mega watt hour scale would have incredible applications in the electricity distribution system. it would make our electricity distribution system much more efficient. all the little ripples, you know, you have a few major generating stations. they distribute out herement you purposely overfill today to -- and if you had little batteries of, you know, kind of that size scale popped here and there, it would have a profound difference. the energy storage is $350 a kilowatt hour. it goes viral at that rate. and so energy storage for renewables, energy storage for making more efficient distribution system, energy storages for a sound er more robust grid are helping that. >> dr. chu, if you could send me

the document that reflects this strategy, that's what i'm really asking for. all i can see in terms of documents is the proposed cut in storage at the office of electricity. i want interested in debating that. what i wanted to see was something that would lay out a strategy. as i said, i have gone back sur several years. if can you get that to me, we'll discuss it back and forth. but what i really want to see here, that i think would be unifying in this committee is an actual strategy so that everybody would understand what the potential is and where we want to go. thank you, mr. chairman. >> just ten seconds. yes, the office was cut because what we decided was it was much more appropriate -- it's increasing dramatically in office and science and in ere. and so we were trying to

consolidate where we could think it would do the most good in terms of the level of program management. and so overall, if we gather up all the pieces in energy storage, it's going up. >> senator portman? >> thank you, mr. chairman. to the question as to whether energy storage is part of efficiency, yes. it is. and part of using our system more efficiently. earlier we talked about your commitment to a new enrichment technology that gives the united states the ability to get back on the cutting edge in terms of our technology, great advance and manufacturing jobs and also be able to supply our energy needs and from the national security point of view to deal with our need for dealing with the nuclear arsenal. that comes from domestic sources of enriched uranium, correct? >> correct. >> is that the policy this administration we should have a

u.s. source of low enriched uranium for production at tva? >> it's not the policy. by treaty, we're obligated to have u.s. sources to create it. >> so this is a requirement that we have a domestic source. with regard to other activities, a huge campus and by the way would once again extend an invitation to you to come out. i think you would really enjoy seeing what's going on there and see the incredible work that's been done. there is also a cleanup of the existing technology which is defusion technology that is being used. there is a decontamination and there are actually 1950 workers involved with that. and i notice in the budget and very concerned about it that there is a 33% cut there from

$190 million to $127 million. will this reduction in fund ago lou the department to maintain the commitment that the department has made. to start the cleanup that was made back in 2009? >> well, we are looking very hard at this. and, yes, there is a decrease in the budget. we're looking again at all our options whether we can do some bartering, its things of that nature. again, we have to be very careful about whether that bartering will effect the markets. and so, we are trying to figure out what the tools we have, how we can move that forward. dl is additional funding and maintain that accelerated schedule. it seems to me that would be the right way forward. when you say you need to analyze it more, what do you need to do?

>> well, right now we are already analyze that if we introduce into the market something 10% or below that we feel safe that won't have material impact on the markets. and we have not done -- we don't know what will happen beyond that. so -- you have done the analysis. you did it in 2011 and went through the third quarter of calendar year 2013. >> the 10% market, yes. >> so i would hope having done that analysis that we could move forward to give the folks at the plant some certainty and just to maintain the cleanup schedule and accelerated basis. i talked about, i worked a lot when i was in the house of representatives on the cleanup and in the end we accomplished

something great working with the department of energy on an accelerated cleanup. it was initially posed by some people including folks who had jobs at the plant to maintain status quo. in the end, it saved taxpayer $3 billion and e$4 billion. i know there is a temptation to find savings. i think this is a place where it is penny wise and found foolish. in other words, for the taxpayer, it's definitely going to cost the taxpayer more over time if we get away from the accelerated cleanup. so i strongly encourage you, mr. secretary, to look at that analysis again and provide the funding through the barter or sales to keep your commitment. i think it's the right commitment. i think it's good for taxpayers and good for the site and the high-tech jobs that are there. >> yes, senator. we did do the analysis for barter and sales at the 10% level or below. right now, we're bumping up hard against that. if you want to ask us to do an

analysis higher than 10%, we would be receptive. >> as i understand it, it was conclusive as to not having a market impact. >> all our obligations were bumping up against that. we'll have to do another analysis to go higher. >> are you committed to the accelerated cleanup? >> we're committed to -- whatever the means we have and the constraints we have to do the best we can. if you want to ask us to do another analysis, we'll be delighted to. >> we certainly would appreciate that analysis. i do think it's the right thing to do.

