these are issues that we are exploring, educating and commissions and quite frankly our commissions are leading the way in being responsive. >> i'm going to come back to that question. now i think that senator portman is next. are there scheduling conflicts that i should know about? >> not now. >> senator. >> thank you, madam chair. i really appreciate it. i know that this is a focus with this panel on cyber security, but we have also talked about reliability. and of the next panel will focus on that and i appreciate your willingness to move for an hearing so quickly after taking the chairmanship. i would like to ask a couple of reliability questions because we have some experts on this panel who may be can give us a preview of what we will hear next but also for us to the will to compare and contrast what we will hear from some of the industry folks. first, i guess, chairman alan

like to hear from you a little bit about what he think we ought to be doing in terms of reliability and price spikes. you are quoted as having said, i'm also concerned about the price, but the absolute magnitude of the price and the variability. nbc's price spikes of the symptom that protecting the liability is causing this issue. can you elaborate? is that an accurate quote? you never know. >> the quote was in that context, somebody had said we are mainly here to worry about reliability, not price. i made the comment, well, they are closely related. when you see the extraordinary price spike as we saw in some regions of the country in january and february, that means the grid operator is doing very unusual things to keep the lights on. that ultimately goes into customers' pocketbooks. we need to say, why is that happening? what can we learn from it? we are in the middle of probably one of the biggest changes we

have ever seen, particularly the increased reliance on natural gas to generate electricity. and what we looked at very much in the tech conference last week was how we can get the rules right to make sure that number one we have the infrastructure in place so that the pipelines and they're so that the constraints don't cause the gas prices to spike up. secondly, the market rule, sometimes very become a specific rules are written in a way to allow people to buy their gas at a more economic time of the day to avoid some of the spikes miss on this winter. we actually trying to change the timing of the electorate markets to make that happen. but more fundamentally of one of the things i have been leading is a look at the capacity market these are the things, ford markets three years or five years out to see what capacity is needed on the system. we have to make sure that the

rules are written so that we are properly rewarding the facilities that are very stressed by the short-term gas prices. seeing a lot of retirement which could ultimately be detrimental to reliability. we are taking a very focused look at what it means to survive in the market to make sure that the market price is right. a very geeky answer, but that is very much what the tech conference was about. what can we learn and get the rules right next year? >> i think it's an answer that goes to a lot of the important issues. one thing you did discuss is the impact of federal regulation systems. i think that is also not kiki but important to reading your testimony you said that should help understand the implications of individual regulations. there in fact might be interested particularly and

reliability. you mentioned you had worked with the epa on the finalized standards and that they should follow the development of the epa, greenhouse gas emissions rules. let me just ask you, as you know, epa is currently working a lot of rulemaking. that would include -- it affects the utility sector certainly. the 316b cooling water intake will, the house on, the particulate matter to and have fools. so let me ask you this. with regard to those regulations what is being done to help epa understand how these rules collectively might impact liability? >> we have tried to be a source of reliability. a lot of our workers been focused because that has such a short time lines. but my colleague right behind me and the next panel, and i cochaired a forum that matt.

we have had meetings on 316b, coal ash, and a lot of the focus is on greenhouse gas. i think that has rules are developed we need to become mentors in the draft stage such as in the greenhouse gas rules that are coming out june 2nd. make sure that those rules are achievable while reliability can be preserved. and then if you look at the greenhouse gas rule, it could potentially make changes for the markets and infrastructure, make sure we are doing well we need to do to support reliability as those rules come and. so commenting and looking to make sure the infrastructure is keeping out. >> i hope on the front end you will do not just commenting but analysis as to what the impact is. it's kind of like the cost-benefit analysis. this is certainly a cost.

reliability is a cost. the talk about the price spikes. did not talk about potential for brown's which is also there. we have gone through a tough winter admittedly, but we really stress the system. now we're looking at a hot summer. at a paw were in need your input on the front-end to give them commons but also to be sure these regulations are not going to make it even more difficult for us to have reliability with all the issues, and the historic right to live models states in connection with utilities were responsible for insuring the construction and maintenance is adequate. who is in charge now? could you think is responsible? >> well, the state still play the critical in deciding where the generation goes.

a lot of that generation. in that two-thirds of the country including ohio better in competitive markets we are relying on the competitive markets to as san the investment signal to make sure that the generation is getting paid said it will stay on line if needed. so they have a big role to play. now we're in a major investment cycle and we need to make sure that they draw the investment we need. >> i know my time is up. really get into this issue for the next panel. i do think this reliability issue is critical and look

forward to following a. >> senator. >> thank you, madam chairman. >> my colleague who has just spoken i wrote to you both last month urging you having a hearing on the greater reliability and stability. what you to know how pleased i am that you did this in such an expedited manner. thank you. it's extremely important. there are two fields that keep the lights on, just to that keep the lights on 247365. gas will get into that position. they're not there yet, but they will get there. fees two phase alone fills provide almost 60 percent of our this country demands. and without the space low fuels are great can't function. we know that. we cannot keep the lights on.

i am having a difficult situation, you can imagine my side of the aisle. i just want the facts to come out which is why i asked for this today. now what you all on the front line, basically depending on can we have electricity keep the lights on. it turned nominated. airconditioner need. whenever it may be. with what we have come to right now, you know, coal still is 30 percent of our power, our national max. as you are thinking about the fact that nearly 20 percent is being retired, 20 percent is being retired. and the fact that epa proposed informants standard, effectively the construction of any new coal plants. so then you start looking and reliability, had a we maintain, keep it running. that's why i'm asking this of ministers and the look at how we

keep the lights on some people's lives will not be in danger. kohl is in the only base load fuel. in the current market conditions on likely that we are going to build any new kits. yet we may need to replace as many as 100 nuclear units by 2050. major liability crisis. 89 percent of the coal units that are slated to be closed. just to keep up with the demand. pjm. there being represented.

there were sent this is a critical time. even they can be straight. there were down anywhere from 50750 megawatts of of 140 plus thousand that are responsible. another tool in the two walks. 10,000 megawatts of coal-fired power. you're going to be sure next year. so i just would like to know. and i will start with you, chairman, your view of this, pushing certain kinds of fuel or looking at basically the portfolio that utilities have?

