00:00 - In attendance we have Steven.

00:01 - De Frank, chairman of the Pennsylvania Public Utility Commission.

00:04 - Kimberly Kimberly Barrow, vice chair.

00:07 - And Katherine Ellsworth, commissioner.

00:09 - Welcome, everyone.

00:10 - May I ask that you each please stand and raise your right hand to be sworn in?

00:16 - Do you swear the testimony you're about to give us the truth,

00:18 - the whole truth and nothing but the truth, so help

00:20 - you, God, in us to indicate by saying, I do, I do.

00:22 - Thank you very much.

00:24 - As reference for members of the audience, the $105 million budget

00:28 - for the Public Utility Commission is made up of $8 million in federal funds

00:32 - and 97 million in state restricted revenues.

00:35 - The commission receives state

00:37 - funding from various assessments on public utility companies.

00:41 - I'll start off with today's questions

00:44 - before we turn it over to our standing committee chairs and our members.

00:47 - First, there has been a lot of recent public discussion related

00:50 - to the electric grid and customer utility bills over the past several months.

00:55 - It's my understanding

00:56 - that there are several steps in how electric ultimately gets to a home

00:59 - or a business from generation to transmission and delivery.

01:04 - Can you please briefly explain each step in the process

01:07 - of how power is produced and delivered to customers?

01:10 - Sure.

01:11 - Thank you. Chairman, I appreciate the question.

01:13 - And thank you, members of the Committee, for inviting us to be with you today.

01:17 - So, as you know, we are in a restructured state in Pennsylvania.

01:20 - So that means that, our electric distribution companies

01:24 - or the electric companies that we interact with to deliver power to

01:28 - our home, does not generate electricity.

01:31 - So our electricity is generated, through the PJM grid and the PJM marketplace.

01:36 - So, as we all know, PJM does have a, various auctions.

01:41 - One of those auctions is a capacity auction based residual auction.

01:46 - And that's a forward looking auction.

01:48 - So, generators can bid into that auction,

01:51 - and it's to provide power for a year certain into the future.

01:55 - So it's a three year look ahead, auction.

01:59 - So when I bid into it, I'm

02:01 - pledging to provide power three years out.

02:04 - That's the auction that has seen huge, increases in cost.

02:09 - That's the auction that, Governor Shapiro, did, file

02:13 - a complaint at Ferc to put a limit on that or collar that auction.

02:18 - And Ferc, there's a pending matter before Ferc.

02:22 - Now, the PJM just filed last week, I believe it was,

02:25 - to extend that collar for another two years.

02:28 - So that's the way power is produced.

02:29 - So we have generators bidding into the PJM marketplace.

02:33 - PJM is also responsible for transmission.

02:36 - Those transmission rates are set by Ferc rules.

02:40 - And so the wholesale power is generated in the it's a generator goes out

02:45 - through the wholesale transmission grid

02:48 - and then comes into the local distribution company,

02:51 - typically coming in to a substation or some sort of other infrastructure.

02:56 - And then that local, distribution company

02:58 - sends it out into our homes and businesses.

03:01 - So in each step of the process, the PUC exercises oversight in different ways.

03:07 - Could you briefly describe the role

03:09 - the Commission has in each step of the electricity supply chain?

03:12 - I'd be happy to.

03:13 - What does the Commission have

03:14 - authority over versus when do rate change approvals occur, etc.?

03:19 - Sure.

03:19 - So, the part that is still regulated in Pennsylvania

03:23 - is the distribution side of that.

03:25 - So that's once it gets to the local grid and going out to our homes and businesses.

03:31 - As I said, we are a restructure state.

03:32 - So we do not have direct regulatory oversight,

03:36 - over generation aspect of it.

03:39 - Or that large scale transmission that's, regulated.

03:45 - The generation is the marketplace and the regulation would be Ferc.

03:49 - Ferc would be the regulator.

03:50 - That where we are regulation comes into play is at the distribution level.

03:55 - So how do we impact pricing at that wholesale level?

03:59 - Because we don't have direct regulatory oversight.

04:03 - Advocacy is usually our leading approach.

04:06 - So we've been very active at Ferc filing, various filings of Ferc,

04:11 - whether it's, on a PJM issue or whatever.

04:14 - And we're also active at PJM stakeholder process,

04:18 - all public utility commissioners.

04:21 - And the PJM footprint

04:23 - is in an organization called Topsy Organization of PJM states.

04:27 - And so that's a make up of the state utility commissioners

04:29 - within the PJM footprint.

04:31 - I currently am vice president of that organization,

04:33 - and I'm poised to become president of that organization this year.

04:37 - That's been a very, very, huge advocacy network.

04:42 - And, and talking to PJM, having input in the PJM process.

04:47 - We've been very active and trying to work on PJM.

04:50 - Q issues as, I think the committee members

04:53 - may be well aware, in and trying to

04:57 - effectuate policy change through have the same.

04:59 - So that's us at the federal level and in the wholesale markets.

05:03 - Now, when we come down to the distribution level, that's what we have direct

05:07 - regulatory oversight over.

05:10 - And that's the part, you know, rate cases,

05:12 - that's the part of that distribution bill, is what's considered into the rate case.

05:17 - So when you look at the overall bill, about 60%,

05:21 - 65% are those federal charges

05:24 - or those out of our jurisdiction charges.

05:28 - And about 35 to 40% are the state charges, whether they're state

05:32 - programs, state taxes, or the distribution system itself.

05:37 - Thank you.

05:38 - Over the past several years, there's been a lot of, signifi investments

05:42 - in intermittent and sources of energy solar, wind,

05:46 - through, different programs, through legal

05:49 - requirements or grant programs and other forms of support.

05:52 - So over the past decade or so, do you know how much public money

05:55 - has been invested in supporting those intermittent energy programs?

05:59 - So if you're

06:00 - are you referring to our APS system program?

06:03 - Okay.

06:04 - So I do have those numbers.

06:08 - So I think we are a little over

06:10 - 700 million in total APS cost that's broken down to tier one.

06:16 - And tier two numbers.

06:17 - Tier two is making up

06:20 - about 350.

06:23 - It's about 54, 55% of that total.

06:27 - Tier one makes up about 45% of that total or excluding solar.

06:32 - Solar makes up about 3%.

06:35 - So 3% of that is just solar.

06:39 - Yes okay. All right.

06:41 - The total amount of electricity available on the grid,

06:45 - what percentage is attributable to intermittent sources of energy?

06:49 - And how does that compare with base load capacity?

06:52 - We're fossil fuels, such as natural gas.

06:55 - So the way pricing works that the wholesale marketplace

06:58 - at PJM is, you know, we love acronyms in this space.

07:01 - So it's called the FCC.

07:03 - Effective load carrying capacity.

07:05 - Is that it capability effective low carrier

07:09 - effective load capacity capability.

07:12 - Anyways, it looks at these resources

07:16 - and tries to figure out how reliable they are.

07:18 - So solar it depends if it's

07:21 - if it's a movable solar panel or a tilt, solar.

07:24 - Solar's roughly about 10 to 12%, electric ALC.

07:31 - Solar that moves with the

07:33 - sun is about 12 to 14%, little higher than that.

07:37 - When we get into some of our thermal units, gas is usually about 70%.

07:42 - Coal might be a little less than that.

07:44 - The most reliable is nuclear coming in about 92, 93%.

07:50 - Great. Thank you.

07:52 - And we could get that whole breakdown for the committee.

07:54 - If you'd like, we can get you a of each each resource category and the elk

08:01 - attached to it. Great.

08:02 - That'd be wonderful. Thank you.

08:04 - One specific entity that has received

08:05 - a large amount of attention relating to tricity prices.

08:09 - Is one that you've already mentioned and is PJM.

08:12 - What is the role, exact role of a grid operator

08:15 - such as PJM in the process of delivering electricity to consumers?

08:19 - So PJM is a very, very important part of the process.

08:23 - When Pennsylvania restructured back in the mid 90s.

08:27 - We we threw the keys to PJM

08:30 - and said, you know, you handle resource planning,

08:33 - you handle, load forecasting, you handle all of that for us.

08:38 - And, you know, when I was working for Senator Bob scholar,

08:41 - we were actually talking about this yesterday was, you know,

08:45 - PJM had those huge reserve margins, 30 plus present reserve margins.

08:50 - And, you know, we were fighting with them then about the reserve margin

08:53 - because ratepayers pay for that.

08:55 - The reserve margin now is about 17, 18%.

08:58 - It's come down significantly.

09:00 - Thank goodness we've had that reserve margin back then

09:02 - because that's what is keeping the lights on today.

09:06 - So, so you when we talk about,

09:11 - you know, that wholesale market, that's what a lot of that costs are.

09:15 - It's first off, we're seeing

09:18 - demand increase like never before.

09:21 - PJM is typically been the 1 to 3% slow, steady chug up.

09:26 - With data center proliferation, electrification of the grid,

09:31 - we're seeing huge increases in electric demand.

09:34 - And when I say load electric demand and load is the same thing.

09:39 - We're seeing huge increases in that.

09:41 - And we haven't seen this capacity market be able to respond to that.

09:45 - That's what's been a lot of the price shifts.

09:48 - That's why you've seen, members talk about the PJM market.

09:52 - File up for to, you know, put a cap on that

09:56 - market and figure out a way to replace that market.

09:59 - When you saw the, announcement a couple weeks ago with the white House

10:03 - and the governor's group, it was setting out sort of parameters

10:07 - of how we incorporate this large load into our grid in a responsible manner.

10:13 - And they set up a set of,

10:16 - core values, if you will, of of key points of trying to hit.

10:21 - PJM is in a process of working on that,

10:24 - figuring out how they procure that power to meet that large load need.

10:29 - We're working on that with them as topsy, it goes

10:32 - and then PJM will eventually make a filing of Ferc for the backstop auction.

10:37 - But we're probably maybe a month away from that.

10:40 - Okay.

10:41 - Can you talk a little bit?

10:42 - And I know you referred to the deal.

10:43 - The government, governor and PJM came to related to the caps.

10:47 - The other side of that equation is also

10:50 - there were flaws that were raised in that discussion, too.

10:53 - Can you explain to everyone, that how that impacts price?

11:00 - So what

11:00 - it does, is it actually so the collar.

11:03 - So it's a collar on that capacity auction that I talked about.

11:07 - So it's been in place with two auctions now I believe.

11:12 - So, PJM holds the auction and because they have a floor and ceiling,

11:17 - so we know the part

11:19 - price is going to be no lower than this is going to be no higher than that.

11:23 - And then it's at auction.

11:25 - Each one of those auctions had come in at the cap.

11:30 - PJM had put out a statement

11:32 - afterwards saying that if the cap was not in place,

11:35 - they gave a number where they believe the auction would have come in.

11:38 - So when the governor says, you know, I've saved consumers X number of dollars,

11:42 - that's how he's getting that figure that's coming from PJM, where they believe

11:46 - the auction would have taken, would have,

11:50 - you know,

11:50 - capped out at without the cap being in place.

11:53 - So for the two auctions

11:55 - that the cap has been in place, both have come in at the cap.

11:58 - Okay.

11:59 - And then on the other side of that equation,

12:01 - what what what when people hear the word collared.

12:03 - I think everyone can understand what a cap means.

12:05 - But when you hear the collar

12:06 - and you talk about a floor, what does the floor mean, to folks?

12:11 - And what kind of potential impact can a floor have versus maybe whatever

12:15 - if there wasn't a floor before or what a previous low short been,

12:19 - if they were having a good run of costs?

12:20 - Could you explain more?

12:22 - So the floor, you know, I really wasn't part of that agreement.

12:26 - You know, that was a settlement reached with the governor and PJM.

12:30 - So, you know, I'm really wasn't privy to those conversations.

12:33 - But, you know, a floor would be setting the minimum, right?

12:36 - So the set setting a price minimum,

12:39 - if the price would have come in for those auctions up the floor.

12:42 - Then the question is, how much more would we be paying?

12:45 - Because you would then believe the price may have been below the floor.

12:50 - The fact that both auctions came in its cap.

12:53 - I'm not sure the floor had any any significance other than,

12:56 - a negotiating point in the settlement with PJM and their members.

13:03 - Chairman. Yes.

13:07 - And it seems counter intuitive

13:09 - to have a floor in, in this kind of arrangement.

13:13 - But you got to remember that we are facing

13:17 - near term, mid term, long term of being short on energy.

13:22 - So just to send the correct signal, keep the correct

13:25 - signal out there that we need you to build.

13:29 - Right.

13:29 - So it's about just allaying some of the risk

13:33 - and concerns that the generators have right now.

13:38 - So you believe the floor is a good encouragement

13:41 - for further investment and growth in the power industry?

13:44 - I do know.

13:46 - When electric electric utility seeks to increase

13:51 - the rates charged to consumers, does the PUC need to approve the rate increase?

13:57 - We do. Yes.

13:58 - So that would be a rate case filed.

14:02 - The utility files the rate case with us.

14:05 - We have 60 days to determine.

14:08 - Was it 30 to suspend? 30?

14:11 - So we have 30 days to either adjudicated or suspended for an investigation.

14:17 - We typically are always suspended for an investigation.

14:21 - Then under statute, we have nine months to adjudicate the case.

14:25 - So I guess just because this is a great education for a lot of a lot of people,

14:30 - so outside of the process

14:32 - we just got talking about in terms of, the auction.

14:36 - In that market,

14:39 - no matter what,

14:39 - though, in terms of energy companies, which most people relate to it

14:43 - via the bill they get in the mail, they open up at home or their business.

14:47 - Any increase to those costs.

14:49 - If a company comes to you to want to raise them, you you guys have to approve that.

14:54 - Yes. If it's in their local, their local tariff or their tariff,

14:58 - which you know, was the same as a rate, the tariff is the same as a rate.

15:01 - And in your investigation, your deliberations, you weigh

15:03 - all the things that are going on over here and, and of course, whether it's the,

15:08 - the, the, the, the, auction that occurred, the different things

15:12 - impacting that industry, they got to provide you

15:14 - information is to, to try to justify why they're seeking a rating.

15:17 - So the auction would be

15:18 - that's a whole separate issue because that's the wholesale market.

15:22 - So the utility isn't coming to us about the price

15:26 - to procure power that's done through a default service proceeding.

15:30 - And so the utility puts out bids.

15:34 - And so because we have default service so we have shopping customers.

15:37 - But if you don't want to shop you can get default service

15:40 - through the local your local utility company.

15:43 - That local utility company has to procure that power for default service.

15:47 - So that's a separate proceeding.

15:49 - As of default service proceeding in a rate case, the the the supply never comes.

15:55 - In the, case, it's a question of,

15:59 - their cost, their infrastructure

16:01 - costs, utilities, what they, what they may have put into the system.

16:05 - And what of those, upgrades they're putting into the right base at the time?

16:09 - Because that's what a rate case does.

16:11 - It looks at the entire, system, the money they've spent into it

16:17 - and then assigns, assigns,

16:19 - a revenue requirement based on those costs.

16:22 - Okay.

16:23 - So at the end of the day, for for Pennsylvanians,

16:26 - who are concerned about their electricity bills that are increasing,

16:30 - the decisions that impact the increases in your electric bill

16:36 - that you receive from a Pal or other like entity around the Commonwealth,

16:40 - they have to go before the PUC in order

16:43 - to justify to you and get approval for that rate increase.

16:46 - If it's only on the distribution side of it, an increase on the

16:50 - the supply side of it is not coming to us because we're restructured.

16:55 - So we don't have regulatory oversight over generation.

16:58 - Okay.

16:59 - Good bye.

17:00 - Appreciate appreciate all that that information.

17:02 - I am now going to turn it over to Leader Pittman.

17:07 - Thank you, Mr.

17:08 - Chairman. Commissioners.

17:09 - Good afternoon. I appreciate you being here.

17:12 - I want to follow up on Chairman Martin's conversations about the PJM collars.

17:17 - Just so I understand, the collar of 325, that is a uniform

17:22 - capacity payment across the 13 states to the PJM.

17:27 - Yes, it's a collar on a PJM auction.

17:29 - Yes, but there are no longer constrained RTOs.

17:35 - Sub capacity numbers.

17:37 - In other words, historically when

17:39 - when the PJM does a capacity auction,

17:43 - the the the rates fluctuate.

17:46 - If there is a constrained auto,

17:49 - is that no longer part of the auction?

17:52 - Do you know that.

17:53 - So I do believe it it.

17:55 - But so everyone that clears is going to get that $325 okay.

18:02 - So there's there's no scenario where constrained auto will pay more than 325.

18:07 - Correct. Okay.

18:09 - Because the last auction, the overall PJM

18:13 - number was, I believe to 69 before the collars came in.

18:19 - And so the caller actually allowed for an increase

18:23 - in the auction that was subsequent.

18:27 - So the reality is that repair bills have still going up

18:32 - because the caller was above the last auction rate.

18:38 - So, you're right.

18:40 - So the auction, remember we were having those 28,

18:43 - $29 day auctions, which you weren't getting any

18:47 - any new generation bid into it because it was such a low number.

18:50 - Right.

18:51 - And then the very next auction, it jumped to 290.

18:54 - That's the auction. I think you're talking about it.

18:56 - It was a 900% increase from the previous one to that one.

19:00 - That was when the governor then filed his complaint at Ferc.

19:04 - And so the auction after that was the first auction

19:06 - that had the price collar on it. Right?

