their transmission assets 

to create the new company. This formative transaction was subject 

to Section 203 of the Power Act. Subsequent to our formation, ATC 

has continued to acquire utility properties, subject to FERC’s Section 203 regulation. 

The Energy Policy Act of 2005 amended Section 203 to increase the dollar threshold from $50,000 to $10 million on FERC’s authority to preapprove dispositions by public utility of jurisdictional utility facilities. FERC’s regulations and orders implementing this 

change have failed to account for congressional intent. 

Specifically, FERC has relied on apparent oversight in the text 

of the statute to reverse its own decades-old application of the minimum monetary threshold. Finally, the new Section 203 eliminated 

the monetary threshold entirely for acquisitions or mergers of jurisdictional facilities. 

This has led to some absurd results. For example, FERC has re- quired preapproval, pursuant to Section 203, for the $1 purchase 

of 10 miles of depreciated transmission line, as well as the purchase of an electrical disconnect switch and associated wiring for 

$10. Conversely, the sellers of the same equipment I just described 

were not required to make any filings with FERC at all. 

FERC’s interpretation requires prior approval for the acquisition 

of utility property that has any monetary value attached to it or 

no monetary value at all. FERC’s interpretation frustrates the intent of the amendment to Section 203 and EPAC 2005. Congress 

intended to reduce the regulatory burden on utilities by raising the 

threshold of FERC preapproval, and Congress did this with good 

reason. 

Public utilities regularly buy and sell utility assets that have 

minimal impact on the bulk electric system and do not affect 

FERC’s ability to regulate. The prior threshold of $50,000 made no 

sense in 2005 and let alone today’s economy. 

Congress sensibly raised the threshold to $10 million in order to 

spare utilities the administrative cost of the preapproval process 

for small transactions while maintaining FERC’s oversight on 

transactions with a potential to impact utility operations and rates. 

FERC’s current interpretation of Section 203 has imposed a new 

and unnecessary regulatory burden on public utilities. It has also 

increased the risk that public utilities will be targeted by the 

FERC Office of Enforcement for violations of Section 203. At least 

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one such FERC enforcement action for failure to receive 

preapproval for relatively de minimis acquisitions has been resolved, and it is reasonable to expect more. 

FERC has refused requests to revise its regulations to conform 

with the intent of EPAC 2005 and has made it clear that only a 

statutory change to Section 203 will force a shift in FERC policy. 

On December 3rd, 2015, the House passed H.R. 8, the North 

American Energy Security and Infrastructure Act of 2015. Section 

3222 of H.R. 8 clarifies Section 203 to expressly include a monetary 

threshold of greater than $10 million for FERC preapproval of 

mergers and acquisitions of jurisdictional utility property, just as 

Congress intended when it passed EPAC 2005. 

This change would serve at least three important purposes. It 

would make Section 203 internally consistent. It would give clear 

instruction to FERC about this preapproval authority. And it would 

relieve an unnecessary regulatory burden on public utilities. 

The bill before the subcommittee today adopts the language of 

Section 3222 of H.R. 8 as a standalone measure. ATC strongly supports this legislation. 

On behalf of ATC, I want to thank the subcommittee for inviting 

me to testify, and I stand ready to answer any questions the members may have. Thank you. 

[The prepared statement of Mr. Marsan follows:] 

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Mr. WHITFIELD. Thank you very much. 

Mr. Slocum, you are recognized for 5 minutes. 

STATEMENT OF TYSON SLOCUM 

Mr. SLOCUM. Thank you very much, Chairman Whitfield, Ranking Member Rush, members of the committee. 

My name is Tyson Slocum, and I direct the Energy Program at 

Public Citizen. Public Citizen is a national nonprofit, nonpartisan 

consumer advocacy organization funded in part by the more than 

400,000 members and supporters we have across the country. 

In my capacity as Energy Program Director, I serve on the 

United States Commodity Futures Trading Commission Energy 

and Environmental Markets Advisory Committee, and I also frequently intervene and comment in a number of FERC proceedings. 

So, I am here to talk about two pieces of legislation. One is the 

bill that would exempt from FERC review any merger or consolidation under $10 million, and the second is the Fair Rates Act, H.R. 

2984. 

On the legislation that would extend a $10 million threshold to 

exempt mergers and consolidations, on the face of it, that might 

seem reasonable. But, when you understand the way that energy 

markets operate, you quickly understand that it is not necessarily 

the dollar value of a transaction, but what the impact of that facility has on the operation of an energy market. With power facilities, 

these are known as what is known as pivotal suppliers. 

In two landmark market manipulation cases that I have brought 

before FERC that are still under review, it was either one power 

plant in the case of New England or a very small collection of 

power plants that, had it been a merger or consolidation, very likely would have been under that $10 million threshold. 

And so, it is very important that Congress retain the language 

that was plainly included in the Energy Policy Act of 2005 because, 

remember, the Energy Policy Act of 2005 repealed one of the landmark utility regulations in this country, the public utility holding 

company, after 1935. As part of that agreement to repeal that longstanding utility regulation, Congress was very aware of the need 

to ensure that FERC had full authority over all mergers and consolidations. That is why they explicitly did not include that threshold dollar figure in the plain language of the Energy Policy Act of 

2005. 

