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S. HRG. 111–99 

NORRIS, GARCIA, AND PIZARCHIK NOMINATIONS 

HEARING 

BEFORE THE

COMMITTEE ON 

ENERGY AND NATURAL RESOURCES 

UNITED STATES SENATE 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

TO

CONSIDER THE NOMINATIONS OF JOHN R. NORRIS, TO BE A MEMBER 

OF THE FEDERAL ENERGY REGULATORY COMMISSION, JOSE ANTONIO GARCIA, TO BE DIRECTOR OF THE OFFICE OF MINORITY ECONOMIC IMPACT, DEPARTMENT OF ENERGY, AND JOSEPH G. 

PIZARCHIK, TO BE DIRECTOR OF THE OFFICE OF SURFACE MINING 

RECLAMATION AND ENFORCEMENT, DEPARTMENT OF THE INTERIOR 

AUGUST 6, 2009 

( 

Printed for the use of the 

Committee on Energy and Natural Resources 
(II) 

COMMITTEE ON ENERGY AND NATURAL RESOURCES 

JEFF BINGAMAN, New Mexico, Chairman 

BYRON L. DORGAN, North Dakota 

RON WYDEN, Oregon 

TIM JOHNSON, South Dakota 

MARY L. LANDRIEU, Louisiana 

MARIA CANTWELL, Washington 

ROBERT MENENDEZ, New Jersey 

BLANCHE L. LINCOLN, Arkansas 

BERNARD SANDERS, Vermont 

EVAN BAYH, Indiana 

DEBBIE STABENOW, Michigan 

MARK UDALL, Colorado 

JEANNE SHAHEEN, New Hampshire 

LISA MURKOWSKI, Alaska 

RICHARD BURR, North Carolina 

JOHN BARRASSO, Wyoming 

SAM BROWNBACK, Kansas 

JAMES E. RISCH, Idaho 

JOHN MCCAIN, Arizona 

ROBERT F. BENNETT, Utah 

JIM BUNNING, Kentucky 

JEFF SESSIONS, Alabama 

BOB CORKER, Tennessee 

ROBERT M. SIMON, Staff Director 

SAM E. FOWLER, Chief Counsel 

MCKIE CAMPBELL, Republican Staff Director 

KAREN K. BILLUPS, Republican Chief Counsel 
(III) 

C O N T E N T S 

STATEMENTS 

Page 

Bingaman, Hon. Jeff, U.S. Senator From New Mexico ........................................ 1 

Garcia, Jose Antonio, Nominee to be Director of the Office of Minority Economic Impact, Department of Energy ................................................................ 10 

Grassley, Hon. Chuck, U.S. Senator From Iowa ................................................... 2 

Harkin, Hon. Tom, U.S. Senator From Iowa ......................................................... 3 

Martinez, Hon. Mel, U.S. Senator From Florida .................................................. 5 

Nelson, Hon. Bill, U.S. Senator From Florida ....................................................... 4 

Norris, John R., Nominee to be a Member of the Federal Energy Regulatory 

Commission ........................................................................................................... 7 

Pizarchik, Joseph G., Nominee to be Director of the Office of Surface Mining 

Reclamation and Enforcement, Department of the Interior ............................. 11 

APPENDIX 

Responses to additional questions .......................................................................... 25 

[Due to the enormous amount of materials submitted for the record, additional 

correspondence and copies of electronic messages have been retained in committee 

files.] 

(1) 

NORRIS, GARCIA, AND PIZARCHIK 

NOMINATIONS 

THURSDAY, AUGUST 6, 2009 

U.S. SENATE, COMMITTEE ON ENERGY AND NATURAL RESOURCES, Washington, DC. 

The committee met, pursuant to notice, at 10:05 a.m. in room 

SD–366, Dirksen Senate Office Building, Hon. Jeff Bingaman, 

chairman, presiding. 

OPENING STATEMENT OF HON. JEFF BINGAMAN, U.S. 

SENATOR FROM NEW MEXICO 

The CHAIRMAN. Why do we not get started here with the hearing? 

The committee meets this morning to consider three nominations: John R. Norris, to be a member of the Federal Energy Regulatory Commission; Jose Antonio Garcia, to be the Director of the 

Office of Minority Economic Impact at the Department of Energy; 

and Joseph G. Pizarchik to be the Director of the Office of Surface 

Mining Reclamation and Enforcement at the Department of the Interior. 

Mr. Norris is currently the Chief of Staff for Secretary of Agriculture Tom Vilsack. He has previously served as Chairman of the 

Iowa Utilities Board. He has extensive experience with electric utility regulation. He has been nominated to the seat that was left vacant by the resignation of Joseph Kelliher for the 3 years remaining on that term. 

Like Mr. Norris, Mr. Garcia is also a former State public utility 

commissioner. He served as Chairman of the Florida Public Service 

Commission. Mr. Garcia was nominated to head the Office of Minority Economic Impact, which has the duty to see that minorities 

have the opportunity to participate fully in the Department’s programs. He will bring to the job his experience both as the Executive Director of the Cuban American National Foundation and as 

President of his own small business, Archon Consulting. 

Mr. Pizarchik has served as the Director of the Pennsylvania Bureau of Mining and Reclamation since 2002 and was legal counsel 

to Pennsylvania’s Mining Program for 11 years before that. He will 

bring to the Office of Surface Mining over 17 years of experience 

with regulating coal mining and abandoned mine land cleanup in 

Pennsylvania. 

President Obama has nominated three experienced and highly 

qualified individuals to these important offices, and I am pleased 

to welcome all three to the committee this morning. 
2 

Senator Murkowski was not able to be here, but she asked if we 

would include in the record a statement of hers, which we obviously will include at this point. 

[The prepared statement of Senator Murkowski follows:] 

PREPARED STATEMENT OF HON LISA MURKOWSKI, U.S. SENATOR FROM ALASKA

I would like to thank Chairman Bingaman for holding this hearing today, and our 

nominees for their willingness to serve. 

While all of these positions are important, I look forward to an interesting discussion with Mr. Norris, our FERC nominee. 

FERC would have the responsibility for implementing some of the most controversial pieces of the energy bill reported by this Committee earlier this year, and Mr. 

Norris’ views on these issues will be of great interest. 

I also anticipate an interesting discussion with Mr. Garcia. 

According to the to the University of Alaska’s Institute for Social and Economic 

Research, rural Alaska Natives were paying 47% of their median family income for 

home energy use last fall, more than 13 times the national average of just over 3%. 

And energy prices that find fuel still selling for an average of nearly $6 a gallon 

in rural Alaska, has driven up the price of food where a loaf of bread is still selling 

for $6 in Barrow, a gallon of milk $10 and a dozen eggs are costing $4.60. 

I look forward to working with Mr. Garcia regarding the role that DOE can play 

with regard to improving the affordability and reliability of energy for native Alaskans as this nomination process continues. 

The CHAIRMAN. Let me go ahead and recognize my colleagues 

who are here to introduce these nominees. Senator Grassley and 

Senator Harkin are both here to introduce Mr. Norris, and Senator 

Martinez is here to introduce Mr. Garcia. So let me just start on 

the left and we will go right across the line. Senator Grassley, go 

right ahead. 

