dr. greg reed. thank you, mr. kidd, and good morning, everyone. it's certainly a pleasure to be here with this distinguished panel on energy management. i'd like to start by complementing richard and the federal energy management program for setting an example nation wide for all of us to follow in this area as we work to meet our goals in energy sustainability in the private, public and academic sectors. what i'd like to do this morning is talk a little bit about the broad overview of challenges and opportunities that we have in the power and energy sectors where energy management fits in and how we can look strategically as collaboration among industry government and academia to achieve success in meeting our energies overall goal goals waes move towards future energy independence in america and sustainability.

first i'd like to talk a little bit about our power and energy initiative at the university of pittsburgh. our initiative is built around three main goals. the first is to educate the next generation of power and energy engineering professionals. these are students in the classroom right now today who i can tell you want to come out and change the world. and the energy sector with all the challenges that we have, the fact it is a defining issue in the decades to come of this century provides them many opportunities that they are getting very excited around. this provides us a a unique opportunity to help with workforce development and we'll talk a little more about in a few minutes. we're also contributing to advanced research initiatives in the power and energy sector. our program is uniquely built around electric power engineering, nuclear engineering, mining engineering and even petroleum. uniquely we're positioned in such a broad energy space to bring comprehensive solutions to different approaches. one of the unique things we

provide from the university is the position on free thinking, of concepts through implementation and the ability to provide open collaboration with partners such as those represented here in industry and in government. so we closely collaborate with our industry partners, with government and other key constituents. our vision is establishing a national and international center of excellence for power and energy engineering. and the initiative fits in very nightsly with the universities threefold mission, which is to be a leader in education. a pioneer in research and a partner in community and economic development. and in a very short time frame over the last couple of years as we developed these programs easy occasionally and research we've been achieving these goals. one of the things that you look at to say why develop these programs, why do we need to look to collaboration? where is all of this coming from? part of it is really a perfect storm environment that has really developed over the last

couple of decades in the power and energy sectors. we're looking continually at increased demand which continues to be driven by the advancement in our society in higher quality is of life. not just in the united states but globally. at the same time we're facing more regulatory constraints and environmental con straights. talked already a little about global warming, and really unprecedented industry challenges in meeting both the technical solutions to those issues as well as the political and policy ones. at the same time our infrastructure for energy, the power delivery system as an example is really becoming antiquated. working with a system that wa design and developed decades ago. it's asked to operate in a very different market environment today. we need to bring more technology and innovation, and it is a sector that has had underinvestment in technology development over the last couple of years. couple all of that with an aging work force. nearly 50% of the entire

technical work force in the energy related industries will be retiring, eligible for retirement with the next five to ten years. an aging work force population we need to train to feed the pipeline of innovation and solutions that it's going to take to meet some of the challenges. as we talk more about some of the challenges, there's a long list, and i won't go through every one in detail, but if you look a little at the first few, the increasing penetration of renewable energy which we need to continue to drive towards in order to reach further levels of sustainability across both our power generation as well as a distributed levels, we'll continue to advance. that's only going to happen with the smart expansion of our electric the delivery and power sector, and in order to do that, to enhance reliability and increase productivity and efficiency, the same time, developing new concepts around smart grid developments and energy storage technologies. these will all be real game

changers and already becoming game changers in the industry. we couple those with growth in the transportation electrification sector needs to develop an expansion of nuclear portfolio, looking at carbon cap per and sequestration and the effects policy and market drivers will have in all this and we look to areas where we can really truly make gains. one of those in certainly in the area of energy efficiency and energy management. through energy demand site management programs through many of the techniques and technologies and methods that eaton and bair are going to talk about in a little bit. couple all of that, again, with the need to bring work force development into these areas. all new and emerging things in our energy economy that we have to train the next generation for. how we meet the challenges in the decades ahead will certainly have imperative implications decidedly environmentally, economic and globally as we set a course for future generations opinion from the development side, if you look at the

