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“Hearing to Examine the State of the Bulk Power System”

Senate Committee on Energy and Natural Resources
March 25, 2026 (recording linked here)

HEARING INFORMATION

Witnesses and Written Testimony:

• The Honorable Todd Snitchler, President & CEO, Electric Power Supply Association

• Mr. Travis Fisher, Director of Energy and Environmental Policy Studies, Cato Institute

• Dr. Liza Reed, Director of Climate and Energy Policy, Niskanen Center

HEARING HIGHLIGHTS

QUICK SUMMARY

• Rising Demand and Grid Strain: Lawmakers and witnesses agreed that the United States is entering a period of significant electricity demand growth driven by data centers, advanced manufacturing, and electrification. This growth is outpacing the addition of new generation and stressing existing grid infrastructure. Participants warned that shrinking reserve margins could lead to higher costs, increased volatility, and reliability risks if supply does not keep up.

• Transmission Bottlenecks and Permitting Challenges: A central theme of the hearing was that insufficient transmission capacity and lengthy permitting processes are major barriers to meeting demand. Witnesses emphasized that interregional transmission is critical for reliability and cost savings but is hindered by fragmented state-level siting authority and complex federal reviews. Several members highlighted the need for permitting reform and clearer federal authority to accelerate infrastructure development.

• Market Structure and Cost Drivers: Witnesses debated the role of competitive markets versus regulated systems in delivering affordable electricity. Competitive market advocates argued that private investment protects consumers by shifting risk away from ratepayers, while others pointed to rising transmission and distribution costs as key drivers of higher electricity bills. There was broad agreement that policymakers must better understand cost drivers and align incentives to avoid inefficient investment.

• Innovation, Technology, and Grid Modernization: Members and witnesses emphasized the importance of deploying new technologies such as grid-enhancing technologies, high-voltage direct current transmission, and battery storage to improve efficiency and reliability. These solutions can increase capacity on existing infrastructure and reduce costs, but regulatory barriers and misaligned incentives are slowing adoption. The discussion underscored the need for both near-term upgrades and long-term modernization of the grid.

• Reliability, Security, and Economic Competitiveness: The hearing highlighted growing concerns about grid security, including cyber threats, extreme weather, and physical vulnerabilities. Witnesses stressed that improving resilience through stronger transmission networks and advanced technologies is essential. There was also a clear consensus that the ability to deliver reliable, affordable electricity will determine whether emerging industries like AI and advanced manufacturing remain in the United States.

IN THEIR WORDS

SUMMARY OF OPENING STATEMENTS

• Chairman Lee stated that the United States is facing a growing imbalance between electricity supply and demand, driven by structural increases from data centers, advanced manufacturing, and electrification. He explained that the grid’s reserve margins are shrinking and that some regions are already operating without sufficient capacity, increasing risks to reliability and costs for consumers. He argued that limiting demand is not an appropriate solution and instead emphasized the need to expand energy supply through improved infrastructure development. He highlighted permitting delays, market distortions, and insufficient innovation as key barriers to meeting current and future energy needs. He stressed that reforms should focus on enabling timely infrastructure development, ensuring competitive markets, and maintaining reliability. He concluded that the country must modernize its regulatory framework to support growth while keeping consumer costs at the center of policy decisions.

• Ranking Member Heinrich stated that the power grid is under increasing strain due to rising demand from data centers, manufacturing, and electrification, while new generation capacity is not being added quickly enough. He argued that this imbalance has contributed to rising electricity costs and criticized policies that he said have slowed the deployment of new energy resources. He outlined four key actions to address these challenges, beginning with maximizing the efficiency of the existing grid through grid-enhancing technologies and distributed energy resources. He emphasized the need to expand high-voltage transmission to reduce congestion and improve reliability, particularly during extreme weather events. He also highlighted the importance of accelerating the interconnection of new generation projects and ensuring that large energy users, such as data centers, bear the costs associated with their demand. He concluded that investing in grid infrastructure presents a major opportunity to lower costs, improve reliability, and support long-term economic growth.