highly skilled people are otherwise going to be found without a job or moving on and more difficult to bring them back to continue the good work they're doing. the other issue, of course, is we're very interested in being able to take the materials out of the decontamination and cleanup effort and we ought to recycle the materials and we appreciate your continued cooperation with that effort. i know there's a concern with some of the other agencies looking at the safety of that. but we think that is an enormous benefit again to the taxpayer and also through the process and provides good economic opportunities for our region. >> thank you, mr. secretary, for your patience. want to follow up on what senator sanders is talking about in terms of i call it retrofitting. i started a retrofitting initiative in my state called back to work minnesota.

and i really believe that this is a low hanging fruit. that we -- what i'm trying to do is innovate -- find innovative financing mechanisms to get that up front money to retrofit commercial buildings, mush, you know, municipals, universities, schools and hospitals, et cetera, and residential buildings. knowing that it pays for itself. it puts people in the building trades to work who are in depression or recession right now. they need the work. it helps our manufacturers in minnesota and would do this all around the country. so i -- it sort of part of the president's better building initiatives as well.

in minnesota, we have a mandate for utility companies that they have to increase the efficiency of their users by 1.5% a year. this is a mandate that actually encourages the utilities to find retro fits so that they are energy efficient projects that they can help finance. i was wondering if there could be -- if we legislate that as a national part of maybe the clean energy standards if, that would be helpful. >> i'm not sure. i don't know whether that has a chance of passing, quite frankly. but let me just say that -- >> let's say it did. that would be helpful. >> here is another thing that would be helpful. it happens now in new york and massachusetts and california, maybe a couple other states.

if the regulatory agencies who set the rates say that the utility companies gets an equal return on investment, if they help a customer, a business, a homeowner and they loan them money to retrofit, that that is seen as investment of the utility company which they're entitled to a return on their investment. utility companies are highly rated utility company has access to fairly inexpensive capital. so they became a bank for the business, for the homeowner. so moderate interest rate and you're entitled to recover for your investment in energy efficiency. so instead of building another power plant -- >> exactly. that's why minnesota put this in. let me talk about p.a.c.e.,

property assess clean energy financing. this is done for commercial buildings. we say a state or county can lend money to a commercial building to do a retrofit and sometime someone else gets involved in this. but some part of the financing can be the p.a.c.e. when puts a property tax on -- even if the building gets sold that property tax continues. it's a great model. and, again, what i'm trying to do is find financing models for this. on residential pace, putting a property tax on doing a retrofit, to finance a retrofit, the hffa will not give mortgages to a residenttial -- to a home with p.a.c.e. because p.a.c.e. would get paid back before the mortgage. do you think that is a wise

policy and is there anything you could do to -- i have written them a letter. you would join my letter? >> well, i've been talking to shawn diamond a lot about this. and he and i are trying to be as supportive as possible. i think the issue that even the lenders don't want to even be -- let's say you loan $200,000 to buy a home and the homeowner wants another $10,000 for home energy improvements. and to be have equal footing in the payback. the lenders are fighting back. they say, no, we don't want to do that. you'll have to be high. that has to be -- they pace is viewed as essentially a mortgage. and it has to be behind the initial mortgage. so we're trying to work this thing through.