STATEMENT OF HON. CHUCK GRASSLEY, U.S. SENATOR 

FROM IOWA 

Senator GRASSLEY. Thank you, Mr. Chairman. I appreciate very 

much this opportunity to introduce an outstanding Iowan to the 

committee to serve the people of this country. I am here to introduce John Norris, and of course, I am here with my colleague, Tom 

Harkin. I am pleased to support his nomination for the commissioner to the Federal Energy Regulatory Commission. 

As members of this committee know well, the commission is an 

independent agency with critical responsibilities regulating energy 

markets. The commission has the important mission of promoting 

our Nation’s energy infrastructure, maintaining competitive markets, and preventing manipulation in energy markets. It is important that these commissioners on FERC have a thorough understanding of Federal policies relating to interstate transmission of 

electricity, natural gas, and oil. Our country runs on energy and 

having a robust, reliable energy delivery system is essential. 

So that brings me to the nominee, John Norris. He does, in fact, 

have the necessary experience and understanding of our energy 

markets to serve well, should he be confirmed. 

Just his background. He has a B.A. from Simpson College, 

Indianola, Iowa from 1981. He graduated with distinction from the 

University of Iowa Law School in 1995. In March 2005, John was 

appointed by then Iowa Governor Tom Vilsack to the 3-member 

Iowa Utility Board and was Chairman of that board from 2005 

until 2009. He was Co-Chair of the 2009 National Electricity Delivery Forum. He also served as a member of the National Association 
3 

of Utility Commissioners, serving on the Electricity Committee and 

as a member of the Demand Response Collaborative. John was also 

the President of the Organization of Midwest Independent System 

Operator States and chaired this organization—the Demand Response Working Group part of it. Prior to his service on the Iowa 

Utility Board, John was Chief of Staff to Governor Vilsack, as well 

as Chief of Staff to Iowa Congressman Leonard Boswell. He is currently Chief of Staff to Secretary of Agriculture, Governor Tom 

Vilsack. 

I believe John is very well qualified to serve as a member of the 

Federal Energy Regulatory Commission. So I am here because I 

strongly support his nomination. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you very much for your statement, Senator Grassley. I appreciate it. 

Senator Harkin, go right ahead. 

STATEMENT OF HON. TOM HARKIN, U.S. SENATOR FROM IOWA 

Senator HARKIN. Mr. Chairman, it is an honor to join with my 

colleague, Senator Grassley, in introducing John Norris, President 

Obama’s nominee to serve as a commissioner on the Federal Energy Regulatory Commission. 

There is no question that Mr. Norris is superbly qualified for this 

critical regulatory position. I do not know that I need to go through 

again all of the different positions that Senator Grassley just went 

through, just to point out again that he served as the Chief of Staff 

to Congressman Leonard Boswell, also Chief of Staff to the Governor of Iowa, Governor Vilsack, and then as was mentioned, he 

chaired the Iowa Electric Restructuring Task Force in Iowa and 

then went on later to chair the Iowa Utilities Board from 2005 

until earlier this year and then came to Washington to be the Chief 

of Staff for Secretary Vilsack, as you mentioned in your opening 

also, Mr. Chairman. 

So he has a distinguished background. He has worked on a lot 

of things in Iowa. 

I might also say that he has held very many top positions in a 

lot of Presidential campaigns. I should also mention that in 1992 

he was the director in Iowa of my campaign for President, though 

I urge members of this committee not to hold that minor lapse in 

judgment against him. 

[Laughter.] 

Senator HARKIN. As was stated earlier, he has a degree at Simpson College, which is in my home county, Warren County. I knew 

him then well. 

Let me just put it this way. I have known John since he was a 

high school kid, a farm kid in Montgomery County, Red Oak, Iowa. 

I have followed his career. He has always been involved in my efforts and political efforts in Iowa, working for good causes. In the 

1980s, John was one of those individuals that worked very hard to 

help family farmers in my State who were facing foreclosures. It 

was one of the toughest eras in family farm agriculture in our 

country, second only to the Great Depression. In the 1980s, we had 

farmers all over Iowa committing suicide, losing farms, families 

being broken up. John worked very diligently during those years on 
4 

behalf of those family farmers to help them stay afloat, to help 

them stay on the farm and to keep their families together. He was 

just one of the driving forces behind that whole rural effort of helping people that just had nowhere else to turn. So I have always admired him for what he did during the 1980s for our family farmers. 

He is a tough guy. He was a former Golden Gloves boxer, I might 

put it that way. That is why I never got in an argument with him. 

He has a profound understanding of energy issues and their impacts on ordinary Americans. We are looking ahead, Mr. Chairman, 

to major shifts in our electricity systems in the years ahead. We 

all know that. It will be valuable to have a commissioner with 

John’s knowledge, his background, his expertise to help ensure that 

we have a fair and equitable treatment of all parties, including consumers, utilities, generators, and transmission developers. 

So I just have the highest praise and affection and respect for 

John Norris. 

Let me just also note that John’s wife, Jackie Norris, is here 

today, a longtime school teacher in Iowa, and now serves as a senior advisor to the Corporation for National Community Service. So 

they are both hardened public servants and work to make sure 

that our country and our system works for the benefit of all. I just 

have the highest regard for both of them. 

Mr. Chairman, I just would close on this. John Norris is a public 

servant of exceptional honesty, intelligence, competence, and experience. I urge this committee to send his nomination to the full 

Senate posthaste with a positive recommendation. 

The CHAIRMAN. Thank you for your statement. I appreciate it 

very much. Let me just indicate if you gentlemen wish to be excused, I know you have busy schedules. 

Senator Nelson has arrived and Senator Martinez is here. Senator Martinez, you were first to arrive. If you would like to go 

ahead and make your statements—— 

Senator MARTINEZ. I would like to defer to my senior colleague 

and let him go first. 

The CHAIRMAN. Senator Nelson, we are glad to hear from you as 

to your views on the nomination of Mr. Garcia. 

STATEMENT OF HON. BILL NELSON, U.S. SENATOR 

FROM FLORIDA 

Senator NELSON. Thank you, Mr. Chairman. Mel and I will basically share the same information with you that Joe Garcia has had 

an exemplary record. He was the Chairman of our Public Service 

Commission. It is an appointed position, appointed by the Governor. It is one of the most sought-after appointed positions in 

State government and it has an enormous responsibility and portfolio in overseeing and basically regulating all of the electric utilities and other utilities in the State of Florida. Then his fellow commissioners elected him Chairman of the Public Service Commission. 

He is born and raised in Miami Beach. Did you go to Beach 

High? 

Mr. GARCIA. No. 

Senator NELSON. There are a lot of famous people that have 

come out of Beach High. 
5 

But he has been very prominent in the Hispanic community, particularly the Cuban American community, and has done a lot of 

charity work. I could go on and on and give you so many details, 

but I am going to defer to my colleague and any additional information that you need. Obviously, Senator Martinez and I being 

here—we want to commend him to you for your favorable consideration. 

The CHAIRMAN. Thank you very much. 

Senator Martinez. 