SUMMARY OF WITNESS STATEMENTS

• Mr. Snitchler stated that the United States is entering a period of rising electricity demand, but significant uncertainty remains about the scale, timing, and location of that growth, which creates risks for both reliability and affordability. He argued that competitive wholesale power markets have proven to be the most efficient way to meet electricity needs while protecting consumers, because investment risks are borne by developers rather than ratepayers. He emphasized the importance of maintaining strong competitive markets and supporting voluntary bilateral agreements and co-location arrangements to encourage new investment. He highlighted accurate load forecasting as essential to avoiding both reliability shortfalls and costly overbuilding. He identified permitting reform as one of the most impactful steps Congress could take to improve system performance and affordability. He also noted that rising retail electricity rates are driven by multiple factors beyond generation, including transmission, distribution, and state policies, and urged policymakers to consider all cost drivers when making decisions.

• Mr. Fisher stated that the United States should approach electricity policy through the lens of free enterprise, arguing that economic growth and innovation depend on reducing regulatory barriers in the power sector. He explained that while the electric system historically supported strong economic expansion, increased regulation and policy mandates have slowed its ability to respond to rising demand. He emphasized that growing electricity demand from data centers and advanced industries is a positive development, but current grid constraints and interconnection delays are limiting economic growth. He proposed allowing large customers to develop off-grid power systems through voluntary arrangements, which would avoid transmission bottlenecks and prevent costs from being shifted to existing ratepayers. He argued that subsidies, mandates, and centralized planning have been ineffective, and that market-driven approaches would better support reliability and affordability. He concluded that embracing free enterprise in the electricity sector would enable the United States to remain competitive and support future economic transformation.

• Dr. Reed stated that transmission infrastructure is central to ensuring reliability, resilience, and affordability in an increasingly complex and growing electricity system. She explained that the United States is experiencing rapid demand growth while also integrating a more diverse mix of energy resources, which requires stronger coordination across regions. She highlighted that the current grid is fragmented, limiting the ability to transfer power between regions and leading to inefficiencies, price disparities, and reliability risks during extreme weather events. She cited evidence that improved interregional transmission could have reduced costs and improved system performance, including significant savings during recent storms. She argued that the United States is falling behind other countries in building modern transmission infrastructure and adopting advanced technologies such as high-voltage direct current systems. She called for clearer federal authority to support interregional transmission development and for removing market barriers to new technologies. She concluded that expanding grid capacity is essential for economic competitiveness and ensuring that emerging industries, including AI, are developed in the United States.

SUMMARY OF KEY Q&A

• Chairman Lee asked about the challenges of load forecasting and why accurately predicting electricity demand is difficult amid rapid growth from data centers and electrification. Mr. Snitchler said that load forecasting is uncertain because it is difficult to determine which projects will materialize and when, and warned that large errors can lead to overbuilding or shortages that increase costs for consumers.
  Chairman Lee asked whether overbuilding in regulated systems results in higher costs being passed on to consumers. Mr. Snitchler said that in regulated systems those costs are recovered through rates as non-bypassable charges, meaning consumers ultimately bear the burden.
  Chairman Lee asked how Congress could improve the regulatory framework to ensure transmission expansion delivers the best value to consumers. Mr. Fisher said that transmission investment is currently inefficient and focused on smaller projects, and argued that better use of market signals and incentives for large-scale transmission would lower costs.

• Ranking Member Heinrich asked whether the United States is building enough interregional transmission to meet demand and support reliability. Dr. Reed said that the country is not building sufficient interregional transmission due to structural and regulatory barriers that discourage development. Mr. Fisher said that transmission expansion has been inadequate and that past policy approaches have failed to produce meaningful growth in high-capacity infrastructure. Mr. Snitchler said that increasing the ability to move electricity across regions is essential for maintaining reliability as the resource mix changes.
  Ranking Member Heinrich asked how transmission expansion can better capture value and reduce costs for consumers. Dr. Reed said that failing to build transmission leads to lost economic value and higher costs, and that permitting barriers and lack of federal authority are key obstacles.
  Ranking Member Heinrich asked how advanced transmission and grid-enhancing technologies could be better incentivized. Dr. Reed said that clearer expectations, improved compensation structures, and regulatory reforms are needed to encourage deployment of these technologies.

