>> with regard to the increase in demand, we, we continually update our system. so we're going to continue to do updates, we've been doing updates all along. so i don't think that process ever stops. >> okay. >> in vermont, we've actually@@z r

a minute and 25 seconds over. >> i thank the gentlemen. by the way, we will be having a second round and perhaps a third round of questions of the witnesses. if the gentleman is interested. let me recognize the gentleman from washington state. >> thank you. i'd like to put on the record no objection of a letter from the university of california berkeley, dr. dan cammond, a letter describing the reason and the appropriateness of expanding new transmission lines. if i can put that into the record? >> without objection, it will be included. >> chairman wellinghov, i wanted you to expand your thoughts on how ferc could implement, if it does receive back-stop citing approval. how it could implement a greenhouse gas performance interconnection standard for new

transmission. and/or some criteria associated with compliance or fulfillment of the nation's renewable energy goals. several other witnesses made reference to something of that nature. could you tell us how you think that could work, even though we've heard the physical explanation that an electron is an electron, is an electron. how could this function? >> thank you, congressman ensle. we would initiate role-making, as part of that, all stakeholders would have an opportunity to provide any proposals as to how to implement such a greenhouse gas performance standard. in doing so, there's a couple of ways it could be done. certainly in looking at the current emission permits from t the, from those, it's based on known items, such as model and

configuration of generator, and mission and control equipment and composition of fuel and the approximate run time and the generator. you could take from that also the annual transmissions that are capped by a baseline used to determine compliance. we would take compliance from the current permit applications or new permit applications from generating stations and take that data, put it into a database. and ultimately, from that, use it to determine a greenhouse gas performance standard for a particular plants that were into the interconnect. >> so you can obviously do that for a particular plant. but could you effectively reference that to a particular lines? in other words, are the plants specific enough to the lines that this type of standard could be applicable to lines? >> i think you'd have to do that by regions. because it's all a matter of displacement. you're not really delivering

electron a to point b, necessarily over an ac line. it's really pushing one electron down the road. so i think you'd have to do it basically on a regional basis. but i feel we can do it, yes. >> thank you. commissioner azur, i appreciate your comments about the appropriateness of the federal back-stop authority and i share your view that it is appropriate. i appreciate your views because of your incredible background in the area. but i also appreciate you making reference to the necessity of considering demand-side issues when you do siting and planning. and i just -- i want to make sure you are aware that in the ace's bill, we do have very specific policy that is a policy of the united states and regional grid planning should take into consideration all demand side and supply side options. do you want to comment on that as a good idea or is there anything we should do to expand

on that in considering that part of our process? >> it is a very good idea. my point in raising it is those kinds of solutions are oftentimes best made at the state level. and because the states are going to understand how they're going to be setting up their distributed generation. how they're going to be setting up their energy efficiency and conservation measures better than the federal government. so that's the point i was trying to make with regards to why i thought a state-led process would be better with regard to those specific items. >> thank you. chairman hibrd, i want to ask you about cost allocations i'm told there recently has been a 345-kv endstar reliability project of transmission in the boston area. and i'm told that the total cost of that was $334 million and it was spread across new england. only 3% was assigned directly to the boston area. ratepayers.

so regional cost allocation seems to work. at least in your area. if cost allocation in general of that nature seems to be acceptable, should we not be able to fashion some other cost allocation more widely? >> certainly. thank you, congressman. i think it's instructive when thinking about the cost allocation issue, to draw a very clear line between transmission projects that are fleeded to maintain grid reliability, and transmission projects that are essentially for the benefit of generation developers. in the new england system, we have exactly that split. if there's, through the regional planning process, lines are identified that are needed to maintain reliability on a regional bases and the endstar line in boston was exactly one such line. then we support the socialization across the entire region. because it benefits everyone within the region. to maintain the reliability of the grid. so the cost of the endstar line

is shared by everyone in new england. and massachusetts, we're about half of the load. we pay about half of the bill. similarly, the project that commissioner cohen referred to in vermont, other projects that are on the books in new hampshire and maine, and connecticut, all focused on reliability of the grid. our project for which even though they're not within massachusetts, massachusetts will consumers will pay half of. it's a vitally important component of cost allocation. and we're looking at reliability to be a willingness within an integrated power grid to share the cross across loads. the distinction i want to make here is that the issue of cost allocation from building lines to interconnect generation resources departs from that. we wanted in order for our consumers to be protected, we want the cost of developing generation, including the cost of meeting compliance measures, and the cost of delivering power reliably to load and making sure you don't adversely impact the reliability of the system, to be borne by the generation

