the house energy and subcommittee on energy held a hearing to review the activities of the electric transmission sector. witnesses talked about ways to improve the grid including planning and construction of new transmission lines. and talked about the effect of existing laws and regulations. we are going to get started . our committee has a major bill on the house floor. nuclear waste, and i know that the debate has started. a number of us have been there to speak and our colleagues is

helping-- our colleague is helping to manage the bill. i'm going to drive to be quick with the gavel and we will continue after that but it will be a series of votes. >> we are continuing our series by taking a closer look at a very important but often underappreciated component, the electric transmission system. ever since visionaries such as edison and tesla argue that merits of using direct-current versus alternate-- alternating current, it has been a complicated and controversial topic. we depend on our high-voltage network to transmit electricity long distances to power everything from iphones to economy. an uninterrupted supply is critical to ensure that health and safety as well as the quality of life that we have come to expect. many parts of our country,

infrastructure like nations roads and bridges is aging and in need of repair or replacement. join the distinguished panel of experts help better understand the challenges faced as well as the opportunities that may be within reach. while much of the debate is focused on generator resilience, we cannot ignore the vital role that the electric transmission infrastructure plays in connecting the producer to the end use consumer. a resilient and reliable transition grid is no less important. however it does not come cheap. the planning and construction of new lines often takes years due to permits and environmental reviews. public utilities and independent developers have committed over $20 billion annually. to upgrade and replace our infrastructure.

while that is good news, sustained investment at similar levels will be critical to ensure that americans have a modern electricity grid that can deliver reliable power at a reasonable cost. consistent policies regarding how projects are approved and paid for is essential to reduce financial risk and attract new capital. burke was directed to encourage investment in transmission infrastructure projects that reduced the cost of deliver power by reducing congestion on the grid. financial incentives were granted to those who met certain criteria and begin to issue a series of landmark rules to regulate the details of how projects are planned, paid for, and developed. order 1000 is the most recent attempt to regulate regional and interregional transmission

planning while also encouraging competition between transmission developers. as we heard from witnesses, while some planning processes have become more effective, order 1000 have-- has all but failed to develop new lines between other planning regions. the rule allowing merchant developers to compete against traditional utilities to build transmission projects has been criticized as ineffective for a number of reasons. we will explore these and other challenges associated with transmission planning allocation in transmission. i hope that we can discuss how alternatives factor into the conversation. while high-voltage wires demand response, energy storage distributed generation and micro grades can provide benefits similar to traditional

transmissions. these alternatives may improve reliability while reducing environmental impact. we should explore whether any legal or regulatory barriers stand in the way to prevent energy innovation from reaching full potential. we look forward to hearing from witnesses. >> i just want to take a few seconds to personally introduce one of the witnesses here today with us, a fellow i have known since grade school and fraternity brothers in college. john was a former ceo in my home district and is executive director of the transmission access study group. i want to thank you for lending your expertise to this hearing. >> my friend and colleague and

ranking member from chicago illinois. >> i want to thank you and welcome witnesses to the hearing . today we will be examining the transmission infrastructure. you know the-- you know mr. chairman there have been many developments in the portfolio issued number 890 back in 2007 and the way to promote transmission services. this rule outlined the planning process for transition provide us consisting of 9 principles including four nation ordinance, transparency, information exchange, resolution , regional coordination and

cost allocation. in 2011, the issued order number 1000 as a way to improve the planning process along the reasons and to determine how transmission was-- to customers. order 1000 was also issued to provide additional opportunities for nonincumbent transmission developers to complete within the service territory of incumbent utilities. mr. chairman, it appears that the results have been mixed and

is-- in achieving its role. we are in the midst of a rapidly changing-- reflected by emergence of renewable resources, low-cost natural gas, state led-- as well as an inquiry and overall. consumer behavior is many of these changes as customers declare new tools to more responsibly use the energy that they consume. where there's a way to save money there's a way to save the environment.

