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NATIONAL INTEREST ELECTRIC TRANSMISSION

CORRIDORS

HEARING

BEFORE THE

SUBCOMMITTEE ON DOMESTIC POLICY

OF THE

COMMITTEE ON OVERSIGHT

AND GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

APRIL 25, 2007

Serial No. 110–7

Printed for the use of the Committee on Oversight and Government Reform

(

Available via the World Wide Web: http://www.gpoaccess.gov/congress/index.html

http://www.oversight.house.gov

(II)

COMMITTEE ON OVERSISGHT AND GOVERNMENT REFORM

HENRY A. WAXMAN, California, Chairman

TOM LANTOS, California

EDOLPHUS TOWNS, New York

PAUL E. KANJORSKI, Pennsylvania

CAROLYN B. MALONEY, New York

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio

DANNY K. DAVIS, Illinois

JOHN F. TIERNEY, Massachusetts

WM. LACY CLAY, Missouri

DIANE E. WATSON, California

STEPHEN F. LYNCH, Massachusetts

BRIAN HIGGINS, New York

JOHN A. YARMUTH, Kentucky

BRUCE L. BRALEY, Iowa

ELEANOR HOLMES NORTON, District of

Columbia

BETTY MCCOLLUM, Minnesota

JIM COOPER, Tennessee

CHRIS VAN HOLLEN, Maryland

PAUL W. HODES, New Hampshire

CHRISTOPHER S. MURPHY, Connecticut

JOHN P. SARBANES, Maryland

PETER WELCH, Vermont

TOM DAVIS, Virginia

DAN BURTON, Indiana

CHRISTOPHER SHAYS, Connecticut

JOHN M. MCHUGH, New York

JOHN L. MICA, Florida

MARK E. SOUDER, Indiana

TODD RUSSELL PLATTS, Pennsylvania

CHRIS CANNON, Utah

JOHN J. DUNCAN, JR., Tennessee

MICHAEL R. TURNER, Ohio

DARRELL E. ISSA, California

KENNY MARCHANT, Texas

LYNN A. WESTMORELAND, Georgia

PATRICK T. MCHENRY, North Carolina

VIRGINIA FOXX, North Carolina

BRIAN P. BILBRAY, California

BILL SALI, Idaho

——— ———

PHIL SCHILIRO, Chief of Staff

PHIL BARNETT, Staff Director

EARLEY GREEN, Chief Clerk

DAVID MARIN, Minority Staff Director

SUBCOMMITTEE ON DOMESTIC POLICY

DENNIS J. KUCINICH, Ohio, Chairman

TOM LANTOS, California

ELIJAH E. CUMMINGS, Maryland

DIANE E. WATSON, California

CHRISTOPHER S. MURPHY, Connecticut

DANNY K. DAVIS, Illinois

JOHN F. TIERNEY, Massachusetts

BRIAN HIGGINS, New York

BRUCE L. BRALEY, Iowa

DARRELL E. ISSA, California

DAN BURTON, Indiana

CHRISTOPHER SHAYS, Connecticut

JOHN L. MICA, Florida

MARK E. SOUDER, Indiana

CHRIS CANNON, Utah

BRIAN P. BILBRAY, California

JARON R. BOURKE, Staff Director

(III)

C O N T E N T S

Page

Hearing held on April 25, 2007 .............................................................................. 1

Statement of:

Kolevar, Kevin, Director, Office of Electricity Delivery and Energy Reliability, Department of Energy ..................................................................... 148

Tonko, Paul D., Chair, Committee on Energy, New York State Assembly;

Bill DeWeese, majority leader, Pennsylvania House of Representatives;

Kurt Adams, chairman, Maine Public Utilities Commission; Elizabeth

Merritt, deputy general counsel, National Trust for Historic Preservation; Paul D. Koonce, chief executive officer, Dominion Resources, Inc.;

and Chris Miller, president, Piedmont Environmental Council ............... 50

Adams, Kurt .............................................................................................. 72

DeWeese, Bill ............................................................................................. 59

Koonce, Paul D. ......................................................................................... 88

Merritt, Elizabeth ...................................................................................... 77

Miller, Chris ............................................................................................... 99

Tonko, Paul D. ........................................................................................... 50

Letters, statements, etc., submitted for the record by:

Adams, Kurt, chairman, Maine Public Utilities Commission, prepared

statement of ................................................................................................... 74

Arcuri, Hon. Michael A., a Representative in Congress from the State

of New York, prepared statement of ........................................................... 46

Cummings, Hon. Elijah E., a Representative in Congress from the State

of Maryland, prepared statement of ............................................................ 162

Davis, Hon. Tom, a Representative in Congress from the State of Virginia, prepared statement of ........................................................................ 11

DeWeese, Bill, majority leader, Pennsylvania House of Representatives,

prepared statement of ................................................................................... 61

Issa, Hon. Darrell E., a Representative in Congress from the State of

California, prepared statement of ................................................................ 20

Kolevar, Kevin, Director, Office of Electricity Delivery and Energy Reliability, Department of Energy, prepared statement of .............................. 150

Koonce, Paul D., chief executive officer, Dominion Resources, Inc., prepared statement of ........................................................................................ 90

Kucinich, Hon. Dennis J., a Representative in Congress from the State

of Ohio:

Prepared statement of ...................................................................................... 4

Prepared statement of Mr. Holland ................................................................ 70

Merritt, Elizabeth, deputy general counsel, National Trust for Historic

Preservation, prepared statement of ........................................................... 80

Miller, Chris, president, Piedmont Environmental Council, prepared

statement of ................................................................................................... 101

Murphy, Hon. Christopher S., a Representative in Congress from the

State of Connecticut, prepared statements of Mr. Murray and Governor

Rell ................................................................................................................. 25

Tonko, Paul D., Chair, Committee on Energy, New York State Assembly,

prepared statement of ................................................................................... 53

Waxman, Hon. Henry A., a Representative in Congress from the State

of California, prepared statement of ........................................................... 15

Wolf, Hon. Frank R., a Representative in Congress from the State of

Virginia, followup questions and responses ................................................ 131

(1)

NATIONAL INTEREST ELECTRIC

TRANSMISSION CORRIDORS

Wednesday, April 25, 2007

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON DOMESTIC POLICY,

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM,

Washington, DC.

The subcommittee met, pursuant to notice, at 2 p.m. in room

2154, Rayburn House Office Building, Hon. Dennis J. Kucinich

(chairman of the subcommittee) presiding.

Present: Representatives Kucinich, Waxman, Cummings,

Tierney, Higgins, Davis of Virginia, and Issa.

Also present: Representatives Wolf, Murphy, Hall, Hinchey, and

Arcuri.

Staff present: Jaron R. Bourke, staff director; Jean Gosa, clerk;

Nidia Salazar, staff assistant; Auke Mahar-Piersma, legislative director, Office of Congressman Dennis J. Kucinich; Natalie Laber,

press secretary, Office of Congressman Dennis J. Kucinich; Jacy

Darding, full committee intern; Kristina Husar, minority professional staff member; Larry Brady, minority senior investigator and

policy advisor; Benjamin Chance, minority clerk; Darcie Brickner,

minority legislative assistant; and Bill Womack, minority legislative director.

Mr. KUCINICH. Good afternoon. The Subcommittee on Domestic

Policy of the Committee on Oversight and Government Reform will

now come to order.

Today’s hearing will examine the implementation of section 1221

of the Energy Policy Act of 2005, which is the section of law that

established new Federal authority for siting new electric transmission lines which, in certain cases, will preempt State and local

authorities.

Without objection, the Chair and the ranking minority member

will have 5 minutes to make opening statements, followed by opening statements not to exceed 3 minutes by any other Member who

seeks recognition. So ordered.

Without objection, Members and witnesses may have 5 legislative days to submit a written statement or extraneous materials for

the record. So ordered.

Without objection, we will be joined on the dais by Members not

on our committee for the purpose of participating in this hearing

and asking questions of our witnesses. So ordered.

We welcome the ranking Republican, Mr. Issa. Thank you, Mr.

Issa, for being here.

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Today this subcommittee will examine the Department of Energy’s implementation of section 1221 of the Energy Policy Act of

2005 and its implications for public land, private landowners, our

Nation’s energy infrastructure, and the environment.

The Energy Policy Act of 2005 was signed into law by President

Bush in October 2005. I opposed the act because it did not provide

any vision for a sustainable energy future. Rather, it was a grab

bag of government giveaways to the energy industry. It weakened

our environmental laws and the laws that provide for public input

while doing almost nothing to help wean this Nation off of our dangerous dependence on oil or addressing the major challenge of global climate change.

Section 1221 amounted to only a few pages in the 1,700-page energy bill, but it was intensely debated within Congress. A host of

organizations opposed the provision, including State Governors,

utility commissioners, and environmental groups. Now that section

1221 is being implemented, the American people are on the verge

of discovering why its enactment was so controversial.

Section 1221 was designed to make it easier for electric companies to construct high-voltage electricity transmission lines over the

objection of private property holders and State and local communities. As the law is written, a State may have little or no ability

to determine whether a transmission line goes through one of its

State parks, a historic battlefield, land protected by conservation

easements, or private land.

Energy companies may be able to apply for permits directly with

the Federal Government, which can grant them imminent domain

authority to construct transmission lines through private property.

This new Federal authority for siting electric transmission lines

is exercised through a three-step process. First, the Department of

Energy creates a transmission congestion study. This study is used

to determine whether parts of the country are suffering from electric transmission congestion.

I should point out that the term congestion, which is used by the

Department and the act, does not necessarily mean that an area

is facing reliability concerns or that demand will exceed supply

within the area. It merely means that additional transmission lines

would be used if they were available. Basically, if an energy company says it has plans for new transmission lines, that pretty much

satisfies the definition of congestion, and no recourse through alternatives need be made.

Second, once the Department of Energy conducts its congestion

study section 1221 authorizes, the Department can designate regions of the country that experience congestion as national interest

electric transmission corridors. Remarkably, there is no statutory

limitation on the size of these corridors, and, as we will hear today,

a corridor could contain nearly an entire State.

Finally, once the Department of Energy designates a corridor,

any proponent of a transmission line can propose a project within

one of these corridors. Within these corridors, energy companies

have special rights to bypass a State and seek permits for a project

directly from the Federal Energy Regulatory Commission [FERC],

here in Washington, DC. Once approved by the FERC, the energy

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company can go to Federal court and force a private land owner to

sell a right-of-way through their property for the project.

To date the Department of Energy has completed the first step

in this process. In August 2006, the Energy Department released

a congestion study that found that a number of regions of the country faced electric transmission congestion. These regions included

southern California, the Atlantic coastal area from metropolitan

New York through northern Virginia, New England, the PhoenixTucson area, the Seattle-Portland area, and the San Francisco Bay

area.

As part of the implementation process, the Department of Energy

also asked organizations whether any region of the country should

be given early corridor designation. A number of proposals were

submitted from energy companies and their organizations. The proposals included requests for corridor designations in California,

Delaware, Maryland, Ohio, New Jersey, New York, Virginia, and

West Virginia. These requests could lead to a designation of corridors covering large populations of States like Pennsylvania,

Maryland, and New Jersey.

The Department of Energy has refused at this point to discuss

the particular corridor designations that it may be making. However, it has stated that southern California and the Atlantic coastal

area are the regions most likely to receive them. Now, with the release of the congestion study and the Department’s pending designations, the large number of groups have once again raised a

host of concerns about the law, itself, and the Department of Energy’s implementation of it. They include: Whether the Department

of Energy is taking into account the protection of national parks,

State parks, conservation easements, and historical sites like battlefields when determining where an electric transmission corridor

should be designated; whether the Department of Energy is considering the effects of a corridor designation on the private property

rights of land owners; whether the Department is considering the

environmental impact of corridor designations; whether the Department of Energy is considering alternatives to constructing new

electric transmission lines like the land side management, distribution generation, and energy efficiency; whether the Department has

adequately considered the actual benefit utility consumers would

receive from new transmission lines; and, finally, whether the Department has adequately consulted States to determine if corridor

designation will adversely impact the energy policies the State has

developed.

I hope that, starting today, Congress will begin to get some answers.

Finally, I would like to thank the ranking member of the full

committee, Mr. Davis, for suggesting today’s hearing. His State is

on the front line of this issue, although many other States are

probably not very far behind.

I look forward to hearing from each and every witness today and

I thank the witnesses for being here.

At this time I would recognize for purposes of making an opening

statement the ranking member, Mr. Issa.

[The prepared statement of Hon. Dennis J. Kucinich follows:]

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Mr. ISSA. And I would yield to the ranking member of the full

committee if I could, please.

Mr. KUCINICH. Mr. Davis, the ranking member of the full committee, is recognized.

Again, Mr. Davis, the committee wishes to express to you our appreciation for the work that you have done in setting up this hearing.

Mr. DAVIS OF VIRGINIA. Thank you, Chairman Kucinich. Let me

thank you for working on a bipartisan basis to hold today’s oversight hearing on the implementation of section 1221 of the Energy

Policy Act of 2005. We call it EPAct.

At its core, this section of the act focuses on the creation of national interest electric transmission corridors in areas of the country where DOE has determined that there is a critical need. Many

have raised concerns about this section of the act, and I understand

both Mr. Hinchey and Mr. Wolf have introduced legislation to address this problem, and I support their efforts. But ultimately we

are here today to exercise our committee’s oversight responsibility

on the provision that is potentially problematical.

Last summer DOE designated two critical congestion areas,

which include the Atlantic Coast area from metropolitan New York

southward to northern Virginia, and southern California. Based on

this finding, DOE is in the process of designing and designating

draft national interest electric transmission corridors. The significance of this designation comes from the new authority that the

EPAct granted to the Federal Energy Regulatory Commission

[FERC].

Utility companies in NIET corridors may apply to FERC, which

now has so-called back stop authority to approve new transmission

lines if the State process fails for a number of reasons.

My concerns over section 1221 of the Energy Policy Act springs

from two sources: federalism/State autonomy issues, and, second,

the mind set with which we approach energy management challenges.

With respect to State autonomy, States have been in charge of

the approval process of new transmission lines from the beginning.

State statutes are set up to balance the interest of their citizens,

who are equally consumers of energy, land owners, and consumers

of the environment.

For example, in my home State, when the Corporation Commission reviews an appreciate of a new transmission line, they are

bound to consider not just need, but also that the new transmission

line will minimize adverse impacts on the scenic assets, historic

districts, and the environment of the affected area. If a utility applies to FERC, will these issues be given due consideration?

With respect to managing the challenges associated with the energy generation distribution, I would first point out that we in Virginia have an agency problem. According to a 2006 DOE report, the

mid-Atlantic region of the country requires billions of dollars of investment in new transmission generation and demand side resources over the next decade to protect grid reliability.

I want to take a moment to reflect on that statement. According

to the U.S. Department of Energy, there are three elements involved in solving grid congestion: transmission lines, new generaVerDate 11-MAY-2000 12:58 Jun 25, 2007 Jkt 000000 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 C:\DOCS\35770.TXT HGOVREF1 PsN: HGOVREF1
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tion, and demand side management. Clearly, there is not a single

solution to my State’s energy problem. New transmission lines are

not a silver bullet. In fact, before they released their national electric transmission congestion study, this here, they released a study

on the benefits of demand response and electricity markets and recommendations for achieving them.

As the title suggests, this study evaluates the benefits of investing in demand side management. Demand side management refers

to the management of consumer demand in response to supply conditions. For example, demand side management solutions work

with electricity customers to reduce their consumption at critical

times or in response to market prices. Customers would then shed

loads in response to a request by utility or market price conditions.

Under conditions of tight electricity supply, demand response could

significantly reduce the peak price and, in general, electricity price

volatility. In fact, the State of California effectively used demand

side mechanisms to cope with last summer’s heat wave.

The bottom line is that sound energy policy is and should continue to be a significant priority of both the States and the Federal

Government. Reliable and affordable energy is a key component of

economic development; however, opportunities for innovation and

conservation cannot and should not be ignored.

It is appropriate to require that solutions such as demand side

management and conservation be part of the package of alternatives considered when planning for expected energy needs. It is

also important that the Federal Government not needlessly usurp

the longstanding authority and role of States on this issue. The

2005 Energy Policy Act understood and shared this goal. I hope we

can leave here today with a better understanding of the way that

the Federal Government can work with States to solve energy congestion problems while respecting State autonomy.

I look forward to hearing today’s witnesses and I yield back.