but lenders really feel that nothing should stand in the way of them and the first mortgage. >> very often the lender is the city or county. this is when someone is buying the house. but it may be when they have been in the house for a while. it's just about making that home more efficient and, again, putting people to work, putting people to work that are in the building trades, people who are in manufacturing and making that home more energy efficient and bringing down the cost of energy in the community. >> i'd love to talk you to. the time is up. if you will indulge me a minute. there are a couple of other ideas we think are worth thinking about. on the commercial sector, there are real estate investment

trusts. reits. and we feel that all we need is perhaps clarification from treasury to say this real estate trust wants to invest in a new system or more energy efficient windows, let's say an hva-ac system. could that be a capital expenditure cost? as differentiated from a -- the depression rate for the building. and just a clarification of that i think would spur a lot of investment. these reits quite often home office buildings and they pay the energy bill because they come and go and they don't want to separately meter all the time. it goes into the rent. and so a very simple clarification could spur a lot of investment. it will make sense to them. it won't cost the government any money. but that would be good. there are a couple of other

things. i think sometimes retro fits, there is a community that wants to do a couple homeowners get together and say one homeowner has a good experience. i'm saving aye lot of money. but now you can capitalize on that. have a block party, talk about it. so if you get five people, eight will do this, but you demand a discount rate ordered and the installation and everything else. to the contractor, it's great. they send a truck out and go bang, bang, bang down. and so that can greatly reduce the price of rro actually get some social awareness in this as well. the finance part of that, if you lower the price by 25%, 40%, the finance price decreases. utility companies, companies

that have access to low cost financing moderate interest rate is a no-brainer. you don't -- not out of pocket expenses. you're saving more in paying back the debt. the money to pay back the debt is less for the energy bill. and it is immediate jobs. and this is immediate jobs that can be for decades. we have 140 million homes. >> right. >> 80 million could use energy uplift. there are many things that we are mulling about and trying to get programs and we have a number of programs to those are some of the ideas we're talking about and also to stimulate state and local governments to think of better ideas. again, a lot of this can be driven by private sector.

it doesn't need government money. can my office work with your office? right now i have written down reits and house parties. >> yes. >> block parties. >> that's what i meant. i'm glad you corrected me. thank you. >> thank you, mr. chairman. >> senator, you have the final questions. i very much hope -- >> i'd like a third round on block parties. >> we'll schedule that for the week after christmas. go ahead. >> thank you, mr. chairman. again, mr. secretary, thank you for being here. you've been to our state several times. i'd like to have you back. i'm really looking for help on this vitally important issue of energy infrastructure. in your -- in our left f last question and answer period here, we went through pipelines. you said well we're trying to build all these pipelines.

and you'll acknowledge that there are thousands of pipelines under the entire country. so why are we unwilling to build a pipeline that will bring crude in from canada and will help us move our crude in the country? why is that? first, we're not unwilling. the president's position and the state department's position not the d.o.e.s, you know, we're not in the decision making loop. we're asked to give technical advice on such things. but is that they wanted an evaluation on the environmental impact. the pipelines that are being built in the country are investments of the private sector. i see a lot of healthy movement in the pipeline construction within the united states. in large part because of the

ability to get oil from shale like rock. this is a big boom in your state. and you got to get that oil to the refineries. and this is also decreased oil propensity. the only time the government actually steps in is, well, there is issues. but in terms of the one you're concerned about is the one that goes across the border and then again that's the state department issue. >> department of energy, this administration's department of energy, the report i cited says that the keystone pipeline will lower gas prices, not may, will lower gas prices. in addition in that report also has that it concludes that the

refiners, the gulf coast refiners will likely consume additional canadian oil sands well in excess of what would be provided by keystone xl pipeline. the reason i cite this is some said we brought it in from canada and then export it somewhere else. but your own experts have said that it will be used here and we're going to need more not less. so it won't be export. so you said the department of energy that will reduce prices and use here, not exporting. your exports. so i appreciate your technical advice. i think it's very good. i compliment you for it. second, private sector investment. this is a $7 billion private sector investment for the keystone xl pipeline. so again i go back and say given that it would bring us more crude, which we otherwise have to get from the middle east or

venezuela, you know what is going on in the middle east, and it helps us with the bottle nekdz. we have a $27 barrel crude in my state, unbelievable traffic up there because of truck traffic and oil trucks. so not only do with very discounts for the producers, not only do we have infrastructure problems, we have the consumer and businesses paying $3.52 a day, the highest it's ever been this time of the year in our country. why would we allow this? i don't understand it. when you say we're willing to build pipeline. i don't understand. >> well, senator, i don't know the particulars. i mean usually when you have trucks, trucks are short term interim solution to a region you expect the same oil production. they're very expensive.