• Senator King asked how free market principles could be applied to a largely monopoly-based transmission system. Mr. Fisher said that stronger oversight and requirements to consider lower-cost alternatives could improve efficiency and better align investments with consumer interests.
  Senator King asked whether projected demand growth should be reassessed if AI facilities generate their own power. Dr. Reed said that even under lower demand scenarios, analysis still shows a need for additional generation and transmission capacity.

• Senator Padilla asked about the benefits of building an interregional high-voltage direct current transmission backbone. Dr. Reed said that HVDC transmission can move power efficiently over long distances, reduce congestion, improve reliability, and lower costs for consumers.
  Senator Padilla asked what regulatory or procedural barriers are preventing deployment of advanced transmission technologies. Dr. Reed said that fragmented state siting processes and lack of market compensation for HVDC services are major barriers.
  Senator Padilla asked how interconnection procedures could be improved to accelerate adding new generation to the grid. Mr. Snitchler said that interconnection reforms have begun but require further improvements, including better coordination of generation and transmission planning.
  Senator Padilla asked for additional perspectives on interconnection reform. Mr. Fisher said that he agreed further improvements are needed to accelerate the process.

• Senator Hickenlooper asked about the need for a comprehensive approach to grid modernization that includes both new transmission and upgrades to existing infrastructure. Dr. Reed said that grid-enhancing technologies and reconductoring can provide near-term improvements while new transmission delivers long-term reliability and affordability.
  Senator Hickenlooper asked for additional views on balancing grid upgrades with broader energy and climate challenges. Mr. Fisher said that the United States should focus on developing scalable technologies that align with economic growth and can be adopted globally. Mr. Snitchler said that existing technologies can be deployed quickly and cost-effectively on current infrastructure, making them an important near-term solution.

• Senator Cortez Masto asked how the United States and the states should work to reduce the risk of cyber, physical, and extreme weather threats to the grid. Dr. Reed said that while cyber security was outside her core expertise, expanding interregional transmission and advanced technologies would improve grid security by allowing operators to move power and isolate affected portions of the system. Mr. Fisher said that the grid remains highly vulnerable to coordinated attacks and that resilience and recovery capacity are essential because not every attack can be prevented. Mr. Snitchler said that the grid is already under constant attack from nation-state actors, that the industry is actively responding, and that evolving technologies such as AI will require continued defensive improvements.
  Senator Cortez Masto asked whether any regional transmission organizations are taking innovative approaches to interconnection queue management that could serve as models. Dr. Reed said that the Southwest Power Pool has taken a more holistic approach by linking interconnection queue reform with broader transmission planning, though transmission buildout remains a limiting factor even when queue reforms are adopted. Mr. Fisher said that the Southwest Power Pool deserves credit and added that first-come, first-served queue structures should be reconsidered in favor of approaches that better distinguish serious projects from speculative ones. Mr. Snitchler said that recent FERC actions and reforms in regions such as SPP and PJM show progress, including efforts to remove speculative projects and move more viable ones forward faster.

• Senator Wyden asked how wildfire and grid reliability legislation could help address the current grid crisis and improve resilience for rural communities. Dr. Reed said that wildfire resilience requires investment mechanisms that account for the financial constraints of smaller rural utilities and that stronger transmission can also help reduce wildfire-related risks by rerouting power when certain areas are threatened.
  Senator Wyden asked whether modernization and innovation are necessary to address the grid’s outdated infrastructure. Mr. Fisher said that much of the grid still relies on very old technology and agreed that innovation is urgently needed to modernize the system.

• Senator Hirono asked how the grid can be made more resilient to wildfires, especially in light of Maui’s experience. Dr. Reed said that stronger transmission backbones can improve wildfire resilience by allowing operators to isolate risky portions of the system while continuing to serve customers elsewhere.
  Senator Hirono asked what technologies could best improve affordability and reliability in Hawaii, Alaska, and other remote locations. Dr. Reed said that advanced technologies such as high-voltage direct current systems can help restart grids after blackouts, improve voltage management, and support faster recovery.
  Senator Hirono asked whether incorporating these technologies would significantly raise costs for ratepayers. Dr. Reed said that studies generally show advanced transmission investments save consumers money over time, though she did not speak specifically to Hawaii’s cost structure.
  Senator Hirono asked what role battery storage can play in reducing transmission bottlenecks and whether large users such as data centers should be required to incorporate storage. Dr. Reed said that storage can provide valuable flexibility, but she emphasized that policymakers should preserve multiple options for large users rather than requiring a single model for obtaining power.
  Senator Hirono asked whether more should be done to bring batteries online quickly and make them affordable for consumers. Mr. Snitchler said that batteries are an important part of the solution for reliability and affordability, but faster deployment will depend on permitting, siting, and supply chain improvements for equipment such as batteries, switchgear, and transformers.