[The prepared statement of Hon. Tom Davis follows:]

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Mr. KUCINICH. I thank the gentleman.

At this time I would like to recognize Mr. Waxman, who is the

chairman of the full committee. Henry Waxman of California has

set very high levels for Government accountability, and we are honored to have him chair the full committee.

Mr. Waxman.

Mr. WAXMAN. Thank you very much, Mr. Chairman. Thank you

for holding today’s hearing.

Developing sensible energy policies has always required a collaborative approach between the Federal, State, and local governments and the constituents they serve. Since the light bulb’s invention, States have been the lead on siting infrastructure like highvoltage transmission lines. State governments are closer to the people impacted by these facilities and know how they want their communities to grow.

That is one of the reasons I was very concerned about the Energy

Policy Act of 2005. Rather than being respectful of the traditional

Federal/State relationship, the Energy Policy Act trampled on it by

creating a legal mechanism for energy companies to end run the

States and get practically any transmission project, no matter how

ill-considered, approved here in Washington, DC.

By someone who was deeply involved in that legislation, I would

like to take a moment to explain how we got where we are to day.

In May 2001, the White House released a national energy policy

developed by Vice President Cheney. This plan proposed a new

Federal imminent domain authority to provide energy companies

with rights of way for proposed electric transmission projects. In

October 2001, the Electric Utility Lobby testified in support of the

proposal. They testified that, in the preceding 5 years, electric utilities had exercised State-authorized imminent domain more than

400 times. Now they wanted imminent domain at the Federal level,

and they wanted State governments preempted whenever a State

materially altered an energy company proposal.

In short, they wanted their projects approved without a delay,

and they wanted the force of government behind them to assure

that private property rights did not stand in their way.

Over the next 4 years, the administration worked hard to give

the energy companies exactly that policy. For example, on April 10,

2003, the Executive Office of the President issued a statement in

strong support of the new Federal imminent domain authority.

Pushed by both the White House and industry, Congress tried to

enact the provision. Democrats raised objections to the new Federal

imminent domain policy. We attempted to offer a floor amendment

to strike the provision in both 2003 and again in 2005. Unfortunately, the House Rules Committee prevented these amendments

from being considered on the House floor.

Remarkably, Congress simultaneously dealt with another imminent domain issue in a completely different way. In June 2005, just

2 months after the House had voted to create this sweeping new

imminent domain authority, the Supreme Court decided Kelo v.

City of New London. This opinion upheld the States’ authorities to

use imminent domain in certain circumstances. The response from

Congress was swift and furious. Republican leadership immediately

brought legislation to the House floor to limit the Supreme Court

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decision. They decried the opinion as an attack on private property

rights.

In reality, the Kelo decision was far less intrusive than the energy provisions passed by Congress 2 months earlier. That is why

this hearing is so important. Instead of more rhetoric about property rights, this subcommittee is taking a hard look at the realworld impacts of the provisions. No Member of Congress wants

their District to suffer blackouts, but this isn’t about blackouts; it

is about respecting State authorities, ensuring adequate protections

for cultural, historic, and environmental values, and making sure

private property rights are protected against needless abuse.

I look forward to the hearing and the testimony of today’s witnesses.

Thank you, Mr. Chairman.

[The prepared statement of Hon. Henry A. Waxman follows:]

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Mr. KUCINICH. Thank you, Mr. Waxman.

The Chair recognizes Mr. Issa. And did you want to make the announcements?

Mr. ISSA. Yes. Mr. Chairman, I would like to ask unanimous consent that Members who are not members of the committee be allowed to sit on the dias and make opening statements and ask

questions at this time.

Mr. KUCINICH. So ordered.

Mr. Issa.

Mr. ISSA. Thank you, Mr. Chairman.

I will submit my entire opening statement for the record and just

paraphrase one small element.

I want to associate myself with both of the previous opening

statements, all three of them. This is a piece of legislation that cuts

two ways. I think all of us want to make sure that real congestion

and real impediments to interstate commerce be, in fact, dealt

with, and dealt with by the Federal Government. At the same time,

the legislation previously passed now gives us some questions

about whether or not perhaps there were some additional items

that were left out of it, concerns of States, States’ rights, private

land use.

I would say in my own home State of California, and particularly

in southern California, where what we call the sunrise path, or the

path that runs near our Mexican border, one of the paths that has

historically been one of the shortfalls that has led to power outages, one of several in the State, is of concern because it only has

a choice of going through either various Federal land, including

tribal land, or going through a large State desert park. Most of

these areas are not inhabited and most of these areas do not have

any significant vegetation above about the 1 foot level.

Having said that, finding a path has been a vexing problem, and

often the State has found itself in an odd situation. It has found

itself wanting to protect the empty space for all, while, in fact, having the alternative be the space which has people in it, and so we

have paths in California, neither of which are acceptable for some

reason, all of which are stalled, that, in fact, are considering tearing down houses rather than being visible perhaps 60 or 90 miles

from some area of natural wilderness. That makes for a very

strange situation that exists in California. I don’t pretend it exists

in every State in the Union. Certainly we are not looking at battlefields and highly populated areas in the case of most of ours, but

I do look forward to this hearing and to follow-on legislation.

With that I yield back, Mr. Chairman.

[The prepared statement of Hon. Darrell E. Issa follows:]

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Mr. KUCINICH. The Chair recognizes Mr. Murphy.

Mr. MURPHY. I thank the chairman for holding this hearing and

allowing other Members to sit as part of our panel today.

Mr. Chairman, I hope that this hearing, in part, will expose two

fallacies with regard to our current policy through FERC and the

siting of transmission lines and other energy facilities that we have

witnessed in the State of Connecticut.

With the chairman’s indulgence, I would like to submit for the

record testimony of M. Jodi Rell, our Governor, today.

Mr. KUCINICH. Without objection.

Mr. MURPHY. Her testimony mirrors the thoughts of many of us

from Connecticut, that these two fallacies that hopefully we will be

able to overcome, in part through this hearing and in part through

our discussions going forward: one, that our Federal Regulatory

Agency can be an effective substitute for local processes. As Chairman Waxman has already said, there is simply no way for a removed Federal agency to be able to substitute for the concerns on

the ground in a State like Connecticut, or any other State in this

Nation. There is no way for this agency to know the true scope of

the environmental issues, the private land rights issues, and the

public safety issues that surround the siting of a very complex and

large energy facility.

In Connecticut we have had particular experience with this one.

We have made simple requests of the Federal Regulatory Agency

to come to Connecticut and hold a simple public hearing in order

to air out many of the concerns that local landowners have. We

have been denied. It is simply hard, in the face of that refusal, to

understand how we can have the substitute for that kind of local

State oversight.

The second fallacy is that there is some divergent State and Federal interest upon the issue of electricity transmission. We in Connecticut understand the difficulties that confront our system and

we are just as interested in making sure that we have the transmission capacity as the Federal Government is. We struggle with

that issue just as they do here in Washington, and we believe that

our State approval process will strike the right balance between

local concerns and the concerns of our electricity grid.

With that, Mr. Chairman, I am very pleased to be part of this

hearing and very interested in being part of the legislative effort

that goes forward today.

[The prepared statements of Mr. Murray and Governor Rell follow:]

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Mr. KUCINICH. Thank you, Mr. Murphy.

The Chair recognizes Congressman Wolf.

Mr. WOLF. Thank you, Mr. Chairman, for having the hearing. I

am not a member of the committee and would like to submit questions at the end if I may, but I want to thank you. I also want to

thank Mr. Issa and Mr. Davis for seeking this hearing.

I will work with Mr. Hinchey on his bill, with these other bills,

as I told him, to see what we can do to pass them.

I want to associate myself with all of the comments that were

made. Being an invited guest, I will not have a formal statement,

but thank you for the hearing, thank you for the intensity, and

thank you for the commitment. We will do everything we can to

deal with this issue.

I yield back.

Mr. KUCINICH. Thank you, Mr. Wolf.

Mr. Higgins, member of the committee.

Mr. HIGGINS. Thank you, Mr. Chairman.

I ask for unanimous consent to enter Mr. Arcuri’s statement into

the record.

Mr. KUCINICH. So ordered. Thank you very much.

[The prepared statement of Hon. Michael A. Arcuri follows:]

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M. KUCINICH. The Chair recognizes Mr. Hall.

Mr. HALL. Thank you, Mr. Chairman, and thank you both our

ranking members for allowing Members who are not on this committee to attend and to ask questions.

I will just briefly say that in my District there are many questions being raised and many lawn signs being put out on virtually

every home in the affected areas around the New York Regional

Interconnect [NYRI] path, which has been proposed under this section.

There is a lot of concern about imminent domain seizure for profit by a largely foreign-owned company, the owners of which are not

readily available to the public, and them seeking a court decision

of being a public benefit and thereby having imminent domain

rights, a private entity to seize private property for profit. I think

that is something a step further than what we saw in the New

London case, which was the city of New London seizing, municipality seizing by imminent domain private property and then turning

around and selling it for use for private property.

This is a direct transfer from private to private, which I don’t

really think the majority of the American people would like to

enter into lightly, especially because we are having a debate about

energy right now in this country. It is very important.

We are really just starting to have this debate, and the more decentralized the sources are, the more renewable decentralized alternative sources come up, be they low-head hydra sites or wind,

which is growing rapidly in New York, or other power generation

that are not a single huge generating point at one place and then

the need to transfer that power to a municipality far away where

a huge amount of consumption is centralized.

The mayor of New York, for instance, just proposed this weekend

in his Sustainable New York City Proposal, a concept of rooftop

wind, which anybody who has been on the roofs of the big buildings

of New York or the Windy city of Chicago, for instance, would know

that as the air mass accelerates up over a mountaintop or a collection of buildings it increases in speed, and that may be a place that

wind can be harvested.

The more we do those kinds of things that generate power where

the power is being consumed, the less need there will be for this

sort of radical seizure of private land to transmit electricity.

So I appreciate the opportunity to listen and to ask questions

and thank you again, Mr. Chairman.

Mr. KUCINICH. Thank you very much, Mr. Hall.

Mr. Issa, your unanimous consent?

Mr. ISSA. Yes, Mr. Chairman.

I ask unanimous consent that a statement from the Edison Electric Institute be put into the record. As you know, they are the preeminent analysis organization as to energy here in Washington.

Mr. KUCINICH. So ordered.

The Chair recognizes Mr. Hinchey. Welcome. Thank you for

being here.

Mr. HINCHEY. Thank you very much, Mr. Chairman. I very much

appreciate your holding this hearing, and I want to express my appreciation to you for inviting others of us to attend it with you. I

think that you are focusing on a very important subject here.

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As you know, any aspect of energy is a critically important issue

for all of us to deal with, and it has to be dealt with in the most

intelligent and respectful and effective ways.

The Energy Policy Act of 2005 has become one of the most controversial pieces of legislation that has come before the Congress

recently. It was recognized as such at that time by many of us, particularly those of us who voted against it.

I am just going to mention one aspect of that bill, which is the

focus of this attention, and the legislation which I and Mr. Hall

and my two friends from Virginia have introduced, which has been

mentioned earlier, and that is the ability that this legislation gives

to ignore very important constitutional and legal provisions in our

country, States’ rights, and the rights of private property.

One of the things that this bill does is it allows the Secretary of

the Department of Energy to provide energy companies the ability

to circumvent State authority by applying for permits to build electric transmission lines and to do so directly with the Federal Energy Regulatory Commission, ignoring completely the fact that constitutionally and legally these kinds of issues ought to be handled

by the State and by localities.

So if a State would withhold approval for a transmission line permit for 1 year because they felt that transmission line permit had

to be looked at carefully and understood, if they had to do it for

more than 1 year, then the energy company could go directly to

FERC and get the authority to put this transmission line right

through the State, even though the State had not approved it.

If the State requires the mitigation of the project that the applicant believes makes the project economically unfeasible, they can

go directly to the Federal Government and get the right to construct these corridors.

Or if the utilization does not serve end-use customers in that

State, well, they can just circumvent the State, build the transmission line on the basis of the authority given to them by the Federal Energy Regulatory Authority on the basis of actions previously

taken by the Secretary of Energy.

The act offers no limitation on where a Federal transmission corridor can be designated; therefore, National and State parks, land

protected with conservation easements, historic battlefields, and all

private property, even school yards, could be subject to the siting

of these new electric transmission lines.

Additionally, all private lands would be subject to the new Federal imminent domain authority for approved projects, when imminent domain authority has been traditionally and lawfully the right

of State and local governments.

So the issue that we are dealing with today, Mr. Chairman, is

a very critical one, and we are all very grateful to you for the opportunity to give it the kind of airing that it ought to get in the

context of this hearing.

I thank you very much.

Mr. KUCINICH. I thank the gentleman.

If there are no additional opening statements, the subcommittee

will now receive testimony from the witnesses before us today. I

am pleased to have such a distinguished panel of witnesses here

to address section 1221 of the Energy Policy Act.

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On Today’s first panel, our subcommittee is pleased to have the

following witnesses: Assemblyman Paul Tonko, who is a lifelong

resident of the city of Amsterdam, NY, and has represented the

105th District in the New York State Assembly since April 1983.

Welcome, Representative Tonko. Representative Tonko currently

serves as the chairman of the Committee on Energy for the New

York State Assembly.

Next, Representative H. William DeWeese. Representative

DeWeese, welcome. Representative DeWeese has represented the

50th District in the Pennsylvania House of Representatives since

1976. He has served as Speaker of the Pennsylvania House of Representatives and currently serves as majority leader.

We are glad to have you here, sir.

Mr. DEWEESE. Thank you.

Mr. KUCINICH. Next we will hear from Chairman Kurt Adams.

Mr. Adams has served as chairman of the Maine Public Utility

Commission since 2005. Prior to that he served as chief legal counsel to Maine Governor John Baldacci. Thank you for being here,

Mr. Adams.

Elizabeth Merritt is the deputy general counsel for the National

Trust for Historic Preservation, where she has served as in-house

counsel for 24 years. The National Trust for Historic Preservation

is a private, nonprofit organization chartered by Congress in 1949

to further the historic preservation policies of the United States.

And we have Paul Koonce. Mr. Koonce serves as chief executive

officer of Dominion Energy, which is responsible for electric and

gas transmission and storage operations for Dominion Resources,

Inc.

Thank you very much to Ms. Merritt and Mr. Koonce for being

here.

Finally, Mr. Miller, Chris Miller, has served as president of the

Piedmont Environmental Council since 1996. He is responsible for

the overall management and strategic planning for the Piedmont

Environmental Council, which had been very successful in protecting Virginia’s landscape through conservation easements.

Welcome to all the committee members. It is the policy of the

Committee on Oversight and Government Reform to swear in all

witnesses before they testify, so I ask the witnesses if they would

please rise.

[Witnesses sworn.]

Mr. KUCINICH. Let the record reflect that the witnesses answered

in the affirmative.

I am going to ask that each of our witnesses now give a brief

summary of their testimony, and to please keep this summary

about 5 minutes in duration. Bear in mind that your complete written statement will be included in the hearing record.

At this time the Chair recognizes the distinguished representative, Mr. Tonko.

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STATEMENTS OF PAUL D. TONKO, CHAIR, COMMITTEE ON ENERGY, NEW YORK STATE ASSEMBLY; BILL DEWEESE, MAJORITY LEADER, PENNSYLVANIA HOUSE OF REPRESENTATIVES;

KURT ADAMS, CHAIRMAN, MAINE PUBLIC UTILITIES COMMISSION; ELIZABETH MERRITT, DEPUTY GENERAL COUNSEL, NATIONAL TRUST FOR HISTORIC PRESERVATION; PAUL

D. KOONCE, CHIEF EXECUTIVE OFFICER, DOMINION RESOURCES, INC.; AND CHRIS MILLER, PRESIDENT, PIEDMONT

ENVIRONMENTAL COUNCIL

STATEMENT OF PAUL D. TONKO

Mr. TONKO. Good afternoon, Chairman Kucinich, Chairman Waxman, Ranking Member Issa, Ranking Member Davis, and members

of the subcommittee. Might I also express my appreciation for the

attendance of good friend and former colleague, Congressman Hinchey and Congressman Higgins, and also a good partner in government, Congressmember Hall. It is a pleasure to be before you, Mr.

Chairman.

I have submitted written testimony and will provide for you a

consolidated version.

I also point out that my turf is the city of Schenectady, the electric city.