>> i do not think it is my job. it uses of generalized pride that allows different fuels to compete fairly. and so if there are preferences for certain kind of tools that was not a fair market. >> let me ask. we will go through in the second round. right now just explain as simply as possible this system, the way it works now. you have producers such as the p.m. for synergy. they are responsible for producing the energy that is needed that goes in through the transmission which is aware, the

great. then you have an arty as such as pgm who is response ability to make sure it is reliable and affordable and dependable. him makes this is and what goes on and what the reimbursement rate would be? if you are saying that we think your portfolio is out of bounds and we don't think you can continue to give us what we need who makes that decision? i want another coal-fired plant or want to get rid of that coal-fired plant. one more gas generation. we need more renewals. i believe, you know, in west virginia we are being blessed. we add all. coal, gas. we're using all. they just like it. >> p.j. and as an analysis three years out and says, how many megawatts will we need to keep the system on? in a run an auction where resources been. i have so much coal, this,

nuclear, some of the existing plants i will run at any cost. >> to make the decision on price? amelie going to reimburse you on what a gas turbine will cost even though i know you need coal i can't do that. it makes that decision? >> what you are referring to is embedded in the auction rules. i would say p.j. am, but those rules have been approved which is what we looking at the capacity markets correct in you overrule if you think they're not having -- of their portfolios and have a good mix? >> if they say we want to do this, we try to balance all of that and make the decision. >> adp or for synergy can come to you and say, listen, we are shutting down. we shut all the coal plants down because we could not get reimbursed. >> the prices are not working. they can come to us. madam chairman, can i just asked

, can anybody explain to me the price spike in the gouging and went on during his boulevard tax and what the people in west virginia will get it with? i am hearing it is unbelievable. they're getting almost double bills, double the cost to the utilities. can you give me a reason why? >> the simplest way to explain it is drying time where power was short because there was successive days of night and day unusual cold, generators to were reliant on gas and spend a lot of money to get emergency gas. >> why, the biggest debate take advantage? is the pricing structure so that we can't -- >> to the best of our knowledge of our analysis so far there was no market manipulation. it was actual supply and demand forces. demand for gas versus how much there was which no one has long-term contracts for gas? despite the price is every day?

they don't do that would call. >> some people have long-term contracts. the price spikes, if more people bid then there is gap. and that is what makes -- >> is not as -- >> more variable than a product. >> it we are putting all of our agencies -- eggs into that basket. so consumers in west virginia and around the country will be held hostage. is that fair? >> well, in 2010 we predicted through an independent study that we updated that last year. at that time the epa kerning four gigabytes. >> is that correct? >> there were off by a couple of thousand. we've been working with the epa. we're still trying to get the message out that overdependence on fuel, gas is very volatile to pricing and is not as reliable. the other concern is that there is not any discussion in the

value proposition of the reliability services provided by base load units of : nuclear such as inertia, balancing, control. the more we move this out into distributed than non dispatched and not can centrally controlled resources the harder and harder it is going to be to manage reliability on the grade. that is what we're seeing. units that are allowed to operate whenever there would like to operate creating the price issues and not adding to reliability. our role is to get that message out there. >> when you're saying it basically you can bring it on, turn and often on as far as the nobles, but you cannot turn off mix and you cannot turn of coal. once it goes a just got to go. >> that is where the base comes. >> senator. >> i'm so sorry. >> that is okay. it has been really --

[laughter] and we have a second panel that will focus on this as well. we really -- yes. this is a warm-up. we appreciate that line of questioning. as we close this panel and again, thank you. it is obvious that there are many more questions on subjects to talk about. we have a second panel that will add some light and eliminate the subject even more, but i want to put into the record, senator, that coal is a very significant base load. gas is now almost 30 percent and nuclear as well. you know, it has shifted quite a bit over the last camino, 15 years. some of it regulation, some of it market-driven. we are going to look forward to drilling down more. >> madam chairman, if i could have one quick thing on this. you know, i come from west virginia. we have been a large coal producing state blessed with

natural gas, fracking, really blessed with everything. someone came to me in west region and the citizens of our state said listen, we have a new super fuel out and it is commercial hydrogen. we will be ready in three, four, five years. you know what, it will be tough, but we would adjust. we would adjust. not here trying to push a product that you don't want. when we hear from people like you, we've got to have it and i've got an administration that is fighting the way they can to get rid of it, you have to have it but you don't want a you know you needed. somebody has to put the facts out. >> and thank you very much because you have been a leader and we appreciate your lead. as we end this panel to my chairman, let me express to you in the strongest possible terms my opposition to the application filed for the midstream abandoning of the pipeline. and you cannot discuss this publicly, but i want to call this to your attention.

the letter is in your file. needs to be responded to. again, this gets back to the whole issue of getting fuel to people when they needed to keep lights on. this is about pipelines and electricity generation, but it is an extremely important issue for both generators, middlemen and middle women and consumers. so thank you, and i am looking forward to following a. this second panel will come forward, we will start momentarily. [inaudible conversations] [inaudible conversations] >> ladies and gentlemen, if i

could reconvene the meeting. thank you. we have a large crowd. thank you for quickly adjusting panels. we have six experts on this panel, and we only have about 30 or 35 minutes left to go. now want to do this quickly, and i'm going to ask each of you to limit your remarks to four minutes if you can do it. i would really appreciate it because we want to leave time for at least one round of questions. first, representing for, perhaps from a different perspective. we're looking for to hearing that. microclimate executive director of president of operations at pgm, senator mansion you will also give us some additional insight into the line of questioning that you have raised . mr. nicholas atkins, chairman and president and ceo of american electric power, we thank you for being here. we also have mr. james hunter representing international brotherhood of electrical

workers. i am proud to have reunions here , what did you all do and a perspective they bring to this issue is very valuable. misters that hill, president and chief operating officer of count by corporation. thank you for being here. finally cannot revert to, we thank you for your views from the clean energy environmental defense fund for your perspective that you bring to this issue as well. if we can start with you, commissioner, and really we will all do well to four minutes of that we can have a very robust line of questioning. >> thank you, chairman, ranking republican, members of the committee. i'm a member of the federal energy regulatory commission since 2006. thank you for holding the hearing on this important topic. we have gone through quite a winter, complete any reference pastry of the staff and out with particularly starting january january 5th. i think we need to ascend appreciation to the thousands of people look up the system running, mr. hunter's members,

people who made decisions in a dispatch, they can't you're remarkably well in a system that was stressed. i have consistently said that we let the market decide which fuels of the winners based on economics and affordability, but it cannot be reliability neutral on this subject is too important. we have to maintain reliability. we went back and looked at the letter that senator murkowski room in 2011, and my response to my house testimony that year in which i call for a more formal process to analyze the potential liability implications of particularly environmental rules to my knowledge. that process has not yet occurred, but i continue to advocate for it. the reasons are as follows. a couple of unusually warm winters before this one and the system was stressed. in 53 weeks who will lose all those plants that now slated for closure. plans to retrofit generally have

a fourth year, sometimes with your. the fifth year is full of uncertainty. some of the other panelists will relate to that. so as referenced earlier our region has different show mixes depending upon where you come from. some areas more dependent on natural gas. we are seeing a lot of stress, particularly with prices, not only the cold plants, but also the nuclear. it should be kept in mind. specifically the midwest is looking and some challenges in the summer 2016 where they project a reserve margin that will be a deficit. now where the reserve margin has been moved upward solitude gigawatts it also depends on the fact that the assumption is that consumers will be using less electricity per year, and that is a pretty big assumption to make. we also have individualized situations. i reference one in my written testimony where the local area

is going to be in a conundrum as to how they move forward without a coal plan. on this issue we have a variety of opinions. executives who will say we can get through this without any problem and others that are concerned. my focus has been to try and keep the data. which plans to retire when the mall where they are in the system, what they provide in terms of not just power but bolted support is very, very important. some that has not been particularly effective in -- we are not exactly confident and a lot of the numbers. that has me very concerned going into the next two to three years . when need to do a better job in government working with the private sector, some time to file some kind of formalized process to analyze this. a lot of it will depend on the