19:08 - So the caller that was set, though, is still higher than the prior auction.

19:14 - It's 375. Yeah.

19:15 - So consumers will see still an increase

19:18 - relative to the prior auction.

19:22 - Because the 269 number is now 325.

19:26 - Yes. It's higher. It's a higher number.

19:29 - Okay.

19:29 - And also in his prior auctions there were capacity

19:33 - payments based on constrained RTOs.

19:37 - Yes. And so in some areas the capacity payment

19:40 - was actually higher than the 269.

19:44 - So for example the autos in Virginia and Maryland were 440.

19:49 - Some dollars.

19:51 - But this agreement, those

19:53 - auto numbers will all be 325.

19:57 - So so can

20:00 - they will. And.

20:04 - I think, I think I see where you're going with, with the question.

20:08 - So let's say down in eastern down Delmarva Peninsula,

20:13 - where the prices are really high because they're constrained or generation,

20:17 - limited, etc..

20:22 - We are part of this 14 state compact.

20:26 - Right.

20:27 - And we need to send a signal

20:31 - wherever, generators

20:34 - feel it's best to build. So.

20:38 - So Delmarva wasn't building down that way down in eastern Mac.

20:44 - If we send out the right signal

20:46 - throughout PJM, I do believe it will incent build

20:51 - in places like Pennsylvania, etc..

20:54 - Oh, absolutely.

20:55 - I mean, it's the whole point

20:56 - of the capacity auction to send signals to generators to build.

20:59 - But my point is, before the callers, the constrained auto

21:04 - capacity payment was $446 in Delmarva,

21:11 - the negotiated collared amount

21:15 - is $325 across the PJM

21:19 - and does not distinguish with constrained autos.

21:23 - Is that correct?

21:25 - I believe so, but I will go check.

21:27 - All right.

21:27 - So my concern is that the collars in real numbers

21:33 - actually reduce the capacity payments in Maryland and Virginia,

21:38 - which is a real reduction in electricity rates.

21:43 - Well, Pennsylvania's actually still went up.

21:46 - I mean, our capacity payment went up $45, right?

21:52 - So the forecast was saying that

21:54 - we were going to hit

21:57 - 500 and actually, probably more when you layer

22:01 - on some of the additional costs, we were we were

22:05 - there was no way we were going to avoid going to the very top price.

22:11 - I understand the forecast.

22:13 - I represent Punxsutawney Phil.

22:14 - So I know all about forecasts, but

22:17 - but my point is the real dollar impact of the collars.

22:22 - Well, the assumption was it would go to 500 and some dollars

22:27 - in the capacity market.

22:28 - It went up to 325 for Pennsylvania purposes, because our capacity payment

22:34 - in Pennsylvania was the 269 PJM wide payment.

22:40 - My point is, the constrained autos are yeah,

22:43 - we're paying a higher capacity payment prior to the collars, $446

22:50 - in Maryland and Virginia because they are constrained markets.

22:55 - So the

22:58 - real dollar effect was that

23:01 - utility bills in Virginia and Maryland went down because the capacity auction

23:07 - number went down to 325 in those constrained markets,

23:12 - but it went up in Pennsylvania because we went from 270 to 325.

23:17 - I actually disagree from talking to the Market Monitor

23:21 - and everyone at PJM, there is no way that we

23:25 - the entire footprint was not going to be up in the $500 mark.

23:30 - There's no way a Commissioner Barrow I understand that as the forecast.

23:36 - What I'm talking about is the capacity auction

23:40 - that was procured prior to the collars

23:43 - in certain regions of the PJM,

23:47 - the capacity payment number was above $325.

23:52 - Our capacity payment was below $325 for the rest of the year.

23:57 - Correct? Correct.

23:58 - So the entire auto went up the 325.

24:02 - But those constrained markets in Virginia

24:04 - and Maryland went down to 325.

24:09 - So my my point is that

24:12 - utility bills in the rest of the PJM

24:14 - still wind up in real dollars, and the constrained

24:20 - markets went down in real dollars.

24:25 - Correct?

24:28 - Correct.

24:29 - From prior.

24:31 - From prior. Prior.

24:32 - Yeah. From from prior. Right.

24:34 - So I recognize the avoided cost of the collars.

24:39 - But obviously ratepayers do not see avoided costs in their utility bills.

24:45 - They see what it was one

24:47 - year versus the next year.

24:50 - And the negotiated collar brought our bills up

24:54 - relative to the last auction, while reducing bills

24:59 - because the capacity auction in Maryland and Virginia

25:02 - went down.

25:06 - We could not let that price hit.

25:10 - I'm not suggesting that I Commissioner, I, I fully agree

25:14 - that we could not let the price hit 500 and some dollars.

25:18 - I'm I'm trying to distinguish the reality of the bill in front of the ratepayer.

25:24 - It went up in Pennsylvania.

25:27 - Yes. It went down in Delmarva because the capacity payment

25:32 - in real dollars from the last auction,

25:37 - which was $446,

25:39 - went down to $325, correct.

25:43 - Okay.

25:44 - I just can't help that think that we in

25:46 - Pennsylvania are, again, subsidizing other states in the PJM

25:52 - by virtue of our exporting of electricity,

25:57 - because the point of the constrained markets

26:00 - was to demonstrate that places like Maryland and Virginia

26:04 - were not producing electricity, that they were consuming.

26:08 - And what really has me concerned is when you think about Virginia,

26:12 - I think about Loudoun County.

26:14 - And why do I think about Loudoun County?

26:16 - I think about data centers.

26:18 - And so in the last auction, the data centers in Loudoun County

26:24 - had a $446 per megawatt

26:27 - hour capacity payment attached to their bills.

26:31 - And because of the global collaring of the PJM, that is now 325.

26:38 - Is that correct?

26:39 - Yes. Okay.

26:40 - So that's why I view us as subsidizing

26:43 - electricity bills in other states as a consequence of this, caller,

26:48 - I respect the reasoning for the caller.

26:51 - None of us want to see the capacity auctions go any higher than they have.

26:56 - You're absolutely right. It's about

26:59 - sending a signal to the market that we need more megawatts

27:03 - because at the end of the day, availability and affordability

27:06 - go hand in hand.

27:08 - If if it's not available, it's not affordable.

27:11 - Correct? Okay.

27:13 - So with that I want to pivot just real quickly.

27:16 - I read the article, in Utility drive about the, PJM

27:21 - looking to do expedited interconnections for generation.

27:26 - And a pointed out that the primary sitting authority

27:29 - of each state needs to be a partner in this process is that you?

27:34 - Yeah.

27:34 - So that's something that we've, started working on when we talked,

27:38 - when I talked earlier with Chairman Martin about the backstop, auction.

27:44 - What the governors in the white House had proposed.

27:46 - That's what PJM is actually working on, is how they do that backstop, auction.

27:51 - Who's actually procuring it, what it looks like.

27:54 - Okay, so that means that

27:57 - you need to to sign off

28:00 - on an expedited application in Pennsylvania.

28:04 - So, it's an interconnection.

28:07 - Expedited interconnection was part of the, ask of the

28:11 - of the group as well as, yes, interconnection.

28:15 - And now siting we don't control that in Pennsylvania again

28:19 - because we don't say generation but the interconnection.

28:22 - So you have connections.

28:23 - We that's our role. Yes.

28:25 - You have a role in approving that in isolation.

28:27 - And the PJM has made it clear that it's resource neutral.

28:31 - Yes. Okay.

28:32 - So if it's a natural gas plant, you will be a partner in getting that

28:37 - interconnection expedited and working on the ones out in your neck of the woods.

28:41 - As you're well aware, if it would be a coal plant that would pop

28:45 - up, yeah, you would be committed to expediting the interconnection.

28:49 - Absolutely. All three commissioners.

28:52 - Okay, good.

28:54 - We have to put as many lights on a grid as we possibly can.

28:57 - And I mean, that's why we are we're in real danger here.

29:02 - We have to make sure we put as many watts on a grid as we possibly can.

29:05 - And that's it. All of the above approach to do that.

29:09 - Music to our ears.

29:10 - I think all of us on this side of the aisle

29:13 - been saying that for many, many years.

29:15 - So welcome to the party.

29:16 - Thank you, Mr. Chairman.

29:19 - Thank you, Senator.

29:20 - We're now going to move on to standing committee members.

29:23 - Follow by, members of the chairs, followed by members of the committee.

29:28 - We're going to start off with senators

29:29 - to follow for ten minutes, followed by Senator Scola.

29:33 - Thank you. Chairman Martin.

29:35 - Chairman, thank you for being here.

29:37 - Commissioners.

29:38 - Appreciate all your hard work.

29:40 - And when you heard the conversations a lot today, it's all about affordability.

29:44 - And our customers complaining about bills myself is one of them.

29:49 - But when we were listening to the governor's proposal

29:52 - a couple weeks ago, almost a month ago now,

29:55 - we heard him talking about transparency

29:58 - of rate cases, and we've been talking about rape cases here.

30:02 - And all these utilities have to come in front of you to present their rate case.

30:07 - And you said most of them, you then, adjudicate

30:11 - and you're long beyond the 30 days.

30:15 - And I want to make sure

30:16 - that I'm also clarifying that you fully litigate all those cases.

30:20 - You bring in multiple stakeholder groups,

30:23 - you've got intervention with the Office of Consumer Advocate,

30:27 - the Office of Small Business Advocate, and then your own oversight.

30:31 - So what was he trying to say?

30:34 - The governor I mean, when there he was, citing lack of transparency.

30:39 - Can you give me some insight on that?

30:40 - So I think the governor was referring to US settlements.

30:44 - So to be clear, we adjudicate cases,

30:48 - but most of the rate cases are not fully litigated, right?

30:51 - Cases, the vast majority are settled.

30:54 - And that's what I think the governor was referring

30:56 - to was transparency in the settlement process.

30:59 - A lot of folks refer to him as a black box settlement.

31:03 - So what the settlement process is and, you know, several states,

31:07 - this is the same as that.

31:10 - All the parties are agreeing to the revenue requirement.

31:13 - So when you have a rate case, it's basically two parts to a rate case

31:17 - revenue requirement, how much it takes to operate the utility,

31:21 - and then who pays what what each rate class pays for for that.

31:25 - So how big is the pie?

31:27 - And then how we're going to cut up the pie.

31:29 - That's the basic, you know, gist of a rate case.

31:32 - The majority of our rate cases are settled.

31:34 - And what that means is that all the settling parties all agree

31:38 - on the revenue requirement.

31:40 - Everyone agrees that the revenue requirement

31:42 - is in the public interest when they sign that settlement.

31:46 - What they don't do is they don't itemize the settlement.

31:49 - So I think what the governor was saying is there should be some aspects

31:52 - of settlements that should be disclosed.

31:55 - This should be transparent.

31:56 - One of the things he pointed out was Roe.

31:59 - So when we do a settlement now, the only thing

32:02 - that's transparent, I liken it to a bill.

32:05 - We get the total bill is just not an itemized bill.

32:09 - So the point is, do we need a fully itemized bill?

32:12 - Wolf, we require a fully itemized bill.

32:14 - We probably wouldn't be seeing too many more settlements then,

32:17 - which would mean we were fully litigate, which means we would be running into that

32:21 - time constraint that we had talked about, and we would be increasing costs.

32:25 - There's no question about it for all parties involved.

32:28 - So, you know, settlements are a way of helping to address those costs.

32:33 - I think that the desire, though, is to have some transparency

32:37 - in those settlements.

32:38 - There should be basic elements of those settlements that we should know.

32:42 - For instance, our last public meeting and I know you listened to all of them.

32:47 - I made a statement on, the two ray cases that we were

32:51 - delaying for an investigation.

32:54 - And one of the my statement, I did say, if you do end up with a settlement,

32:58 - one of the things we're going to want to see

33:00 - is what the cost impact is by rate class.

33:04 - That's something that some settlements do currently contain, some do not.

33:09 - I think there was an interest in trying to get some standardization

33:12 - of basic elements of the settlement that should be disclosed to the public.

33:19 - Because I

33:19 - believe that if it doesn't appear and you say, you know, black box

33:23 - settlements, that it appears that it's more than it would have been.

33:28 - And that's not your role.

33:29 - That's that's not the case.

33:31 - What everyone is agreeing to

33:33 - is that total bill, that revenue requirement, and all parties of the rate

33:37 - case, all the all the advocates, all the statutory advocates, and that includes

33:42 - our Bureau of Investigation enforcement, that's who represents the Commission.

33:46 - The consumer advocate represents consumers,

33:49 - the small business advocate represents small businesses.

33:52 - And then you may have other parties to the case as well.

33:55 - But those are the three statutory advocates.

33:58 - When they settle, they're all saying that this settlement

34:01 - is in the public interest.

34:03 - So as I see that when it comes up to me as a judge, I then say, okay,

34:07 - they're saying the total amount is in the public interest.

34:10 - The reason that they're not disclosing all the amounts is because

34:14 - think of it, that you're getting from point A to point B,

34:17 - but how each one of those parties get to point B is a different route.

34:21 - But they're all they're all agreeing on a total I'm sorry.

34:24 - I'm thank you for your time. Yes, yes.

34:28 - Thank you for clarifying that. That's very important.

34:30 - But you brought up something else I wanted to ask you.

34:32 - When you're talking about the different watch.

34:35 - Dogs watch groups that are out there.

34:37 - And again, I'm going to go back to the governor's presentation

34:40 - because we just talked about and you just mentioned the Office

34:43 - of Consumer Advocate.

34:44 - We talked about the Office of Small Business Advocate,

34:47 - which are all looking for the ratepayers interest.

34:51 - But the governor actually talked about another group, and he talked about,

34:55 - an energy affordability watchdog.

34:59 - So my question then is we already have these other ones that are

35:03 - there, costs are baked into all the rate bases.

35:07 - Now we're asking for our third one.

35:09 - So who would that be and who's going to pay for that?

35:13 - I'm not sure.

35:14 - I heard the governor announced that in, you know, his speech.

35:17 - And I think he was sort of looking, I'm not sure if that person

35:23 - was going to represent him, the state, or what that capacity is.

35:28 - I haven't gotten any more details on that position,

35:31 - but from my understanding, I thought it was a position within

35:34 - his office is my greatest concern is our costs are going to our office.

35:38 - You heard about the capacity auctions and our shortfall generation.

35:41 - Last thing we need is another layer of government on top of that.

35:44 - So it might clarify that in another statement.

35:47 - During his presentation,

35:49 - they said utilities are not allowed to make one more dollar than they need.

35:53 - Can you define what

35:56 - they need means?

35:58 - And you referenced RTD our return on equity.

36:02 - Can you, define that?

36:03 - In in this avenue again?

36:07 - I'm, I don't want to speak for the governor,

36:10 - so I'm not sure what he meant, I can guess,

36:13 - I think what he's talking about is that revenue requirement,

36:16 - that revenue requirement that I talked about this part of every Rea case.

36:20 - What he's saying is that that's the revenue required to run that utility.

36:25 - And I think he's saying

36:26 - he doesn't want that utility to earn over that required revenue.

36:30 - But again, I don't want to speak for him.

36:32 - And Roe, by the way,

36:35 - their earnings of the utility is part of the revenue requirement.

36:38 - So the ROE is a component in the revenue requirement.

36:43 - Can you

36:43 - give a little more definition or either of the commissioners

36:46 - on what return on equity ROE really means to the ratepayer.

36:52 - So you want that Commissioner Moreau,

36:57 - thanks for the question. So,

37:00 - and in any distribution rate case,

37:05 - there's a dollar amounts up

37:06 - for as the chairman said,

37:09 - how much it costs the utility

37:11 - to run the business, to put up the poles, to lay the pipe, all that stuff,

37:17 - and they go out to the markets and they,

37:21 - finance that with equity and debt.

37:26 - We spend a lot of time in our rate case

37:28 - is talking about the cost of that equity

37:32 - and that usually we're talking about

37:35 - at the equity side of that. And,

37:39 - we spend a lot of time on that number. So,

37:44 - a lot of

37:46 - people nowadays are talking about that and saying, why are the utilities

37:50 - earning any more than what they go out

37:53 - to the market for to get that capital?

37:57 - It costs them X amount to get it.

37:59 - And then like how much more they get above

38:03 - that is always what is heavily litigated.

38:07 - There's a lot of focus on that number.

38:09 - I think that might be what he was talking about.

38:12 - So then the other side of that though, is that difference

38:14 - between the cost of capital versus the ROE.

38:17 - Is there margin.

38:20 - So if you want them to borrow at the cost of capital,

38:23 - that means you're saying that you don't want them to have a profit

38:27 - is based on a lot of the investment.

38:29 - This is their return on their investment that helps

38:31 - protect the ratepayers from the capital improvements that they're doing.

38:35 - So I want to. Right.

38:37 - That's exactly right. Yes.

38:38 - I want to make sure you brought that up.

38:40 - My next question is for, vice chair borrow, a couple.

38:45 - Well, last summer you had a resource

38:48 - adequacy, listening tour.

38:52 - So here we are, six, eight months later.

38:56 - Can you tell us a little bit about how that process went?

38:59 - And was there a report generated and you to release anything at.

39:04 - Thanks.

39:05 - Thanks for, bringing that up. So

39:09 - it's almost two years ago now when we, we kicked off this resource adequacy.