STATEMENT OF HON. MEL MARTINEZ, U.S. SENATOR 

FROM FLORIDA 

Senator MARTINEZ. Mr. Chairman, thank you. It is great to be 

with you this morning to introduce Joe Garcia, a fellow Floridian, 

a fellow Cuban American. 

I will focus on two aspects of his career where we have intersected. While Joe was still a law student, he worked in a nonprofit 

refugee resettlement program that reunited more than 10,000 families that had emigrated out of Cuba and had, in desperate conditions, gone all over Latin America. This program was run at no 

cost to the American taxpayer. It was really purely done as a private effort by Cuban American families in the south Florida area. 

This project was an enormous undertaking and a great humanitarian undertaking, and Joe led that effort with great distinction. 

I was proud to work with him in that. 

Then as he served in the Florida Public Service Commission, as 

Senator Nelson noted, I was at that time also serving in the Orlando Utilities Commission which is a municipal utility in Orlando. 

So Joe and I had an opportunity to intersect a great deal, work together on pro-consumer issues, as well as good ideas on how to best 

regulate our State utility scheme in a State that, frankly, was so 

fast-growing at the time that these issues were not without a great 

deal of challenge. 

I will admit that in recent years he has been involved in some 

projects where we have not worked nearly as closely, but we have 

always maintained a very cordial relationship. 

I commend Joe for his appointment. I know he will do a great 

job for the Department and also to look after a lot of the issues 

that will relate to the economic impact on minority families. So I 

commend him to your committee and thank him for his willingness 

to serve. 

I wish his beautiful family was here with him. They are out of 

the country, but that is another great credit to him. 

Thank you. 

The CHAIRMAN. Thank you very much for your statement. Both 

of you, obviously, are excused. Thank you for being here and taking 

time out of your busy schedules. 

Let me call the three nominees up to the witness table. Before 

you sit down, just go ahead and stand there and let me go through 

a little procedure we always do with nominees. 

The rules of our committee that apply to all nominees require 

that they be sworn in connection with their statements. So if you 

would each raise your right hand. Do you solemnly swear that the 

testimony you are about to give to the Senate Committee on En-
6 

ergy and Natural Resources will be the truth, the whole truth, and 

nothing but the truth? 

Mr. NORRIS. I do. 

Mr. GARCIA. I do. 

Mr. PIZARCHIK. I do. 

The CHAIRMAN. Please be seated. 

Before you begin your statements, let me ask three questions 

that we in this committee address to each nominee that comes before the committee. No. 1, will you be available to appear before 

this committee and other congressional committees to represent departmental positions and respond to issues of concern to the Congress? If each of you could answer that, please. 

Mr. Norris. 

Mr. NORRIS. I will. 

The CHAIRMAN. Mr. Garcia. 

Mr. GARCIA. I will. 

The CHAIRMAN. Mr. Pizarchik. 

Mr. PIZARCHIK. I will. 

The CHAIRMAN. The second question, are you aware of any personal holdings, investments, or interests that could constitute a 

conflict of interest or create the appearance of such a conflict 

should you be confirmed and assume the office to which you have 

been nominated by the President? 

Mr. Norris. 

Mr. NORRIS. Yes, Mr. Chairman. My investments, personal holdings, and other interests have been reviewed by myself and the appropriate ethic counselors within the Federal Government. I have 

taken appropriate action to avoid any conflicts of interest. There 

are no conflicts of interest or appearances thereof to my knowledge. 

The CHAIRMAN. Thank you very much. 

Mr. Garcia. 

Mr. GARCIA. Senator, all my personal assets have been reviewed 

by both myself and by appropriate ethics counselors in the Federal 

Government. I have taken appropriate action to avoid any conflicts 

of interest. 

The CHAIRMAN. Mr. Pizarchik. 

Mr. PIZARCHIK. Senator, my investments, personal holdings and 

other interests have been reviewed both by myself and the appropriate ethics counselors within the Federal Government. I have 

taken appropriate action to avoid any conflicts of interest. There 

are no conflicts of interest or appearances thereof to my knowledge. 

The CHAIRMAN. All right. The third question that we always ask 

is, are you involved or do you have any assets held in a blind trust? 

Mr. Norris. 

Mr. NORRIS. No. 

The CHAIRMAN. Mr. Garcia. 

Mr. GARCIA. No. 

The CHAIRMAN. Mr. Pizarchik. 

Mr. PIZARCHIK. No, I do not. 

The CHAIRMAN. All right. At this point, we always invite nominees, if they do have family members present, to introduce them, 

if they would like to. Mr. Norris, did you want to introduce anybody? 
7 

Mr. NORRIS. Yes. I have with me today my wife, Jackie Norris, 

and my three wonderful sons, Sam, Cole, and Hunter Norris. 

The CHAIRMAN. We are glad to have them here. 

Mr. NORRIS. Our nanny who is the reason we look so composed 

today, Diana Sturbek, right back here, and my good friend, Jeannie 

Murray, in the room as well. So thank you. 

The CHAIRMAN. We are glad to have them all present. Thank you 

for having them here. 

Mr. Garcia. 

Mr. GARCIA. Senator, my family was in Europe, but I had the 

good fortune of having one of my best friends, almost a brother to 

me, visiting the city, and so I encumbered him with coming with 

his family. So I have a surrogate family here which is Roland Sanchez Medina, his daughters, Alesandra and Mariana. 

The CHAIRMAN. We are glad that they could come. 

Mr. Pizarchik. 

Mr. PIZARCHIK. Senator, with me today is my wife, Teresa, and 

I also have with me my sister Koreen and her husband David and 

my sister Mary, as well as my brother Tony and friend Marian and 

her daughter Jane. 

The CHAIRMAN. That is a good representation. Thank you very 

much for introducing them and I thank all of you for coming today. 

At this point, why do we not go ahead with your statements, any 

opening statements you would like to make? We will include your 

full statement in the record, but if you could just summarize the 

main points, that would be terrific. Mr. Norris, why do we not start 

with you? 

STATEMENT OF JOHN R. NORRIS, NOMINEE TO BE A MEMBER 

OF THE FEDERAL ENERGY REGULATORY COMMISSION 

Mr. NORRIS. Thank you, Chairman Bingaman. It is an honor to 

be here today as a nominee for the Federal Energy Regulatory 

Commission. I would like to express my appreciation to President 

Obama for nominating me to this position and to thank the committee for considering my nomination. 

I also want to acknowledge and express my appreciation for my 

two home State Senators, Senator Grassley and Senator Harkin, 

for their support for me and for their great service to Iowa and this 

Nation. 

I also want to thank Secretary of Agriculture Tom Vilsack for his 

confidence in me that played a considerable role in my being here 

today. When I was serving as his Chief of Staff in Iowa, he early 

on appointed me to chair or take over chair of the Iowa Restructuring Task Force, Iowa Electric Restructuring Task Force. I did 

that for a year and a half, refocused the effort of that Restructuring 

Task Force to identify what were Iowa’s real needs for the future 

and how we could address those. The result of that was landmark 

legislation for advanced ratemaking principles that developed a 

great deal of new renewable energy for Iowa and baseload and intermediate generation. As a result of that, Iowa is now a world 

leader—national leader—excuse me—in wind generation and has 

had a reliable supply of electricity at stable prices for the past 10 

years. 
8 

The past 4 years, prior to my service now as Chief of Staff at 

USDA, I was Chair of the Iowa Utilities Board. I think that experience on a regulatory commission is a valuable experience that I 

would bring to the Federal Energy Regulatory Commission. 

