security and the potential for -- >> right. >> -- someone, some government, some rogue group to hurt the u.s. by attacking the power grid. >> rogue group, maybe just some lone hacker. >> lone hacker. >> once your smart meter is in essence a little computer, that produces possibilities. hope the radio link between your smart meter and utility is secure and nobody is going to get in and give it signals like shut down or whatever. the operation of the grid, itself, is increasingly computerized. there's computer links among the grid operators and it's crucial that those things stay in tact and, libby, as you said, there's a lot of operators on the grid. big ones, small ones. companies with huge i.t. departments and companies where, well, we just got our first computer and it seems to be running fine, thanks very much. so there is a worry someone will hack in through some weak link

and because of the interconnectedness of the system cause widespread problems. this has not happened but that's not to say it could never happen. the stuxnet virus which the united states created to hit the iranians turned up in some computers at a nuclear plant in ohio, although not the computers that run the system. the new reactors, nuclear reactors that are being built in south carolina and georgia, have extensive defenses against cyber attack. it's not clear if the whole industry has all these defenses. >> here's a story from "bloomberg" by brian wingfield. power attacks leaving millions in the dark for months. wingfield writes, energy companies including utilities would have to increase investment in computer security more than sevenfold to meet an ideal level of protection according to a survey done for "bloomberg government." >> sevenfold wouldn't be a lot of money. i don't think they spend a lot on this now.

>> richard, independent caller in rice lake, wisconsin. welcome. >> caller: yes. i don't even know what to think. >> richard, it sounds like your lights are out. go ahead. >> caller: because on c-span, they had scientists, they had bartlett, a congressman, i think he's from maryland. on c-span, people can actually go to c-span. they can actually see the presentation that was put on by scientists with roscoe bartlett. they were begging our members of congress to come back to washington to solve the problem. because they could solve it with -- i can't remember for sure, but i think it was $350 million and it's called harden the grid. and what they're talking about is this doesn't happen -- >> they're talking about emp. >> caller: in the next two to three years we could be affected by solar flares of the sun that could literally take out

approximately three quarters of the people in the united states. >> so, richard, are you talking about electric magnetic pulses? >> caller: that's correct. i'm talking about the electromagnetic pulse. >> in 1989, the sun which works on an 11-year cycle went through an active period. solar wind. the suns throw out protons. the protons eventually get to the earth. the earth has a magnetic belt around it. the protons are charged particles. they hit the magnetic belt and push it a little bit. this is a little geeky but kind of interesting. if the magnetic belt is deformed, it moves. if it moves through the earth's crust, you've got a magnetic field moving through a conductor and that's how you make electrici electricity. so you get these electric currents in the dirt. actually you get them in rock. it turns out granite, which we have a lot of in north america, gets these currents. the currents tend to flow into the power system and you end up

with scattered outages. the province of quebec is particularly vulnerable. there was a reactor in new jersey that had a transformer catch fire. there was another one in maine. this is, in fact, a problem, but there's a serious group of engineers at the north american electric reliability council, corporation, which is an organization chosen by the federal government to write grid standards and enforce them that says, yeah, it's a problem, but it's not a doomsday scenario. it just -- it could cause problems. we don't really know the full -- it's like earthquakes. our time on earth is short, we don't know what the worst one you can have is, but the system is not as vulnerable and some people believe. >> matt wald, energy reporter, "the new york times," he's based here in the washington bureau. this is our "your nomoney" segment. chris is a republican caller joining us from new york state. good morning. >> caller: good morning. i want to touch base with the

deregulation that's sweeping the nation. >> sorry, chris? >> caller: i may be a bit biased. i say, i do work for a utility. >> okay. >> caller: but in my mind, deregulation is not necessarily going to work in this industry. so inherently a monopoly. you have the same folks still producing it, the same folks still transporting it and the same folks on the distribution end. all we've done is break those three entities up and brought in power brokers. as you stated, companies built new lines, put in separate meters. so i don't know how deregulation can actually lower the costs when it's the same folks still doing the work. >> it's a good question. and, chris, i think you said you're in new york. okay. it does work.

the question is, does it work better than what we had before? what we had before was monolithic utilities that put all of the risk on the customers and set out to build some generating stations that weren't needed, that had cost overruns and prices went up. now on the generating side, those utilities have sold off their generators. new generators tend to be built by private companies and they have an incentive to produce as efficiently as possible and they sell in a competitive market. i think that the business of deregulation could be divided into two tiers. one is a whole bunch of digit players on the generation side and others a whole bunch of different players trying to sell you electricity. i think the first tier on the generation side has shown a little bit more promise than the second tier, although chris, i think i agree with you, you pick your poison here. the old system didn't work very well. it had one set of problems. the new system has a different set of problems. >> let's take a look at what kind of money is spent on the