confluence of many of these issues, whether it be energy efficiency in building systems, the growth of the vehicle market and the transportation sector in electricity, the expansion of the grid, the integration of more renewables, a lot of it is coming around the smart grid concept and the ability to begin to provide realtime access between end user and energy provider. that realtime access to energy usage, to energy patterns will really help us lead to energy efficiency, and it will be what enables some of the technologies that are being developed today that exist today, quite frankly, from corporations that have been providing advancements in technology, such as eaton and bair. one example that we're doing at the university of pittsburgh is building con semts around smart energy environments where we look at commercial and residential environments and look at new improved ways of not only designing but actually delivering and utilizing electrical energy. this is in the form of everything from advances in

solid state lighting to reduced consumption, to automation and control, in realtime access, to even d.c. powered distribution with these environments to increase efficiency. uniquely, in the pittsburgh region we can help solve some of these challenges through collaboration of a number of regional organization. we're geographically unique in terms of our position as being a center position to be a national leader in the energy space. and if you look at it, part of it is our heritage. built on a lot of technology and manufacturing, expertise in these sectors, it's the birthplace of nuclear energy. we have tremendous natural resources such as the pittsburgh coal scene. knopwhere around the country can you find sump a diverse and unique range of capabilities. so these company, bair, eaton,

including the national technology energy labs are beginning to collaborate more and more to bring some of the solutions we need in a very collaborative and strategic manner. some of of the things we've gn doing at the university of pittsburgh to bring these organizations together include events that help us to identify what the needs are in industry. not only from a educational point of view but from a research point of view. an event we hold in november, power and industry day, grown every year in the last four years and had over 1 ooh participants this year highlighted by eaton executive dave buck, with a keynote presentation. talk to companies together around themes for research development and also bring them together with all of our students hoo are studying in this area, which includes over 200 students right now in our undergraduate and graduate programs to interact and network with these industry organizations as they seek to plan out their future in this arena. a great example of that collaboration is what we've

established with eaton corporation in terms of a porter inship. structured on several initiatives from the development of a brand new state of the the artt power systems lab that will provide research opportunities and education opportunities for our students and faculty alike. support of undergraduate design projects and support for new curriculum, dwelling and delivering new curriculum in smart grids, energy management and other emerging fields at the graduate and undergraduate level leading to research program development, working closery with both internally on initiatives important to eaton's business development needs also together with other companies informing strategies around the american recovery opportunities. creating opportunities for regional economic growth, technology development, work force training was really the emphasis of what we base this partnership on and it has proven to be very successful in the early year of its existence.

so as we look to the future, we must look at comprehensive strategies as mr. kidd already mentioned. there's not going to be one solution. we're going to need a combination of things. we need to look at it strategically from a technology point of view, also from a personnel point of view. that's really where we come in at the university. top provide that technical talent training, the work force development, coupled with the research and development in a very open and collaborative environment. and it's everything from ecofriendly building designs you'll hear bair talk about in a little bit to smart grids and smart meter concepts, some of the things eat to s eaton bring table, all the way through to what we're doing at the mike yo grid level to bring solutions. so at this time i thank you for your attention, and turn it over to mr. paul plate from bair corporation. thank you very much.

. thank you, greg. and on behalf of baer material science i'd like to thank eaton for inviting me and baer to participate in today's panel discussion. the topic is one that's very rep vent to our business. thantsds what aye like to explain in a little more detail. baer's motto is science for better life, and by being rated number one in global, carbon disclosure leadership last fall, i think it shows that we are in fact committed to that motto. our commitment to innovation, product stewardship as well as sustainability impacts the products we make as well as the markets we serve. in fact, our products touch people's lives as well as the planet on the whole in so many ways that sustainable development is critical or four

business success. in the development of sustainable building design and construction solutions that i'd like to talk about today. i think what you'll see is that baer offers many material solutions to this area, but also i want to be able to address how we feel that only by working openly and seamlessly with organizations such as academia as well as the government and other industry partners will we be able to meet challenges of this particular market, and that's what i'd like to go into a little more right off the bat. baer favors a holistic approach whereby the walls, if you will, of the construction process are broken down replaced by an open plant whereby the state-of-the-art building solutions are able to be achieved. we think this holistic approach can be achieved by combining the expertise of architects, engineering firms financing organizations, suppliers from components as well as materials with academia and government.