During my time on the Iowa Utilities Board, I also was active in 

the National Association of Regulatory Utility Commissioners on 

the Electricity Committee and the Energy Resources and Environment Committee. 

I was also very active with the Organization of MISO States, 

serving as a board member, Secretary, and then President of that 

organization. So I dealt extensively with the work of regional transmission organizations and the issues that they face. 

I have also been involved with the National Regulatory Research 

Institute to deal with emerging regulatory issues throughout the 

Nation. 

I would be honored to join in the important work FERC is doing 

on improving the reliability and security of the electricity grid, incorporating renewable energy into the system, the grid, for the benefit of customers and the environment, and promote the development of smart grid policies that will improve the efficiency of our 

system and provide consumers with better choices. If confirmed by 

the Senate, I will make these issues a personal priority and I look 

forward to working with the members of this committee as it prepares to move legislation addressing them. 

I know you are also aware of the serious challenges created by 

the uncertainty facing the industries regulated by the FERC. Investments in such capital-intensive industries as electric generation and transmission, hydroelectric power, natural gas infrastructure, and more are jeopardized by an uncertain future. There is a 

need to address such concerns as the reliability of our Nation’s energy supply, containment of costs for consumers, upgrading of our 

electric transmission grid, and development of renewable energy 

and energy efficiency technologies. If confirmed, I look forward to 

working with members of this committee and Members of Congress 

in general to address our Nation’s energy needs and resolve some 

of the uncertainties facing that sector of our economy. 

So I believe my experience both as Chairman of the Utilities 

Board, the Iowa Restructuring Task Force, activities with NARUC 

and involvement with the Organization of MISO States will all be 

an asset to my ability to serve this Nation at the Federal Energy 

Regulatory Commission. 

I also recognize the FERC’s role as an independent regulatory 

agency in carrying out its statutory responsibilities Congress has 

given to it. It is essential that FERC continue to provide its expertise and assistance to the Congress in the development of Federal 

energy legislation. If confirmed by the Senate, I pledge to work 

closely with this committee toward that end. 

I appreciate the opportunity to testify here today and am happy 

to answer any questions you may have. 

[The prepared statement of Mr. Norris follows:] 

PREPARED STATEMENT OF JOHN R. NORRIS, NOMINEE TO BE A MEMBER OF THE

FEDERAL ENERGY REGULATORY COMMISSION

Chairman Bingaman, Senator Murkowski, and distinguished members of the committee, I am honored to be here today as a nominee for the Federal Energy Regu-
9 

latory Commission (FERC). I would like to express my appreciation to President 

Obama for nominating me to this position and to thank the committee for considering my nomination. 

I also want to thank Secretary of Agriculture Tom Vilsack for his confidence in 

me that in large part is responsible for my being here today. While serving as thenIowa Governor Vilsack’s Chief of Staff in 1999, I was asked to take over as Chairman of Iowa’s Electric Restructuring Task Force. I spent the next year and a half 

working with the Task Force to focus first on Iowa’s energy needs for the future 

and then on how we could best meet those needs. The result of that process was 

the passage of landmark advanced ratemaking principles legislation that led to the 

construction of significant new electric generation capacity for Iowa, including baseload, intermediate and renewable generation. Iowa is now a national leader in wind 

generation as a result of the work of the Task Force and has had a reliable supply 

of electricity and stable electric prices for the past decade. 

Beginning in March of 2005 until this past February 2009, I served as Chairman 

of the Iowa Utilities Board. I believe my service on a state regulatory commission 

is a valuable experience that I would bring with me to the Federal Energy Regulatory Commission. While serving on the Iowa Utilities Board I was a member of 

the National Association of Regulatory Utility Commissioners (NARUC) and worked 

on that organization’s Energy Resources and the Environment Committee and Electricity Committee. I also was the Co-Chair of the Department of Energy/NARUC 

2009 National Electricity Delivery Forum. 

From 2005 through 2009 I was also deeply involved in the issues facing Regional 

Transmission Organizations. During that time I served as a Board Member and was 

elected to Secretary and then President of the Organization of Midwest Independent 

Transmission System Operator (MISO) States, and was Chairman of the MISO Demand Response Working Group. I also had the privilege of serving on the FERC/ 

NARUC Demand Response Collaborative. 

I have also benefitted greatly from my years of service as a Board Member of the 

National Regulatory Research Institute and my participation with the Institute of 

Public Utilities Regulatory Research and Education at Michigan State University. 

I would be honored to join in the important work the FERC is doing on improving 

the reliability and security of the electric grid, incorporating renewable energy into 

the grid for the benefit of consumers and the environment, and promoting development of smart grid policies that will improve the efficiency of our system and provide consumers with better choices. If confirmed by the Senate, I will make these 

issues a personal priority and look forward to working with the members of this 

Committee as it prepares to move legislation addressing them. 

I know you are also aware of the serious challenges created by the uncertainty 

facing the industries regulated by the FERC. Investments in such capital-intensive 

industries as electric generation and transmission, hydroelectric power, natural gas 

infrastructure and more are jeopardized by an uncertain future. There is a need to 

address such concerns as the reliability of our nation’s energy supply, containment 

of costs to protect consumers, upgrading of our electric transmission grid and development of renewable energy and energy efficient technologies. If confirmed I look 

forward to working with members of this Committee and the members of Congress 

in general to address our nation’s energy needs and resolve some of the uncertainties facing this sector of our economy. 

I believe my experience as Chairman of the Iowa Utilities Board and my work 

as a member of NARUC and the Organization of MISO States will be assets at the 

FERC. I also recognize the FERC’s role as an independent regulatory agency in carrying out the statutory responsibilities Congress has given to it. It is essential that 

the FERC continue to provide its expertise and assistance to Congress in the development of Federal energy legislation. If confirmed by the Senate, I pledge to work 

closely with this Committee to that end. I have enjoyed my years of public service, 

and should I be confirmed it would be a privilege and an honor to continue that 

public service at the Federal Energy Regulatory Commission. 

I appreciate the opportunity to testify before you today and am happy to answer 

any questions you may have. 

The CHAIRMAN. Thank you very much. 

Mr. Garcia, go right ahead. 
10 

STATEMENT OF JOSE ANTONIO GARCIA, NOMINEE TO BE DIRECTOR OF THE OFFICE OF MINORITY ECONOMIC IMPACT, 

DEPARTMENT OF ENERGY 

Mr. GARCIA. Thank you and good morning, Mr. Chairman. It is 

a pleasure to be here with you today and as well to thank my two 

State Senators, Senator Nelson and Senator Martinez, for their 

presence. 

It is a privilege to appear before you as President Obama’s Director of the Office of Economic Impact of the Department of Energy. 