weather. we might make it through. if we have extreme weather and the summer or the winter the system will be streaming stressed. and it reliability is paramount. people safety and lives are at stake if we have extended extreme weather and if the system is not able to produce power. thank you for the chance to testify. i look forward to your questions >> thank you so much for adhering to the time. >> good morning. tom want to thank the chairman, ranking member, members of the committee and staff. executive vice president of operations for pgm. again, as has already been discussed, going through a major transition as we shift from coal to gas and see significant coal reserves retire. as part of our responsibility to maintain reliability which is our prime responsibility. it has been mentioned we run a

capacity option where we looked at adequate commitments from resources to cover the expected low plus an adequate reserve. throughout the next three years we have, in fact, procured not only the minimum amount we need but in fact access. and with that we believe we will be able to maintain reliability. having said that, i will not tell you it will not be without challenge. our film makes is changing fairly radically. our increased use of demand response. kohl will continue to play a big role. it will still be one-third of our capacity going forward. however, the question we have enjoyed is, in fact a measure. being replaced by demand response. this may not be familiar command responses a contractual obligation for customers. the issue with demand responses typically is not available to us

until we are and are very near emergency and is typically extremely high-priced. one of the most highest priced resources. having replaced our coal resources with demand resources i would expect to see much more significant volatility in the energy market as we will have to rely on them more as being part of our capacity. also, as we mentioned before, we are moving much more international gas and in many ways we're going to be about one-third natural-gas. natural gas also has its challenges as well, particularly in the winter. has been a very good resource for us. prices have been affordable. during the winter when it competes with residential heating and natural-gas we do see some difficulties in managing it. prices can become volatile.

early one of the most difficult waters of been involved in. 1994 to c1. we saw extended periods of coal, demand response 20 the four nuclear plants are what are to the one to love to be. 22 percent forced outages on a system. i would agree, we are able to maintain reliability even though it was a fairly difficult time track. ..

>> and that is something i think we are very concerned about. i said 89% of the generation that aep will retire in 2015 was called upon to meet electricity demand in january. and that is a fact. we needed it. and it is a concern. those power plants will not be available after next year to help meet peek and the markets isn't supporting development to replace them. what we are concerned about is the timing associated with the transition that needs to occur so we can make powerful decisions about what happens to

the grid in the future and how we accommodate the resources attached to. even the market that is the most developed and i thank them and their effort for the operation, they are trying to support changes to be made in the capacity markets so we can adequately have a view of what new generations should look like in the pj markets. we support those changes and it goes to the notion of not having long-term price signals to support new investment in generation. and you are seeing that are retiring 25% of the coal fleet retires by mid-2015 and certainly you have heard nuclear operators saying they are

challenged and i believe it was said five units may come off the market. so concern that we ensure we can maintain that type of capacity going forward. 6500 megawatts will be retired and those no turning back. we are harvesting assets and making human resource decisions about moving people from those facilities to other facilities and it is a difficult proposition to close down a plant. they will close down in mid-'15. we are concerned about the additional closures that might occur as a result of impending environment environmental regulatory that could have an affect.

you are seeing the cost going up as a result of regulation and other activities and the markets are not supporting these long-term assets that support the grid. you are getting hit from both directions and that is why we are seeing the multiple announcements of retirement. the grid itself has many aspect, physical security and grid importance from a cyber standpoint. it should be based on the market threat and the combined impact of the environmental regulations and the impact it will have on the grid growing forward. thank you. >> thank you so much. nick hunter? >> i think he said everything i needed to. i am nick hunter and i am the

director of the utility industry. to put the situation plainly the united states is facing a crisis in power generation and it is caused by the regulations, the demand and the laws in the structure of the system. i have worked in the industry for 40 years and never seen our business generation in a worse place than today. many of the veteran members are telling me the same thing. we just had a conference with leaders in the industry and everyone is in agreement we in trouble. coal and nuclear retirements are being seen. we submitted back in 2011, our estimated of 56 gigawatts of

coal closing. at the time, epa was saying 4.7. this came not from modeling, but common sense looking at 40 year plants under 40 megawatts wouldn't be capable of staying in service. that number turned out to be right on the nose. that translates into the over 50,000 direct jobs coming from rail workers, plant workers and workers in the industry. take a bsl number uses 4:1. so we are talking about 250,000 people loosing their jobs over the next two years. the impact of the lost generation will be severe. we talked about how many plants were running during the polar vortex. we believe next year we are

going to be in deep trouble. we have been told that we can issue must-run orders but we are told you cannot allevate a civil lawsuit under the clean air act so where are the utilities going to be. i agree with mr. akins once you close a plant it is not reversible. we have people moving to other plants, moving to other parts of the industry and leaving the industry as a whole. we firmly believe the issues need to be address and congress needs to address this double jeopardy issues. baseload power plants are the heart of the industry. even the most clean and efficient plants, we know clinton nuclear facility ran at

100% efficiency and lost $30 million. if that doesn't tell you something is wrong with the market, i don't know what does. we have a situation where the only plants that can be built is gas. putting all of our eggs in a vo volitile basket. we saw many situations where less maintenance and people and we were not able to bring some units online because of that. and one plant starts the unit with gas, a coal plant, and they were not able stto get gas and turn the unit on. thank you. >> chairman hill. >> good morning. i am thad hill and the president

of calp corporation and next month i will become the ceo as well. we are an independent power producer with 29,000 mega watts and we produce enough energy for about 30 million homes. we are the largest gas generator in the country. it is worth to note that 90% are fuel oil back-up so we have dual fuel capability. the key message and we believe the competitive electricic sector can make transition from goal to a mix of coal and gas. the market isn't perfect. there are changes needed that i

will talk about at the end. but it is working. competition and free markets are a better way to pick than have the government pick winner and looser. we have a power plant under construction in dover, delaware and considering other investments. to talk about the polar vortex, we know the facts. very, very strong winter weather and came close to a noticeable disruption. 40,000 megawatts and 22% of the system forceded out and 75% were because of mechanical or operational failure because of the weather. and 9,000 were natural gas and only 1500 of modern combined

psychom. almost 15,000 of coal units were forced out. this isn't about over reliance on one fuel it was about operational readiness and i want to make sure we understand that because the solution is much different. we should have a higher bar of how we operate in extreme weather. i know it was said, but there are about 15,000 megawatts of coal plants that will be retiring and we are replacing with it 19 megawatts of new resources so we will have more and the summary of margin is 30% above where it is supposed to be and winter will be in bert shape. and there is three billion investment in the northeast.