My name is Paul Tonko and I am a member of the New York

State Assembly and Chair of the Energy Committee, a role in

which I have enjoyed serving for the past 15 years.

During my tenure, few issues have given rise to the concern and

sense of disempowerment than the potential exercise of Federal

preemption regarding transmission line siting and what it has created. There is little confidence at this moment that Federal Government officials, who are far removed from the physical and socioeconomic location of local proposals, will be able to fully appreciate

the environmental, economic, and social impacts of long-range,

high-voltage transmission lines.

The purpose of my testimony today is to support a reversal of

those provisions of the Energy Policy Act of 2005, which permits

the Federal Energy Regulatory Commission to finally determine

the siting of electric transmission lines. This newly conferred regulatory power may hold hostage the ability of States to craft and implement energy policy best suited to the States’ needs and policy

goals.

What is needed at the State level is the freedom to take a holistic

approach to energy policy, an approach which looks at all the supply side and demand side options available without fear that such

policies, programs and decisionmaking could be trumped or thwarted by private interests seeking alternate Government intervention.

New York is certainly one of the battleground States in this particular arena. New York has already been host to a transmission

line proposal which has sought early access to the provisions of section 1221 of the Energy Policy Act. At an Assembly Energy Committee hearing regarding this proposal, the committee received testimony from your colleague, Maurice Hinchey, here today, who was

able to speak authoritatively on the dynamics which resulted in the

provisions of the Energy Policy Act which you are now examining.

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In that testimony, Congressman Hinchey reiterated his concern

that provisions of the new act were intended to erode State and

local jurisdiction over proposed projects. Thus, it appears that these

Federal policies may not have been drafted with the protection of

the public interest in mind.

Given New York’s experience with creating energy policy behind

closed doors, I am well aware of the consequence of creating energy

policy that does not meet the multiple needs of all consumers and

energy service suppliers. More to the point, these provisions should

never have been incorporated into statute, and the time to repeal

these provisions is now.

Many times elements of emerging State energy policies are the

result of the absence of Federal Government policies and programs

to do the same. For example, in New York and the northeast, more

broadly, the Regional Greenhouse Gas Initiative, a regional compact amongst 10 northeastern States, has been initiated and is

poised to establish a cap in trade program to control emissions of

carbon dioxide, primarily from electric-generating plants.

While the possibility that energy prices may increase as a direct

result of capping of carbon dioxide, other energy policies are being

crafted and implemented to help consumers better control their energy use, thereby reducing their energy costs, and possibly bringing

down overall energy prices in the long run.

Individual energy policies are only effective when they are implemented as part of the comprehensive energy plan. Outside factors,

or possibly wild cards, can only disrupt the orderly implementation

of complementary energy programs which have been designed according to the needs of the system, a forecast of prices from which

appropriate incentive levels are set, and the market potential for

specific technologies in that given location.

Last week New York’s Governor Eliot Spitzer announced just

such a comprehensive energy plan. This strategy is premised on

the achievement of a 15 percent reduction in energy consumption

by 2015. The goals of this new policy are to simultaneously lower

New York’s high cost of energy, while expanding the supply of

cleaner generation sources. Further, implementation of this policy

requires that all resources be enlisted to achieve these goals, balancing demand side options with supply side options.

This type of energy plan will also benefit the widest spectrum of

economic interests, and not merely give preferred access to very

large capitalized corporations.

Certainly the policies outlined by Governor Spitzer will provide

an opportunity for new transmission lines to be constructed in New

York State; however, a transmission line which does not comport

with the policy goals of the comprehensive energy plan and is focused solely on maximizing profit opportunities to the project developer could jeopardize the overall plan.

Transmission line proposals which do not comport with comprehensive State-level planning should not be given new life

through Federal Government preemptive power.

In conclusion, I would like to thank the subcommittee for this opportunity to present this testimony and respectfully and strongly

urge a reversal of the policies embodied in section 1221 of the EnVerDate 11-MAY-2000 12:58 Jun 25, 2007 Jkt 000000 PO 00000 Frm 00055 Fmt 6633 Sfmt 6633 C:\DOCS\35770.TXT HGOVREF1 PsN: HGOVREF1
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ergy Policy Act of 2005. Repeal that provision in my message on

behalf of the Energy Committee I chair.

I will be happy to answer any questions that members of this

subcommittee may, indeed, have.

Thank you.

[The prepared statement of Mr. Tonko follows:]

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Mr. KUCINICH. Thank you very much, Representative Tonko.

Representative DeWeese, thank you.

STATEMENT OF BILL DEWEESE

Mr. DEWEESE. Thank you very much, Mr. Chairman, Congressmen, Congresswomen, staff. My name is Bill DeWeese, and I certainly appreciate the opportunity to appear before the members of

the Subcommittee on Domestic Policy and provide some comments

on the implementation of section 1221 of the Energy Policy Act.

Parenthetically, I would like to thank Congressman Hinchey for

his negative vote. I think it was pregnant with common sense and

a respect for States’ rights.

I offer these remarks not only as a member of the 50th Legislative District, which encompasses all of Green County, parts of Fayette and Washington County in southwestern Pennsylvania, but as

the current majority leader of the Pennsylvania House.

I have 10 quick points, two or three sentences each.

No. 1, as it stands today, FERC, the Federal Energy Regulatory

Commission, can use its imminent domain power to locate and construct a transmission line, regardless of what our Pennsylvania

Public Utility Commission finds and rules.

No. 2—and obliquely I referred to this when I mentioned my

compliment to Congressman Hinchey—this is an unprecedented

usurping of States’ rights. As a little boy, the term ‘‘States’ rights’’

had a vulgar and sometimes malignant connotation, but this is an

absolute State right, and our Pennsylvania Public Utility should

not have its powers arrested.

No. 3, we in Pennsylvania understand the need for reliable power

and are willing to do our part for the PJM grid. We know that the

American consumers and companies up and down the east coast

need electricity.

No. 4, we are willing to do what we can to allow the Federal Government to be involved, but we don’t want it to impose its long arm

and its will into our back yards, into our green spaces, and into our

lives.

No. 5, if the Federal Government is allowed to dictate on this

issue, where does it end? Will they come up to Green County and

tell us where we are going to put a nuclear power plant or a hydroelectric plant or a windmill farm?

No. 6, if section 1221 of the Energy Policy Act of 2005 is not repealed—and I certainly join my colleague from the Empire State

and request that it is repealed—we will necessarily strip the States

of their right to govern their own future when it comes to citing

and construction of high-powered transmission lines. Public participation and regulatory review be damned.

No. 7, the following is a mere snapshot of Pennsylvania’s economic, cultural, historical, and natural and scenic resources. We

have about 2,300 and 23,000 acres of farmland that has been preserved through our Commonwealth’s agricultural and land preservation program. We have 120 State parks on 283,000 acres, 20

State forest on over 2 million acres, 300 State game lands on over

approximately 1.5 million acres. Pennsylvania State forest land is

one of the largest expanses of public forest land east of the Mississippi River. We have Gettysburg National Park. We have Valley

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Forge National Park, Fort Necessity National Battlefield. We have

42 other places in Pennsylvania that are listed on the National

Historic Record.

No. 8, under the guidance of Governor Edward G. Rendell, Pennsylvania has become one of the first States to implement an alternate energy standards portfolio.

No. 9, nobody has convinced me or any of my constituents that

the proposed power line is in the public interest. What I have become convinced of is the fact that at the end of the day Pennsylvania and the Pennsylvania Public Utility Commission should

make these determinations, not the Federal Energy Regulatory

Commission.

No. 10, and finally, there is no doubt in my mind that section

1221 of the Energy Policy Act should be repealed post-haste.

With that, I will continue my efforts to oppose all efforts to designate the National Interest Electric Transmission Corridor and

any projects, Mr. Chairman, seeking to locate and construct interstate high-voltage transmission lines in the Commonwealth of

Pennsylvania.

Thank you very kindly.

[The prepared statement of Mr. DeWeese follows:]

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Mr. KUCINICH. Thank you very much, Mr. DeWeese, for that very

powerful statement.

The Pennsylvania PUC chairman also has concerns. Without objection, I will put into the record the statement of Wendell Holland,

chairman of the Pennsylvania Public Utility Commission, addressed in remarks to this committee.

Without objection, thank you.

[The prepared statement of Mr. Holland follows:]

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Mr. KUCINICH. Next we are going to hear from Mr. Adams, State

of Maine.

Welcome.

STATEMENT OF KURT ADAMS

Mr. ADAMS. Thank you, Chairman Kucinich, members of the

Subcommittee on Domestic Policy. My name is Kurt Adams, and I

am the chairman of the Maine PUC. I am very pleased to be here

before you today to discuss the implementation of section 1221.

Section 1221 directed the Secretary of Energy to conduct a congestion study, and that will be most of what I talk about today.

The congestion study was to be a nationwide study of electric

transmission congestion. The study was released on August 8,

2006. It is supposed to be renewed every 3 years.

The Secretary may designate any geographic area experiencing

electric energy transmission capacity constraints or congestion that

will adversely affect consumers as a national interest corridor.

Section 1221, however, requires the DOE, before it exercises this

authority, to consult with affected States in conducting the congestion study. Only after consulting with the affected States is the

DOE to issue the mandated congestion study.

As is clear from the appendices to the congestion study, DOE

never contacted or met with any Maine regulator or government

representative in the process of conducting the study.

The study found Maine’s New Hampshire interface and Maine’s

interface with New Brunswick to both be contested and identified

the Maine/New Hampshire interface as one of the top 40 congested

interfaces in the eastern interconnect.

DOE did contact the Maine PUC on October 6th, and, after communications from our delegation, had a subsequent meeting with

the PUC and Maine delegation staff in December 2006, but these

after the fact meetings cannot cure DOE’s lack of consultation that

was required by statute prior to the release of the congestion study.

The congestion study identified several congested pathways in

New England and identified the region as a congestion area of concern. It is worth noting that the New England Governors Conference and the New England Council of Public Utility Commissioners also objected over the lack of consultation, and, to the best

of my knowledge, there was not a single Governor, a single PUC,

or a single elected or government official from any New England

State consulted by the DOE consistent with the law.

The DOE’s failure to follow the simple requirements of section

1221 mean that the congestion study, as it currently stands, cannot

be used as the basis for designations of corridors in Maine or New

England. The congestion study is fundamentally legally flawed as

to that region.

In addition, getting to the merits of the congestion study—and I

am tempted to start making this seem like a PUC hearing room,

but I fear everyone will fall asleep—we do very detailed analyses

in PUC hearing rooms. We look very carefully at what is behind

load flows. We look very carefully at reliability questions. That is

what we do for a living.

When we looked at the congestion study, there is insufficient

support for the study’s finding of congestion at the New Brunswick/

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Maine border, and at the Maine/New Hampshire border, and I will

just touch on this briefly, but it is concerning to us.

We individually and through NECPUC, our regional regulators

association, and NARUC, our national association, have sought access to the load flow studies, input data, and modeling used by

DOE and its consultants in arriving at the conclusions in the

study. However, it does not appear that DOE has released all of

the inputs and modeling data it relied upon to make its findings

of the congestion study. What it has released does not appear to

support its conclusions. Release of all of the data is important, because the DOE’s conclusions in the study conflict with other publicly available information about congestion in New England.

For instance, ISO New England, our RTO, our grid operator, the

experts in maintaining reliability in our region, do not believe that

the Maine/New Hampshire interface is meaningfully constrained.

They have said so to the DOE.

In addition, although not addressed in the report, even though

it is publicly available information, two factors will greatly reduce

or eliminate congestion from New Brunswick to Maine during the

study timeframe. There is a new transmission line being constructed between Maine and New Brunswick as we speak, and it

is going to be energized very soon. That new line will increase

transfer capability by 300 megawatts over an interface that currently appears not to be congested.

The second widely known fact is that in New Brunswick a nuclear power plant will out for service for 2 years. That will also relieve pressure on the Maine/New Brunswick interface and reduce

flows that typically go from New Brunswick into New England.

This information was readily available to the DOE, but it was

not or does not appear to have been considered in the congestion

study. At this moment we don’t know.

It is worth noting, in closing, that both of those facts would have

been easily ascertainable had the DOE consulted with the Commission.

Thank you.

[The prepared statement of Mr. Adams follows:]

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Mr. KUCINICH. Thank you very much for being here, Ms. Merritt.

Please continue with the testimony.

STATEMENT OF ELIZABETH MERRITT

Ms. MERRITT. Good afternoon, Mr. Chairman and members of the

subcommittee. I am Elizabeth Merritt, deputy general counsel for

the National Trust for Historic Preservation, and we really appreciate the opportunity to testify before you about section 1221 of the

Energy Policy Act and the designation of national interest electric

transmission corridors.

We are particularly concerned that the Department of Energy

and other Federal agencies involved in implementing the act

should comply with the National Environmental Policy Act and section 106 of the National Historic Preservation Act prior to designating these national corridors. Section 106 is the law that requires

Federal agencies to take into account the effects of their actions on

historic properties, in particular, prior to making decisions that

could harm them. Section 106 is implemented through a consultation and review process that seeks alternatives to avoid, minimize,

and mitigate adverse effects on historic properties.

Unfortunately, the Department of Energy has made it very clear

that it does not intend to comply with section 106 or with NEPA

prior to designating any corridors under section 1221. In our view,

this is wrong, and we think Congress should clarify its intention

that the agency should be conducting these reviews now, not after

corridor designation has already occurred.

As you summarized, Mr. Chairman, the designation of national

corridors will have draconian results, including the potential effect

of overriding or preempting reviews by State and local governments

and by other Federal agencies. If a State regulatory board doesn’t

approve an application for a power line in the designated national

corridor within 1 year, the Federal Government can take control of

the review process and approve the project, itself, even if the State

has denied the application for legitimate reasons under State law

or has requested the consideration of alternatives and mitigation

measures that the applicant would prefer not to include.

Most disturbing, section 1221 authorizes the broad use of Federal

imminent domain power to advance these projects to construction.

In other words, national corridor designation will virtually guarantee the approval of any proposed transmission lines within the corridors. As a result, we believe it will be impossible to ensure any

meaningful consideration of alternatives after those corridors have

been designated. That is why it is so important for NEPA and section 106 review to occur now, before those corridors are locked into

place.

I would also like to summarize a few of the types of historic and

cultural resources that are at risk and the ways in which these resources are especially threatened by the visual impact of a major

power line.

The map prepared by the National Park Service which is attached as the last page of our testimony—and I also brought a larger poster copy of the map—shows that a wide variety of our Nation’s most significant public historic places are in close proximity

to these proposed transmission corridors that are currently being

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considered. These resources include historic battlefields, rural landscapes, historic districts, and other places from our Nation’s past

that still retain their authentic setting.

These areas derive their significance and their ability to convey

the story of our history in large part from their visual context.

These are places that offer members of the public the opportunity

to take a step back in time in order to understand our Nation’s heritage by seeing the world through the eyes of those who lived in

an earlier age.

It is important to understand that in most cases harm to historic

places can be even more difficult to mitigate than harm to environmental resources. Historic places are unique, authentic, and irreplaceable. A historic battlefield cannot be moved. It cannot be recreated like a wetland can. It cannot be planted or bred, like an

endangered species.

Many of these historic battlefields and landscapes have sweeping

views that are highly significant. Visual intrusion into those views

cannot be avoided by shifting a power line a little to the left or a

little to the right within the designated corridor. The massive infrastructure that is associated with these power lines cannot be camouflaged by planting trees to shield the view. Once the corridor is

designated, these visual impacts will be unavoidable and irreparable.

I also want to specifically mention the impact of the proposed

corridors on national heritage areas. As you can see from the Park

Service map that we have attached to our testimony, many of the

proposed corridors would cut right through the heart of our national heritage areas. In contrast to the National Register of Historic Places, these areas are designated by Congress. They are

areas where historic, cultural, and natural resources combine to

form a cohesive, nationally distinctive landscape. However, the

land is not acquired by the Federal Government because these

areas have the imprimatur of congressional designation, they have

been very effective in cultivating heritage tourism for community

and economic development.

The Alliance of National Heritage Areas estimates that every

year 68 million people visit our country’s 37 national heritage

areas, and during those visits they spend more than $8.5 billion a

year. Based on the enormous economic benefits for heritage tourism, we are concerned that local communities in these heritage

areas may suffer economically, not just environmentally, if massive

power lines are allowed to harm the historic areas and assets that

draw these visitors in the first place.

