WASHINGTON — Senior executives from all seven ISO/RTOs testified March 25 about how they are maintaining reliability in the face of growing demand at the House Energy and Commerce Subcommittee on Energy. 

Subcommittee Chair Bob Latta (R-Ohio) noted that NERC has forecasted that 52 GW of generation is retiring in the next four years as demand is shooting up from data centers around the country. 

“When operating correctly, electricity markets should allow clear market signals to drive investment into new generation; efficient interconnection of new resources should address increasing demand; and coordinated transmission planning should bring needed electricity supplies to growing load centers,” Latta said. “However, these organizations and their electricity markets do not operate in a vacuum.” 

Policies like EPA rules and tax credits for renewables have helped to undermine the economics of baseload power and are impacting the markets, Latta said. 

Ranking Member Kathy Castor (D-Fla.) noted that the hearing’s focus on reliability ignores negative impact from Republican policies, including Congress trying to end subsidies for renewables and President Donald Trump’s executive actions. 

“The energy affordability crisis we are grappling with today requires real, forward-looking policy solutions,” Castor said. “It requires a politically independent and well-staffed FERC.” 

During the question-and-answer period, Castor noted that Trump recently fired the two Democratic members of the Federal Trade Commission, even though it already had an open seat that, once filled, would have produced a Republican-appointee majority. FERC is one of many agencies where longstanding precedent holds that members can be fired only for cause, which likely will be the central issue of litigation over the FTC commissioners and other firings by Trump. 

“Is more politicization of FERC a good thing or a bad thing?” Castor asked the assembled ISO/RTO leadership. 

All the ISO/RTO leaders said that a more independent FERC is better, including ERCOT CEO Pablo Vegas, whose organization interacts more with the Texas Public Utility Commission than the federal agency. 

“My observation over the years is FERC has tried to stay in the middle, to the extent possible, and I think that less politicization is helpful,” ISO-NE CEO Gordon van Welie said. “Another point I’d make is there needs to be alignment between federal and state policies.” 

Several others said an independent FERC was important to all of the issues the industry is facing, like load growth, new resources coming online and traditional power plants retiring, which were the focus of the hearing. 

“The stability of FERC is important to move all of these things forward,” MISO Senior Vice President Jennifer Curran said. 

PJM CEO Manu Asthana said having FERC at the helm with the ongoing transition the industry is facing is important. 

“FERC plays a critical leadership role in our industry,” Asthana said. “And the value of having a fully staffed, well-functioning federal regulator, particularly at this time, cannot be understated.” 

Asthana said PJM is seeing three trends that make ensuring reliability more difficult. Federal and state policies are leading to the retirement of dispatchable, thermal generation, and what is coming online and waiting in the queues is almost all intermittent renewables, which help but cannot replace dispatchable power one for one. The third trend is growing demand, largely from data centers. 

“Less supply, more demand — it adds up to increased reliability risk,” Asthana added. 

The grid’s tightening balance contributed to a spike in capacity prices, which led to political backlash that continued at the hearing. 

“I am incredibly frustrated at the costs that PJM’s failures are imposing on my constituents,” Rep. Frank Pallone (D-N.J.) said. “The vast majority of the rate increase on New Jersey families is due to what happened in PJM’s capacity market.” 

New Jersey imported 43% of the energy consumed last year, and its plan to make up that gap was to build offshore wind. PJM helped it as much as it has with any state policy in the region to get that done, Asthana said. 

“The problem is there is not one turbine spinning offshore of New Jersey,” Asthana began. 

Pallone cut him off and noted that the Trump administration has thrown up more roadblocks to offshore wind, including cutting off permits. (See EPA Puts Hold on Atlantic Shores OSW Permit.) 

PJM should have made changes to the capacity market and the interconnection queue sooner, Pallone argued. 

Asthana said the RTO was not delaying anything: It has been making reforms for years, he argued, and even as it continues to work through a queue backlog, about 50 GW of resources are ready to plug into the grid now. 

The spiking capacity prices led PJM to agree to a new cap and floor on its market after negotiations with Pennsylvania Gov. Josh Shapiro (D), but that drew the ire from the other side of the aisle later in the hearing. (See PJM, Shapiro Reach Agreement on Capacity Price Cap and Floor.) 

“I am concerned that PJM gave into political pressure of some of the governors of its member states, and this is a very distressing precedent,” Rep. John Joyce (R-Pa.) said. “What are the dangers of governors in the future influencing PJM’s market to score short-term political points?” 

PJM had bipartisan support to institute the price cap, with 11 of its 13 states and five of the region’s governors backing the move to cap prices, Asthana said. “But I do think it’s important to let our markets work, and we’re going to have to ensure that we really allow that in the future,” he added.