>> i agree. which is why we need the pipelines. >> again, if we're talking about the trucks in north dakota and wyoming, the private sector -- i don't know the particulars about this. but i think once you see a lot of truck traffic, that's almost the last resort. you know, it goes pipeline and then rail and the last is truck. >> mr. secretary, i'm looking for help here. frankly, your experts have been helpful. and they've been right on the money. literally. they have. they reported this thing straight up. i appreciate it. maybe we conclude with as you in our state, when we talk about all of the above energy development, we don't just talk about it. we do it. if you go to our state, you'll see wind. you'll see biofuels. you'll see ethanol. you'll see biodiesel. you'll see shale gas. you'll see oil. you'll see hydro. in other words, we're really

doing it. but the reality is to get to that, all of the above, that means we have to develop all of them. i'm looking for help in this endeavor. let's touch for just a minute on this. i may go over my time just a minute. i hope you'll endullth me. 80% of the new development is in situ. instead of excavating as is the traditional practice, you actually drill like you drill for conventional oil. >> so talk to me in terms of what -- with canada, united states and some help from mexico, we produce about 70% of our crude. we have keystone, we go to 75%. plus and we have the opportunity for much more. we then don't have to rely on

the middle east. 80% of the new development is in situ which is the same footprint as conventional. why wouldn't we be trying to do all of that than we can? from an energy standpoint, from the concept of north american energy independence, isn't this a plan that gives us the opportunity to truly get to all of the above? and why aren't we doing it? how can you help us get this done? >> first, i agree that in situ is environmentally much preferred than the open pit mining that started with the oil sands and it leads a lot of the really gufrpgy stuff that we don't want in the ground. >> but 80% of the development is in the ground. >> i understand. but it is still a little more carbon incensive. you're using fossil fuel to heat up the steam. but having said that, it is much preferred than open pit mining.

as they develop the sands, they find they have to go deeper. it doesn't make sense. there is the environmental cleanup issues that they have to face when you have that open pit mining. and so the recovery is much more desirable. >> and awe dress that problem, too. >> correct. again, because you're using natural gas to heat up the steam, that is going to cause more carbon. but the refining issues are much easier. all sorts of issues are easier. >> thank you, mr. chairman. i appreciate it. i appreciate you being here. >> secretary chu, you've been very generous with your time. and we appreciate you being here. so that will conclude our hearing. >> all right. thank you. >> thank you, mr. chairman.

president obama proposed just over $27 billion for the energy department for next year. it's about 3% more and includes more money for clean energy research and development. the proposed budget cuts tax subsidies for oil, gas, and other fossil fuel producers. the overall budget for next year is proposed at $3.8 trillion in total spending. reducing the debt of projected $3 trillion. discretionary spending goes down 3% but overall spending increases mainly due to growth

in the government's major health benefit programs. the president's budget is a recommendation for congress when it passes spending for the upcoming fiscal year. >> testimony on the president's 2013 budget request continues this afternoon as treasury secretary tim geithner returns to capitol hill to explain it. he's going before the house budget committee. live coverage begins at about 2:00 p.m. eastern. in 1966, jewel yn bond was prevented from taking his elected seat in the georgia state house after state representatives voted 184-12 not to seat him due to a stance against the vietnam war. his appeal went to the u.s. supreme court. >> i went to the court to hear the argument and i was sitting in the court just behind the bar with the lawyers in front of me. i was sitting next to my lawyers' partner. and the attorney general of georgia was making an argument that georgia had a