U.S. GOVERNMENT PUBLISHING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Publishing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

95–507 PDF 2015

THE 21ST CENTURY ELECTRICITY CHALLENGE: 

ENSURING A SECURE, RELIABLE, AND MODERN 

ELECTRICITY SYSTEM 

HEARING 

BEFORE THE

SUBCOMMITTEE ON ENERGY AND POWER 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

MARCH 4, 2015 

Serial No. 114–18 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

COMMITTEE ON ENERGY AND COMMERCE 

FRED UPTON, Michigan 

Chairman 

JOE BARTON, Texas 

Chairman Emeritus 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOSEPH R. PITTS, Pennsylvania 

GREG WALDEN, Oregon 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

Vice Chairman 

STEVE SCALISE, Louisiana 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

GUS M. BILIRAKIS, Florida 

BILL JOHNSON, Ohio 

BILLY LONG, Missouri 

RENEE L. ELLMERS, North Carolina 

LARRY BUCSHON, Indiana 

BILL FLORES, Texas 

SUSAN W. BROOKS, Indiana 

MARKWAYNE MULLIN, Oklahoma 

RICHARD HUDSON, North Carolina 

CHRIS COLLINS, New York 

KEVIN CRAMER, North Dakota 

FRANK PALLONE, JR., New Jersey 

Ranking Member 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

JANICE D. SCHAKOWSKY, Illinois 

G.K. BUTTERFIELD, North Carolina 

DORIS O. MATSUI, California 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

JERRY MCNERNEY, California 

PETER WELCH, Vermont 

BEN RAY LUJA ́ N, New Mexico 

PAUL TONKO, New York 

JOHN A. YARMUTH, Kentucky 

YVETTE D. CLARKE, New York 

DAVID LOEBSACK, Iowa 

KURT SCHRADER, Oregon 

JOSEPH P. KENNEDY, III, Massachusetts 

TONY CA ́ RDENAS, California7 

SUBCOMMITTEE ON ENERGY AND POWER

ED WHITFIELD, Kentucky 

Chairman 

PETE OLSON, Texas 

Vice Chairman 

JOHN SHIMKUS, Illinois 

JOSEPH R. PITTS, Pennsylvania 

ROBERT E. LATTA, Ohio 

GREGG HARPER, Vice Chairman 

DAVID B. MCKINLEY, West Virginia 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

BILL JOHNSON, Ohio 

BILLY LONG, Missouri 

RENEE L. ELLMERS, North Carolina 

BILL FLORES, Texas 

MARKWAYNE MULLIN, Oklahoma 

RICHARD HUDSON, North Carolina 

JOE BARTON, Texas 

FRED UPTON, Michigan (ex officio) 

BOBBY L. RUSH, Illinois 

Ranking Member 

JERRY MCNERNEY, California 

PAUL TONKO, New York 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

PETER WELCH, Vermont 

JOHN A. YARMUTH, Kentucky 

DAVID LOEBSACK, Iowa 

FRANK PALLONE, JR., New Jersey (ex 

officio) 

(II) 

(III) 

C O N T E N T S 

Page 

Hon. Ed Whitfield, a Representative in Congress from the Commonwealth 

of Kentucky, opening statement ......................................................................... 1 

Prepared statement .......................................................................................... 2 

Hon. Jerry McNerney, a Representative in Congress from the State of California, opening statement .................................................................................... 3 

Hon. Frank Pallone, Jr., a Representative in Congress from the State of 

New Jersey, opening statement .......................................................................... 5 

Hon. Fred Upton, a Representative in Congress from the State of Michigan, 

prepared statement .............................................................................................. 103 

WITNESSES

Thomas Siebel, Chairman and Chief Executive Officer, C3 Energy ................... 7 

Prepared statement .......................................................................................... 10 

Additional material submitted for the record 1

Dean Kamen, Founder and President, DEKA Research and Development 

Corporation ........................................................................................................... 27 

Prepared statement .......................................................................................... 30 

Additional material submitted for the record 2

Answers to submitted questions ...................................................................... 105 

Michael Atkinson, President, Alstom Grid, Inc., on Behalf of GridWise Alliance ....................................................................................................................... 34 

Prepared statement .......................................................................................... 36 

Christopher Christiansen, Co-Founder and Executive Vice President, Alevo 

Energy, Inc. .......................................................................................................... 48 

Prepared statement .......................................................................................... 50 

Joel Ivy, General Manager, Lakeland Electric, on Behalf of American Public 

Power Association ................................................................................................ 54 

Prepared statement .......................................................................................... 56 

Paul Nahi, Chief Executive Officer, Enphase Energy .......................................... 65 

Prepared statement .......................................................................................... 67 

Answers to submitted questions ...................................................................... 107 

Naimish Patel, Chief Executive Officer, Gridco Systems ..................................... 72 

Prepared statement .......................................................................................... 75 

Answers to submitted questions ...................................................................... 111 

1The information has been retained in committee files and also is available 

at http://docs.house.gov/meetings/IF/IF03/20150304/103072/HHRG-114- 

IF03-Wstate-SiebelT-20150304-SD001.pdf. 2The information has been retained in committee files and also is available 

at http://docs.house.gov/meetings/IF/IF03/20150304/103072/HHRG-114- 

IF03-Wstate-KamenD-20150304-SD002.pdf. 

(1) 

THE 21ST CENTURY ELECTRICITY CHALLENGE: ENSURING A SECURE, RELIABLE, 

AND MODERN ELECTRICITY SYSTEM 

WEDNESDAY, MARCH 4, 2015 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON ENERGY AND POWER, 

COMMITTEE ON ENERGY AND COMMERCE, 

Washington, DC. 

The subcommittee met, pursuant to call, at 10:17 a.m., in room 

2123 of the Rayburn House Office Building, Hon. Ed Whitfield 

(chairman of the subcommittee) presiding. 

Members present: Representatives Whitfield, Olson, Shimkus, 

Pitts, Latta, Harper, McKinley, Pompeo, Kinzinger, Griffith, Johnson, Ellmers, Mullin, Hudson, McNerney, Tonko, Green, Welch, 

Loebsack, and Pallone (ex officio). 

Staff present: Nick Abraham, Legislative Clerk; Charlotte Baker, 

Deputy Communications Director; Leighton Brown, Press Assistant; Allison Busbee, Policy Coordinator, Energy and Power; Patrick 

Currier, Counsel, Energy and Power; Tom Hassenboehler, Chief 

Counsel, Energy and Power; Tim Pataki, Professional Staff Member; Chris Sarley, Policy Coordinator, Environment and the Economy; Christine Brennan, Democratic Press Secretary; Michael Goo, 

Democratic Senior Counsel, Energy and Environment; Caitlin 

Haberman, Democratic Professional Staff Member; and Rick 

Kessler, Democratic Senior Advisor and Staff Director, Energy and 

Environment. 

OPENING STATEMENT OF HON. ED WHITFIELD, A REPRESENTATIVE IN CONGRESS FROM THE COMMONWEALTH OF KENTUCKY 

Mr. WHITFIELD. I would like to call the hearing to order this 

morning, and certainly want to thank our panel of distinguished 

witnesses. I am not going to introduce them at this time, but when 

you—right before your opening statements, I will introduce each 

one of you, and each one of you will be given 5 minutes to make 

your opening statement, and then we will have an opportunity to 

ask questions. 

Today’s hearing is entitled ‘‘The 21st Century Electricity Challenge: Ensuring a Secure, Reliable, and Modern Electricity System.’’ And I recognize myself for 5 minutes, I see I am already 

started on the clock. 

As we all know, the U.S. was the first nation to electrify, and our 

system of generation, transmission, distribution, and related comVerDate Mar 15 2010 11:35 Oct 05, 2015 Jkt 037690 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 C:\USERS\WLAUFERT\DESKTOP\114X18MODERNELECTRICPDFMADE WAYNE
2 

munication remains the best in the world. Nonetheless, new challenges are emerging, as are opportunities to modernize and improve the electric grid. The challenges are significant. Much of our 

grid is outdated. In fact, I have heard—I think I remember in 

someone’s statement, 70 percent of our grid is over 25 years old. 

Coal-fired generation facilities are shutting down at an alarming 

rate, reserve margins are inadequate in several regions, intermittent and remote renewable capacity is coming online, and cyber 

threats pose a growing concern. Those are some of the challenges, 

but the—we have many opportunities also. Utilities are planning 

to invest more than $60 billion in transmission infrastructure 

through 2024 to modernize the Nation’s electric grid, while abundant fuel resources and advanced generation, storage, and distribution management technologies can help modernize and diversify 

the Nation’s power portfolio. Further, big data energy analytics and 

new information technologies offer a diverse suite of novel products 

and services that can identify and mitigate inefficiencies in the 

electricity supply chain, while helping utilities meet changing consumer expectations. 

So we have many opportunities, and that is why we want you 

distinguished gentlemen here today to give us some insights on opportunities for the future. 

[The prepared statement of Mr. Whitfield follows:] 

PREPARED STATEMENT OF HON. ED WHITFIELD

Ensuring a secure, reliable, and affordable electricity system that meets the needs 

of the American people may very well be the most important task within this subcommittee’s jurisdiction. Indeed, the National Academy of Engineering cited electrification as the greatest achievement affecting the quality of life in the 20th century. This morning’s hearing is focused on improving our electricity system in the 

21st century. 

The U.S. was the first nation to electrify, and our system of generation, transmission, distribution and related communications remains the best in the world. 

Nonetheless, new challenges are emerging, as are opportunities to modernize and 

improve the electric grid. 

The challenges are significant—much of our grid is outdated, coal-fired generation 

facilities are shutting down at an alarming rate, reserve margins are inadequate in 

several regions, intermittent and remote renewable capacity is coming online, and 

cyber threats pose a growing concern. But there are opportunities, as well. Utilities plan to invest more than $60 billion 

in transmission infrastructure through 2024 to modernize the Nation’s electric grid, 

while abundant fuel resources and advanced generation, storage, and distribution 

management technologies can help modernize and diversify the Nation’s power portfolio. 

Further, ‘‘big data’’ energy analytics and new information technologies offer a diverse suite of novel products and services that can identify and mitigate inefficiencies in the electricity supply chain while helping utilities meet changing consumer 

expectations. 

The availability of advanced, user-friendly communications technologies has disrupted the traditional business model for nearly every consumer sector from home 

entertainment to taxis. The electricity sector is witnessing a similar shift. New innovative products and technologies in the electricity space hold the potential to empower consumers to make smarter decisions in energy usage, while providing new, 

more efficient and responsive ways to generate and distribute power. As consumer 

expectations and technology evolve, new business and regulatory models within the 

electricity sector also may be necessary to better reflect changing market conditions. 

A more modern and resilient grid will be better positioned to withstand and minimize any impacts resulting from severe weather, cyber attacks or any other threats 

to the grid. However, as the grid becomes increasingly reliant on information technology and digital communications devices, thousands of potential new grid access 

points are being created. While encouraging technology and innovation in the elecVerDate Mar 15 2010 11:35 Oct 05, 2015 Jkt 037690 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 C:\USERS\WLAUFERT\DESKTOP\114X18MODERNELECTRICPDFMADE WAYNE
3 

tricity sector should be a priority, policies must ensure that new grid-related products do no leave the grid more exposed or compromise customer information and privacy. 

Given the shift taking place in the electricity sector, it is paramount that policymakers and regulators at the Federal, State, and local level carefully weigh policies 

that can adapt to these new challenges and opportunities to build a market-driven, 

modern, and flexible system while ensuring the continued safe, reliable and affordable delivery of electricity to consumers. 

Mr. WHITFIELD. So with that, I will yield back the balance of my 

time. And, Mr. McNerney, I will recognize you for a 5-minute opening statement. 

OPENING STATEMENT OF HON. JERRY MCNERNEY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Mr. MCNERNEY. Well, thank you, Mr. Chairman. 

Hey, this is a really exciting hearing. It is an area I care a lot 

about. You know, the American grid is one of the great engineering 

challenges of the—great engineering achievements of the 20th century. It has provided us reliable electric power, it has helped our 

industry grow, and yet at today’s hearing we are going to get a look 

at what the 21st century grid might look like, but also what the 

transition between where we are today and what the 21st century 

grid is going to look like. It is going to be an opportunity and some 

very big challenges. 

Some of the factors that I want to bring to our attention are, coal 

is still our number one energy producer. Produces about 38 percent 

of our power. And to the chagrin of some of our colleagues, that 

number is decreasing over time. New—natural gas is our number 

two energy—electric energy supplier, and that is growing rapidly. 

There are some challenges with natural gas. We have the distribution challenge, especially in New England States, and—but the 

price of natural gas is going down, or is low now because of all the 

abundance of natural gas. So it is a real opportunity for us. Nuclear is number three, and I think nuclear is kind of stagnant right 

now. That may change over time. And fourth, renewable energies. 

It is growing rapidly, but it is only 13 percent of our capacity, and 

that includes hydro. So we have—with renewable energy, there is 

cost competitiveness. We can produce renewable energy pretty 

cheaply now, but we can’t dispatch it. It is not going to be there 

necessarily when we need it, so there needs to be some account 

taken to that and—when we integrate renewables into the grid. 

But if you look at what is happening, California is going to require 

33 percent nuclear power by 2020, so we have to rise up for this 

challenge. 

We also have the specter of climate change sitting there in front 

of us. It is going to require us to reduce fossil fuels, but it is also 

going to require us to increase efficiency. We have a need to make 

our grid more resilient. We are seeing that with our bigger storms 

now. We also have physical and cybersecurity. We want to make 

sure that our grid is strong, is safe. If there are physical attacks, 

if there are cyber attacks, if there are storms, if there are earthquakes, whatever the—nature throws at us or whatever our fellow 

human beings throw at us, we have to be able to maintain our grid, 

so this is a pretty big challenge. 

4 

There are big opportunities. I just want to tick off some technology. Some of these I don’t even understand myself. We have the 

automated circuit breakers and feeder switches. That is going to 

allow us to switch problems, we can—it is just like a transistor in 

a radio. I mean it is going to allow us to switch back and forth, 

and that gives us quite a bit of flexibility. There are mapping systems that will allow us to stop grid problems from spreading from 

one part of the Nation, and one sector to another. We have load 

management tools like megawatts that are being adopted in San 

Francisco. We also have smart meter technology, which I helped 

develop for a period of years in California. 

So there is a lot of technology out there, but a big opportunity 

is if we can provide cheap power for our customers, then manufacturing is going to be able to continue to grow and thrive in this 

country, and without it, we are going to be hamstrung. So this is 

a big challenge for Congress. It is going to require continued investment and commitment in Congress and in industry. We need 

to understand the big picture challenge before we do anything 

drastic here in Congress. We need to understand the engineering 

challenges. We need to put money out there so that the engineering 

challenges can be met. We need to incentivize that. We need to 

make the investment, and that means investment here in Washington, but it means also investment in our States, and it means 

investment by private investors. And how are we going to invest— 

incentivize private investors in grid innovation and grid technology, 

and development and grid infrastructure development if they are 

not sure they are going to get their money back? So we have to be 

able to figure that out. So this is part of the big picture challenge. 

But my colleague, Renee Ellmers, and I have started the Grid Innovation Caucus. That is giving us here in Congress several members that are interested in this area an opportunity to talk about 

some of these issues. So—and think about the big picture. 

I do have a story from my past when I developed wind energy 

technology, I started in the business in about 1980 when the industry was just at the beginning. And, you know, we went out there 

and we got an investment from some folks out there. We designed 

a wind turbine from a plain piece of paper. It was a wonderful experience. We put it up in the hills of New Hampshire, turned it on, 

had all the investors come out, turned it on, and then things started turning, the blades all flew off and everyone had to run for 

cover. But, you know, the investors stuck with us, and year after 

year we put a little bit more understanding in the blade roots, in 

the foundations, and the transmission, and in all engineering parts 

of that machine, and how, because of that kind of work, wind energy is very cost-effective, it is growing very rapidly. So you have 

to make the investment, you have to stick with it, and if you do, 

you get rewarded. 

So that will be my opening statement. Mr. Chairman, I yield 

back. 

Mr. WHITFIELD. Mr. McNerney, I am glad to see you so enthusiastic this morning. So, you know, I want to also give a warm welcome to our former Secretary of Energy, Spencer Abraham. Appreciate you joining us today, very much. And Mr. Charlie Bass, a 

5 

former member of this committee, we appreciate him being here as 

well. 

Our chairman, Fred Upton, is going to be a little late arriving 

today, so at this time, I would like to recognize Mr. Pallone for his 

5-minute opening statement. 

OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW JERSEY 

Mr. PALLONE. Thank you, Mr. Chairman, for holding this hearing 

on the future of the grid. I don’t know if I can be as energized as 

Mr. McNerney, but I did notice how energized you were and I was 

happy to see it. 

The National Academy of Sciences has referred to the U.S. electricity grid as the greatest engineering achievement of the 20th 

century because it delivers critical energy services to consumers in 

an instantaneous, affordable and dependable manner. In fact, as a 

society, we have come to expect that every time we flip the switch 

in a dark room, light will appear. But our grid is changing as we 

speak. There are ever-growing demands on the grid to power our 

new technologies, to accept new forms of generation, while at the 

same time conventional attacks, cyber attacks, climate change, and 

other new threats require the grid to become more resilient. And 

the grid is now the subject of almost constant innovation and entrepreneurship as well as—as many of our witnesses are going to attest. How we unleash that innovative spirit and at the same time 

ensure overall system reliability is the challenge for the grid of the 

future. 

Fortunately, advanced technologies exist to address these challenges, with substantial benefits for both the electricity sector and, 

in most cases, consumers. These new technologies are working 

smarter and promise electricity generation and delivery that is 

more efficient, economic and environmentally responsive. And 

while this transition will not be quick or easy, our witnesses today 

make clear that the move towards smart grid technology is already 

here. 

Today, you can already find this technology deployed around the 

Nation. You can see it in the deployment of smart meters and other 

technologies that facilitate greater energy efficiency and cost savings, as well as in the deployment of solar and other distributed 

generation. These technologies will also help us move forward in 

the fight against climate change, providing new ways to reduce 

greenhouse gases emissions, while at the same time enhancing 

overall system resiliency and reliability. 

In my home State of New Jersey, you can also see the deployment of smart grid technologies in the work DOE has done to set 

up a microgrid to prevent transit service outages in northern New 

Jersey, like the one we experienced during Super Storm Sandy. 

And while the movement to these new technologies is important in 

many cases, its near-turn adoption is not inevitable, nor is it necessarily a panacea for all the problems we face. And we will need 

to work with our State and local counterparts, including State regulators, to develop workable solutions. For instances, while a 

microgrid may help preserve power for a portion of a community 

6 

during an extreme weather event, policymakers will be the ones 

tasked with deciding who gets the benefits of that power, and who 

pays for establishing the infrastructure. Similarly, the rate of adoption for many of these new technologies often depends on the incentives put in place by policymakers. For example, real time smart 

metering can provide consumers with critical information about 

their energy use during hours of peak demand, yet without the 

proper structures in place to encourage residential or commercial 

customers to use energy during off-peak hours, there is little motivation for someone to charge their electric vehicle at night instead 

of in the morning, or to alter their business plans to ensure others 

can consume electricity during the day. 

And so policy questions still exist, but there is little doubt that 

adopting these new technologies to move us towards a smarter grid 

could spur benefits for consumers, our economy and the environment, and the witnesses before us today can help us navigate these 

obstacles to quickly realize the benefits of these technologies in a 

cost-effective manner. So I look forward to hearing your views. 

I would like to yield the remainder of my time to the gentleman 

from Texas, Mr. Green. 

Mr. GREEN. Thank my colleague for yielding to me—our ranking 

member colleague. I want to thank all our panelists for being here 

today, and I look forward to discussing this critical component of 

our economy. 

The electrical system and grid are technological wonders, and 

the—it is the bedrock of our industrial and commercial and domestic way of life. When folks turn on the switch, they never question 

whether America’s power sector will perform. 

In the 20th century, we expanded rapidly, constructing lines and 

establishing functioning markets. The complexity and vastness of 

the U.S. utility transmission and distribution system is unmatched 

across the globe. 

In the 21st century, we face challenges and opportunities from a 

changing marketplace. Traditional utilities face new challenge because the integration of renewable resources, implementing the 

new environmental regulations built on the rapid expansion of 

cheap natural gas. Transmission and distribution companies are 

looking at new dynamics of distributor generation. 

Finally, consumers are increasingly savvy and informed about 

consumption management and household efficiencies. As legislatures, we must provide these constituents the tools required to 

meet the challenges and capitalize on the opportunities of the new 

marketplace. Today, it is my hope we can elicit some information 

that would help us better understand the rapidly changing atmosphere, and assist us in crafting solutions so as to remain innovative, flexible, but 100 percent reliable. 

And I yield back my time. 

Mr. WHITFIELD. The gentleman yields back. And that concludes 

the opening statements. 

So now I would like to introduce our panel. And once again, we 

thank all of you for joining us today, and we look forward to your 

testimony. 

Our first witness this morning is Mr. Tom Siebel who is chairman and CEO of C3 Energy, also one of the founders of Oracle. 

7 

Each one of you will be given 5 minutes, then the little red light 

will come on when 5 minutes is up, but we won’t go strictly by that 

red light. But, Mr. Siebel, thanks for being with us, and you are 

recognized for 5 minutes. 

STATEMENTS OF THOMAS M. SIEBEL, CHAIRMAN AND CHIEF 

EXECUTIVE OFFICER, C3 ENERGY; DEAN KAMEN, FOUNDER 

AND PRESIDENT, DEKA RESEARCH AND DEVELOPMENT 

CORPORATION; MICHAEL ATKINSON, PRESIDENT, ALSTOM 

GRID, INC., ON BEHALF OF GRIDWISE ALLIANCE; CHRISTOPHER CHRISTIANSEN, CO-FOUNDER AND EXECUTIVE 

VICE PRESIDENT, ALEVO ENERGY, INC.; JOEL IVY, GENERAL 

MANAGER, LAKELAND ELECTRIC, ON BEHALF OF AMERICAN 

PUBLIC POWER ASSOCIATION; PAUL NAHI, CHIEF EXECUTIVE OFFICER, ENPHASE ENERGY; AND NAIMISH PATEL, 

CHIEF EXECUTIVE OFFICER, GRIDCO SYSTEMS 

STATEMENT OF THOMAS M. SIEBEL 

Mr. SIEBEL. Good morning. Mr. Chairman, thank you for the opportunity. 

I am here from Silicon Valley, and I have spent the last 4 decades in the information technology business, and we have been 

working for the better part of the last decade to think about the 

problem of applying the state-of-the-art of information technology 

and communication technology to the value chain associated with 

power generation, transmission, distribution, metering, and consumption. And if we are to look at this value chain, it would be— 

today, it would be largely recognizable by Thomas Edison, because 

we are dealing with late 19th century and early 20th century technologies, where at one end of the value chain we are boiling water 

and spinning a turbine, OK, we are rotating a magnet within a 

coil, creating a voltage, stepping up the voltage to, you know, higher voltage, transmitting it over long distances at high voltage, medium distances at medium voltage. It goes to a meter and then to 

the consumer. This is pretty much what it looks like. And it works 

great until it breaks. OK, and then when it breaks, whoever, Baltimore Gas and Electric or Constellation Energy or Pacific Gas and 

Electric, sends trucks out with people with volt meters to climb 

telephone poles and go down manhole covers, to find boxes that 

don’t conduct electricity, and they keep replacing boxes until the 

lights go back on. And this is pretty much how it works. 

Now, this infrastructure—these—the way that utilities are operated is then tend to run these businesses of generation, transmission, distribution, metering, customer care and billing, as separate business units, and as separate business units they have these 

separate enterprise information systems that have been supplied 

over the years by companies like Oracle and General Electric and 

Siemens and others. There are lots of reasons we can get into some 

other time why these enterprise information systems don’t want to 

communicate with one another. It makes it very difficult to share 

information, but let it be said that, you know, this has all been 

kind of driven by Moore’s law. Now, this decade, worldwide, this 

infrastructure is being upgraded so that all the devices are becoming remotely machine-addressable, so we can remotely sense their 

8 

state. The most common being the smart meter. So we don’t have 

to send a truck out to read it once a month, we can read it once 

a minute or once every 15 minutes. But what is significant is not 

the smart meter, the entire value chain is being sensored, from the 

vibration sensor on the nuclear reactor to the thermostat, the variable speed fan at Wal-Mart, OK, the single phasers, the step transformers, the stepdown transformers, and the substations. So as this 

becomes sensored, this begins to look like a fully sensored—basically, a fully connected sensor network. A guy named Bob Metcalfe 

out of Xerox PARC, he invented something called Ethernet, OK, 

and he coined something called Metcalfe’s law. So the power of that 

network is the function of the square of the number of nodes that 

are connected. 

So when this is—the amount that is being invested, I don’t know 

if I mentioned this, in upgrading this network worldwide this decade is $2 trillion. So this is the largest and most complex machine 

every built. The amount being invested in the U.S. this decade upgrading this infrastructure is $1 trillion. So as we do this, if we 

read a meter every 15 minutes, it is being read 32,000 signals a 

year. If we read it once a month, it is 12 signals a year. That is 

four orders of magnitude. Actually, we are increasing the amount 

of data by six orders of magnitude. So we have massive amounts 

of data that is being collected, and so what we can do now is we 

can apply the sciences of big data, cloud-scale computing, analytics, 

machine learning, and these new social human-computer interaction models to dramatically, you know, to optimize the entire 

value chain to, you know, if we balance—it reduces the amount of 

fuel that we need to generate by a percent. OK, if we use these 

technologies for predictive maintenance, we can replace devices before they fail, dramatically increasing safety, increasing reliability, 

we can, you know, increase the security infrastructure, and by the 

way, we can reduce the environmental consequences of the value 

chain by, say, order of 50 percent. 

So this is what we are doing today all over the world. I would 

say that Europe is probably ahead of the U.S. as it relates to this 

today. We are doing this now, and now putting this in the perspective of a company based in Rome, they have 67 million meters in 

40 countries, and so they are a 100-billion-euro company. It is a 

utility roughly the size of the U.S. market. And there, we are aggregating I think 7 trillion rows of data into an 800 terabyte cloud 

image. We process these data at the rate of 800,000 transactions 

per second, OK. Apply machine learning to optimize the value 

chain and the economic benefit to do this across the world is 6.3 

billion euros a year. We are doing this at Exelon. The economic 

benefit to them, $2.7 billion. This is the economic benefit to their 

consumers. Baltimore Gas and Electric, Pacific Gas and Electric, 

Socal Edison, Commonwealth Edison, we are doing—GDF Suez, so 

we are doing this all around the world today. This is what will 

make the smart grids smart, is the information technology, the 

ability to apply big data, analytics machine learning, and new 

human-computer interaction models. And the economic, social and 

environmental benefits are significant. So this is the exercise upon 

which we have been engaged, and it is fascinatingly difficult and 

fascinatingly exciting. 

9 

Thank you. 

[The prepared statement of Mr. Siebel follows:] 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

Mr. WHITFIELD. Well, thank you very much. 

And our next witness is Mr. Dean Kamen, who is the Founder 

and President, inventor and—also, but he is the Founder and 

President of DEKA Research and Development Corporation. And, 

Mr. Kamen, thank you very much for joining us, and you are recognized for 5 minutes. 

STATEMENT OF DEAN KAMEN 

Mr. KAMEN. Thank you, Mr. Chairman, and I think everybody 

here knows we are not here to talk about whether there will be disruptive change in the grid, but how it is going to happen and hopefully how to make it happen in the best possible way. 

Though we are here to talk about energy, I am a technology guy 

and I thought a very quick review, and it will be a very quick review, of a few other industries that were dramatically transformed 

at the intersection of new technologies that were properly embraced to take over from old systems that suddenly seemed inefficient and terrible. So as an example, I will give you computing. We 

all grew up, I think, with big computers that sat some place and, 

you know, the average kid today doesn’t know about what Mr. Watson and his company were about, they have tablets and cell 

phones, and they changed an industry and they wiped out an old 

infrastructure. There were interestingly three major infrastructures that were built in the 1880s—were established in the 1880s; 

photography, communications, and energy. 

So quickly, looking at this one, Alexander Bell in the 1880s decided we can let everybody talk to everybody, all you needed was 

a wire from your ear to anybody else’s ear. And it took about 100 

years to build up that massive infrastructure. Then the technology 

came along, and that was really neat. Most kids don’t know that 

a house has a phone. You have a phone. And technology like wireless and cellular and fiber optics have just transformed the communication industry, I think we would all agree, for the better. 

Photograph, again, in the 1880s it was a wonderful thing. We all 

remember our Kodak moments. We remember we could get that 

stuff to actually develop in only one day. You ask the average kid 

for a selfie today, they don’t know what film is, and the Kodak moment is—Kodak is history, it is a memory. So it is because technologies came along that were just breathtakingly better. 

What about energy. That is what we are here to talk about. Well, 

in the 1880s there was this guy Edison and Tesla, and they gave 

us big centralized plans, like Ma Bell, photography, what do we 

know about that great model that we have already heard is from 

virtually everybody out there and the first speaker, it is 150-yearold architecture. What do we know about it? Is it ready for disruption? Well, it is old, it is inefficient, it is unreliable, it is expensive, 

and it is dirty. 

Quick facts about what the grid is today. We have about 1 

terawatt, 1,000 gigawatts, of production capacity at an average of 

$1 a watt to produce that. That is $1 trillion in generation assets. 

Well, more than 50 percent of that stuff is 30 years old, and if you 

only replace the stuff that is that old at $1 a watt, it is $500 billion. Once you make that energy, you have to move it. And you just 

heard, at high voltage, transmission lines, they cost about $1 milVerDate Mar 15 2010 11:35 Oct 05, 2015 Jkt 037690 PO 00000 Frm 00031 Fmt 6633 Sfmt 6633 C:\USERS\WLAUFERT\DESKTOP\114X18MODERNELECTRICPDFMADE WAYNE
28 

lion a mile, and oops, sometimes they are not quite what we would 

like them to be. And 70 percent of those things are 25 years old 

or more, and there are 280,000 miles of that high voltage stuff, so 

if you replace the really old stuff, it is another $200 billion. Then 

you have the low voltage stuff in all your neighborhoods. Wires 

hanging on wooden poles. What could possibly go wrong? So those 

things are a real deal, they are only $140,000 a mile, and there are 

2.2 million miles of that stuff and 50 percent of that is at least 30 

years old. And if you just replace the stuff that old, it is another 

$150 billion. And then, of course, you have the annual capital cost 

of that infrastructure. Now, that is $90 billion is what we are 

spending in this country right now to keep that architecture operating, and we have all heard how critical it is, but by the way, that 

$90 billion, that is not one drop of oil or one pound of coal, that 

is just to keep that system up. 

So is there a better, more efficient way to do to this industry 

what has happened to communications, for instance? I think so. 

Everybody loves solar panels, and I think you will hear from this 

whole panel, between solar panels, battery technology, wind technology, controls technology, megawatts, all of these things are 

going to change. The question is how do we catalyze them to work 

together instead of frustrate each other, both technically and in a 

regulatory environment. 

Well, everybody I know loves solar panels. Very few people I 

know have put up enough solar panels that they have disconnected 

themselves from that grid that we all complain about. It is our lifeline. So how do you catalyze more people to do this? Well, the more 

you put those up without doing something else, you are actually 

hurting the grid because they add instability, unless you add good 

technology, and they lower the amount of power coming through 

the grid, but the models by which the grids are funded is by selling 

electricity. The more of this stuff you put up, it is a competitive 

perverse alternative to the grid. You have to do something that can 

catalyze this stuff to happen in a way that helps everybody, including the people supplying the power. So we said, why don’t we make 

an appliance, like all the other appliances in a house, that might 

help. This appliance makes 10,000 watts of electricity. We call—it 

is a sterling thermal technology. It is about as quiet literally as 

your hot water heater or your furnace, and the ones that we have 

made now 20 of, and placed them with a great visionary partner, 

David Crane, the chairman of NRG, have already produced 300 

million watt hours of power directly where it is needed in places 

where we can also use the waste heat because after all, it brings 

the same fuel as your hot water heater. 100 million of those things 

could produce as much power as the whole grid. I don’t think we 

need to go that far, but is 100 million a lot? No. Americans have 

140 million appliances bigger than this. Much more relevant, they 

have 117 million hot water heaters and 182 million furnaces, together that is 200 million appliances that use exactly the same infrastructure as us, except we will make your electricity and your 

heat. Where else could you put these things? This is why I think 

it can work to make the grid a great new future. Don’t put them 

in the houses, put them out on those transformer pads. By the way, 

there were 40 million of those transformer pads sitting there now 

29 

between the grid at that last stop and the user, and it is close 

enough to the user that we can still recover the heat, so we said 

put them out there, you lower the installation cost, you will make 

them easier to service, you will get higher efficiency, higher reliability, because houses can share them. Neighborhoods can start 

putting these things in under an intelligent control plan, and as 

you put a bunch of them near a set of houses, you don’t need another one of those wooden poles with the wires draped through 

your trees. You put enough of those neighborhoods together, you 

don’t need that substation. Over the next few years you, in a controlled way, get rid of enough substations, you start eliminating 

transmission lines, and finally you eliminate the power plants that 

aren’t the efficient ones, and then America has a bright future. 