traditional methods of buying and selling energy are being disrupted by the man responsible for emergency technologies allow consumers to reduce energy and sell it back to the grid. mr. chairman, we are here today and it appears that there are some real concerns for order 1000 and my indication that may be needed. if the role was to enter regional planning process, for transferring allocation in order to serve additional competition, and increased

investment in infrastructure, projects, of that-- it was not clear if that objective had been achieved. while most witnesses made the changes that should be made, there is less contention among those changes. the challenges surrounding order 1000 as well as recommendations for improving this. >> mr. walden is not here so the chair calls upon the ranking mender for an opening statements. >> thank you mr. chairman. i want to welcome our excellent panel of witnesses. i'm pleased that we have mr. ralph izzo, the president of pg&e energy.

i appreciate the service that they provide to my constituents and the state of new jersey. the network of transmission lines are the backbone of the power system and are critical to providing reliable electricity. just like any large project, they are really free from controversy and in densely populated areas like the northeast, allocating space for new infrastructure is often a challenge. the electricity sector is ongoing tremendous change. at the same time demand for power has remained relatively flat. there are new challenges of extreme weather and cyber security threats as well as increasing demand for the grid to be more flexible and responsive. they require us to evaluate the tools they are using to manage

the evolution. we will hear a variety of opinions on how these orders are helping or hindering. it is a challenge to get the balance correct so it's no surprise that there will be diverse opinions on how to improve these policies. if we look at the map of existing lines it's hard to believe that we need a lot of new transmissions. this is a mature network. since much of the network has been in place for decades it's -- it also needs to be upgraded and modernized. this is something companies must consider when pursuing a transmission project. one county proposed by first energy, there's one example where there was no serious consideration given to non- transition options that can make the system more resilient and reliable. it was only through a group of my constituents that this unnecessary project is now

moving forward. expert analysis was provided demonstrating that they could be accomplished with an upgrade to the grid at a lower cost to repairs that these alternatives were never seriously considered. the law judge who reviewed the case agree with that assessment. this project illustrates that building transmission rather than using new tools is in the financial interest of companies to build especially when there are rules that will allow them to recoup those investments. determining new transition must be evaluated without bias. if new transitional lines are needed and in some cases they will be, then the project should go forward. where new technology can provide a cheaper solution it is less disruptive to other business, we should ensure that those options are used. the rapidly changing environment we are in is exciting and challenging.

efforts to address transition challenges have been admirable. there will continue to be missteps that require adjustment and correction and perhaps a serious revision. i'm hoping that this series of hearings is providing everyone with an opportunity to see where greatest challenges are made. we look forward to your testimony and will give the balance of my time. >> as the cochair of the grid innovation caucus i am pleased to be part of this hearing. the witnesses for the testimony, i look forward to looking with them to create what the presidents of both parties have called 21st century electric grid. congress needs to address the requirements including advances in technology, consumer adoption of distributed generation, and increasing cyber threats to this backbone

of american industry. yesterday, 2 bills focused on cyber security for the full committee. this is an important corollary. what investment should we be making? what regulatory regime should be you be-- should we be reviewing, and what more should we be doing to modernize our grade? i like for that modernizing the grade? i look forward to working with you to creating an advanced transmission system. >> witnesses will have five minutes to get breeze-- brief presentations. we will work from your right to your left. make sure you hit the button. we have a former commissioner

who is a senior advisor. you are up for five minutes. >> my name is tony clark. i'm a senior advisor who has offices here in dc and denver colorado. from 2012 to 2016 i had the honor of serving on the federal energy regulatory commission and served 12 years. it's a particular honor to recognize my former colleague congressman kramer and good friend of many years. my testimony centers on a paper that i recently authored named order number 1000 reflecting-- it offers reflections on the order, the status of that and where it might go up. i've attached a copy of my paper. order 1000 was propagated before i got on the commission

so i did not participate in that but i anticipated the compliance filings that came forward in the wake of the order. the main thesis of my reflection is that however well- intentioned the order it is, i suggest that with the passage of a better part of a decade, now is an appropriate time for the oversight authority to engage in a meaningful assessment. the paper concludes that one of the paradoxical results of the rule has been that major transmission projects that many of us thought might come out of order 1000 actually came out of a pre-order 1000 world and there really have not been in a lot of tangible products or empirical data to support the success of the order. the paper concludes that if they were to better tailor the role especially recognizing significant regional

