>> it's the not the problem with the federal government it's the problem with the states of the federal government. of the federal lands especially across the west. could you elaborate on that and perhaps give us some specific examples. >> sure, mr. chairman. let me mention a couple of things. at a meeting of the western governors in february, governor otter from idaho made the statement very clearly that in those instances where we have the opportunity to cite transmission lines and not go through federal lands we're often going to want to exercise that. there are a couple of issues that come to mind in terms of permitting of federal lands.

if you live in the west it's difficult to avoid federal lands. many of the states are covered with lands under federal jurisdiction both the departments of interior, departments of agriculture. so that -- that's certainly an issue. second, there's no priority system. for dealing with lease applications. it's on a first come, first serve basis. one of the things that we're doing with the western renewable energy zones is really point what we think is a critical issue. there are places that are really better for not only locating renewable energy but there are also transmission corridors that are going to be more important in moving that renewable energy. we believe that there ought to be some kind of a way to recognize that priority and to do the transmission work, the permitting work that's necessary to get those facilities located. we think in many cases it's not

unusual to see five, seven or even ten years to locate transmission lines when they go through federal land. >> could you repeat that. repeat that fact. >> that it's not unusual to see five, seven, ten-year time periods in terms of getting lines approved through federal lands. >> so when the states go to federal agencies, it takes five to seven to ten years? >> there's certainly instances where it has taken that long. many of the applications that we see now that are going through that process, governor rounds from south dakota was talking about a line to run from south dakota to minnesota and at one of our meetings he mentioned they'd been working on it for two years and they've had very little success in moving it through the federal permitting process and he sort of got a response of a chuckle from

people in the audience essentially suggesting two years you barely started. and so i think, you know, there's a great -- >> so what you're saying is that the states were working together cooperatively to try to find a solution to that regional, not the coda, minnesota, issue but because of the federal government there was a multi-year delay in getting to a point where the issued could be resolved. >> that is what i think is the sense of the western state. the federal permitting process. it's difficult. it's onerous, it's time-consuming and in many cases there are requirements that don't add any value to the permitting process. we would hope to see something that one would recognize those areas that have a priority because of the richness of their renewable resources. but more than that recognize that if we are going to meet any requirements for renewable

portfolio standards or carbon reduction, we've got to do a much better job of matching how long it takes to do renewable development with how long it takes to get the transmission to those developments >> but you're saying out west it's very difficult if you're dealing with the remote areas where the wind and the sun might be strongest, geothermal as well, to create any kind of a transmission system without at some point confronting this federal issue. >> that's absolutely true. >> and no matter how cooperative the states are and your testimony in most instances the states are trying to resolve these issues and the federal reserve serves as a impediment sometimes of such a nature to paralyze the process. >> that's correct. >> that's very helpful to us. thank you. let me turn and recognize the gentleman from kentucky, mr. whitfield.

>> thank you, mr. chairman. and thank you all for your testimony. back in april of 2009, the "new york times" quoted you in an article saying new coal and now plants may be necessary. and i know that some others sent you a letter about that and i've not had an opportunity to read your response, but you're certainly not opposed to coal and nuclear power, i'm sure of that. >> that's correct, i'm not opposed to coal and power. >> and since i didn't even read the "new york times" article, would you basically explain what you were referring to when you made that statement. >> i'd be happy to. thank you for the question. i was referring to basically a scenario where if we look at the diversity of a number of renewable resources which would include potentially midwest wind

that may have a diversity of delivery from offshore wind and include solar and geothermal, biomass and also include the demand side, looking at demand response, energy efficiency, distributor generation, combining these things together with a smart grid and the whole answer was and the response was in the context of the smart grid. if you combine those things together it may, in fact, be possible with a smart-enough grid to effectively provide these renewables as if they are base load and that way would displacing base load. that was the context of my statement. >> and when you talk about a smart grid, do you have any idea or thoughts or -- have you seen any studies about what the cost would be to complete transformation to a smart grid? >> i've seen cost estimates anywhere from 50 to $60 billion

up to $200 billion. >> okay. and to reach the scenario that you referred to in the "new york times" article that you just explained, what sort of time frame viewed this transformation period. >> at least a 10 to 15 time period. >> now, on the court of appeals decision, have you -- has ferc upheld that decision. >> let me check with my counsel. it's due in july. we are looking at it now. i personally disagree with the fourth circuit decision. >> well, i know there are many of us who hope you will appeal but that's the decision you all will make, of course. could you tell me the last --

when the last new transmission line was built in each of your states. >> we are actually in vermont in the process of upgrading most of our transmission systems so we actually have ongoing projects as we speak. the most major transmission line that has ever been siteed in vermont the docket ended two years ago and the line is currently almost complete today. >> and how long lines is that. >> well, this is vermont. the line is 60 miles. >> what about you? >> just yesterday we approved a 32-mile 345kv line that cost business $220 million for the city ofman -- for it.