39:13 - Just taking a look, as to what was going on in the state

39:18 - and in the PJM region,

39:22 - reliability,

39:23 - affordability, is there enough generation?

39:26 - All of those things.

39:29 - And what we have done thus far is

39:34 - we took a look at our interconnection

39:39 - regulations.

39:42 - Because those have not been updated since 2006.

39:47 - And when they were last updated,

39:50 - it was in response to the alternative energy portfolio standards.

39:55 - So it really is very focused on that.

39:57 - So we realize coming out of of the study that we did that,

40:01 - meet that those need to be updated.

40:06 - It's important that they be updated because as the chairman said,

40:09 - we need every megawatt that we can get on to the grid.

40:13 - We need them connected quickly and as efficiently as possible.

40:18 - And also for, businesses

40:21 - that are going out, starting up new businesses,

40:26 - when they want to

40:28 - get service from our electric companies.

40:32 - We've been hearing things like it takes o

40:36 - the better part of a year to get them connected.

40:39 - So we have, I issued a C motion interconnection C motion,

40:44 - and we will be starting a rule making looking at the rules of connecting

40:50 - new businesses who need service and also connecting

40:54 - new, things like storage or any other megawatts

40:59 - that need to get connected to the distribution companies.

41:02 - And if I could just add to that, one of the things

41:04 - that they come out of that, tech conference,

41:06 - as well as our large load model tariff as well as load forecasting,

41:10 - is there a published report out from that listening tour?

41:13 - They're they're coming out

41:14 - piecemeal, piecemeal in these in the forms of these rule makings.

41:18 - But we will be sure to get them to you.

41:20 - Okay. Thank you. Yeah. Thank you chairman.

41:22 - Thank you.

41:23 - Senator.

41:23 - Up next, Senator Bass Scholar, followed by Senator Penicuik.

41:28 - Thank you, Mr.

41:29 - Chairman.

41:29 - I was glad to say that, I have a question that I'm sure you're anticipating,

41:35 - since the expiration of chapter 14.

41:39 - And then, of course, the adoption of the commission's policy

41:42 - statement on ratepayer protections.

41:45 - What trends are you seeing in customer

41:49 - ranges and payment plans approved by the Commission?

41:52 - Because what I've been hearing is that there is administrative law judges

41:57 - that are doing inconsistent type payment plans.

42:02 - And, depending on what judge you're seeing.

42:05 - And then, hopefully I what I don't want to see

42:08 - is any venue shopping happening in the future.

42:10 - But I was wondering, have you been hearing the same things?

42:12 - What are you doing about it?

42:14 - And how can can we do anything in the legislature to help?

42:17 - So, thank you for the question, Madam Chair.

42:20 - And, so first off, yes, we did do a policy statement.

42:25 - So after chapter 14, expired

42:29 - in the summer on December 31st, 2024, as you know, we did a policy statement,

42:34 - asking everyone to sort of keep the playing field as is.

42:39 - While it was a new session coming in for the General Assembly

42:43 - and until the new General Assembly comes in, and if they take up this issue again,

42:49 - you know, great.

42:50 - So let's just keep the playing field as is.

42:54 - We went to the through the full year, in I think the November

42:58 - I offered a commissioner, his motion is the motion

43:02 - that, authorized or instructed our law bureau

43:06 - to start a no or notice a proposed rule making on chapter 14.

43:11 - So basically, what it was, was looking to

43:15 - continue the program because, as we said, as I met with the oversight chairs

43:19 - when we did that initial policy statement, this is a Band-Aid.

43:23 - This isn't a permanent fix.

43:25 - We knew that, once we went a full year and we weren't seeing legislation

43:31 - move over here, we decided, okay, let's start the permanent fix that.

43:36 - So we voted last meeting to, authorize the no.

43:41 - For the notice of proposed rule making.

43:43 - That will be going out hopefully within 30 days or so.

43:47 - And we'll start a rule making process.

43:49 - We'll take in comments.

43:50 - The starting point of what we used

43:54 - was the last legislative authorization from 2014.

43:58 - But what are these administrative law judge is doing now?

44:01 - So we did have so the utilities have basically been playing by that

44:06 - the rules that have been playing by the policy statement.

44:09 - The majority of our ALJ had been following that as well.

44:13 - We've had had a few ALJ that went beyond that in terms of a payment arrangement.

44:19 - So they may have given

44:21 - the law was very prescriptive in that if you were a certain income level,

44:26 - the term of your payment arrangement was defined in law.

44:31 - Because

44:32 - the ALJ viewed it as the law had expired.

44:35 - That's where that language was.

44:36 - It's not in our regs.

44:38 - So there so they're deciding that either

44:40 - through their judicial independence or they're going beyond the guidance. Yes.

44:45 - So what we've done then when those cases have come back to the commission or up

44:49 - to the commission, we have put them back within the guardrails of chapter 14.

44:54 - So we would override the ALJ decision

44:57 - and put it back within the parameters of the last authorization.

45:01 - Okay.

45:02 - So they so when we were said and done they were within the guardrails.

45:06 - Okay. Good to know.

45:07 - So so what you're saying is we really do need the legislature.

45:10 - We guys need to do something on chapter 14.

45:13 - They can't keep relying on this.

45:14 - We would love to have legislative authorization please.

45:18 - Hopefully it's coming on data centers.

45:21 - I mean, this is the big thing now

45:24 - that everybody's talking about, even in my community, I'm amazed.

45:27 - I want to go knocking on doors and things.

45:29 - People are saying, what are you doing about these data centers?

45:32 - It's like I always thought in our area it was warehouses that were the evil.

45:36 - Now it's, data centers.

45:38 - But I and I do recognize the need for data centers

45:41 - and the infrastructure that we need for the future.

45:44 - Across this country.

45:46 - But, where do you see, where

45:49 - do you think the General Assembly needs to lead as far as you're going to be?

45:53 - We're seeing some of this stuff in, you know, the the amount of energy

45:57 - that's going to be consumed is a lot the same with water.

46:00 - So sure, we're, we're we're do we in the general Assembly need to lead on this?

46:05 - I know there are bills out there, but if you know

46:09 - what what do we need to do as far as help with the infrastructure.

46:12 - So one of the things I talked about was the large load model tariff

46:16 - that we're working on.

46:17 - When you when we do that, when we, you know,

46:21 - enact that it's voluntary.

46:24 - It's a suggestion for utilities to follow.

46:28 - If the legislature does it, it's mandated then.

46:31 - So, you know, one of the things we're looking at,

46:34 - we haven't gotten that large low tariff back yet.

46:36 - So I'm not sure what it's going to look like, when we get it back from staff.

46:40 - But one of the things, for instance, that, we were looking to do

46:44 - was have large load customers pay into the customer assistance programs.

46:49 - Pennsylvania.

46:50 - We have very robust customer assistance programs.

46:53 - Lead, we're number two in the country in terms of dollars provided

46:57 - and all those dollars with exceptions of some hardship funds that are done

47:01 - by corporate donations, the majority are funded by residential ratepayers.

47:06 - So if we are able to get the large load data center to pay into those programs,

47:12 - you could then

47:13 - remove that, those costs or those burdens on residential ratepayers.

47:19 - And again,

47:19 - we can suggest that you guys can mandate that above it.

47:24 - Okay.

47:24 - And lastly, because I know there's

47:26 - a lot of people here that want to ask questions,

47:28 - we, frequently hear from constituents about the retail electricity

47:32 - and natural gas supplier contracts. Right.

47:35 - And then the variable rates, the products and then the

47:39 - the rates spike after, in the introductory period.

47:44 - Right.

47:44 - So what additional statutory reforms would you recommend to better protect

47:49 - seniors, especially seniors, fixed income

47:52 - households, from these variable rate traps?

47:56 - I call it a trap.

47:57 - So that's a great question.

47:58 - And it's back to

47:59 - when I used to work for you and things that we did during the polar vortex.

48:03 - If you remember, you had a bill and the PUC

48:07 - then enacted it through regulation that did a three day switch time on Edcs.

48:13 - Okay.

48:13 - We did not put that requirement on suppliers.

48:17 - So, for instance, say I'm in an introductory rate

48:21 - and that's a rate that balloons up and I'm in some great rate.

48:24 - And you know, I'm having trouble making ends meet.

48:28 - So I, you know, set my calendar, make sure I switch out of that contract.

48:33 - Because typically when you deal with a lot of these introductory rates, if a month

48:37 - for if you don't switch, you're usually paying everything back that you saved.

48:42 - And then some.

48:43 - So I said I make sure I get out of that rate.

48:46 - And so I call the supplier and I say I want to switch.

48:50 - That supplier can hold my request for another month.

48:53 - They can allow the new rate to come in, the fact they make all their back

48:57 - money up, and then they let me out.

48:58 - So a three day switch for suppliers,

49:01 - just like we hold for electric companies,

49:05 - helps helps the system work instead of I mean, that's just my $0.02.

49:09 - Instead of banning things, instead of banning options for customers,

49:13 - let's educate them and let's give them tools to make those options work.

49:17 - Thank you, thank you, thank you, Mr.

49:19 - Chair.

49:19 - Thank.

49:23 - Thank you.

49:24 - Senator.

49:24 - Up next, Senator Penny cook, followed by Senator Kim.

49:28 - Thank you, Mr. Chairman.

49:30 - This is a really interesting topic to me.

49:32 - Obviously, we have more demand in Pennsylvania than we have supply.

49:36 - I think we can agree on that.

49:39 - I would love to see Pennsylvania

49:43 - meet all of our demands first

49:45 - before we export any of our electricity.

49:49 - I just think that makes good sense because we're naturally exporting electricity.

49:55 - But one of my concerns I have, I have, a manufacturer in my district

49:59 - that uses a lot of electricity.

50:02 - So this, large load rate class,

50:05 - he's going to be lumped in as a data center,

50:09 - and that's really going to affect his bottom line.

50:12 - He's been there for over 50 years.

50:16 - How how can we define data centers

50:19 - in one hand and manufacturing in another?

50:23 - So for our large load tariff, we were looking to,

50:26 - define it by usage because really,

50:30 - you know, if it's not a data center,

50:32 - but they still have the same usage as a data center.

50:35 - I think that's really the issue we're dealing with because it's a large usage.

50:41 - I think, you know, we were looking at what, 50MW, I think.

50:44 - Yeah. Yeah.

50:45 - So that's a huge industrial.

50:48 - So for an industrial use in 50MW of power, that's a pretty large industrial.

50:53 - So I'm not sure he's still going to fall into that.

50:55 - Right class.

50:56 - If he is he's using a ton of power. Okay.

50:59 - When was the last time, we had built

51:02 - a brand new power plant in Pennsylvania?

51:06 - We would have you back to you on that.

51:08 - I think there was a gas.

51:10 - It certainly was gas.

51:12 - New plants and, probably within the last couple of years.

51:16 - But we'll get back to you if I can answer through the chair on that.

51:20 - I'm sorry. Five years.

51:23 - How many more?

51:24 - What do we need to meet the current demand and the projected

51:28 - demand of these data centers?

51:31 - So one of the key premises of the governor's

51:35 - group with the white House, and it's something that PJM is looking at.

51:39 - And then the governor called for it in his budget address

51:42 - is bring your own generation for large loads.

51:45 - And I will be the first to tell you that, I shifted my position on that.

51:49 - If you asked me a year ago, I would have said, let's let's connect.

51:54 - You know, we can make this work.

51:56 - And I've since changed my tune on that.

51:59 - And the reason why is because the PJM capacity market has not responded.

52:05 - It just has not responded to this need.

52:09 - So the market's not responding.

52:11 - We've gone through, what, three, you know, 3 or 4 auctions

52:16 - now where it's not responding to this increased load.

52:19 - And I apologize for interrupting, but why is it not responding?

52:22 - No problem.

52:23 - I just my personal view is I don't think the construct

52:27 - of the market was ever designed for this, these types of challenges.

52:31 - This market was designed for a 1 to 3%

52:34 - slow and steady low growth year in and year out.

52:37 - The challenge with the data centers, it's three fold.

52:41 - It's the size of the load.

52:44 - It's the speed of interconnection, the speed of the load.

52:48 - And there's not an end in sight.

52:52 - This is going on indefinitely forward.

52:55 - So those three things, those three aspects

52:59 - have made it very challenging for this capacity.

53:02 - Market to work.

53:04 - And in fact, we've seen the capacity market even before.

53:07 - We've gotten into large loads,

53:09 - as we've seen increased electrification, we've seen the market go vertical.

53:13 - And what I mean by that is we want a flat market, we want a horizontal market.

53:17 - We don't want a vertical market because when we have a vertical market,

53:21 - small changes and in load in demand results in huge changes in price.

53:28 - And so you want a flatter curve

53:29 - where you can absorb those differences in load

53:34 - and it not impact prices drastically as it has been

53:37 - in this current construct.

53:40 - Great.

53:40 - Thank you so much.

53:45 - Up next

53:45 - we have Senator Kim, followed by Senator Dush.

53:49 - Good afternoon.

53:50 - One of the thank you, Senator Barrow, for being in my district

53:53 - to talk about utility costs and talking with my constituents.

53:57 - You have a knack for breaking things down and helping us

54:00 - understand, some complex issues.

54:03 - And I also want to thank PUC for helping us with a dirty drinking water issue.

54:07 - We don't really appreciate you guys until we really need your help.

54:10 - I saw a report today that because of the war in Iran,

54:14 - people can be paying $0.25 more on gas affordability is on our minds.

54:20 - Can, especially for consumers.

54:22 - Want to talk a little bit about water?

54:24 - I know that you can't force, water companies for Caps,

54:29 - the assistance program, but are you saying more and more companies providing

54:34 - customer assistance programs to make it more affordable when it comes to water?

54:39 - We are we've seen a number of programs being offered in various rate cases.

54:43 - They tend to come out of rate cases, settlement.

54:47 - That's one of the advantage of the settlement, is that you can get

54:51 - items in a settlement that you normally would not get in full litigation,

54:54 - and that's a prime example of of programs like that.

54:59 - I'm sorry.

55:00 - I'm sorry.

55:00 - Just to add to to clarify our universal service programing,

55:04 - our water companies are not required to provide those programs, but they do.

55:08 - So the same kind of assistance programs and nets that are available to those

55:12 - through the electric and gas companies, water, customers get them as well.

55:16 - Excellent.

55:17 - I wanted to talk to you a little bit about chapter 111.

55:22 - When it comes to

55:24 - the commission working on enforcement efforts,

55:27 - through investigations and penalties against suppliers found to be

55:31 - violating Pennsylvania's Consumer Protection rules to ensure accountability

55:34 - and protect, protect consumers, especially with calls.

55:38 - My older Pennsylvanians don't like these calls

55:41 - and are very feel very vulnerable with the scam jams or whatever.

55:44 - People call it.

55:46 - Can you talk a little bit about your efforts

55:48 - and what's going on in that area?

55:50 - So we do have a need oper out in that area,

55:53 - that, that deals with marketing practices.

55:56 - I did hold it back though, and we, I was looking to expand it

56:00 - to talk about the switching stuff that I talked to Senator Bosco

56:03 - about to include that and maybe do a more holistic,

56:07 - retail market reform rule making.

56:11 - So right now we have a net oper

56:14 - probably pull that back, add a little to it, put out a number.

56:17 - Okay.

56:18 - My last question is, I know that you're not involved with

56:22 - the Three Mile Island upstart again.

56:23 - That's with NRC.

56:25 - But what as a commission are you looking at?

56:29 - I mean, down the line, we've already had TMI up,

56:31 - but now we're going to, it was decommissioned.

56:33 - Now it's going to be back up again.

56:36 - How are you looking at the process and what are you ready to do if needed?

56:42 - So as.

56:44 - Vice chair, barrows talked about interconnections, the key there,

56:48 - I mean, that's basically a PPA, a power purchase agreement with Microsoft.

56:52 - That power would go out onto the grid.

56:54 - So we don't have a whole lot of touch point on that.

56:58 - It's it's going on for the wholesale grid.

57:00 - It's a private contract with Microsoft.

57:03 - And the owner, constellation.

57:05 - Constellation will provide a 1000MW,

57:08 - to Microsoft, from generation from that plant.

57:12 - Now that power is going out onto the grid.

57:16 - So it doesn't mean that specific electrons going into that specific Microsoft

57:21 - data center.

57:22 - But it's sort of, you know, thousand megawatts here being purchased,

57:26 - thousand megawatts here being consumed.

57:30 - Thank you.

57:30 - That's all I have.

57:32 - Thank you.

57:32 - Senator.

57:33 - Next, Senator Dush, followed by Senator Haywood.

57:36 - Thank you, chairman and commissioners, I appreciate you being here.

57:40 - I want to make a comment.

57:41 - Price fixing has never worked, and I'm in my 60s.

57:45 - And even looking back further than that, it's always

57:48 - had to be corrected because it just doesn't work.

57:52 - And yet, the governor's, Miss Barry,

57:55 - you said it was a signal to motivate other states to take corrective action,

58:00 - with their rules

58:03 - and policies that are limiting the coal,

58:06 - natural gas and other production, the base load for those states.

58:12 - I've got relatives in the Delmarva Peninsula.

58:14 - I've got friends down there.

58:16 - They're benefiting from this right now.

