captioned by the national captioning institute --www.ncicap.org-- >> hello, i'm llewellyn king, host of "white house chronicle," which is coming right up, but first, a few thoughts of my own. >as you know, the country has been roiled by the debate over energy in the age of obama. we are here in san francisco where the edison electric

institute is holding a meeting with the purpose of finding out more about the future of electricity. what is it going to cost us? how will we generate it? it is a terribly a vital service that we all depend on. you know, sentences go is a city that does different things to different people. i think this is the home of -- i think of this as the home of william randolph hearst and his newspapers that would not have been if he or his newspapers had not come on the scene at the same time as electricity, to turn his presses, to make type out of lead. i think first of electricity and of this really great american city, sentences go. i hope we can tell our viewers and show them something interesting about the future of this because it affects every

single one of us. >> hello, i'm llewellyn king, host of "white house chronicle," which is coming right up, but first, a few thoughts of my own. >> "white house chronicle" is produced in collaboration with whut howard university television. and now, the program host, nationally syndicated columnist llewellyn king, and co-host, linda gasparello. >> i am joined by john easton from the edison electric institute for international affairs. in my book, maybe the best job in the organization. wellcome. >> good to be with you. >> there are two buzzwords around here. one is cap and trade. the other is alternative energy. in europe, these things are

rather more advanced in some ways. germany has more alternative energy. of course, they are on their second version of cap and trade, which is the idea that cold -- coal other emissions will be tapped and there is the ability to buy credits. what happened in europe the first time? >> the first time that europe had the cap and trade, it was called the emissions trading scheme. it was meant to be a trial period. it is probably a good thing that it was. they found that they over- allocated the allowances. at one point, after it was discovered, the companies had far more allowances that they needed, the system collapsed and they learned a lot from that situation. one of the reasons that happened is because they did not have good data going in.

that is the difference with our system. we know what our plants are in bidding, so we will be much more refined. >> who were the winners in europe? was a france the winner? was germany the winner? >> i think it is early to tell who the winners will ultimately be because that first time was just in effect at test. ultimately, the winners will be the citizens if they bring down carbon emissions. what is important to me -- and i asked the question the other day -- all this talk about cap and trade, how much of that system brought down emissions in europe? at this point, not that much. part of the decrease in emissions is the general economic decline. we expect more results out of the u.s. >> our ability to do cap and

trade depends on other countries doing it as well, correct? >> certainly that has been one of the concerns propounded by some congressmen. they do not want to expose added costs to their constituents. we have made it very clear that we have climate principles, that we want some kind of protective measure to make sure that cost did not go out of sight. some sort of price tolerance so it would come within certain limits. >> in northern europe, germany which is very far north actually had the most solar and wind power installed. that is quite expensive. >> it is expensive. some people suggest the reason is expensive is because of the way they design their tariff to provide incentives for people to develop alternative energy.

our experience in the 1970's would be the law which required utilities to buy power for an extended time and avoided cost. >> it is just that -- instead of burning your own barn, it is somebody else's. >> right. we were concerned about any kind of proposal here that we provide the incentives through taxes. we were concerned about the negative experiences of companies during that mandatory purchase time. >> there seems to be in europe -- you have coal, germany. you have spain. you have when de france. -- windy france. france has nuclear.

they do not really need to develop windmills. is it not odd? >> i think that part of it is one of the things we watch out for from a policy standpoint, this idea that the government's want to -- governments want to impose an ideal on the industry whether or not it what still makes sense. historically, our renewable energy standard is in the southeast. to have a national standard means -- >> explain that to our viewers. southeast, which is really from washington down to florida. there is not much wind in summer. >> that is correct. >> there is a lot of sunlight. a lot of flowers. you have a very large population area on the coast that would not be terribly well served by wind power. or by solar power.

>> if you look at what states have adopted renewable standards -- >> which is a government mandate. >> it is a mandate. 29 states have these. if you look at the southeastern states, none have adopted a because they did not have those resources. -- none have adopted it because they did not have those resources. if we go to a national standard, it will mean those states have to effectively buy that energy from somewhere else. that will come at a cost to their citizens. >> you have been at mother superior about the tap of gasoline. they also have many more diesel cars. they do not make annoys like other machines.

every diesel engine makes a noise. how is it that europeans have achieved this? should we copy them? >> like so many things in europe, they have a different perhaps cultural background on regulation and legislation. through their tax policies, europeans achieved some of this by taxing some very highly. we all know that we pay a lot more for gasoline in europe than we do in the states. part of how we -- how they achieved this was tax policies that would never work in the united states. have they been successful? i think certainly in the development of highly-performing it diesel engines, they have been quite successful in europe, and i suspect we may see that come across to the atlantic -- or across the atlantic. however, it may disrupt the

intention to develop hybrids. >> which is very exciting. alternative, cap and trade, hybrids. we have pollution. if also means utilities still have to find the power. and pay for it. >> one of the advantages of going with hybrids is that most people would be expected to charge their automobiles in the evening hours when electricity demand is at its lowest. we are talking starting at 10:00 at night, running until 4:00 in the morning, having favorable rates during that time, along with smart grid technology. >> that would be good for the utilities and good for the air. >> ultimately, it is quite possible that these plug-in hybrids could be a distributor resource back to the grid during the daytime hours.