[The prepared statement of Mr. Kamen follows:] 

30 

31 

32 

33 

34 

Mr. WHITFIELD. Marvelous. Thank you, Mr. Kamen. We appreciate that. 

Our next witness is Mr. Michael Atkinson, who is the President 

of Alstom Grid, Incorporated, who is testifying on behalf of 

GridWise Alliance. So you are recognized for 5 minutes, Mr. Atkinson. 

STATEMENT OF MICHAEL ATKINSON 

Mr. ATKINSON. Good morning, Chairman Whitfield, Ranking 

Member Rush, full committee Chairman Upton, and Ranking Member Pallone, Congressman McNerney, and distinguished members 

of this subcommittee. I am Michael Atkinson, President of Alstom 

Grid, Incorporated, and also I am here on behalf of the GridWise 

Alliance. I appreciate the opportunity to testify at today’s hearing. 

The U.S. electric system is undergoing a transformation unlike 

anything we have experienced in the past 100 years. This transformation will create opportunities to enhance reliability, efficiency, 

resiliency and security of the grid. The grid will continue to serve 

as the backbone of the Nation’s electric infrastructure. It will enable innovation to flourish, and the supply and demand of electricity across the transmission and distribution networks, all while 

continuing to provide safe, affordable, reliable power. 

The future grid will optimize the management and operations of 

the entire electric system value chain, which includes power generation, delivery and consumption. For example, new smart grid 

technologies help to enhance situational awareness, prevent outages, accelerate restoration, and—in the case of extreme events, 

and also integrate distributed energy resources. In addition, other 

technologies—other related technologies and capabilities such as 

energy storage, power electronics, and microgrids will also improve 

the performance of the grid. 

The Electric Power Research Institute has estimated that the 

total benefit of smart grid is in the trillions of dollars. More importantly, for every dollar invested, $2.80 to $6 in benefits are realized. 

GridWise and DOE’s Office of Electricity work with hundreds of 

public and private stakeholders to develop a shared vision for the 

grid, which includes the following. The grid will be the key component of the future electric system. This system will include both 

central and distributed generation sources. Powering communications will flow in multiple directions. Residential, commercial and 

industrial customers will use the grid in different ways, becoming 

both consumers and producers of electricity. This will help achieve 

the following three outcomes to accelerate the transformation to 

the 21st century electricity system. First, building on this shared 

vision, enable policies to ensure the markets, regulations, and new 

technologies are all aligned. Congress can exercise its leadership to 

facilitate ongoing and new public-private collaboration to achieve 

the grid of the future. Second, the pursuit of this future grid will 

continue to spur innovation and attract ideas, talent and resources 

from a range of industries. And I think you only need to look to 

my right to see that. Third, create additional highly skilled jobs. 

The transformation of the grid will necessitate advanced skills to 

implement these technologies. 

35 

In conclusion, we have an important opportunity to accelerate 

the modernization of our Nation’s electric grid. This will drive economic growth, strengthen our global competitiveness, and create 

highly skilled jobs. Action is needed now because this is a complex 

issue, and the technology and policy changes required could take 

years to implement. I want to underscore that access to a reliable, 

efficient, resilient and secure grid is a major source of our Nation’s 

competitive advantage. Congress can play a key leadership role in 

facilitating the acceleration of grid modernization, and ensuring 

that we maintain this competitive advantage into the future. 

Mr. Chairman, thank you for the opportunity to testify. I look 

forward to any questions. 

[The prepared statement of Mr. Atkinson follows:] 

36 

37 

38 

39 

40 

41 

42 

43 

44 

45 

46 

47 

48 

Mr. WHITFIELD. Thank you, Mr. Atkinson. 

And our next witness is Mr. Christopher Christiansen, who is 

Executive Vice President, Alevo Energy. And you are recognized for 

5 minutes, Mr. Christiansen. 

STATEMENT OF CHRISTOPHER CHRISTIANSEN 

Mr. CHRISTIANSEN. Thank you. And, Chairman Whitfield, Ranking Member Rush, and members of the committee, thank you for 

inviting me to testify on behalf of Alevo, Inc. You will hear from 

me today how Alevo believes that energy storage will play a crucial 

role in ensuring a secure, reliable and modern electricity system. 

I will also discuss how Federal policymakers can help to accomplish this goal by reducing regulatory barriers to the development 

of energy storage to benefit electricity ratepayers and consumers. 

My name is Christopher Christiansen, and I am the co-founder 

of Alevo, and I serve as the executive vice president of the Energy 

Division, which means I am responsible for all the energy daily activities, which include production design, business development, 

and sales strategies. I am also overseeing the development of over 

200 megawatts of battery energy storage projects, which we are implementing in the next 12 months. 

Alevo is a leading provider of energy storage systems designed to 

deliver grid-scale electricity on demand. Alevo couples grid analytics with our innovative battery technology, the Alevo GridBank. 

Alevo GridBank features a nonflammable, long life inorganic battery that enables a new source-agnostic architecture for electrical 

grids that reduce waste, greenhouse gases, create efficiencies and 

lower costs for the world’s energy producers and their consumers. 

Our mission is to maximize the value, availability, usability and 

cleanliness of electricity to better serve mankind and the environment. 

Alevo’s manufacturing plant is located in a former cigarette plant 

in North Carolina in Concord, in the district of Congressman Hudson. We are on track to employ 500 people in 2015, and we expect 

to employ over 2,500 by the end of next year. We are also set up 

for significant growth, as Congressman Hudson knows, because we 

have a 3 1⁄2 million-square-foot facility that can, at full capacity, 

produce 16 gigawatt hours a year. Within the next 12 months, we 

are manufacturing and commissioning more than 200 megawatts of 

energy storage batteries. 

Alevo is building a vertically integrated manufacturing and deployment organization, creating a global energy storage business to 

work with the world’s leading and largest energy companies. 

The electric grid is the only system of production that has not 

had a way to store its product efficiently. Energy storage changes 

that equation, allowing us to store that electric production and 

then use it when we need it, where we need it, and at the best 

price. Energy storage technologies, like the battery Alevo is manufacturing, will change the way our electric grid works, to enable 

greater efficiency of our existing generation fleet by optimizing heat 

rates, reduce ramping, to allow for increased resilience and reliability of the system, and to lower the cost of electricity for every 

consumer. Additionally, the increased efficiency provided by storage 

49 

lowers emission and water usage, 2 important and environmental 

benefits realized without adding cost to ratepayers. 

According to market research firm, IHS, energy storage growth 

will explode from 340 megawatts in 2012 to 2013, to 6 gigawatts 

by 2017, and over 40 gigawatts by 2022. To put that in perspective, 

40 gigawatts is equivalent to 40 new coal or gas fire power plants, 

and it is enough power to power a home—over 32 million homes 

for 1 hour. This explosion would create jobs in manufacturing, as 

with Alevo, right here in the U.S., allowing us to put our innovation to use to the benefit of the electric grid and consumers. 

As the theme of this hearing suggests, energy storage technologies like Alevo’s GridBank will secure a reliable and modern 

electric grid. The 21st century grid will be exposed to increased 

generation from variable sources, and also increased fluctuations in 

load. States hit by Hurricane Sandy, like New Jersey and New 

York, are already building these technologies into their resilience 

plans to ensure that emergency services are kept functional during 

catastrophic events. Even during ordinary power blips or outages, 

energy storage can help a system and its consumers ride through 

those events seamlessly. Southern California Edison recently 

issued a series of awards to accommodate local capacity requirements for their electric customers. They were required to consider 

50 megawatts of storage; instead, they awarded 50—sorry, they 

awarded 260 megawatts of storage, since it was competitive and 

provided the flexibility the utility needed for the system. As utilities and system operators consider their needs both now and in the 

future, and with the right policies in place, more and more energy 

storage is being deployed, decreasing the perceived risk inherent in 

new technologies, and reducing the cost of those technologies 

through increased scale. Alevo is positioned to drive down those 

scales—those costs even further with the manufacturing of hundreds of megawatts of energy storage capacity in the first year 

alone. One key policy that this committee can change is to reduce 

regulatory barriers for energy storage facilities, including exemption for Federal and State regulations in the same way those barriers are currently used for qualifying coal generation facilities. 

Congress could also ask FERC to valuate the value generated by 

energy storage, and ensure that FERC’s current policies recognize 

and award those values. 

I look forward to addressing any questions the committee has 

about Alevo and our innovation, or about energy storage technologies more generally. And I thank you for the opportunity to 

present this testimony. 

[The prepared statement of Mr. Christiansen follows:] 

50 

51 

52 

53 

54 

Mr. WHITFIELD. Thank you, Mr. Christiansen. 

At this time, I would like to recognize Mr. Joel Ivy, who is General Manager of Lakeland Electric, who is testifying on behalf of 

the American Public Power Association. You are recognized for 5 

minutes. 

STATEMENT OF JOEL IVY 

Mr. IVY. Thank you, Mr. Chairman. Good morning, everyone. I 

bring you warm greetings from sunny Florida. 

The American Public Power Association, based in Washington, 

DC, is the national service organization for the more than 2,000 

not-for-profit community-owned electric utilities in the United 

States. Lakeland Electric in Lakeland, Florida, is an APPA member, serving approximately 122,000 customer accounts in central 

Florida for the past 110 years. Like other public power utilities represented by APPA, Lakeland Electric was created to serve the 

needs of its local community by providing low-cost, reliable electric 

service on a not-for-profit basis. 

Public power utilities have been improving our grid-based technologies for some time now. As fiber optic systems started to become more prolific, the application of smarter tools and equipment 

became truly viable. Together with newer wireless technologies, we 

have been able to greatly expand access to information, perhaps 

like never before. 

I will discuss initiatives being, excuse me, under—I will discuss 

initiatives being undertaken nationwide by public power utilities 

related to grid innovation, but focus the bulk on my testimony on 

what Lakeland Electric has done and why. I am defining grid innovation as including deployment of smart meter technologies and 

communication systems to support those and other technologies, 

deployment of distributed generation, or DER, distributed energy 

resources, including storage. Increased real- and near-time realtime monitoring of power systems, which enhances situational 

awareness, and management of the big data being accumulated 

through the use of smart grid technologies. In addition, I want to 

discuss briefly some of the challenges to deploying these technologies, including cybersecurity. 

So the deployment of AMI, or automated metering infrastructure, 

is significantly more mainstream than a decade ago. It has become 

almost the default choice for upgrades to meters, leaving on the 

question of using fiber or wireless, or in Lakeland’s case, both. This 

effort was kick-started with Federal grants and loans, of which my 

organization was a proud recipient. In fact, we completed our deployment in 2013, and are now offering customer access to their information via our Web portal, and have some creative alternative 

rate programs for earlier adopters to use to save money and energy 

in their homes and businesses. 

The APPA and Lakeland are generally supportive of distributed 

energy resource technologies, such as rooftop solar, but the concepts of rate programs that will continue to spur this investment, 

while allowing utilities recovery of our fixed cost, is among the fastest growing issues in our industry. Excuse me. Net metering in 

some locations such as Lakeland provides a customer credit based 

on the full retail rate, which may allow customers to reach a netVerDate Mar 15 2010 11:35 Oct 05, 2015 Jkt 037690 PO 00000 Frm 00058 Fmt 6633 Sfmt 6633 C:\USERS\WLAUFERT\DESKTOP\114X18MODERNELECTRICPDFMADE WAYNE
55 

zero bill on an annual basis. Changes to our rates must not punish 

the early adopters who invested in older, more expensive solar 

technologies. At the same time, we must ensure utilities have proper revenue to recover the cost of our poles, wires and generators. 

This rate design issue is going on appropriately at local and State 

levels across the country, including in Lakeland. 

Regarding distributed energy resources, utilities are also concerned about customers having access to good information that allows them to make sound decisions without future regrets. Business practices that may be leading to the provision of erroneous information to customers, including information provided by certain 

solar leasing companies related to the payback of the leases, which 

are in turn being tied to unrealistically high assessments of annual 

electricity price increases, are at the heart of our concern. 

The future construct of the smart grid is full of unknowns as we 

look out longer into the future, and continued Federal support for 

funding innovative projects will be very important as our Nation’s 

entrepreneurs provide the newest and best support equipment and 

processes. 

Finally, Lakeland—Federal, State, and local collaboration is essential to maintaining physical and cybersecurity. While Lakeland 

has adopted cybersecurity as an essential business practice, the collaboration with governments at all levels remains a critical component, particularly related to information sharing. 

In summary, public power utilities like Lakeland Electric are deploying a variety of technologies to optimize a grid for more efficient and reliable service. In so doing, we worked very collaboratively with our customers, our policymakers, and our communities to determine what is most appropriate at the local level. The 

Federal Government can help in terms of targeted grants, and research and development, as well as in the area of cybersecurity, by 

sharing actionable and timely information with the industry. 

Mr. Chairman, thank you for allowing me to be here. 

[The prepared statement of Mr. Ivy follows:] 

56 

57 

58 

59 

60 

61 

62 

63 

64 

65 

Mr. WHITFIELD. Well, thank you, Mr. Ivy. 

And at this time, I would like to recognize Mr. Paul Nahi, who 

is CEO of Enphase Energy. And you are recognized for 5 minutes. 

STATEMENT OF PAUL NAHI 

Mr. NAHI. Thank you, Mr. Chairman. Chairman Whitfield and 

fellow subcommittee members, than you for the opportunity to testify at the Subcommittee on Energy and Power’s 21st century electricity challenge hearing. 

Enphase Energy provides solar energy solutions for the residential and commercial market, as well as energy services for utilities. 

Through the most sophisticated power electronics and communications technology in the world, we are able to bring a level of visibility, intelligence and control to our solar systems, which are deployed in over 80 countries. This has enabled us to leverage our 

solar assets to help strengthen and increase the resilience of the 

grid, while providing clean, affordable energy for our customers in 

the U.S. and all over the world. A public utility company located 

in the San Francisco Bay area, Enphase has grown to over 600 employees since 2006, and plans to employ over 750 employees by the 

end of 2015. Our products are now installed by tens of thousands 

of workers across the United States each day. We have a profitable 

business, and continue to invest in new technologies and new markets to enable more consumers to enjoy the benefits of clean, affordable energy, while helping our utility partners strengthen and 

stabilize the grid. In doing so, we are creating both blue- and 

white-collared jobs in our country, and creating competitively 

priced products that make the United States a global leader in our 

technology class. 

Our advanced technology solutions turns solar systems into assets on the grid, and our energy management system addresses the 

grid’s needs via our intelligent communications technology. In fact, 

we just completed an upgrade with a utility partner to remotely 

modify the operating characteristics of thousands of solar systems 

to substantially strengthen their distribution and feeder networks. 

In essence, we enable solar systems to observe and then respond 

to the potential grid issues, thus increasing its reliability. By optimizing the grid in this manner, we can either delay or eliminate 

significant capital costs, thereby reducing cost for consumers. 

As is implied by our product offering, it is clear that our number 

one job at Enphase is to help provide clean, affordable energy, 

while increasing grid stability. At the same time, we recognize the 

urgent need to increase the security of our energy supply. Energy 

security is fundamental to the health of our country. It is also a 

specific focus of this Congress. It must be recognized that new, 

clean energy resources can play a significant role in enhancing our 

energy security. Solar and wind are abundant and limitless, and it 

is our responsibility to harness these resources responsibly. That 

said, Enphase and others in this new energy economy will play a 

fundamental role in ensuring the energy security of our country. 

The technologies we develop leverage years of innovation in the 

semiconductor and information technology markets, and include 

many of our own advances. Because of this, each system we ship 

is embedded with the most advanced security protocols, and can be 

66 

remotely updated as necessary to prevent new cyber threats. We 

take our role as a though leader in the energy security seriously, 

and believe this arena will become increasingly critical over time. 

In order to ensure that our efforts to provide clean energy to consumers, while strengthening the resiliency and security of the grid, 

continue unabated, we must also maintain our relentless pursuit of 

more cost-effective solutions. Providing clean, secure energy is not 

enough. We must make it affordable for everyone. We have been 

able to dramatically lower the cost of our solar solutions, and are 

now applying the same technology to storage, where we also expect 

to see a dramatic decrease in costs. The same processes and semiconductor technologies used for developing and scaling the consumer electronics market are now being applied by Enphase to the 

renewable energy market. Technologies like the Enphase energy 

management system have the ability to realize significant cost reductions through economies of scale and continued innovation. It is 

my opinion that solar and other energy technologies will play a 

fundamental role in the new energy economy as a result of our 

ability to innovate and scale, resulting in highly cost-competitive, 

reliable and secure energy generation. 