we spent billions of dollars upgrading 7200 miles of transmission in the state of wisconsin. we have construction going on all over the state. a line was just energized i believe last week which was over 100 miles long and as congressman baldwin indicated before i became commissioner, on the other side i was getting permits to -- for a 210-mile line between minnesota and wisconsin. and that line has been energized. >> in massachusetts, our most -- >> can you turn on your microphone, please. >> sorry. in massachusetts our most populace area is the boston region and it's where the heaviest electrical loaded and in 10 years we have sited and had constructed a number of transmission enhancements to support the flow of power in boston between two major kv

lines to eliminate constraints between the boston load pocket and the remainder of load pockets. >> with the anticipated increase in demand of electricity needs over the next 15 or 20 years, do you think the existing system is adequate in your state? >> with regards to the increase in demand, we continually update our system so we're going to continue to do updates. we've been doing updates all along. so i don't think that process ever stops. >> okay. >> in vermont we've actually been able to mitigate the -- any increase in our load over the last five years with energy efficiency. so i would say offhand with the completion of what is called the southern loop, in a couple of years that i think our transmission grid will be adequate for the next 10 to 15 years. >> and i would give a similar

answer. the answer to your question is yes. when we look at potential scenarios for load agreed over time within areas, we see the transmission system what's existing today and what's in the process of going through the regional planning process in siting will be more than adequate to support the movement of power throughout our region for a decade or two. >> mr. chairman, i've seen i've gone a minute and 25 seconds over. >> i thank the gentleman. by the way, we will be having a second round and perhaps a third round of questions of the witnesses if the gentleman is interested. let me turn and recognize the gentleman from washington state, mr. inslee. >> thank you. i'd like to put in the record with no objection, a letter from california berkeley, a letter describing the reason and the appropriateness in of expanding new tradition lines, if i can put that in the record. >> with no objection, it will be

included. >> chairman wellinghof i wanted you to expand on your thoughts on how ferc could implement, if it does receive back-stop sighting approval, how it could implement a greenhouse gas performance interconnection standard for new transmission and/or some criteria associated with compliance or fulfillment of the nation's renewable energy goals. several of the other witnesses made reference of something in that nature. could you tell us how that could work even though we've heard the physical explanation that electron is an electron is an electron. how could this function? thank you, congressman inslee. well, first of all we would initiate a rule-making and as part of that all stakeholders would have an opportunity to provide any proposals as to how to implement such a greenhouse gas performance standard. but in doing so, there's a

couple of ways it could be done. certainly, in looking at the current emission permits from the generation stations from those, it's based on known items such as model and configuration of the generator. you could take from that also the annual emissions are typically capped by a permit that can be used as a baseline to determine compliance. so we could take compliance, i think, from their current permit applications or new permit applications from generating stations and take that data, put it into a database and ultimately from that use it to determine a greenhouse gas performance standard for particular plants that were into the interconnect. >> you can obviously do that for

particular plants. but could you effectively reference that to particular lines? in other words, are the plants specific enough to the lines that this type of standard could be applicable to lines? >> well, i think you'd have to do that by regions because it's all a er ma of displacements. you're not delivering point a to b. it's pushing one electron down the road so i think you would have to do it basically on a regional basis but i feel we can do it, yes. >> thank you. commissioner azar, i appreciated your comments first off about the appropriateness in of federal back-stop authority and it's a general view that i share and it is appropriate and i appreciate your views on that because of your incredible background in this area. but i also appreciate you making reference to the necessity of considering demand side issues when you do siting planning and i want to make sure you're aware that in the aces bill, we do

have a very specific policy that's a policy of the united states and regional electrogrid planning to meet these, is there anything we should do to expand on that to make sure we consider that in part of our planning process? >> it is a very good idea. my point in raising is that those kinds of solutions are oftentimes best made at the state level because the states are going to understand how they're going to be setting up their distributed generation, how they're going to be setting up their energy efficiency and conservation measures better than the federal government. that was -- the point i was trying to make with regards to why i thought a state-led process would be better with regards to those specific items. >> thank you. chairman hibbard, i wanted to ask you about cost allocation. i'm told there's recently been a