electrical grid. federal dollars. the recovery act poured money into that. $4.5 billion. we also see money coming from the ag department for grid upgrades in rural areas. 2011, that was $250 million. there's also money from private investment. $5.5 billion. then $61 billion from inve investor-owned utilities, power lines. we're seeing most the public money and the private money coming into play. >> the stimulus money, they were looking for things that could be done quickly that would generate employment. i don't know how much employment this generated. for one thing, meter readers are going to become extinct if we follow this far enough. we won't need somebody to go read the meter every month. it will come in by radio. the -- but there were a lot of projects on the books that could be funded quickly. that's what made it i think attractive to the obama administration. transmission spending is a tiny fraction of our total electric bill. and we have a grid now because

it doesn't suit our purposes. because it's congested. often there's a generator way off on one side that can sell you power cheaply but you end up buying from somebody local that's more expensive because the lines aren't there in between. those extra costs run to billions and billions of dollars a year. and if you build more transmission, you could cut people's electric rates. so there is an argument for spending more on the grid. there's a reason we don't do it which is the local guy who's got the high-priced power. think of it as like the convenience store instead of the big box costco off in the distance. he doesn't want a new power line built. of course, nobody wants a power line going through their own neighborhood, so there's a political log jam getting economically rational investments made. >> let's hear from scott in hayley, idaho, a democrats line. >> caller: hi, i have a comment and then a question. >> okay. >> caller: the centralized grid

wastes an enormous amount of power cpow er due to the resistance of the lines and heats the atmosphere. my local power company says it takes 100 watts to bring 1 watt to my local town 75 miles away. so it's tremendously inefficient and decentralized grid would, of course, be a lot more efficient in bringing power to localized areas. so please comment on that. also, my unrelated question is that, you know, any large contractor portions 10% or so of their profits to maintaining the grid, and to what extent is the u.s. taxpayer asked to contribute to and maintain, subsidized power grid just like we're asked to subsidize the gas expense at the pump with the taxes we pay? thank you. >> okay. well, i'll tell you a difference

about taxpayers and rate payers. there isn't any. i pay taxes, i pay for electricity. i pay for electricity at home, pay for electricity in the cost of everything i buy. there's some subsidy as in the stimulus act. most of it is paid by rate payers, but i don't thing that's a huge difference. people pay electric bills and pay taxes. i don't think your local utility is losing 99% of the energy in the grid. if you take coal or natural gas and you burn it and turn it to electricity, you lose some of the energy in that conversion. you lose a little bit in shipping it. the grid does have some aspects where you lose energy, but it also has some aspects where it becomes highly efficient. for example, suppose, for example, in your town, you've got -- you're in idaho and it's cold in the winter and your peak turns out to be on a really cold winter day and you're connected by the western interconnection to phoenix which doesn't have a

big winter demand but has a huge summer demand. do you want to have to build enough generation to meet your worst day which is in the winter and let phoenix build enough generation to meet its worst day which is in the summer or build a line that connects you and you can share these assets that you both need but don't need them at the same time? so the grid has terrific efficiencies and does have some inefficiency built into it. >> question on twitter. jason writes in and asks you, what is it you would like grid users to understand that they most likely don't and/or what's a common myth about the power grid that you'd like to bust right here on c-span? >> well, one thing to understand is, especially with the weather we've been having recently, is that most consumers pay a certain price per kilowatt hour 24/7, but that price to the utility actually varies. and there's an economic theory, probably valid, that if the price you paid reflected the

actual cost, you would do things like run the dishwasher when you went to bed at night instead of running it when you got home at 5:00 p.m. and, therefore, the grid would need less generating resources because the load would be spread out. do your laundry on the weekend instead of a peak hour and the whole system would get a little more use o tut of generation. right now some of it runs all the time. some of it only runs a few hundred hours a year. the system would be a little more efficient, i'm talking about dollar efficiency here. how many dollars do we have to invest in generating assets that we don't use very often? a myth to bust, the idea that we can do away with the grid because we're going to renewables. in fact, renewables will require a stronger grid. wind, which is cost competitive at times, is so variable that

what you really need -- you d e don't want to be connected at a wind farm. then you'll have electricity at some hours, none at others. you want thousands of wind farms spread out across the country and want their average output, not the output of an individual farm. solar is different. you need diverse resources that are interconnected. >> matt wald is with "the new york times" in washington. he writes about the energy, the environment, also transportation and safety. he's been in the d.c. bureau since 1995 and been at "the new york times" for 35 years. >> yes, so long i've started to lie about it. >> previously working in boston and hartford and in his port fell fo portfolio written about the manufacture of nuclear weapons materials. steven is our next caller, independent in coconut creek, florida. we're talking about the u.s. power grid. >> caller: matt, i'd like you to comment on an overall inefficiency of even the smart

grid. it's worse with a grid that is not a smart grid. the -- if you look at one of the major intended uses of the grid, namely charging up the batteries of electric cars, you have the following. half of our electricity is currently produced by burning coal. this is not something that can change any time soon. the objective, of course, is to save oil and economically, financially, that's a very important objective. however, for every unit of energy that is put into the battery of an electric car at the time it's charged, you have to produce 14 units of energy by burning coal. >> well, yes and no.