working in a collaborative method to be able to deliver the ecological and eke nomic solutions sought by building decision-makers up and down the value chain. we think this collaborative approach we're able to address what i call the six es of building sustainable. energy savings, environmental friendly materials reduce emissions materials, efficiency in application, ecology as well as economics. this is very important, because while having sustainable building concepts is the right thing to do as a corporate citizen, it's also the right thing to do as to consider from an economic standpoint from a business perspective. and we think in this collaborative approach we're able to address the complexity of the value chain, of the construction process, we're able to benefit the different parties that are involved in it, as well as to foster the holistic dialogue we think is necessary to develop these solutions. and what i'd like to do now is touch on the next key area for

our particular program. that's our material solutions. what you see here is a conceptual office building that i'd like to use to just showcase some of baer material sciences material solutions that meet those six es i just spoke about. let me give awe quick tour. polycarbonate isn't terms of single or multiwall stheets can be used for glazing, skylighting as well as if a sots that enable daylighting in and of itself reduces energy consumption but also improves the visual comfort of the occupants of the building. ceiling systems based upon our polyurethane raw materials enable new or existing flat roofs, a seamless protective layer that's root resistant but also reduces the drafts in whereby also improves the energy efficiency of the building. le

led lighting efficient by reducing the amount of electricity needed to illuminate the building and reduces the heat load with the building and polycarbonate used in led as well as houses to provide a lighting system robust against indoor and outdoor conditions. coating systems. again, based upon our polyurethane raw materials are characterized by high resistance to aging as well as low maintenance costs. we're able to do this with low sufficienta solvent and water borne formulations opinion polyurethane in the form of spray or rigid foam can be used for thermal insulation solutions for the roof, walls as well as the floor. and it's important to note that the embedded energy to fab brab kate the foam itself is paid back 50 fold or more over the life of the building in terms of energy savings.

photovoltaic benefits also from our products. tpu and captain lit film used to encancellate cells and polyurethane with protrusion technology produces lin yules frames building photovoltaic systems can be produced. it's really the combination of these material solutions toegs with the holistic and collaborative approach that we at baer material science device wlad we call our ecocommercial building program. for ecb for short. to walk the talk of that program but also to showcase the viability of these technologies we have a series of buildings that showcase this. we have an operational daycare center in germany. we have an operational office building in belgium, and under construction is another office building in india. over the next couple months we'll be announcing our plans

here in nafta as we roll out the program with this market. so it's really by working in combination with these material solutions as well as academia and the federal government, state government as well as the local government and other industry partners such as eaton, that we think from an industrial partner we're able to help bring these solutions to the market that are really critical for our overall business. and with that, i'd like to turn it over to paul cody from eaton. okay. thank you, paul.

good morning, everyone. it's a pleasure to be here with all of you on this important and relevant subject. before i get into the heart of my discussion i would like to tell you a little bit more of eaton and our efforts in energy management and sustainability. recently eaton was ranked in the top 10% overall, number 43, on "newsweek's" inaugural dream rankings of the 500 largest companies in america, and number three in general industrial category. "newsweek" ranked eaton in the top 30 companies for green policies and performance xwor. the reason for this kind of recognition is simple subpoena we are taking action and we care. to create a sustainable market transformation what eaton is doing, requires the shift in behavior and beliefs as well as implementation of technological solutions then complemented by operating and maintenance strategies that further optimize the combination of people, operations and technology. i'd like to touch briefly on