On the second piece of legislation, the Fair Rates Act, H.R. 2984, 

this is a great piece of legislation that directly addresses a market 

manipulation case that I brought before FERC in 2014 that has 

been much talked about at today’s hearing, the 2014 forward-capacity auction in ISO New England. 

We made an allegation in our FERC filing that a Cayman-Islands-based private equity firm named Energy Capital Partners 

had acquired a fleet of power plants in New England, and six 

weeks after closing on that transaction, announced the retirement 

of one of them. That retirement moved the New England market 

from a surplus to a deficit, thereby triggering a significant price increase by about $1 billion in that auction. 

We filed our market manipulation complaint saying that their actions were the subject of market manipulation and that the resultVerDate Mar 15 2010 10:04 Apr 29, 2016 Jkt 037690 PO 00000 Frm 00117 Fmt 6633 Sfmt 6633 F:\114THCONGRESS\114X111ENERGYBILLSAWAITSCANS\114X111ENERGYBILLSPEND
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ing rates were unjust and unreasonable. As has been explained, 

FERC deadlocked two-to-two on my complaint. And so, they did not 

set for hearing whether or not to consider if the rates were lawful. 

Instead, they issues this notice that the rates had become effective 

by operation of law. 

We asked for rehearing. FERC denied our rehearing. We, then, 

filed a petition to review in Federal court. FERC made a motion 

to dismiss. The court did not grant FERC’s motion to dismiss, and 

we have filed initial briefs and reply briefs, and the court is actively considering this reviewability question. 

It is clear that the Fair Rates Act of H.R. 2984 would help alleviate this problem if it were to occur in the future. That is why Public Citizen supports that legislation. 

Thank you. 

[The prepared statement of Mr. Slocum follows:] 

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Mr. WHITFIELD. Thank you. 

Mr. Leahey, you are recognized for 5 minutes. 

STATEMENT OF JEFFREY LEAHEY 

Mr. LEAHEY. Thank you, Chairman Whitfield, Ranking Member 

Rush, and members of the subcommittee. 

I am Jeffrey Leahey, Deputy Executive Director of the National 

Hydropower Association, and I am pleased to be here to discuss 

legislation to reinstate and extend the deadline for the commencement of construction for five licensed hydropower projects and how 

these projects demonstrate new growth potential we see in the hydropower industry. 

The U.S. hydropower fleet is made up of 2200 plants with a capacity of almost 80 gigawatts. These plants provide roughly 7 percent of all electricity and close to half of all renewable electricity, 

making hydropower the largest provider of renewable power in the 

United States. 

Hydropower’s contributions to the electric grid are many: baseload power, peaking power, load following, energy storage, reliability, and more. Because of the need for more of these services, 

the industry has grown in recent years. In fact, the U.S. experienced a net capacity increase of 1.4 gigawatts from 2005 to 2013, 

and that is to power over half-a-million homes. 

A prime growth area is on existing infrastructure, such as 

nonpower dams and conduits. The projects today showcase these 

opportunities. Two would add generation to Bureau of Reclamation 

dams, two to Army Corps of Engineers dams, and another dam 

owned by New York City. They are all small projects, ranging from 

4 to 15 megawatts, and together, they will add 51.7 megawatts to 

the system, enough to power close to 21,000 homes. 

Of the 80,000 dams in the United States, only 3 percent have 

electric-generating facilities. The vast majority were built for other 

purposes, water supply, navigation, irrigation. 

The Department of Energy recognized this untapped potential of 

nonpower dams and in 2012 released a report of these projects. The 

map you see on the screen depicts the size and locations of the top 

prospects. 

The study showed 12 gigawatts of total potential, with 8 

gigawatts available at the top 100 sites alone. Eighty-one of the top 

100 sites were located on Corps of Engineers dams. These types of 

projects, including the five here today, are some of the lowest-impact developments in the energy sector. No new dams need to be 

built, and the projects aim to utilize existing flows. What better 

way to maximize the benefit of this infrastructure by also generating renewable carbon-free power? 

These projects can face a variety of obstacles that push back construction timelines, thus, requiring the action that the subcommittee is taking today. Speaking generally, these include delays 

in post-licensing construction approvals, refinements in project design, negotiations on power purchase agreements, and others. 

To begin, hydropower has the most complex development 

timeline of any renewable resource. It can take 10 years or longer 

from the start of licensing through construction to being placed in 

service. It also requires considerable upfront financial commitment 

123 

from the developer for the studies needed for Federal and State approvals. 

Water is a public resource, and NHA recognizes the need for 

thorough review of new project applications. However, the overall 

process can also be a factor for delays in moving to start of construction. For example, when adding generating facilities to nonpowered Federal dams, FERC may issue a license; yet, that project 

cannot start construction until it receives additional approvals from 

the Federal dam owner. If there are unanticipated delays for those 

approvals, no work can commence. 

NHA notes that the House passed H.R. 8 and the Senate is debating is S. 2012, energy bills that contain bipartisan provisions to 

address inefficiencies and improve coordination in the hydropower 

process. We note the Water Resources Reform and Development 

Act of 2014 provided direction to the Corps to prioritize hydro development and complete permitting in a timely and consistent 

manner. 