and by the way, if we end up with a lot of electric cars, which we don't now have, it's conceivable we'd use a little more coal because there would be more use for those power plants. we can get off coal. we're getting off it because natural gas is so cheap right now. i don't know how long that will go on. we don't look at these things by their energy balance, by how much we have to burn to deliver it to the customer. we look at it by the money balance. how many dollars is it going to cost me to drive 100 miles? if you can do it by burning a whole huge pile of coal, or natural gas, natural gas doesn't come in piles but if you can do it by burning a cheap fuel and substituting for oil which is expensive and imported, you don't really care quite so much what the energy balance is and, in fact, there's a lot of inefficiencies in the internal combustion engine, that the system you're replacing is no great either, and depending on

what kind of driving you do, the electric car may be a lot more efficient because it's not sitting at the red light burning energy. >> steve is our next caller. republican in st. norfolk, nebraska. welcome. >> caller: yeah. thank you. thank you for c-span. i was just wondering about the outlook for employment in, like, utility linesmen and would you have any problem trying to persuade your kid, your child, rather, into a profession of, you know, the grid work, or what have you? >> is that your line of work, steve? >> caller: no, no, it's not. i have a son coming out of the army here in a little while and i've been trying to persuade him to pick up utility linesmen for some time. and he's somewhat interested. just i'm not sure how aggressive, how aggressive i should get in persuading him to pick up the profession.

if that would be a good profession to pick. >> well, the energy department says that the cohort of people working in the utility business now is demographically unbalanced. they're like baby boomer types. and a whole bunch of them are going to have to retire at the same time in the coming years. don't go into reading meters. there's not much future in it. however, there's a variety of linemen and other technical and quasitechnical development where there will be terrific turnover in years to come. >> tell us why reading meters will be phased out more and more in the future. >> because eventually your meter is going to talk lelectronicall to the utility. one of the reasons that looks even remotely economically viable is you don't have to hire a guy with a car to drive from place to place. he doesn't have to make house calls anymore. the other reason it's economically viable is we don't have this now in many places,

but the country may move to a system where you get billed for energy depending on the time of day. whether it's peak or off peak. it may change hour by hour. you may eventually end up with appliances that can talk to the meter and your clothes dryer may sit there until the price falls below a certain level and then it will run. so you throw the clothes in when you leave your work in the morning and it may run during the day or may wait until that night to run. and that's -- that's automation of a kind that's going to do away with the guy with the clipboard walking from house to house. >> greg, independent caller in sarasota, florida. good morning. >> caller: hey. good morning. mr. wald, i'm going to listen -- thanks for you. my reference is going to be a nova episode "making stuff cleaner." what i'd like to bring up is the work of nate lewis from cal

tech. he has a process where he takes the sunlight and through a membrane put in water, it breaks the threshold of hydrogen so it releases. >> right. >> caller: okay. the second part is richard wall from university of delaware. hydrogen storage is almost impossible. it needs 10,000 psi. through nature's wonders, he found he can take a cheap substance like chicken feathers, heating them in a closed environment to 700 degrees and making, exposing the nanoreceptor sites inside chicken feathers. blow off tons of them. >> i hadn't heard that+++91v

power grid. i'm talking about in your backyard being able to use the technology that's available today to actually convert sunlight to hydrogen. >> let's leave it there. that's a lot to go with. >> you've latched on to one key issue in renewables which is if you don't have storage to go with the renewables you've got a problem. the grid in fact is a form of storage. if you have a lot of wind in one place, you can distribute it over a huge area, reduce the burning of coal and natural gas. if you have solar in one place you can do the same. you can't do that in a single location if you're off the grid

unless you have batteries. batteries are expensive and fragile. they may come down in price. they may get more able. but right now they're not competitive. what greg is talking about is using sunlight to split the water molecule h 2rks 0rks into h and o. and at some later time combining those things to get energy back. so the water molecule becomes your storage medium. the problem is hydrogen is the smallest atom there season and it's very difficult to store. i haven't heard about the chicken feathers. i'm certain this is not a commercial idea at this point. it may become a commercial idea. there's a lot of ideas out there and eventually i hope one of them or more than one of them pans out. if you did all those things, i suspect you'd still want to have a grid. i suspect you'd still want to prepare yourself for times when the sun wasn't shining for several days a t a time. i suspect you would be more reliable if your home water