developer and included in the price that they're charging customers. >> i really appreciate that. just one comment. i think this is a new approach that some of us are suggesting, because there is a new national need just as important for reliability, and that's to prevent the earth from turning into toast. so that's the reason for our thinking. thank you very much. >> the chair recognizes the gentleman's time has expired again. there will be a second round of questions for all member who is are interested. the chair recognizes the gentlelady from the state of wisconsin. >> thank you, mr. chairman. and i want to direct this question to commissioner aczar. one of the proposals we hear a lot about on capitol hill is the possibility of a 760-kv line, also known as the transmission superhighway. and i would like to hear your insights on how 765-kv line

might affect a profile of a state like wisconsin. and if you could describe any concerns you might have that it would be detrimental to wisconsin or others? >> thank you, congressman. when you add a high-voltage overlay into a state, you have got to make sure that the underlying system is built up to accept that. in wisconsin, as both you and i have dmoeted, we've spent billions of dollars at this point in time, designing a specific kind of system. the american transmission company has designed a 345-kv system. if there's an 765 overlay built into wisconsin, it's essentially going to -- mess up our very deliberate 345-kv design. so we're going to have to build up our underlying grid. that being said, ultimately, if congress you know, gives us the mandates and the group of states

decide that the best thing to do would be a 765 grid overlay, then we're going to need to accommodate that. but i think there are better ways to do it. the one size fits all will likely be in my estimation, probably oversized and not cost-effective. the one way in which i think about a 765 grid overlay, is you've got somebody with a hose on one side of a swimming pool and he's got to get the water to the other side of the swimming pool. there's a strain at the other side of the swimming pool. there's two ways, two options he's got. one, he can extend the hose or the second option is, he fills up the swimming pool. and the 765 grid overlay is more akin to filling up the swimming pool than extending the hose. i think there are better ways to do it than one size fits all. bottom line is, the primary message is, we need to do the calculus, we can figure this out. a tailor-made answer is better than a sort of generic answer.

>> another proposal that we hear a lot about is making rtos the final decision-makers with regard to transmission decisions. and i wonder how you would analyze this as an option. do you think our rtos have all the correct interests in mind when they, when they would approach these sort of decisions? >> you know, the decision-maker in selecting the plan for the grid needs to be beholden to only one interest, and that's the public interest. the rtos are, they've got a lot of different stakeholders, and they're very adept, and i compliment them on trying to, to balance the competing needs of the stakeholders. but i can speak for the midwest independent system operator. they actually have a contractual obligation to their transmission owners to maximize the revenues of the transmission owners.

and it's, when you've got those kind of interests, they will not be thinking about the public interest when they're making their decisions. they will be thinking about their contractual obligation to the transmission owners. so, no, i do not believe the rtos should be the ultimate decision-maker in this. that being said, their expertise with regard to planning and their planning engineers absolutely need to be involved in this process. >> and i don't know if mr. cohen or mr. hibbard have any comments on that same question. >> i would concur with commissioner azar's comments as well. >> as would i. >> okay. great, i thank the gentlelady. the chair will recognize himself for another round of questions. let me move to you, mr. hibbard. so that we can put this out on the table. a lot of people, when they think

of the solar revolution, they think, well, we're going to bring it in from the deserts of the united states and bring it into the cities of our country. and that is true. and they also think that when we consider wind, that we're going to go out to the prairies of the united states and we're going to bring it into the cities. in order to provide the electricity. but people don't really think about the oceans as much as a source in the future of renewable electricity. and you made a reference to all of the eastern states governors from maine down to virginia, who are very concerned that their plans for bringing in wind off of the coastline or other renewable sources, might be undermined by this kind of a proposal. could you talk about that and talk about what your vision is, that is all of these governors in terms of what the long-term renewable prospects are for the east coast? >> certainly, and thank you, mr. chairman. you know in massachusetts, and i

think throughout the new england region, we are strongly supportive of the climate goals is that are inherent in the aces legislation and the renewable goals. certainly in massachusetts, we are. and we want to find the best way to meet them. we see off-shore wind as being in an enormous renewable potential for the coastlines of our country. a potential that is very close to load centers and can interconnect in multiple locations on the lower-voltage type networks that commissioner azar mentioned that will strengthen the reliability of the grid. and it represents, there's a huge amount of onshore renewable potential up and down the east coast. the concern that we have is that by, if you take for example, what's included in the joint coordinated system plan -- >> could you expand on what that is? >> it's a multiregional plan, i think coordinated by myself. >> can you -- can you explain what miso is?