Also, S. 2012 specifically aims to address the issue at hand 

today. It contains a provision allowing applicants to receive an extension of the commence construction deadline for up to 8 additional years. NHA strongly supports all of these efforts. 

Further, design changes for projects at Federal facilities can result from discussions with the Federal owners as developers move 

to construction. Working cooperatively, developers must show the 

final construction plans will not interfere with the original purposes of the Federal dam and, also, not harm its integrity. 

There have been instances where design changes were proposed 

post-licensing and pre-construction that differed from the design 

that was originally licensed. As such, more consultation was needed between the developer FERC and the Federal owner to approve 

these changes. 

Lastly, industry members also report difficulty securing power 

purchase agreements. In testimony before the subcommittee last 

year, Cube Hydro, a developer, stated that regulatory uncertainty 

and risk of delays can negatively impact acquiring PPAs, and that 

failure to obtain one, in turn, inhibits the ability to obtain project 

financing. This can include post-licensing financing to cover construction costs, which can also impede the ability to meet the start 

construction deadline. 

To conclude, hydropower projects have a critical role to play in 

meeting our Nation’s energy, climate, and economic development 

objectives. The five projects the subcommittee considers today are 

prime examples of the tremendous growth potential at existing 

water infrastructure across the country. 

It is NHA’s hope that the time granted by these extensions allow 

the projects to complete the process and protect the significant investment of time and financial resources, both by the developers 

and also the Federal Government. 

I thank the subcommittee for inviting me to testify, and I look 

forward to answering your questions. 

[The prepared statement of Mr. Leahey follows:] 

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Mr. WHITFIELD. Thank you, Mr. Leahey, and thank all of you for 

your opening statements. 

At this time I will recognize myself for 5 minutes of questions. 

Mr. Bottiggi and Mr. Slocum, let me ask you, the Cayman Group 

that purchased these power plants in the Northeast, how many did 

they purchase and what did they pay for it? What was the purchase price? 

Mr. SLOCUM. I can’t remember the exact number of power plants. 

I believe it was a deal that included, I think, five or six total power 

plants in two different geographic markets in PJM and in ISO New 

England. 

I don’t know if there was a public purchase price. Because Energy Capital Partners is a private equity firm, it doesn’t have to 

submit Securities and Exchange Commission filings. But it was 

most likely in excess of $10 million, and it also was not a merger; 

it was a disposition. 

Mr. WHITFIELD. So, FERC did approve the acquisition? 

Mr. SLOCUM. Yes, sir. 

Mr. WHITFIELD. And so, Brayton Point is the plant that was 

closed? Is that the one you refer to in your testimony? 

Mr. BOTTIGGI. Yes, sir. That was a 1500-megawatt, coal-fired 

power plant. 

Mr. WHITFIELD. Now, Mr. Slocum, you said market manipulation. If it is coal, I would think environmental had something to do 

with it as well. 

Mr. BOTTIGGI. Well, the low price of natural gas has put pressure 

on coal-fired electricity. 

Mr. WHITFIELD. Right. 

Mr. BOTTIGGI. So, it was closed for economic reasons—— 

Mr. WHITFIELD. Yes. 

Mr. BOTTIGGI [continuing]. Is what they claimed. 

Mr. WHITFIELD. But the EPA regulation on existing coal plants 

also makes a big difference. 

Mr. BOTTIGGI. Right. 

Mr. WHITFIELD. But, whatever the reason, they closed that down 

and that created a shortage of supply, is that correct? 

Mr. SLOCUM. Yes, sir. 

Mr. BOTTIGGI. Correct. 

Mr. WHITFIELD. And so, that contributed to these higher rates? 

Mr. BOTTIGGI. It did. 

Mr. WHITFIELD. Now, on the capacity markets, I am certainly not 

an expert on capacity markets, and I know it is pretty complicated, 

but it is my understanding there are two areas of the country that 

have mandatory capacity markets, is that correct? 

Mr. SLOCUM. Yes. 

Mr. WHITFIELD. OK. And one of them is ISO New England, and 

one, is it PJM? 

Mr. SLOCUM. Yes, sir. 

Mr. WHITFIELD. OK. Now why do they feel like they are necessary, say, in New England, these mandatory capacity markets, 

but they are not necessary in other parts of the country? 

Mr. BOTTIGGI. In other parts of the country where there are no 

Regional Transmission Authorities, RTOs, which ISO New England 

is one of them, they still use a cost-of-service model to finance 

138 

power plants. A utility will still be vertically integrated and will 

still own their own capacity, their own power plants. So, they will 

develop and construct a power plant and go to the State regulators, 

and the State regulators will review the cost structure. As long as 

it is just and reasonable, they will pay the utility the full cost to 

construct and maintain that power plant. 

Mr. WHITFIELD. And did I understand that the ISO New York 

has not allowed you to self-supply anymore? Is that correct? 

Mr. BOTTIGGI. ISO New England, correct. 

Mr. WHITFIELD. I mean ISO New England. 

Mr. BOTTIGGI. Yes, correct. We are grandfathered for our existing 

power plants, municipal utilities are, but if we want to build a new 

plant in the future now, we can’t build it just on the backs of our 

own ratepayers to satisfy our own—— 

Mr. WHITFIELD. So, when you were talking about reforming the 

capacity markets, were you primarily focusing on the ability to selfsupply or is there other area of reform you were referring to? 