Enphase Energy is built on a foundation of collaboration. We believe that a health industry lifts all market participants. We have 

no doubt that the creation of a new energy economy will result in 

hundreds of thousands of new jobs for Americans, and we are looking forward to enabling those interested in participating in this industry to make a smooth and successful transition. The result will 

be a strong and vibrant industry, abundant access to clean, affordable energy, a large, well-paid workforce, and a prosperous future 

for all Americans. The success of our company and other new energy participants is a testament to the increasing demand for affordable, clean energy, and we do not expect this to subside. 

That said, I believe our role as job creators now and in the future 

cannot be underestimated. With this role comes the responsibility 

to help others transition to this new and growing industry. We 

must recognize the amazing accomplishments of those in the industry who carved the path before us, and provide the support necessary to enable them to participate in this new energy paradigm. 

Lastly, we aim to remain competitive internationally to ensure 

the United States retains a position of leadership in the world’s energy ecosystem. 

I appreciate the opportunity to testify before this committee, and 

look forward to working with Congress as we continue to add jobs, 

increase grid stability, protect our citizens against cyber threats, 

and ensure the United States maintains its position as a global 

technology leader. Thank you. 

[The prepared statement of Mr. Nahi follows:] 

67 

68 

69 

70 

71 

72 

Mr. WHITFIELD. Thank you. 

Our next witness is Mr. Naimish Patel, who is the CEO of Gridco 

Systems. And you are recognized for 5 minutes. 

STATEMENT OF NAIMISH PATEL 

Mr. PATEL. Thank you, Mr. Chairman, and the other distinguished guests or congressional members of this committee. 

This is an important topic we will be speaking about today. My 

name is Naimish Patel. I am the CEO of Gridco Systems, a leading 

provider of agile grid infrastructure, that is consisting of advanced 

control and power flow technologies for the electric grid. 

Since the Pearl Street Power Station first went online in Manhattan in 1882, the electric grid in the U.S. has become pervasive 

in its reach, essential to the sustainable growth of our economy and 

national security, and a services platform that we have become intimately reliant upon, yet often take for granted; all testament to 

the work of the numerous utilities that maintain and operate our 

grid. 

Today, however, utilities are operating in a changing environment that poses a wide variety of challenges, but also opportunities 

for innovation. Much as our telephone system experienced a transformation in the 1990s, catalyzed by customer adoption of computing and demand for information services, so too are we seeing 

the beginning of a customer-driven evolution of the electric grid. 

Consumers of power are increasingly also becoming producers, 

through adoption of rooftop solar or small-scale wind power, requiring the distribution grid to accommodate two-way power flow for 

the first time, counter to the assumptions underlying its original 

architecture. Customer adoption of electric vehicles is creating new 

demand for power, each vehicle equivalent to entire home while 

charging, requiring new utility demand control measures to avert 

overloading existing infrastructure. Customer adoption of energy 

efficiency measures and home automation offer new resources that 

utilities can potentially harness for systemic benefit, blurring the 

nature of the relationship between utility and customer. Finally, 

increasing diversification of customer demand is creating stress on 

regulatory frameworks that have traditionally been oriented towards one-size-fits-all power delivery. All of these changes are compounded by the fact that centralized base-load generation and 

transmission capacity are growing tighter, and increasing volatility 

in global weather patterns is driving the need for higher levels of 

grid resiliency. In the face of these challenges, utilities must continue to deliver on their fundamental mission of supplying safe, reliable, and affordable power, while also introducing system flexibility in order to be adaptive to a more dynamic and diverse demand/supply environment. Emerging at this intersection of requirements is a historic opportunity for regulators, utilities and technology suppliers to jointly innovate. 

Not surprisingly, given the aforementioned trends are occurring 

at the edge of the grid where customers connect, the electric grid’s 

distribution system is on the forefront of change. Historically, investment in the distribution system has targeted upgrades of wires, 

poles and transformers; what is typically referred to as grid reinforcement. While these investments in grid capacity are indeed necVerDate Mar 15 2010 11:35 Oct 05, 2015 Jkt 037690 PO 00000 Frm 00076 Fmt 6633 Sfmt 6633 C:\USERS\WLAUFERT\DESKTOP\114X18MODERNELECTRICPDFMADE WAYNE
73 

essary, the flexibility to accommodate a more dynamic demand/supply environment relies on investment in infrastructure that can efficiently utilize existing capacity in order to curb costly grid reinforcement and, thus, electricity rates, while assuring reliable delivery of power under rapidly changing conditions. Much as the Internet is based on devices that actively and dynamically manage the 

flow of information across fiber optic or copper wires, the electric 

grid will increasingly require devices that actively and dynamically 

manage the flow of power, all under the control of a reliable, secure 

and scalable grid operating system. Fortunately, the technology 

building blocks needed to provide these functions are available, and 

at the cost, efficiency, and reliability metrics expected of electric 

utilities. Advancements in power electronics technology borrowed 

from hybrid and electric vehicles, wind convertors and solar inverters, can now be leveraged to provide dynamic regulation and routing of power flows at utility scale. While ruggedized distributed 

controllers, coupled with advanced networking techniques borrowed 

from the telephone sector, enable an emerging grid operating system to manage both utility and customer-owned assets, including 

power regulators, distributed energy resources, and home automation gateways, amongst many others. These core functions make 

the grid not just smart, but agile. It is brains and brawn in combination, or smarts in conjunction with action, that underlies agility, and most importantly, provides for a strong, standalone business case. 

We at Gridco Systems are singularly focused on providing these 

essential building blocks of the agile grid. We are working with 

utilities throughout the Nation in deploying our empower solution 

to address the challenges of today, while providing the foundation 

to adapt to the challenges of tomorrow. Strong economics drives our 

customer engagement process. Gridco’s focus is on delivering solutions that are more cost-effective, and delivering more compelling 

benefits to cost ratio than business-as-usual approaches, avoiding 

the need for subsidies and rate increases. As such, many utilities 

are able to leverage existing budgets to implement our solutions to 

address DER integration, increase asset and capacity utilization, 

improved energy efficiency, and deliver higher power quality, all 

justified on the fundamental economic benefits rendered. 

Technology availability is currently not the limiting factor in 

driving modernization of the electric grid. Missing are the financial 

incentives for utilities to invest in new technologies to address diversification of customer demand. And to be clear, I am not suggesting that use of subsidies. The cost of service-based regulatory 

compact that has guided the evolution of the distribution system 

since the Public Utility Holding Company Act of 1935, has proved 

highly effective during times of simultaneous load growth, relatively uniform customer demand, and increasing economies of 

scale and supply. Such macroeconomic conditions generally present 

from the 1930’s to the 1980’s, maintained low electricity rates and 

reliable service for end customers, while strong predictable returns 

for investors. Over the last 2 decades, however, average load 

growth in the U.S. has slowed, becoming less coupled to GDP 

growth, owing in part to the adoption of energy efficiency measures, and also to an increase in the service orientation of the U.S. 

74 

economy. Nevertheless, the reliable operation of the electric grid is 

as critical as ever to those customers—to our growth of our economy, and as such, continued investment is essential, but without 

rate increases for those customers whose use of the grid has not 

changed. After all, changes in customer use of the electric grid are 

by no means universal, at least at present. Customer adoption of 

rooftop solar, energy efficiency measures, and electric vehicles tend 

to be highly demographically correlated. As such, a minority of end 

customers, albeit a rapidly growing minority, is demanding something new of the grid, yet, the cost to accommodate them are socialized across the entire customer base under currently regulatory 

structure. Further compounding this is the fact that such customers may even pay less into the system, owing to their lower 

consumption of energy. Let us be clear; we want the grid to accommodate such customers. Their behind-the-meter investments are 

driven by basic economics that are only getting stronger. However, 

the revenue a utility realizes from these customers must reflect the 

actual cost of service to accommodate them. Fundamentally, not all 

customers are alike, and electricity rates structures must not only 

start to account for diversification of customer demand, but indeed, 

incentive—incentivize utilities to supply such demand. 

Conversations among State regulators, utilities, suppliers and 

other stakeholders are occurring throughout the Nation on how to 

evolve rate design to better align utility revenues with their underlying costs. 

Mr. WHITFIELD. Mr. Patel, I have let you go over almost 3 minutes, so would you conclude? 

Mr. PATEL. Yes, sure. 

Let us not forget that modernizing the electric grid is not only 

good for our national security and economic growth here at home, 

but also represents an opportunity for the U.S. to lead a global renaissance in energy services and grid infrastructure. 

Thank you for the opportunity to speak at this forum. 

[The prepared statement of Mr. Patel follows:] 

75 

76 

77 

Mr. WHITFIELD. Thank you very much for your testimony. And 

thank all of you. 

And at this time we will open it up for questions, and I will recognize myself for 5 minutes. 

Mr. Siebel, you had mentioned that the smart grid analytics 

technology, the savings are so great over cost that you really don’t 

need incentives or subsidies from the Government for some of this, 

but anytime we go through transformation of any sector, certainly 

in the electricity sector, there are always impediments, and you do 

refer to some State regulations and accounting rules. I was wondering if you would elaborate a little bit on that for us? 

Mr. SIEBEL. Thank you. Thank you, Mr. Chairman. 

We retained McKinsey and Company to do a study on the economic benefit of a smart grid analytics platform, and you think of 

this as the operating system for the smart grid, so it is the economic benefit to the U.S. consumer. And the study, which we will 

be happy to provide the committee if they are interested, concludes 

that the economic benefit is $300 per meter, per year. So it is pretty significant. So this is like $50 billion a year in economic and social benefit across the United States. 

Now, we have the adoption of these new technologies. If we look 

at all the new technologies that are being developed in Silicon Valley, Boston, Jerusalem, anywhere today, these are all Cloud-based 

Saas systems, you read about it every day, Google, Facebook, Twitter, whatever, so this is where innovation is happening. 

Now, the way that utilities make money is they spend money, 

and they spend money on capital and they get a guaranteed return 

on the capital by their regulator. Now, if they spend money on 

technology that was developed in the last decade, what we call enterprise information systems that you install behind a firewall, 

they will get a guaranteed return on that investment. It is capital 

expenditure and they get a return on that investment. If they invest money on this new generation of Cloud-based, what we call 

software as a service and platform as a service-type technologies, 

that is not deemed to be a capital investment, it is deemed to be 

an operating expense. So there is a disincentive to invest in innovation. If they invest in innovation, it results in reduced profitability 

and reduced cash flow for the utility. If they invest in obsolete technology, you get a 9 percent return on the investment. 

So I think the regulatory incentives at the State level need to 

change, and if they don’t change, we are depriving the American 

consumer of innovation. 

Mr. WHITFIELD. Yes. I would ask any of you, in America, we have 

this pretty well balkanized system. We have some independent systems like California, Texas, we have RTOs, we have regulated 

States, deregulated States. Does that balkanized system impede 

the growth of technology in the electricity sector? 

Mr. SIEBEL. I would comment briefly. I think it does. I mean if 

we are dealing with a company like GDF Suez, or a company like 

Anel, Anel is—both of these companies are roughly the size of the 

U.S. market. 

Mr. WHITFIELD. Yes. 

Mr. SIEBEL. They operate in 40 countries, they might be 100-billion-euro businesses, and they have in the order of 70 to 80 million 

78 

meters. So this is roughly the size of the U.S. This is one decision 

process addressing—— 

Mr. WHITFIELD. Yes. 

Mr. SIEBEL [continuing]. 25 to 40 countries. In the U.S., you have 

3,250 utilities servicing 100 million meters. 

Mr. WHITFIELD. All right. 

Mr. SIEBEL. So it is highly, highly, as you would say, balkanized. 

Mr. WHITFIELD. You know, Mr. Kamen, in your testimony, we go 

through these transformations, there are always unintended consequences, and you do refer to the distributed energy resource 

death spiral of Germany. Would you elaborate on that a little bit? 

Mr. KAMEN. Well, as I said, new technologies bring new opportunities. They also sometimes bring problems, especially to stranded 

infrastructure. And I am not a policy guy, but as I said, there are 

some perverse incentives out there. From a practical point of view, 

if the entire system that has ran for 150 years premised on the 

generating company only making money by selling more power, 

there is not an encouragement to save. If they have to run it 

through a whole system that they already own, and somebody puts 

a solar panel at the other end, instead of supporting the overall 

system, it hurts the guys that are losing some of that. But from a 

technology point of view, there is a subtlety that I don’t think 

maybe the regulators understand as well as the technology people 

which is, those big power plants are very good at producing a constant amount of power. It takes, in many cases, hours and hours 

and hours to bring those big boilers up. When you start putting 

transient capability online without enough battery, for instance, or 

other kinds of new technologies, what happens when that cloud 

goes by and suddenly a couple of hundred megawatts that was 

there goes away, or when that wind stops, you are asking that big 

tired grid that you were trying to avoid paying their bill an hour 

ago, suddenly you are desperate for more power. They have a 

tougher time reacting and keeping a stable grid with these other 

systems online than they had before, and they are making less 

money. 

In the case of Germany, the instability from a pure technology 

point of view, not an economic or financial point of view, but the 

instability induced in their large systems by all these new transient systems is making life difficult from a technology—— 

Mr. WHITFIELD. Right. 

Mr. KAMEN [continuing]. Point of view, therefore, making a reliability issue and a security issue. And I think we should avoid that 

in this country. 

Mr. WHITFIELD. Yes. Yes. My time is out, but I did want to just 

convey one thing. I was talking to a CEO of a big utility company 

in California, and they were building some additional transmission 

lines underground, and he said that the cost for them per mile was 

$100 million, which—that is a lot. 

At this time, recognize the gentleman from California, Mr. 

McNerney, 5 minutes. 

Mr. MCNERNEY. Thank you, Mr. Chairman. I want to thank the 

witnesses for all your testimonies. Very good this morning. 

Mr. Kamen, I just want to ask you a question here. What do you 

think the microgenerators that you discussed, I forget what you 

79 

called them, what do you think they would do to the grid system, 

to the transmission system, to the traditional utility company? 

Mr. KAMEN. So one of the things I particularly think should be 

attractive about it, again, as I said before, almost all of the systems 

out there are presented, some—it is true, some it is by perception, 

as a somebody wins, somebody loses alternative, as we move forward. 

I think if you can make, for instance, these generators, which is 

what they are, that use the—a lot of the infrastructure, for instance, the largest buried infrastructure in the country that we 

don’t need $100 million a mile for is natural gas, and many, many 

buildings have buried tanks with oil, propane. If our device could 

be moved so close to where it is needed, but still on the energy producer’s side of that equation, still just outside the meter, then the 

energy producers could have millions of these small devices that 

they own and operate, because most buildings and, certainly, 

grandma doesn’t want to become her own utility company because 

she has a solar panel, but if the utility companies and energy providers could compete with each other to have small units that are 

so close to the loads, they still get the full advantage of being a 

supplier of energy with just millions of little plants, but they get 

to avoid needing those transmission lines, distribution lines, substations, et cetera, that everybody is talking about being expensive, 

unreliable, and subject to issues. 

Mr. MCNERNEY. Right. Thank you. Nice answer. 

Mr. Atkinson, you said that the future will spur innovation and 

investment. How do you see it spurring investment in transmission 

systems, the future technology? 

Mr. ATKINSON. Today, it is spurring investment. As we get a 

framework, you are aligning our market, our policy, our technology, 

everything, you know, lines up for companies to come in, you know, 

drive solutions forward and invest. Again, as I point to the gentlemen on my right, came from different places, have come into the 

grid, and now are investing based on what exists today, based on 

the, you know, again, the policy and the technology that is available today and looking forward into the future. 

Mr. MCNERNEY. OK. Mr. Christiansen, just sort of an estimate, 

if someone puts a solar system on their house, how much will the 

storage devices that you are talking about add to the capital cost? 

Will it add 20 percent to the capital cost in order to serve the— 

a good purpose for the homeowner? 

Mr. CHRISTIANSEN. To direct cost, I mean on our unit we really 

do not approach the distributed solar household market, we see 

greater benefit of the grid connected bigger units. 

Mr. MCNERNEY. So you are not talking about a residential—— 

Mr. CHRISTIANSEN. We are talking megawatts scale, that is what 

we produce. 

Mr. MCNERNEY. OK. 

Mr. CHRISTIANSEN. We produce—yes, and then multi-mega—our 

standard building block is 1 megawatt hour, 2 megawatt units. 

