gentleman from california. >> thank you, mr. chairman. i want to thank you for holding this hearing. this is a complex and difficult issue. i want to thank the panel for appearing this morning, in particular the chairman. i had the opportunity to visit one place this week. it was a good use of my time. this issue is complex and difficult as i just said. as economic challenges, technical talent is, and political challenges. i believe the ask.com will be best if we do our homework, consider the challenges, and devise a rational and bipartisan plan. thank you for appearing. i look forward to your testimony. i hope i can stay most of the time this morning. i yield back my time now. >> we now recognize the gentleman from kentucky.

>> thank you, mr. chairman. we look forward to this hearing today. i want to make a couple of points. if the applicants for the renewable energy mandate are successful, there will be large portions of the midwest that do not have solar, wind power sufficient to meet their needs. . renewable mandate without some federal involvement regarding deciding refinancing the building of additional transmission lines. particularly when you consider the department of energy's 20% energy by 2030 saying they'll have to build at least 12,000 new transmission, 12,000 miles new transmission, 12,000 miles of new meet that need and then on top of that when you consider this recent fourth circuit court of appeals decision that ranking member barton mentioned which

does make it more difficult for ferc to operate in this area. i do think we have some significant issues, and i hope this hearing can help us decide those. i yield back the balance of time. >> the time has expired and the chair recognizes the gentle lady from wisconsin, miss baldwin, for an opening statement. >> thank you, mr. chairman. transmission is critical to our nation's electrical system, and i certainly support grid expansion. i have significant concerns, however, about many of the recent federal proposals that jeopardize state and regional efforts to develop the transmission grid. specifically, these efforts ignore progress and may actually slow investments being made in states like wisconsin and others in the midwest. over the last seven years my home state of wisconsin -- the wisconsin rate payers have supported more than $2 billion

in investments in our transmission system. these actions have and will continue to improve reliability and increase the flowf renewable energy in wisconsin and our neighboring states. congress must ensure that weir not undermining the existing processes if we are going venture into the transmission arena especially when sensitivities exist to state authority, cost allocation, safety and eminent domain issues. as we examine these issues there are questions and challenges that we must keep in mind. who's going to pay for this? will those not receiving the benefits of transmission have to spend for the cost of lines traversing the country. i'm hearing strong concerns about designing our transmission system for one specific purpose. it's not the job of transmission planners or transmission companies to choose the types of generation that may interconnect with the transmission system. transmission is needed, plain and simple, regardless of the

type of generation. where i come from, transmission is a sensitive subject. it would be very difficult to convince wisconsinits and other americans that in the name of national interest, the federal government is taking their proper toe essentially stretch an extension cord across it to power a larger urban area many, many miles away. so what will this process be like for a public input if it is a federally-directed process? the citing of underground transmission lines may be easier than that than above-ground lines, the costs are significantly know creased perhaps as $3 million per mile. mandating technologies on states and regions have significant ramifications. again, i share the goal of ensuring the critical investments are made in our transmission system, but we must proceed with caution not undermining existing efforts that are already working in this process. thank you, mr. chairman. i yield back. >> great, the gentle lady's time

has expired and the chair recognizes mr. pitts. >> thank you, mr. chairman. thank you for holding this hearing on the national transmission policy. the official report on the 2003 northeastern blackout concluded that, quote, as evidenced by the absence of major transmission projects undertaken in north america over the past 15 years, utilities have found ways to increase the utilization of their existing facilities to meet increasing demands without adding significant high-voltage equipment, end quote. clearly, there is a significant need for an increase in transmission capacity. this need is amplified as we consider adding more and more renewable energy to the grid. while i'm fully supportive of adding more capacity, i believe we do need to keep in mind the legitimate desires of localities to preserve green spaces and historic sites. my district includes some of the

most pristine, historic landscapes in the mid atlantic. my district also has some of the most productive farmland in the united states. chester koirnths the home of valley forge in the brandywine county where i come from is one of william penn's original three counties. the tradition of preserving land and being good stewards of the earth have been passed down from generation to generation. we're not against progress, but we want to protect our heritage and be wise about how we use and develop the land we have. having the needed energy to turn on lights and heat water is critically important to the quality of life of every american. however, the preservation of natural environment of people's communities contributes to our quality of life as well. we need to ensure that all stakeholders are included in deciding where and when transmission lines are cited. compromise and dialogue are key in this issue, indeed it is