Mr. BOTTIGGI. Well, the forward-capacity market for all utilities, 

for all generation in New England, setting aside self-supply for the 

moment, what happens is, if an old power plant is still in existence, 

like many still are, when an auction clears like the 8 forward-capacity auction, new generation gets paid that very high price. It 

was $15 a kilowatt month. But existing generation gets an average 

price. So, in this case, existing generation went from being paid $3 

a kilowatt month to $7 a kilowatt month. Putting that in dollar 

terms—we have an old power plant, so I am familiar with the numbers—we currently get about $2.5 million a year in capacity payments. It is really value because we self-supply. 

Mr. WHITFIELD. Right. 

Mr. BOTTIGGI. It is $2.5 million a year, and it costs us about $2.5 

million a year to maintain that plant. So, just to have it sit there 

is a break-even proposition. 

After FCA 8 went through, if we were an independent generator, that $2.5 million for our old power plant jumps to $6 million a 

year. So, it is a windfall for the old plants that are just hanging 

around. 

The next auction in 2019, when FCA 9 cleared—and this will 

happen—that old power plant that we have would go from $2.5 

million to $6 million, now to $9.5 million a year we are going to 

get just for sitting there, just for hanging around. So, that is why 

this $1 billion in 2016 is jumping to $4 billion in 2018. 

Mr. WHITFIELD. Yes. OK. Well, I wish we could talk more about 

this. My time has expired. 

So, Mr. Rush, you are recognized for 5 minutes. 

Mr. RUSH. Thank you, Mr. Chairman. 

Mr. Slocum, the bill amending Section 203 that would exempt 

mergers or consolidation of facilities with a value of less than $10 

million from FERC’s merger review authority has been portrayed 

as a very innocuous bill that would simply correct a drafting error 

from EPAC 2005 language. However, in your testimony you take 

a decidedly different view on this legislation. You are stating that, 

even with mergers or consolidations under $10 million, it is possible that—and I am quoting you—‘‘a single facility or contract has 

the ability to be a pivotal supplier in a given market, providing the 

139 

owner with an ability to unilaterally charge unjust and unreasonable rates.’’ End of quote. 

Can you give an example of how allowing this exemption from FERC review of mergers under $10 million might result in unjust 

and unreasonable rates? 

Mr. SLOCUM. Yes, sir. Let’s take this Brayton Point facility that 

has been the subject of parts of this hearing. As the chairman 

pointed out, that was not a merger and it also was in excess of $10 

million. But let’s assume, theoretically, that the Brayton Point facility was a standalone company that Energy Capital Partners was 

going to merge with in order to combine the two companies into 

one. It is likely that, because of the age of the Brayton Point facility, that that transaction could have been valued at less than $10 

million. And therefore, FERC, under this proposed legislation, 

would not be able to review that transaction. And that would be 

a problem because, as we identified in our market manipulation 

complaint, that single facility was what economists term ‘‘a pivotal 

supplier’’ in that market, and therefore, not allowing FERC the discretion to look at that kind of transaction I think is problematic. 

It is important to note that it isn’t like FERC is a difficult place 

to submit a merger application. I cannot find in the last 20 years 

a single merger consolidation proposal that FERC has rejected outright. So, this is not necessarily a difficult process. I understand that the $10 million threshold sounds like it is a 

reasonable proposal, but there are a number of examples where instituting this threshold would deny FERC the opportunity to review pivotal supplier transactions. 

Mr. RUSH. Well, Mr. Minzner from the first panel indicated that 

FERC has other tools at its disposal to protect consumers, even in 

a situation where a series of mergers take place, but not individually meet the $10 million standard. What do you think about that 

statement? 

Mr. SLOCUM. Well, I think that in the case of the transaction of 

the Energy Capital Partners’ acquisition of a portfolio of power 

plants, FERC approved that transaction. And yet, the result of that 

transaction was that one entity was able to utilize the capacity of 

one power plant to have a billion-dollar swing in energy prices. 

And so, in this case, FERC reviewed the transaction, approved 

it, and then, did not have safeguards in place. Even after we 

brought our market manipulation complaint, FERC still did not 

rule on it because they deadlocked two-to-two. 

So, at its core, the Federal Power Act is all about reviewing 

transactions. We think it is very important that FERC retain the 

ability to be able to review any and all mergers and consolidations 

of facilities under its jurisdiction. 

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

Mr. WHITFIELD. Mr. Marsan, you look like, did you want to say 

something? 

Mr. MARSAN. Thank you, Mr. Chairman. 

I don’t think anything that Mr. Slocum is saying frustrates the 

intent of Section 203. As he stated, he is bringing a complaint for 

market manipulation right now, and FERC still has, as the general 

counsel stated, market power authority over all rates. And folks 

like Mr. Slocum and other citizens who want to bring a contest to 

140 

market suggesting market power can do so, and FERC has full authority to review that. So, I don’t think any change to Section 203 

frustrates FERC’s ability to monitor these things. 

Mr. WHITFIELD. The gentleman’s time has expired. 

At this time, Mr. Flores, you are recognized for 5 minutes. 