differences, it might have more efficacy. but today finding ourselves in the position of having to ensure significant compliance costs but without demonstrable benefits, it is perhaps ironic that many of the most impactful transition projects such as my home region arose from that world that i talked about. i suggested the reason is multifold. some of it is that regions, particularly those served by vertically integrated utilities were doing a fair amount of planning within regions prior to the order. for those, order 1000 replaced the collaborative bottoms up process with a federal top-down process where there is a fair amount of bureaucracy involved in the name of the game is making sure you are checking compliance checklists as opposed to bringing projects into fruition. creating a federal mandate on

top of what was happening was a time complexity and a lot of litigation with results-- respect to transmission projects. the electricity landscape has changed in terms of resources, technology and state policies that drive transmissions, and order 890 which preceded order number 1000. then finally certain implementation decisions such as how cost allocations has altered transition development models that were previously accepted within the region. in short, amongst those who are broadly supportive of order 1000 there seems to be a sense that something is amiss in terms of the underwhelming results that have come out of it. i would argue that it's appropriate for policymakers to consider the future given its track record, my paper encourages conversations of ways that it could be

streamlined across the board while regional planning conversations may result in some benefit. there may be benefit when talking about interregional projects where maybe not as much conversation had happened in the past. revealing some of the more prescriptive aspects of the order and briefly moving beyond, i would think there are a number of calls coming up that could have a significant impact on how transmission infrastructure will be developed. there are significant decisions like rates of return for jurisdictional rates, issues related to transmission incentives that are built into the rate structure, and one of the elephants in the room on development is, as it is with pipeline development, it's very difficult to get infrastructure projects brought through the construction phase because of multiple levels of bureaucracy

and red tape that can block some of those permitting decisions. i look forward to any questions that you might have. >> right on time. our next witness. five minutes dr. krapels. >> my name is ed krapels and i am the founder and ceo of an independent transmission micro grid storage and smart energy campus developer. we are funded by institutional investors so we are not your typical utility. we like to think we build of the electric businesses of the future and it's very different from the past as other members have indicated. we helped to spearhead berry to transmission lines between new jersey and new york. current technology is common

but not widely used in the united states. as a person who has developed interregional tactics have taken the opportunity to write an article part of my prepared testimony just published in the electricity journal called triple jeopardy and reviews why even though everyone agrees these kinds of transmission links are useful and that more are needed, both existing and new interregional projects are being choked off by well intentioned but unproductive regulations. some stem from order 1000 and the ability to implement order 1000 in a way that is sufficiently prescriptive to handle the many issues that arrive when projects are proposed. >> i'm here to discuss an important new opportunity. federal energy and environmental policy can accelerate what promises to be

a once in a generation chance to launch a new domestic industry. if we do it thoughtfully from the start, the key to success is to plan design and build independent offshore transmission. ocean grids in a thoughtful way in each of the participating states. the federal government has a huge role in this and procedures that have to be implemented as part of this plan. why are they so important? after years of development, the price has been pushed to supracompetitive levels and with that offshore wind is a natural component in the administrations energy dominance strategy. it is indeed fuel from heaven and it's time has come. as with all large-scale energy resources, indeed with any

important new industry, the natural and physical platform on which it was built must be carefully designed. unfortunately some ideas would jeopardize the ability to realize full potential. early policy proposals explicitly would give generators the exclusive ability to own the transmission lines that take offshore wind from market. these have been promoted by a largely european wind developers that would get america's offshore undertaking on an anticompetitive and incorrect footing. it's in their interest to control as much of the access to the onshore grid as possible. if we allow that to happen we will lose the kind of competition that will further lower offshore wind prices. there are more cables than necessary. we will lose control over a substantial portion of our own coast. a proliferation of cables with

distressed marine life and make it hard to avoid estuaries and navigate sensitive shoreline ports of entry. it will undermine an industry in a vital period of growth. we are proposing a smaller number of large collector stations placed at the end of wind farms gathering the electricity from multiple windfarms and bringing it to shore via the minimum number of transmission cables. they would be buried under the ocean floor for multiple projects and could be either direct-current or alternating current depending on the distance from shore. if we do it correctly we will create an industry and tens of thousands of jobs. we will create competition between generators and that competition will bring the price of offshore wind down to market levels. i will close by saying that in