Beyond these resources, which are nationally significant and

often publicly owned, the transmission projects may also harm

thousands of other significant historic properties, including local

historic districts, landscapes protected by conservation easements,

and privately owned historic properties whose owners have relied

on Federal, State, and local legal protections that could be overridden by section 1221.

Many States have sophisticated regulatory agencies that review

major transmission projects, and the legislatures have developed

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ridor designation threatens to override and preempt these important State policies.

In sum, the National Trust is very concerned about the ambiguities and the excesses of section 1221 of the Energy Policy Act and

the way it is being implemented by the Department of Energy. We

are especially disturbed that the Department does not intend to

comply with NEPA or section 106 of the National Historic Preservation Act prior to designating any national corridors, and the impact of this approach could be the future approval of major power

lines without fully considering alternatives or ways to minimize the

adverse consequence.

We urge Congress to amend section 1221 of the act in order to

resolve the concerns that we and others have highlighted today.

Thank you.

[The prepared statement of Ms. Merritt follows:]

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Mr. KUCINICH. Thank you very much.

The Chair recognizes Mr. Koonce.

STATEMENT OF PAUL D. KOONCE

Mr. KOONCE. Thank you Mr. Chairman, members of the subcommittee, fellow Virginians Congressmen Davis and Wolf. I appreciate the opportunity to be here today.

My name is Paul Koonce, and I am executive vice president of

Dominion Resources and CEO of Dominion Energy. Dominion Energy operates the natural gas and electric transmission, natural

gas storage, and L&G operations of Dominion Resources, one of our

Nation’s largest energy providers.

Dominion supports the Energy Policy Act of 2005, including

those sections that call for Government to establish NIETC corridors. In the wake of the August 2003, cascading blackout from

the midwest to New York State, the entire country realized that we

had to improve our Nation’s energy infrastructure. Our economy

and security simply cannot tolerate such events.

The Energy Policy Act of 2005 recognized this need and established two important principles among many. First, that reliability

is no longer voluntary. The Energy Policy Act of 2005 established

nationwide reliability standards and backed those standards with

substantial penalty authority, some penalties as high as $1 million

per day per violation. Second, in areas where national interest are

at stake and cross-border State permitting stymied, the Energy

Policy Act of 2005 provides Federal backstop siting authority.

While Dominion has not sought such authority, we support Congress’ actions to protect and improve this vital network. The interconnected network of power plants, wind turbans, and transmission

lines are an asset and strength to our entire Nation’s economy. The

NIETC designations and the Federal regulatory siting process, once

it is established and tested, have the potential to improve the Nation’s reliability.

I stress potential is the operative word here. We must not prejudge the outcomes, regardless of which side of the debate we are

on.

Last week Dominion filed an application with the Virginia State

Corporation Commission to construct a 65-mile, 500 KB line to

serve the greater northern Virginia region. Our six-volume filing

for this project totals more than 1,000 pages and presents overwhelming evidence of need. It contains independent reports that

validate the need, expert testimony on the load forecasting model

use, and detailed information on the proposed route.

Dominion has stated repeatedly that we intend to use our State

siting process, but we recognize our industry and technology are

changing. Wind does not blow uniformly, and in many cases natural gas and coal handling and transportation infrastructure does

not exist to support power plant development in many metropolitan

areas. I believe the Energy Policy Act of 2005 recognized this reality and has attempted to address our changed circumstance.

Turning to customers, Dominion encourages customers to conserve energy when they can and use it wisely. The company offers

a variety of energy and money-saving resources to encourage its

customers to conserve. We supported House bill 3068, recently

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passed by the Virginia General Assembly. This legislation guides

Dominion away from retail choice, and in doing so makes it our responsibility to do more.

After years of promoting retail choice and giving retail providers

access to time of use rates and smart metering, expecting that retail providers would aggregate customers and provide load management incentives, the market solutions did not achieve the level of

success we had all hoped. This lackluster result, combined with the

rate shocks witnessed in Maryland, Illinois, and Texas, is why Dominion was a leader in the discussion and moved toward enactment of House bill 3068.

In sum, Dominion is a company dedicated to serving its customers, and doing so responsibly. Dominion is a company dedicated

to the State siting process, and Dominion is a company that recognizes the importance of the interconnected electric grid and the potential role the Department of Energy and the Federal Energy Regulatory Commission may play to ensure our Nation’s reliability.

I appreciate the opportunity to be here today. I look forward to

answering your questions.

[The prepared statement of Mr. Koonce follows:]

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Mr. KUCINICH. We appreciate you being here too, sir.

Mr. Miller, thank you.

STATEMENT OF CHRIS MILLER

Mr. MILLER. Chairman Kucinich and members of the committee

and Congressman Davis and Congressman Wolf, you have been

wonderful leaders in this issue in Virginia. Thank you for the opportunity to testify.

As president of the Piedmont Environmental Council, I have

spent a decade on issues of land use planning, regional land use

planning, and land conservation, and in that exercise, working with

a professional staff, with thousands of land owners, and with the

communities in the nine-county region that is almost the size of the

State of New Jersey, we have learned a lot about a lot of policies,

including energy policy, and about the potential impacts of transmission siting on those local, State, and Federal policies.

I think I am here today to present a perspective from the land

owner and local level. The result of implementing 1221, which creates this new power of Federal imminent domain, affects hundreds

of thousands of land owners in Virginia and millions across the

United States.

The graphic that you see on the screen is the combined corridor

request from PGM Interconnection, a regional transmission organization operating in 11 States and representing about 400 utilities.

This is what the utilities of the mid-Atlantic area requested. Dominion is part of that process, in fact, shares the committee that

put together this proposal.

The implications are enormous. Every land owner, every jurisdiction within that area, which includes almost the entire State of

Delaware—does include the entire State of Delaware, Maryland,

most of Pennsylvania, parts of West Virginia, and Virginia now

face the prospect of Federal preemption over an undefined set of

potential corridors.

Very specifically, PGM requested that authority be continued for

at least 10 years, and that parts of it be expedited. In fact, they

asked the Department of Energy to rule on these corridors before

the end of 2006, December 31, 2006, and requested that a specific

line-to-line that we are dealing with in Virginia be given special

status no later than August 31, 2006.

Those of us who live on the ground are concerned that the process by which this policy is being implemented is not protective of

public interests and the balancing of the need for clean and reliable

energy and the need to protect national and State resources, priorities that we have had long established.

The process thus far has been described I think adequately by

the representatives from New York, Pennsylvania, and Maryland,

but from the perspective of our organization, when we learned of

a potential corridor designation in Virginia we were the first to notify Governor Tim Kaine, we were the first to notify the Federal

elected officials, we were the first to notify State elected officials,

we were the first to notify local elected officials, and certainly the

first to notify affected land owners. So just the basic idea of these

corridors being designated, no one who is going to be affected was

part of the process.

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When we asked for meetings with the Department of Energy we

were told that they could not meet. Once they closed the comment

period, October 10th, they refused to meet with representatives of

PEC and have continued to state that a meeting with representatives of PEC would violate a prohibition on ex parte contact. So it

raises real questions about how stakeholders are supposed to discuss the alternatives to transmission, discuss the mitigation that

potential transmission corridors may require.

Let me talk a little bit about the types of resources that are implicated, national resources. This is a perspective from Virginia. We

have probably the highest concentration of Civil War battlefields.

There are eight Civil War battlefields designated by the National

Park Service as worthy for protection within the study area created

by the Dominion and Allegheny request, by PGM’s request. We

have the highest concentration of nationally recognized rural historic districts. We are the view shed of the national scenic trail, the

Appalachian National Scenic Trail. There are over 200,000 acres of

land within this area that are visible from the Appalachian Trail,

one of the most visited parts of the National Park System. We have

37 individual historic sites, including the homes of Chief Justice

John Marshall of the Supreme Court, and a host of other important

historic sites to both national, State, and local history.

All of this area is part of a proposed national heritage area, the

Journey Through Hallowed Ground, which Congressman Wolf and

Senator Warner and Members of the delegations from Maryland

and Pennsylvania have supported the Congress approving, and

these proposed lines would cut right through the heart of that proposed heritage area.

Let me argue this. Please refer in our testimony to the letter

from David McCullough and James McPherson, probably the most

recognized historians in American history. What they call for, what

many energy leaders call for is a different process if we are going

to go forward with national interest corridor designation, and that

process would call for two things: openness, transparency; and a

programmatic EIS.

Why is that so important? This is a decision which has the potential to shift the market for energy in a dramatic way. Transmission

lines will bias our future energy decisions in a very significant way,

and now is the time, before designation takes place, to look at all

alternatives, look at the environmental impacts, look at the impacts on other national interests, national priorities, and be sure

the that balancing is done before designation, not after it is complete.

Thank you very much for this opportunity.

[The prepared statement of Mr. Miller follows:]

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Mr. KUCINICH. Thank you very much for your testimony, Mr.

Miller, and thanks to all members of the panel.

We are now at the point where members of the committee will

begin with questions.

The Chair will recognize for 5 minutes—each Member will have

a 5-minute round of questions—the gentleman from New York, Mr.

Hinchey.

Mr. HINCHEY. Thank you, Mr. Chairman.

I want to express my appreciation to all of you for your very competent and informing testimony. We very much appreciate all of

your being here.

I would like to ask a question of Mr. Tonko, who is a dear friend

and a colleague of mine formerly in the State House of Representatives in Albany, NY.

Paul, you are one of the most informed and reliable people on

this issue of energy that I know. I think that your importance of

being here is very considerable.

One of the main provisions of this act, as has been pointed out

here over and over again, is 1221, which preempts the right of imminent domain and preempts State authority. Do you think it is

possible for the States to maintain a reliable electric system without this kind of preemption, and States should be giving energy

companies the right of Federal imminent domain?

Mr. TONKO. The first point I would make is it is absolutely possible for States to do this work. We have been doing it for decades,

if not a century, whereby States have maintained systems, albeit

deregulation has entered into the mix. But I think it is important

to recognize that, A, we have done it, we have a track record, B,

no one has to tell me or a State that we have a congestion corridor.

We know that. We are working with it, but we are developing comprehensive energy policy, especially with the onset of the new administration.

It is a mix of phenomena that take hold in that comprehensive

plan, from renewable energy to energy efficiency, demand side

management, conservation, perhaps upping some generating facilities that have been not operating, and yes, perhaps transmission

lines. But my concern about the preemption from the Federal level

is that, once you develop a strategy and a plan you can then have

that intercepted, interrupted by Federal action, which may not be

the outcome we need.

Where we need transmission, to what degree, how it is incorporated with renewables, how it blends with the strategy for efficiency, those are all important factors that will be, I think, not part

of the mix if the Feds intercept and do their decisionmaking outside the context of that plan.

So I think, because of our track record, because we didn’t need

anyone to tell us we had a congestion highway, because we need

comprehensive strategies, and I would add to that if there are any

incentives the Feds need to provide, it is to encourage interstate

planning, creating the compacts where there is a better bit of understanding about how the States can deal with their inter-relationships. That is far more comprehensive and valuable than this

heavy hand entering in, and perhaps at an inopportune time or

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without the discipline that is required to live in accordance with a

given State’s comprehensive energy policy.

Mr. HINCHEY. Thank you very much.

There is also the idea that the only way to deal with the electricity needs is through the establishment of these massive transmission lines, but we know that there are other ways to deal with

this. Would you comment for us on other aspects of this? What

about more broadly distributed generation, energy efficiency? Are

those the kinds of things we ought to be focusing attention on?

Mr. TONKO. Absolutely. The aggressive nature of the plan that

has been presented, to which I alluded in my testimony, by our

new Governor is speaking to just that. I think there is an untapped

resource in distributed generation. I think it is something that will

get great focus. We need to think outside the box.

I think that what we have in New York State is an opportunity

to utilize our natural resources in a way that produces great energy outcomes, and to also emphasize renewables. Wind will become, I think, very much part of the solution. And we have said

in testimony that we need to regard energy efficiency as an energy

resource. Just as they drill and well various items out there, we

need to tap into that resource and consider it a major player, a

major solution in the outcome that allows us to avoid perhaps some

of the additional transmission activity that won’t serve useful.

We have had contrary opinions as to whether or not more transmission opportunity actually serves us well in some cases. It may

cause some additional disturbances or re-route disturbances in a

way that may not be the kind of outcome we want for any of our

States.

Mr. HINCHEY. Thank you, Paul.

Mr. TONKO. Thank you, sir.

Mr. KUCINICH. I thank the gentleman.

The gentleman from California, Mr. Issa.

Mr. ISSA. Thank you, Mr. Chairman. And thanks, again, for this

hearing. I think it is very, very important that we look at legislation as soon as possible after it begins impacting our States.

Mr. Tonko, I would like to ask you a question sort of in the abstract, because I think, as a legislator, and in the case of New

York, it is a good what if. New York is between several States. If

New York is under the in state commerce clause, if New York for

some reason their failure to build transmission line was causing

problems in Connecticut, and Connecticut came to the Federal Government and said, ‘‘you know, we have done everything we can but

we can’t get our transmission line from X to Y,’’ would you look

into this and preempt other States, would you say that was within

the historic—forget about this legislation, per se, but within the

historic rules of the road similar to the interstate road system,

would you say that in a sense there are some cases in which the

FERC might appropriately come in and make sure something happened for interstate commerce reasons?

Mr. TONKO. Right. Congressman, I agree it could be set into that

historic context, but, more importantly, being done with comprehensive strategy, with interstate cooperation. That is the best

assistance we could hope for from our Federal partners in government.

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Earlier Congressman Murphy talked about his concerns, and immediately coming to line was the cross-sound cable from Connecticut to Long Island, which was decided by FERC, and that decision

was deemed to be a decision that was made on an emergency basis,

which was later rerouted as a permanent solution.

Now, I would suggest to you that outcome was not the best outcome for Connecticut, and I think that if you had encouraged

through Federal policy intergovernment comprehensive planning,

where we can avoid the need to step in and usurp State rights and

bring and build a plan, constantly updating it and implementing it,

we are in a new world of energy need out there, and I think that

the interdependency that we all share as States—I look at the

major impact from the blackout of 2003 in August 2003 befalling

New York State, and the lack of maintenance of the infrastructure

in a neighboring State caused disruption in our State.

So the States need to have the reliance of Federal Government

to bring about that cooperation, but not a heavy hand that tells you

when to do things.

Mr. ISSA. But I think you hit the point. As a New Yorker, you

have asked for that. You have said that we, in fact, somebody has

to make sure that something going wrong in Cleveland doesn’t turn

your lights off. So the very case that is the balance, the reason that

we may have to mend this don’t end it, is the lights going off in

the northeast; that, in fact, the system was not robust enough and,

as a Federal Government, when you say we have to be fair,

wouldn’t it be fair to say that we have to give the States a chance

to propose an interstate compact that they believe meets the test,

and if they fail to do so the Federal Government still has a role

on behalf of any one of the States or on behalf of the commerce?

And I am saying this because I am very concerned that this

hearing today could potentially cause people to say we will just

scrap what we have and hope that the States agree. I think New

York’s lights going off shows that decades of loose agreements, all

of which were designed to benefit each State, did tend to have

every other State not looking at excess robustness to protect anyone other than themselves.

Mr. TONKO. Congressman Issa, I think that you can accomplish

these goals by working within the bounds of the existing law and

encouraging the kind of——

Mr. ISSA. This is existing law.

Mr. TONKO. Well, within the context of the law that guided the

process prior to preempting the process by encouraging the kind of

planning that is essential. I think what was taken was a leap to

the extreme without offering——

Mr. ISSA. My time is limited, so I am just going to do one final

one, and it can be for another member of the panel that would like

to weigh in.

If we require planning and if that planning is not executed on,

wouldn’t you all agree that, if you make the plans, the Federal

Government holding you to those plans or to your accomplishing

those plans is still within Federal jurisdiction under interstate

commerce?

Mr. TONKO. I would think there is a role to be played to make

certain that plans—I think, very importantly, plans need to be deVerDate 11-MAY-2000 12:58 Jun 25, 2007 Jkt 000000 PO 00000 Frm 00127 Fmt 6633 Sfmt 6633 C:\DOCS\35770.TXT HGOVREF1 PsN: HGOVREF1
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veloped, updated, and implemented, and if there is a role to encourage that without usurping the States’ rights and without perhaps

derailing regional compact, comprehensive plans, or individual

State comprehensive plans, let’s do it. But this I think supersedes

in a way that is very disruptive.