Mr. FLORES. Thank you, Mr. Chairman. 

Mr. Powell, a couple of quick questions for you. 

Mr. POWELL. Yes, sir. 

Mr. FLORES. Would allowing an agency to utilize aerial data and 

to condition a permit on a followup ground survey interfere in any 

way with the integrity of the environmental review? 

Mr. POWELL. No, sir, I don’t believe that it would. It is very common practice, even today. Landowners routinely deny survey permission. That is very common in every proceeding. FERC uses its 

conditional authority to require us to go back and close any gaps 

that those other agencies administering those Federal reviews require. 

Mr. FLORES. OK. Well, let’s go ahead and build on that. In Mr. 

Lloyd’s testimony, the testimony appears to be driven by his dissatisfaction with the FERC public interest review rather than any 

substantive criticism of H.R. 3021, outside of the notion that, for 

some reason, that FERC wouldn’t require air survey data to be 

verified by a ground survey. 

So, two parts to this. In your experience with these permitting 

decisions, do you have any reason to believe that an agency would 

ignore the authority provided in H.R. 3021, which states very clearly—and I quote—‘‘An agency accepting aerial survey data may require, as a condition of approval, that such aerial survey data be 

verified through the use of ground survey data before the construction or extension of a facility that is subject of such application.’’? 

Unquote. Do you have any reason to believe that FERC or any 

other agency would ignore that authority that is provided in H.R. 

3021? 

Mr. POWELL. I would say, as a general rule, no. I think there 

might be some specific places where, I would say particularly a 

State agency that is administering 401, might because they may 

want 100 percent before they would deem the application complete, 

which is why this legislation is that important. 

Mr. FLORES. OK. Good. Do you think that Mr. Lloyd’s concerns 

are well-founded, given that it is verified by a ground survey? 

Mr. POWELL. Not in my experience, sir. 

Mr. FLORES. OK. 

Mr. POWELL. As a matter of practice, prior to prefiling, applicants approach the regulatory agencies, the Fish and Wildlife Service or the State agency administering their listed species program, 

the SHPO—I’m sorry—State Historic Preservation Office, and discuss which species should be considered in a particular project, 

what the survey protocol should be for those resources. As you 

might imagine, most species don’t occur across all geographies. 

And so, it tends to be a very small subset of the overall list, and 

they tend to be unique to specific habitats, which you can identify 

by and large. You may not be able to determine specifically whether the individual is there today, but you can very much limit the 

area that requires resurvey, as a general rule. There are other speVerDate Mar 15 2010 10:04 Apr 29, 2016 Jkt 037690 PO 00000 Frm 00144 Fmt 6633 Sfmt 6633 F:\114THCONGRESS\114X111ENERGYBILLSAWAITSCANS\114X111ENERGYBILLSPEND
141 

cies that are more broadly distributed and you would need to do 

that. 

Mr. FLORES. OK. I have got a little bit of time left. Do you have 

any general comments on anything that has been said about 

FERC’s environmental review process today? 

Mr. POWELL. Well, I think FERC’s environmental review process 

is very good. 

Mr. FLORES. OK. 

Mr. POWELL. They strongly encourage applicants to work with 

the landowners, and we do that. We do that throughout the process. We do that all the way to the very end of a process. We want 

to obtain survey permission, and we want to do the required surveys to complete the record. There is really no benefit to us to having an incomplete record that late in the project. So, we do very 

diligently try to get that, but what is needed is a solution. 

There are going to generally be some landowners that are going 

to say no, and we need a mechanism where a regulatory agency 

can’t say, well, this one individual said no. Therefore, I don’t have 

to review your permit, and I can wait until after the certificate and 

after the order and after imminent domain, until you can gain access. And, oK, now my regulatory review clock starts. And that 

happens. 

Mr. FLORES. OK. Thanks, Mr. Powell. I thank the rest of the witnesses for their testimony. 

Mr. Chairman, I yield back the balance of my time. 

Mr. WHITFIELD. The gentleman yields back. 

Mr. McNerney is recognized for 5 minutes. 

Mr. MCNERNEY. I thank the chairman, and I thank the witnesses 

this morning. 

Mr. Slocum, what would be the practical effects of the merger 

legislation? 

Mr. SLOCUM. The practical effects would be that any merger or 

consolidation under $10 million would not be subject to FERC review. 

Mr. MCNERNEY. So, you think there would be a rush of unquestioned mergers at that point? 

Mr. SLOCUM. I don’t know if there would be a rush, but I think 

that, theoretically and practically, you could have a merger or consolidation structured in a way to ensure that you get under that 

threshold amount. 

Mr. MCNERNEY. OK. 

Mr. SLOCUM. And particularly as we see a lot of older generation, 

whether they are older nuclear power plants or older coal-fired 

units, that for a variety of reasons, by themselves are not worth 

very much, but as part of a larger portfolio could be extremely valuable. We just think that it is not prudent policy to not allow 

FERC to review those transactions when they are first proposed. 

Mr. MCNERNEY. Thank you. 

Mr. Leahey, in your testimony you mention that S. 2012 contains 

provisions to extend construction timelines to 8 years. What are 

some of the biggest obstacles that prevent construction post-licensing? 