europe today offshore wind auctions are yielding prices of four cents-five cents to kilowatt hour which is pretty close to the marketplace. >> thank you mr. krapels . our next witness is jennifer curran who is a graduate of rice university, my alma mater, most importantly. >> go owls. five minutes man. -- five minutes ma'am. >> members of the subcommittee, i am jennifer curran, vice president of system planning for the midcontinent independent system operator. i appreciate the opportunity to be here with you today as you examine the state of the electric transmission system and i hope that the insight on how we plan are useful as you work to shape your energy

policy. we are a 501(c) for not-for- profit social welfare organization with responsibility for ensuring reliability of the high-voltage election-- electric transmission system to deliver low-cost power to customers. that mission is reflected in our approach to transmission planning. we seek not to minimize the cost of transition but to identify transmission which maximizes value in the form of overall lower total energy costs. the system is geographically the largest in north america and spans from manitoba through parts of 15 states to the gulf of mexico. as you might imagine, a geography that white presents a lot of diversity in resource types, weather, state policies, and consumer preferences as it relates to supply. transmission is a key tool to

optimize the diversity for the benefits of customers. that also presents challenges as we seek to design transmission plans and determine who will pay for them. >> even prior to order 1000, miso was planning for economics and public policy of the $30 billion of transition investment that has been enabled through the planning process and 20% of that is associated with a long-term regional planning effort to address the changing resource mix known as the multivalue projects. the multivalue project portfolio is a set of 17 projects distributed widely across the north and central regions and provide benefits of 2 to 3 times the cost predominantly in the form of access to existing and low cost

energy resources and reliably enable the new portfolio standards in the midwest. transmission like the multivalue project is a longer- term view. we are halfway through the implementation of the multivalue projects with the final project scheduled to go into service in 2023. in the meantime, we continue to see a great deal of change in the electric industry so where do we go from here? >> i think the challenge is best described by the 2 questions that i get most frequently about transmission planning. miso, why have you not developed the next set of regional or interregional transmission , and miso, why are you thinking about additional transmission that we clearly will not need? that dichotomy is clearly representative of the diversity that i mentioned and that diversity becomes more broad as

we expand beyond the regional boundaries and plans with our neighbors. it is also reflective of the uncertainty of the future as it relates to electricity. the miso planning process uses a scenario-based approach. we tried to balance the potential outcomes and look for projects that will be valuable in all of those futures. if we can find transmission that is valuable then we can feel comfortable that the benefit will continue to accrue to customers and we can continue to recommend that transition. we refer to these as no regrets projects. >> we have a lot of planning to do to determine whether there is a future set of transmission that has excessive cost and probably to come to consensus on who will pay for that transmission. who sees the benefit and believes the cost they will

bear will be aligned with those benefits. nonetheless, i believe that regional and interregional transmission will be a critical part of the overall solution set as we seek the resilience and efficiency of the electric grid into the future. >> we will talk off-line. >> dr. ralph izzo , you have 5 minutes. >> good morning mr. chairman, members of the subcommittee as well as a full committee ranking member. i've had a long career serving the people of my state of new jersey. i'm pleased to provide overview on the importance of modernizing infrastructure. today i will highlight one

federal policy that stands as an impediment, order 1000. i am here representing public service enterprise group and our subsidiary ps eng, a 114- year-old company that is the largest electric and gas utility. despite the fact that pse&g has been one of the midshipman- atlantic's most reliable electric, much of it is old. while it has helped power the industrial northeast, in recent years we have worked to replace, upgrade, modernize, and sometimes move parts of the grid to ensure that the system can withstand extreme weather events and other threats. customers are using less electricity, but the reliance has never been greater. we do not have a blank check. investments must be prudent.