Mr. ISSA. I just wonder if anyone can give me a ‘‘yes’’ to the question I asked.

Mr. KUCINICH. The gentleman’s time has expired. I want to acknowledge that, but also go ahead and answer the question.

Mr. ISSA. I don’t want to ask another question. If there is anyone

on this panel today that can give me an answer of ‘‘yes’’ to the Federal Government having that role if the compact fails to occur or

if one or more States fail to provide their share of it. I will leave

it for the record, I think. I don’t see anyone, unless Mr. Adams

wants to answer.

Mr. ADAMS. Your question is prior to the Energy Policy Act of

2005? Absent the Energy Policy Act of 2005 does the Federal Government have the authority under the——

Mr. ISSA. No, should we do it constitutionally is the question, because we are considering, if we get rid of this act, do we scrap the

whole idea that if one State doesn’t meet the requirements, even

if agreed, for another State, that the Federal Government should

just sit on the sidelines and watch the lights go off in New York.

Thank you, Mr. Chairman.

Mr. KUCINICH. Mr. Tonko, did you want to add anything?

Mr. TONKO. No. I will stand with the answer I gave.

Mr. KUCINICH. Yes. The gentleman’s time expired about 2 minutes ago.

Mr. ISSA. Thank you, Mr. Chairman.

Mr. KUCINICH. But let me, with unanimous consent, just ask a

question or engage in a colloquy with my good friend.

The question that was raised with respect to the 2003 power failure, which began in northern Ohio, the District I represent, if I remember correctly, the occasion of that power failure was not so

much the lack of robustness of the system as it was the failure of

maintenance by First Energy, which is our local power company.

Mr. ISSA. And for the chairman, I completely agree that we could

look at an initial cause. What has been discovered, as I understand

it from our work in the last Congress, was that the reason that the

failsafes never stopped—in other words, Cleveland was allowed to

go completely black, and the rest of the country should have stayed

up. You should not be only as strong as one engine failing.

So, as much as we know why Cleveland failed, the system was

not robust enough to keep one after another from being pulled

down, and that is where the interstate commerce question comes,

because, Mr. Chairman, I am very aware that there are failures in

2005 act. The question is what is the legitimate role, and hopefully

under your leadership we will define the limits of that role but not

fail to meet that requirement of interstate commerce. When does

the Federal Government have an appropriate role? I think the

Cleveland to New York blackout is the best example where we as

Federal officers, if we don’t make sure the States do their job so

that that network is robust enough, we will be held accountable.

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Mr. KUCINICH. You know, maybe the gentleman and I could cooperate in producing another hearing on the relationship between

the causative factors of the 2003 blackout as it reflects on some of

these issues and other issues relating to capacity. I think that

could be quite constructive.

I am going to go to Mr. Hall right now for purposes of his asking

questions.

We are in a series of votes soon.

Mr. HALL. I will make it quick.

Mr. KUCINICH. No, please, you get 5 minutes. Proceed.

Mr. HALL. Thank you, Mr. Chairman, and thank you to all of our

witnesses.

Representative DeWeese, I would like to ask you, regarding the

Allegheny Energy requests of March 2006, to designate a national

interest electric transmission corridor they call the TRAIL project,

Trans-Allegheny Interstate Line project, which, if it is approved,

will give them power of imminent domain from Maryland through

the tip of northern Virginia across western Virginia through southwest Pennsylvania and into Ohio, which is a remarkable stretch of

imminent domain. Two questions about this. First of all, for a

project of this size, how long would you expect the normal State

permitting process, the environmental impact statements or what

have you, to take?

Mr. DEWEESE. I do not know, but my speculation would be a 11⁄2

to 2 years. My colleague from Maine would probably be more precise in extrapolating a Maine or a Pennsylvania Public Utility

Commission dynamic. I only know that Wendell Holland, the chairman of the Pennsylvania Public Utility Commission, has expressed

to Chairman Kucinich and the membership some of his reservations and comments, but I do not know the exact number of months

that it would take.

Mr. HALL. I could ask everybody at the table, are you aware of

any such size projects that comes in through the normal environmental review process at under a year? I am not. I mean, in New

York, I am familiar, as Mr. Tonko is.

Mr. TONKO. Right. I think the 1-year timeframe is a very threatening situation. There needs to be flexibility. It is very murky. The

definition of when the clock starts ticking is very murky. I think

that it can be a very troublesome bit of nomenclature in the law

that really might undo a very valuable project.

Mr. HALL. Or, as one might put it, it is sort of a gone to the head

of the State government saying don’t screw up too many roadblocks

or ask too many questions, don’t drag the process out, or else it is

going to get kicked out of your hands and up to FERC. Yes, sir.

Mr. MILLER. Our concern about the 1-year clock is that in many

States the process of discovery, getting the data, acquiring the information, analyzing impacts is structured as an adversarial process. I mean, you have to ask the question, you have to do the interrogatories, you have to depose the witnesses, you have to review

the testimony.

For example, in the case of the 1,000-page filing by Dominion, all

of the flow data was submitted in a sealed document, so it is not

available to anyone to review. They are assertions and studies that

back up assertions by making other assertions, but there is not

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public access, until the intervention process is triggered by the

State Corporation Commission, to the actual flow data so that they

can be independently verified.

Similarly, as you have heard, at the Federal level there hasn’t

been access to the underlying data to make sure the conclusions

were drawn fairly and with consideration of alternative perspectives.

That process, by its very nature, can take more than a year. And

it is interesting that Dominion in this case, while claiming not to

plan on using the corridor designation and Federal imminent domain, has requested that the State rule on their application within

a year of the date of filing, which is exactly the unusual characteristic of the Federal law.

Mr. HALL. Thank you.

Chairman Adams, can you tell me exactly what the Department

of Energy has refused to share with your State?

Mr. ADAMS. There are two categories of information. One, information when we look at what they provided, they provided, after

a fair amount of complaining from NARUC, NECPUC, and a variety of individual States, they eventually posted on their Web site

some certain assumptions that they gave their consultant, but in

peeling that back the assumptions did not appear to be the whole

picture and they just don’t add up to the result, and a lot of the

information we get, for instance, in a PUC hearing room that

would lead us to conclusions about things like reliability or congestion we just don’t see there.

But, more troublesome, our public advocate issued a Freedom of

Information Act request on the DOE, and there was an e-mail

chain amongst DOE staffers talking about forwarding confidential

information among themselves delivered to them by PGM, the New

York ISO, and ISO New England.

We have asked for that confidential information, and it has not

been provided. DOE has actually said that they don’t have it.

So, from our perspective, from Maine’s perspective, the dots just

don’t quite line up to the conclusions that they have come to, and

that is what we don’t understand. There does appear to be at least

some information that they relied upon that either has been lost

or misplaced or is no longer in DOE’s possession to provide to us.

Mr. HALL. Thank you, Chairman Adams.

Thank you, Mr. Chairman.

Mr. KUCINICH. I thank the gentleman.

Mr. Davis.

Mr. DAVIS OF VIRGINIA. Mr. Koonce, thanks for being with us.

Let me just start with you.

I understand Dominion Power has filed its application with the

State Corporation Commission last week to move ahead with the

transmission line in Virginia. Is the intention to work through and

abide by the decision of the State Corporation Commission with respect to the Meadowbrook Loudoun 500 KB transmission line?

Mr. KOONCE. Yes, Congressman, it is. We have had great success

working with our State Corporation Commission. Every line that

we operate today has been approved by that State Corporation

Commission. We don’t see that relationship changing.

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Mr. DAVIS OF VIRGINIA. I mean, there has been some concern in

the community that the State process is now just a mere formality

for utility companies located in the NIET corridors, but that is not

your intention?

Mr. KOONCE. No, sir, that is not our intention. We have great

confidence in our commission to weigh the issues, analyze the load

flow studies, look at the need, make that determination, and provide the pathway for the company to move forward.

Mr. DAVIS OF VIRGINIA. Now, in your application, which I understand is lengthy——

Mr. KOONCE. That is correct.

Mr. DAVIS OF VIRGINIA [continuing]. You make the case for a new

power line. Can you just briefly highlight some of the needs—you

did some in your testimony—in terms of the areas that are impacted to where the power would be going?

Mr. KOONCE. Yes, sir. We filed an application for a 65-mile line.

It is a 500 KB system, moving from the western part of the State,

traveling along an existing transmission line corridor, ultimately

terminating at the Loudoun substation, which is just west of the

Dulles International Airport. The line that we propose will transfer

about 3,400 megawatts of energy into what has been described by

many as the fastest-growing region in the eastern seaboard. Our

load data certainly reflects that. It is a rapidly growing area.

The transmission corridor that we have identified will be residing beside an existing 500 KB system, so there will be areas where

we will be able to stay within the preexisting footprint. For example, where we cross the Appalachian Trail we have proposed to

change the pole structures so that the two power lines can coincide

within the existing footprint. There will be areas where we will

have to acquire an extra 100 feet so that we can put the line adjacent to an existing information. And then there is much of the

route that we won’t have to take any additional right-of-way, the

right-of-way is already suitable to this transmission line.

Mr. DAVIS OF VIRGINIA. You are obviously aware of the public

comment. You have done your best to minimize, assuming the need

for it, minimize the taking of additional right-of-way, is that——

Mr. KOONCE. Yes, Congressman. We have had five open house

meetings where we have tried to show people how we would route

the line, the structures that we would use. We have had over 100

meetings with community planning boards, chambers of commerce,

and have participated in over 300 media interviews. We have done

everything that we could to try to engage the community, and I

think through the Piedmont Environmental Council and Virginians

for Sensible Energy we, I think, have engaged the communities,

and I think we have a good filing that reflects that.

Mr. DAVIS OF VIRGINIA. You certainly have them engaged. There

is no question.

Mr. Miller, let me just ask you, do you think there is overwhelming evidence for the need for the proposed transmission line in

northern Virginia? Do you share the same conclusions at this

point?

Mr. MILLER. At this point we don’t. The evidence we have been

able to evaluate up to this point reaches very different conclusion,

which is that, as NERC found in 2005, Virginia is adequately

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served, both generation and transmission, and that the need is

being generated outside of northern Virginia and actually part of

a much greater region than the larger PGM interconnection.

The question then becomes: is this the best place to locate a line

to serve that interregional need, and are there other solutions?

One of the interesting things about the Dominion filing is that

they attribute the amount of demand reduction that would be necessary to obviate the need for this line. Remember that they are

using rather unusual contingency scenario where they close down

Opossum Point and a line fails, so it is sort of a double whammy,

not just a transmission issue.

But, in addition to that, they then say that, in order to avoid

building a transmission line, northern Virginia would have to reduce demand by 2,800 megawatts when, in fact, the area of demand that this line would be serving and the reliability that it

would be serving includes all of Maryland and the District of Columbia.

So if you spread that demand reduction over that area, it is less

than 10 percent reduction for the actual service area. The point

being, the kinds of initiatives that Maryland, that Governor Kaine

has initiated for the State agencies, Government Rendell, Governor

Corzine have all proposed would actually reduce demands from levels where these transmission lines may not be necessary.

Our concern is that the analysis process, the data that is held

as confidential and proprietary doesn’t allow for any independent

analysis of whether the conclusions reached and asserted actually

match reality on the ground or accommodate potential future

changes on the generation and demand management side.

Mr. DAVIS OF VIRGINIA. But the State Corporation will be able

to get all that, won’t they?

Mr. MILLER. If they have time. But, as I was trying to say before,

this is not a process where the application is only deemed sufficient

when all of the information is made available. It is, unfortunately,

structured as an adversarial process, and so the answers may not

come in the first 6 months, 8 months, 9 months, twelve months.

Mr. DAVIS OF VIRGINIA. Thank you.

Mr. Chairman, my time is up.

I do want to note the presence of John Stirrup, one of the Prince

William County supervisors that is in the room attending to this.

We appreciate your being here as well. Thank you.

Mr. KUCINICH. All right.

Would the gentleman from Virginia yield for a question? Do you

need more time?

Mr. DAVIS OF VIRGINIA. I am OK.

Mr. KUCINICH. Sure. OK.

The Chair recognizes Mr. Arcuri.

Mr. ARCURI. Thank you, Mr. Chair, and I thank you for giving

me an opportunity to be here.

I would like to thank the panel, all of you, for being here. Assemblyman Tonko, thank you very much for coming down.

Assemblyman, in response to one of the questions that my colleague from California asked you, do you think that there is a distinct difference between seeing to it that the States work together

to prevent the kind of blackout that we saw on the east coast, as

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opposed to overruling a position that a State takes if a State chooses not to allow a corridor and then the Federal Government comes

in and preempts it?

Mr. TONKO. I think it is very important for us to bring States together in these regional compacts so as to address concerns that

have already been documented, with the point in case being the

2003 blackout. You know, it wasn’t about the robust issue, it was

about communication, it was informing another State as to what

was coming, and it was about maintaining a system as you theoretically had indicated in your guidelines. We need to make certain

that kind of deliberative effort is made.

There are also concerns. I look at the interrelationships or the

potential partnerships amongst not only the New York ISO but the

PGIM and New England ISO where we could develop, I think,

sound policy and encouragement from the Federal level to deal

with inter-ISO seams that would address not only economic outcomes but reliability potential.

Mr. ARCURI. My other concern is this. If a State creates a policy

that it chooses to, for instance, in New York, if the policy were to

promote generation down State, wouldn’t a power line such as

being proposed create a disincentive to creating generation in another place, because what they are doing is bringing power from

one place to another place rather than promoting generation?

Mr. TONKO. It could. I think, again, in the case of New York

State there needs to be ample opportunity, total opportunity to exercise our strategy as a State with a comprehensive plan.

Mr. ARCURI. I just have one more question. And if the strategy

of New York was to keep the cost of power down in a place like

upstate New York where unemployment is high, then wouldn’t taking power from there, driving up their cost, also serve as a disincentive for creating caps?

Mr. TONKO. It absolutely would be a disincentive, and that is

why I think the mix of energy efficiency, onsite distributed generation, conservation efforts, and renewables are all blended into the

discussion and the determinations of policy within New York, and

having some sort of preemptive process that could cause price fluctuations for regional outcomes in New York State would be a tremendous setback.

Mr. ARCURI. Mr. DeWeese, do you see that in Pennsylvania, as

well?

Mr. DEWEESE. I do. I do. I live in the heart of the coal fields,

and we are honeycombed with the tritus of coal mining underground. We are scarred with the results of coal mining on top. Our

water volume and our water quality are questionable. The paradigm that you offered seems to be very, very accurate relative to

the future.

Clean coal technology that Ed Rendell and a variety of other people in our State and General Electric are advocating seems to me

a very, very aggressive alternative. We should be building plants

where population bases exist. The river valleys and steel valleys of

western Pennsylvania have paid their fair share over our national

history, and we don’t think that we should be developing power in

those little corners in the red in the southwestern part of rural

Pennsylvania for the burgeoning populations of the east.

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Mr. ARCURI. Thank you very much.

Mr. DEWEESE. Yes, sir.

Mr. TONKO. Mr. Chairman, if I might again refer to the upstate

economy, which has been a primary focus, energy costs obviously

are a tremendous concern. If that comes at the expense of outcomes

for transmission owners’ profit margin and reduces our opportunity

to revitalize the upstate economy, it would be a dreadful outcome.

I think, again, it has to be looked at in totality. It has to be a

holistic approach so that we can balance the needs for energy within New York State and to do that in partnership with neighbors

and regional compacts.

Mr. KUCINICH. I thank the gentleman.

The gentleman from Virginia, Mr. Wolf.

Mr. WOLF. Thank you, Mr. Chairman.

In the interest of time, thank you and Mr. Davis for the hearing.

I want to thank the witnesses.

If I may, I would like to submit a series of questions for the

record, if I may.

Mr. KUCINICH. Without objection.

Mr. WOLF. Again, thank you very much.

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Mr. KUCINICH. I thank the gentleman. I just want to assure Mr.

Wolf and Mr. Davis that you have the complete and total cooperation of all of us on the committee relative to your concerns.

I would like to ask some questions, and I understand there is a

series of votes right now. What it is my intention to do is to finish

with this panel, unless the Members are looking for another round.

If you want to do another round of questions, let me know and I

will ask if the panelists—if Members wanted another round of

questions, would the panelists be able to stay. We will see how far

we get.

I want to start with Mr. Koonce.