critical to strike a balance between the crucial needs of the country while at the same time maintaining historic open space areas that make our country beautiful and unique. as the country considers this issue i hope that we hear from an affected parties and work towards viable solutions. mr. chairman, i'm grateful for the opportunity to discuss this issue and it is my hope that today's hearing is only one in a series of hearings on this issue to ensure a robust and well-rounded approach to a transmission policy, and i look forward to hearing from our witnesses. i yield back. i thank the gentleman. the chair recognizes the gentleman from vermont, mr. welsh. >> thank you, mr. chairman. i actually want to just get my microphone to work here. i am proud that we have here today as one of our witnesses, david cohen. david is a member of the public service board in vermont serving on his third term, and he's been

appointed by republican and democratic governors alike. he's done a tremendous job. he's vice president of the national association of regulatory utility commissioners. david is acutely sensitive to the particular needs of rural utilities where a small state, but this issue of transmission is incredibly important to us as it is all around. so i want to welcome him and thank you, mr. chairman, for inviting david to be here and add to the testimony. thank you. >> the chair recognizes the gentleman from louisiana, mr. scolese. >> thank you, mr. chairman. renewable energies will play an important role in the energy policy and the support the development of renewable sources of energy. as a matter of fact, republicans have drafted legislation, the american energy act which will

be in energy. as we expand energy sources like wind, solar and hydro and as the congress and this administration discussed the grid and its capacity, we must not neglect that many of these sources of energy are intermittent and need to be backed up by other sources of energy and we would be remiss if we do not emphasize the importance of diversifying our energy portfolio and ensuring that nuclear power is any part of the policy we discussed. wind and solar power still need to overcome fundamental obstacles and we cannot exclusively rely on the energy sources to power the nation. when the winds stop blowing and the sun stops shining, the hospitals that care for our families and schools that teach our children must continue to have reliable sources of energy to ensure that the lights stay on. transmission infrastructure, planning and citing policies are all important to this conversation as is the regulatory framework that will surround these policies. i believe it is also important

for the congress to carefully weigh regional considerations as we further discuss this issue. i look forward to today's hearing and i yield back. >> the gentleman's time has expired. the chair recognizes the chairman from north carolina, mr. butterfield. >> i'm going to move one seat down so i'll have the benefit of this microphone. thank you very much, mr. chairman, for convening this hearing. i want to thank the five witnesses who have come forward to make their testimonies available. it goes without saying that i support the expansion of the grid using 21st century technology. we certainly must do that. waxman takes dramatic step for the electric generation. the nationwide res standard and demands use of the sources and the price signal from the carbon cap will further the use of clean fuels. as we move forward we, must ensure, that it gets to the load

centers that demand them and this means we must address the deficiencies in our transmission grid that will delay us from reaching our full renewable potential or grid efficiency. there are a number of challenges to improofing transmission, but citing will be particularly difficult to overcome. balancing the federal, state and regional and stake holder needs and interests will be difficult, but cryptical to the completion of a modernized grid. comprehensive planning, cost allocation and ownership will also present challenges as we've heard today. the collaborative nature of the subcommittee and look forward to discussing the issue further. i yield back. >> i thank the gentleman. the chair recognizes the gentle lady from california, miss harmon. >> thank you, mr. chairman. we're debating on the floor a bill to have the fda regulate tobacco and i have to say it's a long time in coming and i'm

absolutely thrilled that we will finally, i believe, pass it and it will become law very soon. so while i'm celebrating about that, i'm thinking about another hard issue, this one which will require all of us to step up and think about risky strategies to make certain the promise of renewable energy and the absolute need for transmission of electricity throughout the count r country can be accomplished. i think anything we do in this committee will make us a few friends and make us a few enemies and that applies to us, regardless of which party we're in and which region we're from, but i think we have to step up as many people finally have stepped up in both parties to the need to regulate tobacco. i just want to point out some of the obstacles.

the u.s. electorate encompasses 167,000 miles of high-voltage transmission lines and another 300,000 miles of lower voltage lines. the grid is operated by approximately 130 balancing authority which is are typically utilities that own transmission systems and operate control centers to monitor control of the grid. those transmission systems are owned by several hundred prief and the public entities so let's start with that. it's incredibly complex and if we don't get a handle on that and don't step up to the tough decisions we won't solve the problem, but i would close by saying if we really want renewable energy in this country, we really have to fix the grid. thank you, mr. chairman. >> gentle lady's time has expired. the chair recognizes mr. greene. >> thank you, mr. chairman. i have a full statement for the record. in the '05 ak, we provided for

the transmission corridors that are so needed and like my colleagues have said, we disagree with the court decision any hopefully it won't be overturned by the supreme court, but there are things we can do, i appreciation the legislation and to expand and have a national grid. we know, and it can't be just limited renewables because those electricity protons don't decide where they come from, they just go down those lines. so that's why i'm happy to be part of the hearing, and i'd like my full statement to be placed in the record and support to expand the national grid. i have a huge transmission corridor right behind my neighborhood and in texas we don't have a problem with pipelines and transmission grids because we just approved $5 billion for the renewable electricity to come from west texas and our urban market. thank you, mr.