each of those topics. on the people front we have trained more than 60 lead accredited professionals across the united states to drive the green building business and educate engineers and contractors on green building strategies. in addition, we are hiring energy engineers for our newly formed energy solutions business to improve both eaton's operations as well as our customers opinion in the operations front, eaton was one of the first companies to have a sustainability report as part of our annual report. because our executives want all stakeholders to know how we're doing reducing greenhouse gases by 18% by the year 2012 and recently completed an expansion of our electrical group head quarters where we are on lead gold certification. a recognition of the information efficient environmentally friendly from the green building association. and technology. last year we instituted eaton's

griefleaf product solution program where a committee follows a strict process of evaluating whether or not our products can use eaton's griefleaf logo with off the green washing going on it is important to our reputation we can back up our claims and going further with some products by completing a life cycle assessments to truly gauge the environmental footprint both in production and in use of our products. most recently, we received smart gold certification for our uninterruptible power system you the u.p.s. 9395. the most energy efficient product in its class. what lead is to buildings smart to to products and we are the first diversified industrial manufacturer to have a product certified. as much as we are doing the right things ourselves and being recognized for these efforts, our biggest value is what we are doing for our customers and it comes in the form of managing energy.

today many energy users are using individual technology approaches to manage their energy. alternative transportation, things including high-speed rail, hybrid truck transportation and plug-in electric vehicles. renewable energy. sources like solar, both building based an utility scale, and wind, hydropower and geothermal are beginning to spread beyond places like california, texas, massachusetts and pennsylvania. and the prospects offered by smart grid with smart meters, smart power distribution, demand response, home automation networks and plug-in electric vehicles. but the first step in any organization's efforts to get a grip on energy still remains energy efficiency. and homeowners, commercial building owners and industrial facilities are tackling specific projects, often simply doing

those energy efficiency projects that have is a one to three-year payback like lighting retrofits and temperature controls. and although eaton provides products and services in all of these technologies and strategy, the real value to the customer is when they are combined into a comprehensive holistic or solutions approach. according to a cover story in the december 2008 issue of "time" magazine, we americans complain about the cost of our energy, but we still throw away most of it. our power plants, for example, waste enough energy to power japan, only 4% of the energy used to run a typical incandescent bulb produces light. the rest is put at heat over transmission lines or in the bulb itself, which is why you burn your fingers when you touch. a holistic approach, depicted on the slide includes all the technologies i mentioned.

renewable energy, smart grid technologies, alternative transportation and energy efficiency projects. but with the, but it begins with energy efficiency as the foundation and is comprehensive, just not low hanging fruit projects. what is comprehensive include? the consideration of the following -- definition and understanding of an overall enterprise-wide energy management strategy that includes energy goals and objectives. identification of all energy conservation opportunities and the rationalization of these to align with the overall strategy. thinking beyond the implementation of individual technologies more importantly how these would be integrated together to provide short and long-term benefits. and giving consideration to the behavioral operation technological opportunities that includes some of the following focus areas. upgrades through central heating and cooling. plants ventilation systems and envelope modifications.

distributor generation combined heat and power plants water redikds and shaving or shifting. improvements to energy intensive processes that include compressed air and recycling waste systems and the efforts to have the most appropriate energy rate schedule. so let's now look at some of the tremendous implications and approach like this might have on residential, commercial and industrial facilities. to do this i'd like to share a few thoughts that we at eaton think are paramount from a recent mckinsey study published in july of 2009. if executed at scale, holistic approach to energy fishtsy would yield gross energy savings worth more than $1.2 trillion. well abrov the $520 million needed through 220 for up front investment in efficiency measures. such a program is stinted to reduce end use energy consumption in 2020 by roughly 23% of projected demand. potentially updating 1.1 ton

giga tons annual. more significant the opportunity resides in all types of buildings. the 1.2 trillion in gross energy savings the commercial sector accounts for 25% of the end use efficiency potential. the residential sector accounts for 35%, and the industrial sector represents the biggest opportunity at 40%. so with this kind of potential savings for holistic energy savings the obvious question is why don't we already do more of it? there are three primary barriers. one, energy efficiency is highly fragmented, spread across more than 100 million locations and bills of devices used in residential, commercial and industrial facilities. this disburse ensures that efficiency is the highest priority for virtually no one in an organization. until recently, even the most progressive companies and even the most progressive companies no one really had accountability for energy usage or for energy efficiency overall. finally, measuring and verifying