58:19 - But we're here representing the people of Pennsylvania,

58:23 - the, by giving that incentive

58:27 - to the consumers in Delaware, Maryland, Virginia,

58:32 - there's no pressure on the legislature

58:34 - to fix this stuff that they've created.

58:38 - And that's the problem.

58:41 - What would be the impact

58:43 - on Pennsylvania in terms of supply,

58:45 - as well as what it would do to benefit businesses and others?

58:50 - If Pennsylvania got out of the PJM and created a model

58:54 - like Ercot in Texas, where the power lines stop at state water.

58:59 - So I think there's

59:02 - I get that ask that question asked a lot, Senator, as you can imagine.

59:05 - And the leaving PJM is the easy part.

59:10 - What happens after PJM and, you know, you used Ercot as an example.

59:15 - That's one model. Yes.

59:17 - You can use New York as an example where they have their own in-state ISO,

59:21 - but they're still interconnected with the intercontinental grid.

59:25 - I would be very hesitant of not being interconnected in their continental grid,

59:31 - because we've seen what happens in Texas when you go your own.

59:35 - Lots of people died there.

59:38 - I, I think that for me

59:41 - personally, whether we go our own or not, that's one conversation.

59:45 - But I think we still should be interconnected into the intercontinental

59:48 - grid, though, I agree we should, but I what I don't want is any longer.

59:54 - Mayor. Mayor, I hear you as conversations.

59:57 - Sarah Phillips, the one that I have had,

01:00 - 01.307 a lot of it.

01:00 - 02.675 And I hear what you're saying.

01:00 - 05.702 I will say that some of those policies, you know,

01:00 - 09.105 the LNP prices that Senator Pittman was talking about earlier,

01:00 - 13.343 I think have caused some states to reevaluate some of those policies.

01:00 - 18.424 I know, Maryland, is trying to bring some gas generation in there.

01:00 - 21.327 I think they've actually done legislation

01:00 - 24.863 where they're trying to bring gas generation into the state.

01:00 - 29.459 So I think that, you know, some of those policies from years past

01:00 - 33.029 this Titan grid is causing everyone to relook.

01:00 - 35.307 There's still hesitancy there. And it's interesting.

01:00 - 39.068 We're pumping natural gas down to, Cove Point in Maryland

01:00 - 41.013 and we're fueling Europe.

01:00 - 41.147 Yeah.

01:00 - 43.749 Maryland should be taking advantage of that.

01:00 - 46.743 Virginia should be taking advantage of that pipeline

01:00 - 49.588 and generating their own down there.

01:00 - 52.615 But unfortunately, there's legislation in Maryland.

01:00 - 56.419 But, my sense from some of the Maryland legislature

01:00 - 00.232 is that there's not enough support yet to get.

01:01 - 04.236 And I don't see it unless the consumers start feeling it.

01:01 - 05.270 And the constituents

01:01 - 08.297 that have been driving this narrative to go to wind and solar,

01:01 - 11.668 to the extent that it's detrimental to their constituents,

01:01 - 13.512 I don't see a change to that.

01:01 - 18.517 So and, to Senator Phillips Hill, the I've got problems with that whole thing

01:01 - 22.445 about taken off our farmlands, preserve farmlands and stuff as well.

01:01 - 26.392 So for exporting this to people who actually don't

01:01 - 29.419 have any kind of grasp of reality.

01:01 - 32.955 So, I appreciate that answer.

01:01 - 36.726 The, what do you see as a small

01:01 - 41.497 are the impacts on the, grid with small nuclear?

01:01 - 46.412 The stuff I didn't they just flew one out of on a C-17

01:01 - 49.782 into, Utah to power up a base out there.

01:01 - 52.685 What what do you see as the impact of that?

01:01 - 57.847 So I think small modular nuclear is certainly, you know, when we saw,

01:01 - 00.159 I think that

01:02 - 04.187 if we see new nuclear generation, that's likely what it's going to be.

01:02 - 07.299 You know, the older, large scale nuclear

01:02 - 10.326 plants, we've seen one being built in Georgia.

01:02 - 14.330 Cost overruns from that plan, doubled.

01:02 - 17.309 So I think you're probably going

01:02 - 20.379 to see smaller plants like small modular nuclear.

01:02 - 24.416 One of the things we always hear about that is, oh, it's ten years away.

01:02 - 25.718 It's ten years away.

01:02 - 28.387 Well, at some point it is going to be ten years away.

01:02 - 32.081 And as the price point that's the one thing, is the PJM market.

01:02 - 37.029 You know, higher prices are good and bad in that they're bad.

01:02 - 38.664 We're paying higher prices.

01:02 - 43.168 But it brings other nascent technologies online that would not have been,

01:02 - 47.396 brought online otherwise with lower markets, lower cost of markets.

01:02 - 48.774 Thank you. Thank you very much.

01:02 - 52.034 And the one thing I want to going back to my original point,

01:02 - 56.115 Governor Shapiro, two years from now

01:02 - 59.618 is going to be benefiting in those 13 states where he's helped drive.

01:02 - 02.979 It'll be a talking point for him if he's running for president.

01:03 - 04.623 That'll be a talking point.

01:03 - 07.392 I don't want that talking point. We have got to do some things.

01:03 - 08.727 Take care of Pennsylvania first.

01:03 - 11.497 Thank you.

01:03 - 13.398 Senator Haywood,

01:03 - 16.425 Senator Haywood, followed by Senator Cole.

01:03 - 17.303 Thank you.

01:03 - 20.329 I'm not going to do a bunch of forecasting into,

01:03 - 21.673 the future.

01:03 - 26.912 However, there was a framework described around subsidy

01:03 - 30.415 that I wanted to explore a little bit, but I have three questions.

01:03 - 33.442 So hopefully you can give me some short answers if at all possible.

01:03 - 37.613 The phrase I understood is, since, there's a collar

01:03 - 41.393 that was a three and a quarter that there's a subsidy to the folks

01:03 - 45.488 in Virginia because they're paying less than the prior price,

01:03 - 48.167 and that we are paying more

01:03 - 51.194 than the prior price of, therefore, a faster subsidy.

01:03 - 56.632 And then I understood that if we were at 500

01:03 - 00.612 without a subsidy,

01:04 - 02.014 that would be the other scenario.

01:04 - 05.374 And those are two models, the two scenarios that were discussed.

01:04 - 09.011 So so I would like to know

01:04 - 13.625 what event is for Pennsylvanians of Option.

01:04 - 16.652 B, which would be paying the $500

01:04 - 18.797 without subsidy.

01:04 - 21.824 Is that a better position for Pennsylvanians?

01:04 - 24.203 So no. Okay.

01:04 - 26.405 I mean, let me go to my next question.

01:04 - 28.173 Yeah, I can't imagine. Five.

01:04 - 29.942 That's good. That's good.

01:04 - 33.169 No, no, no one thinks 500

01:04 - 36.148 paying 500 is better than paying 3 or 4, right?

01:04 - 39.175 No, no, nobody thinks that subsidy or not.

01:04 - 42.879 My next question goes to solar.

01:04 - 46.148 So all my conversations with folks who,

01:04 - 50.262 trying to develop solar, they have described a number

01:04 - 53.289 of Pennsylvania impediments.

01:04 - 57.159 And so what I would like to know is if

01:04 - 01.006 the lightning plan of, of,

01:05 - 03.809 of the governor was, was implemented.

01:05 - 06.836 So we had some real solar incentives

01:05 - 09.848 as we look at power from everywhere,

01:05 - 14.577 what would that do to create more power sources

01:05 - 17.623 for our

01:05 - 18.957 citizens?

01:05 - 22.895 So part of the lightning plan is,

01:05 - 26.822 the press proposal, which would be an update of the APS.

01:05 - 30.068 Act, as you know,

01:05 - 35.107 APS was originally enacted in 2004, update in 2007,

01:05 - 38.801 but the the margins were not updated since 2004.

01:05 - 44.483 The biggest part of press would update, those those those provisions.

01:05 - 47.510 So I think it would create fuel diversity.

01:05 - 51.156 One of the things that we're seeing here, and these increased prices

01:05 - 55.117 in the wholesale market is not just on the capacity market.

01:05 - 59.588 And I Am's last report, it's the actual cost of power.

01:06 - 01.967 And it's one of the things that Chairman Strus

01:06 - 04.002 has been talking about for ten years now.

01:06 - 07.029 And we're seeing this come home to fruition

01:06 - 10.142 as we're putting all of our eggs in one basket,

01:06 - 14.203 and we are not experiencing fuel diversity or resource diversity.

01:06 - 19.208 We're now subject to the price fluctuations of that commodity.

01:06 - 22.487 When we look at this last winter storm, by the way,

01:06 - 26.415 we're going to be experiencing about 800 million and upper uplifts,

01:06 - 31.020 as a result of the 17 cold days in January.

01:06 - 36.058 That's in addition to increases in the, cost of natural gas.

01:06 - 39.471 But a lot of those costs are from the cost of natural gas.

01:06 - 43.275 The Henry hub, pre before that, cold

01:06 - 46.311 spell was about 3 to $4.

01:06 - 50.940 It spiked up to 55 to 60 and then came back down.

01:06 - 52.985 Settled in around seven right now.

01:06 - 56.245 So as we're tying these commodities closer and closer together,

01:06 - 00.182 you have to realize that when you have a price impact on one commodity,

01:07 - 03.319 it's going to ripple out through the other sectors.

01:07 - 07.699 So what what you know, resource diversity brings it.

01:07 - 10.268 You insulate yourself from that.

01:07 - 12.371 Is there going to be a cost of that diversity?

01:07 - 15.398 There absolutely is no question about it.

01:07 - 19.177 But you're insulating yourself from the cost of tying yourself to

01:07 - 20.736 one commodity. Thank you.

01:07 - 23.648 Hopefully two more quick questions.

01:07 - 25.517 You know, I live in Cheltenham Township.

01:07 - 29.688 We've had a number of concerns about the cost associated

01:07 - 33.315 with rate increases for waste water.

01:07 - 38.263 And the waste water costs are making my neighbors

01:07 - 41.290 and myself really pay significant bills.

01:07 - 44.269 And we know that there's some proposals

01:07 - 47.296 for detention centers around the Commonwealth,

01:07 - 51.500 which we understand will then take more water and more waste water.

01:07 - 55.647 So as we look at your role in seeing

01:07 - 58.674 that the cost of waste water

01:07 - 01.486 is affordable residential.

01:08 - 07.383 So how are you looking at your approach or what is your approach?

01:08 - 13.322 So that residents facing detention centers would be potentially thousands of people

01:08 - 18.027 using, water that weren't present in those communities before,

01:08 - 21.764 as well as older communities like Cheltenham.

01:08 - 23.775 What's your approach to that?

01:08 - 25.710 Those costs can be somehow managed.

01:08 - 30.082 Wastewater costs are tough to deal with because of compliance costs.

01:08 - 31.450 A lot of those costs,

01:08 - 35.220 there's just not margins to be able to make because the compliance

01:08 - 39.215 costs for treating water, it makes it very difficult.

01:08 - 43.328 The legislature passed act 11,

01:08 - 47.532 which allows us to take cost

01:08 - 51.327 in a waste water rate base and put it on to the water rate base.

01:08 - 54.706 We were doing that for a little wet, and then we stopped doing that

01:08 - 57.609 because we started seeing the water rates going through the roof.

01:08 - 00.979 So we sort of kind of backed off of that a little bit,

01:09 - 05.150 is trying to find that balance of where we have that tool in our toolbox.

01:09 - 10.922 We are able to offset those rates with a water rate base, much larger rate base.

01:09 - 14.783 So you're spreading that cost out over a larger pool of customers.

01:09 - 18.797 But we were doing it so much that those rates were starting to go up.

01:09 - 22.901 So that's the balancing act is, is, trying to

01:09 - 26.328 we do have that ability to put that onto the water rate base.

01:09 - 30.208 But we can't do it too much or else you're going to have

01:09 - 33.602 the same issue you're having on the other rate base.

01:09 - 37.173 Thank you.

01:09 - 39.285 Thank you, Senator.

01:09 - 41.987 Senator Culver, followed by Senator Schwenk.

01:09 - 42.587 Thank you, Mr.

01:09 - 43.556 Chairman.

01:09 - 46.491 I thank you, chairman de Frank and commissioners for being here.

01:09 - 50.495 I know we're posing this question in different forms today,

01:09 - 52.464 but I think we all can tell you

01:09 - 56.859 that there has been a lot of concerns raised by the public about data centers,

01:09 - 00.129 and how they will impact the residential taxpayer.

01:10 - 04.776 Some of the most common concerns, I think, we hear are, the cost

01:10 - 08.504 to the consumer or power interruptions or reduced power availability.

01:10 - 11.816 Can you talk about your role

01:10 - 14.843 in data centers and protecting the consumer?

01:10 - 17.022 Briefly? Sure.

01:10 - 20.859 So I'll talk about our role in my day job, and then I'll talk about our role

01:10 - 23.828 in that advocacy role that I talked about before.

01:10 - 28.891 So in our day job, it's trying to protect consumers from stranded costs.

01:10 - 33.605 That's the reason we started the large load model tariff is to be able

01:10 - 39.368 to insulate consumers for upgrades that may not come to fruition.

01:10 - 44.716 As I've talked all about with this development, this isn't

01:10 - 48.286 the kind of development we're used to seeing, said the Sara Steffen.

01:10 - 51.413 And we're not talking about curb cuts and turning lanes here.

01:10 - 56.418 These are hundreds of millions of dollars in infrastructure upgrades required,

01:10 - 59.855 so you have to make sure the ratepayers insulated from that.

01:11 - 03.602 One of the things I hope to see in our model tariff is allowing

01:11 - 07.105 for third party build out, and that is that is centers.

01:11 - 10.909 As you are well aware, it's all about speed, the market speed, the market speed,

01:11 - 11.677 the market.

01:11 - 14.012 How quickly can we get connected.

01:11 - 15.814 So great.

01:11 - 18.350 Let's help them get connected as quick as possible.

01:11 - 21.977 And some of that in terms of speed to market,

01:11 - 25.514 they may be able to do on their own through their own build out.

01:11 - 30.419 So if we allow them to do infrastructure build out, it's at their dime.

01:11 - 34.823 So if they don't come in one second, does that infrastructure build out

01:11 - 38.027 also help the consumer, the individual consumer or not?

01:11 - 39.337 Well, you're going to insulate them.

01:11 - 41.406 So so you're not going to

01:11 - 44.909 if they're not paying the bill to begin with, you don't really have to worry

01:11 - 48.370 if the entity comes in or not because the consumer never paid for it.

01:11 - 50.182 So that's one of

01:11 - 54.009 the the thought processes of trying to insulate the consumer

01:11 - 57.479 and making sure they're not getting caught with any of these stranded costs

01:11 - 02.618 because they're already getting hit on the supply end on PJM.

01:12 - 05.730 From a little bit from just the supply demand

01:12 - 08.757 paradigm, we're seeing the capacity cost increases.

01:12 - 10.368 So they're already getting hit on that.

01:12 - 13.872 And we least have to make sure we protect them on the infrastructure.

01:12 - 19.034 And on the other side of that, you know, with our advocacy at Ferc

01:12 - 22.447 and PJM, we're always talking about that,

01:12 - 26.075 how to make sure the data center

01:12 - 29.912 provides enough power, bring your own generation as part of that.

01:12 - 34.383 That's something that the governor call for and the white House call for as well.

01:12 - 39.064 So just I have time here.

01:12 - 40.131 So I think I'm going to keep going.

01:12 - 43.902 I think I heard you say earlier, and I think we all know there is a need

01:12 - 46.929 for more power for reducing plants within the Commonwealth.

01:12 - 50.499 And I think we have high hopes for, you know, the, the nuclear that's coming up.

01:12 - 52.577 And that's much simpler.

01:12 - 55.146 Along with this question, I'm getting a lot of questions about,

01:12 - 59.775 concerns about foreign owned utilities within the Commonwealth.

01:13 - 02.487 And I wasn't sure how to answer that.

01:13 - 05.490 So I actually had to Google that to figure out if we do.

01:13 - 07.726 In fact, Google is correct.

01:13 - 12.063 We do have about 5600, entities

01:13 - 16.325 that are either, investing in and or owned in Pennsylvania.

01:13 - 20.863 Do they fall under the same guidelines as anybody else within the Commonwealth

01:13 - 22.440 that's under your control?

01:13 - 23.409 They absolutely would.

01:13 - 25.810 If they're the third certificated by us.

01:13 - 29.204 Then they're following the same, our regs

01:13 - 32.817 for whatever the certificate is, whatever entity.

01:13 - 38.757 Again, we regulate over 8700 entities from, you know, for hire.

01:13 - 42.861 Transportation, companies to the largest

01:13 - 45.864 electric distribution company and everything in between.

01:13 - 49.601 And would you say that there are good impacts

01:13 - 53.595 to having that foreign investment here, or should consumers be concerned?

01:13 - 57.008 I think that it's something that we're probably dealing with.

01:13 - 01.270 I mean, when we see, investment in utility infrastructure,

01:14 - 03.748 a lot of it's Wall Street,

01:14 - 08.119 you know, we're not seeing the old, family run utility anymore.

01:14 - 11.956 And, you know, I don't think many folks think of utilities as being family run,

01:14 - 14.893 but they're certainly not hedge fund run either.

01:14 - 17.986 And we're seeing more and more of that Wall Street influence,

01:14 - 21.957 whether it's domestic or, abroad.