Mr. LEAHEY. Sir, thank you. As I mentioned in my testimony, 

particularly on these pieces of infrastructure, these existing dams 

142 

that are owned by the Federal facilities, once FERC issues the license for the project, there still may be supplemental permits that 

are required to get either from the Bureau of Reclamation or from 

the Army Corps of Engineers. Delays in that permitting process 

can, then, cause those delays that require the applicants or the licensees to come back to Congress individually. 

The cases before you also have a variety of other issues that 

come up post-licensing. In one of the cases, I believe it was getting 

easements for purposes of the transmission line. In others, there 

were unexpected issues that resulted when work started at the 

dam. So, a variety of things can pop up post-licensing that could 

cause those delays. 

Mr. MCNERNEY. Mr. Lloyd, would you please explain—— 

Mr. WHITFIELD. Your microphone. 

Mr. MCNERNEY. Oh, thank you. We lost power or something. I 

will speak up. 

Can you please explain if an aerial surveying can effectively 

identify the full range of critical mass in the environment and cultural resources on the ground from such a distance? 

Mr. LLOYD. Unfortunately, I think the answer is no. The data 

that we have looked at shows that often endangered species are underground. Often, if you have to delineate a wetland, you have to 

do digging in the ground to find out the kind of soils that are there. 

I wish I could tell you the aerial surveying would solve the problem, but for a large number of species that we have looked at it 

will not solve the problem. 

If I may, our experience has been that FERC is not getting 

enough environmental data to adequately do its job. What we are 

finding is, when a State permitting agency has to come in and do 

permits, they have to look at those permits in a much more granular way, generate a lot more environmental data. It enables them 

to make a better decision. We think that that information ought to 

be in front of FERC when FERC makes its decision in the first 

place, and that that would help the process, not harm it. 

Mr. MCNERNEY. Well, another one of the things you mentioned 

is that some folks might be offended by aerial activities. What 

about drones, unmanned drones? How is that going to fit into this? 

Mr. LLOYD. I don’t think we have experienced it yet. We have 

had concerns about helicopters and low-flying aircraft. To be honest 

with you, given where the technology is going in this country, I 

think drones may be the next step. We may all need to look at that 

to see whether that is not an invasion of the use of private property 

by using drones to go over private property. 

Mr. MCNERNEY. I mean, in my career prior to coming to Congress, I did a survey of a competitor’s equipment. I don’t think they 

would have been too happy if they had known about it, but they 

didn’t have any way to stop me. 

[Laughter.] 

Is that the kind of thing we are talking about? 

Mr. LLOYD. It is the kind of thing we are talking about. Landowners in New Jersey have already experienced adverse impacts 

from helicopters. As I have said, I expect that drones might be even 

more invasive, and I don’t think we have addressed that issue at 

all as yet. 

143 

Mr. MCNERNEY. All right. Thank you, Mr. Chairman. 

Mr. WHITFIELD. Well, I think that concludes our questions, except for our friend Mr. Kennedy. So, we will recognize him for 5 

minutes as well. 

Mr. KENNEDY. Thank you, Mr. Chairman. I appreciate the time, 

and I appreciate the witnesses being here and your testimony. And 

if you guys stick around for me, I will ask you a couple of questions 

as well. 

Mr. Bottiggi I heard also say that the market rules are vital to 

ensuring reliability. I was wondering if you could share your take 

on that? Are capacity markets the only way to make sure that new 

generation gets built? 

Mr. BOTTIGGI. Electric utilities have been around since the 

1800s, including Braintree Electric, and we think we have provided 

very reliable service in that 120 years. Capacity markets have been 

around since 2007. So, there was a way to do it before the capacity 

markets. I do not think they are vital. I think generators have to 

be paid enough revenue to cover their costs, but paying this windfall to old generation I don’t believe is necessary. 

Mr. KENNEDY. So, I was interested in analyses that showed that 

over 90 percent of new generating capacity has been constructed 

under bilateral contracts or utility ownership, but not solely for 

sale in the capacity markets run by RTOs. What do you think this 

finding says about the ability of capacity markets to achieve the 

needed generation mix to meet the reliability and policy goals? 

Mr. BOTTIGGI. The forward-capacity market as we experience it, 

in my opinion, drives short-term decisionmaking. A long-term decision for a utility is 40 years, whether it is electrical infrastructure 

or generation assets. So, the RTOs drive utilities to make shortterm or the owners of generation to make a fairly short-term decision. Seven years now is what you get paid for capacity if you clear 

the auction as a new resource. That is a short-term decision. 

Those same decisions, that same short-term window is only 1 

year. Each year is a new market for existing generation. So, the 

nuclear power plants that are closing in New England, Vermont 

Yankee, Pilgrim Nuclear Power Plant, and, then, in New York, 

FitzPatrick, they are all basing that decision on a short-term window. 

When you get out of the RTO markets and you get down South 

and they are still building generation under the old cost-of-service 

model, that long-term view of the world that you need for these 

major expenses, that is why those assets are being built down there 

and they aren’t being built in New England. 

Mr. KENNEDY. You mentioned that Braintree has been able to 

self-supply its capacity, but that auction was taken away for further generation. What does that mean for your ratepayers going 

forward and how does the current ratemaking process for Braintree 

work within the structure of capacity markets? Finally, with regard 

to that, in your opinion, how critical is a review by the Federal regulator to ensure that rates are, in fact, just and reasonable? 