splitter broke down you wouldn't want to sit in the dark until somebody came to fix it. the grid's reliability is not perfect. but it's a lot better than any individual appliance in my house. >> jim from oklahoma on our democrats line. good morning. >> caller: yes. until we have a let me say a massive program on home generation, i live in oklahoma. i've got a friend that runs his freezer and the brother on his a.c. and heating unit for free off of one solar panel and a battery back up. $1500 he saved that much money in a couple years. until we go to a system where we can generate at home and get the billionaires out of making money

off of everyone, we'll go in where. >> jim, i think you've hit on a difference between politics and engineering. we have this fascination with decentralization with do-it-yourself, every man a king. my house is my castle. and i'm going to cut myself off from these big evil corporations. the flip side is we have some engineering questions that seem to work better on a big scale than a small scale. a big grid is more reliable than a small grid. that's why we have big grids. there may be billionaires in the electric business. there's also a lot of publicly held companies which you and i probably have in our 401(k) plans. i think it would be sensible not to mix the emotional feeling i'm going to do it myself. i'm going to go it alone. grow any own vegetables make my own electricity. with the engineering question i actually doubt in oklahoma you

can run your air-conditioning system on a $1500 system. you need something much larger with much more storage and frankly there are a lot cheaper ways to do it than yourself. there are a lot of things i don't for myself. i don't do my own dentistry. i don't build my own computer, although i do use a computer. there's some things i'm content to rely on others to do. some of that stuff i'd like to be involved in like decision about my dentistry. but i don't aspire to do it myself. >> mael would is an energy reporter with "the new york times." this is the regular your money segment where we look at where tax dollars are spent. we're talking about the u.s. electric power grid. breaking it up in how much the taxpayer pay, the companies pay. victoria writes she has a friend who uses solar panels and she receives a check from the energy company. >> we all paid for them.

she probably has a net metering system which means it's not like she's sitting there with a switch. but her panels are part of the grid. they feed the grid. they feed her house. if her house is demanding less than the panels produce, the excess goes to the grid. in the hours when the sun is not shining, which by the way the not most of them, she's drawing from the grid. and she gets paid some amount. in a lot of states, the state utility commissions have set a rate of pay back that's fairly high because they're trying to encourage solar. but victoria that made your rates higher. the more utility that you share with her, the more the utility pays her, the more the rates are going up. this could be a good deal. it could be a cheap way to avoid having to improve the distribution effort. it may clean up the air. it may be a temporary subsidy that we put in to help incubate an infant industry. but you are paying for it.

>> mark in philadelphia republican caller. good morning. >> caller: good morning. i'd like to readdress the issue of the polls. i appreciate knowing your specialty has been nuclear. my concern about and many people's concern about the nuclear power plant are the systems in place are not redun tant enough and they are dependent upon electricity to produce the fuel or whatever to deliver for the backup generators and cooling systems. this is an issue, and also to let you know the pulses or the sunspot activity was extremely high this past week. extremely high. i'm originally from missouri. and missouri we never got over 100 degrees until the last couple weeks in august.

they've had over 100 degrees from june on and i believe it's related to the sunspot activity. if we could please -- >> we'll get your response right now. >> jim, i'd be careful -- sorry, mark. i'd be careful about making two different ideas. if sunspot activity is high it means the density to have proton flow is higher. that's not actually make it hotter on earth. if it were it would be the whole earth it wouldn't be missouri or washington where i live. we do have a warming trend in the climate, but i don't think it's sunspot activity. the nuclear plants must have a continuous flow of electricity. what happened at fukushima daiichi in march of last year is their diazle generators broke down or were swamped by the tsunami. their electrical connections were swamped by the tsunami. without electricity they couldn't tell what was going on in the reactor and the spent

fuel pools and they couldn't run the pumps, they couldn't move the vafls. that would be a problem if you had a blackout at an american plant. i have to thank you the 9/11 crew saying this facetiously. one of the things the nuclear plants did after 9/11 was bring in a lot more portable equipment, portable energy storage devices which might be in the form of batteries. might be in the form of compressed air tanks. they brought in hoses, diesel pumps and they established methods to operate during a stationed blackout. the fukushima daiichi parliamentary commission reported last week said that if fukushima had had those preparations which we took for terrorism not the tsunami, they might have avoided much of the accident. that's not to say our plants aren't vulnerable. but the ability to operate, to

safely shut down and maintain a plant after a blackout is a lot better than it was. i think you're raising the idea what happens if the grid disappears for months or years. and no, i don't think we're prepared to deal with that. but i think this is a scare scenario that may not be justified. >> our next caller is a democrat from slefr poort, louisiana. hi. >> caller: hi, yes fine morning to you sir and madam. my question is for the gentleman, mr. wald. >> yeah. >> are you aware of any research effort public or private to outfit the smart grid to handle i guess back and forth transactions with reck trick cars, hybrids or other large storage forms that i guess are going to be populating the market?