01:14 - 24.936 We're seeing a lot of those investment dollars coming in.

01:14 - 27.241 Okay. Thank you for your time and thank you, Mr. Chairman.

01:14 - 28.908 Thank you, Senator.

01:14 - 31.934 Up next, Senator Schwenk, followed by Senator Phillips Hill.

01:14 - 36.181 Thank you, Senator Martin,

01:14 - 38.049 I'm so glad to see you here today.

01:14 - 43.278 Appreciate I don't remember a budget hearing when PUC came before us.

01:14 - 45.190 This is the first time I've been here.

01:14 - 49.260 So it's exciting being in front of the Senate Appropriations Committee.

01:14 - 50.829 For me, I think it was a good idea.

01:14 - 53.856 Now, I'm going to hammer you.

01:14 - 55.633 No, I'm.

01:14 - 58.236 This is a really serious matter, and I know you.

01:14 - 01.263 You know that it is almost three years ago,

01:15 - 04.600 we had a gas explosion at the R.M.

01:15 - 07.612 Palmer plant, which is in my district.

01:15 - 09.280 Chairman de Frank.

01:15 - 12.116 Seven people were killed, 11 were injured.

01:15 - 16.044 I can tell you that doesn't even touch on the costs of this.

01:15 - 18.556 People lost homes, people.

01:15 - 21.583 I mean, mental health became a huge issue.

01:15 - 25.330 Just it was devastating.

01:15 - 26.564 It truly, truly was.

01:15 - 28.566 The community is recovering.

01:15 - 31.760 But I think for some of these individuals, they never will.

01:15 - 36.774 We know from talking and from the reporting from the NTSB,

01:15 - 40.178 National Transportation Safety Board, what happened there.

01:15 - 43.305 That was a faulty fitting and there was a gas leak.

01:15 - 48.386 And as a result, that happened not too long ago, Chris.

01:15 - 52.257 Almost Christmas Eve, there was an explosion at a nursing home

01:15 - 54.158 in Bucks County.

01:15 - 56.494 They link it to a gas link.

01:15 - 58.630 They have not had a final report yet,

01:15 - 02.124 so I don't want to go out there on a limb and say that's what it was.

01:16 - 07.696 But I, I despair when I think that these kinds of things continue to happen.

01:16 - 11.209 And I think, you know, and I'm aware of you read about a house

01:16 - 14.236 blowing up somewhere where there's gas,

01:16 - 17.649 and may have been involved, may not have been involved.

01:16 - 19.984 We don't always know for sure.

01:16 - 22.754 Senator Abascal and I introduced legislation

01:16 - 24.989 that would address some of the issues.

01:16 - 29.518 One of them was sharing the information from the PUC

01:16 - 32.654 with the NTSB as quickly as possible.

01:16 - 36.091 My understanding now is that you cannot do that.

01:16 - 38.703 So it would have to change by law.

01:16 - 41.973 The second thing would be to,

01:16 - 46.778 ensure that we have more, you know, there's safety measures

01:16 - 50.548 taken in terms of what happens not only at these,

01:16 - 53.575 you know, industrial plants, but in our homes

01:16 - 56.754 where you could get a gas monitor similar to what you have,

01:16 - 01.183 a carbon monoxide monitor, I bought one, I have natural gas heat.

01:17 - 04.162 And I had a leak actually before we moved in.

01:17 - 06.698 So it hit home with me.

01:17 - 10.301 What can the PUC do to help us get over

01:17 - 13.862 if I can't get this legislation passed, what can we do?

01:17 - 17.032 Because it's a really it's a life and death matter.

01:17 - 20.435 Can't understand how we we're not moving forward on this.

01:17 - 22.971 Well, thank you for the question, Senator. And,

01:17 - 26.918 you know, I was working for Senator Mascolo

01:17 - 30.045 when the explosion happened in Allentown, and that is life changing.

01:17 - 32.690 I mean, I had to sit there for a year.

01:17 - 35.717 Every Friday, those families will come in.

01:17 - 38.329 And because that's when they were able to get off work and

01:17 - 42.190 and talk about where they were, what they were trying to get,

01:17 - 45.937 that's I, I've lived part of that.

01:17 - 50.508 So I completely understand and appreciate that regarding NTSB.

01:17 - 52.710 So I can't comment on the.

01:17 - 54.379 Well, actually, they're both ongoing.

01:17 - 57.506 And we should be wrapping up your investigation here,

01:17 - 00.318 in the coming month or two.

01:18 - 05.590 But first off, what we did was we started our first generation

01:18 - 10.085 plastic pipe, rule making or order.

01:18 - 15.066 And that's trying to identify that first generation plastic pipe.

01:18 - 19.027 So that's plastics in the ground from 1960 to 1983.

01:18 - 22.531 Tends to have a tendency for brittle,

01:18 - 26.134 not even cracking, just disintegration.

01:18 - 28.279 That's what happened there.

01:18 - 32.841 And so identifying that in systems and trying to get it out,

01:18 - 37.245 we have a good story to tell from what happened after Allentown

01:18 - 40.716 and our efforts to get cast iron out of the state.

01:18 - 44.162 And we are in a spot where we are almost, cast

01:18 - 47.732 iron free throughout the Commonwealth, with the exception of PG.

01:18 - 52.160 So, you know, that's a good story to tell.

01:18 - 55.840 And I think that's a blueprint of how we address first

01:18 - 59.701 generation plastics and, and trying to make these systems safer.

01:19 - 02.413 Regarding NTSB.

01:19 - 04.615 So, as you know, it

01:19 - 08.443 came up in Redding and and the issue in Redding was

01:19 - 12.347 we signed an agreement as a party to the investigation.

01:19 - 14.292 And part of that agreement is

01:19 - 17.953 we had to disclose any information that NTSB asked us for.

01:19 - 22.100 So NTSB asked us for what our state law considers

01:19 - 25.260 confidential CSI, confidential security information.

01:19 - 28.306 Our law does not allow that to share with

01:19 - 31.333 another investigative agency.

01:19 - 34.011 So at risk of us going to jail

01:19 - 37.038 is a, you know, criminal prosecution.

01:19 - 40.451 We said, no, we couldn't provide that.

01:19 - 42.487 We tried to do it different ways.

01:19 - 45.614 And we ended up getting through that through the subpoena.

01:19 - 48.025 NTSB went subpoenaed us.

01:19 - 52.788 We complied with court order and provided the information for Bucks County.

01:19 - 56.258 We never got that far because we knew it was going to be an issue.

01:19 - 00.662 We didn't sign the party agreement, and it was a much better

01:20 - 02.874 working relationship with NTSB.

01:20 - 07.169 They understand the limitations we have with our state law,

01:20 - 09.814 and we were able to do that as a workaround.

01:20 - 13.441 But again, the way of addressing this is addressing this in our state law

01:20 - 16.711 and allowing us to share information with another

01:20 - 20.925 investigative, let me ask you, I know my time's out.

01:20 - 21.959 Excuse me,

01:20 - 26.230 but what can you do in a proactive consumer way to alert

01:20 - 29.934 at least homeowners to have the kinds of monitors

01:20 - 32.069 they should have in their home, if you have. Yeah.

01:20 - 33.504 So it's something we've there.

01:20 - 34.239 Absolutely.

01:20 - 37.499 It's something we've done with education programs at the commission.

01:20 - 41.603 In addition, the one PG settlement we had,

01:20 - 44.806 that was stipulation of the settlement.

01:20 - 46.918 So again, going back to settlements,

01:20 - 49.220 that's something that if that was fully litigated,

01:20 - 52.881 we never would have gotten methane detectors for homes in Philadelphia.

01:20 - 54.759 We were able to do a settlement.

01:20 - 58.119 And they provided, I don't know how many methane detectors.

01:20 - 01.356 For any reason, in Philadelphia, the one of the.

01:21 - 04.392 Thank you. We're counting on you. Thank you.

01:21 - 08.673 Senator Phillips Hill, followed by Senator Brown.

01:21 - 10.007 Thank you, Mr. Chairman.

01:21 - 10.976 Chairman to Frank.

01:21 - 13.044 Thank you. It's good to see you.

01:21 - 16.304 Grateful that you and your team are here, grateful that you take my phone calls

01:21 - 19.650 and that you continue to work with me because

01:21 - 22.677 you know how passionate I am about

01:21 - 25.790 so many of the issues that come before the PUC.

01:21 - 30.962 I'm passionate and very concerned, much like my constituents, about the cost

01:21 - 34.765 that we bear for the desecration of our farmland, for high voltage power

01:21 - 39.237 transmission lines, the cost that we bear for the burden of generating that power.

01:21 - 42.440 And then, to add insult to injury, finding out

01:21 - 46.234 that we also bear a higher cost on our electric bills.

01:21 - 49.647 And so, you've said it here

01:21 - 53.718 today, Leader Pittman said it as well.

01:21 - 57.722 Availability and affordability are so important

01:21 - 00.749 when it comes to energy in Pennsylvania.

01:22 - 04.295 And I heard you say today as well that we have to put

01:22 - 07.322 as many watts on the grid as we can.

01:22 - 10.167 And I think we all agree that Pennsylvania

01:22 - 13.170 needs more electricity.

01:22 - 15.539 I have a major employer.

01:22 - 20.702 It's a national, iconic brand that has been built over the last century.

01:22 - 24.682 They're looking at expansion in my district, but they cannot get

01:22 - 28.176 the electricity that they need to build a new facility.

01:22 - 31.780 We have already lost $35 million in investment,

01:22 - 35.250 a 100 jobs to another state.

01:22 - 38.920 We are potentially on the verge of losing another

01:22 - 42.691 $35 million and 100 jobs to another state.

01:22 - 46.661 And these are jobs that are good paying that would go to Pennsylvanians,

01:22 - 49.740 and we generate a ton of power.

01:22 - 54.211 In southeastern York County, we have peach bottom atomic energy plant.

01:22 - 55.446 We have Calpine one and two.

01:22 - 57.448 We have two hydroelectric plants.

01:22 - 01.543 But you know where all that power goes, all of that power goes south

01:23 - 05.513 to Maryland and Baltimore and Northern Virginia and Washington DC.

01:23 - 09.593 And I don't have enough power for my businesses

01:23 - 14.522 to grow, to employ my people and have them earn family sustaining wages.

01:23 - 17.068 So I'm I'm completely in agreement.

01:23 - 21.062 It's time we have energy policy that puts Pennsylvanians first.

01:23 - 24.866 And I'm also concerned, and it sounds like

01:23 - 28.236 from your testimony here today, that the governor is, as well,

01:23 - 31.816 that utilities are earning excess profits

01:23 - 34.843 and overbuilding the transmission system

01:23 - 38.122 with little accountability and oversight.

01:23 - 43.284 So what is the PUC doing to ensure that we don't overbuild

01:23 - 46.755 when it is the ratepayers who are paying for that?

01:23 - 49.600 Thank you for the question, Senator.

01:23 - 54.271 And, both of your comments actually go hand in hand.

01:23 - 56.273 So, you know,

01:23 - 59.377 I did have a conversation with the electric company

01:23 - 02.804 after you sent me that letter about the business, the left,

01:24 - 06.841 and made sure they understood that, you know, they lost the customer

01:24 - 12.390 and their interconnection timelines so bad that they didn't even know

01:24 - 14.925 they lost a customer because the customer didn't

01:24 - 18.253 even have any faith that they could get in power.

01:24 - 21.399 That's different from power supply, though.

01:24 - 23.067 So I want to be clear with that.

01:24 - 27.662 They couldn't get an interconnection and that's on our local SDC level.

01:24 - 29.140 That's with us.

01:24 - 31.909 So that was one of the reasons that I asked Vice Chair Barrow

01:24 - 37.014 to start a rule making on interconnections that gives a timeline that that gives

01:24 - 40.842 a requirement that for a utility to interconnect the customer.

01:24 - 44.021 Because we are not very good

01:24 - 47.582 at doing that in Pennsylvania, and we have to get a whole lot better.

01:24 - 50.161 I don't know if you want to add anything to it, Mr.

01:24 - 50.762 Chairman.

01:24 - 54.322 The connection is that we have the power, right?

01:24 - 56.167 It's not that we don't have. That's my point.

01:24 - 00.895 We have the power, the power being shifted out of state, and we can't even get it

01:25 - 06.701 into the other side of the county for our own economic benefit.

01:25 - 10.105 I understand, but the point is, that's two part of the systems.

01:25 - 13.951 It's our local part that we can interconnect.

01:25 - 16.187 It's not necessarily on a wholesale end.

01:25 - 16.922 That's my point.

01:25 - 19.948 And that's something that we can address right here in Pennsylvania

01:25 - 23.994 by doing a rule making on interconnection timelines

01:25 - 25.453 and an interconnection proceeding.

01:25 - 32.736 I, and I'm sure other members of this committee have been receiving

01:25 - 36.030 a lot of questions from our constituents about their high energy bills.

01:25 - 40.077 You've heard it here today, and it spans,

01:25 - 43.104 the political divide.

01:25 - 45.483 Specifically,

01:25 - 49.186 how can they best navigate the retail market

01:25 - 52.590 to shop for their electric and or gas supply to obtain a lower rate?

01:25 - 55.326 I get those questions all the time.

01:25 - 56.727 So I have legislation.

01:25 - 01.999 It would make it easier for customers to shop the rates and switch their suppliers,

01:26 - 06.327 and it would also require training for retail suppliers.

01:26 - 09.764 We want this to be the best

01:26 - 12.877 possible scenario for consumers.

01:26 - 16.881 And finally, it would unbundle the cost of default service providers, as we know

01:26 - 21.118 that part of our cost and our utility bill is constructing those high

01:26 - 25.180 voltage power transmission lines that feed other states within our grid.

01:26 - 29.727 The Maryland's, the Northern Virginia's, the DC that cannot

01:26 - 35.132 or will not generate their own power, but again, continue to cite those power

01:26 - 39.069 hungry data centers while they shut down their own power plants.

01:26 - 42.406 So while the PUC doesn't regulate supplier

01:26 - 45.476 rates, you do licensed suppliers in the state.

01:26 - 50.281 You impose penalties for violations and have also implemented regulations

01:26 - 56.010 in the last couple of years around contract terms and customer notifications.

01:26 - 57.421 Could you provide the committee

01:26 - 01.959 with additional insider information into how the PUC specifically regulates

01:27 - 05.920 electric and gas retail contracts between a customer and supplier,

01:27 - 09.400 and what notifications they're currently required to provide

01:27 - 12.427 to their customers before our contract expires?

01:27 - 13.305 Sure.

01:27 - 16.740 So thank you for your letter regarding power switching.

01:27 - 19.076 I'm one of the top power switch right now.

01:27 - 21.011 I think that's a excellent tool.

01:27 - 22.880 We operate at the commission.

01:27 - 26.317 I think the key to,

01:27 - 29.911 vibrant, strong retail market is education.

01:27 - 35.492 Making sure folks understand what the products are available to them,

01:27 - 39.454 how that may interact with their particular situation.

01:27 - 43.758 And, you know, figure out what the product is best

01:27 - 47.071 for their situation, best fits their needs.

01:27 - 50.565 One of the things I've always been supportive of is

01:27 - 53.978 empowering consumers with choices.

01:27 - 58.339 Instead of removing choices from them, give them choices to help manage

01:27 - 01.352 whatever their current situation is.

01:28 - 05.856 I think it's important to make sure the system works,

01:28 - 10.194 and that's why we're getting back to that three day switching that allows me to

01:28 - 13.221 maybe take advantage of an introductory rate

01:28 - 17.392 and be able to get out of that introductory rate, in a timely fashion.

01:28 - 22.130 That's what I think the biggest thing is how to make the system work,

01:28 - 25.342 how to get information and folks hands in.

01:28 - 30.204 And again, events, websites like RPA, Power Switch.

01:28 - 33.341 I think it's an important tool in helping to do that.

01:28 - 36.287 I appreciate that. Chairman De Frank.

01:28 - 40.391 And we need to make it the best possible experience for our Pennsylvania consumers.

01:28 - 41.815 Thank you. Thank you, Mr. Chairman.

01:28 - 43.060 Thank you.

01:28 - 43.461 Senator.

01:28 - 46.487 Up next, Senator Brown, followed by Senator Carney.

01:28 - 49.733 Thank you, Mr. Chairman.

01:28 - 51.869 Good afternoon, and thank you all for being here.

01:28 - 56.564 I believe the gentleman from York County right before me

01:28 - 00.835 and a few of my comments mixed into her questioning.

01:29 - 05.073 So I apologize for some repetitiveness here, but it's a good reminder.

01:29 - 09.877 You've done a great job today answering questions and really clarifying a lot.

01:29 - 13.181 But you did mention in your testimony today,

01:29 - 16.217 several statements that really took my attention.

01:29 - 19.163 One of those, the first one is you mentioned

01:29 - 23.634 we are in need as much energy as possible for our grid,

01:29 - 27.061 which was mentioned before, and if we don't, we are in trouble.

01:29 - 32.033 We know that, we are we were very focused on energy,

01:29 - 34.678 you know, ensuring that Reggie, we were pulled out of Reggie,

01:29 - 37.705 making sure that things were done correctly.

01:29 - 42.643 You also mentioned in regards to the power needed for data centers,

01:29 - 47.915 that PJM capacity market has not really responded

01:29 - 50.594 to that market.