>> as you all continue your n# n @ @ @ @ n%@ @ ue your astute observation about the link between our national economy and baseball. we are seeing signs that our economy is improving and it occurred to me, that at the same

time, if you watched the red sox once again sweep the yankees over the past few days, david ortiz is hitting home runs again. >> i'm going to stop right here. people won't know what you're talking about. i gave a speech in boston on monday, and i said that, i said in boston, that the economy was in a david ortiz-like slump. but that i had faith that our economy and david ortiz would be hitting home runs again. now, unfortunately, the "boston globe" ran a little editorial the next day, questioning my judgment and linking david ortiz's recovery to the american economy. that night, david ortiz hit a home run. last night, david ortiz hit a home run. today and yesterday, we got received all this new positive commentary about the american economy. i'm not saying it's directly related to my speech on monday,

however, i do believe that, and i thank you for pointing this out, that my comments were accurate. so please continue and we'll add back the time on to your statement. >> i'll see if i can remember the original question. there was, what i think has gone hand in hand with the efforts to push for expanded federal oversight over transmission, there have been a couple of major studies done recently by d.o.e. and also done by a group of regional planning entities across the country to look at this idea about how do we actually expand the development of renewable generation in the parts of the country where it exists. and move that across the multiple regions, and deliver it into subregions. so the joint coordinated system plan was a very large technical analysis of how to go about doing that. what the transmission network would look like, a superhigh voltage network would look like to accomplish that result. as part of that plan, when you

look at it, one of the things it does, is it would dump on extra-high voltage lines, on the order of several thousand megawatts of power into new england. at a very high voltage. now, in addition to the issues that commissioner azar has mentioned, that would require a lot of building-out of the transmission network within new england. the concern i have is that we have a competitive market framework in new england, that is absolutely essential to keep commodity prices low for our consumers. we have a need in the region over the next couple of decades, only on the order of several hundred to 1500 megawatts of new power. if we were to administratively put in a large, high-voltage transmission line, that puts that quantity of power into our region, it would eliminate the market signals that our local renewable resources require in order to move forward with financing and development. so that's our threat. our position is we have to meet

the carbon goals that the country is now warming up to and that we need to meet in the coming years. but the way to do that is to do it through insuring that the resources that are brought online are those that make the most sense to customers from the standpoint of the delivered price of electricity. and we think we can do that without this level of federal oversight. >> so if i may, one of your concerns and new england concerns then, generally those six states, is that as you put together regional plans to generate renewable electricity within the region, offshore or onshore, there's a huge project up in maine that could be ultimately in the thousands of megawatts, if it's built out completely. but there will be an issue there of getting that electricity down into the population areas. but nonetheless, it's contained within new england and has had historic relationships and worked through all the reliability, cost allocation and

siting issues over the years. but you'd be concerned that if there were some superimposed decision it build other lines in from other parts of the country, then that would change the economics of developing the renewables that are indigenous to massachusetts and new england, whether it be in arista county, maine, or off the coastline of new england. i'll add this as well. one of the things that's not well understood about the east coast of the united states. is that when you go out ten piles, 20 miles, 30 miles, 40 miles, you're still only in 200 feet of water. when you go out that far on the west coast, you're miles deep. in the ocean. and so in terms of the siting issues along the east coast, for wind especially, you can go out miles and miles and still be just hundreds of feet from having to site these wind

facilities. and then with superconducting technologies, bring them into shore and poke them into the preexisting grid that already is there in new england, with the states having to work out what the cost allocation is. but knowing that all of new england, for example and new york for that matter, and new jersey and maryland are all committed to resolving and cooperating in the production of new renewable energy resources. so hoping up the whole question of the remote areas of maine, for example most people don't know that 95% of main is forest. it's woods, it's rural. so there's a lot of opportunity there as well. although in the, it's a huge state as well. i just raise that issue of the because we have to strike a balance here. we two want each region's indigenous resources to be developed as well. let me recognize the gentleman from california, mr. mcinerney,

with his questions. >> i was expecting you to recognize mr. enserle first. >> i think it's appropriate to recognize you first. >> thank you. first of all i want to thank chairman wellinghof for his testimony this week. you're seemg to advocate that the fed have a significantly large role and that the state regulators were all saying the state should have a larger role, and the fed should have a littler role. so i guess that's not too surprising. i wanted to ask you, though, do you think that the u.s. faces significant technical hurdles? or do you think it's mostly political hurdles to improving our national grid? thank you, congress marn mcinerney. first on the issue of the

federal role. i believe we should primarily defer to the states. i think what we need is to have federal pressure to insure that the states can move forward with interconnect-wide regional planning, siting, cost allocation. but i largely agree with commissioner azar and her testimony, that really, it needs to be primarily informed by the states. we certainly have to have some entity who would overlook that state activity, to insure that the national goals are also incorporated into the, with the states. >> i liked her, miss azar's suggestion that we look all the people of the state in one room until a decision is made. but i don't know if that's going to happen. >> on your second question with to whether it's technical or political. i think it's a good mix of both and i think it's important to understand that, and i know that new england and the eastern seaboard states are very interested in offshore wind and i support offshore wind, i think that's a great resource. we have to understand that they're not an island, either.