Sir, in your testimony you state that you are committed to the

State siting process. Would you be able to assure this committee

that Dominion would, under no circumstances, seek to preempt the

State process by invoking section 1221?

Mr. KOONCE. Mr. Chairman, I could not make that commitment.

Mr. KUCINICH. Why not?

Mr. KOONCE. We are a company that provides energy and interstate commerce in many forms. We operate interstate natural gas

pipelines. We are constructing a wind farm. And we provide energy

throughout New England, as well as Virginia. There can be circumstances where we believe Federal back stop siting authority

can have a use.

I don’t know the exact year, but in 1989 American Electric Power

filed an application in West Virginia to construct a line into Virginia. It took them 13 years to construct that line because the two

States could not reconcile their interstate conflicts.

I would not make a commitment to this company. I would not

make a commitment to this subcommittee to subject our customers

to that same type of interstate conflict.

Mr. KUCINICH. Now, in 2002 the American Council for Energy

Efficiency Economy [ACEEE], released a report that examined utility spending on energy efficiency in the year 2000. ACEEE ranked

the States to determine which States were doing the most to become more energy efficient. At the top of that list was Connecticut.

Connecticut spent just under $20 per capita on energy efficiency.

At the very bottom of the list was Virginia. They found that Virginia utilities were dead last in their spending. Virginia spent

nothing, zero. The Virginia utilities simply made no investment in

energy efficiency.

Now, in 2005 the ACEEE updated their report for the year 2003.

Things have changed. Vermont had moved to the head of the pack.

Utilities there spent about $30, $28.26 per capita on energy efficiency programs. Unfortunately, Virginia was still spending zero

per capita on energy efficiency.

Now, Mr. Koonce, according to your testimony today Dominion’s

hands are tied. You seem to be saying you have no option but to

build a new transmission line, but you can’t increase the efficiency

within your service territory fast enough, but it seems your problem has been years in the making. Nothing was spent on energy

efficiency in 2000, and today you have come before this committee

explaining that your demand is so high that it has limited your options.

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Now, Mr. Koonce, how much did Dominion invest last year per

capita on energy efficiency?

Mr. KOONCE. Mr. Chairman, that report captured ratepayerfunded energy efficiency. In 1999 the General Assembly passed the

Utility Restructuring Act. The purpose of that act was to promote,

in its widest and complete form, retail competition. The 1999 Utility Restructuring Act contemplated that our generation, transmission, and distribution entities would be functionally separated

and ultimately legally separated such that retail providers could

come into the marketplace and could look at peak versus off-peak

consumption and could come up with creative packages, offerings

to customers so that they would be economically incentive to engage in demand side management conservation.

Mr. KUCINICH. I understand that, but your question is how much

did Dominion invest last year per capita on energy efficiency.

Mr. KOONCE. I don’t have that number today. What I can tell

you——

Mr. KUCINICH. Would you be able to submit that information for

the record?

Mr. KOONCE. I will seek to do that.

I will tell you that we still have and continue to work with all

of our commercial industrial customers, as well as our homebuilders. We have certified energy planners. They work throughout

the year——

Mr. KUCINICH. If you could submit that planning, those documents to the committee it would be very helpful. I am sorry to interrupt you. We have just got a couple of minutes before we have

to run and vote.

Do you know how much you are going to spend this year then

on energy efficiency? You don’t really know?

Mr. KOONCE. Again, the Virginia General Assembly, which is

charting the course for Virginia, which we certainly support,

passed a new law this spring. That law required the State Corporation Commission to pull together across-State group to identify

ways to cut energy consumption by 10 percent.

Mr. KUCINICH. What I would like, if you could, sir, is for you to

submit to this committee, if you have such information, how much

money Dominion expects to invest per capita on energy efficiency,

if you could submit that, because in the case of Dominion the facts

seem to suggest that there has been a failure to anticipate the need

for energy efficiency ahead of time.

I would like to ask about another important issue and see if Dominion is acting proactively. There is no longer any doubt that

human activities are resulting in global climate change. What steps

are you taking to reduce Dominion’s greenhouse gas emissions over

the coming decade?

Mr. KOONCE. Mr. Chairman, in 2003 Dominion was the first utility to enter into an agreement with EPA. That agreement called for

our company to spend $1.7 billion to install NOX/SOX pollution control equipment. Since that time, we have also acquired the generation assets in New England of U.S. generation. We will be spending, in total, $2.5 million on fossil plants to improve air quality,

both with NOX and SOX pollution control equipment.

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We anticipate that by the year 2015 we will reduce our emissions

by 70 percent, at the same time increasing plant output by 30 percent.

Mr. KUCINICH. Let me just ask you one question before we take

a break for votes. How about reduction in CO2 emissions?

Mr. KOONCE. We have plants that are in New England, as part

of the REGI program, where we feel confident that we will be in

compliance with the regulations as they are promulgated. We

are——

Mr. KUCINICH. But are you able to state—I am not talking about

regulation, I am talking about plans to reduce greenhouse gas

emissions. That is two different things. Can you provide this committee with information about the efforts that you are taking to

provide for reductions in CO2?

Mr. KOONCE. Sure, we can provide that information.

Mr. KUCINICH. We appreciate that.

At this point the Chair is going to call this committee in recess

for 45 minutes. We have a series of five votes. We will return.

Mr. Hinchey.

Mr. HINCHEY. Thank you very much, Mr. Chairman.

I just wanted to ask one question before we left of Mr. Tonko.

The regional transmission line that is being proposed for New

York, the so-called New York regional interconnect, it is not really

regional. It is entirely within the State of New York. You have

been personally involved in these energy issues for a long time, and

I know you know them very well. Can you describe the New York

review process for these transmission review facilities and how that

process would conflict with the 1-year arbitrary limitation in section 1221 of this energy law?

Mr. TONKO. Sure. Basically, we allow for intervener activities.

There are funds that are set aside for that. There is a process that

is conducted by our own regulatory group that will review comments made by the applicant. I don’t think that the pressures of

a 1-year framework are very helpful.

When we looked at that whole system, as was asked by Congressman Arcuri earlier, it is obviously looking at impacts that will

befall not only the various communities, the economy, the environment, but also looking at the outcomes in terms of what ratepayer

impact there would be.

Again, to put that into the context of a bigger picture, which is

the strategy within New York State, all of those aspects are looked

at.

What is troublesome here is we might have activity spurred by

deal brokering which may empower the applicant to forego this

process or not—will have the local regulator feel as though they are

at risk or threatened by this process, because there is always an

outcome whereby they can circumvent our process and move to a

Federal decisionmaker, which I think would be disruptive.

In many cases our process, Mr. Chair, is longer than 1 year.

Mr. KUCINICH. Mr. Hinchey, we are going to come back for another round of questions right after we return from votes, so the

committee is in recess for approximately 45 minutes, and we will

look forward to another round of questions.

Thank you.

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[Recess.]

Mr. KUCINICH. The committee will come to order.

We will go to Mr. Davis.

Mr. DAVIS OF VIRGINIA. Thank you.

Mr. Koonce, I just have a couple other questions.

In your testimony you mentioned the 2005 EPAct established reliability standards and that these standards are backed with substantial penal authority.

Mr. KOONCE. Yes.

Mr. DAVIS OF VIRGINIA. Can you elaborate on these standards

and how Virginia is faring in relation to them?

Mr. KOONCE. Yes, Congressman. First off, we have always operated our electric transmission system as if the standards were

mandatory, even when they were voluntary prior to the Energy

Policy Act, so we have always done the planning and done the operations of our system with that in mind. So, as a result of the Energy Policy Act and these reliability standards now being mandatory, we see effectively no change to our operations. We are compliant. We were compliant. So this move is one that we certainly welcome.

In terms of the substantial penalty authority, the $1 million per

day tight fine, the most egregious tight fine, are fines associated

with operating your system in a manner that could put its system

and the neighboring systems in a blackout condition. That is obviously the most egregious. The other is the planning criteria that

you use to plan for adequate reliability. Those are the two areas

where there is the greatest potential for the largest fine.

Mr. DAVIS OF VIRGINIA. OK. Mr. Miller, let me just get in with

you and Mr. Koonce for a minute on the demand side management.

In my opening testimony we talked about demand side management. That is an important part of the equation. Could you give

us your vision, and then, Mr. Koonce, hear your vision on how we

are dealing with this, because transmission authority is important,

but that shouldn’t be the only part of the equation, and I think

under the law it is not.

Mr. MILLER. Well, I think generation, as well, could be a third

leg of the stool.

Mr. DAVIS OF VIRGINIA. Right.

Mr. MILLER. We have actually commissioned a study by Summit

Blue of what opportunities exist in Virginia, and we asked them to

look at Virginia and then a broader region, which is actually the

service territory for PGM, which is Virginia, D.C., and Maryland.

What they concluded is that there was so much low-hanging fruit

in all three jurisdictions in terms of readily available investments

that could be made to reduce demand and to do better load management that achieving 10 percent of reductions in that large area,

which is over 3,000 megawatts, was achievable in a very short

timeframe.

I think that was the reason that we asked the General Assembly

to consider and the Governor to make amendments to the re-regulation bill in Virginia so that the goal of a 10 to 15 percent reduction within a very short period of time would be a statutory goal

and included in the SEC’s decisionmaking structure.

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Dominion actually opposed that amendment and offered, I think,

much softer language that makes it sort of a study of whether it

is possible, as opposed to a mandate.

The second part of this is that these things can be done quite

quickly. We have talked to Chairman Connelly in Fairfax County

about, you know, what it would take to get 10 light bulbs changed

at every residence in Fairfax County. That could have the effect of

something on the order of 750 megawatts of demand reduction simply by changing lightbulbs. There are so many people there, there

is so little that has been done previously, that in a matter of

months you could reduce demand during peak hour by changing

light bulbs.

Mr. DAVIS OF VIRGINIA. Changing light bulbs? Seriously, I keep

hearing that.

Mr. MILLER. But you have to do it in bulk. If we all change one,

that isn’t going to get us there, but if we all change 10, which is

good economics, we could get there.

Let me give you the math. Each light bulb that you change from

100 watt incandescent to a 23 watt compact fluorescent saves 75

watts. You multiply that by Dominion’s 1.1 million customers in

northern Virginia and you have 75 megawatts. You multiply that

by 10 and it is 750 megawatts.

Now, is that all at peak hour? That might be debatable, but it

is still a real savings.

The investment that would be required to do that is about $10

million, $1 a light bulb. For $10 million we could reduce demand

by 750 megawatts, but instead we are going to look at a $250 million power line that will take 4 years to build.

I just think that the opportunities in northern Virginia, throughout the region that is served by these proposals are so real and so

under-developed that we have to look at them.

Another one that is very important, another one where Dominion

is falling short, is A/C cycling, air conditioning cycling. By comparison, NOVEC, which acts in the 11th District, has an aggressive

program of encouraging customers to use A/C cycling. A third of

their customers have had A/C cycling devices installed that allows

the utility to switch off the compressor 7 minutes out of every half

hour during the peak demand period, thereby reducing demand by

nearly a third in most critical components. That service is not

available from Dominion.

Mr. DAVIS OF VIRGINIA. Thank you.

Mr. Koonce, do you want to respond?

Mr. KOONCE. Yes, Congressman.

We do think that it is a combination of transmission, generation,

and energy conservation. All should play an equal part in providing

for reliable infrastructure going forward.

On the day that we filed the application for this transmission

line, we also filed an application to install 300 megawatts of clean

natural gas peaking capacity in the region to support the region’s

continued growth. We also intend to work very closely with the

State Corporation Commission, as has been called for by the recently enacted law, to identify all the measures that we can employ

in order to conserve energy and to employ demand side management techniques.

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We currently have about 314 megawatts under demand side

management programs. We have about 17,000 customers using

time of use rates. We sell about 4 million megawatt hours under

those time of use rates. But we are anxious to do more, and we

think that the legislation that has been enacted that really required we stay on the sidelines and let retail merchants provide

these services, we don’t think that has worked, and we are anxious

to work with the State Corporation Commission, with the Piedmont

Environmental Council to identify those programs and put those

programs in place.

Mr. DAVIS OF VIRGINIA. Finally, let me ask about new generation. You have a North Anna plant that will be coming on in, what,

10 years; 5 years?

Mr. KOONCE. We are currently working on securing an early site

permit for the North Anna plant. That is correct.

Mr. DAVIS OF VIRGINIA. What will that mean to ability to deliver

generation to the region? You will still have to transmit it?

Mr. KOONCE. No question. The discussion around North Anna,

could be a plant as great as 1,500 megawatts. To unload a 1,500

megawatt plant, unload it, and get the power to where it is needed

will require some investment in infrastructure. We have looked at

that. We think it is modest. But certainly when you build generation you have to also be prepared to construct the transmission to

move that power to market.

Mr. DAVIS OF VIRGINIA. OK. Thank you.

Mr. MILLER. Mr. Chairman.

Mr. DAVIS OF VIRGINIA. Did you want to respond to that?

Mr. MILLER. Yes. I think there is some new facts that have also

affected generation. The ruling that the Mirant plant can continue

operations, both as a regulatory issue and as a land use issue, actually changes the scenario that these projects are being analyzed

against. The assumption of PGM is that Mirant would be retired.

There are other proposals for generation starting to move

through the process. I think all those kinds of things have to be

taken into account. Our concern always with this process so far is

it is not clear how the Department of Energy is looking at the

three, you know, major components. The decision on NIET corridors seems to be weighted toward a transmission-only analysis,

not a balance of the different factors.

Mr. DAVIS OF VIRGINIA. Good point. Thank you.

Mr. KUCINICH. I thank the gentleman.

I would like to followup on a question that I had asked Mr.

Koonce earlier.

Mr. Koonce, in your earlier responses you seemed pretty proud

that Dominion was spending, I think you said, $1.2 billion on NOX

and SOX reduction. For the record, we are talking about a reduction of sulfur dioxide and nitrogen oxides. That is known as NOX,

sulfur dioxide known as SOX for short. Isn’t it true that the 1.2 billion you have spent is pursuant to an EPA enforcement action

against your company in 2003?

Mr. KOONCE. Mr. Chairman, the correct number is $1.7 billion,

but the question you asked is exactly correct. We did not pursue

litigation with EPA. We reached an agreement with EPA to spend

the money to improve the air quality in Virginia, and we feel like

140

that has been rewarded by being able to get equipment and manpower in place earlier than many of our competitors who are still

litigating in a much more expensive construction market. So yes,

we were pursued by EPA. We did reach that agreement, and those

expenditures have been made.

Mr. KUCINICH. All right. I thank the gentleman.

Now, just out of curiosity, do you think you would have made that level of investment, in this case $1.2 billion pursuant to a consent agreement that was filed in Federal court, without the enforcement action that was taken?

Mr. KOONCE. I am not sure how to answer.

Mr. KUCINICH. You know, I just want to make sure that you have

come before this committee and what you are saying is you are trying to be a good corporate citizen, and I think everyone appreciates

that, but I also think that it is important for the record that we

establish what incentivized you to be a good corporate citizen, and

that the incentive was a threat of prosecution for the company violating laws by making major modifications to its power plants without installing equipment to control pollution that causes smog, acid

rain, and soot, this according to a release by the Environmental

Protection Agency which I am going to put into the record.

And I say this not in any way to demean your efforts, but I really

think that, as we proceed in this committee’s investigation into the

dynamics in the marketplace, that it is important for us to be entirely fact based, and at the same time it is absolutely true that

the cooperation of Dominion in moving toward more effective efficiencies in the marketplace are mandatory, so that is why your

presence here today is so important. But I wouldn’t want anybody

to leave this hearing with a misimpression as to what was one of

the stimulating factors in the transit to a more effective expression

of civic responsibility. I just want to express my gratitude to you.

Mr. Arcuri.

Mr. ARCURI. Thank you, Mr. Chairman.

I want to thank the panel again for your patience during our

vote.

I have a question for the gentlemen from New York and Pennsylvania. I was thinking during the recess about what happens in

terms of Federal preeminence to State policy decisions. I asked

questions earlier about cost and I asked about trying to promote

generation, but my question is this: if the State has a policy of protecting the environment or choosing one idea or one concept over

another because it feels that it is environmentally more sound,

does the fact that the Federal Government can come in and preempt and change that affect the planning for a State in the future?

Mr. TONKO. I think it could. I think it is problematic. I think

that, again, usurping States’ rights in regard to such important

matters and principles that are established is a negative outcome.