Mr. MCNERNEY. OK. So you don’t want to answer that question 

for the residential—— 

Mr. CHRISTIANSEN. I mean I could estimate based on competing—competitors’ price estimates, but—— 

80 

Mr. MCNERNEY. OK, I will give you a chance to answer that offline later. 

Mr. Atkinson, do you think there is a role for the Federal Government, then, with respect to grid modernization? 

Mr. ATKINSON. Absolutely. I—again, I think you are helping 

drive that shared vision forward, aligning, you know, the public 

and creating new public-private partnerships. You know, today, 

companies like myself, you know, we are working with the national 

labs, we are working with our customers, and creating, you know, 

a more defined framework for that I think is a great job for the 

Federal Government to do, and that then allows the public and the 

private sectors to get together, you know, and fill out the space. 

Again, there is significant investment going on in the grid today, 

and it needs to continue. It is—it will exist in the future. It is the 

backbone of, you know, what we do, and it needs to be utilized in 

different ways. 

Mr. MCNERNEY. So you see a significant role for the national 

labs then in creating this future? 

Mr. ATKINSON. Absolutely. I think the national labs, you know, 

we are out—our technology center, Global Center of Excellence for 

Grid Technologies in Redmond, Washington, we have a very close 

relationship with VNNL. We work with several of the others as 

well. They have a different timescale that they look at, and it is 

great getting together with them and a customer. A customer who 

is doing things today, national lab is looking out 3, 5, 10 years, us 

looking out 1 to 3 years, and merging that together and figuring 

out what is going to work, and then figuring out how to commercialize that. 

Mr. MCNERNEY. Thank you. 

Mr. Chairman, I yield back. 

Mr. WHITFIELD. At this time, recognize the gentleman from Illinois, Mr. Shimkus, for 5 minutes. 

Mr. SHIMKUS. Thank you. Sorry for bouncing back and forth. I 

have another hearing upstairs, and met with the funeral home directors, and so we are trying to do multiple things at once. 

Mr. Kamen, it is great to see you. Charlie Bass, it is good to see 

you. Secretary, good to see you back in the crowd. 

FIRST Robotics. I will do the plug, right? We talked earlier, so 

the actual—the championship is in St. Louis, Missouri, which is 

right across the river from where I live. We follow it very, very 

closely. Thank you for that because now, it has gone not just into 

high school, but in the middle schools and in the grade schools with 

the Lego thing. And our Christian Dade School that I graduated 

from, my wife teaches at, they are all in it, and it is a great thing 

that you have started and I want to give that plug here. 

Also, I would like to go on just the issue, I know you have a great 

diverse background as an inventor in the medical field, insulin 

pumps, dialysis, why are you interested in this energy debate? 

Mr. KAMEN. First of all, thanks for the plug for FIRST. You are 

all invited to our—— 

Mr. SHIMKUS. It is the—and you have to use it when you get it, 

right? 

Mr. KAMEN. Well, we have events in every congressional district. 

Schools from every district. I hope all of you will get involved, but 

81 

thank you for that. And also thank you for asking because, honestly, we did not start building a small power generation systems 

for the U.S. After all is said and done, we still have a world class 

energy system. We have heard about that. I am a member of the 

National Academies. We did determine a few years ago it was one 

of the great achievements of the last century. 

I started building these small boxes because there are 2 billion 

people around the world that have never used electricity. And I 

made a box of a similar size that would make clean water without 

a lot of other stuff. It didn’t need filters or membranes or chemicals, but it needs a little electricity to run. And I thought the two 

most basic human needs around the world, water and power, ought 

to be available to everybody, and the rest of the world they are 

going to skip over ever building a power grid, just the way they 

skipped over landlines for cell phones—for phones, and now most 

of the developing world has this productivity called a cell phone, 

but they don’t have a grid. Our little boxes can operate remotely 

to make true microgrids, and in fact, we ran two villages in Bangladesh for 6 months off two of these boxes, and the only fuel that 

went into them was the methane coming off a pit full of cow dung. 

If we bring these things into production here, the U.S. could start 

supplying electricity to a couple of billion friends around the world. 

Mr. SHIMKUS. And I think the last time you really testified was 

on that technology also, as I remember. 

Mr. Christiansen, I was interested in your testimony, and of 

course, I am from a cold part of the country, that is a big debate 

here, but you—this—as I understand it, the provisions of getting— 

we want to create efficiencies by our major generators, the base 

load folks, and sometimes that goes up and down, and then—and 

peekers come in, so just briefly, how do we segue your technology, 

and what is it again, and then how do you think it is being reviewed and accepted by our friends down the street at the Environmental Protection Agency? 

Mr. CHRISTIANSEN. Well, we actually have sent this idea to the 

EPA as well. We did that last April. And the concept is essentially 

coupled with base load. You can optimize heat grades, basically 

have a unit that operates at constant output, almost like your car 

going down the highway at highway speeds where your battery system handles the flexible components, and that is what batteries are 

good at. They excel at responding quickly, fast and accurately, and 

that is what batteries should do. And then you have a unit that 

generates—that gets to be a generator and generates constant. And 

we have done a study that—on the whole west end connector, we 

sent it to the EPA on that, and you can essentially incorporate 

storage and have the efficiency pay for the storage units. 

Mr. SHIMKUS. Great, thank you. 

And I want to end up with Mr. Siebel. What do you see the primary regulatory burdens preventing utilities from grading adoption 

of new information technologies? 

Mr. SIEBEL. Great question. The barrier is very simple. OK. Utilities get a return on things that are deemed to be capital expense. 

Information technologies developed in the 20th century are deemed 

to be capital expense. You buy a piece of iron, a computer, disks, 

you put it behind your firewall, you get a disk from Oracle and you 

82 

install it, that is a capital expense. The new—and you get a guaranteed return on those investments through your rate case, so you 

can pass it on to the rate case. 

Investments in the new generations of technologies that they 

never see and touch, these softwares of service technologies like 

using Google or Facebook or Twitter, where nothing is ever installed, they get—that is not a capital expense for accounting treatment, so they—not deemed to be capital, so they cannot pass the 

cost on to the ratepayer. So it is deemed an operating expense, lowers profitability, lowers cash flow, major disincentive to invest in 

innovation. Consumers—U.S. consumers deprived of all the innovation going on today. 

Mr. SHIMKUS. And I thank you. 

Thank you, Mr. Chairman. Sorry for going past. 

Mr. WHITFIELD. At this time, recognize the gentleman from New 

Jersey, Mr. Pallone, for 5 minutes. 

Mr. PALLONE. Thank you, Mr. Chairman. 

I wanted to ask two things of Mr. Atkinson. First, you talked a 

lot about—and I wasn’t here so I have to apologize, I had to go to 

the other hearing, but you talked a lot about increasing reliability. 

What has industry been doing since the blackout in August 2003 

that, you know, went from Ohio to New York, to improve the reliability of the grid, and where are there technology gaps at this 

point? 

Mr. ATKINSON. There has been a lot of activity since 2003. It was 

a bit of a wakeup call. You know, one of the things it spurred, honestly, was the creation of the GridWise Alliance. That is what—the 

reason it was formed was to, you know, move forward and address 

these things. 

Another thing this, you know, people started paying a lot of attention to—as you looked at the root cause of why it happened, was 

situational awareness. We as a company came out with a product 

around situational awareness, letting people understand what is 

happening with the bigger picture and not just in the specific numbers and charts and graphs they are used to looking at. 

Since that point, us and, you know, frankly, our competition as 

well, has driven that, you know, situational awareness through all 

of the technologies that they have, making sure, again, that there 

is a bigger picture look at what is happening in the grid, not just 

right in front of me, but the potential ripple effects as it extends 

out from just my system. 

Mr. PALLONE. And then I wanted to ask you with regard to 

Super Storm Sandy, my constituents and I personally endured 

Super Storm Sandy, and could you explain—could you please explain whether and how we might avoid such severe and long-lasting power outages in future extreme events? It think it was about 

2 weeks or so that we were out of power. What is being done now 

to prepare for future extreme events like that? 

Mr. ATKINSON. An awful lot is being done. You know, the—as the 

grid is being, you know, rebuilt and revamped, it is being hardened. New technologies are coming into play. There was a 

microgrid that was—you discussed yourself with the trains, making 

sure that they can continue to flow. Also I believe around Princeton 

83 

there is a microgrid that has been put in place as well to maintain 

power. 

The—at the same time, there is a lot we could learn from each 

other. The GridWise Alliance, you know, joined together a bunch 

of people to discuss best practices. And just, you know, some people 

came back differently, better or worse than others. What are the 

best practices and how can utilities leverage that for the next 

event. We know these events are going to continue to happen, and 

it is minimizing their impact that we need to, you know, focus on. 

And then additionally, just the grid technologies continue to advance. You know, distribution systems that are being put in place 

today, the advanced systems, you know, they automatically identify 

a fault. You no longer have people out in a dicey situation, you 

know, looking for where the fault may be along miles of lines. You 

can identify very closely where a fault is. You can also do some 

automatic reconfiguration of the system to bring some people back 

automatically, thus minimizing the number of people that are, you 

know, experiencing the outage. And all this is helping things come 

back faster from the inevitable events. 

Mr. PALLONE. All right, thanks. 

I wanted to move to Mr. Nahi, if I am pronouncing it right. 

There was an earlier question, again, I wasn’t here, raised by one 

of my colleagues about issues relating to integration of solar and 

wind to the grid, but to the extent there are truly issues there, 

aren’t they easily dealt with? Could you just respond to that? 

Mr. NAHI. Sure. So I think we have to acknowledge that the dynamics that are making solar as powerful as it is today are doing 

nothing but getting better. The cost of solar energy continues to decrease exponentially year on year, while at the same time grid electricity, utility electricity, is continuing to increase in price. So the— 

it is less a question of how we do it, if we do it, it is a question 

of how we do it, and the reality is that the integration, the technologies that are available today at the—at—for distributed generation are so sophisticated that not only does it make the integration relatively straightforward, it actually acts to strengthen the 

grid. The fact is that the old hub and spoke model that we currently have is inherently flawed. What we want is more generation 

of all kinds, more distributed generation, and associated with that 

brings about greater visibility, greater control, there is more and 

more we can do to leverage solar as an asset on the grid and increase stability if we have the will. The technology is here. We 

don’t need any more. And I would say that it has become so sophisticated that it is relatively straightforward to integrate right now. 

With the appropriate policy and regulatory issues, with the right— 

the will to support it, we can easily integrate more and more distributed generation. 

Mr. PALLONE. All right, thanks a lot. 

Thank you, Chairman. 

Mr. WHITFIELD. At this time, recognize the gentleman from 

Pennsylvania, Mr. Pitts, for 5 minutes. 

Mr. PITTS. Thank you, Mr. Chairman. Thank you for your testimony. Good to see you. Charlie Bass, the Secretary, welcome. 

Mr. Atkinson, please tell us a bit about your R and D process, 

how does Alstom Grid go about bringing R and D to the market? 

84 

Mr. ATKINSON. First and foremost, we listen to our customers. 

The—and we work on solutions that are solving, you know, business problems. We are constantly, and I believe all technology providers are constantly working towards a more cost-effective delivery of electricity. You know, as we look longer out again, I thought 

that we have, you know, we discuss a lot with the national labs 

and we, you know, taking a step back, looking even further out as 

to what may be happening and, you know, begin planning ahead, 

but a lot of our efforts are focused in the now-to-3 years, you know, 

things that can, you know, be commercial pretty quickly. 

Our R and D center is located, you know, for the globe, is located 

here in the U.S. We have, you know, we hired, you know, in the 

last 8 years we have more than doubled the number of advanced 

engineers, power system engineers, and computer scientists. We 

work mostly with Masters in PhD, you know, people. It is a highend workforce, and they are sitting around working with customers, working to solve their problems, and then working to adapt 

what was a specific customer problem to a larger set of, you know, 

use cases across the industry, and that is when you come up with 

a full commercial product. 

We are focused on single code base and, you know, we created 

here and again for use cases in the U.S. and globally but, you 

know, making sure we have a single product pack that we can leverage globally. 

Mr. PITTS. Thank you. 

Mr. Christiansen, you stated that your technology is source agnostic architecture that helps balance the grid. What is the importance of being source agnostic? 

Mr. CHRISTIANSEN. I think the key point is that we are a flexible 

resource that is not purely a renewable integration, it is an 

optimizer for all assets. You look at the grid itself, the grid needs 

flexibility, it needs a dynamic resource that can adjust to changing 

load, change in generation, and can do it quickly, and that is unrelated to the source reflected. We have done studies where collocated with coal, we are collocated with natural gas, we have been 

working with cases where we collocated with nuclear. And the 

value proposition for storage is unique that it fits into all generation resources. 

Mr. PITTS. Mr. Ivy, how do the advanced grid technologies being 

deployed by Lakeland Electric better empower consumers to save 

energy and reduce their electricity bills? 

Mr. IVY. So we have enabled the customer information to be 

available on a customer account basis by anybody that is willing 

to get in there and look at what their consumption patterns are. 

We have also deployed shift-to-save rates. Our shift-to-save rate is 

a three-tiered rate. It is intended to incentivize people to go to a 

lower cost rate that is in an off-peak period of the day. We have 

a winter peak, oddly enough, in Florida, but we have a lot of northern visitors. So the tendency of wanting to get people to shift their 

consumption patterns from like 7 o’clock in the morning, everybody 

takes a shower, everybody turns on their heater, a cold morning, 

or two or three cold mornings in a row, and all of a sudden we have 

a winter peak that looks like this. That is what we have to build 

our system to. 

85 

So we are actively engaged with the consumers in outreach 

groups and civic organizations, and whatnot, trying to get them to 

get a good feel for how they can use that data to their advantage. 

Mr. PITTS. OK. Mr. Kamen, in your testimony you noted the need 

to promote renewable energy technology while ensuring continued 

viability of the utility-based model, siting Germany as a cautionary 

tale. How do you think these 2 seemingly opposing objectives can 

be achieved? 

Mr. KAMEN. Well, I think if you include all the energy producers 

and the people that handle transmission, distribution and retail, 

and included them in making these transitions to modern, clean, 

efficient technologies, first of all, a lot of people in the public don’t 

want to own and operate their own photovoltaic farms, et cetera. 

They are used to having somebody from whom they get a bill once 

a month and they have reliable power. So if you could make small 

distributed generators, but make them compatible, for instance, 

with solar panels, and as you have heard, the technology to make 

instant power electronically is pretty good, but the big old plants 

can’t respond as quickly when suddenly there is a cloud or the 

wind dies, but if those utility companies had access to distributed, 

very quick response ways to make energy so if the wind went 

away, if the cloud came by, if those batteries, even those great batteries go down a little, if those utilities and those energy suppliers 

are part of an integrated—that could say I am going to put clean, 

efficient, small, new stuff out there, it still helps them as the old 

guard get rid of some of their problems with these aging systems, 

right back to those big plants, those old transmission lines, those 

unreliable distribution, the switch gears, the transmission that the 

substations that we are hearing about being a problem during 

Sandy. So I think creating a piece of technology that could be put 

behind the meter, could be put in front of the meter, but giving all 

of the stakeholders the capability to find competitive ways to optimize producing energy, doing it cleanly, doing it effectively, everybody wins. 

Mr. PITTS. My time has expired. Thank you. 

Mr. WHITFIELD. At this time, recognize the gentleman from New 

York, Mr. Tonko, for 5 minutes. 

Mr. TONKO. Thank you, Mr. Chair. And welcome to our panelists. 

A number of you have mentioned in your testimony the increased 

role of customer involvement in the current operation of the grid, 

and the prospects for much more involvement in the future. Of 

course, this represents a significant departure from the mostly passive role that the average consumer plays now. They receive a bill 

and they pay it. If the power goes out, they call their local utility 

and report it. Now, consumers are also producing energy, and their 

ability to refine and manage their appliances and sources of energy 

are expanding. This is certainly part of what the smart grid is all 

about. 

You all mentioned the need for better information to go to consumers about their choices, and to educate them about how all this 

is going to work. How are utilities approaching this given phenomenon? Anyone? Yes, Mr. Siebel? 

Mr. SIEBEL. If we look at the utility engagement model, customer 

engagement model, it is firmly entrenched in, say, 1950. OK, so 

86 

where the primary communication is through direct mail and the 

call center. So if any of you remember Publisher’s Clearinghouse 

when we grew up, that is kind of what it is like. 

Now, it is clear that consumer expectations are dramatically 

changing. You know, with Uber and Amazon and Google, we can 

do anything in 30 seconds and two clicks. And fundamentally, 

there are very few transactions that we want to engage in with a— 

with our utility. Pay a bill, question a bill, establish service, change 

service, hook up our PV array, whatever it may—that is about it. 