01:29 - 54.856 And our our grid was really not constructed

01:29 - 58.593 for this type of energy and data.

01:29 - 01.839 The size, the speed

01:30 - 04.866 and no end in sight, which I think we all agree on.

01:30 - 08.269 And these are the facts basically.

01:30 - 11.248 And then while while the large load capacity tariff

01:30 - 14.275 I think is a good idea based on usage.

01:30 - 19.180 And it makes sense, I think for, for residents energy bills.

01:30 - 23.560 But that is only the end of our distribution

01:30 - 26.954 and correct it on the supply and

01:30 - 30.968 the consumer would still be hit.

01:30 - 33.637 So that's that's one question.

01:30 - 36.831 But to me, it appears in many ways,

01:30 - 41.002 even based on the example to prior to my questioning,

01:30 - 45.716 that there are businesses, although that was slightly different,

01:30 - 50.011 trying to get power, unable to create 100 jobs.

01:30 - 56.984 And financially, I think we're not ready to protect the residents,

01:30 - 01.398 nor do I think we are ready to protect them.

01:31 - 04.401 On the reliance for their energy

01:31 - 07.528 with the data center market at this moment,

01:31 - 11.442 can you give me your position

01:31 - 14.469 if you think we are ready

01:31 - 17.748 for the energy that is needed for data centers,

01:31 - 21.142 based on the questions of the supply and the demand

01:31 - 26.757 for in-state and out-of-state feeling that I'm getting here, we have energy.

01:31 - 29.760 We send it away, but we need it.

01:31 - 31.895 But yet we're going to have these data centers.

01:31 - 34.565 The reliance long winded intro.

01:31 - 36.967 But I think it's important to state all of that.

01:31 - 41.271 Where are you with that reliance and that reliability for our consumers

01:31 - 42.606 with energy.

01:31 - 44.007 So thank you for the question.

01:31 - 49.146 And I know your neck of the woods, it's a big conversation up there.

01:31 - 52.049 So, you know, thank you for the question.

01:31 - 57.011 I think that we are ready for it and we're ready for it right now.

01:31 - 00.457 And that's with bring your own generation.

01:32 - 04.027 Again, if you would have asked me this question a year ago,

01:32 - 05.562 I would have said, we're ready for it now,

01:32 - 08.098 and you don't have to bring your own generation.

01:32 - 11.192 But again, this market has not responded.

01:32 - 14.972 We've gone three auctions now and the market has not responded.

01:32 - 17.999 The last auction was six gigawatts short.

01:32 - 20.911 Of the reserve margin.

01:32 - 25.215 So, you know, again, we're likely going to be short.

01:32 - 29.210 Again, those large users have to bring their own power.

01:32 - 32.356 That's that's the answer to that, because I don't know

01:32 - 35.492 that this current market is going to be able to

01:32 - 39.420 to provide the supply that's going to be needed for large loads.

01:32 - 42.590 So large loads interconnect with our supply.

01:32 - 44.025 I think we're ready to go.

01:32 - 48.739 Do you think that there's any questions in regards

01:32 - 52.400 to the ability to do that, to get their own supply and energy?

01:32 - 56.146 Well, I think that's the point of the interconnection.

01:32 - 58.081 So if they're not,

01:32 - 59.483 if they're not

01:32 - 03.110 putting steel into the ground, if they don't have a power purchase agreement

01:33 - 07.315 for a new supply, and I won't be clear, new supply not existing,

01:33 - 10.751 then you don't interconnect them.

01:33 - 12.696 That's how you manage. That's how you handle it.

01:33 - 13.764 That's how you manage it.

01:33 - 14.098 Yeah.

01:33 - 17.692 Is there any, with the large tariff load,

01:33 - 21.963 is there any because of the distribution piece of it,

01:33 - 25.166 there's no other costs that you think would fall on the consumer

01:33 - 28.378 based on there.

01:33 - 31.439 So the large deal with, with with data centers.

01:33 - 32.383 Well, I think there

01:33 - 33.650 there are other costs

01:33 - 36.820 that fall on the consumer, not necessarily on the distribution.

01:33 - 37.988 And will there could be

01:33 - 40.924 unless we protect them and make sure they're insulated.

01:33 - 45.353 If we don't there could absolutely be cost that falls on a local consumer

01:33 - 46.430 on the wholesale.

01:33 - 47.098 And again,

01:33 - 48.398 we are seeing

01:33 - 52.836 the increases in the capacity auction are likely a direct result from that.

01:33 - 54.972 A center proliferation.

01:33 - 56.440 Thank you. Very big subject.

01:33 - 58.132 A lot of details. Thank you very much.

01:34 - 03.938 Senator Carney followed by Senator Kozy.

01:34 - 05.516 Thank you, Mr.

01:34 - 07.718 Chairman.

01:34 - 08.885 Good afternoon.

01:34 - 09.520 How are you?

01:34 - 11.054 I'm good. How are you? Good.

01:34 - 12.990 Nice to see you, I think here.

01:34 - 14.157 Thanks for being here today.

01:34 - 17.885 I was going to ask a bunch of questions around data centers, but I think I'll ask.

01:34 - 21.022 I think we beat the dead horse at this point.

01:34 - 23.433 Never too many questions on data centers.

01:34 - 25.369 Is there?

01:34 - 27.671 I want to, I'm in the future.

01:34 - 30.907 I plan to introduce legislation to require, the commission

01:34 - 35.112 to consider the usage of energy efficient and cost effective equipment,

01:34 - 39.006 such as grid enhancing and advanced transmission technologies.

01:34 - 42.743 When any transmission site application is filed with the Commission.

01:34 - 46.280 These technologies, as I'm sure you're aware,

01:34 - 49.126 use a mixture of physical infrastructure and software

01:34 - 53.320 to increase the efficiency of existing transmission lines to the point

01:34 - 57.458 where they could potentially eliminate some need for an entirely new line.

01:34 - 58.770 Can you

01:34 - 02.739 talk about how the current federal and state regulations incentivize

01:35 - 05.766 or incentivize the usage of these technologies,

01:35 - 09.980 and how would you anticipate usage of these technologies impacting consumer

01:35 - 10.915 rates?

01:35 - 14.608 So that's a great question, and thank you for the question.

01:35 - 18.713 We'd certainly have to look at advanced technologies and transmission.

01:35 - 23.326 And that is part of an issue is we have to provide low cost.

01:35 - 27.621 And sometimes we cannot, that's an issue.

01:35 - 31.425 I'm going to turn it over to Vice Chair Barrow to talk a little bit about,

01:35 - 37.240 some of those market efficiencies and some of those different conductors.

01:35 - 40.177 Vice chair, thank you for that question.

01:35 - 42.045 Grid enhancing technologies.

01:35 - 48.819 One of my favorite topics, reason being, with the supply and demand issues

01:35 - 52.046 that we're having right now and additional cost

01:35 - 57.451 being put on ratepayers, these, we call them caps,

01:35 - 00.430 are one of the least cost

01:36 - 04.201 ways of avoiding further transmission.

01:36 - 07.370 Build out unneeded transmission build out.

01:36 - 07.839 Yeah.

01:36 - 12.309 And for the cost of the technologies

01:36 - 16.270 to deploy them on the transmission grid, it is.

01:36 - 20.016 I wouldn't say pennies on the dollar,

01:36 - 24.945 but much cheaper than laying out additional transmission lines.

01:36 - 30.417 And it's and it's a way to buy us some time, and defray costs.

01:36 - 34.021 So so it absolutely makes sense.

01:36 - 39.202 There's the, the advanced conductors where you can send

01:36 - 43.364 more electricity through the, you know, the same right away.

01:36 - 46.777 There's, voltage optimization,

01:36 - 50.046 technology that you can put on the lines.

01:36 - 54.341 And if you need more power somewhere, just switch it like a railroad track

01:36 - 55.786 with switches.

01:36 - 00.381 And and they are, they're proven and they're inexpensive.

01:37 - 03.851 So. And one other point about voltage

01:37 - 07.898 reduction, on our phase five energy efficiency plan

01:37 - 10.967 that we just okayed last year, it's taking effect on June 1st.

01:37 - 14.295 This year, voltage reduction at the distribution end

01:37 - 17.765 has been added to that because as the cost of this electron

01:37 - 22.345 continues to rise, these are the programs we have to be looking at.

01:37 - 24.071 These are cost effective programs.

01:37 - 26.417 Well, thank you for that.

01:37 - 29.586 And, I really do appreciate,

01:37 - 33.147 your willingness to look at these things and understanding how important they are.

01:37 - 36.717 I guess I'm wondering how the legislature and the commission can,

01:37 - 40.764 can work together to basically increase the usage of goods,

01:37 - 43.791 and that's.

01:37 - 47.704 I know any questions you have.

01:37 - 49.506 We'll reach out.

01:37 - 50.308 Absolutely.

01:37 - 54.211 And serve as a technical resource and, and we've got good stories

01:37 - 56.012 coming out of people.

01:37 - 00.140 They have deployed some of these technologies and they're working.

01:38 - 03.720 If you ever get a chance to go to the press control room,

01:38 - 06.747 you probably should see that, because it's pretty impressive.

01:38 - 09.659 One of our more advanced, grids in the state.

01:38 - 12.686 Good to know the,

01:38 - 14.764 and separate but equally important

01:38 - 17.767 sort of utility, water.

01:38 - 21.328 We've seen a large uptick in private companies purchasing municipal water

01:38 - 25.699 and sewage systems since the legislature passed act 12 in 2016.

01:38 - 28.702 The person desert there,

01:38 - 31.348 I think people thought that they were going to be limited

01:38 - 34.718 to distressed systems, but that doesn't seem to be the case.

01:38 - 38.655 And, we're seeing sort of astronomical bids.

01:38 - 41.849 It just means more cost for consumers.

01:38 - 44.461 So thank you for the question.

01:38 - 48.198 I will point out that we did do an order at the commission to deal

01:38 - 49.933 with, this issue.

01:38 - 52.035 And one of the things we've established

01:38 - 55.329 was called an RR reasonableness review ratio.

01:38 - 58.909 What it does, it looks at the industry as a whole.

01:38 - 03.737 So all for profit water companies, we only have about 8 or 10 in the country.

01:39 - 05.348 And we basically look

01:39 - 08.909 at what their assets are compared to what their depreciated value is.

01:39 - 10.387 And what that difference is.

01:39 - 14.114 That ratio, that's what we call reasonableness review ratio.

01:39 - 17.227 We go back ten years. We do it by quarter.

01:39 - 20.354 So there's 40 data inputs into that number.

01:39 - 25.135 And and we've seen some of the prices have come down.

01:39 - 30.631 In fact our last 1329 acquisition was price of 1.29

01:39 - 34.001 percent over depreciated cost.

01:39 - 37.480 So that's something that we were seeing these at two and three

01:39 - 41.584 times the depreciated cost we've seen.

01:39 - 45.512 So it seems like our orders, our order has sort of slowed that,

01:39 - 51.118 you know, race, the skyward race up on that cost these systems.

01:39 - 54.285 Well, thank you very much for that. And thank you for being here today.

01:39 - 58.101 Senator Vogel, followed by Senator Cappelletti.

01:39 - 59.970 Thank you. And good afternoon, chairman and commissioners.

01:39 - 00.971 Thanks for being here.

01:40 - 02.639 It's been very enlightening conversation.

01:40 - 05.909 I've learned a lot and, got some refresher stuff on some stuff.

01:40 - 08.078 You, talked about electricity rates and everything.

01:40 - 08.579 And also,

01:40 - 13.407 I agree 100%, 210% on what you told Senator Brown about the, data centers.

01:40 - 16.777 And but also, I want to change gears and talk about some of the electricity,

01:40 - 20.190 the updates on the broadband situation.

01:40 - 22.058 How is that coming along? And where are we at?

01:40 - 25.552 And is it overrunning costs or time or.

01:40 - 28.098 We haven't heard anything about it in a while. Was big deal while ago.

01:40 - 29.666 And also you're going to be hearing about it.

01:40 - 30.501 So, okay.

01:40 - 34.070 Well, so I just, I was brief late last week, and,

01:40 - 37.231 I'm probably gonna have to make a few calls to some of our ADCs.

01:40 - 40.243 We've been having some attachment issues.

01:40 - 42.846 We did do an expedited proceeding.

01:40 - 46.206 Do dealing with a 90 day pole attachment proceeding.

01:40 - 49.286 We need

01:40 - 52.355 to make sure we can get broadband on the poles.

01:40 - 54.357 So that's what we're working on.

01:40 - 58.118 And I think we have some work to do in that front.

01:40 - 59.863 So that's the main holdup right now.

01:40 - 01.598 And it's just basically right.

01:41 - 03.867 I think that we're we're in a good spot, too.

01:41 - 07.828 You know, that 800 million that came in, we're in a good spot to spend that.

01:41 - 10.940 And, you know, it's my intention

01:41 - 13.967 to make sure our utilities,

01:41 - 18.105 work to spend that, make sure we're connecting Pennsylvanians.

01:41 - 18.783 I appreciate that

01:41 - 22.309 you obviously, we rural Pennsylvania special needs hooked up as fast as we can.

01:41 - 23.454 Absolutely.

01:41 - 26.480 Thank you. And also, the impact fee revenue.

01:41 - 28.224 Where is that stand right now?

01:41 - 30.994 Is it up or down or standing still or.

01:41 - 34.597 I mean, obviously, I think it was high a few years ago because all the drilling.

01:41 - 38.668 But I realize that prices are and you know, so so it's down a little bit.

01:41 - 44.374 So we're just curious as to where we're at on price so that under the impact

01:41 - 48.001 fee, the, the, the timeline was 15 years.

01:41 - 52.482 And as you know, gas reduction, you know, the start of a

01:41 - 56.510 well is the highest production and it tapers down as the well gets older.

01:41 - 00.423 So we are seeing some of that diminish production in some of those older

01:42 - 04.727 wells, I believe, we have about 3000 wells

01:42 - 08.922 that will be aging out, in the near future in that 15 years.

01:42 - 12.735 We are projecting to add about 500

01:42 - 17.064 new wells annually, though, however, we are going to see

01:42 - 22.178 we're expecting about a $6.4 million decline as a result.

01:42 - 24.705 More wells aging out. And we're bringing online.

01:42 - 26.250 Okay.

01:42 - 27.484 Yeah, I was just curious about how that was going

01:42 - 29.619 because I knew they aged out as time went on.

01:42 - 32.322 And I know drilling some new wells in western Pennsylvania,

01:42 - 34.257 going back on the pads and drilling a second time,

01:42 - 37.460 it still wasn't going to be in the amount that they drilled years ago.

01:42 - 38.728 Right. So yeah.

01:42 - 39.563 Okay. Thank you for that.

01:42 - 43.357 Also, just quickly on methane digesters and net metering,

01:42 - 45.201 it's been an issue with some of the farmers

01:42 - 47.103 I've talked to around across the state and everything.

01:42 - 48.738 And, can you just give us an update?

01:42 - 50.974 I know there's a couple cases.

01:42 - 52.909 I guess you probably maybe can't talk about it a whole lot

01:42 - 54.611 because there are a couple cases pending,

01:42 - 57.614 but just any kind of an update you can give us on.

01:42 - 58.449 So I'm going to try to.

01:42 - 02.318 So we're Commissioner's office who handles a lot of other digester issues there.

01:43 - 04.721 But I'll just say briefly on net metering.

01:43 - 08.057 We have had some issues with net metering

01:43 - 11.919 and unfortunately these folks are are getting caught into the mix here.

01:43 - 16.232 We have a young Sam.

01:43 - 19.560 Bosco's and I have a loophole out there that, is,

01:43 - 23.397 you know, creating exorbitant costs in this space.

01:43 - 27.644 And unfortunately, digesters are getting, caught up in there

01:43 - 31.038 and trying to figure out how we're able to separate them out.

01:43 - 32.650 Yeah.

01:43 - 35.285 I mean, I don't think there's much more, to mention there

01:43 - 39.255 because there are many pending cases that we cannot get into the details,

01:43 - 45.295 however, we are well aware, of the digester issue

01:43 - 48.522 and the impact on the farming community in the agricultural community.

01:43 - 50.800 I have been, bird dogging that issue.

01:43 - 52.869 Personally,

01:43 - 55.738 and, I have even, like, assembled, like a mini work

01:43 - 59.576 group, to kind of look into the issue overall.

01:43 - 01.978 Right? So just well aware of it.

01:44 - 05.114 I heard the public testimony from folks who showed up

01:44 - 08.318 at input hearings, and, and I'll just leave it at that.

01:44 - 10.587 Okay. That's fine. Thank you. Thank you very much, chairman.

01:44 - 12.451 Thank you for your being here today. Thank you.

01:44 - 15.959 And I realize it's before you right now,

01:44 - 19.128 but I just want to say thank you for actually having that on your radar.

01:44 - 23.866 I mean, to, to get farmers over the years to take manure management very seriously.

01:44 - 27.337 And its impact on clean water has been critically important.

01:44 - 28.471 We made great strides.

01:44 - 32.242 And, you know, hopefully we don't create an environment that discourages

01:44 - 33.876 and we kind of take steps back.

01:44 - 35.812 Another important battle. Exactly.

01:44 - 36.647 So thank you for that.