chairman. i want to commend you on all the to have done on this issue. i know it has been so many years and we finally pass the bill. i know that we will pass it on the floor and sent it to the president eventually. we will have someone testifying and under brown's leadership, it has been a leader throughout the state of new jersey. it today, the committee will propose options. a strong grip essential to energy reliability. -- a strong grip is essential to ensure reliability. -- a strong grid is essential to insure reliability.

it is critical that states like new jersey have authority over a new transmission lines. jersey have authority over the citing of new transmission lines giving far greater authority to cite high-voltage transmission lines will generate widespread local opposition. it must give states adequate authority over siding to ensure they can protect the environment and cultural and historical sites. another thing that would affect my state is -- how do we craft legislation to move renewable energy such as wind to population centers? i think we should think regionally. new jersey has tremendous potential to meet the renewable energy goals through solar and off-shore wind. it does not make sense for new jersey rate payers to subsidize from moving wind from the east to the west coast a cost at $10 million per mile. this could slow development of

alternatives closer to home. i believe the transmission provisions that were passed in the security act provide a balanced approach that respects regional differences and local concerns. before we pass legislation, we must consider how it will affect the economies of local, renewable energy projects and again, thank you again, mr. chairman. >> thank the gentleman very much. the chair recognizes the gentleman from georgia, mr. barrow. the gentleman waives his opening statement. all time for opening statements has been completed and we now turn to our very distinguished panel and our first witness, the chairman of the federal energy regulatory commission which overseas wholesale, electric transactions and transportation in the united states. he is also co-chair of the demand response collaborative launched jointly by ferc and the

national association of regulatory utility commissioners. we thank you so much for being here and your first appearance before our committee. we welcome you sir. whenever you're ready, please begin. >> good morning. >> could you just push the microphone a little bit closer and turn it on. >> good morning. thank you, mr. chairman. ranking member upton, members of the subcommittee. first, i have two preliminary issues and first i'd like to recognize and thank my colleague commissioner muller here today and i would request that my full testimony be placed in the record. >> without objection, so ordered. >> the fall into summary of the testimony. i appreciate the opportunity to appear before you today, discuss our nation's electric transmission grid. mr. chairman, your invitation for this hearing envisions, quote, a transmission system that will serve the goals of

substantially reducing greenhouse gas emissions and developing we newable resources and improving energy efficiency while preserving and enhancing reliability. a transmission system that meets the goals you have articulated will assist in promoting field diversity and reducing greenhouse gas emissions and strengthening our national security and revitalizing our economy and enhancing competition and ensuring reliability. such a reliable and robust transmission grid is essential to allowing regions, states and our nation to meet these goals. the commission has taken a number of important steps in recent years to promote the development of such a transmission system. for example in february 2007 the commission issued order which among other things had coordinated regional planning and required evaluation in that planning and demand resource on a comparable basis to other resources. the commission also approved an

initiative proposal from a california independent system operator to better allocate costs and the facilities needed to interconnect local constrained resources such as wind and solar to the transmission grid. nonetheless, i believe there are gaps in the commission statutory authority. the absence of a regulatory framework is the principle obstacle developing a transmission system that can support the goals you have outlined. if we are to overcome that obstacle, we need a national policy commitment to develop such a transmission system and in developing that policy, congress should consider three closely-related issues, planning, siding and cost allocation. first, the scope of regional planning initiatives needs to be expanded. we must create a structure that includes coordination on an international regional basis. it will transport power from areas rich in renewable energy

resources as well as the deployment of redistributed resources and key smart grade equipment and systems. second, states should ton have the opportunity to cite transmission facilities and developers should have resource as a federal siding authority under appropriate circumstances. it would be helpful even if limited only to transmission facilities needed to reliably meet renewable energy goals. third, if congress determines there are broad public interest benefits in the transmission system necessary to meet the goals discussed and then congress should consider clarifying the commission's authority to allocate costs of such infrastructure to the load serving entities or part of an interconnection where it is appropriate to do so. of course, the commission would need to ensure as it does today that these costs are allocated fairly to the appropriate entities and that due deference is accorded regions that work