I think it is very obviously, listening to the exchange here today,

that we need to promote the kinds of partnerships amongst States

that will enable them to foster the best outcomes for energy consumers. We need not to encourage pollution or taking the easy

route, but rather encourage the binding of energy efficiency, which

is our country’s greatest resource, and allowing for outcomes that

have a full continuum, a complement of activities going on that will

141

express respect for the environment and strong energy outcomes

for all categories of ratepayers. I think that, indeed, is important.

Earlier we were asked about the heavy hand coming in if States

don’t do their thing or compacts if States don’t do their thing. That

is one approach. I think the better approach is to provide incentives for us to burn clean, to reduce carbon dioxide emissions, and

to encourage efficiency. Building those incentives, rather than

going to the extreme where you usurp State rights and perhaps

deny them public policy, that should be their given opportunity and

responsibility.

Mr. DEWEESE. It would be pretty difficult for me to amplify or

burnish the remarks of the Honorable Energy Committee chairman

from the Empire State.

Mr. ARCURI. How about with respect to populations? I mean, if

the State of Pennsylvania wanted to choose one route for a power

line or, for instance, to bury a power line or to put it in a place

where less people live, would the fact that the Federal Government

can then come in and preempt and change that route affect Pennsylvania’s ability to plan for the future?

Mr. DEWEESE. Yes, sir. No doubt about it. And if you check the

map of Pennsylvania, the northern tier counties that abut New

York State, which are in white—they are not even delineated with

county lines because they are not involved in this discussion

today—are very sparsely populated. In fact, most of the middle

counties are sparsely populated.

To invoke, although metaphorically, of course, that famous line

from James Carvel, ‘‘Pennsylvania is Philadelphia and Pittsburgh

and Alabama in the middle,’’ well, I think he was talking politically. I am going to talk population-wise. Most of our population is

based in the southwest and the southeast, so the Pennsylvania

Public Utility Commission I think could make much better decisions than, again, having the long arm of the Federal Government,

FERC, Federal Energy Regulatory Commission, come in to the

Keystone State and make these decisions for us.

Mr. ARCURI. Mr. Tonko, would that apply to New York, as well?

Mr. TONKO. Absolutely. You know, a lot of discussion today was

focused on the NYRI line. That is a line that was proposed totally

internal to New York State. There is no impact on other States.

That tells me that the decision should rest with our State. We

should be able to incorporate the logic, the thinking on the impact

on rates, on economic recovery, for regional economies in our State.

This is, I think, an overuse of power that just does not spell good

public policy.

Mr. ARCURI. In effect, the energy is for the most part produced

in New York, run through New York, and consumed in New

York——

Mr. TONKO. Exactly.

Mr. ARCURI [continuing]. Yet the Federal Government can come

in and tell New York how to run its lines?

Mr. TONKO. Right. I think it is wrong. Again, to repeat myself,

there are better things that you can provide to the energy outcomes

and to the environment outcomes of Americans by doing those incentives that encourage the addressing of reducing emissions of

carbon dioxide and encouraging efficiency.

142

Mr. ARCURI. Do you agree with that?

Mr. DEWEESE. The Greek philosopher Plato said that repetition

is the first law of learning. I want to repeat one more time, apropos

of your question, I believe that clean coal technology now and clean

coal technology in the next 2, 4, 6, 8 years will be such that we

could construct power plants further toward the coast without as

much challenge of air pollution, and Pennsylvania Coal, Ohio Coal,

Kentucky Coal, Union Railroad workers, and so forth, would be favorably impacted.

I don’t think we need this big power line, and I think we can still

have very, very beneficent impacts culturally, historically, economically, socially, and with the production of energy.

I think, again, I represent coal miners and coal mining, and I

really believe that we can build these power plants further east

and still not suffer negative consequences.

Mr. ARCURI. Chairman Adams, do you agree that the Federal

Government should stay out of intrastate shipping of power, movement of power?

Mr. ADAMS. You know, it is an interesting question because it is

so foreign to New England context, but I am intrigued by that very

question. The issue that you are grappling with on what a State

ought to do is one piece of it that is extraordinary to me that is

lost in the shuffle that I think my colleagues from the States understand, and that is, when you are studying a transmission line

you spend a lot of time with neighbors talking about where the line

ought to go. Should it go behind Oak Street or behind Pine Street?

Maybe you put it under that river, and maybe you put it there. It

is a long, painful, excruciating process for the utility, and it is supposed to be, because that is how a utility’s business is supposed to

work.

If you move that forum out of the State regulatory bureau, you

let PUCs off the hook. If we don’t have to make a decision and we

can’t, we won’t. Regulatory authorities like ours won’t go down and

sit with the communities and angry residents and make the difficult decisions. They won’t go and stand up and do what we are

supposed to do what we are paid by our ratepayers to do. We will

pass the buck to the Federal Energy Regulatory Commission and

those citizens will have a heck of a time making their interests

known between Elm Street and Oak Street in Washington, DC.

It is a profoundly important issue for just about every State.

Mr. ARCURI. Thank you.

Mr. KUCINICH. The gentleman’s time has expired.

Mr. ARCURI. Thank you, sir.

Mr. KUCINICH. The Chair recognizes Mr. Waxman.

Mr. WAXMAN. Thank you, Mr. Chairman.

I thank all the witnesses for their testimony. I am sorry that

scheduling conflicts prevented me from being here throughout the

whole presentation, but I do want to ask some questions.

I indicated in my opening comments that I was involved in the

legislative process that developed the Energy Policy Act of 2005. I

identified many of the problems we have heard about today. In

fact, I released a report in July 2005, that highlighted the problems

this bill would pose for the States. Unfortunately, the House ReVerDate 11-MAY-2000 12:58 Jun 25, 2007 Jkt 000000 PO 00000 Frm 00146 Fmt 6633 Sfmt 6633 C:\DOCS\35770.TXT HGOVREF1 PsN: HGOVREF1
143

publican leadership at the time just wasn’t interested in addressing

the problems.

Frankly, section 1221 was included in the bill over my objections.

It was one of the reasons I opposed the bill.

Proponents of this provision dubbed it the back stop provision.

The idea was that if States were unreasonably delaying the siting

of a new transmission line, there would be a Federal backstop to

ensure that needed infrastructure was able to be constructed on

time.

Chairman Tonko, I would like to ask you about this. Under section 1221, if a proponent of a transmission line doesn’t serve end

users within a State, the proponent can bypass the State altogether. Does that sound like a backstop against unreasonable

delays?

Mr. TONKO. I think it is interesting nomenclature, but basically

it is preempting the powers of individual States which need to be

able to work within the context of their own State and get things

done. I think it is going to be very difficult to broker some of the

outcomes if they know that there is a way to circumvent that process, as just was alluded to by Chairman Adams.

Mr. WAXMAN. Yes.

Mr. TONKO. I think that when you have that given obstacle in

the path of this process, it produces strong challenges for any

State.

As was mentioned earlier today, some of these lines proposed,

their impact is totally within defined territory of States, so they

need to have that power, they need to have that decisionmaking

process, and no sort of threats to them that eventually someone

could opt out to another decisionmaker that will be doing that in

a vacuum. And FERC would be doing that decisionmaking in a far

more greater vacuum.

I also think that comprehensive plans are important here and

they need to be implemented and we need to give States that authority and that ability. I think that comprehensive quality is important to look at all these elements of energy policy that will help

reduce cost or reduce pollution or reduce dependency on fossilbased fuels.

Mr. WAXMAN. Talking about proposals that are completely within

a State, New York is considering a proposal for a line that is nearly

200 miles in length, and this would essentially be a new permanent

feature through the heart of the State. I assume there are many

issues to address. Do you think that having 1 year as section 1221

provides a State to deal with the project is a reasonable thing for

the State to do?

Mr. TONKO. I think the timeframe of 1 year is troublesome and

problematic.

Mr. WAXMAN. Yes.

Mr. TONKO. I think that certainly some projects have been resolved within the confines of 1 year. Some haven’t. I think the

flexibility is important, and I think that also there is that murkiness of when the clock really begins ticking. I think the definition

of that timeframe is not solid enough, and 1 year limiting something that may be a good line—there are transmission lines that

States may want to incorporate, and if they are lost in the process

144

because of this artificial restriction that is imposed in the process,

that is not helpful.

Mr. WAXMAN. So it is your view that this is not really a back stop

authority. That is more rhetoric than reality. What it is is trumping the authority of the State and giving the energy companies the

upper hand because they can go right to the Feds after the State?

Mr. TONKO. Right. Well, earlier I was asked if the Feds should

step in if States or an individual State does not do its right thing,

does not put together the good energy outcome. There are far better

things to do—encourage partnership among States, enabling people

to address those seams between ISOs, perhaps providing resources

for switching technology that will allow the avoidance of some of

the outcomes of the Ohio/New York experience of 2003.

There are many things that can be done. Try the incentives for

cleaning up pollution out there or providing incentives for energy

efficiency, but don’t bring in the heavy hand that can disrupt the

thought process and the planning process that is driven by a State

or a compilation of States that should be their opportunity. I find

it troublesome that we would have that happen.

Mr. WAXMAN. Thank you very much.

Mr. Adams, do you agree with those comments?

Mr. ADAMS. I absolutely do. To his point, one of the most fascinating issues to me as an economic regulator about this whole

area of law is DOE has really punted on the question of who pays,

the economic relationship between building a transmission line and

the cost to certain consumers on a variety of different respects and

the incentives that develops.

As the issues start moving forward, the idea of planning and getting economic signals right to create incentives is completely lost

in the middle to build transmission lines. It seems to me that the

economic incentives ought to be driving what gets built, as opposed

to building what we can.

Mr. WAXMAN. Thank you.

Thank you, Mr. Chairman.

Mr. KUCINICH. I thank the gentleman.

I yield myself 5 minutes.

The question that arises here that is a result of some of the colloquy I had earlier, should the Feds step in in the event of disputes

within a State or between the States, I don’t know if that is the

right question, because I think the question which gives rise to this

committee meeting is: should the utilities have such a broad reach

into planning and siting and basically setting energy policy without

consulting with the States, because what this section of the law

did, essentially, I think, in reading it, was to go a long way toward

nullifying the States’ abilities to be able to enter into the decisionmaking process because, in effect, what 1221 does is it trumps a

lot of States’ powers.

I don’t know if any States’ attorneys general have filed any action to raise questions relative to this, but, you know, absent a congressional remedy, there might be some constitutional issues here

that haven’t been appropriately addressed.

I would like to ask Chairman Tonko and also Representative

DeWeese, once the Department of Energy designates a transmission corridor, energy companies can get their projects approved

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by the Federal Government at the level of the Federal Energy Regulatory Commission. Since we have State legislators with us, I

would like to explore the wisdom of this policy and how it might

affect States.

Representative DeWeese, in your testimony you stated that

Pennsylvania’s agricultural land preservation program had preserved over 300,000 acres of farmland in 53 counties. Do you have

any reason to think that the Federal Energy Regulatory Commission here in Washington, DC, understands the nuances of Pennsylvania’s farmland preservation policies?

Mr. DEWEESE. No, sir, Mr. Chairman, I do not, and I think that

the sharing that my colleague from Maine offered 10 or 15 minutes

ago to me was the most telling aspect of today’s hearing. I believe

it was Congressman Murphy from Connecticut who said that after

repeated supplications FERC refused to go up to Connecticut for a

hearing. If that is their degree of casuality and nonchalance when

the U.S. Congressmen and others are asking them to make a visit

and to explicate their policy, I think they would be comparatively

cavalier and disregard those of us who are trying to alter the power

line for Allegheny Energy in Pennsylvania. I think that the farmland preservation dynamic apropos of your question specifically

would be on the far periphery, if available for their thought process

at all.

Mr. KUCINICH. Thank you. Thank you very much.

Chairman Tonko, the administration has taken a very different

approach to global climate change than New York. For example,

New York and other States sued the EPA for denying a petition to

regulate greenhouse gases.

Mr. TONKO. Yes.

Mr. KUCINICH. Obviously, the States just won in the Supreme

Court and the White House lost. Do you see any reason to believe

that the Federal Energy Regulatory Commission is committed to

seeing New York’s greenhouse gas reduction program succeed?

Mr. TONKO. Not really. I think this whole approach really denies

or delays progressive thinking, a new realm of thinking in the energy policy area. It is taking us back into the same old traditions,

the status quo, and I think this country is sadly in need of progressive energy policy, and the way to do it is to, again, have a full

complement of responses in a comprehensive energy strategy, in a

planning concept, and this disrupts that opportunity to implement

that planning. I think it is wrong, I think it is hurtful, it is harmful, and it certainly holds back on a progressive, proactive order of

policy creation and implementation.

Mr. KUCINICH. Thank you very much.

To Ms. Merritt, why is Section 106 of the National Historic Preservation Act important to corridor designation? Can you explain

that for members of the committee?

Ms. MERRITT. Well, section 106, like NEPA, would provide a

mechanism for looking at alternatives that could be less harmful

to historic properties. And, like NEPA, it can be implemented programmatically by looking broadly at the kinds of resources that

could be harmed. But if it is done after the fact, after corridor designation is also completed, then the options for minimizing or

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cause of the magnitude of the infrastructure involved in these

projects, very little can be done at that point to try to mitigate

harm to historic properties.

Mr. KUCINICH. So is it your understanding that the Department

of Energy doesn’t want to take into account historic resources before designating transmission corridors?

Ms. MERRITT. They have made no indication that they intend to

comply with section 106 prior to designating new corridors.

Mr. KUCINICH. Is there a public policy rationale for that?

Ms. MERRITT. Well, it is our understanding that they intend to

comply with section 106 after the corridors are designated, but at

that point our view is that meaningful alternatives will be foreclosed.

Mr. KUCINICH. Well, we are going to look forward to hearing

from the Department of Energy in the next panel.

We have come to the time where we have asked sufficient questions of the members of the panel. I would just like, because of the

importance that each member of this panel has, I would like to give

you approximately 1 minute, if you want to make a final statement

before you leave. If you don’t want to, that is OK.

Chairman.

Mr. TONKO. So many things have been said here today, and I

have repeated myself a few times only because of the importance

of the message. But where the Feds do not provide for progressive

orders of thinking, let the States or compacted States be those laboratories of change. Let them exercise their rights to really bring

about sound energy policy, environmental policy that will allow us

now to come to a new realm of thinking that will help us revitalize

the regional economies of so many areas of this country.

Mr. KUCINICH. Representative DeWeese.

Mr. DEWEESE. Very succinctly, sir, I would just say that 1221,

the most malignant section of that act of 2005, be eliminated by

congressional action, and that we return the power of the States

to the States. I believe that is an ethos that both Republicans and

Democrats can embrace prospectively, notwithstanding this temporary mischief.

This is a wrong-headed, rickety 2005 action by the Congress, and

my polite admonition would be that you change it, sir.

Thank you.

Mr. KUCINICH. Thank you.

Mr. Adams.

Mr. ADAMS. Thank you.

Maine is a potential site for over 1,000 megawatts of new generation. In a non-CO2 environment that we are heading into for generation, Maine is potentially the Saudi Arabia of New England for

the purposes of non-CO2 generation.

The problem with this particular statute is, if preemption is

forced in a way that is not consistent with Maine’s interests, Maine

does not have an incentive to site that generation that New England needs to help reduce CO2 emissions.

I would look forward to watching your deliberations carefully.

Mr. KUCINICH. Thank you very much.

Ms. Merritt.

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Ms. MERRITT. I would just like to echo the concerns expressed by

the other panel members of the importance of making changes to

section 1221. You have heard a lot about the problems with the law

as it is written now, and it has really got to be addressed.

Mr. KUCINICH. Mr. Koonce.

Mr. KOONCE. Mr. Chairman, I appreciate having the opportunity

to participate in this discussion. I recognize that my views are in

the minority, but I appreciate the way I have been treated today

and I appreciate being here. Thank you.

Mr. KUCINICH. You are welcome, Mr. Koonce. And I want to say

that we could not have this hearing without you, because we really

need to get all of the elements in this discussion, and we are going

to continue to want to engage you and other people in the industry.

We appreciate it.

Mr. Miller.

Mr. MILLER. One thing I would like to add is that, you know, the

act as it is currently constituted does recognize that there are certain lands that really deserve permanent protection, the national

park system and the national wildlife refuge, land that is acquired

with Federal dollars through the Land and Water Conservation

Fund.