Mr. BOTTIGGI. Braintree Electric being a municipal utility, for 

the most part, is not regulated. We set our own rates. I report to 

a three-member light board. The rates that we control within town, 

like our distribution system, we are not regulated. The capacity 

144 

markets are regulated at the State and regional level in New England by ISO New England. 

When deregulation occurred, since we were allowed to stay 

vertically integrated and own our own generation, the next step 

was, when the capacity markets was started, the ISO New England 

agreed you can self-supply your own generation. You don’t get paid 

for it as a generator and your load doesn’t pay for it. You are revenue-neutral. So, off we went and I built the 115-megawatt new 

state-of-the-art gas turbines that way. 

The ISO was led to believe that we had market power, the little 

municipal utilities had market power over New England. We only 

have a few hundred megawatts of generation in this 33,000 

megawatts of generation, but they were convinced that that gave 

us market power to manipulate the system. So, they took that selfsupply option away from us. 

Flash forward to today. We have an old combined-cycle power 

plant, about 40 years old now, that we would like to replace with 

new modern generation. If we could self-supply, I could go to the 

town, borrow money, general obligation bonds at a very low rate, 

build a new power plant. Our ratepayers would pay off the debt 

service, and we would provide that capacity for our own needs. 

Since we can’t self-supply, we need to bid against other private 

companies into the forward-capacity market in order to try to replace that old generation. It is much harder to do. We have been 

at it for 3 years. We would be well underway replacing that generation now if we knew we could with certainty get paid, will get credit for that capacity. 

Mr. KENNEDY. Thank you. 

Chairman, I yield back. 

Mr. WHITFIELD. I think we need to spend more time on these capacity markets. 

[Laughter.] 

Mr. BOTTIGGI. I can come back. 

[Laughter.] 

Mr. WHITFIELD. Mr. Rush, do you have additional questions? 

Mr. RUSH. Thank you, Mr. Chairman. I do have an additional 

question for Mr. Lloyd. 

Mr. Lloyd, recent studies have suggested that many of the States 

in the Northeast region do not require new natural gas infrastructure to meet their energy needs. According to Post-2014 State-ofthe-Market Report, the Northeast is a net exporter of natural gas, 

as in the summer of 2014 the attorney general of Massachusetts 

commissioned a study that determined the New England States do 

not need new infrastructure to meet their energy needs. 

Given the Northeast region is a net exporter of natural gas, is 

there a risk of overbuilding natural gas infrastructure in the 

Northeast? And how does FERC’s policy of certification of new 

interstate natural gas pipeline facilities address the possibility of 

overbuilding? 

Mr. LLOYD. Thank you, Congressman. 

I think there is a risk of overcapacity, and this goes directly to 

the FERC process. As I said, it has got 80 pipelines pending in 

front of it right now. Many of them are in the Northeast. They are 

looking at those pipelines on an individual basis and they are asVerDate Mar 15 2010 10:04 Apr 29, 2016 Jkt 037690 PO 00000 Frm 00148 Fmt 6633 Sfmt 6633 F:\114THCONGRESS\114X111ENERGYBILLSAWAITSCANS\114X111ENERGYBILLSPEND
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sessing the need for those pipelines by looking at whether those 

pipelines have a contract for gas. 

Now we have some examples where the companies contracting 

for gas are related corporate entities to the companies that are 

building the pipelines. So, there is self-dealing going on there, and 

it doesn’t appear that FERC is going beyond just looking at the 

contract. 

So, what we are seeing, I don’t think FERC is adequately examining all of the infrastructure at once. They are looking at it pipeline-by-pipeline. And then, we don’t have an opportunity to look at 

what is the infrastructure that we actually need in the Northeast. 

Do we need 12 pipelines, for instance, crossing the Delaware River 

or could we meet our needs with far fewer pipelines? 

As you pointed out, because the Northeast, and New Jersey in 

particular, are net exporters of gas now, it is a real question about 

whether there is a need for gas. And if we build the new infrastructure, the danger is we are going to be taking gas from the existing 

infrastructure and we are going to end up with wasted assets. 

And we have experienced this. If I may, we experienced this in 

New Jersey with the nuclear industry where, in fact, we began to 

look at three nuclear power plants. We spent a billion dollars in 

looking at those plants and never built any of them. 

Now the good news is, because we didn’t build them, there was 

no environmental impact. The bad news is, because we didn’t have 

a mechanism in place, a regulatory mechanism in place to review 

those expenses before the utilities made them, the ratepayers 

ended up paying them. 

I fear that we may face the same situation with natural gas infrastructure where we are building pipelines that ultimately we 

may not need. And then, we will have to pay for those investments 

in one way or the other. 

Mr. RUSH. Thank you, Mr. Chairman. 

Mr. WHITFIELD. Let me just ask a question. We have had a lot 

of hearings on the supply of gas in the Northeast. I was not aware 

that the Northeast is considered a net exporter of natural gas. Is 

that the case or is that not the case? 

Mr. LLOYD. As the congressman said, the attorney general of 

Massachusetts did just an analysis and said that they were a net 

exporter. This was, as I understand it, in regard to pipelines that 

were proposed to serve Massachusetts. 