>> we are compulsive about travel. i envy you your job. >> thank you very much. >> i am happy to be joined now by craig mundie, the chief research officer from microsoft. that is a legendary company. yours is an extraordinary job. thank you for being here. i want to tell you a story. years ago, i was in bell labs in new jersey. i was blown away by what they showed me. this was extraordinary. i went back to washington, and on the train i was thinking -- there are so many great inventions. the things i am interested in are not new inventions.

the train, newspapers, utilities. they are all using technology that is 100 years old. this is still basically in boiling water to turn turbines. how'd you get deeper into the utility business and change it? >> i think you will see technology player role in changing the energy and environment space. to egg -- to a degree, it has. this will happen in a couple of ways. one, can we make the business of generating and selling power more efficient? in particular, if it involves this, will it be more distributed, it will be a real requirement for much improved networking, for command and

control, billy. on the other hand, however the generation side is involved, conservation is going to be important. i think computers provide a real opportunity now to change the pattern of consumption by making it more automated for people, so they can take electives choices about being more conservative. i think that is one of the advances in computing and networking and the low cost of consumer electronics will make that possible. that will be the first big change. >> when you think this change will be felt? -- when do you think this change will be felt? by the lower utilities? >> i think it will be in stages. we decided to be at the first stage in the conservation focus at microsoft, creating something that does not require

a technological or infrastructure shift. we are creating something called microsoft home, which is a free -- >> and that is spelled -- >> o-h-m. this is a very fundamental, basic electrical concept. it is a play on words to put an "h" in front of that. >> this is now available? if i go out next week and buy it, what will i get? >> first of all, you do not have to buy anything. just go to the microsoft website. it will give you an introduction and ask you a simple questions. it starts asking you your zip code. we recognize that while we want to build complex models to be

able to guide recommendations, it is very difficult to presume people would know all the necessary information. we start by doing your profile, with a set of default parameters developed for your zip code. this has worked and then the international laboratories through the years. we put a friendly wrapper around it. then it begins to take you through the different aspects of your home. when was it built? what materials was it constructive from? what direction does it face? very simple questions. you are basically providing more and more detailed information. at any point, you can stop, and we run a very complex mathematical model of your home and come back with a characterization of your energy consumption. from that, we can help you understand what matters and does

not matter. >> when you make observations -- they are very interesting and well received. one question is about privacy. we feel that we have none. all we know belongs to the great computer. whatever, the credit card. the problems utilities may face with the smart grid and smart technology, there is the sense that big brother is in the house now. >> it is an area of great focus for us. 2000, 2001, bill gates and i created a program called the trust through computing issue. it was focused on what the company would have to do to reassure the public so they did not have these qualms about technology. we focused on privacy, security,

reliability, and inter-opera ability. >>-- interoperability. all of our programs are launched with an eye to satisfying these constraints. we have seen the release of personal records. this is arguably even worse. this was examined in great detail by regulators, privacy advocates, citizen advocates, and we came through with flying colors. today, having succeeded in creating a model of how to take this data and be a trustworthy with the data, we can apply that same model to the energy space. a key part that is our promise

that the data is your data, not our data. so we act as an agent to hold it and only discharge, you know, disclosed it at your election. that has a great deal of emphasis of security around which has created a space where people are comfortable. >> do you think he will do exciting things for electricity and the consumers? the person down the line, using your technologies? >> i am optimistic. if i look at what we have done in the health field, i am excited by the energy that this is bringing to another community, the health-care community which, while technologically advanced, has not been particularly technologically advanced in the way they approach their patients. if you look at how the best

hospitals in the country are working, there is a new way to bring the patient together with the practice. i am hopeful we will have a similar phenomenon as consumers find microsoft hohm. >> i really hope you succeed. we need a departure in the delivery of electricity. thank you for talking with us. >> if there is a buzzword, it is a smart red. i hear them all the time at the white house. the smart grid is talking about nonstop. it is very important to the future. particularly because it brings in the alternative for new energy sources. the smart grid is different