All of those things are very time-consuming and painful transactions for a consumer to engage with. So we are working today 

with Northeast Utilities, Exelon, Commonwealth Edison, Pacific 

Gas and Electric, Socal Edison, Anel in Italy, GDF Suez and Europe, and basically what is going on is applying the learnings that 

we have learned from Uber and Google and Amazon, and applying 

that level of interaction to the customer engagement problem, so a 

consumer can get—basically do anything they want to do, you 

know, within a minute and say 5 clicks. 

Mr. TONKO. Um-hum. 

Mr. SIEBEL. And so there is major investment going on in this. 

Much of it was driven initially by the State-mandated energy efficiency mandates that are coming out, I think 39 States where they 

have almost $10 billion a year allocated for energy efficiency programs, but with, you know, fuel prices diminishing, those efforts 

are now being put to, you know, reinvent the customer engagement 

model, and we are working with utilities all over the world to do 

that. 

Mr. TONKO. Well, I agree we need to provide sufficient engagement of consumers early enough in the process to get good input 

from them on the frontend of program design. 

I would point out an issue we had in New York with rolling out 

smart meters. There were a significant number of consumers that 

strongly opposed having them installed because of a variety of concerns, including privacy. I would also point out that opening up the 

utility and the grid to a broader two-way conversation with customers presents both opportunities and problems in terms of computer security. I think with a much more dynamic and two-way 

role for the consumer and grid operations, we are going to need a 

more inclusive process to engage our consumers. Have any of you 

thoughts about what that might be in terms of engagement? Yes, 

Mr. Ivy? 

Mr. IVY. We are actually going through the throws of that in 

Florida. The Sunshine State has sunshine laws that allows everything be done in the sunshine. So if you are a public agency like 

we are, for example, we are kind of beholding to public records requests and we are to be providing what the requestor is asking for. 

At the heart of kind of what you are saying with us is, there is also 

information that we are keeping hourly information on metering 

data, things that can indicate whether or not people are home or 

not, closer to a real-time basis than just the monthly consumption 

information perhaps that they could get before. So we are wanting 

to push the notion in Tallahassee that perhaps we want to close 

that down just a little bit without getting rid of peoples’ ability to 

still get access to historical-type information. 

87 

Those conversations are important. They need to be had because 

we need to make sure that we are protecting the consumers’ information. 

Mr. TONKO. Thank you very much. 

And, Mr. Christiansen, as an advocate for renewable energy, I 

am very interested in the work your firm is doing with energy storage. You seem very encouraging. I feel encouraged about the possibilities. But the other day I heard a bit more skepticism about how 

fast this technology could evolve to make a significant contribution 

to the grid. What are the biggest challenges, and how quickly down 

the road will we see a meaningful energy storage outcome? 

Mr. CHRISTIANSEN. So we are in the process now of deploying 

over 200 megawatts, which we will do in 2015, and that is in markets that have been opened by, you know, FERC Order 755, opened 

the way to some of these markets. We also have tremendous interest now from utilities and also international. I think we can do 

some work on the policy part and ensuring that storage gets cheated for the value of the—and the flexibility, and the speed and accuracy it provides, and that will help more installations come up. 

Mr. TONKO. Thank you very much. 

With that, Mr. Chair, I yield back. 

Mr. WHITFIELD. Gentleman yields back. 

At this time, recognize the gentleman from West Virginia, Mr. 

McKinley, for 5 minutes. 

Mr. MCKINLEY. Thank you, Mr. Chairman. 

I thought that when we came here, the hearing was the ensuring 

a secure, reliable and modern electric system, and I thought by extension, we were going to be talking a lot more about the grid, and 

I have got more confused as I have heard all this discussion. It is 

much like, you know, I am an engineer by training and, by virtue 

of that, I suppose I can take on the lawyers in the room, because 

you ask 100 lawyers an opinion on something, you are going to get 

100 different opinions. So I am curious, I have heard very professorial comments, very in-depth, your white papers that you have 

all developed about this topic, but I wonder whether or not we have 

been able to reach America with the story, because we have been 

talking about source agnostic architecture. We have even heard 

about balkanizing. We have heard about platforms, we have talked 

about polar vortexes. Mr. Kamen, you were about as close to talking to the American public as I have seen in this panel. One thing 

I have learned in Congress in my 4 years here, that we have trouble when we are confronted with more than one option, and I 

haven’t heard the option. I have heard seven or eight different 

themes of where we should go, and I am really trying to get to a 

point with the grid of what is—and the folks on the other side, they 

all keep talking about consensus, so I will take their word. Is there 

a consensus of where we should go to develop grid reliability, because what we have not talked about is the public’s resistance, the 

public doesn’t want—‘‘don’t put that high-tension line over my 

property, not in my back yard’’. We haven’t talked about electromagnetic pulse, the threat to our grid reliability with that, because 

we know that is a serious challenge. We have talked about the fact 

that we have had briefings, I don’t think I am breaching protocol 

here, but we can shut off someone else’s grid in another country, 

88 

and they can shut off our grid, because we have that capability. 

There was just some mention slightly about the EPA regulations 

and shutting down some of our powerhouses that when we had this 

polar vortex, that we are now leading to a point that we came within, what I was told, 700 megawatts of having a brown-out last winter. That is really threatening. I don’t know whether people across 

American understand, that is really just one powerhouse, 700 

megawatts. 

And then the option of the age issue, I would like for you to just 

explain in terms that we don’t use here in the beltway for Mildred 

Schmidt to understand, what does that have to do with what—tell 

me a little bit more about the age because we have waterlines and 

sewer lines, and buildings and roads and bridges that are far older 

than 25 years. Why should I be worried about electric grid—why 

should I be worried about the electric power lines being 25 years 

old? So with that, I would like to hear, is there a consensus of 

where we should go, where Congress should be putting its first priority in getting greater reliance or dependability, or are we just 

kind of talking abstract again? Is there a consensus? Mr. Kamen. 

Mr. KAMEN. First of all, thanks for being an engineer in Congress. 

Mr. MCKINLEY. It is lonely. 

Mr. KAMEN. Secondly, I would continue, you know, in our FIRST 

competitions we call it coopertition. We believe that if you apply 

technologies properly, everybody can win as they compete because 

the public gets the best that way. And I think what you have heard 

from everybody is the grid is getting older, it is getting, for various 

reasons, the environment, terrorism, cyber attacks, and it is more 

fragile, and you are hearing a lot of people adding a lot of new 

technologies, but I would think where there is a consensus should 

be that you have to get all the people that provide the net result 

to the public, as you point out, working together so that you don’t 

create an if-I-win-you-lose situation. And the energy providers, the 

transmission or the generation—for instance, our partner for our 

little box is a major generator, NRG, yet they are now becoming 

one of the biggest suppliers of solar panels, and working with us 

on these small distributed boxes. In one perverse way, you could 

say they are undermining their core business, but, you know, like 

they always say, the railroads went away because they thought 

they were in the train business, not the transportation business. 

And to your point, the public doesn’t care about CDMA and 

TDMA and Time Division—they care about a cell phone being more 

convenience than a landline. So the public—if the public could have 

a simple appliance put into their home that already used infrastructure that we have great confidence in, because it is buried 

under the ground, like gas lines, like their oil, like their propane, 

and it could be made to work in parallel with solar and wind and 

the grid, because it sits at the intersection of all those things, 

somebody with an appliance like that would say, my costs went 

down because the waste heat from this thing is now my water system and my furnace, and I have more security and reliability because it is distributed, it is sort of like getting a back-up generator 

free, the people that run the grid and all the other systems win 

with it because it deals with transient problems, it is compatible 

89 

with solar panels, it is compatible with batteries, it is compatible 

with the big producers. 

Mr. MCKINLEY. My time has expired, but I just—so thank you 

for your comments. I am going to ask if you could please—I don’t 

have time, we are limited to 5 minutes here, so if you could please 

each of you could—would you mind, I would like to hear from you 

what is the number one thing we should do. If you could write that 

to me, I would like—— 

Mr. KAMEN. Yes. 

Mr. MCKINLEY. So that it is more direct. Instead of this abstract 

idea, let us get down to concrete where we can—— 

Mr. WHITFIELD. And did anyone else want to briefly respond to 

that? You looked like you wanted to say something, Mr. Siebel. 

Mr. SIEBEL. Yes, sir. You have an 800-pound gorilla in the room 

here, is the cybersecurity problem. OK, now, every now and then, 

I mean and this is an opportunity where the Federal Government 

can play a role. All right, so every year or so, we get the word out 

of Washington that this is a priority. The fact of the matter is any 

hostile government, OK, any 10 smart engineers from UC Berkeley, OK, could bring down the grid from Boston to New York, you 

know, in 4 days. And this system is entirely exposed. And if you 

bring in the leadership from Homeland Security, DHS, in here to 

talk what they—I think what they will say, and what I believe, before we really do something about this, we are going to have the 

equivalent of 9/11. There is going to be some disaster, and it is not 

going to be good, and it will come from just some bad actor or some 

kids. And then we will get serious and spend, you know, $100 billion a year on it for, you know, 10 years and declare a war on 

whatever it is. OK, but this system is so vulnerable and so fragile, 

and there is going to be a problem and we are not going to be 

happy. And it is fixable. 

Mr. MCKINLEY. So if you—again, when you—— 

Mr. SIEBEL. I will personally send you a letter, sir. 

Mr. MCKINLEY [continuing]. See it, you have that—tell me what 

is—— 

Mr. WHITFIELD. And Mr. Patel wanted to make a comment. 

Mr. PATEL. Yes. On a basic level, customers care about the cost 

of electricity and it being on when they want it. And for the variety 

of reasons we have discussed, we are at a point in the evolution 

of the grid where there are fundamentally two paths that utilities 

can go. One is to do what they have done in the past, which his 

to invest in wires and transformers, and poles and grid hardening, 

another option is to actually take a different path where the cost 

of upgrading the infrastructure can be lower. See, the challenge 

with the first path is costs are going to go up. That means your 

rates are going to go up. Investing in wires and poles is expensive. 

Now, with the technologies that we have all been discussing 

today, there is an opportunity for a much lower-cost path. Now, the 

question is why isn’t that happening? Why are utilities not pursuing the lower-cost path? And from my perspective, it comes down 

to incentives. You know, the regulatory compact that has driven 

decision making at distribution utilities is not directly incentivizing 

them to take the lower-cost path. Why? Because it is a little bit 

more risky, because of, you know, adoption of new technology is alVerDate Mar 15 2010 11:35 Oct 05, 2015 Jkt 037690 PO 00000 Frm 00093 Fmt 6633 Sfmt 6633 C:\USERS\WLAUFERT\DESKTOP\114X18MODERNELECTRICPDFMADE WAYNE
90 

ways somewhat risky, but also because there isn’t the direct financial incentive for them to adopt something lower cost. And so in my 

view, there needs to be a change on a State-by-State basis to the 

regulatory compact insomuch as it relates to how utilities invest in 

a capitally efficient way, rather than just investing in capital—— 

Mr. WHITFIELD. Yes. 

Mr. PATEL [continuing]. As has been referred to multiple times. 

And I think those incentives, once in place, the market and efficiency will naturally drive to an outcome that addresses reliability 

in a cost-effective way. 

Mr. WHITFIELD. Thank you, Mr. Patel. 

At this time, I would like to recognize the gentleman from Iowa, 

Mr. Loebsack, for 5 minutes. 

Mr. LOEBSACK. Thank you, Mr. Chair. Thank you for having this 

very, very critical hearing today, and thanks to all of you for being 

here. I really appreciate this very much. 

I am new on this committee, on the larger committee. I am new 

on the subcommittee, but I have been dealing with these issues, especially in rural Iowa, since I have been in office since 2007. Trying 

to get my head around all of this. It isn’t all that easy, as you 

might imagine as well, because all of you are kind of coming at this 

from different angles and what have you. But, you know, clearly, 

the idea of the smart grid makes a lot of sense. The whole idea of 

the—of an individual sort of having more control over how they use 

energy, the amount of energy they use and all, I mean I get my, 

you know, monthly utility bill, it tells you sort of in a macro-sense 

how much I have used, but that is not nearly the same as being 

able to control, you know, time of day and all kinds of things much 

better than I am able to do now, so I really appreciate that. And 

I do believe in individuals taking their own responsibility for their 

decisions. 

And we see in Iowa, for example, we do see a lot of wind turbines, you know, at farms, and solar panels powering, you know, 

hog farms, for example. I mean there is all kinds of stuff like that 

going on around this country, and around the 24 counties in my 

congressional district. It is really quite fascinating to see how this 

is all going. And the local RECs are kind of coming onboard more 

on solar, and some of these alternative energies as well. So it is 

really pretty exciting, and I am glad that Mr. McNerney was excited because—I am not quite as excited, but I am excited about 

all this, and sort of where we can go from here. 

You know, Iowa, traditionally, we were a coal State, not unlike 

parts of Illinois where Congressman Shimkus is from. John L. 

Lewis, actually, is from Iowa, long ago. But we have made this 

transition in many ways. I like to remind people that 27.3 percent 

of our energy in Iowa is wind-generated. We have a heck of a lot 

of wind energy in Iowa. Now there is big controversy about building a transmission line across the State carrying, you know, energy 

that is not necessarily generated in Iowa, but in other places, over 

to other markets to the east of us. But we are really making tremendous progress when it comes to renewables, there is no doubt 

about that. 

But I do want to ask kind of a general question. Anybody wants 

to answer this. And keeping in mind that if I get—if that takes my 

91 

time—I want to come back to you, Mr. Kamen, especially the German issue and some things you were talking about, and if I don’t 

get to that then we will do it for the record, if that is OK. Thank 

you. 

So, you know, I am from a rural area. We have a lot of challenges. We have natural disasters. Aligned Energy said they lost 

6,000 poles in February of 2007 when we had this massive ice 

storm. And I guess if you could be as specific as possible, how do 

we look at making sure that we get sufficient energy—continue to 

get sufficient energy to the more rural areas in places like Iowa 

and other places? I know it is a general question, and it is a big 

challenge to answer that question, but I want to open that up to 

anyone. You are nodding, Mr. Kamen. I don’t want to be preferential here, but you are nodding like you do want to answer that 

question. 

Mr. KAMEN. Well, as I said before, the actual stimulus to make 

our little box was for the parts of the world that have no grid at 

all—— 

Mr. LOEBSACK. Right. 

Mr. KAMEN [continuing]. Because it is very compatible with 

microgrids and can be networked, especially when you put smart 

technology around to connect them, and you make them compatible 

with solar, so you reduce your fuel needs, which could be hog waste 

or other things, but I think the more you have an unstructured 

area that doesn’t have a big grid already in place, transmission, 

distribution, substations, the more the 21st century is going to 

start from the other end of this equation and start integrating local 

solar, local wind—— 

Mr. LOEBSACK. Right. 

Mr. KAMEN [continuing]. But you need a system to make sure it 

is there all the time. And so since most places have some sources 

of fuel, natural gas or propane or—— 

Mr. LOEBSACK. Um-hum. 

Mr. KAMEN [continuing]. Number two, and, you know, we build 

a technology that is agnostic to that, if you have a hot water heater 

or a furnace, well you have—you can make electricity. So I think, 

again, it is also a piece of hardware that the competitive environment will say any forward-thinking utility or energy generator, or 

transmission company or any other provider would say it is compatible with what they are doing, and it should be made part of the 

equation for the future. 

Mr. LOEBSACK. If I could just skip—I know I kind of opened that 

up to everybody, but now I am thinking in terms of regulatory 

framework, making sure that we integrate some of these things 

into, you know, the generation and provision of power to folks, because it was mentioned, you know, we have to have the right regulatory framework, right policy, right regulatory approach. What is 

that approach? I think you were saying—talking about that, Mr. 

Nahi. 

Mr. NAHI. Exactly. So I completely agree with Mr. Kamen that 

the right answer is distributor generation. 

Mr. LOEBSACK. Um-hum. 

92 

Mr. NAHI. It can’t be done at the expense of the grid, this is done 

in concert with the grid, but really what we need is more and more 

of all kinds of distributor generation. 

Mr. LOEBSACK. OK. 

Mr. NAHI. In terms of the regulatory and policy changes that 

need to be adopted for that, we have to recognize that the potential 

for an adverse relationship between the renewable energy companies and the utilities exist. It doesn’t have to be. 

Mr. LOEBSACK. Right. 

Mr. NAHI. There are ways these companies can work together, 

there are ways that we can help the utilities adopt to a business 

model that would provide for more distributed generation. Right 

now, most of the distributed generation, not all but most, is done 

by third-party companies. 