It is an honor to be asked by the President to serve particularly 

at this transformational time in our Nation’s history, a time when 

we need to call upon all Americans and all communities to help our 

economy not only recover, but prosper. The American innovative 

spirit, coupled with the opportunity to succeed through hard work, 

is the very essence of the American dream that brought my parents 

to this country from communist Cuba years ago. This same spirit 

will help small businesses and disadvantaged communities create 

the jobs of tomorrow. 

If confirmed by the Senate, I look forward to working with Secretary Chu to carry out the statutory duties of the Office of Minority Impact and collaborate with his team to advance energy priorities that the President has outlined for our Nation. 

President Obama has challenged the Department of Energy with 

the importanttask of implementing significant programs under the 

American Recovery and Reinvestment Act of 2009. I will make it 

a priority to ensure that small and disadvantaged businesses, including those owned by women, minorities, and veterans, as well 

as minority educational institutions, are included in these important programs. 

My experience as a public servant and consumer advocate in the 

utility industry have formed my belief that hard work is paramount to personal success, and I will apply the same level of commitment to service and advocacy toward small businesses and disadvantaged communities. I will dedicate myself to be the Department’s voice in support of those with innovative ideas and those 

willing to work to ensure they can all participate in the advanced 

energy opportunities our Nation offers. 

In conclusion, I would like to reiterate my sincere gratitude to 

President Obama and Secretary Chu for nominating me for this position, and I want to assure the committee that I will work with 

the Secretary of Energy, with this committee, and with Congress 

to carry out the duties as Director of the Office of Economic Impact. 

Thank you and I am, of course, available for questions. 

[The prepared statement of Mr. Garcia follows:] 

PREPARED STATEMENT OF JOSE ANTONIO GARCIA, NOMINEE TO BE DIRECTOR OF THE

OFFICE OF MINORITY ECONOMIC IMPACT, DEPARTMENT OF ENERGY

Good morning, Mr. Chairman, Ranking Member Murkowski, and members of the 

Committee. 

My name is Joe Garcia. It is a privilege to appear before you today as President 

Obama’s nominee for the position of Director of the Office of Minority Economic Impact at the Department of Energy. 

It is an honor to be asked by President Obama to serve, particularly at this transformational time in our country’s history—a time when we need to call on all Americans, and all communities, to help our economy not only recover, but prosper. The 

American innovative spirit, coupled with the opportunity to succeed through hard 
11 

work, is the very essence of the American dream that brought my parents to America from communist Cuba years ago. This same spirit will help small businesses and 

disadvantaged communities create the jobs of tomorrow. 

If confirmed by the Senate, I look forward to working with Secretary Chu to carry 

out the statutory duties of the Office of Minority Economic Impact and to collaborate 

with his team to advance the energy priorities that the President has outlined for 

our nation. 

The Office of Minority Economic Impact was created to advise the Secretary of 

Energy on the impact of the Department’s policies, regulations, legislation, and related activities on minority communities, businesses and educational institutions. 

This Office has the important responsibility of ensuring that minorities participate 

fully and actively in the programs of the Department of Energy. 

I commit to you today that, if I am confirmed, I will work aggressively to carry 

out these responsibilities. By doing so, I believe I will advance the Department’s 

goals across its many missions, because success will require fully tapping the talents 

of all of our people. That is why I am committed to the idea of making the Department of Energy as the model agency for addressing issues of diversity and for providing support and assistance to small and disadvantaged businesses and minority 

educational institutions. I believe that the United States cannot afford to continue 

to underutilize small and disadvantaged businesses, or continue the under-representation of minorities in the technical and scientific workforce and industries. 

President Obama has charged the Department of Energy with the important task 

of implementing significant programs under the American Recovery and Reinvestment Act of 2009. I will make it a priority to ensure that small and disadvantaged 

businesses, including those owned by women, minorities, and veterans, as well as 

minority educational institutions are included in these important programs. 

Small businesses must play a critical role in creating new energy technologies. 

Their ability to innovate remains unsurpassed, yet they need the support of the Administration to remain in the global forefront of effective energy development strategies. According to the U.S. Small Business Administration, small businesses represent 99 percent of all employers in the country. If I am confirmed for this position, 

I will ensure that DOE becomes a leader in utilizing small businesses to create the 

competitive jobs of tomorrow. 

My experiences as a public servant and consumer advocate in the utility industry 

have formed my belief that hard work is paramount to personal success. I will apply 

this same level of commitment to service and advocacy towards small businesses 

and disadvantaged communities. I will dedicate myself to be the Department’s voice 

in support of those with innovative ideas and those willing to work hard to ensure 

that they all can participate in advanced energy opportunities. 

In conclusion, I would like to reiterate my sincere gratitude to President Obama 

for nominating me to this position. I want to assure this Committee that I will work 

with the Secretary of Energy, with this Committee and the Congress to carry out 

the duties as Director of the Office of Minority Economic Impact at the Department 

of Energy. 

Thank you, and I will be happy to answer any questions from the Committee. 

The CHAIRMAN. Thank you very much for your statement. 

Mr. Pizarchik, go right ahead. 

STATEMENT OF JOSEPH G. PIZARCHIK, NOMINEE TO BE DIRECTOR OF THE OFFICE OF SURFACE MINING RECLAMATION AND ENFORCEMENT, DEPARTMENT OF THE INTERIOR 

Mr. PIZARCHIK. Thank you, Chairman Bingaman, Senators. I am 

honored to appear before you as President Obama’s nominee to 

head the Office of Surface Mining Reclamation and Enforcement in 

the Department of the Interior. I thank President Obama and Secretary Salazar for their confidence in me and I thank you for considering my nomination. 

The majority of my career has been in public service to Pennsylvania. My experience there has given me exposure to the many facets of the mining industry that make up the responsibilities of 

OSMRE. 

For the past 17 years, I have been engaged in Pennsylvania’s 

mining program, first as legal counsel and then as Director of the 
12 

Bureau of Mining and Reclamation where I oversaw the development and implementation of a policy to protect streams from underground coal mining subsidence without shutting down mining. 

I also oversaw the resolution of a post-mining discharge liability 

matter that was blocking progress on the Flight 93 National Memorial. Pennsylvania’s mining program encompasses a broad array of 

issues and my tenure as Director required knowledge of a broad 

range of laws and interaction with various agencies. 

I understand and appreciate the interests and duties of the 

States and Federal Government and the roles of citizens, environmentalists, and industry in protecting the environment and our 

people while helping to meet America’s energy needs. Each plays 

a critical role. I have the experience, temperament, and skills to 

work with stakeholders. I understand the value of an objective, 

honest approach to resolving matters whether they are complex, 

simple, controversial, or mundane. I am comfortable working with 

people of divergent backgrounds. 

As a member of the executive branch, I see my duty as executing 

the law. 

On a more personal note, I grew up on a small farm in southwestern Pennsylvania with my parents and six brothers and sisters. Survival was a collaborative effort. The entire family had to 

pitch in. We all had our responsibilities. When I was 10, my brothers and I assumed full operation of the farm. We handled the crops, 

livestock, equipment, and buildings. My brother Tony, who is here 

with me today, now owns and runs that family farm. Through that 

experience, I learned the value of hard work, cooperative decisionmaking, work distribution, and completing a job the right way the 

first time. Those values and work ethic instilled in me as a kid are 

still with me today. 