over the past 10 years we have made improvements that have reduced unplanned outages by over 80%. -- the customer benefit is clear. investment has been helped by federal policies that have recognized the importance of transmission and the risk of building large projects. however, order 1000 stands out as a policy that undermines these efforts. order 1000 was touted as landmark reform that would promote cost efficient transmission planning and remove barriers to development. but in the last few years them, sufficiency looks more like confusion, controversy, and chaos. regional grid operators have voiced their beer-- voiced their views. order 1000 was once-- was once called a solution in search of a problem. nick brown said it created quote more overhead and more

uncertainty. our main experience has been through a competitive solicitation launched in 2013 for a project that saw voltage issues in southern new jersey. to call a process a mess would be generous. an initial decision was made and then reversed. pgm found itself having to make judgments outside of its expertise lake for example which alternatives me ensure environmental permits or how to did-- interpret the inclusions when it says it will cap construction costs. >> five years in, we do not have a constructive project to address a major need. other red flags continue to appear. no regions have attempted to administer a bid. the southwest power poles but $5 million on a

competitive process for an $8 million process deemed unneeded and never built. the california iso awarded a partnership between the developer and other entity in order to-- to just see them go bankrupt. these can no longer be called growing pains but beyond the chaotic implementation there's a more fundamental concern. order 1000 tends to drive short- term band-aid fixes for the grid, projects that solve multiple problems and provide long-term value don't move forward because they are ruled too costly. competition is positive but goals must be set to achieve the outcomes that we want. people and businesses depend on an efficient system that is resilient for the long term against an array of real threats leaving order 1000 in place which-- risks the ability to achieve that end. >> the chair calls upon john

twitty . off-line he would probably have-- there are probably stories we would all like to hear.>> indeed i do but -- will good morning mr. chairman and members of the subcommittee. i am john twitty, executive director of the transmission axis policy study group. our transmission has been active and protecting the interest of transmission dependent utilities, we represent municipal utilities, a rural electric cooperative serving about 1200 utilities with retail customers. they depended on the transmission facilities and taps members recognize the importance of a robust grid and have long advocated policies to get transmissions built but are

keenly aware that expansion must be achieved at reasonable cost. by enacting such in the federal power act of 2005, congress gave clear instructions on transmission planning. they are directed to facilitate planning to meet reasonable needs and enable load serving entities for long-term power supply arrangements made or planned to meet service obligations. these directives translate into steps that should be taken regarding transmission planning and investment but that is not happening to the degree necessary to make congressman date. the grid has to meet the need of load serving entities. although rules have been established for an apparent-- and opened transparent planning process, even ferc has recognized this is not happening efficiently. they do not have a seat at the

table the way that they would if they shared ownership. joint transmission ownership arrangements for all of them serve ownership of the grid which have occurred in many states, have a long history of ensuring that the transmission needs are met consistent with section 217. they also facilitate the siting process and spread investment risk and responsibility and provide an opportunity for small load serving entities to offset increasing transmission rates against transmission revenues thus reducing costs to customers. second, we need to ensure that investment is appropriate, consistent with 217's focus on those entities. members have experience rapid increase in transmission costs wiley portion is no doubt justified. transmission has become an investment magnet. the potential for guaranteed returns on equity on low risk

transmission assets, that is not necessary. well we support the consideration of grid resilience it should not become a blanket justification for excessive investment. third, ferc has fallen short fulfilling to 17's directives of long-term transition rights particularly after the capacity associated with those on which load serving entities rely on which exposes entities to increase costs especially of choices of large transmission owners have left them with resources and multiple rto's. fourth, above costs-- cost incentives are not needed to attract investment. there is no shortage of entities seeking to invest in the base equity and turn intended to refract-- reflect the cost of attracting capital. there's no need for-- incentive rates much less to expand

beyond opportunities provided under current ferc policy. those seeking permissions seeking to make load ratio investment in the grid. finally, the planning process can also be a more effective vehicle for inclusive transmission investment. nonincumbent transmission developers, especially those that accommodate participation by small load serving entities should have a fair opportunity to develop new transmission. congress should encourage the development process in a manner that will promote transmission ownership as well as the competitive discipline to curb those costs. we want to be part of the solution and so long as the needs of our customers are met. i look forward to this discussion. >> our final witness is mr. rob gramlich . you have five

minutes for an opening statement. >> thank you very much, ranking member rush and members of the subcommittee, i appreciate the opportunity to talk about the important issue of the state of transmission. there's no infrastructure more important than transmission which is essential to the reliable and affordable electricity service that we depend on for almost every modern commercial and individual activity. since this subcommittee was involved in passing in 2005 the industry has succeeded in building a lot of transmission. benefits have exceeded the cost by factors of 2-3.5 in major investments that you've heard about. transmission investment has enabled over $100 billion a generation investment, transition investment is needed for both a distributed future