together for mechanisms that garner cost support. it's important to recognize the issue is not how to choose between nearby renewable resources. both should be part of the mix of energy resources to achieve our national goals. and appropriately allocating the cost of transmission facilities needed to connect remote resources should not disrupt the implementation of state policies or disadvantaged local, renewable resources. rather, full-planning analysis that reveals respective costs of scenarios and a fair cost allocation of necessary transmission reliable to deliver the resources to lows will eliminate the barrier to clean resources and thus, will facilitate competition. such a measured approach should inform consumers that the sustainable resource options to meet state, environmental, and security objectives and enacting

a regulatory structure that enables such an approach to be implemented assuring the energy goals to be achieved. thank you for the opportunity to appear before you. i'd be happy to answer any questions you may have. >> thank you very much. our next witness is david cohen. he is the first vice president of the national association of regulatory utility commissioners. mr. cohen has also served as a member of the vermont public service board since 1995 and has continued. he has served in a variety of regional and national leadership positions including the chair of the consumer affairs committee of the new england conference of public utility commissioners. we welcome you, sir. whenever you're ready, please begin. >> good morning, mr. upton, and ranking subcommittee. i also served as the first vice

president of the regulatory commissioners also known as neru. i offer a state view on transmission. i'd like to thank representative wells for his kind introduction and his service to our state. he is certainly my favorite congressman from vermont. at the state level, we deal with transmission planning and siding requests regularly and the issues and concerns are not policy or procedural, and do not lend themselves to a one size fits all solution. state commissioners are obligated to act deliberately to ensure that any new projects would benefit the public. this means regulators must determine whether demand respon response, energy efficiency or local energy source is more appropriate than putting transmission towers in the ground. a major impediment is a great difficult no getting public

acceptance. as a country, we want our electricity to be affordable, reliable and increasingly clean, but we also want to ensure the transmission infrastructure does not impact our quality of life. public hearings on transmission lines are always packed with concerned rate payers and land owners with nearly all of them in opposition to the project. i can assure you no level of federal involvement will make this go away. still, the state and local level provides an important venue for all parties to be heard. state regulators know the geography and citizenry better than any federal agency can. our processes are transparent and give all parties a voice. what some may consider roadblocks and impediments we consider process. let me tell you more of what we're doing in vermont. it has a planning process that analyzes potential transmission constraints over a 20-year horizon and considers various alternatives including targeted

energy efficiency programs that would address any identified, reliable issues. the process ensures that solutions to transmission constraints 11 the long-term needs of consumers at the lowest cost. after decades, without major investment, the public service board has approved three major transmission projects from 2005 to 2008 with total projected capital over half a billion dollars. at the regional level, these without any transmission investme investment, more than 4 million has been placed in service and new england since 2002. despite the activity on the say the and regional level, they will provide broader transmission authority even though we're four years removed from the enactment of the policy act in 2005. epac gave backstop citing authority designated by the department of energy.

not enough time has passed to determine whether this law needs to be revisited, but the congress addressing this issue is nevertheless, neru reese notally updated our transmission policy in anticipation of federal action. we believe that a bottom up state and regional driven approach is the most appropriate model going forward. while we are not convinced that the case has been made for federal authority. we recommend the following principles. anything granted to ferc by the legislation allow for primary siding jurisdiction by the states and provide a ferc's backstop siding authority be as limited as possible. in no event should ferc be granted any additional authority over the siding and construction of new interstate transmission line. in no event should ferc be granted any additional authority to approve a new interstate transmission line that is not consistent with the regional transmission plan developed in coordination with affected state

commissioned or other citing authorities or regional planning groups. in no, vent should ferc be granted authority to approve a new interstate transmission line unless there is already in place either a cost allocation agreement among all of the states through which a proposed project will pass governing how the project will be financed and paid for. or if the cost allocation rule that covers the entire route to the proposed project. in no event should any legislation allow ferc to preempt state authority over retail rate making. the mitigation of impact under state authority. the distribution facility, the citing of generation or the participation by affected stake holders in state and/or regional processes. in no event should any legislation preempt existing state authority to eliminate bundled transmission services. in conclusion, the electric transmission system must have the capacity to meet the growing energy needs of the nation

regardless of the generation source, the solutions to the challenges will not come quickly or easily and will require the cooperation of all stakeholders including state and federal governments. thank you, and i look forward to your question. >> we thank you very much. i am now going to turn to congresswoman baldwin to introduce our next witness. >> thank you, mr. chairman. >> i am pleased to welcome a constituent to our hearing today. in 2007 governor jim doyle appointed laura naz ar to the service commission. she has played a leading role in confronting the challenges associated with transmission development. the wisconsin psc cited a significant transmission line. lauren serves as president of the organization of miso states where she's leading a regional planning and cost allocation effort for developing electrical transmission over the midwest iso region which includes 13 states and one