so with all of that said, we think the free market is working but there are changes. the renewable product tax credit is dissorting the market and leading to premature retirements. you have billions of money that is subsidized that they run and are waiting for someone to take their power. they threaten the nuclear and coal plants. and secondly, demand response is a significant part of the plate. we are okay with demand resource competing but they need to have the same rules. they need to be available all year around and not just when it is an emergency. third is better coordination of power and gas and four is making sure the capacity markets are

appropriate. if you take a capacity payment you need to be there operationally and if you say you are going to be there you need to be. the first is congress' and the second is being handled already. with that, thank you for your time. >> thank you very much. >> ms. roberto. >> good morning. i am delighted to be with you this morning. i am the associate vice president of the environmental defense fund clean energy program. edf isn't your typical environmental organization. i served as a commissioner in ohio and i likely don't fit your stereotype of an environmental a

activist. we use market-based solution and draw on science, economic, and partnerships and bipartisan. the clear message i want to share with you is with or without new environmental regulations market-base changes are transforming our electric system but our electricity system can still meet our reliability needs. as a former regilator and aaa system operator no one puts a higher value on the system than i do. i am confidant transition can e happen without sacrificing anything. we need to recognize that the electricity system we built in the last century and the

regulations that governor them are no longer accurate either to ensure reliability or to keep up the changes in technology, environment standards or the market changes. our energy landscape has been shift and the change in fuel for large and electricity scale generators isn't even the most significant part of the transformation. the very model of centralized work is falling and energy productivity is rising. in the digit world, there is increase demand and power quantity are predicted to fall. as a result our system is

transforming from a one-way power delivery network in which passenger receive electricity and customers receive electricity. it is difficult to notice the power outages we suffer don't arise from the lack of generation. they are rooted in the distribution system and the transportation system. this grid transformation can enhance our reliability. we have every reason to believe we can seem together and it will meet our energy needs more reliablely and cost effectively. in order to realize the benefits of this transformation we need to release the invasion we see

in the states i strongly support active state engagement. or history and experience has demonstrated we can weather this without threatening our reliability. but we need to tap all of the tools at our disposal to ensure robust, reliable and integrated internally system that is no longer dependent upon management. thank you very much. >> thank you very much. that was eccellent. we are under a time constraint so i will ask one question and turn it over to mccowski.

the price of electricity currently, today, from a high of well, the highest is new york 16 cents for kilowatt per hour. louisiana, arkansas, wyoming are the low est. and i would like to submit the epa toxic rules. this graph is flightening because it isn't showing a mix of fuels, which i think we need. but it shows the potential of natural gas which i am excited about. let me ask you, can you reiterate your thoughts about gas as a baseload fuel for

electrici eleche trelectric production ans making that possible? >> thank you, madam chairman. the gas is perfectly capable of being a base load fuel and in fact it is around the world. the smell gas revolution is what chang changed. we have been blessed with natural gas that is very affordable. this isn't about government. this is about having a resource that is cheaper to extract than anyone thought. it is keeper to employ natural gas plants than other technologies. >> i am going to come back to a question about how exports could, or don't, i think they do, open to hear, though, the supply issues of natural gas

issues in the united states. but because of time i will move on. thank you so much. >> thank you, madam chairman. thank you to each of you for very, very important testimony following on our first panel here. commissioner muller, i want to recognize your leadership in this issue. you mentioned the letter back in 2011. i have spent a lot of time on the issues of reliability of the electric grill before it was fun and poplar and generated a full committee room of interest. when i posed a series of questions that started to prompt a more robust dialogue the impact of federal policy on reliability and we are finally getting traction. it has taken longer than i had hoped but i do think what we

have heard today just goes so much to the heart of this. i think if there is one point of agreement amongst everybody at the witness table this morning, madam chairman, it is we cannot be reliability neutral. we have got to ensure that the lights go on and that our electric sources are there, they are robust, they are reliable and they are affordable. i want to ask a question and this is probably director to you mr. akins and mr. hill. we are talking about moving from coal-fired plants to gas-fired plants. and mr. hill you spoke to what is online in terms of investment out there. but how confidant are we we are

going to have the gas pipeline infrastructure that can be placed in service in time to allow these new gas facilities to enter when we need them for reliability? i am concerned how this all knits together and i am not convinced we have a good handleal on what the investors are doing with grid opportunities to move toward gas. but how do we get it from here to there? >> i will try to address that. and thad, you can take over obviously. but as we have been retiring generations, we put in 5,000 megawatts of natural gas facilities. it has to be done in the measured way because you are looking at the resource and the able to deliver it. from a natural gas perspective, if we are continue to depend on

it more, we need to make sure the underlying grid is just as reliable. >> do you think you are talking enough about the reliability of those systems, though? >> i don't think so. i think there is a lot of work through the federal engineering commission on the nomination cycle relative to natural gas but the pipeline activities are being looked at. the issue is the timing of that transition because naturally there are parts of the country in midwestern parts that natural gas wasn't that prevalent. that is in the southwest areas that it has been prevalent for

years. >> mr. hill, your comments. >> as i mentioned in my prepared remarks there are billions of capital being spent on this program and $3 million in the east alone. what is is driving that and producers want to get their product out. you had gas at a low price in pennsylvania and gas at 100 btu down the road. there are a lot of gas producers that will spend heavily on pipeline expansion. so the time period we are talking about, 2-3 years, the investment will follow. longer term we should play close attention to this. >> senator baldwin. thank you so much for your presence today. >> thank you and thank you for

convening this important hearing and i want to thank my colleagues for letting me skip the line. i was not present for the questioning of panel one and i intended to ask question about large power transformers and will submit and hopefully week we can hear back. thank you panel two for year here. commission commissioner muller, i walked in just as you were finishing up talking about capacity markets. given that examination of the winter, i would like to hear if you think they are performing as they should, are you considering any changes in the constructs

and is furc planning to receive any steakstake-holding informat for the challenges over the winter? >> we had a technical conference on capacity markets and extended the deadline. the staff is analyzing that. it is ongoing. there is a lot of interest. i cannot tell you where it is going because i am not sure what the options are. but one of the question is should we assign a higher value to generators who have on-site fuel. is there greater value that is not being recognized now.

did they work as intended. the system worked but the prices were very high and a lot of that, though, was as referenced before to capacity constraints. you would have gas hundred miles away trading at the nation levels but 20 times that where there is constraint. be happy to talk in more details so i don't take up all of your time. >> i will close a quick comment. wisconsin is no stranger to extreme weather and cold. and we had fierce conditions this last winter. negative 30 degrees in some communities. and i wanted to stay that things actually worked pretty well in the state during this extreme weather with regard to electricity. the chair and i talked a lot

about our challenges with propane. but american transmission company and miso operate in wisconsin and their transition lines and other facilities fared well. so i am wondering if wisconsin's success and experience during the extreme weather can serve as success for other renal regions. >> in future hearings, we want to hear from different parts of the country because i do think we can pick up the best practices. i think getting more of that on the record in washington would be helpful. senator mansion you were going to get the last word. >> we are limited to one hour.

>> he has ten minutes or less. >> okay. >> i want to thank you again. this hear extremly interesting. commissioner mular, i will start with you. some commissioners believe furc doesn't play a role only in oversea rates. will you tell us how much input they have? >> we essentially create policy almost daily in terms of the precedent that is set. >> is that how energy is going to be produced, delivered or everything? >> we don't have a role in generation outside of our role as regilator of hydro power production and that is primarily

a safety and environmental role. >> the question was with pjm, if they are not able to and you see they are not able to produce because they don't have the power or reliability, are you able to step in and give them the ability to keep running? >> we call those reliability must-run contracts and we have several that have been approved in the last few years and probably anticipate more. that was the essence of my testimony. i think we need a deeper dive into what is going on. >> it would not be accurate to believe you don't have input in the policy or directly of generations.