01:44 - 39.740 I'll I'll leave it at that because I know you guys have cases before you.

01:44 - 43.310 Mr. Chairman, if I may, though, to your point, and thank you for that.

01:44 - 47.090 I think it has been fantastic that the farming community

01:44 - 49.692 has been really engaged in the energy issues.

01:44 - 53.830 These days, when they show up on public input hearings, regardless the proceeding.

01:44 - 54.398 Right.

01:44 - 59.068 I have personally taken a tour, of, the rain farm.

01:44 - 00.937 Everybody knows the Rainford farm, right.

01:45 - 05.608 But the, the, participation of our farming community

01:45 - 08.635 in some of these energy matters, they are right in the middle of it.

01:45 - 11.080 Energy and agriculture go hand in hand.

01:45 - 12.415 So, to the extent

01:45 - 16.486 we can all we continue, to, make sure that participation is there.

01:45 - 18.454 I think it's very important, Greg.

01:45 - 19.956 Thank you.

01:45 - 20.291 Okay.

01:45 - 24.284 Up next, we have Senator Cappellini, followed by Senator Perkasie.

01:45 - 29.232 Thank you, Chairman Martin.

01:45 - 32.268 And thank you, chairman De Frank and everybody

01:45 - 35.638 at the PUC that that's their today answering questions.

01:45 - 38.875 I think a lot of what's been asked has been really important, answered

01:45 - 42.402 questions that I had and really kind of helped explain,

01:45 - 46.073 what the PUC is, what you guys do.

01:45 - 49.710 And one of the things that I'm just kind of wondering about,

01:45 - 53.347 is that, access to,

01:45 - 57.260 I call it justice is the minority chair of the Judiciary Committee.

01:45 - 00.263 I think about the importance of people having representation

01:46 - 03.290 and attorneys helping them throughout their processes.

01:46 - 07.837 And sometimes through the process, as a quasi judicial,

01:46 - 12.265 a setting for individuals to go through, when filing a formal complaint.

01:46 - 15.912 And I'm just wondering, do you have anything in your mind

01:46 - 19.206 that could be one of the most significant things that could be improved

01:46 - 22.585 for accessibility or transparency of your processes?

01:46 - 27.848 For those consumers who file formal complaints but don't have a phrase much like.

01:46 - 30.561 Sure.

01:46 - 34.897 So, the question was, about our complaint procedures

01:46 - 38.725 and, processes that we may be able to improve there.

01:46 - 42.772 I'll turn it over to Commissioner Surface, who headed up an effort

01:46 - 47.000 to, modernize our complaint.

01:46 - 51.214 Form intake form, do a fill able form

01:46 - 54.241 and some of the other things you worked on there, Commissioner.

01:46 - 55.418 Yeah. Thank you, Mr. Chairman.

01:46 - 56.320 Thank you for the question.

01:46 - 00.189 So, a little while ago, getting to the commission,

01:47 - 04.927 to the chairman's point, headed up, an internal process to modernize those.

01:47 - 09.055 Well, we started with the formal complaint system, with the complaint itself.

01:47 - 12.335 So not only is it online, it's available.

01:47 - 15.671 It's fill able now, which is something that had not been available.

01:47 - 19.809 You know, even though we're in the, you know, the well into the 2000 now,

01:47 - 21.911 we did not have fill able forms, but we do now.

01:47 - 23.646 And it's not just for the formal complaint.

01:47 - 23.881 You know,

01:47 - 27.407 we're working through on many of our forms that we should be able to do that.

01:47 - 31.254 In addition, you know, we really streamlined,

01:47 - 37.026 that formal complaint and some of these other, applications

01:47 - 40.053 and complaints that are online to make sure that it's,

01:47 - 43.566 you know, intuitive, it's user friendly, and it makes sense.

01:47 - 48.604 And we used a lot of, really smart folks, you know, internally to do that

01:47 - 52.608 and, are continually in the process to do that and all in the,

01:47 - 56.345 in the vein of, you know, making sure that people understand

01:47 - 00.674 how did, you know, fill these forms out and how to get the information they need.

01:48 - 04.754 Thank you so much for that and the work that you're doing.

01:48 - 09.082 I just think it's really important that, you know, through this process and,

01:48 - 13.286 you know, companies are required to have attorneys, but individuals aren't.

01:48 - 17.166 We do the best that we can to improve that process for the individuals who are

01:48 - 21.037 seeking, support in terms of what costs they may

01:48 - 24.931 or may not be paying through the system and what utility companies are doing.

01:48 - 28.044 That can be a bit of a power disadvantage.

01:48 - 30.546 And I think it's an important piece of justice

01:48 - 33.583 for every Pennsylvania that they they understand what they're doing

01:48 - 36.977 and how to how to best, support themselves through that process.

01:48 - 40.013 I just want to say thank you for that.

01:48 - 42.848 Thank you

01:48 - 44.962 very question.

01:48 - 46.062 That's all I have, Mr. Chairman.

01:48 - 47.797 Thank you. Yeah.

01:48 - 49.899 Thank you, Senator.

01:48 - 51.968 Up next, we have Senator Perkasie, followed

01:48 - 54.961 by Senator Street.

01:48 - 55.706 Thank you, Mr.

01:48 - 57.306 Chairman, and thank you for joining us here.

01:48 - 59.942 Chairman Frank and the whole team

01:48 - 02.979 and my constituents and clearly constituents all across Pennsylvania

01:49 - 05.882 are struggling with high utility bills we've been talking about all day.

01:49 - 08.651 I hear about the doors. I hear about community meetings.

01:49 - 11.487 Affordability right now is an existential challenge for a lot of people.

01:49 - 14.514 And utility bills are a big part of that.

01:49 - 15.558 Consumers Electric bill.

01:49 - 17.059 It's composed of various things,

01:49 - 20.329 including the supply costs, the transmission costs, the local delivery

01:49 - 23.356 costs, cost of taxes and other government programs.

01:49 - 26.469 Are there any other components in the electric bill,

01:49 - 28.173 and if so, could you please describe them?

01:49 - 32.308 Thank you for the question, Senator.

01:49 - 33.743 Now, I think you pretty much have them.

01:49 - 39.906 So about 60, 65%, is that part we don't directly have oversight over

01:49 - 46.222 whether it's the PJM marketplace or transmission through Ferc, regulation.

01:49 - 50.317 We do have direct oversight over about 40%.

01:49 - 53.653 And you summed it all up as taxes, as state programs.

01:49 - 56.923 And it's the cost of distribution

01:49 - 00.493 of the various components of a consumer's electric bill.

01:50 - 02.438 How much does each account for, for example,

01:50 - 05.465 how much of an electric bill is attributable to energy supply

01:50 - 08.702 compared to other components such as transmission and local delivery?

01:50 - 11.847 So again, 60 to 65%

01:50 - 14.908 is going to be that local supply and transmission.

01:50 - 19.221 We put those all together because, a lot of them

01:50 - 23.726 is the transmission PJM order transmission.

01:50 - 27.988 So all those costs are always bundled together.

01:50 - 30.690 But you know, I think there's

01:50 - 35.404 some so wholesale markets, probably about 40%,

01:50 - 39.141 transmission is about another 20%, and it might be a little higher.

01:50 - 45.772 3525 and then on the local end, 35 to 40%,

01:50 - 51.854 taxes is going to be, you know, 4 to 5%.

01:50 - 56.092 We're going to have state programs at about another 4 to 5%.

01:50 - 01.921 And then, the distribution costs of the other 20, that's not right.

01:51 - 06.335 Yep. And just to me, because there's a lot of different numbers

01:51 - 07.236 or we're moving around,

01:51 - 08.138 I believe the governor

01:51 - 12.141 said in his budget address that only 20% of the bills associated with generation.

01:51 - 13.909 Is that correct?

01:51 - 15.411 That's what the governor said.

01:51 - 17.647 I am not sure.

01:51 - 21.384 I think he was referring to the capacity portion of the bill.

01:51 - 24.620 So if you look at the overall bill, about 15

01:51 - 27.647 or 20% would be just your capacity cost.

01:51 - 30.884 But the wholesale cost, wholesale and transmission is about

01:51 - 33.262 60 to 65% of the bill.

01:51 - 37.733 And again, most of these wholesale costs, while we have seen increases

01:51 - 39.368 in the capacity market,

01:51 - 44.240 the Independent Market Monitor has pointed out and it talked about,

01:51 - 47.143 you know, when I that's why I talked about those gas prices.

01:51 - 50.913 The actual cost of power is what's actually increasing.

01:51 - 53.940 It's it's not necessarily the capacity side.

01:51 - 56.176 It's the actual cost of producing power,

01:51 - 59.188 the cost of producing it.

01:51 - 59.656 So is that

01:51 - 03.526 how does that relate to actual supply and supply available in the market?

01:52 - 06.553 And how could you know an increase supply if consumers electric bills.

01:52 - 10.866 So an increased supply simple supply demand paradigm.

01:52 - 14.094 So it's certainly going to bring down the capacity part of it.

01:52 - 17.506 Not necessarily going to bring down the cost of power though.

01:52 - 21.077 So the cost of energy itself doesn't really matter

01:52 - 24.080 how much you have going in there because it's the cost of power.

01:52 - 28.108 It depends how much you're paying for natural gas or or coal

01:52 - 32.011 or uranium or whatever your your fuel source is.

01:52 - 35.958 What else can we do as a general assembly to help, you know, our constituents,

01:52 - 38.194 the people we represent, help get their bills down

01:52 - 41.221 and help make it more affordable for them to keep the lights on.

01:52 - 43.532 So that's something we're always looking at, Senator,

01:52 - 45.501 and it's always something we're striving for.

01:52 - 47.403 It's reliability and affordability.

01:52 - 50.005 And and you know, those aren't competing interests.

01:52 - 51.540 Those are complementary interests.

01:52 - 55.368 And Senator Pittman, you know, started to talk about a little there where,

01:52 - 59.939 you know, if it's not affordable, it's not reliable.

01:53 - 03.385 If I can't afford to turn a light switch on, it doesn't matter whether there's

01:53 - 06.613 electrons at the light switch or not to power the light on,

01:53 - 10.459 I can't afford to power it on so that we take that very seriously.

01:53 - 13.696 And that's the balance we have to strive is how we're making sure

01:53 - 15.030 the system is reliable.

01:53 - 17.867 How are we making sure the system safe,

01:53 - 20.894 and still be able to afford it for consumers?

01:53 - 22.938 Absolutely. Thank you very much, Mr. Chairman.

01:53 - 24.440 I appreciate you taking all of our questions.

01:53 - 27.209 And, we'll continue to work together, you know, a bipartisan basis to do

01:53 - 31.413 everything we can to keep supply reliable and try to make as affordable as possible

01:53 - 33.357 for our decisions. Thank you. Thank you, Senator.

01:53 - 39.679 Our final member is, Senator Street.

01:53 - 40.457 Thank you, Mr.

01:53 - 43.483 Chairman.

01:53 - 46.586 Good afternoon.

01:53 - 51.825 Affordability has been sort of a theme here.

01:53 - 55.261 Earlier today, you talked about the importance of,

01:53 - 59.999 resiliency and diversity in terms of our energy sources.

01:54 - 04.113 We pointed out that the Alternative Energy Portfolio.

01:54 - 07.707 Standards legislation has not been reauthorized.

01:54 - 12.045 I've, I've authored, clean energy legislation and alternative energy

01:54 - 16.015 portfolio standards, legislation that would increase the,

01:54 - 21.054 increased the goals for wind, solar and water, but also create

01:54 - 25.525 categories like, advanced nuclear

01:54 - 29.162 and, carbon capture as a tier as a tier two.

01:54 - 33.142 How important do you think it is that the General Assembly takes action

01:54 - 36.936 on actually reauthorizing an alternative energy portfolio standards

01:54 - 40.306 and give some real legislative direction and clean energy?

01:54 - 43.052 So thank you for the question, Senator.

01:54 - 47.247 And I, I'll say, I think what the more important thing is,

01:54 - 50.683 is to address energy in a comprehensive fashion.

01:54 - 53.095 I mean, that's what we've seen.

01:54 - 56.556 You know, when we when we address energy issues piecemeal

01:54 - 00.569 through budget amendments, that's what's been increasing costs.

01:55 - 03.930 When we look at between the the

01:55 - 07.409 net metering solar issue

01:55 - 11.738 and, tier two waste coal and APS,

01:55 - 17.143 those two costs for close to $1 billion are going to be $1 billion.

01:55 - 19.188 And that's because we've done a piecemeal

01:55 - 21.757 and we haven't done them in a comprehensive fashion.

01:55 - 23.292 I think that's the biggest thing

01:55 - 26.619 is when you when you try to put an energy plan out,

01:55 - 30.590 you put a comprehensive plan out and you look to see

01:55 - 34.093 how the different pieces of this plan are going to fit together,

01:55 - 36.338 because that's what we haven't been doing.

01:55 - 39.208 And that's what I think has been increasing the cost.

01:55 - 42.811 When you talk about updating APS, there's going to be a cost to that.

01:55 - 44.146 There's no question about it.

01:55 - 48.408 You know, there's a cost to our current APS plan,

01:55 - 52.912 but there's also a cost of not having resource diversity.

01:55 - 57.784 And, you know, as we're throwing everything into one bucket,

01:55 - 01.664 we're going to be held to the whims of the market of that bucket.

01:56 - 03.666 And we got to be cognizant of that.

01:56 - 07.327 You know, our last gas reliability report in Pennsylvania,

01:56 - 11.073 63% of gas used in Pennsylvania is used to generate

01:56 - 15.568 electricity with the PJM footprint, nearly 50% of PJM

01:56 - 19.648 generation is generated with natural gas.

01:56 - 24.086 Now, I'm the natural gas chairman, so I'm not saying gas is bad.

01:56 - 26.755 Gas has been a great source for us.

01:56 - 29.258 It's been an affordable source for us.

01:56 - 31.894 But you have to understand is you're going to throw more

01:56 - 33.662 and more eggs into that basket.

01:56 - 36.031 You're going to be tied to those Henry hub prices.

01:56 - 39.158 And with gas spikes up to 50 or 60 bucks,

01:56 - 42.962 you got to understand that that's going to ripple into the electric sector.

01:56 - 45.708 And then when that ripples in the electric sector,

01:56 - 49.979 because water systems use so much electricity to pump water out

01:56 - 53.006 into the system, it's not going to trickle into the water system.

01:56 - 53.950 That's what's happening.

01:56 - 58.954 We're interconnecting these sectors so closely that when you have a price

01:56 - 01.957 impact in one sector, it ripples through all three.

01:57 - 03.459 Yeah. Thank you.

01:57 - 07.963 And that was the approach you're taking around, creating a comprehensive, plan.

01:57 - 10.632 It sounds like you agree with that.

01:57 - 14.603 One of the things that's sort of you alluded to is that,

01:57 - 18.498 we're increasingly all of our energy sectors are more price sensitive.

01:57 - 21.267 So now we're entering an era where,

01:57 - 23.079 the United States

01:57 - 27.483 just chose to go to war, in a way that could impact the price

01:57 - 32.045 of, of natural gas or liquefied the LNG, oil.

01:57 - 36.592 My understanding is that Iran is now planning to shut down

01:57 - 41.421 the Straits of Hormuz, which is where 20% of the world's, oil comes through.

01:57 - 45.200 That seems like that's going to that could have a price,

01:57 - 49.171 an impact on global supply and a price.

01:57 - 52.198 And that's going to eventually impact our consumers.

01:57 - 57.846 I mean, do you think that this, this, this voluntary war that we're going into

01:57 - 01.683 is going to increase the price that Pennsylvania regular Pennsylvanians

01:58 - 06.345 are paying for, energy at a time when energy is already high?

01:58 - 10.225 So, you know what I think is, any time

01:58 - 14.396 when you limit supply, you're going to put greater stress on energy systems.

01:58 - 18.524 So if the supply is limited by that 20% number that she cited there,

01:58 - 21.637 then yes, there is going to be greater stress on it.

01:58 - 22.805 But in the short term

01:58 - 27.066 and what we're about to put out as Secretary, a letter to our, utilities,

01:58 - 32.972 is that the increase of cyber attacks is now a threat.

01:58 - 36.709 And we're making sure our utilities are prepared for those threats,

01:58 - 41.547 because we have a hostile actor now that may be looking to strike,

01:58 - 45.294 infrastructure assets here in our country and making sure

01:58 - 47.229 we're prepared to meet those challenges.

01:58 - 49.298 Oh, I see, I'm out of time, but thank you for pointing that out.

01:58 - 51.233 You know, the

01:58 - 54.994 the idea that there would be cyber attacks on our infrastructure and certainly,

01:58 - 59.408 we've gotten a lot of threats from Iran, is something we should all be

01:58 - 03.769 cognizant of, and it's just another vulnerability caused by, this war.

01:59 - 06.482 And I appreciate your input. Thank you.

01:59 - 07.506 Are you.

01:59 - 13.312 On. I turn it over to Senator Hughes.

01:59 - 15.992 Chairman.

01:59 - 18.927 Different when it gets to me. That means you're almost done.

01:59 - 21.530 Okay, I, I was ready to put my stuff away.

01:59 - 22.898 I thought I was done.

01:59 - 26.768 I've, you know, as, former Mayor Street used to say.

01:59 - 28.937 I'll be brief, no matter how long it takes. All right.