We have had the same experience in New Jersey where, in fact, 

we have no net need for gas right now. One of the bases that the 

companies are justifying the pipeline is redundancy, but this is a 

question I think that FERC needs to address: should we have a redundant supply in New Jersey, in the Northeast, or anywhere? And 

I don’t think FERC has mechanisms in place to examine that. 

One way we have suggested that they might get at that is 

through a programmatic environmental impact statement which 

would look at a number of pipelines, not just one pipeline, and see 

what, in fact, the overall need is. And perhaps it would lead to a 

decision that assures that we have adequate supply for the Northeast and for New Jersey, but also assure that we are not overbuilding, to leave ratepayers with a bill that they may not want to 

pay. 

146 

Mr. WHITFIELD. Did you have a comment on that, Mr. Powell? 

Mr. POWELL. No, sir. 

Mr. WHITFIELD. OK. 

Mr. POWELL. I am not expert on market. 

Mr. WHITFIELD. OK. 

Mr. RUSH. Mr. Chairman, if I might respectfully request that you 

ask the attorney general of Massachusetts—— 

Mr. WHITFIELD. I am going to go up there and see him. 

[Laughter.] 

Mr. RUSH. Well, take me with you. 

Mr. WHITFIELD. I will. 

[Laughter.] 

I have been wanting to go up there to Braintree, anyway. 

[Laughter.] 

I do want to ask one additional last question for Mr. Marsan because in his written testimony he said that, since enactment of the 

Energy Policy Act of 2005, that FERC has been interpreting I think 

Section 203 to mean that any acquisition of any utility property, 

that they would have to get preapproval. I was just curious if you 

might just give us a couple of examples of that which you consider 

particularly maybe egregious. 

Mr. MARSAN. Correct. I can speak from my own experience on 

this. I will just give you three of our own company’s transactions 

we have had to seek 203 approval for: a 12-kilovolt line and land 

rights for $1,513; a relay for $2,802, and miscellaneous substation 

equipment, $2,874. 

Mr. WHITFIELD. I’m sorry, would you just turn your microphone 

on, so that our transcriber can hear? 

Mr. MARSAN. OK. Can you hear me better now? 

OK. I will just go through those again: $1,513 for a 12-kilovolt 

line and land rights; $2,802 for relays, and $2,874 for miscellaneous substation equipment. So, in each of those cases we had to 

take the expense of drafting a 203 application, the legal fees and 

such associated with it, file it with FERC. FERC had to do their 

due diligence, as the general counsel of FERC stated before, on 

transactions that would have no impact whatsoever on the grid. 

Mr. WHITFIELD. Well, thank you very much for that, and thank 

you all for your testimony. We look forward to additional contact 

with you, as we try to decide what we are doing with this legislation. 

I also would ask unanimous consent that we enter into the 

record a letter of support from Advanced Hydro Solutions, a statement for the record from Clark Canyon Hydro, a statement from 

Congressman Zinke in support of H.R. 2080 and 2081, and a statement of record from the American Rivers. I think you all have seen 

this. 

Mr. RUSH. No objection, Mr. Chairman. 

Mr. WHITFIELD. No objection? 

[The information appears at the conclusion of the hearing.] 

Mr. WHITFIELD. So, that will conclude today’s hearing, and the 

record will remain open for 10 days. 

We look forward to working with you all. Thank you very much 

for your time and your testimony. 

That concludes today’s hearing. 

147 

[Whereupon, at 12:42 p.m., the subcommittee was adjourned.] 

[Material submitted for inclusion in the record follows:] 

PREPARED STATEMENT OF HON. FRED UPTON

Today we will examine eight bills as part of our ongoing bipartisan work to 

strengthen our domestic energy infrastructure to help keep costs affordable and reliable for consumers and job-creators. 

Three of these bills make process changes at the Federal Energy Regulatory Commission (FERC), the result of which will be more streamlined agency oversight of 

the Nation’s natural gas infrastructure and electricity system. Specifically, they will 

allow greater use of aerial survey data in natural gas infrastructure approvals, create a new process for public challenges to certain electric rate changes previously 

not subject to redress, and raise the monetary threshold for FERC jurisdiction over 

electricity acquisitions which will help facilitate increases in transmission capacity 

for the utilities that need it. These are small but important changes that will help 

yield a more effective regulatory process at FERC, and ultimately a more affordable 

and reliable supply of energy delivered to folks in Michigan and across the country. 

Five of the bills before us today extend the licenses of hydroelectric power 

projects. Renewable hydropower is a critical component of our all-of-the-above energy strategy, and its benefits are many. Hydro is cheap and reliable and has minimal environmental impacts. Each of these hydroelectric projects will create many 

high-paying construction jobs and expand the electricity supply for the communities 

directly served. They are precisely the kinds of power projects that both sides of the 

aisle can, and should, get behind. But as the law currently stands, the FERC licenses for these five projects have or will soon expire before construction has started, and for reasons outside the control of the companies undertaking them. These 

bills would extend the licenses and allow construction to commence in the future. 

All eight of these bills are steps in the right direction for American energy, and 

I urge my colleagues to support them. 

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