Coal was a part of our daily lives. That is how we heated our 

home. I also knew many people who worked in the mines. I saw 

firsthand the value placed on a job in the mines, tempered by the 

effects of poor safety regulations and the environmental havoc 

wreaked by unfettered mining. I have also witnessed the benefits 

of improved safety and improved environmental laws over the 

years. 

Like four of my siblings, I worked my way through college. I 

earned my bachelors degree from Penn State and my law degree 

from the University of Arkansas at Little Rock. 

It would be an honor and a privilege to serve America, its citizens, and the environment and President Obama as the Director of 

the Office of Surface Mining Reclamation and Enforcement. 

Thank you, Mr. Chairman, for the opportunity to testify. I am 

ready to answer questions. 

[The prepared statement of Mr. Pizarchik follows:] 

PREPARED STATEMENT OF JOSEPH G. PIZARCHIK, NOMINEE TO BE DIRECTOR OF THE

OFFICE OF SURFACE MINING RECLAMATION AND ENFORCEMENT, DEPARTMENT OF

THE INTERIOR

Thank you, Chairman Bingaman and Senators. I am honored to appear before you 

as President Obama’s nominee to head the Office of Surface Mining Reclamation 

and Enforcement at the Department of the Interior. I thank President Obama and 

Secretary Salazar for their confidence in me and I thank you for considering my 

nomination. 
13 

I appreciate the opportunity to present my background and qualifications. The 

majority of my career has been in public service for the Commonwealth of Pennsylvania. My experience there has given me exposure to the many facets of the mining 

industry that make-up the responsibilities of OSMRE. 

For the past 17 years I have been engaged in Pennsylvania’s mining program, 

first as legal counsel and then as the Director of the Bureau of Mining and Reclamation, where I have worked on a variety of projects. Under the guidance of Kathleen 

McGinty, then Secretary of the Pennsylvania Department of Environmental Protection, we developed and implemented a policy, based on sound scientific and legal 

principles, to protect streams from underground coal mining subsidence without 

shutting down mining. I was also assigned the responsibility and did resolve a 

postmining discharge liability matter that was blocking progress on the Flight 93 

National Memorial. While working closely with the Pennsylvania State Police and 

the Pennsylvania Office of Homeland Security, I led the state effort to secure explosive storage magazines. These security measures, the only ones of their kind in the 

country, greatly reduced the risk to the nation’s capital and other major East Coast 

cities. The number of break-ins and thefts of explosives in Pennsylvania dropped 

from one of the highest in the country to zero. Notwithstanding dire industry predictions, zero is also the number of explosive industry firms that left Pennsylvania 

or went out of business because of the security requirements. 

Pennsylvania’s mining program encompasses more than coal permits. It also includes water quality and stream encroachment permits, Environmental Good Samaritan projects, remining and reclamation of abandoned mines, industrial mineral 

mining, blasting and explosives regulation, mine subsidence insurance, and bonding. 

The breadth of Pennsylvania’s program requires knowledge of a broad range of laws 

and interaction with various agencies. 

I understand and appreciate the interests and duties of the states and federal government and the roles of citizens, environmentalists, and industry in protecting the 

environment and our citizens while helping to meet America’s energy needs. They 

each play a critical role in effective development, implementation, and enforcement 

of our mining program and regulations. I have the experience, temperament, and 

skills to work with stakeholders for pragmatic and creative solutions. 

I have represented Pennsylvania as both the client and attorney in litigation, legislative, regulatory, and programmatic matters. Through these experiences I understand the value of an objective, honest approach to resolving matters, whether they 

are complex, simple, controversial, or uninteresting. I am comfortable working together with people of divergent backgrounds and interests, whether an average citizen or high government official. 

As a member of the Executive Branch, I see my duty as executing the laws enacted by the legislators and, at times, as interpreted by the courts. The laws are 

to be implemented for the benefit of America and not used to the detriment of an 

individual or interest. 

If confirmed, I will be leaving a corps of state government employees dedicated 

to implementing the laws to protect Pennsylvania’s environment and people while 

meeting the country’s mining needs, but I will be joining a group of similarly dedicated federal employees and officials in OSMRE, EPA, and elsewhere in the Obama 

administration. Together we will work with the states, citizens, and industry to 

build on past successes, correct past missteps, and craft new solutions as we strive 

to meet America’s environmental and energy needs. 

On a more personal note, I grew up on a small farm in southwestern Pennsylvania with my parents and six brothers and sisters. My dad, a World War II veteran, worked in the steel mill in addition to farming. Survival was a collaborative 

effort; the entire family pitched in. We all had our responsibilities, which started 

at a very young age. Like my siblings before and after me, by the time I started 

school I had already moved from feeding the dogs to feeding and caring for the 

chickens. Life on the farm involved recycling before there was an Earth Day. We 

practiced conservation measures that arose out of the Dust Bowl era and cared for 

the environment upon which we were so dependent. 

When I was 10, my brothers and I assumed full operation of the farm. We planted 

and harvested all of the crops, cared for the livestock, and repaired and maintained 

the equipment and buildings. My brother owns and runs that farm today. Through 

that experience I learned the value of hard work, cooperative decision making, work 

distribution, and completing a job the right way the first time. The values and work 

ethic instilled in me as a kid are still with me. 

Coal was a part of our daily lives; that’s how we heated our home. I also knew 

many people who worked in the mines so I saw first-hand the value placed on a 

job in the mines tempered by the effects of poor safety regulations and the environ-
14 

mental havoc wreaked by unfettered mining. Through friends and family I witnessed the benefits of improved safety and environmental standards. 

Like four of my siblings, I worked my way through college using a combination 

of summer jobs, work study, education grants, and Social Security, as my dad died 

while I was in high school. I have worked as a laborer for masons, in general construction, in a plant that fabricated steel buildings, in flood cleanup, and as a security guard. After getting my BA from the Pennsylvania State University I attended 

law school and received my law degree from the University of Arkansas at Little 

Rock. 

It would be an honor and privilege to serve America, its citizens and environment, 

and President Obama as Director of the Office of Surface Mining Reclamation and 

Enforcement. 

Thank you, Mr. Chairman, for the opportunity to testify. I am ready to answer 

questions. 

The CHAIRMAN. Thank you for your statement as well. 

Let me start and ask each of you a question or two, and then I 

am sure Senator Menendez will have some questions as well. 

Mr. Norris, you referred to the substantial amount of wind generation that has been created in Iowa during the time that you 

chaired the Public Utility Commission. What role do you see for the 

Federal Energy Regulatory Commission in promoting the development of renewable generation of electricity and also in developing 

the additional infrastructure needed to get that generation to market? 

Mr. NORRIS. One of the most pressing needs we need to address 

for the utilization of renewable energy is upgrading the electric 

transmission grid both for local distributed generation and for the 

transportation of renewable generation across the country. So I 

think one of the most critical roles that the FERC can do is to assist in the efficient and economical development of the transmission grid so we can get renewable energies from generation to 

the load centers. 

The CHAIRMAN. Very good. 