Unfortunately, what that ignores is that east of the Mississippi

the way that we have pursued land conservation and protection of

national priorities, be they battlefields, be they historic sites, is

through public-private partnerships, and those are conservation

easements. Private individuals, State government, and Federal

Government has invested billions of dollars into trying to get those

lands preserved, and this act would disregard all of those actions

and allow for Federal condemnation of those very values. That has

to be changed.

Mr. KUCINICH. I appreciate that very much. We have concluded

our first panel.

This is the Subcommittee on Domestic Policy, Committee on

Oversight and Government Reform. This is a hearing on Federal

electric transmission corridors. I am Congressman Kucinich, the

chairman of the committee. We are pleased to have with us the

ranking Republican on the full committee, Mr. Davis, as well as

our colleague, Mr. Arcuri.

I want to thank all members of the panel for being here. We are

going to be continuing this discussion. We will look forward to all

of you presenting any ideas that you have about more effective energy policies, and also ideas with respect to 1221. Thank you, and

the first panel is dismissed.

We will move immediately to the gentleman who constitutes the

second panel. We are going to have to move right to the second

panel here because of the business of the committee. If anyone has

any other business inside the room, I would ask that you take it

outside, because we do want to proceed.

Our next witness will be Kevin Kolevar. He is the Director of the

Office of Electricity Delivery and Energy Reliability for the U.S.

Department of Energy, and he will testify at this hearing on Federal electric transmission corridors, consequences for public and

private property. I want to welcome Mr. Kolevar.

I would ask that you stand.

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[Witness sworn.]

Mr. KUCINICH. Let the record show that the witness has been

duly sworn and has answered in the affirmative.

Welcome. Please proceed.

STATEMENT OF KEVIN KOLEVAR, DIRECTOR, OFFICE OF

ELECTRICITY DELIVERY AND ENERGY RELIABILITY, DEPARTMENT OF ENERGY

Mr. KOLEVAR. Thank you, Mr. Chairman, Ranking Member

Davis, members of the committee, for the opportunity to testify before you today on the Department of Energy’s statutory authority

under section 1221(a) of the Energy Policy Act of 2005 regarding

national interest electric transmission corridors.

Today the availability of and access to electricity is something

that most Americans take for granted, even though it is vital to

nearly every aspect of our lives.

As our Nation’s economy continues to grow, consumers’ demand

for more electricity will steadily increase. In fact, even when accounting for advances in energy efficiency, the Energy Information

Administration estimates that by the year 2030 U.S. electricity consumption will increase by 43 percent from the 2005 level.

Our future electricity needs will only be met through a combination of options, such as new generation, transmission, advanced

technologies, demand response programs, and improved efficiency.

That said, perhaps the greatest challenge will be developing the appropriate network of wires and other facilities to reliably and responsibly deliver electricity.

The Office of Electricity Delivery and Energy Reliability was assigned the responsibility of executing many of the provisions in

title 12 of EPAct. Specifically, EPAct amended the Federal Power

Act by adding a new section, 216(a). The act now required that ‘‘not

later than 1 year after the date of enactment of this section, and

every 3 years thereafter, the Secretary of Energy, in consultation

with affected States, shall conduct a study of electric transmission

congestion.’’

In accordance with that law, Mr. Chairman, on August 8, 2006,

DOE published the first National Electric Transmission Congestion

Study. During the development of the study, the Department provided numerous opportunities for discussion and comments by

States, regional planning organizations, industry, and the general

public, as required by section 216(a). Outreach included conference

calls with States to request suggestions and relevant information,

notice of inquiry explaining the Department’s intended approach

for the study and inviting comment, and a public technical conference to address the questions presented in the notice of inquiry.

In addition to these efforts, the Department held numerous meetings with State officials and participated in regional conferences

across the Nation.

The congestion study defines congestion as the condition that occurs when transmission capacity is not sufficient to enable safe delivery of all scheduled or desired wholesale electricity transfers simultaneously.

In analyzing transmission congestion, the Department identified

congestion and other related concerns through two approaches:

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first, the Department conducted a thorough review of recent reliability studies and transmission expansion plans conducted by regional reliability councils, regional transmission organizations,

independent system operators, and sub-regional transmission planning groups. Altogether, the Department reviewed 65 studies and

related documents for the eastern interconnection and 38 for the

western interconnection.

Second, DOE developed projections for both the eastern and

western interconnections using industry transmission planning

models.

Based on this data, the congestion study identifies existing, projected, and potential congestion and reliability problems in different parts of the country.

The first category, critical congestion areas, is comprised of two

large, economically vital, and heavily populated areas that have

widespread existing or potentially severe congestion. These two geographic regions are in southern California and the Atlantic coastal

area from New York City to northern Virginia.

A second group, congestion areas of concern, consists of four

areas where a large-scale congestion problem exists or may be

emerging but that aren’t as critical or longstanding.

And the third area, conditional congestion areas, consists of

areas where congestion is not acute at present but where congestion would become so if large amounts of new electric generation

were to be built without associated transmission capacity.

The Department invited and received over 400 public comments

on the findings of the congestion study and has posted all of the

comments it has received on its Web site.

Section 216(a) also requires that ‘‘after considering alternatives

and recommendations from interested parties, including an opportunity for comment from affected States, the Secretary shall issue

a report based on the study which may designate any geographic

area experiencing electric energy transmission capacity constraints

or congestion that adversely affects consumers as a national interest electric transmission corridor. However, prior to issuing a report that designates any national corridor, the Department will

first issue a draft designation to allow affected States, regional entities, and the general public additional opportunities for review

and comment.’’

Following an appropriate comment period on a draft designation,

the Department would decide whether the designation of a corridor

is, in fact, warranted. The Secretary is expected to release his decision with respect to draft national corridor designations very soon.

With the enactment of section 216(a), Congress gave the Federal

Government the new responsibility of identifying electric congestion and its causes. The Department takes this new rule seriously,

and we will execute the letter and the spirit of the law conscientiously with the Nation’s best interest in mind.

This concludes my statement, Mr. Chairman. I look forward to

answering any of your questions and those of your colleagues.

[The prepared statement of Mr. Kolevar follows:]

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Mr. KUCINICH. The Chair recognizes Mr. Davis.

Mr. DAVIS OF VIRGINIA. Thank you.

Do you think that section 1221 of the EPAct weakens the power

of the States over the authorization of transmission lines?

Mr. KOLEVAR. I don’t believe it weakens the power of the States.

It does present another opportunity for application to be made to

the FERC should a company not be able to reach agreement with

a State on a proposed transmission route.

Siting has long been the province of the States. That doesn’t

change by virtue of section 216(a) of the Federal Power Act. It does

provide one more opportunity for another entity to hear arguments

in favor of building new transmission.

Mr. DAVIS OF VIRGINIA. I wonder if, in fact, what happens to an

elected public service commission, whether it be elected or something, whether at this point they can’t more easily go the populist

route, reject it, knowing there is a backup, and let FERC make the

decision.

Mr. KOLEVAR. That is a legitimate argument, and I know the

first panel made comment to that. I have heard both sides of that.

I have heard a number of commissioners that insist they will do

their job, they will do the job that they were elected to do. I am

of the view that is the way that most of these situations will be

handled.

Is it possible that there are situations where some commissioners

wash their hands of it and just decide that they are going to say

‘‘no’’ but, wink-wink, there is an understanding it will go up to the

FERC for consideration.

Mr. DAVIS OF VIRGINIA. I guess we will find out.

Mr. KOLEVAR. I can’t predict whether that will happen.

Mr. DAVIS OF VIRGINIA. Let me ask you this. Since this is new

for FERC, since we are just getting established, in fact, we are just

getting the probable lines established later this week, what do you

foresee, what circumstances would you foresee FERC considering

an application from a utility after they have applied at the State

level? Would they have to exhaust all their appeals at the State

level first?

Mr. KOLEVAR. Right.

Mr. DAVIS OF VIRGINIA. And once the issue is raised to FERC

level, would the utility then be able to disregard State laws such

as consideration of wetlands, historic sites, and so on, or do you

think the FERC would take those into account?

Mr. KOLEVAR. This is a very important point, Congressman. And

I do appreciate the opportunity to testify on this, because there are,

in my opinion, a number of misperceptions with respect to section

216(a) that ought to be addressed.

To your point, section 216(a) in no way allows a scenario by

which the FERC would be able to permit a line and through permit

of that line have the authorities of imminent domain conveyed to

any federally owned lands, to any State owned lands. That means

Federal parks, that means State parks, for example, that means

schools, to the extent that some schools are owned by State lands.

But the FERC authorities with respect to Federal imminent domain are very limited and, of course, in addition to those limitaVerDate 11-MAY-2000 12:58 Jun 25, 2007 Jkt 000000 PO 00000 Frm 00161 Fmt 6633 Sfmt 6633 C:\DOCS\35770.TXT HGOVREF1 PsN: HGOVREF1
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tions, they are only empowered when considering application within a national corridor.

It is worth noting that State unions with respect to imminent domain are much more robust. A State can route a line through a

State-owned park if it chooses. A State could run a line through a

school yard if it so chooses. There are good reasons for doing neither.

My opinion is that federally elected officials, Federal Governmental officials appreciate the reasons for not doing something in

a sensitive area for the very reasons that a State official would.

It is also the case that there are a number of permits that will,

in all situations, have to be received by an applicant prior to ultimate permission of a line, notwithstanding a FERC decision to permit a line. By way of example, the very same authorities that we

are talking about here—that is, FERC authority to allow for imminent domain on transmission lines—this is precisely the very same

authority that FERC enjoys today with respect to certificating natural gas lines, and FERC has enjoyed this authority since section

7 of the Natural Gas Act was passed in 1938, 69 years. There was

significant precedent for this kind of action.

Mr. DAVIS OF VIRGINIA. So you think that precedent could——

Mr. KOLEVAR. It will, sir. Not to filibuster your time. To get to

the point of that, notwithstanding a FERC permit for a line to go

through, the permitee will still be required to secure, where applicable, permits for section 404, when proposing to cross wetlands,

permits from State agencies that administer the Clean Water

Act——

Mr. DAVIS OF VIRGINIA. How about historic sites?

Mr. KOLEVAR [continuing]. The Clean Air Act, and Coastal Zone

Management Act.

Mr. DAVIS OF VIRGINIA. How about historic sites?

Mr. KOLEVAR. I will report back on historic sites, because I am

not aware of——

Mr. KUCINICH. Without objection, the committee would like to enlist your report.

Mr. KOLEVAR. Yes, sir, I will respond.

Mr. DAVIS OF VIRGINIA. Finally, just a quick question, the NIET

corridors that are going to be, we think, coming out maybe this

week, do you have any idea what they are going to be? Are they

going to be very general? How specific will they be? Any thoughts

on that?

Mr. KOLEVAR. They are coming out very soon, and the Secretary

has not announced his decision and I cannot——

Mr. DAVIS OF VIRGINIA. You wouldn’t want to scoop him on that,

would you?

Mr. KOLEVAR. No, sir.

Mr. DAVIS OF VIRGINIA. OK. Give us an exclusive here? OK.

Thank you.

Mr. KUCINICH. I thank the gentleman. I just want to followup on

that.

The pending proposals for early designation cover an expansive

territory. They propose corridors in New York, New Jersey, Pennsylvania, Virginia, Louisiana, Oklahoma, California, North Carolina, Ohio, West Virginia, Maryland. That is about right, isn’t it?

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Mr. KOLEVAR. Yes, 10 or 11.

Mr. KUCINICH. OK. When will the Department act on these requests for early designation?

Mr. KOLEVAR. The Department has already indicated that it

would not act on those requests. If I could take a moment, sir, to

give the background so that you understand the context behind

that——

Mr. KUCINICH. I understand the context. What I want to know,

though, is that, I am sure you know, these proposed transmission

corridors are causing an uproar.

Mr. KOLEVAR. Yes, sir.

Mr. KUCINICH. We have received testimony that the administration has refused to share the data it is using to determine transmission congestion. What I want to know, can you commit today

that the Department will address all the concerns you have heard

today prior to designating any transmission corridor?

Mr. KOLEVAR. I think yes, sir, I will, and the reason we will do

that is precisely because the Department has taken an extra step

and inserted an extra step into this process that we were not bound

to by virtue of the statute. In November of last year the Department announced that prior to any final designation, that should

the Secretary decide to move forward on designations, the next release would be a draft.

I have indicated that action by the Secretary is imminent. That

action will be with respect to draft national corridors. When that

happens, a 60 day comment period will go into effect and this agency will work aggressively to seek consultation with all affected parties, and so there will be opportunities for all interested parties,

certainly all affected parties, to present their point of view and

opinions and recommendations to the Department.

Mr. KUCINICH. I thank the gentleman.

With unanimous consent, I would introduce into the record the

testimony of National Parks Conservation Association and the testimony of the National Association of State Utility Consumer Advocates, without objection.

Final question to Mr. Arcuri.

Mr. ARCURI. Thank you, Mr. Chairman.

Thank you, sir, for being here. I will move quickly. We don’t have

a lot of time left.

You indicated that the purpose of 1221 was to ease congestion,

and you talked about areas like New York and Los Angeles. I take

it areas like Chicago, Houston, Dallas, Denver are areas of congestion that the Department of Energy is concerned with?

Mr. KOLEVAR. Yes, sir.

Mr. ARCURI. All right. And does the potential for the creation of

energy corridors exist throughout the country?

Mr. KOLEVAR. Well, the Department has to come back every 3

years and update the study, so——

Mr. ARCURI. My question is, do they exist universally throughout

the country, the continental United States?

Mr. KOLEVAR. Congestion?

Mr. ARCURI. No, the ability to create the corridors. Are there any

places that are exempt?

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Mr. KOLEVAR. That authority would convey upon a report that

found congestion and constraints causing congestion——

Mr. ARCURI. Well, if there was congestion found in Houston or

Dallas, would the FERC corridor be allowed to run a corridor

through the State of Texas?

Mr. KOLEVAR. Oh, I see your point. No, sir. That is not covered

by this.

Mr. ARCURI. It has been exempted out, the State of Texas; is that

correct?

Mr. KOLEVAR. It sure has.

Mr. ARCURI. All right. And do you know why the State of Texas

has exempted out?

Mr. KOLEVAR. No, sir, I don’t.

Mr. ARCURI. OK. So basically what happens to the citizens in

New York, the Federal Government feels that the Department of

Energy can make the decisions for the people of New York but not

for the people of Texas?

Mr. KOLEVAR. Congressman, I am bound to act within the confines of the statute. This is the way that the Congress put the statute into effect.

Mr. ARCURI. I take it that the only time you can put a corridor

in is when there is a demonstrated need?

Mr. KOLEVAR. When there is a finding of congestion and/or constraints causing congestion.

Mr. ARCURI. Who determines when that need is demonstrated?

Mr. KOLEVAR. The Department, through virtue of the congestion

study.

Mr. ARCURI. What if an area like New York City is in need of

power? Who determines where the corridor should be located to

meet that need? Is it a private company that stands to reap a hefty

profit, or would it be placed in a place where it was most convenient for the citizens?

Mr. KOLEVAR. To be clear, are you talking about a line that

is——

Mr. ARCURI. A corridor.

Mr. KOLEVAR. OK, because a corridor is defined in the statute as

a geographic region.

Mr. ARCURI. Who decides where to put the corridor?

Mr. KOLEVAR. The Department of Energy after appropriate consultation and public input.

Mr. ARCURI. And would they look into the fact that there would

be a private company that would want to run a line in a particular

area?

Mr. KOLEVAR. No.

Mr. ARCURI. They would not?

Mr. KOLEVAR. No.

Mr. ARCURI. That would not be in their consideration if a private

company had a plan already in place to run a line in a particular

area?

Mr. KOLEVAR. No, it is not part of the criteria that we are bound

to consider in making a needs determination and identifying a

problem.

Mr. ARCURI. Thank you, sir.

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Mr. KUCINICH. I want to thank the gentleman. Thank you very

much.

Thank you very much. I want to thank the witness for his patience. The committee members may have some followup questions

they will submit in writing.

This has been a hearing of the Domestic Policy Subcommittee of

the Oversight and Government Reform Committee. It has been a

hearing on the national interest electric transaction corridors.

I want to thank all those who have participated.

I am Dennis Kucinich, Chair of the committee, and the committee stands adjourned.

Thank you.

[Whereupon, at 5:45 p.m., the subcommittee was adjourned.]

[The prepared statement of Hon. Elijah E. Cummings and additional information submitted for the hearing record follows:]

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