>> can you reverse closures you made if there are issues? >> there maybe areas it is a possibility. but we have known these units were going to shutdown for years so like investing in the bottom of boilers to keep those running. you would have to put a substantial amount back in the units and you would have to step back up. we are running with skeleton crews. >> are all of the units you are taking offline the older units that were not scrubbed or had not met the clean air act? >> they were the small subcritical 200 watt units. >> have you taken anything

offline that meets the clean air standard in the pass? >> all of the units we are taking offline don't have scrubbers. i think one has a cat cad latic device on it but it is about changing the rules based on what is available but that takes time >> were you certained when first energy -- concerned -- took off critical units? this unit met the standards. >> they felt economically the unit wasn't viable going forward. >> that the because of pricing? >> it is based on the prediction of what they thought the future revenue would be. it was a business choice made by

them. >> and you didn't get involved? >> we did to make sure the grid was reliable >> what is the average increase of bills people will get hit with? any idea of how much they went up? >> that is very dependent on what kind of rate they have. >> what kind of prices are you paying and you will be passing on that. >> the average price was well over $100 mega watts. >> and that could double a person's fill? >> variable rate, yes. fixed rate, obviously not. >> should we open the gates? i think senator landrieu addressed bit. but we have people wanting to

export lng. should we open the gates on the exports? >> senator, you know, our view is in most things that are free market should be allowed to work. you know obviously there are questions about if you were to export lng or anything else whether prices go up. >> knowing the price of gas do you think this would be a good policy decision to vote to open an unfeathered market when we will be needing so much of this product? >> i will say this about natural gas: there is lots of it. >> they told us this before and it didn't turn out. i knew how much coal was there because i can see it. i cannot see the other voe so i

am taking your words. i am a market and we are making everyone shift because of the policy. now if i can ask anybody who wants to chime in on this do. do any of you believe this government's and energy paul ses is insync are reality or ahead of the curve. >> i knew i should have cut him off. >> i still have one more minute. >> we are ahead of what can be done. are you being put in a bind and your shorts are really tight. go ahead nick. >> i will take a crack at it. >> here is the issue. i think there needs to be a more

thorough and thoughtful analysis. if i would encourage anything it would be the for epa and the environmental agency to get to together and talk about the environmental policy and the framework of other activities occurring around reliability. that is what needs to be done. yes, we are in a box. but it is because of the aggr s aggressive timelines put in place. we are adjusting to that. it is going to be vulnerable for a period of time. there is a transition occurring. >> the max rule, there are lots of other debates out there including climate change and other topics. but there is no debate that

mercury is bad for your health, this is causing smog and r respiration issues. the 89% of the units that were talked about that are retiring are on average over 50 years old. so i think maybe there is a question about how you implement it. but there is no doubt the rules that you talked about. >> thank you so much. senator portman and senator barrasso and then we will have to bring the meet to a close. >> the questions i was asking earlier about the reliability to the first panel i wanted to tee up for you all. so if you have comments, jump in. let me go to the issue of how do you have a epa coordination and

furc and adding dle to that and the private sector to figure out with the utilities to figure out how are we going to have this reliability? we came dangerously close this winter. and my understanding is we came so close that people found their lives would be at stake because people do lose lives when the grid goes down because they rely on it for heat and you have to have electricity. you have in a box and we have a problem with consumers having to pay more and not having the reliability we should have. i understand we need regulations

and some of it plants were old, it is true. but some had upgraded equipment on dealing with environmental concerns. my question is the accumlative affect of the regulations isn't being analyzed, there is no coordination with the utilities and new regulatory model which as we talked about earlier is no longer a model where the state is in conjunction with it. what should we be doing about that? who wants to jump in on better coordination and we will not run into this this summer if we have a heat wave and another polar vortex. mr. hunter? >> thank you.

i think it is a great point. these hearings are very much a like. we are depending more on transition grid and cyber and physical security. i came from a substation here at pepco. we have got a very vulnerable grid and we are making it more so the more we close down. 316 b water rule is going to affect nuclear and coal as well. we are beyond talking about 56-60 in coal plants. we are talking about the possibility of closing down nuclear and super critical coal. it is an issue that needs to be addressed. i had in my comments that the coordination and the cost of these new rules and nrc needs to come into picture. we have regulatory rules coming from the nrc that have

significant cost impacts and we are not looking at them from nrc or epa. >> i probably just offer one thing. we asked for and got the safe reliability safety valve and i think that is important going that allows that analysis to happen and hopefully people to look at it and if we see the reliability problems we will be the first to speak up. nick is right. a lot of this is about time. we need to make the time and the time to make the transition. if you give us that time, this industry is robust. it is more about the time. >> but the problem is we have all these plants shutting down by 2015 and 89% of that power would have been needed so as mr. hunter said earlier when you shutdown and people leave and they are dismantled and you can what bring it right back up.

and i appreciate about the fact there is more distribue power coming but in the meantime, 2015 is right around the corner. and my question is what can we do about it now? >> i think we should take the time to get this right. i don't know what that means in terms of legislation or other activities that can ensure the right parties are coming together to make the situation better but there was this notion of grid security around cyber and physical security come together and it is a national security issue and one we need to be thoughtful about. with you think about the issues that can occur, certainly we

talk about first contingency out ags. when the system is stressed, we plan around those events. when we take away resources that provide pow skwr this is a larger focus, the reactive power that many of these facilities provide that maintain voltage on the system. they maintain the integrity of the grid and solar roof tops and many others don't pride that resource. it is incredbly important to think about the power needed to serve and the services used to facilitate the grid operating properly. >> thank you, senator. can we hold that? senator barrasso?

>> thank you, very much. you said you are concerned the epa has quote greatly underestimated the amount of power that would be retired due to its rules and you have been calling for a review and proposed that others participate in this analysis and explains as far as you know this analysis has never commenced. can you spread analysis on why you think the analysis hasn't taken place? >> thank you, senator. i have wondered that many times myicism because i think what is the downside. they are not our rules that are driving this. they are epa rules. we have been in an awkward situation. there are informal communications that have done on. i know that epa calls the rto's

or they call them every month. i know we just need more transparetran transparency and rules on this. it isn't just the april '15 rule, but it is an accumulation of the rules and the reliability con consequences have to talk about. >> that is my question. is the head in the sand or are they actively opposed to conducting the results? >> i don't know their motivation. >> mr. hunter, in 2011, your union and several others testified about the impact of the then proposed regulations and i understand the union's predicted it would result in retire of 54 gigawatts and that

represents 56,000 jobs coming from mine, rail, and power plant workers and you said they will fall on rural communities heavily where most of it the plants are located. who do you think the epa has ignored the concerns of your union and other unions? >> we have asked that question many times. we met with the epa direct and staff and they sat with their numbers saying we are going to be fine and it isn't going to be a big deal. but now it is showing it is a big deal and they are furthering more regulations and everyone of them has a cost and every time there is more cost we see more plants closing >> do you think the epa takes

the jobloss serious when they issue regulations? >> i don't think they have taken into consideration the cost of their rules, no. >> in your testimony, you explain that steps can be taken to ensure reliability of the electric grid. you explain power plants maybe directed to operate under what is known as must-run orders but you note a must-run order doesn't exempt to power plant from civil lawsuits or federal penalties under the clean air act so you stated congress must address the double jeopardy issues from the must-one and the fact they can be sued under clean air act. would your union support legislation that exempts plants under the must-run order? >> absolutely.