energy not consumed is by nature difficult. in that same december issue of "time" magazine, "time" magazine referred to energy efficiency as america's untapped energy resource. and there are three primary elements that we believe and support to access this energy efficiency resource and overcome these barriers. first, identify methods to provide the significant up front funding required by any plan to capture energy efficiency. it has been estimated that the entire up front investment of $520 billion could be recovered through a system benefit charge on energy on the order of half a penny we are kilowatt hour of electricity and $1.12 a million btu or other fuels over ten years. a cost increase of 8% per unit basis to the average customer which would more than be offset by eventual energy savings of 24%.

second, sfoforge greater alignm agros government agencies manufacturers and energy consumers. and, third, recognize energy efficiency as a strategic and comprehensive effort. piecemeal approaches will make little impact and oftentimes harvest only the low hanging fruit. comprehensive approachless take more discipline, education and patience but will ultimately offer a much more significant reward. energy efficiency is the cornerstone for implementation of other renewable energy solution and it imperative it is completed before or in conjunction with projects like solar or wind. an infish building wastes energy. fortunately we're seeing examples of this approach both at the federal level through programs like the gsa's high performance green buildings efforts funded with $4.5 billion from the recovery act. the results of this program, gsas high performance green buildings use up to 45% less energy and 39% less water than

conventional office buildings. we have seen prudence on state level like north carolina where state energy plan funding will only be provided if a city or municipal government has a strategic energy management plan in place to show how those funds will be part of a comprehensive energy efficiency approach. what the public sector is simply not enough. in our national pursuit of energy independence, national security and the prospect of improved employment, nothing right now stands taller than to take bold steps to formulate constructive ways to unlock the full potential of a comprehensive holistic energy efficient strategy. with that, thank you. bring tom back up. >> well, thank you, gentlemen, for your excellent presentations and excellent views. energy management clearly is not a new issue, but what we think

is unique and new is the need for broader thinking and the fact that that thinking and dialogue really has to span public, private and academia. this is what we think is unique about today, and it's highlighted simple conservation, while helpful is typically an afterthought. we have to go beyond that. it just isn't enough to build billings and make them more energy efficient after the fact. we also heard today that there really isn't any single silver bullet and, in fact, we have to be thoughtful about these investments that are below the line or above the line. and, in fact, those decisions are different for every type of industry and every type of application. this issue will also take future leaders, and i think you saw just an excellent example of work being done at the university of pittsburgh with corporations such as eaton

grooming those future leaders who will be needed to really make those thoughtful investments. and you saw the need for new materials in this equation. very important part of the whole equation. and finally, you heard us say a number of times, a holistic strategic approach starting with an energy plan is really critical for us to move this issue forward. so with all of that, i would encourage you to go to the eaton website for more information on the collaboration that you've seen here today. and also on this specific event. and with those closing comments i'll turn it back to or moderator for questions. thank you. >> thanks, tom. let me mention a few things before we get started. we a web casting and it is live. so, please, as you ask your questions, wait for the hand mike to come over to you.

i think, there it is in the back corner. please identify yourself before you ask your question, and your affiliation, and we would like to give priority to members of the media, to ask those questions. we can go beyond 11:00. so we'll take your questions as you need them, as they're there. let's start, irv, go ahead. >> thanks. ircharpman i work for bloomberg radio. real estate agents are saying respect ib tenants in office buildings are asking about energy costs before they move in. i'd like to ask the industry people whether you're seeing an aim pact on the business you're actually doing in a way that something driving down the beltway might observe as he looks at all the tall buildings, and also, do you think that serious inroads can be made in

what you've been talking about without putting a price on carbon, or did mr. cody say the way to do that is by taxing our electric bills? >> go ahead. >> i'll give it a shot. as far as the first question on impacting our business, yes, we are seeing the business many pactded in a positive way in that our products and services that we are offering, we are being moved in a direction to provide more energy efficient, cost efficient, green products to go into buildings to help reduce that overall energy cost. >> go ahead. >> i would just add that it is that shift towards those types of requests that we've seen a shift with the whole construction industry, in which people are now asking about more energy efficient types of solutions. and that's one of the impetus that we've had to actually try to focus our products that we already offer into that type of a scheme.