Mr. LOEBSACK. Right. 

Mr. NAHI. There is no reason why the utilities themselves can’t 

take a greater ownership and greater responsibility for putting on 

more of that distributed generation. 

Mr. WHITFIELD. Thank you. 

Mr. LOEBSACK. Thank you. And, Mr. Chair, thank you. And I am 

going to pursue this with you, Mr. Nahi, more after this, and also 

Mr. Kamen on the German issue, if I may. Thank you. Thank you. 

Mr. LATTA [presiding]. Well, thank you very much. The gentleman yields back. And the Chair recognizes himself for 5 minutes. And I apologize, there is another subcommittee of the full 

committee running at the same time as this, but I tell you, this is 

a very, very important issue and I really appreciate the testimony 

that you all submitted today, and also being here today. 

And, Mr. Siebel, if I could start with you, how do the kinds of 

energy analytics you have described help us with energy security 

and reliability? 

Mr. SIEBEL. Great question. So what we do when we look at this 

as a big data problem is we aggregate all the data from all of the 

operating systems in the utility, generation information, meter 

data management, customer care and billing, outage management, 

Volt/VAR, all of it into a unified data image in the Cloud. These 

can be like petabyte-sized data images, which are, in engineering 

speak, bigger than a breadbox. OK, and then we can correlate so 

that we get these, say, for predictive maintenance or grid reliability, or energy efficiency or whatever it may be, we can see in 

real time across the entire value chain from when somebody is 

moving a thermostat, to making a decision on whether we are 

going to bring on a peaker plant or change capacitates to balance 

Volt/VAR. Now, over in another building, OK, in a subbasement, 

there are 13 people looking at computer screens, and they are looking at utilities that are provided by companies like Symantec and 

like Hewlett Packard, and whatnot, looking for virus detection and 

malware detection that are penetrating the network. And basically, 

this is a pattern recognition problem, where they are looking for 

strings that look similar to malware that they have seen come out 

of China or Syria or Korea, or whatever it may be. And then this 

person, almost like an accountant with green iron shade, is kind 

of looking at this gibberish coming across the screen that says this 

93 

is the type of malware that is trying to come in from this point. 

The question is what do you do with it. 

By being on a core like that as just another data source with the 

entire grid infrastructure, you can say, what does this mean, what 

portion of the grid is impacted, what critical infrastructure is impacted, what is the single point of failure, so you can then 

prioritize, and so you can both prevent them at the perimeter and 

you can do something about it right away. And so this is where 

cybersecurity comes together with kind of big data analytics. And 

we have done a lot of work with this at the University of Illinois 

with—and UC Berkeley, The Trust Group, and it is a well-understood problem. The fact is there are no budgets at the utility level 

to deal with it, and this is where I think the Federal Government 

can do something to encourage investment in hardening the system. 

Mr. LATTA. Well, thank you very much. 

Mr. Atkinson, and how do advanced grid technologies help prevent the outages and enable the grid to better withstand outages 

when they do occur, and how can the technologies facilitate faster 

outage restorations and provide utility crews with greater situational awareness? 

Mr. ATKINSON. It comes down to situational awareness. Allowing 

people to understand what is going on with the grid at all levels, 

pushing that information out from a centralized room into the 

hands of the people in the field that are there, and giving them 

more accurate information. And the technologies that exist today, 

you can identify the location of faults to, you know, a very close geographic proximity, rather than it is somewhere in, you know, in 

this, you know, series of seven blocks. You can send people directly 

out to a—the fault. They have a knowledge of what is happening 

because, you know, one of the things we discussed is things are, 

you know, more distributed energy resources are in play, you have 

to be careful, and you have multidirectional flow of electricity that 

changes the safety environment for the line worker pretty dramatically, and he needs to understand what is going on, and there 

needs to be, you know, that communication about what is going on. 

The technology that exists today is allowing that, and it continues 

to get better and better. 

As far as preventing outages, you know, as you see things happening, you know, from the transmission system down into the distribution systems, you see harmonics building, you get a chance to 

adapt quickly where, you know, the faster, you know, talking system today. The phasor measurement units are providing data 100 

times a second, versus once every 6 seconds. You are able to get 

an accurate dynamic picture of what is happening, and it gives you 

a chance actually to, in some cases, you know, and there is proof 

this, eliminate when an outage was about to happen. If an outage 

does happen, you are now working on coming back faster, and 

eliminating as many people from that outage as you can. And 

again, that is where the fault identification, automatic restoration 

through switching on the rest of the grid, brings back a portion of 

the people, leaving a subset that is still out, and again, you have 

identified it very closely where it is, giving you a better chance to 

come back quickly. 

94 

Mr. LATTA. Well, thank you very much. 

My time has expired, and the Chair recognizes the gentleman 

from Ohio, Mr. Johnson, for 5 minutes. 

Mr. JOHNSON. Thank you, Mr. Chairman. 

Mr. Kamen, you testified that advanced grid technologies offer a 

promising future for U.S. electric systems, but the immediate challenge is to develop the appropriate business models and regulatory 

structures to effectively manage the integration of modern technologies. Do you have any recommendations as to what these business models and regulatory structures might look like? 

Mr. KAMEN. So with the caveat that I think thermodynamics is 

way easier than Government, way easier, I—— 

Mr. JOHNSON. I would agree with that. 

Mr. KAMEN [continuing]. I would give you an example from my 

practical life experience. I spent 30 years building medical equipment. We built some very advanced medical equipment, life support equipment, and as tough as the standard is to get an FDA approval, once you get it, you have it, and every hospital, whether it 

is Harvard or UCLA or—you know what the standard is, you build 

stuff, it gets approved and you are done. 

We just built 20 of these model systems that our partner, NRG, 

has put around the country, but pretty much not only every State 

but almost every city and every town has a different set of rules 

about how you put these in, what you are required to do, and how 

do you make them become legally part of the grid. I think if there 

was some standard that the feds could put out so what the FDA 

does for medical products, if you guys could do for energy products, 

you could encourage innovators to start making stuff because they 

know what they have to do—— 

Mr. JOHNSON. OK. 

Mr. KAMEN [continuing]. They know if they did it, it could be 

used everywhere. 

Mr. JOHNSON. OK. Good. 

Mr. Atkinson, your testimony suggests that the grid of the future 

will enable electrons to flow into or even multiple directions. Why 

is having flexibility in power flows significant, and how can advanced grid technologies facilitate this? 

Mr. ATKINSON. In the traditional hub and spoke that was mentioned before, you have an outage upstream, everybody downstream is out. When you have multiple directional flow, you get a 

chance to re-switch your system, reconfigure your grid on the fly, 

thus allowing, you know, all or some of the people to be brought 

back up immediately and not suffer that outage. 

The technologies today, you know, they exist to do this and they 

continue to get better, and the algorithms that are written, you 

know, continue to improve and, you know, it continues to move forward. Again, it exists today, getting better into the future. 

Mr. JOHNSON. OK. Mr. Christiansen, how can energy storage 

help utilities and consumers ride through outages and other power 

interruptions seamlessly? I understand it, but for the American 

people I would like—— 

Mr. CHRISTIANSEN. I think, first of all—— 

Mr. JOHNSON [continuing]. For them to hear from you. 

95 

Mr. CHRISTIANSEN. Yes. First of all, to piggyback on everybody’s 

comments here on having a distributed network and really, in my 

creative environment but almost local balancing authorities, adds 

a lot of reliability to the system. You have this capacitance in the 

grid that is able to soak up capacity and quickly deliver it back 

when it is needed really helps you ride through any peak, you 

know, that nature. Also as a good blank start—— 

Mr. JOHNSON. Sure. 

Mr. CHRISTIANSEN [continuing]. Get—helps us just to get back up 

to speed again after an outage, and this is a huge benefit by energy 

storage. 

Mr. JOHNSON. Yes. I—as a chief information officer for a global 

publicly traded manufacturing company, I had to be concerned 

about the data center and UPSs and those kinds of things, to make 

sure that we had that steady power. 

A lot of folks don’t realize in today’s high-tech arena what a 

power outage, a power surge, and what those constantly changing 

power parameters do to solid state circuitry and those kinds of 

things. It wreaks havoc. 

Mr. Ivy, you state in your testimony that greater adoption of advance grid technologies may help create self-healing grids. Can you 

expand on this concept of a self-healing grid a little bit? 

Mr. IVY. We have actually touched on this quite a bit, and Mr. 

Atkinson did a fair job of describing that I think. So if there is an 

outage somewhere in the field, like he said, in the original hub and 

spoke method, you are just out if you are downstream of that, or 

even in some area around it you are still out. 

We are installing in our company, and other municipalities and 

investment utilities around the country are pretty advanced already in the tactics of installing these high-speed switches that are 

sensing where these short-circuits are in the system, and they are 

talking to each other to try to figure out how to isolate it—— 

Mr. JOHNSON. Um-hum. 

Mr. IVY [continuing]. And then the goal is to have it just isolated 

to the smallest area that you can possibly have it in. So then that 

allows us then also to dispatch somebody straight to what the problem is, because normally it is lightning, it is trees, it is an animal, 

something that can be cleared up very quickly, we can get the 

lights back on very, very quickly. 

Mr. JOHNSON. OK, very good. 

Well, thank you, Mr. Chairman, and I yield back. Thank you, 

gentlemen. 

Mr. WHITFIELD. Gentleman yields back. 

At this time, recognize Mr. Mullin, the gentleman from Oklahoma, for 5 minutes. 

Mr. MULLIN. Thank you, Mr. Chairman. 

I want to start with Mr. Ivy, and I know these two may not actually go together, but in practical and legal terms, which those are 

the two I am talking about, is it better for the development of advanced grid technology to be managed at the local or State levels? 

Mr. IVY. Our preference is certainly at the local level because all 

of our systems have these unique nuances to them. I think somebody had brought up in Iowa, for example, their system is pretty 

sparse. They don’t serve a lot of customers. Their needs are going 

96 

to be decidedly different from mine. I am like a 258 square mile 

service area, very dense, pretty good population base. So the kinds 

of things that we need to do in my area are going to be decidedly 

different from what other people would want to do. And then you 

have the State rules that go along with the implementation, or not, 

incentives or not, that exist, so it can get pretty much—well, I am 

just going to say, there is no one-size-fits-all for us, and so our preference is to keep it as local as possible. 

Mr. MULLIN. Thank you. 

Mr. Kamen, you made a point in your written testimony that 

more than 50 percent of the generating capacity in the U.S. is 30 

years old, and at 70 percent of the 280,000 miles of transmission 

line is more than 25 years old. What do you feel your company, as 

well as other companies like yours bring to the table in addressing 

this issue? 

Mr. KAMEN. I think that, you know, like with a used car, you 

reach a point where it is cheaper to buy a new one than to keep 

fixing the old one. I think if you could—— 

Mr. MULLIN. Unless it is antique. You have to hold onto those. 

Mr. KAMEN. OK. Agreed. I have a 1913 Model T and it is not for 

sale. 

Mr. MULLIN. Wow. 

Mr. KAMEN. I would tell you if the proper incentives were put before the people that produce the energy, transmit the energy, distribute the energy, supply it to the end user, if they had a clean 

piece of paper and could invest their money in alternatives to just 

fixing these things that are, as you have heard, more—when it is 

a big central power plant, cybersecurity is a real issue. There are 

only a few of them to take down, you heard that there are only a 

few plants that are hub and spoke, it is very hard to make them 

self-healing. If you could have thousands and thousands of small, 

locally operated and controlled units that, by the way, when there 

are thousands or for—hundreds of thousands of them, you can put 

them so close to where you need the electricity that you can also 

take their waste heat, because all of these systems make mostly 

waste heat of whatever energy they burn, but you can’t transmit 

heat very far, but if you made lots of small distributed plants, you 

would sort of get as a bonus, you could use the waste heat in most 

places so it is no longer waste, it is what people need for their furnace, not water, you would be much safer against anybody taking 

one system down. It might require more sophisticated controls and 

interaction, but as we have heard, that is becoming easier and easier. So if you could create a system instead of taking these very, 

very old systems, which they sort of have no other choice but to 

keep them up and operating, and allow them to transition to a new 

alternative technology, they would do better. 

Mr. MULLIN. What is keeping it down? What is keeping the companies from being able to do this? Are we the hindrance? 

Mr. KAMEN. From my understanding, when I have talked to people that do generation, that do transmission, it is a—it boggles my 

mind, as I—I wasn’t kidding when I said thermodynamics and engineering is easier than regulation, I have heard CEOs of major energy-related companies say I am not allowed to do transmission, I 

generate, or I am not allowed to generate, I do transmission. I can’t 

97 

put your box somewhere there. And I get a headache thinking, I 

think I just spoke to my power company who said I can do this but 

not do that. Well, my lights only come on when all of that stuff is 

done. 

Mr. MULLIN. Does anybody else on the panel want to address 

that? What is holding the industry back? 

VOICE. I sense they do, but—— 

Mr. MULLIN. Yes. I am the good guy, I am not going to hurt you, 

but I need. Look, I come from a business, and the only reason why 

I am here is because the biggest problem I had with running our 

company was rules that were being made up here. 

Mr. IVY. Um-hum. 

Mr. MULLIN. And so I understand it, but I need to know what 

it is that is holding you back so we can help. 

Mr. IVY. Let us look a little bit at the macroeconomic piece of it. 

And, you know, the answer or the solution for the future is, and 

I will tell you is a combination of all the stuff that we have been 

talking about. So you have a great panel here. 

We—when we build a $300 million natural gas combined cycle 

generating unit, we spread the cost of that out over 25 to 40 years 

maybe, and whoever is on the system at the time gets to help—not 

only do they get the benefit of it, but they get to help pay their 

share of the cost for that facility. 

I have been challenged with being a little stodgy, little narrowminded in my thinking, but we are that way be design and I accept 

that almost as a pat on the back because we are that way by design. We don’t change quickly. I am leveraged right now about 60 

percent debt to my assets, and that is fairly typical for the utility 

business. So we still have to look at the long-term payout before 

we start looking at a rapid and widespread integration of these different types of technologies that we are hearing. That is one of my 

main concerns. And I will tell you, that is a local issue, and we are 

talking about it. We are talking about it with our city commission, 

about the need to start changing our minds about how long we 

should be amortizing that debt out like that. So it is going on but 

unfortunately, it is not going to happen really quick. 

Mr. MULLIN. Thank you. 

My time is out. 

Mr. WHITFIELD. At this time recognize the gentleman from Virginia, Mr. Griffith, for 5 minutes. 

Mr. GRIFFITH. Thank you very much. Wow, what a great panel 

you have put together, Mr. Chairman. It has really been a very 

educational morning. I have been here since the beginning, so I can 

say that you all have been very helpful in educating me. I happen 

to be one of the few members of this committee that is one of those 

evil lawyers everybody talks about, so I need lots of help in understanding these things. But I am concerned about privacy issues, 

and, Mr. Ivy, your company has some smart meters, as I understand it, and you all have an opt-out provision. Can you tell me 

what that is important to your customers? 

Mr. IVY. The opt-out provision is as much not wanting to have 

a smart meter on the side of their house as it is anything else, 

frankly. So they have a standard digital meter that we read manually once a month. That is not very many that are left, and less 

98 

than 1⁄2 a percent of our consumers went that direction. I am more 

concerned about the hourly information that we can collect and 

maintain in our large database that we have. That is the part that 

I am looking to try to conceal, and if people can still get access to 

more historical-type information that they can get already before 

smart meters were available, fine. I don’t have an issue with that. 

Mr. GRIFFITH. OK. I do appreciate that. I am concerned about all 

the collection of this data and being able to predict with the new 

smart grids and so forth what the usage is going to be is very important, but when it comes to an individual house, sometimes, you 

know, just because we can doesn’t mean we should. So I appreciate 

that perspective. I am excited—although I am having some kind of 

a technical glitch here, I don’t know whether my phone is too close 

or whether I am just electric today or something—but, Mr. Kamen, 

I am excited about the technology you are talking about with these 

small generators. So how small a facility can they be used at, and 

how big can you go? 

Mr. KAMEN. Sadly, I think again, the thermodynamics limits this 

kind of technology from getting very, very big, but it can get pretty 

small. We built a few small ones for DARPA a number of years ago 

that a man could carry around base, and run it on any liquid fuel. 

The ones that we build now at NRG produce 10 kilowatts, that is 

enough for a small neighborhood of houses or a small business—— 

Mr. GRIFFITH. All right, let us—— 

Mr. KAMEN [continuing]. The size of a typical home appliance. 

I—— 

Mr. GRIFFITH. Let us define that small neighborhood. I live on 

a cul-de-sac with 13 houses, do I need to be bigger? 