>> thank you very much. the record of this committee will stay open for another week. i encourage anyone to submit additional information and ms. roberto thank you for your pace and i know you have additional things to add. the meeting is adjourned. [multiple conversations taking place] [inaudible discussions] >> with the senate in recess, we are bringing you highlights from booktv and primetime all this week. tonight the topic is human intelligence. elizabeth colbert on her book the sixth extinction and then

our final invens and then the future of the mind. the quest to understand, enhance and empower the mind. booktv all this week on c-span2. on c-span this week we are presenting five of the notable oral arguments from today. mccutcheon versus the fec is today. here the arguments at 7 eastern on c-span. and tonight at 8 eastern on c-span. casey sherman and dave wedge mark the one-year anniversary of the boston bombing from personal stories from those in boston that day. they are the authors of the up

coming book "boston strong" here is a preview: >> the family had a decision: to go hiking or chose the marathon. they chose the marathon. when they were in this position at form when the first bomb went off, bill richards, he knew it was a bomb. a lot of first responders thought it could have been transformer fire, a cannon used as part of the man hole fire. bill richards new it was a bomb and he had to get his family away from there. he jumped the barricade and got on to boil street. >> they were at the second bombing. they heard the first one and bill reached over the fence and

grabbed henry the oldest boy. >> as he is pulling henry to safety, he is reaching to his next child who was martin and that is when the bomb went off. we learned the family was targeted. there is fbi surveillance film that shows him casing that family going back and forth. how do you rip the heart out of america? you chose on all-american family. martin was still alive after the bombing for a few seconds. and the only words he ever uttered were where is jane? and jane is his younger sister. and jane wass almost torn apart.

she lost her leg. her life was saved by first responders. their mother dennis suffered severe injuries to her eye and other parts of her body. one of the things that we found out in the course of writing this book was that the day of the bombings as martin richards body was there on the street because it was part of the crime scene and they would not remove it. the boston police were outraged. they wanted the victims off those streets and reunited with their families wherever they were. and one boston police officer said i am not leaving this kid. not tonight. and i am going to stay with him because i want his parents to

know he wasn't ever alone. that is a hero. it is incredible what so many people did in the wake of this tragedy >> watch the entire discussion marking the one-year anverse -- anniversary at 8 eastern on c-span. and a number of colleagues are sharing thoughts on the anversely. the new york senator says: al franken and saying minnesota is boston strong as we pay tribute to the the family and the strength of survivors and the courage of those rushing to help. and ann wagoner from missouri posting one year ago the people of boston suffered evil but they

showed the light of humanity. jenna mccarthy talked about her agency's new rules on greenhouse gas emission that is expected to be released in june. it is hosted by the bipartisan policy center looking at the regulations and best practices of state and how the industry is addressing greenhouse gases. this is 50 minutes. >> good morning, everybody. we have a long day ahead of us. i am president of the bipartisan policy center. nice to see everyone on a crisp,

sparkling morning. we have had three of these and scheduled four of them and every time it is dereary and drainrai. april showers bring proposed rulemakings and we will find out what those are. this is the third in the 111 trilogy. we are delighting to be here with partners. and before we get into the panel i will say a little bit about the day ahead of us. our first workshop was in september where he layed out the aspirations of this tricky session of the clean air act.

and then we got together and focused on economic modeling and today we will talk about the efforts companies are taking to reduce greenhouse gas emissions and the effect section 1-11d can have. before we start the fireside chad and i asked folks to roll out the flat screen tv and they listen to me all of the time. but we will have a comfortable and engaging discussion. our first panel is with poc commissioners sharing perfective on existing state efforts and how they are proceeding recognizing their is a tremendous flux of change in the electric power sector. our second panel will bring together leaders and companies that will discuss efforts

underway to diversify and the implications of 1-11 d and the third panel is going to focus on energy efficiency and look at questions critical states are looking at how to integrate and use this efficiency in their framework. and finally we will talk about multi state efforts and regional approaches. eelectr thinking about regional approaches in the power sector has proven important. today's event is being livestrelive p livestreamed. we would like to give a shot out to all of the folks in your basement at home watching this. and so finally let's get this underway. i am honored to introduce two good friends.

gina mccarthy and colette honor. they have risen to national prominen prominence. i met gina in the 1990's in boston. she has roots in boston and you might get a better sense of that. administrative mccarthy joined the epa as the assistance for air in 2009 and appointed to the role of administrator in 2013. colette was elected to the board as president and ceo of the national association of reg lor tory commissioners in 2013. we will enter into a little interaction about this

rulemaking that is underway and you can start off and ask both of our speakers to say a few words and we will kick it off. gina want to take the lead? >> it is great to be here and in front of everyoned this morning. colette, always. wonderful to be here and thank most particularly for helping engage the energy world. energy and environment are two sides of the same coin and we have been working hard to bridge that gap and get an understanding of the fl flexabilities states the are looking for. the president made it clear in the climate action plan that epa had a significant role to play in the development of many actions but in particular the

1-11 b and 1-11 d. the challenge was to make sure we were crafting the rules that were supportive of a vib nutrievibrant 21st century economy. we have to understand the energy plans and the way we look at the energy supply and we look at the national opportunities to reduce carbon and face what we believe to be one of the most significant public health challenges of our time. ...

my goal is not to sit land with the states are doing, but to support it. it's to be able to look at state and the leadership they are provided and to translate that into opportunities for us. opportunities to get a really good good, clean, vibrant 21st century. i think climate change threatens that for us we wouldn't be doing these carbon pollution standards. but i think if we work together, we'll find a way to move this forward and tried the innovation we are looking forward that will provide all of us who secures the future. thanks. >> thank you, gina. colette. >> thank you, jason. it is a delight to be here.

she's got me beat. she's got a quite a few engagements today. i have quite a few this week. but it is really a delight to be here with you, certainly to be here with their friends at the bipartisan policy center. jason is a dear friend and it's a pleasure to see senator dorgan work on the energy project, which is really a breath of fresh air dimarco held to herd us when we were led astray from time to time about the issues. there's so many papal passion about this work. it's important work at roff cabana think to reach the cat. i think our work on the tivoli is another example of the way in which we can collaborate. i agree with gina. this work is not mutually exclusive. there's so much we can do when we do it together. i want to also publicly acknowledge she enough for your

leadership. gina certainly isn't a stranger. she's fearless and she would, take a follow-on even before she was an administrator. it really has any privilege to engage with her. i mentioned to jason i had of our beginning this morning, by the way, you're getting a demonstration about the differences and accent this morning. you've got austin on the right to my southern soil acts and tear on the last. but i was mentioning to jason that would really hit home for me in terms of good news after to bridge this gap of environment and economic regulation was the meeting we held a believe it was an unprecedented meeting the white house with all of the energy principles in the obama administration in the executive committee. we plan to go there and to take a resolution on 111 d.

i hope to talk more about that in our discussion. the new tech from the white house that we have the resolution we want to thank you for it. so they were on top of it. we are speaking the same language that my messages i hope the states can be help all and miss work that gina has ahead of her. i don't see any need to reinvent the wheel. i want to thank my colleagues. those commissioners in the room, will you raise your hand? with quite a few here today. there's some commissioners emeritus in the room as well. thank you. there's so many commissioners across the country who represent diverse states, regions, fuel mixes, states who are well ahead of many others in terms of renewable energy standards, methane emissions, greenhouse gas emissions and energy efficiency programs.