in terms of impacting our business, i think that's still evolving at this point in time, but the requests are now beginning to come. >> go ahead. back? follow-up. go ahead, irv. >> will you repeat that? do you think we can make serious inroads without putting a price on carbon and mr. cody suggested the way to do that, tax our electric bills. >> my suggestion was that we put an up-front fee to fund, if there's any energy efficiency project, there is an up-front investment that yields far greater return down the road in energy cost savings. the suggestion was that we include an up-front fee on energy to fund the up-front investment to realize the savings down the road and ultimately the cost savings. a fee to the energy users. people using the energy. >> i want to -- tom, go ahead.

>> tom, following up on that point. several years ago there was a plan developed under the efficiency trying to coincide and talk about a holistic approach with state regulators. prioritizing efficiency, yet out of that there is not any kind of natural movement that i am aware of. epa is doing things on that and i'm not seeing much at the state level in terms of the holistic approach or national charge or system benefits charge. >> in the state of pennsylvania, they enacted a new policy for energy efficiency with aggressive programs for both individuals, residential as well as business and commercial and industrial in meeting efficiency

goals. a lot of it is going to take new methods and strategies and technologies to achieve, but it's also going to require a change in behavior and where that comes from is really not an easy question to answer. is it a price point? is it a quality of life difference? these are things that will play into the equation of energy efficiency. at least in the state of pennsylvania, a bill has been enacted to achieve energy efficiency measures. >> i guess if i can follow-up, it's a state by state, utility by utility approach. i heard holistic approach a dozen times. >> the program in its inception is providing a tremendous example and leadership for all of us to follow.

>> we need to bring everyone together at the table. the customers work with their local utility, state and community to get the federal site and that led to success and various military bases and federal facilities, etc. it is not easy. it is a challenge. overcoming that challenge will generate greater amount of benefits than a piece meal approach. the sum of the parts is greater than the whole. did i say that right? the sum of the whole is greater than the parts. >> in the back? let me mention while she is getting back there, we have callers calling in as well. we may jump to a caller in between if we have to. go ahead.

>> i am suzanne watt with the american council for an efficient economy. we toyed with the theory for a long time. one of the organizing factors that is prevalent is in play now and is a national energy efficiency resource standard. eers. similar to an rps, but this is a national energy efficiency standard. this is something if we all got behind account perhaps happen. almost 50% of the states have an eers in play. one out of the national standard to rally behind. >> i'm not in the position to address that in terms of national policy. i work with the federal agencies. i think there is clear evidence of having an efficiency standard to generate benefits. we the fed are watching closely

and evolving policy debate. i am not directly involve and cannot provide an extensive amount on that. >> go ahead, jim. >> i'm a free lancer with a focus on alternative fuel vehicles. i'm interested in hearing more about the smart grid for alternative fuel vehicles, especially electric and plug ins. there is a lot of hype from the auto industry and i haven't heard a lot of discussion about where the energy for the smart grid is going to come from and what a realistic time table would be. thanks. >> when you look at the smart grid, there is a lot of different definitions. a broad one is really creating realtime information access of energy usage patterns of