Mr. Garcia, let me ask you what steps—maybe this is premature, 

but do you have in mind particular steps that you would take if 

confirmed to reach out to these minority institutions and businesses to ensure that they compete fairly for grants and contracts 

that the Department is involved with? 

Mr. GARCIA. I think it is a two-step process, Senator. Thank you 

for the question. But it is a two-step process. One is the Department of Energy’s contracts that we put out tend to be highly technical and highly skilled, and for a long time, they were controlled 

by a relatively small group or very technical group. Clearly, minorities and disadvantaged businesses had not been given an opportunity. So part of that is to get the work force to the level that they 

can do some of this work and, more importantly, to offer more opportunities. 

In fact, next week the Department has a conference in Long 

Beach, California where we have 200 exhibitors. Most of those are 

labs and large contractors with the Department of Energy. We 

have over 1,100 participants already signed up. The idea is to get 

those procurement officers and create mentoring programs with existing contractors and with new contractors, smaller contractors, so 

they can participate in the opportunity that a new energy field offers all of us. 

The CHAIRMAN. All right. Thank you. 
15 

Mr. Pizarchik, there has been a great deal of concern expressed 

about Pennsylvania’s policy on placing utility coal ash in coal 

mines and the possible impacts of that on water quality. Can you 

briefly describe what Pennsylvania’s policy on mine placement of 

coal ash is and how Pennsylvania’s policy comports with the recommendations of the National Academy of Sciences? 

Mr. PIZARCHIK. Yes, Senator, I can do that. In Pennsylvania, we 

have what has been referred to by some as one of the best programs for ash placement in coal mines in the country. It was originally developed in the mid to late 1980s. 

Under the process, not all ash is suitable for use at a mine site 

to assist in reclamation. The ash has to, first, be tested in accordance with EPA standards and tests to make sure that it will not 

leach out any hazardous metals or contaminants. Then it needs to 

be certified for a particular use. Once it has been tested and certified, then the applicant, the mining site, has to apply through the 

normal permitting process with public involvement to get approval 

to use the ash at that particular site. The ash and the site have 

to be adequately analyzed and characterized to make sure there 

will not be any problems. There are monitoring wells that are put 

in place to monitor the groundwater to make sure that the ash 

does not, in fact, leach any contamination out into the site. 

A few years ago, we started reexamining our program to see if 

there were areas needed for improvement. We had a lot of public 

scrutiny from various citizen groups and concerned members of the 

public. The National Academy of Sciences had conducted its study, 

and as a result of that review and the recommendations of the National Academy of Sciences, in April of this year, Pennsylvania updated its coal ash beneficial use program in mine sites to include 

the recommendations of the National Academy of Sciences. 

We are now monitoring 40 parameters instead of just 27 from a 

few years ago. We have also required all of the sites where coal ash 

is being beneficially used to upgrade their monitoring systems, and 

we have increased the monitoring from annually to quarterly on 

the sites. Certification of the ash at the powerplants has to be tested at least twice a year, instead of once a year. We have also increased the requirements for how long you have to monitor the ash 

after the placement ends. That period is now 10 years. 

So in addition to implementing the National Academy standards, 

we also made a number of changes that were recommended by various citizen groups and environmental groups, but we did not stop 

with just the policies which we used to implement that. Recently 

we have also in Pennsylvania—the State has published proposed 

rulemakings that incorporate the national recommendations, as 

well as the other improvements to take a good program and make 

it even better. With the science that we have, we have not had any 

evidence of pollution of groundwater caused by the use of coal ash 

at these mine sites. 

The CHAIRMAN. Thank you. 

Let me go ahead and defer to Senator Menendez for his questions. 

Senator MENENDEZ. Thank you, Mr. Chairman. 

Congratulations to all of you on your nominations. 
16 

Mr. Norris, we have an energy bill that, as currently drafted, 

would allow FERC to approve lines anywhere and for almost any 

reason, as it relates to transmissions. It concerns me because, one, 

it could lead to more dirty coal power being piped into our State, 

a concern that 10 Governors of the Northeastern States have also 

voiced. We understand the need for greater transmission. The question is for what purposes. 

So since FERC has such a significant impact in its decisionmaking here, especially if we were to give it this very wide authority, give me your thoughts on what the Federal Government’s role 

should be in siting transmission lines. 

Mr. NORRIS. I would bring, first of all, my experience as a State 

utility commissioner to the table and respectful of the rights of 

States and traditional rights of States in siting infrastructure and 

give great deference to States on this. 

There is a need to upgrade our transmission grid and that is not 

an easy process. As we look at how we get renewables built in this 

country, there has to be the capacity to get that renewable energy 

to the load centers. So there is going to have to be an upgrade in 

our electric transmission grid. 

I think, depending on what Congress—the power of the Congress 

decides to give to FERC, we have to use it very sparingly and judiciously where we would be respectful of the State process and the 

State input in this process. 

With regards to does that enable carbon emission generation 

sources to be on that same grid, as you well know, you cannot control the electrons once they are on the grid. But I think what we 

are looking at is the development of renewable energy in this country, and the increased capacity of our transmission grid should be 

utilized to enable renewable generation to get on the grid as a priority. 

If I understand the current legislation that gives FERC the siting 

authority or backstop authority for 345 kv and above and the 400 

dc line and then the feeder lines for renewable energy, I think that 

is a key element that helps ensure that we can work to make sure 

that the renewable energies have the access to any upgrades in 

transmission. 

Senator MENENDEZ. I appreciate your answer. Let me just say 

right now, as mapped out, the entire State of New Jersey would be 

subject to transmission lines going through. The entire State. I am 

sure that if I were taking the entire State of Iowa and throwing 

transmission lines through it, you all might not look at it so well. 

So my concern and my interests, because if FERC is given this 

power as envisioned under the legislation, it would be in my view 

almost unlimited power. So what commissioners at FERC decide to 

do with that unlimited power will be very important. So my hope— 

I heard about your deference to States, but that deference can be 

as simple as listening and then disregarding. 

So it is my hope that we are going to see a view that there is 

a role here that we understand we have a need for transmission, 

but we want to see more of that transmission be for renewable energies and we want to watch the consequences of how we site those 

lines to States like my own. It is not that we have a swath that 

is open to it. We have an entire State that is open to it. Whether 
17 

that goes right through the Highlands of New Jersey, which is one 

of the few open space areas that we have in a State that is the 

most densely populated per square mile in the Nation, or whether 

that goes through major residential areas, the consequences of that 

are very significant. 

I also want to ask two other questions, if I may, about net metering and interconnection standards. My legislation, the Grid Access 

Act, tries to help us create some national net metering and interconnection standards. It basically would then allow any individual 

or business to put a renewable energy project on their State without local authorities using arbitrary rules to prevent it. 

What are your views on that in general, and should utilities really be able to shield themselves from competition by putting up arbitrary market barriers? 

Mr. NORRIS. No. I think as we look at changing the energy system of our country and empower renewables, we have to enable 

people to be a part of that process. So access through net metering 

or other means through interconnection agreements to enable local 

generation, local distributed generation to be a part of the solution 

I think is important. 

Senator MENENDEZ. I have another question, but I will submit 

that one for the record. 