and so we have so many tools in our toolkit. we too have been delighted to engage more significantly on this issue 111-d not only with gina and her team. they've been everything every single one of per meeting recently and i hope i'll be there next one in july. >> because a committee meeting meeting in secret sin just to keep us out. >> that's right. even with industry, with edi and many players interested in this as well. i look forward to the dialogue and thank you him adjacent for getting us together one. >> two women who are both triple threat. smart, strategic and shockingly friendly. it is a powerful advocacy accommodation over the course of the next several months. >> it's disarming. you don't see it coming. >> is a friendly conversation. he got that notice of proposed rulemaking in.

what does it say? just kidding. [laughter] were seriously coming you mentioned you've been on a whirlwind tour and has been unprecedented. i'm just wondering, what surprised you? what have you learned are these discussions do you anticipate going in? >> i think -- i don't think that the broad interest surprise to me. i mean, clearly this is an important role. it needs to be incredibly, smartly crafted. >> my son has the same issue. >> giving it away already. rightly crafty to make sure it provides the flexibility states need while continuing to provide the kind of an pates for carbon pollution reductions that we need. i am not sure that i was

surprised, may be presently surprised frankly at the tone of the discussion. i am incredibly pleased with the way in which the discussion has been both respectful as well as engaging in a positive way. the meetings did not spend time talking about the science of climate. it was not about climate denial. it is about the fact that many understand the climate is changing. they are concerned about it. they want to take action, but they want to make sure the action is measured in flexible enough to states can to need to do their thing. states out in front can continue to be there and get rewarded for that and recognized for it while states that haven't yet gone down this road can crafty way to do that in a timeframe that will be meaningful for them, that will provide them the opportunity to gear up and do things that they believe are

useful to their energy system as well as our collective environments. so i guess the surprise was its gone better than i expected in terms of being a very positive engagement and providing us with a ton of things to think about, which is probably a downside as well. we've had to do a lot of thinking about this. the good thing if it is an interagency review and it is i think the kickoff of the next round of discussions. there's no way we are going to add. [inaudible] >> yeah, absolutely. i'm kind of looking forward to it. >> you mention there's been an unprecedented amount of engagement in which i think was an acronym not everybody in this town knew in the last several months. flash forward a little bit. you mention the engagement of the economic and environmental power regulators is different.

do you see that having a lasting effect as we move forward not only to implement the rule, but in the way states think about the energy environment? >> indeed, indeed. i might take a moment to advise those attending that they feared newark is celebrating its 125th birthday. we were formed in 1889 and were comprised of economic regulators , regulators of public utilities and this work touches every household, every bit as. so we're very proud to support the work of our member states and u.s. territories. getting to your question, what do i see in the future? i think it is a completely new tag. at beirut, it has been both internal and external. internally, we have not only our task force on energy regulation and generation has been working very diligently, let by chairman

a caliph of colorado and commissioner of the tele of maine, very diverse group of participants. our lecture committee, our electricity committee, energy resources and environment committee, it even are clean and close clean coal subcommittee and numbers throughout are very interested in working daily, literally, on these issues with our team headed by highland smith and chuck wright. so the work we're doing internally internally is very different. the engagement that we've had with gina singularly is refreshing quite frankly. but also with her team, we've met with them at a number of meetings, workshops. our region's hazmat. we've had conference calls. it's unlike anything i've ever witnessed within the organization, let alone the federal agency.

>> so taken forward, talk about the role of the rto transmission organizations, the rulemaking process, but also how significant a role do you think those kinds of institutions are going to have quite >> well, i will be a little bit political and say we have to see what the rule says hers. certainly, i think to win our resolution issued in november 23rd team, we requested that epa consider giving the state the flexibility to fashion solutions that work for them, work for them and their respective borders based on the diverse field mixes around the country, but also regional efforts that could be a veggie solution is offered. it could be one that contemplates, for instance, the proposal put forward are the rto, rsi council. my point is that the states are roping. i think we have to see what the rule says in order to be able to fashion a response thereto.

>> could i just add that, you know, i know i can be telling what the rule says, so please kick me if you think i'm getting on the verge of doing that. >> i'm going to definitely shut that down. >> i did bring a copy. you can get copies of the proposed rule. but i did want to say that i think the energy world as a whole, including the isos and rto's are going to have to be a strong voice in that. whether or not they are an active participant because the president made it really clear and i think we've said it over and over at one of the reason we are doing so much outreach to the energy world is nothing we do can threaten the liability. we have to recognize in a changing climate like the one we've recently been experiencing , it is an increasing challenge to maintain a reliable energy supply. and so, we have to get this

right. his idea of putting out a climate change plan was not to have a bunch of individual actions that each of the federal offices in the disease went in there a little huddle and came out. it have to be comprehensive. he's forcing the discussion at the federal level if need be and he is demanding that we make sure we reach out to the folks at the states in the region who really know the intricacies of the energy supply and can help us understand how you would frame an environmental role that was informed by that. and that would support the efforts that states are taking. they're going to have to be an important voice whether or not they are part of the exact solution. >> i applaud the president on this work. certainly the regions will have a role to play. the nuance here is something we have economic regulators have been dealing with since 1889. who's on first.

the states, and this is something we address in our resolution as well. we ask epa to and i appreciate your recognition of assuring reliability first and foremost. states are the sole entities that jurisdiction over things such as resource adequacy. those sorts of things. we have done this work very well alongside a regional entities, which are under the purview of ferc and i agree the regional, rto side, undertake such significant work not only in building out our transmission infrastructure, but insuring the generation. needs to be in those states where there are members who participate in rto's, isos, but we can't allow utility regulators, and i don't think they will or should or can to

check the duty they have. it is a duty that they have to their states and repairs. so i think it is something we will continue to work through. >> we been dancing around that has been a bit of a challenge for the nation for the last 250 years. while i think there is clear recognition of statute contemplates the states have been the fund mental obligation, you are putting out payments. there are some expectations. i wonder if you could speak broadly. they recognize all the flexibility, collaboration, regionalism. is there framework you think about which will be sent to look for christ aboard? >> yeah, we will be teamed up a number of ideas and taking comments on what state plans should look like in the timing for the state plans. we've heard two things. one is that going to have to look like others they plan in the clean air act, how are we going to get them done in this

timeframe that the president is interested in. and also, how do we allow adjustments in that play in overtime? might be other issues we heard was that we need -- the states their interest in and time frames that are achievable over the long-term. and so, it presents a challenge to us. the good thing about 111-d is the good and the bad. it is not very well defined because it hasn't been used that many times. there's enormous flexibility in the definition of a state plan and our ability to look at the timeline for achieving maximum for submitting the plans and achieving the reductions. we are going to take full advantage of that in this proposal so we can have more concrete discussion as we move forward. so we know what the fundamentals of a plan has to be, at least to the concrete enough to understand that states will over time be able to achieve that

guidance that epa issues. but it is announced the collaboration between the federal and state government. this is a partnership if there ever was one. so we are going to treat it that way. we are going to nurture and in the end we'll find a program we all can embrace. >> talk a little bit about timing. i mean, how much anxiety as they are at state level? as gina points out, this is a collaboration, which of course is a blessing and a curse. there's a lot of work to do. state resources are not in wonderful shape. federal government does not provide support. state budgets are tight. what is your sense to the states have a sense of the window you hope you're have to work through the internet process quite >> let me say first i don't envy the job that gina and her team have here, but from a state active, it is tight at best.