realtime utilization versus what's happening at the production level. building smart grid concepts into a transportation sector is the next evolution of what we are trying to do at the power distribution and transmission levels first. we don't have an infrastructure, a physical infrastructure around electric vehicles yet. you are going to charge it at your home. you won't be able to do it on the highway or interstate. you can get petro and ethanol, but we can't get to the massive amounts of recharging leading to storage in the vehicle sector until we first figure out how to do this in a more efficient way and what already exists is an infrastructure that needs a lot of innovation to it, which is the power t and d sector. from the vehicle side, we have a ways to go. within the vehicle, you can look

at that as almost a microgrid. various manufacturers are coming up with all kinds of ways to automate and control and look at how energy is used within the vehicle itself. >> one of the research and development projects they are undertaking is electric vehicle charging application for the home. they're doing the research to understand the requirements of driving home and plugging your vehicle in and the best time to do it and what intelligence should be used to determine what the best method to do that is. that is a program under way in the early stages.

>> there is some chatter about commercial building sector having an adjustment similar to where the residential sector has over the last couple of years. what extent are the challenges are retro fitting for efficiency and how do they correspond to residential? making an existing home is harder in many ways than doing this for new buildings. >> i will address some of that as well. the difference between the commercial and the residential buildings, you touched on a lot of similarities, whenever you try to retro fit into a system, a house or a commercial building that was not designed to be able

to capture and integrate that, you run into the difficulties. often what we are seeing is dismannedling that has to happen in order to add it. that affects the holistic solution of the building in and of itself. it will affect the building in and of itself. we are trying to work into the development by bringing architects together with engineering firms and other organizations. we can help integrate how the materials will play out into those areas. to interface with the building is where we want to rely on the expertise of those who are already there. >> if i can add, that's a very important and pertinent question. how farly 70% of the building stock that we are going have in 2050 we have today.

we are not going to get an energy-efficient economy on new buildings. we have to look at existing building stock and that presents a number of unique and interesting challenges. the department of energy announced the start up of a dedicated research institute to look at the questions and i would refer you to the press releases on that project. one thing we talked about with buildings and we talked about cost and benefits is a change that say employees in a green building are two to 16% more productive than in the previous building. for most organizations, the sing e8 biggest expense is salaries. if you can get the productivity, that is valuable.

that is something that can be returned as investment to the organization. >> go ahead, nick. >> i was hoping to revisit the question from earlier about the need for a carbon price. if i could get everyone to weigh in. to what ex-stent that necessary and what would you like to see from congress as the senate prepares to move. does it need to be cap and trade or would an energy bill be sufficient to reach the goals we have been talking about today? >> i don't believe we are in a position to state what would be the proper approach towards it. we try to approach all of these solutions from an economic standpoint and not ignore the

key drivers. to set what would be happening would be the wrong thing for us to do in the value chain from a material supplier. >> enacting the programs and being a steward of the environment, as i said in my speech to reduce green house gasses by 18% in 2012, we are 80% of the way there and gaining every year. reducing and going back to a comment about retro fitting buildings, most of the factors that they have are existing.

a process we all talked about the holistic approach and the analysis of those facilities to determine who are the biggest energy users and the biggest green house gas emitters through an audit, an infrastructure upgrade and deployment of discreet technologies used to save energy and reduce green house gasses and pulling all of that together and embedding the energy efficiency within the corporation. that has economic and social benefits to society as well as through business. >> we are working nationally to incentivize the renewable forms of energy as long as we make it a level competitive playing field, the markets and the economics will work out where we

provide economic growth. that's one of the main things and the elements of recovery as well. incentives to look at new technologies, whether it's carbon capture and clean coal to address the emissions issued from the fossil side or the development of larger scale solar as an example and geting it to the scale efficiently will work out in the markets as well. >> as a career, i can't comment on what's deliberating in congress or i could comment, but the short career. >> they make it clear that man made carbon and global warming has a cost, a social cost. it is fair and renl to place a

value on carbon. even if you don't, even if you value carbon at zero, the energy efficiency improvements generate financial returns and they make sense regardless of your policy position on carbon. for the federal government, we are going forward with a planning process that includes a social cost or benefit of carbon that we are factoring into cost benefit analysis. there was an a pliant standards from the department of energy office. there is a documentation on how we would do that. it works out to about $19 a ton and within the range of various academic studies are at about $1.50 to well over $100 a ton. you can do that and those methodologies exist. the key point is even if you value carbon at zero, energy