345kv end star project and transition in the boston area. and i'm told that the total cost of that was $334 million and $325 of that was spread across new england in a cost allocation system, only 3% was assigned directly to the boston area rate payors. so regional cost allocation seems to work at least in your area. if cost allocation in general of that nature seems to be acceptable, should we not be able to fashion some other cost allocation more widely? >> certainly. thank you, congressman. i think it's instructive when thinking about the cost allocation issue to draw a very clear line between transmission projects that are needed to maintain grid reliablity and for developers. in the new england system, we have exactly that split. if there's -- through the regional planning process lines

are identified that are needed to maintain reliability on a regional basis on the end star line in boston was exactly one such line, then we support the socialization of costs across the entire region because it benefits everyone within the region to maintain the reliability of the grid. so the cost of the end star line is shared by everyone in new england. in massachusetts, we're about half the load. we pay about half of the bill. similarly, the project that commissioner coen referred to in vermont, other projects that are on the books in new hampshire and maine and connecticut all focus on reliability of the grid are projects for which they are not within massachusetts, massachusetts -- consumers will pay half. it's a vitally important part of cost component. there would be a willingness to share that cost across load. the distinction i want to make here is that the issue of cost allocation from building lines to interconnect generation

resources departs from that. we want -- in order for our consumers to be protected, we want the cost of developing generation and the cost of compliance measures and the cost of delivering reliability to load so you don't impact the reliability of the system including the price that they are charging customers. >> just one comment i think this is a new approach that some of us are suggesting. because there is new national need just as important for reliability and that's to prevent the earth from turning into toast. so that's the reason for our thinking. thank you very much. >> the chair -- the gentleman's time has expired, again, there will be a second round of questions for all members who are interested. the chair recognizes the gentlelady from the state of wisconsin. >> thank you, mr. chairman. and i want to direct this

question to commissioner azar. one of the proposals that we hear a lot about on capitol hill is the possibility of a 760kv line often known as the transmission super highway. and i would like to hear your insights on how a 765kv overlay might affect a state -- a profile like the state of wisconsin and if you could describe as concerns that you might have that would be detrimental to wisconsin or others? >> thank you, congressman. when you add a high voltage overlay into a state. you've got to make sure that the underlying system is built up to accept that. in wisconsin, as both you and i have noted we've spent billions of dollars at this point in time designing a specific kind of system. american transmission system has defined a 45k system if there's a 74 five overlay built into

wisconsin, it's essentially going to mess up our very deliberate 345kv design so we're going to have to build up our underlying grid. that being said, you know, that ultimately if congress, you know, give us the mandates and the group of states decide that the best thing to do would be 765 grid overlay then we're going to need to accommodate that i think there are better ways to do that. the one size fits all will likely be in my estimation probably oversized and not cost-effective, you know, the one way in which i think about a 765 grid overlay is you've got somebody with a hose on one side of the swimming pool and he's got to get the water to the other side of the swimming pool. there's a drain on the other side of the swimming pool and there's two options he's got. one he could extend the hose or the second option is he fills up

the swimming pool and the 765 grid overlay is more akin of filling up the swimming pool than the hose. there's better ways to do it than one size fits all. íer bottom line is, the primary message is, we need to do the calculus, we can figure this out. a tailor-made answer is better than a generic answer. >> making rtos the final decision-makers with regard to transmission decisions. and i wonder how you would analyze this as an option. do you think that rtos have all the correct interests in mind when they would approach these sort of decision? >> you know, the decision maker for selecting the plan for the grid needs to be beholden to the interest and that's the public interest. the rtos are -- they've got a

lot of different stakeholders and they're very adept and i compliment them on trying to balance the competing needs of the stakeholders. for the midwest independent system operator. they actually have a contractual obligation to their transmission ownersíc to maximize the revenu of the transmission owners.umnh and when you've got those kind of interests, they will not be thinking about the public interest when they're making their decisions. they will be thinking about their contractual obligation of the transmission owners so i don't, i do not believe the rtos should be the ultimate decision maker in this.&$at being said, e with regards to planning and their planning engineers absolutely needs expertise with regard to planning and their planning engineers absolutely need to be involved in this process. >> and i don't know if mr. cohen or mr. hibbard have any comments on that same question. >> i would concur with commissioner azar's comments as