Mr. KAMEN. OK. The average American home consumes less 

than 2 kilowatts. So a 10 kilowatt unit, and I would probably put 

a cluster of three or four of them on a pad, and then they, at that 

last pad at the bottom of what used to come from all those things 

we have been talking about, distribution, switch—half—let us say 

four of these on a pad would handle your neighborhood and would 

have the advantage that if one of them went down, with the redundancy, you have the other three would keep everybody happy, and 

at their convenience, somebody would fix the one that went down. 

Mr. GRIFFITH. And as a part of that, because I was thinking 

about it when the testimony was going on earlier about the storms 

and the neighborhoods being wiped out—— 

Mr. KAMEN. The big advantage we have is, of course, we run on 

any fuel, and typically your neighborhood has buried lines in it 

that are bringing natural gas. You probably have buried tanks with 

heating oil or propane. Those things are way less susceptible to 

problems than wires running through all the trees that get taken 

down by ice or wind or hurricanes, and these boxes then are so 

close to where you need them that the rest of the system going 

down hundreds of miles away isn’t going to affect you, and again, 

they are so close to your loads that you can also take their ‘‘waste 

heat’’ and turn it into your heat and hot water. It is no longer 

waste. 

Mr. GRIFFITH. Well, I am hoping I have time to get back to waste 

heat, but you said it could use any fuel at—on a couple of occasions, but then once you said liquid fuel—— 

99 

Mr. KAMEN. Or gaseous. We right now run on natural gas, propane, diesel fuel, gasoline. The device is actually running on something that looks like a burner in your hot water heater, which is 

why it doesn’t make lots of noise. An engine, diesel cycle, Rankine 

cycle, auto cycle, typical—an engine has a very specific kind of fuel 

because it touches every part of the inside of your engine. It gets 

atomized, a spark comes in, compression come—an engine typically 

has a very, very selective appetite for fuel, but your hot water heater will keep water hot if there is a flame under it, and it doesn’t 

really care what the fuel is. We are running a system that looks 

much more similar to your hot water heater, but we turn some of 

that energy into electricity instead of heat. 

Mr. GRIFFITH. So if I had a big storm, and for some reason I 

lost—let us say I have natural gas, which my neighborhood doesn’t, 

but let us say that we had natural gas, and some—for some reason 

we lost our natural gas, would I be able to drive down to the local 

gas station and—— 

Mr. KAMEN. Absolutely. 

Mr. GRIFFITH [continuing]. Get my tank filled up? 

Mr. KAMEN. Absolutely. When we were asked to fire these little 

ones up for the Department of Defense, the original deal they said 

was you have to be able to switch from one fuel to another with 

only a 2-hour cool down, shutdown and refit it. We said to them 

we don’t need 2 hours, we will add a little gasoline to the diesel 

fuel, throw in a little beer and let it keep running, and we never 

even shut the engines off as we changed fuel. 

Mr. GRIFFITH. I think this is exciting, and I would love to get to 

waste heat but my time is up, but I find it exciting from another 

perspective because one of the fears that some folks have, and I 

am—probably share some of that, is that if you get a smart grid 

that covers everything, and you have just a few big providers, that 

gives a lot of power to a few folks in the switch room. This gives 

power back to smaller communities and so forth, and I think it is 

very exciting technology. 

Thank you all so much for being here, all of you. I had other 

questions for others but I don’t have time, but what a great panel. 

Thank you. 

Mr. WHITFIELD. Gentleman yields back. 

At this time, recognize the gentleman from Texas, Mr. Green, 5 

minutes. 

Mr. GREEN. Thank you, Mr. Chairman. And I want to thank our 

panel. 

You know, we draft legislation and if it becomes law, it may be 

30 years before we go back and visit it. And back yesterday, we had 

a hearing on oil exports, it is from the 1970s. I know you all have 

a lot of good suggestions in your remarks about what is going to 

happen in the electricity market over the next few years in alternative fuels. I just am glad to hear that, you know, my generator 

I bought when Hurricane Ike was hitting Houston, Texas, in September 2008, that I may have another fuel source from going down 

and, you know, buying gasoline. And the problem is we haven’t 

needed that generator for 7 years, but—so I have to start it up 

every 30 days to make sure it doesn’t foul up when we need it. 

100 

I know that sometimes you are all over the board though on envisioning what may happen with industrial and consumer demand. 

I know the testimony, and we have seen it, efficiencies, that is part 

of—should be part of what we do, but at least in my area, and I 

have east Harris County, we have refineries and chemical plants, 

they are always looking for ways that they can efficiently run those 

plants and, you know, as cheap as they can. And some of them 

probably have cut their fuel requirements over the years because 

the cogeneration and lots of things, in fact, I don’t think we have 

a chemical plant that doesn’t have a cogen facility, but do you expect industrial and consumer demand to increase over the new few 

years? We can’t save our way out of the power. 

Mr. IVY. If I can jump in. I assume you are talking about retail 

customer consumption, industrial consumer demand. What we are 

seeing all across our industry is kind of a suppression of demand 

increase on us. So on a per unit basis, let us say, households, for 

example, they are not consuming even though they have as many 

appliances as they have ever had. They have much more energyefficient appliances. And we are seeing a little bit of that on the 

industrial sector as well. We are going to see a—I will caveat this, 

based on the cost of energy, we could see an increase in industrial 

demand based on industrial growth, able to add new processes to 

their facilities and whatnot, and I think that is very important 

while we continue to keep our eye on what the price that we are 

giving them is, because that signals what they are going to be 

doing. That is going to be probably where the main amount of 

growth in electricity consumption comes from, in my opinion. 

Mr. GREEN. Anyone else? 

Mr. PATEL. Well, I think there are certain parts of the country 

that are seeing load growth because of electric vehicles. That is obviously very small as a percentage of load growth right now, but 

that is occurring, and I think that depending on the price evolution 

of electric vehicles, we could see a rapid adoption of that. But I 

would also say there is something that is actually keeping or containing the growth on the electrical demand side, and that is the 

fact that, it goes back again to our regulatory compact since 1935 

which, in effect, utilities are constrained to operate at one point in 

the customer’s demand curve. And it is actually multiple points depending on whether you are a, you know, industrial or commercial 

customer, but there are relatively few points on the customer’s demand curve that utilities are constrained to operate on. If we were 

imagined to say allow the utility to address different customer demands, but also at different price points, now the total opportunity 

to the electrical—to the electric delivery ecosystem as a whole actually can increase. And there are some prime examples of where 

there is a need to do this. In storm—particularly storm-prone 

areas, there are cases where there is a demographic living in those 

areas that are actually willing to pay more for electrical service 

should it be recovered more quickly. Now, the utilities are currently constrained to offer a price of electricity in that area and 

other areas in their service territory that is the same, yet there is 

demand that goes unfulfilled because of this fact. And so if you 

were to enable utilities to operate at multiple points and address— 

101 

diversify demand from the customer, you can actually now increase 

the total size—— 

Mr. GREEN. I only have 5 minutes, so appreciate it. 

One of the issues though, and I understand where you are coming from on that, but—is infrastructure. For example, we have— 

Texas has grown—wind power—predominantly in west Texas, but 

also on the Gulf Coast. Gulf Coast it is much easier to do transmission to the urban areas, San Antonio, Austin, Dallas, Fort 

Worth, whereas west Texas, the ratepayers in Texas to get that 

spending $5 billion for the transmission. And we are—of course, we 

have a competitive market in ERCOT that—and we are very proud 

of that. In fact, whether you are democrat or republican for Texas, 

we barred our ability—although ERCOT has gone through some 

tough times, but I think they are back on their feet now, they are 

much better. 

Mr. Ivy, in the sector—the new transmission lines, we—should 

we be concerned with building more of these intrastate in eastern 

Texas or interstate? 

Mr. IVY. As renewable energy gets to be much more prolific in 

our industry, our ability to offload the variability is a way to help 

manage the system reliability. If any one of us believes that we are 

going to get up to 30, 40, 50 percent penetration and manage it all 

on our own, we are not drinking the right Kool-Aid. So I think it 

is very important that we start looking at—in Texas’ case, that is 

almost blasphemy to say that you are going to build transmission 

outside the State like that, but you may well get to the point where 

that needs to be the thing that you do just to be able to help manage the variability, but still facilitate—— 

Mr. GREEN. Mr. Chairman, I appreciate it, and I know I am out 

of time, but in Texas we don’t mind selling it to you, we just don’t 

want you to take it from us. 

Mr. WHITFIELD. Thank you. 

And at this time, I recognize the gentlelady from North Carolina, 

Mrs. Ellmers, for 5 minutes. 

Mrs. ELLMERS. Thank you so much to my colleague, and thank 

you for this panel. This is awesome. And, Ranking Member 

McNerney, I don’t know if he had mentioned, because I had to step 

out, that we co-chair the Grid Innovation Caucus together, and we 

are very, very excited and energized, no pun intended, on this issue 

and all of the significance of it. 

And, Mr. Kamen, I can’t agree with you more, when it comes to 

thermodynamics and then when you are talking about what we do 

here, it makes absolutely no sense. You are talking about logic and 

facts, and unfortunately, many times those things do not fit into 

what we do here, unfortunately. So, you know, it is so funny, I 

have my list of questions and I have changed up, you know, as I 

am listening to the conversation because I want to ask everything 

and, obviously, I can’t. 

I do want to get to the question of the hurdles that are in place, 

that are standing in the way of us moving forward with more of 

the grid innovation, and how do we pay for this, what do we do, 

how can we do a better job as legislators just being able to tell your 

story and the advancements that can happen. You know, I just believe that when we are talking about energy, and long-term energy 

102 

policy for our future of this country, we have the grid technology 

as a part of that conversation. It is just so vital to our future. 

You know, Mr. Atkinson, I just want to go back to the conversation we have been having about the, you know, how we incorporate 

analytics into everything that we are doing, and obviously, that is 

a big part. As far as your ability to improve the way you forecast 

how energy will be used into the future, and the supply that is 

needed, are your companies incorporating these things, do you have 

that capability, and are there metrics in place now where we can 

start measuring the efficiencies and the improvements? 

Mr. ATKINSON. Yes, we do those things. The—we do, you know, 

multiple levels of load forecasting—— 

Mrs. ELLMERS. Um-hum. 

Mr. ATKINSON [continuing]. Or help utilities do multiple levels of 

load forecasting. We have the technology that allows them, you 

know, short-term, medium-term, long-term, based on lots of factors, 

lots of variability, historical patterns, weather patterns, existing 

weather, you know, in the near-term, you know, projected weather 

in the far-term. That is, of course, only a small piece of data analytics. 

Mrs. ELLMERS. Um-hum. 

Mr. ATKINSON [continuing]. But it, you know, it is a pretty major 

piece for the utilities because, you know, as we have talked about 

here today, you know, there is a lot of assets on the grid and they 

are incredible assets. A lot of them are very big and move slowly. 

Mrs. ELLMERS. Um-hum. 

Mr. ATKINSON. You know, what Mr. Kamen is talking about—— 

Mrs. ELLMERS. Um-hum. 

Mr. ATKINSON [continuing]. Are some smaller and more nimble 

assets. 

Mrs. ELLMERS. Um-hum. 

Mr. ATKINSON. And, you know, again, you need kind of an allthe-above though. Everything needs to be considered, everything 

needs to be integrated, and the more accurate you are in what you 

do, you can balance those different assets and, you know, the 

intermittency with the other renewable assets as well, you know, 

be it wind, solar, storage. 

Mrs. ELLMERS. Um-hum. 

Mr. ATKINSON. Storage—— 

Mrs. ELLMERS. Um-hum. 

Mr. ATKINSON [continuing]. Is a big piece of what we are also 

talking about as well. So again, it is a little bit of an all-the-above. 

We have the analytics today to do this kind of forecasting. We have 

the technology that also integrates, you know, the control systems, 

as it were, of all the different types of technologies, understands 

what they are doing, and is able to present a simple view of that 

to the operators in the control room, to the utilities who are on the 

frontlines—— 

Mrs. ELLMERS. Um-hum. 

Mr. ATKINSON [continuing]. Of, you know, making sure that we 

all have electricity at the flip of a switch. That is what we want. 

Mrs. ELLMERS. Yes. And, Mr. Christiansen, you—I can see that 

you want to comment on that as well. 

103 

Mr. CHRISTIANSEN. Yes, and I guess the—my comment goes out 

to the type of data that we use—— 

Mrs. ELLMERS. Um-hum. 

Mr. CHRISTIANSEN [continuing]. When we typically use these 

analyses, something that Alevo does as well. We try to—we do base 

systems to evaluate the proposition of what storage brings. And it 

goes back to Mr. Siebel’s comment that, you know, the amount of 

data that we need to really optimize the grid is tremendous, and 

when we look at average data of just typically what is available 

today as an average heat grid for the year—— 

Mrs. ELLMERS. Um-hum. 

Mr. CHRISTIANSEN [continuing]. It really—when we look at the 

variability and the granulidity we need for the grid today, it is just 

not enough data to make the—— 

Mrs. ELLMERS. Um-hum. 

Mr. CHRISTIANSEN [continuing]. Choices or to look at the value 

proposition. 

Mrs. ELLMERS. Um-hum. 

Mr. CHRISTIANSEN. So really, it goes down to collecting, you 

know, down to sub-hourly data—— 

Mrs. ELLMERS. Um-hum. 

Mr. CHRISTIANSEN [continuing]. Regarding automation— 

Mrs. ELLMERS. Um-hum. 

Mr. CHRISTIANSEN [continuing]. That type of data. 

Mrs. ELLMERS. One of the things that I have learned over time 

is for my rural electric co-ops, the importance of the smart meters 

for consumers and how they have been able to really have that dynamic relationship with their providers, so that they can actually 

control cost. So I would just like to add to that in my 5 seconds 

left. Thank you on behalf of the customers of our rural electric coops because you are providing for them the—this vital piece so that 

they can actually be doing a better job in their costs every day. So 

thank you. And thank you to the panel. You guys are awesome. 

Mr. WHITFIELD. Well, thank you. 

That concludes today’s hearing, and I want to thank each and 

every one of you for joining us today, for your testimony, for responding to our questions. And we look forward to working with 

you as we move forward, and it is going to take the efforts of all 

of us, of course, to be successful. 

And I will keep the record open for 10 days for any additional 

materials. 

And with that, the hearing is concluded. 

[Whereupon, at 12:38 p.m., the subcommittee was adjourned.] 

[Material submitted for inclusion in the record follows:] 

PREPARED STATEMENT OF HON. FRED UPTON

America is currently enjoying an energy renaissance, and we are all better for it. 

But this resurgence is not limited to just oil and natural gas. In fact, the nation 

that created the modern electricity system is poised to reinvent it, bringing with it 

the potential benefits to both electricity producers and consumers all the while helping to keep the American economy competitive in the decades ahead. 

Utilities are spending billions of dollars each year modernizing the grid and making it smarter. These jobcreating technology and infrastructure projects are an integral part of our architecture of abundance, and will give us an electricity system 

104 

that can better serve the current and future needs of users—from homeowners to 

small businesses to major manufacturers. 

Our potential is exciting. The same information technology revolution we have 

seen in our smart phones and in many new business models can be applied to create 

an electricity system that is more secure, reliable, efficient, integrated, and responsive to user needs. 

Old problems like power outages will be addressed as a smarter grid can substantially reduce the number and duration of blackouts. At the same time, new opportunities are emerging, such as electricity storage breakthroughs that can improve efficiency and allow for greater diversity of supply, and better communications between 

each link in the electricity chain to further drive efficiencies. 

And greater transparency and new technologies increasingly allow consumers and 

businesses to have more control over their electricity use. For homeowners in Michigan and across the country, that means help where it matters most—the bottom line 

with lower electric bills. And for businesses, that means less spending on energy 

and more available for hiring. Lower bills and more jobs—the future is certainly 

bright. 

But with new technologies come new challenges. Just as data theft is a crime that 

previous generations didn’t have to worry about, a digitally connected grid is subject 

to new forms of manipulation by bad actors. We need to protect both the grid and 

consumers from cyber threats and other risks. The good news is that the same advances that make these threats possible are also capable of addressing them. 

Of course, Congress must decide the proper role of Government in these changes 

to the electricity system. New mandates and subsidies are not the answer. But we 

do need to identify and address regulatory barriers to entry, market-distorting incentives, and artificial constraints on competition that will be critical to further innovation. 

Although the age of electricity is well into its second century, the pace of innovation is as rapid as ever. Federal energy policy needs to adapt in order to ensure that 

these advances can continue. 

105 

106 

107 

108 

109 

110 

111 

112 

Æ