they're interconnected to the entire eastern connect. for example, if we had offshore wind from rhode island, new jersey, new york, all the way up through new england, put in place, developed at say ten,000 megawatts of wind butt into the east coast. we could not simply as i understand it from my reliability engineers, simply interconnect it into the existing grid. we in fact, if we had that happen, and we had as little as perhaps 25 hundred or 3,000 megawatts of that go offline. we could black out florida. so we ultimately need to look at how to strengthen the entire interconnect, so that all the regions can meet the renewable goals and can do it with their local renewable resources and distant renewable resources, if necessary. >> thank you, mr. chairman. mr. halvey, i certainly appreciate your work toward the western region. i understand that your desire do

streamline the permitting process, do you have any specific recommendations along those lines? >> yes, i think a couple of recommendations. one, because of the work that we're doing, with regard to western renewable energy zones projects, it will become clear quickly which areas are the most desirable, the richest and the most developable renewable resource zones. given that identification, we think there's the opportunity to prioritize those areas, where they exist, in concert with federal lands. we believe there should be a priority given to the permitting in those areas. same thing with the transmission lines that would be necessary to move that power from those renewable energy zones, to the market centers where it's needed. one of the other aspects of the project is that we will identify conceptually at least, where the

transmission lines need to be, in order to use that power. >> so you're really addressing the prioritization, not the -- >> we think it's both. one recommendation is the prioritization. the second is to look at the requirements and certainly limit the numb of requirements that agencies have to go through, that have no value added in terms of the permitting process. that there's a way to protect wildlife and there's a way to address environmental values and there's a way to go through these processes and not take the kind of time that we're seeing with many of these applications. >> okay. i agree. and i just want to remark on mr. hibbard's optimism that offshore wind can be as significant as it can. and the fact that it's proximate to load centers and that's an important consideration as posed to putting in a lot of transmission. so i appreciate that. and also, the observation about just putting in large transmission capacity.

can have a negative impact on renewables. so those are appreciated, those comments are appreciated. and with that, i'll yield back. >> the gentleman's time has expired. the chair recognizes the gentleman from washington state, mr. hinsley. >> i want dodd read a little portion of commissioner azar's testimony and ask you questions about it. commissioner azar said congress should play an important role by setting clear mandates and guidelines, as well as strict deadlines for state and regional planning efforts. if the planning efforts fail to meet the mandates or deadlines, congress can set up a back-stop authority for federal agencies to take action and make sure that projects identified in the regional planning efforts move forward. paraphrasing now, examples of th type of leadership that would be helpful include the following, and then the commissioner lists four things. and the fifth thing is, clear

and powerful back-stop authority for federal action to plan for and approve and site transmission lines that are identified as vital in the state-led transmission process. i agree essentially with that statement and a bill that i've introduced, i think heads in that direction. the question i'd like to ask mr. hibbard, commissioner azar and chairman welling hov, is that mr. hibrd doesn't want to see offshore wind intruded by say coal coming in from ohio or somewhere else. andbard doesn't want to see offshore wind intruded by say coal coming in from ohio or somewhere else. a and. >> i believe we do have this back-stop authority. we can build something in that would make sure we preserve our goal of enhancing low-carbon-based fuels as part of what you might think of as bonus back-stop federal authority. is there a way to do that? and if you could give us your

thoughts on the best way to do that. i would start with mr. hibbard. if we were going to adopt this federal back-stop authority, what would you encourage us to do to prevents the scenario that you fear? >> let me start by saying that i think that the legislation, as it stands, contains the back-stop authority. by setting a cap on carbon and by setting a floor on renewable resource development, you're providing competitive markets, the market signal they need to spur the development. the question you're posing is, what if that's not enough. what if at some point we look and we see that for whatever reason, we're not getting the level of development of renewable and low-carbon resources to meet our clear caps and our clear floors. what i would urge all of you to consider is to try to come up with a framework that does so, while maintaining the importance of competitive market solutions. again, we on ferc's