efficiency makes sense. >> go ahead. >> there is numbers from eaton here and there. how industry-wide is this focus that you guys are talking about and is there a federal money? if you look at what they are doing at the university, the example i gave of our annual event in november to bring industry in the space to not only discuss the issues, but then to formulate comprehensive strategies working and keeping

arrangements on them, they are doing that. when you look at the collaboration, it's multifacetted and we have metrics that we have set. the great example, we have come out with a recent announcement on additional funding now in energy areas of one of them being energy efficiency in building system designs. we are in a great position to put together a strong regional teaming arrangement along with other companies to bring a proposal to that opportunity. this is the concept of the energy that has been talking about and the first roll outs. >> we obviously have the largest consumer of goods and services.

we have a network of relationship contractural and otherwise with the public and the private sector, etc. we have established standards for new building construction or retro fit that industry is responding to. basically if you have a new building or a major remodel, you have to follow the design. going forward, by the time 2030 gets here, every new federal building must be a net zero energy facility. that's in the executive order or congressional statute has it framed with is a zero fossil fuel belt. they own about 1.5% of america. that's a fragmented market. that portion put down the standard that you have to have

the best of the best when you rebuild or build a new federal building. while we have 1.5% of the building stock, we have 5% of the lead certified buildings in america. i highlight that as an example of federal leadership trying to drive market place. >> this is our federal grand money and recovery act. >> gsa with the department of defense and department of interior got recovery act funds that they are spending on new building and major retro fit. if you look at the concise 90 something pages. there is a page that said all of these have to be done to the highest of standards. it outlines what they are based on the building.

>> to add to your question that eaton is involved with dozens of these kinds of discussions. there is obviously a good reason to focus on buildings. let's not forget that motors are a huge consumer of electricity and consumes many more times in terms of energy. if you look at industrial sectors, there is a need for the same collaborative arrangements and the players change. the issues remain the same. >> i would add to the imaginal questions with regard to the breath we are looking at. we are interesting into the program now. from us from a concerned standpoint, we have operational buildings and the daycare and a

showcase building that demonstrates what richard kidd had responded to about a net zero type of a building. for us that's the technical target for us. reduce the energy consumption of the building maybe through insulation-types of systems to a point where renewable energies can support or take over the full energy requirement there. we see it's impacting our business. that is one of the first questions. are the requests coming for this? that's a they have done to provide that type of funding through the arra to enable this dialogue to begin and allow us to work through the solutions.

>> check out the relationship price time frames. we are seeing more and more price spikes and energy commodities. the big in the summer of 2008, but katrina before that and then 9/11 and the gulf war. saddam's invasion of kuwait. if these price spikes continue or accelerate, what is your confidence level? my frame with the federal government spoke in 2030. if the country and the economy

face serious challenges, how confident are you that we can respond more quickly than a 10-or 20-year time frame? >> i believe that over the last several years, the effort around energy management sustainability has been ramped up significantly. as evidenced by our own goal and reduction with green house gas reduction. as we do that. as we invest more money in research and development to provide more energy-efficient products. i believe in the markets there will be ups and downs, but the need is there and industry in general have invested and

shifted research and development monies to accelerate in this deal. i'm understanding what the core problem is. that's one of the things we're able to do is begin increasing awareness of how to resolve the issues. when the spikes occur, there is an expedited response. >> it is renewable energy is based on price fluctuations against grid reliability and national disasters. many of the other activities and the federal government, a number of our agencies such as the department of defense and others

are taking a look at being able to make their installation and base it as energy-efficient as possible and produce enough energy on that base so they can meet critical national defense and national security and public service needs. should you have follow-up questions and individual questions you want to ask them, once again thank you for coming in and we appreciate your time.

>> now from