• Senator King said that if artificial intelligence demand is removed from load growth projections the scale of the problem could be much smaller, and he asked whether AI has also helped speed interconnection reviews. Mr. Snitchler said that AI tools have already been used to accelerate queue analysis significantly, including in projects such as PJM and Google’s effort to streamline interconnection review.
  Senator King asked whether direct current transmission also reduces line losses. Dr. Reed said that direct current lines are more efficient in that respect because they experience lower line losses than alternating current lines.

• Senator Cassidy asked whether transmission costs, more than generation costs, are now driving electricity price increases. Mr. Fisher said that transmission costs are generally a major driver, though fuel input costs must also be considered.
  Senator Cassidy asked how a free-market approach can be reconciled with the use of eminent domain and federal authority to build long-distance transmission across private land. Mr. Fisher said that this tension makes him uneasy and that as much development as possible should occur through voluntary private arrangements rather than heavy reliance on eminent domain.
  Senator Cassidy asked whether a private-grid or optionality approach is preferable. Mr. Snitchler said that there is no single perfect path and that policymakers should preserve multiple options, including private generation, co-location, grid service, and other contractual arrangements.
  Senator Cassidy asked for another view on whether broader federal authority is needed for interstate transmission siting. Dr. Reed said that a narrow federal authority for interstate transmission would be appropriate because current state-by-state barriers suppress competition and raise costs for consumers.

• Ranking Member Heinrich asked whether it would be the most efficient use of capital for each large data center to provide its own generation. Dr. Reed said that the most efficient approach should depend on the data centers’ own choices, but that policymakers should ensure they have both grid access and private options available.
  Ranking Member Heinrich asked what customer risks are associated with the private-grid model. Dr. Reed said that if large users leave the shared grid entirely, fewer customers may remain to support the cost of valuable transmission infrastructure that benefits all consumers.

• Chairman Lee asked whether FERC’s backstop siting authority under Section 216 would still face environmental permitting hurdles even if it is used in the future. Dr. Reed said that interstate transmission projects would still benefit from reforms to statutes such as NEPA and NHPA because multiple overlapping procedures and iterations continue to create delay.
  Chairman Lee asked why transmission costs in PJM have risen so sharply as a share of wholesale electricity costs. Mr. Fisher said that utilities have increasingly focused on smaller, lower-voltage projects that are easier to place in rate base, which has raised costs without producing the most efficient consumer outcomes.
  Chairman Lee asked what impact additional natural gas infrastructure into New England would have on prices, reliability, and emissions. Mr. Snitchler said that greater gas infrastructure would lower fuel input constraints, reduce electricity prices, improve reliability, and likely reduce emissions by displacing more carbon-intensive oil generation.
  Chairman Lee asked how EPA greenhouse gas regulation and the resulting uncertainty have affected grid reliability and affordability. Mr. Fisher said that unstable EPA policy created long-term regulatory uncertainty that discouraged investment in needed generation and left the grid less prepared to respond to rising demand.

• Senator Hickenlooper asked how policymakers should approach permitting and public process challenges for major transmission and infrastructure projects. Mr. Snitchler said that a centralized decision-making model using expert input but vesting final authority in a single body can effectively balance statewide interests and move projects forward.
  Mr. Fisher said that the current system contains too many veto points and lawsuits that can stop projects even after they begin, and he argued for a framework that provides greater certainty once approvals are granted. Dr. Reed said that Congress should create a single, clear, and narrow federal process for interstate and interregional transmission because the current layered state and federal structure causes excessive delay and limits competition.

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