i can assure you that all of us in june of this year will be weeding, day by day, for this rule -- for that guidance to come out. quite frankly, we have urged our colleagues to reach out to their environmental regulators. we've done that americans because we know that we simply will not have time to begin from scratch. we've already met with our utilities. we've had joint meetings with their environmental regulatory team, economic -- at the u. s-sierra is with all this work in arkansas that is very important for the economic regulator if you haven't already to begin reaching out, to begin informing the environmental regulator about the work happening to your psp because you have to move very, very quickly in june of 2014 to be

able to propose some work the following year. it's a very, very tight timeline. when i mention it's a new day, it is certainly a new day because we are engaging with our colleagues at the environmental regulatory commissions and department like never before. very different from the work of one alleged in the end so many other efforts. it's a very good thing. quite frankly it is something that should have happened before now. we have to work very quickly on a whole male dynamic, a whole new regime an entirely new way of thinking about work that we do and it also impacts industry in the same way. so it's a very short timeline. >> we been talking about the timeline as it relates to states. there's a lot of concern and questions about sites.

the statute explicitly contemplates this idea of useful life, which of course are two nice words, useful and life and you put them together if they are nice. what do they mean as you think about the obligation to put the roast together in ways that understand to knowledge you try to up void assets. not an easy task. how are you thinking about the stiffer challenges? >> i think what you just stated is exactly what it means. and it's looking at how you can provide what opportunities the flexibility they are that we have to ensure that goals can be met in a variety of different ways that they don't exclusively need to be that by putting very expensive technology on facilities that won't be around for a while. i think that we heard ultimate activity about that issue when we were out about who is going to be responsible for all these reductions. this is a new day in many ways

as: it indicated. you know, there's challenges with visceral, but for every challenge is tremendous opportunity. you know, when one thing doesn't make sense, cut love others might. one of the things is very encouraging i.t. is the expertise at the state level and many of these issues as well as the fact that states have been doing integrated resource planning. this sort of know what they want to head. in many ways if you do in our mental rule that regulates carbon, if you can follow where the states are having and underpin that with significant carbon pollution reductions, and you've got your answer and it's apparent than it should be clear and we should be able to figure this out. >> been impressed on us a little bit. if you have you have been at this for a little while. you can't coach redbaiting and not here one way or another that

all of our goals are aligned and if we could just be given the time to respect those technology cycles so they can retire the facilities we want to retire, we could achieve these goals much more cost effectively. intuitively, who could argue with? but then i flash back to 1970 and i was alive and walking in the basic idea of the clean air act was bad. we are going to provide some time because all the facilities were on the verge of retiring. we were going to bolt unnecessary to those facilities and then look to the future. welcome to the future. we look at many of the same facilities today. have you think about the agency and collaborate to get that rate for the first time? are you afraid for a look the same facilities? >> i understand your point and,

you know, i think the challenge of doing a carbon pollution standards is that this carbon pollution standard is federally enforceable. it is going to be a requirement. it's not going to be an aspirational goal that if everything else goes right it has to have been. we are going to be looking at the state plans to determine whether or not we are forming with the guy and with the productions that are going to be required. we are going to recognize individual stays. but were not going to rely on an aspirational goal that is integrated resource planning goes well, then things should have been in the way we want them to have been. in anyways it is going to be, you know, challenge you get into ices be as flexible as possible, but that doesn't mean it's going to be so flat above that i won't be able to rely on this as a federally forcible role to

deliver carbon pollution reductions at the level that are guiding does. >> now were talking. colette. >> the resolution, the number of import things. it clearly said we have momentum. we have momentum because of the planning, because of changing geology could watch is provided incredible amounts of natural gas and the transfer of in the industry as we can imagine in the basic gist i took away was the statute carol. >> indeed. have you think about that. measurements, and for ability i do talk about the early reduction? >> so i think reggie is a great example. the full absurdity region to reduce greenhouse gas emissions,

excellent work. our colleagues in the northeast are leaders indeed. however, we aren't paying let everything count. we are simply named epa, let's not reinvent the wheel here. there's so much great work already have been. robust energy efficiency resource candidates across the country where we are, let me tell you, i'm learning more about you and the than i ever thought i would know or care to know in my lifetime. we are working very diligently on renewables. if you ask me tell it is, they will tell you i'm asking about that. what are you doing in terms of planning for renewables to or integrated resource. we are saying let's throw it all against the wall and see what sticks. we are saying we have demonstrated proven cleaner energy offerings that would be a

shame not to acknowledge, allow these efforts going on across the country to support the work that gina and speaking of. i agree with gina is no reason why we can't find the solutions as we've worked diligently in the past. timing is going to be an issue. getting to the nuts and bolts of do we need a common standard for measurement of energy efficiency savings, the source of things. we have to work through those issues. will there be common standards for renewables and how those might count distributed for demand response efforts and how other renewable programs throughout the country will play a part. that's a harder tire. but that's also the part that we as economic regulators are very committed to. i feel compelled to mention this absurd about how do you wind

down or shut down these coal plants where there's in investments? all these sorts of things will weigh into this effort. the economic regulators role is to ensure safe, reliable utility service at just and reasonable rates. so we only approve those costs that are necessary for the operation of utilities nervous. and we are useful. we acknowledge there is a lot of this were that will calm dement support the epa work in the first instance to ensure reliable and safe service. >> that obviously is a critical question going forward. the politics of early reduction or test. it's very hard to use -- here's the line. it's may 15th -- may 13,

sorry, may 17th, good to go. we saw in 1603 e. when everyone could put into the register it just became a crazy hot mess. we post it sometime time in the northeast with the terms for the jet stream always felt we were ahead of game. no good deed goes unpunished. we have people in different parts of the country. it's leaving the country and how can you give credit for this. how hard is it to say because? >> you're beginning to depress me. it's very early in the morning. we should try to keep things a little later. >> i think, you know, i think our challenge is to try to

asbury state not in the same place. you should recognize that in almost every state does not have the same opportunities for reductions in the need to recognize that. we also need to make sure to do a 111(d) proposal. we are not trying to develop a cap-and-trade program. it's not how you look at early reduction can capture those, but the challenges to stay within the legal constraint of one 111(d). epa is not using its own vision of what it looks like. we look up at the energy world is. we are looking at what people tell us who know the energy world that's where it's heading and we are trying to find the opportunities for the carbon aleutian reductions we need. >> let's talk a little bit about

the implementation no one litigates moving forward. >> no one litigates. i'm happy again. >> i want to talk about two topics. you talked about energy-efficient and renewables. integrating and finding ways to make these apples to apples is always a tricky. epa is working pretty hard to put together and support the kind of model rules, model guided. they give states the opportunity to opt into some kind of baseline. is that a fair assumption? >> at the fair assumption that folks have asked us to look at a variety of tools that epa is familiar with traffic on those in regional affairs and we're looking at those flexibilities and we see great opportunity