01:59 - 29.938 Okay.

01:59 - 30.773 But. Right.

01:59 - 34.066 Senator Street always trying to give homage to, to that.

01:59 - 37.179 First of all, before I go any further,

01:59 - 40.249 one of the things that,

01:59 - 44.410 most folks don't know about this commission, is,

01:59 - 47.580 is it pays attention to,

01:59 - 50.893 folks who are in need, and especially folks

01:59 - 55.063 who are in, desperate need, in difficult

01:59 - 58.090 environments, storms, crisis,

01:59 - 03.172 fallen trees, power outages, nor'easters, whatever you want to call it.

02:00 - 07.400 And I want to thank you personally for stepping in on a constituent issue.

02:00 - 10.803 That was extremely,

02:00 - 13.549 traumatic, not just for that constituent,

02:00 - 16.609 but for that constituents family, extended family.

02:00 - 20.613 And stepping up, in a way that,

02:00 - 25.551 utilizing the long tentacles of your reach,

02:00 - 29.488 that, you normally don't listen to in Jersey, but they did this time.

02:00 - 30.699 They did this.

02:00 - 32.634 And and I appreciate that.

02:00 - 36.905 That was, a very helpful, very responsive, very helpful.

02:00 - 37.407 Thank you.

02:00 - 41.467 And I think, you know, we spent a lot of time

02:00 - 46.772 with the significant policy issues talking about acronyms, and nobody has a clue

02:00 - 50.543 what who what it is we're talking about or who we're talking about or whatever.

02:00 - 54.880 But when it comes down to that personal situation, I want to thank you.

02:00 - 58.684 And I dare say I'm I'm thanking you on behalf, not just of myself,

02:00 - 03.398 but on behalf of all of the members up here, who understand the value

02:01 - 06.969 and the importance of really strong and significant public service.

02:01 - 08.637 So we thank you for that.

02:01 - 12.107 On a little bit lighter note and need to know,

02:01 - 14.676 and I've been wondering this ever since I had this problem.

02:01 - 18.371 Is there a PUC regulation that says

02:01 - 24.810 that the old gas furnace has to go out on the coldest day of the year?

02:01 - 26.889 Is there?

02:01 - 29.791 Is that in the PUC regulation files?

02:01 - 33.452 It's the coldest Friday night of the year, actually, usually a weekend.

02:01 - 35.697 That's usually okay. So. Right. Yeah. Okay.

02:01 - 37.532 I mean

02:01 - 39.368 you just saw I had that experience right.

02:01 - 42.495 You know, and and we did recently as well.

02:01 - 46.708 So and you know, look, I, I reside in,

02:01 - 50.045 an old West Philadelphia home with,

02:01 - 54.816 with, and it just went out because our furnace

02:01 - 56.251 is only a year old and it went out.

02:01 - 58.387 So it's probably a little worse.

02:01 - 00.222 You need to talk to your contract.

02:02 - 01.556 Exactly. Okay.

02:02 - 05.151 Although I think the person who installed my furnace,

02:02 - 08.630 that contract is no longer around.

02:02 - 09.698 Okay. All right.

02:02 - 13.068 But it's just so happen to go out on the call to say.

02:02 - 14.369 But I was fortunate enough.

02:02 - 18.440 All right, to be able to find someone who within two days

02:02 - 23.769 or so, we're able to replace it, and, or so not.

02:02 - 25.747 I said two days or so. All right.

02:02 - 28.717 You know, and I was blessed.

02:02 - 29.218 Okay?

02:02 - 32.244 I had the financial capacity to take care of and get it done.

02:02 - 36.191 Now, it leads to the second question.

02:02 - 38.551 All right. And I think I heard you say,

02:02 - 42.521 Pennsylvania has the,

02:02 - 46.125 the second most robust,

02:02 - 49.962 customer service or customer assistance

02:02 - 53.742 program or network of programing than any state in the country.

02:02 - 55.377 Is that it? Yes.

02:02 - 58.246 Is that that I'm I'm I'm right about that. Right.

02:02 - 59.348 Yes. Okay.

02:02 - 01.983 So only one other state,

02:03 - 06.812 has a more robust operation in Pennsylvania.

02:03 - 08.257 Okay. Yes.

02:03 - 10.258 And I think that's on dollar figure.

02:03 - 13.228 So amount of money spent okay. Okay.

02:03 - 14.529 So not not necessarily

02:03 - 17.566 in the length and breadth of the different kinds of programs

02:03 - 21.494 that may be out there, but just just dollars for simple dollar figures.

02:03 - 24.539 I like to be number one in that. Okay.

02:03 - 28.000 Now been doing this for a long time.

02:03 - 30.245 I have, all right.

02:03 - 35.708 And, there was a time, if I remember correctly,

02:03 - 41.690 that, the, the company Commonwealth used to assist with old systems.

02:03 - 44.893 Old heating systems and what have you.

02:03 - 45.328 All right.

02:03 - 48.897 I had the capacity to replace mine, but, Blessed.

02:03 - 51.924 Right. All right. Not everyone does.

02:03 - 54.569 Do we still do that kind of work?

02:03 - 58.006 We we do still have those programs that would be in our weatherization

02:03 - 59.941 type of program. Yeah, yeah.

02:03 - 05.204 So in addition to windows, insulation, actual

02:04 - 09.842 units, heating units I believe are part of that as well. And

02:04 - 13.789 is there any thought about how,

02:04 - 18.894 we can be creative and figure out how we can expand those kinds of programs

02:04 - 21.096 because it's getting tight for for regular folks.

02:04 - 23.098 And it was a question asked earlier,

02:04 - 26.034 you know, that, you know, we talk about affordability.

02:04 - 30.639 One one way to deal with affordability is to, you know, make the systems

02:04 - 35.935 that are in our homes or in our dwellings much more efficient, more cost effective.

02:04 - 38.480 Is there thoughts about how we can sort of be clear?

02:04 - 41.716 The number that I gave you that we ranked second in nationally,

02:04 - 43.251 that's customer assistance programs.

02:04 - 46.278 So that those are dollars going to help people pay bills.

02:04 - 50.759 Weatherization is administered by, Department of Human Services.

02:04 - 52.928 So we don't touch any of those dollars.

02:04 - 55.230 We don't do assessments or anything like that.

02:04 - 57.799 We do have utilities is sometimes we'll do,

02:04 - 00.535 you know, grants into it or something like that.

02:05 - 04.630 But, for the most part, that's handled on a DHS,

02:05 - 07.042 but on the back end, you get the benefit of it, right? Yeah.

02:05 - 08.210 Yeah. Well, sure. Yeah.

02:05 - 11.837 When someone is, is is improving the system,

02:05 - 17.309 it's usually more efficient system in that, you know, saves energy.

02:05 - 18.154 You sure does.

02:05 - 21.180 State dollars and, yeah, I mean, I

02:05 - 23.792 again, I don't want to make you replace yours.

02:05 - 25.961 I think you going to see that at the end of the year.

02:05 - 26.429 Yeah.

02:05 - 29.455 Good OPG you got a few less dollars.

02:05 - 30.333 Okay.

02:05 - 33.826 And I'm, I was asked my friends of PGE, but they got a few less dollars

02:05 - 36.505 because I had a new system. Right, right, right.

02:05 - 40.299 So it goes to how do we

02:05 - 45.070 we're in a moment right now.

02:05 - 48.817 And some of this conversation has come up during the course of your, your,

02:05 - 51.977 your, your appearance, the three of you, your parents here.

02:05 - 55.524 Where where it's

02:05 - 58.727 I don't want to say it's a crisis moment, but it's an inflection point.

02:05 - 59.428 How about that?

02:05 - 04.690 All right, that's where where the data center conversation is going on.

02:06 - 08.703 The need to, create

02:06 - 12.665 more energy, more power sources to, to respond to that.

02:06 - 14.543 Yeah.

02:06 - 18.938 We're we're in an inflection point, and I and I guess the question is,

02:06 - 22.551 is, is the commission

02:06 - 25.520 utilized in this moment to figure out

02:06 - 30.592 how we can, take what could be a crisis moment

02:06 - 34.896 and take it, take it and make it a triumph for regular folks.

02:06 - 35.197 Right.

02:06 - 40.192 You know, you know, if we've got a if we've got to generate

02:06 - 43.862 more power, okay,

02:06 - 47.433 to respond to more demand.

02:06 - 48.944 Okay.

02:06 - 54.873 Can we generate more power to fuel residential people

02:06 - 58.987 in either improving their systems, okay.

02:06 - 04.817 Investing in their systems, maybe even driving rates down.

02:07 - 06.295 I mean,

02:07 - 10.889 how how is is is there from your vantage point as a commission,

02:07 - 14.169 the three of you here,

02:07 - 16.037 how are you looking at this

02:07 - 20.008 in the context of what can we utilize this moment,

02:07 - 25.104 this inflection point, to really transform what it is that we're doing here?

02:07 - 27.015 So first off, you are right.

02:07 - 28.617 This is an inflection point.

02:07 - 31.686 The decisions we're making over the next 5 to 10 years

02:07 - 34.713 is setting us on a course for the next 80.

02:07 - 36.758 So that that is key. It is.

02:07 - 39.127 And doing this for a number 80 years,

02:07 - 41.029 you're not going to be in office 80 years from now.

02:07 - 42.564 And and I suspect Mrs..

02:07 - 45.000 Different will allow you that is your staff know that.

02:07 - 46.868 Yeah.

02:07 - 51.030 Yeah he knows they know so but you know

02:07 - 54.442 and it's something that Senator, I know we have spoken about this before.

02:07 - 59.705 So it's basically, you know, increase load, increase demand.

02:08 - 06.054 What that does for pricing and how a data center can actually suppress pricing.

02:08 - 10.182 So when we think of rates, rates is nothing more than a cost per unit.

02:08 - 11.260 Right.

02:08 - 17.165 So if we increase the number of units drastically but don't increase the cost

02:08 - 21.603 to serve those units at the same rate, the cost per unit then is decreased.

02:08 - 24.630 So that's the whole mindset

02:08 - 28.977 mindset of how that increased, load, that increased

02:08 - 33.605 demand can benefit all ratepayers through price suppression.

02:08 - 36.851 One of the things I point out all the time is when we talk about

02:08 - 42.114 the Amazon facility up, up in the mid state there.

02:08 - 45.360 The current Ferc filing,

02:08 - 48.887 is for about 480MW.

02:08 - 52.257 To put that in perspective, for the size,

02:08 - 55.270 the city of Pittsburgh's 300MW.

02:08 - 00.108 So the data center and Sara Colvin's district is using one

02:09 - 03.902 and a half times the amount of power as the city of Pittsburgh.

02:09 - 10.018 However, to serve that size of load, you have nowhere near the infrastructure.

02:09 - 11.786 You have nowhere near the costs.

02:09 - 15.981 You have one substation there, compared to 100 substations in Pittsburgh.

02:09 - 19.952 The thousands of miles of wires and poles

02:09 - 25.023 you have tens of miles of poles and wires there, the number of transformers,

02:09 - 29.027 the entire cost of that system to serve that size of load

02:09 - 32.264 is drastically decreased in a data set.

02:09 - 36.401 So I think when folks talk about data centers and what they talk about,

02:09 - 40.448 you know, the discussion around them, that's part of the conversation

02:09 - 43.509 is how that increased load, provided we conserve it.

02:09 - 46.712 And that's bring your own generation helps you serve it.

02:09 - 51.683 Provided we can serve it and, and still serve the native load that's out there.

02:09 - 56.498 You know, it will be a price suppression, in the long run.

02:09 - 59.491 And in generating

02:09 - 03.095 revenues that ratepayers don't have to pay.

02:10 - 07.566 But if you create it, as I understand it, if you create a

02:10 - 11.312 excuse me if I get the language wrong, a energy,

02:10 - 15.474 a power generating system, you theoretically can

02:10 - 20.012 create more power and then drive rates down

02:10 - 24.082 and maybe even create investment opportunities

02:10 - 27.386 for fixing up

02:10 - 31.890 Pennsylvania homes, which are some of the oldest housing stock in the country.

02:10 - 33.235 Exactly right.

02:10 - 35.170 And, you know, that's one of the challenges

02:10 - 39.007 we have with our infrastructure here is we have very aging infrastructure.

02:10 - 40.508 You know, your district is

02:10 - 44.712 is and the cost of replacing that infrastructure is what we're seeing.

02:10 - 46.014 And that's what we're seeing.

02:10 - 49.942 Our utilities do is replace that infrastructure each and every day and

02:10 - 53.212 and trying to make sure their systems are reliable and safe.

02:10 - 56.949 It again, I would just want to encourage

02:10 - 00.485 that the commission utilize whatever

02:11 - 05.023 in this moment, this inflection point, whatever,

02:11 - 10.362 creative research, what can be done to figure out how

02:11 - 15.944 we can make the best decisions to benefit, benefit all of Pennsylvania's people.

02:11 - 21.106 If there's if there's so much new things that are going to have to be done,

02:11 - 25.186 how do we make sure that it responds

02:11 - 29.023 to the needs of regular folks

02:11 - 32.026 in the Commonwealth of Pennsylvania?

02:11 - 35.254 I mean, it's got to be a charge that we respond to.

02:11 - 37.899 We cannot miss the moment.

02:11 - 40.068 We cannot miss the point.

02:11 - 42.804 And I would just encourage that.

02:11 - 46.841 I mean, again, I know it's not run by your operation.

02:11 - 51.446 It's run by, secretary or secretary, our Cushing's operation.

02:11 - 56.517 But to be able to assist local homeowners in all across the Commonwealth

02:11 - 59.544 of Pennsylvania, not not obviously in big city Philly,

02:11 - 03.391 you know, but all across the Commonwealth to to get new systems,

02:12 - 06.451 to update the systems to make them more efficient.

02:12 - 08.663 Needless to say, the employment opportunities

02:12 - 13.368 that can come out of all of this, I have got to be, tremendous.

02:12 - 18.730 So it's really economic opportunity, for, for everyone.

02:12 - 22.301 And I know there was some conversation earlier and,

02:12 - 24.579 and you won't have to comment on this one.

02:12 - 28.240 I know with some conversation earlier about rates being driven

02:12 - 32.010 down, in Maryland and Delaware

02:12 - 36.748 because people wanted to move to 1600 Pennsylvania Avenue.

02:12 - 39.961 And I just remind folks that the road to the white House goes

02:12 - 44.222 through Pennsylvania, Wisconsin and Michigan

02:12 - 48.260 and Wisconsin and Michigan are not part of the PJM network.

02:12 - 51.039 Again, you don't have to comment on that. All right.

02:12 - 52.407 Thank you very much. Thank you, Mr. Chair.

02:12 - 53.775 Thank you, Senator.

02:12 - 54.542 Thank you. Chairman.

02:12 - 55.210 Commissioners

02:12 - 58.270 want to thank you all for being here today and participating in this.

02:12 - 01.149 I really appreciated your comments.

02:13 - 04.443 And, especially on the on the digester issue.

02:13 - 06.087 But probably more importantly

02:13 - 10.282 is hearing that more and more people are understanding the, the deficit

02:13 - 14.519 and capacity that we are facing and the needs here in Pennsylvania.

02:13 - 18.123 So any talk in terms of how we can strengthen that grid,

02:13 - 23.161 I truly appreciate you bringing up the most recent example of in Texas.

02:13 - 27.632 I appreciate you bringing it up to talk about the diversity of our system.

02:13 - 30.678 And you even mentioned the 17 coal days.

02:13 - 36.074 Because when you talk about polar vortex and things that we are faced with,

02:13 - 39.087 there's no one in the Commonwealth that will truly understand.

02:13 - 40.989 When you go out to Senator Pittman's district

02:13 - 45.159 and you see those things roaring over a long period of time to make sure

02:13 - 48.487 that our loved ones aren't freezing and our hospital lights are staying on.

02:13 - 51.132 That's critical stuff.

02:13 - 52.567 But finally, I'll just say this.

02:13 - 56.337 You also mentioned some things talking about how we can make sure that we talk

02:13 - 00.565 about a state that needs desperately to grow economically and demographically.

02:14 - 03.111 That's going to take the speed of business.

02:14 - 04.345 There's connector issues.

02:14 - 06.147 You're talking about are critically important.

02:14 - 10.275 That's why we've all been focused on permitting and regulatory reform as well.

02:14 - 13.488 And we can't leave this conversation without talking about

02:14 - 16.748 something that you guys do have a say in whatever comes before you.

02:14 - 21.653 There's probably not a bigger issue facing Pennsylvanians than affordability.

02:14 - 27.092 And so to hear our commitment to making sure that we have a strong grid,

02:14 - 30.071 that we want to grow this state and we want to be affordable

02:14 - 32.240 for our residents, that's a winning formula

02:14 - 35.443 that can turn around two of those declines we really need to focus on.

02:14 - 37.378 So thank you for being here today.

02:14 - 41.873 We, are going to be transitioning to our higher ed presidents.

02:14 - 45.987 Who are outside waiting anxiously to come in before us.

02:14 - 49.448 We are going to take a ten minute break,

02:14 - 52.918 so we can kind of reset the playing field out here.

02:14 - 56.664 So any members who have to use the restroom or get a cup of coffee,

02:14 - 02.527 will be back here at exactly 325 to start.

02:15 - 03.694 Thank you all.

02:15 - 20.644 And and.