well. >> as would i. >> okay. great, i thank the gentlelady. the chair will recognize himself for another round of questions. let me move to you, mr. hibbard. so that we can put this out on the table. a lot of people, when they think of the solar revolution, they think, well, we're going to bring it in from the deserts of the united states and bring it into the cities of our country. and that is true. out to the prairies of the united states. we're going to bring it in to the cities in order to provide the electricity. but people don't really think about the oceans as much as a source in the future of renewable electricity. and you made a reference to all the eastern states governors from maine down to virginia who are very concerned that their plans for bringing in wind off

off the coastline or other renewable sources might be undermined by this kind of a proposal. could you talk about that and talk about what your vision is, that is all of these governors in terms of what the long-term renewable prospects are for the east coast. >> certainly, and thank you, mr. chairman. you know, in massachusetts and i think throughout the new england region we are strongly supportive of the climate goals that are inherent in the legislation and in the renewable goals. certainly in massachusetts we are and we want to find the best way to meet them. we see offshore wind as being an enormous renewable potential for the coastlines of our country. a potential that is very close to load centers and can interconnect in multiple locations on the lower voltage type networks that commissioner azar mentioned that will strengthen the reliability of the grid in that it represents -- there is also a huge amount of onshore up and

down the coast. if you take, for example, what's in the system plan it would dump -- >> could you expand what this is. >> it was coordinated -- >> with you explain what miso. as you all continue your testimony, we have c-span watching this and i think it would be a very interesting subject if it was actually communicated in english to the watching audience. [laughter] >> so we're going to be on acronym alert for you the rest of the hearing and i'm going to stop you every time you use an acronym. every time you make an assumption everyone in the room knows what you're talking about. this is a very important issue that has an impact on families. >> thank you, mr. chairman, i'll try not to use a lot of acronyms. i hope my boston accent is okay. >> you sound very eloquent. all the other people in the room

have such funny accents, don't they? >> i agree. >> how about those red sox and yankees last night. >> well, i was going -- on a personally note commend you for your observations about the link between our national economy and baseball because we are seeing signs that our economy is improving and it occurred to me that at the same time, if you watch the red sox once again sweep the yankees over the past few days, david ortiz is hitting home runs again. >> i'll give you an extra minute -- [laughter] >> people won't know what you're talking about. i gave a speech in boston on monday and i said that -- i said in boston that the economy was in a david ortiz-like slump. but that i had faith that our economy and david ortiz would be hitting home runs gun. now, unfortunately, the "boston globe" ran a little editorial questioning my judgment and

linking david ortiz's ability and the economy. last night david ortiz hit a home run. today and yesterday we received all this new positive commentary about the american economy. i'm not saying it's directly related to my speech on monday. [laughter] >> however, i do believe that and i thank you for pointing this out that my comments were accurate. so please continue and we'll add back your time onto your statement. >> i'll see if i can remember the original question. [laughter] >> what i think has gone hand-in-hand with the efforts to push for expanded federal oversight over transmission, there have been a couple of major studies done by d.o.e. and also by a group of regional planning entities across the country to look at this idea about how do we actually expand the development of renewable generation in the parts of the country where it exists and move

that that across the multiple regions and deliver it into subregions? so the joint coordinated system plan was a very large technical analysis of how to go about doing that, what the transmission network would look like, a high voltage transmission network would look like to accomplishment that result. as part of that plan, when you look at it, one of the things it does is it would dump on extra high voltage lines on the order of several thousand megawatts of power into new england at a very high voltage. now, in addition to the issues that commissioner azar has mentioned, that would require a lot of building out of the transmission network within new england. the concern i have is that we have a competitive market framework in new england that is absolutely essential to keep commodity prices low for our consumers. we have a need in the region over the next couple of decades only on the order of several hundred to 1500 megawatts for

new power. if we were to administratively put in a high voltage transmission line that put that quantity of power into our region it would eliminate the market signals that our local renewable resources require in order to move forward with financing and development. so that's the threat. our position is we absolutely have to meet the carbon goals that the country is now warming up to and we need to meet in the coming years but the way to do that is doing it through ensuring the resources that are brought online are those that make the most sense to customers from the standpoint of the delivered price of electricity. and we think we can do that without this level of federal oversight. >> so if i may, so one of your concerns and new england's concerns generally, those six states would be as you put together regional plans to generate renewable electricity within the region, offshore, or onshore, there's a huge proje