and a large utility scale generation future. we've learned a lot about what works. in planning and cost allocation have worked well. in my testimony i provide 9 ideas for expanding transmission and improving performance but none of these ideas matter if there is no leadership at the department of energy or ferc. we are waiting for that leadership. i fear the agencies are too distracted to provide life extensions to all power plants. we are wasting our time comparing different dictionary definitions of reliability and resilience when we should be updating policies for transmission. if resilience is a code word for popping up on economic plants that needs to sink on its own merits as pat woods said recently. turning to transmission.

to improve transmission most of my recommendations are for ferc but i have some for congress as well. it doesn't matter if it's under the heading of 2000 or others, they could pull it out. we need to update transmission policy to create the grid that we know that we need in the future. i recommend that curran and congress built upon the twin policies of broad regional planning and beneficiary paid cost allocations. that is what worked in texas, miso, and what dr. krapels described should be done. >> they should align incentives for advanced technologies. not asking for a subsidy, i said align incentives so that transmission owners have an incentive to deploy cost- effective technologies. number two, curran should

incorporate advanced transmission technologies into planning. i don't like to call it non- wires alternatives. they are just other transmission options and should all be considered along with other assets. >> number three, they should fix into regional planning and cost allocation. clearly no improvements have been made since order 1000 attempt to improve that. >> the department energy and ferc should improve siting. it's important for the grid and we should make sure that it works and is used where appropriate. >> ferc should require proactive planning that captures all of the values of transmission . too often it gets compartmentalized and not all of the benefits are included. >> the administration should improve federal coordination on

federal lands. >> the department of energy should harness the authority and capabilities of marketing administrations. they can be involved in transmission, utilize section 1222, and help in other ways. >> the administration should couple the department of energy planning and support for corridor designation with the department of interior efforts to identify renewable energy zones and transmission corridor is. finally, congress should consider public financing to right size transmission. too often we under build for resources that we know will be there when our children, their children, and children's children will benefit from. those resources are there, we

know they will be there even in texas when we built a lot of transmission we have essentially used up that capacity. looking back we would have done better to build at the right size. i look forward to your questions. >> thank you, and for the panel we will have votes called within the next 10-15 minutes. we will have to go into recess but until then we will get through as many member questions as possible. we have 5 minutes to ask questions. you all know that i'm a texan. and y'all know that texans love to brag about fellow texans. we say they've done something good. half of the home of our former governor and excuse me former secretary rick perry. he did something good with these competitive renewable energy zones. he used them to fix a problem

that we had in texas. eight is a big problem. we have a lot of wind power but we have more power in rural texas where it's not needed. we needed in eastern texas, central texas, houston, dallas, austin and san antonio. but that's part of why, as dr. krapels said, texas leads the nation in wind power. one day a couple of years ago half of our energy was provided by wind. offshore corpus christi texas that wind whips 300 days a year. my question is for you, can you talk about how the model worked and if that's something we can do elsewhere? >> you are absolutely right. that model as well as the market structure overall as a model for the country and we would be doing a lot better if

we had the market model throughout the northeast in the areas as well as proactive transmission planning model that has accessed all of that wind and gas resources and served out on western texas in the panhandle. it is a simple formula of identifying where general resources are and proactively building to those resource. the alternative that is often used in the other places is to wait one by one for all the projects to connect and i know one of them are going to build the transmissions that are needed so you need to proactively build to the resource area.>> dr. krapels, do you know how that worked out? >> i totally agree. in the northeast we are looking

at a wind resource offshore that could be 10-20,000 mw, texas sized mr. chairman, and yet that is very big. it represents a huge investment opportunity of $30 billion or $40 billion which even by texas standards, yet our transition-- transmission policy is the opposite of that of texas. it is building and owning transition which seems almost insane. we should do what texas did. we should learn from texas and build and plan the transmission first and let the generators compete like hell to get access to that transmission. that is what you did and it works great. >> this is a great hearing so far. >> the last question, the white paper of new technologies that can optimize transition systems at a much lower cost. can you describe how that will work and

how to compare that to the cost of the consumer? what the benefits are of your plan?>> i formed a coalition working for advanced transmission technology and we put out a white paper. we were thinking part of our wholesale customers and that we do need more transmission but we should also make sure that the existing grid is used as efficiently as possible. many of these new technologies were not really commercially available in the energy policy act directed folk to promote them in 2005 so there's an unfinished chapter in the implementation of congresses act and that is on the utilization of the existing wires. a lot was done on incentives for new transmission but nothing was done on utilization.