things to different people. one hope for the capability comes from the ceo of tendril corp., a boulder, colorado company. what does this mean to you? >> if you go to a supermarket as a consumer, the supermarket gives you all the information you may. you can compare the prices of two loaves of bread on the shelf. you can look at the ingredients on the package. if you care about recycling, that information is on the package. as you check out, you get an instant itemized bill of everything. you are perfectly equipped to manage the things that you buy. can you imagine going to a supermarket that was run by your local utility with the information because you would

walk in and there is no price. we do not know the price of our electricity in real time. we do not know how much it cost to run the washing machine. as you check out, there would be no check out. you would be waived out into the car park, and 45 days later he would have a bill with all of the shopping you have done with one number. what we are about is trying to move the electricity consumption model closer to the supermarket model. >> how will it work? " there is a real benefit for the consumer to -- >> there is a real benefit for the consumer to control their consumption. there is real, tangible benefit to giving people information. >> how will the smart grid, which is a computerized meter, how would it tell you which appliances are making it go up?

>> there is a whole raft of connected appliances. they are connected seamlessly to the consumer. they read the consumption from the meter and the price slowed from the meter. what we are demonstrating here today with the refrigerator, if the price of electricity goes up, this is seamless to the consumer. you do not see it. you do see it if you said the rules. the reality is there are plenty of times a day -- >> we come from a culture where ice is not important. what is the timeline on the horizon? when will we have this? >> it is starting now. it will take five years in any given city. the early movers will be in the next five years.

i think it will still take another five years beyond that -- >> what are the chances we will have a lot of companies moving together that are it incompatible? we will have this played out large scale? >> i think there is a hazard of that. one thing the obama administration has done is if you want this money, you have to agree on this pattern. that process is going on today. the white house has kicked it off. >> the other thing i hear a lot about is jobs being created through the smart grid, and traditionally, energy has not been a source of jobs. it has not been people- intensive. if you get the price down, other industries have been attracted by the low cost of energy. all the while, and gas has not been traditionally high.

coal is very high, and it is a very unfortunate line of work. where you think these jobs are coming from? >> i think there are jobs in the infrastructure side of things. if you build these concentrated sources of renewable energy, there is a lot of work associated with extracting those, building the links that power the wires. in the united states where we are touching the consumer, there is our real tried to educate consumers about energy consumption. >> it has come out of this conference, and some have expressed fear that this is also the spy in the kitchen. one of the reasons not to go to the supermarket, not to use the smart card is that all of this information will be mined. it may be coded, but

nonetheless, it is your information. >> that is absolutely right. that is a very big concern. the consumer needs to make a decision about how much they want to share. we have this view that -- it is almost a religion -- that the data it be systems create belongs to the consumer. it goes nowhere. unless the consumer says they wanted to go somewhere. >> we do not control the fire wall. you control the fire wall. >> we will store this information for you and we will not do anything unless you want this to. we do nothing but store it. for example, consumers are not willing to sacrifice any amount of comfort when they are at home. they do not want the utility to turn their air-conditioning down when they are at home. but if they are a way, if they save $5, they will get a $5 rebate and they are willing to

let the utility no perhaps one day -- let the utility no brass when they are away -- let the utility know perhaps one their way. >> we get the sense with computers -- dial 9, if you know the name do that. this sense that the computers and the people running the computers have taken away our lives and left us without personalities. i called up a supplier, and i said do you have the number? no, i have a name. it is much faster if you have the number. it made me feel so small and awful. i detect -- there is one of female on this program. people are complaining about

this. they have the sense of being absolutely impotent in the face of the stock. then there is a national crisis like aig, and there is the sense that they are not players. the sense that they are victims increases. >> i think that is right. and that started when the utility industry has not traditionally thought of the consumer that way. all the focus has been on giving utility control and not in power in the consumer. this is much more about giving the consumer level of control. everything should be optional. >> canada was working on this. are there other countries ahead of us on smart grids? >> i think there are. there are countries further on, some european countries. italy springs to mind, as well

as some of the nordic countries. there is much more attention going into what goes beyond the meter. >> it was a pleasure having you. please come back. and look after my privacy. thank you. >> that is our program for today. i would like to remind you can watch this and other programs on the web at whchronicle. this is also broadcast on sirius xm radio. cheers. >> "white house chronicle" is produced in collaboration with whut howard university television. from washington, d.c., this has been "white house chronicle" -- a weekly analysis of the news with insight and a sense of humor, featuring llewellyn king, linda gasparello, and guests.

this program may be seen on pbs stations and cable access channels. to see the program online, visit us at whitehousechronicle.com. to see the program online, visit us at whitehousechronicle.com.