we are not asking for more incentives, just alignment and inclusion into the planning process. >> one question. i would be curious to know if you think they are doing a good job of keeping up with those transmissions. >> grade abcd or something below that? >> i would say incomplete. part of the challenge we talked about-- when we talk about regulators is that you are looking at multiple jurisdictions of authorities. unlike the case of texas where you have a wholesale regulator that is both retail and wholesale regulators, for most of the rest of the country it's difficult to bridge some of those divides. interstate transmission authority, but many other decisions regarding resource adequacy, planning or retail decisions are made at the state level.

it's tough because of the natural divide that sometimes creates tension.>> now his five minutes of questions. >> as i mentioned in the opening, we are moving into the new energy with advanced technologies. criminal-- in your opinion, in order 1000, an increase of these cause clean energy resources? >> sure, thank you for the

question. we are indeed moving toward the future of a more distributed network with many small sometimes retail or state jurisdictional resources. the planning process need to incorporate that and i do not agree with those who say we are not going to need as much as the bulk power grid. resources are often variable and remote and we need to move around the power geographically as well as over time which storage can do. we are going to need the big grid and much more coordination at the local level for state regulators to handle. i think reliability and efficiency can improve but if we bring those resources into the wholesale markets there are going to be a lot more resources available and if there are any shortfalls for

example if we give them access to wholesale markets we will have more reliability. >> in your testimony you are saying the reasons and we already know a fair amount of planning for order 1000. do you maintain that order 1000 should replace the approach to transmission planning? and the compliance checklist that may not necessarily result in additional transmission developments? what recommendation would you suggest that would help order 1000 to better achieve better

process planning and cost allocation? and increase competition or not incumbent transmission analysis? >> what i would do for those regions for the majority of the states they maintain vertically integrated utilities, i would argue that it should be put on a pretty severe diet so that it's slammed back in terms of trying to leverage and what we are working on in the past. you had indicated to reference my testimony when i talked about this, a lot of the compliance obligations in regards to things like competitive bidding in the process that each of these regions have to go through don't fit very well in regions

of the country that are so vertically integrated, and the reason is because utilities working with state utility commissions had always done that sort of regional planning in the past and order-- miso 's project is a good example of how that worked well. those type of projects we are not-- were not seen as coming forward because now the game of -- the name of the game is now we have to comply with order 1000 so it really just becomes a compliance exercise as opposed-- opposed to the more organic process that happened bottoms up. i think there were different issues and parts of the country that have restructured or that may have natural tension between generations and transition as it relates to the marketplace. even there i don't think order 1000 is working perfectly as indicated by some of the examples that dr. izzo talked about. at the very least in those vertically integrated regions it would be slowing down from a compliance standpoint and focus

more on good aspects of regional planning and collaboration and maybe especially on interregional projects but there may not have been as much conversation going on as there was after order 1000. >> another question for you sir. >> i think i'm ready to start now. i appreciate you hitting this to me. mr. twitty, work order 1000 has been discussed but the scope of transmission completion to date has been severely limited during

implementation forcing american businesses and households to overspend for transmission projects. why is competition in this area so important? >> well i guess first thank you for the question. we all believe the competition brings lower prices and better services. whether that can happen in a commodity -like transmission, or for that matter other aspects of the electric business i think is still a question out for debate. i think it's clear that we have to pay more attention to how transmission gets built, how its ownership share is divvied up, what the rates of return on her that are provided to the people who are building it, and as i suggested, there are lots of folks out there who do not have the opportunity to participate in the ownership and in some cases even the planning for these projects. i

would suggest that if you really believe in competition and you really believe in having a grid that is right sized, that everybody should be at the table whether we like order 1000 written with the way it has