Mr. Garcia, I am glad to see your nomination. I know you personally. I think you will do an excellent job in this field. Your experience speaks wonders. So I do not want you to think that a lack 

of a question to you is meaning that I am slighting you. The chairman basically asked what I hoped to get a sense of where you were 

headed. 

I do hope that one of the Department’s efforts in attracting more 

Latinos, African Americans, women, and others into the field is incredibly important. If we are going to be competitive globally, we 

are going to have that human capital at the end of the day be 

there. There are Department initiatives to try to get more of our 

young people engaged in this respect and also moving in the college 

areas. So I hope that in addition to the whole question of getting 

access to the opportunities that the Department of Energy provides, there will also be opportunities for the educational pursuit 

that will lay the foundation of the human capital and intellect in 

the country that we will need to achieve. So we look forward to 

working with you on that. 

Finally, if I may, Mr. Pizarchik, I have seen that Kathleen 

McGinty, your former colleague and a pretty nationally respected 

environmental leader, has heartily endorsed your nomination. 

But I have to be honest with you. I have received so many emails from people concerned about your nomination. I heard you 

respond to the chairman before, but I would like to give you the 

opportunity to respond to critics who say that in your work in 

Pennsylvania, you, one, ignored evidence that certain ways of disposing of the coal ash degrade water supplies, and they also say 

you are not open-minded about their concerns. 

So I would like to hear your response to that and, at the same, 

time how you are going to be in the midst, if you are confirmed, 

about how we protect people from the disastrous effects of mountaintop removal. I would like to know how you intend to, if con-
18 

firmed, implement the plan and what ideas do you have on how to 

tighten mountaintop removal regulations. 

Mr. PIZARCHIK. Senator, that was a pretty long list there. If I do 

not get to them all, please bring me back to those. 

Regarding the first question on the coal ash and how we used it 

in Pennsylvania and been open on that, we have engaged with 

stakeholders and people who have an interest in the safe management of coal waste, coal ash materials in the sites. I have had a 

number of meetings with those folks over the past year plus. We 

have received good input from the citizens and the activists, many 

of whom are not even from Pennsylvania but who bring value to 

the table as well. 

Through the changes that we have made in our program, many 

of those are based on input that we received from the citizens. A 

number of those improvements were designed to develop higher 

quality data so that we can have a better data field with which to 

assure the public that the use of coal ash at these mine sites in 

Pennsylvania is not polluting the groundwater and has not polluted 

the groundwater. 

In regards to a series of analyses that they have performed and 

published, there was a very large document that they put together 

and submitted to us. We have expended considerable resources 

going back and double checking every allegation to find out whether or not there is any merit to that. On each of those cases where 

we have looked, we have not found there to be pollution resulting 

from the use of the ash at those mine sites. 

As far as being open-minded, I listened to everybody who comes 

in. I make myself available to the citizen groups, to the environmentalists, and to the regulated community to hear their perspectives. Where the requests have a valid basis in the law and in the 

sciences, we will act upon them. But as a member of the executive 

branch, I carry out the laws as they have been enacted, and I do 

not go off and do things for one particular interest group or another. That would be contrary to the law which I am charged with 

executing. 

Senator MENENDEZ. So you are open-minded. Within that context 

you have just described, you are willing to continue to follow the 

opportunities for people to have input. 

Mr. PIZARCHIK. Absolutely. 

Senator MENENDEZ. If their input is both within the law and in 

fact, you are willing to consider that in terms of how you decide. 

Mr. PIZARCHIK. Yes. My track record, I think, in Pennsylvania 

documents that. A number of years ago, we had a rulemaking 

package regarding coal mining and underground longwall mining, 

mine subsidence on that. There were a variety of issues on that 

where there was a difference of opinion as to how effectively Pennsylvania’s law met the minimum requirements of the Federal law. 

Through the course of working out the differences that existed, 

I led the work group for Pennsylvania that met with the citizens 

who were interested in this area, as well as the regulated community. It was a bit of a controversial atmosphere in that those two 

groups refused to be in the same room together with each other. 

So we literally had to have meetings in the morning with one group 

and in the afternoons with the other group. But it was worthwhile. 
19 

We got good input from the public. We made a lot of changes to 

implement the concerns. 

By meeting with those folks, I find that it helps me as a government official to better understand the concerns of the public and 

what the basis of those concerns are. If you have an understanding 

of the basis of a person’s concerns, you can better assess whether 

you can accommodate those concerns within the bounds of the law 

or whether there may be other means that you need to do to address those concerns. 

Senator MENENDEZ [presiding]. My time is way past gone. So I 

will wait for either the next round or ask you to respond to my second question for the record. 

The chair has had to step out and he has asked me to preside. 

With that, Senator Barrasso is next. 

Senator BARRASSO. Thank you very much, Mr. Chairman. 

I want to thank you both, Mr. Norris and Mr. Pizarchik, for taking the time to come and visit with me in the office and discuss 

a number of these issues. 

Mr. Pizarchik, we talked quite a bit about coal when you had the 

chance to visit, and while coal mining in the East is different than 

coal mining in the West, I think you bring strong credentials and 

an important State perspective to the job for which you have been 

nominated. We know that coal is an abundant, affordable, reliable, 

and secure source of American energy. Wyoming supplies 40 percent of our Nation’s coal. Coal mining creates good paying jobs for 

hard-working folks in my State and your State of Pennsylvania. It 

provides revenues for the State and for local government. If confirmed, I would like to invite you out to visit one of Wyoming’s coal 

mines and see the wonderful and excellent job they do with reclamation. 

We talked about coal leasing and the coal bid bonuses. We talked 

about abandoned mine land money. We talked about the self-bonding rules. I would like to spend my time on the abandoned mine 

land funding. 

Washington owes Wyoming hundreds of millions of accumulated 

abandoned mine land funds. Washington also owes significant 

amounts of money to many other States. After more than a decade 

of politically finding a solution, a bipartisan compromise was 

reached that satisfied the States, satisfied Washington a few years 

ago. The law ensures that Wyoming and other certified States and 

Indian tribes would receive the money that they were promised 

without strings attached. It also provided States with their share 

of future fees collected from coal mining. 

President Obama, as well as Secretary Salazar, when they were 

Senators, both voted for this bill signed into law. Unfortunately, 

the administration now with President Obama and Secretary Salazar proposed a budget earlier this year that called for ending the 

payments to the certified States, the same payments that the 

President and Secretary voted for while they were members of the 

Senate because they knew the impact on their home States. 

Are you familiar with this abandoned mine land funding issue? 

Mr. PIZARCHIK. Thank you, Senator. Thank you for your compliments, and I will take you up, if confirmed, on visiting your 

State. I would be happy to do that. 
20 

Regarding the abandoned mine land funding, I am not familiar 

with the intimate details of it. I know of the issue generally. I 

know that a few years ago when the States were trying to get reauthorization, that there was a lot of effort put in by many States, 

including Wyoming, for a successful resolution of that. But at this 

time, I am not familiar with the details of the proposal or the basis 

for the proposal. So it would not be appropriate for me to speculate. 

Senator BARRASSO. As a State official, formerly a State official 

now to come into this new position, do you think that States are 

entitled to their share of revenues from development within their 

borders? 

Mr. PIZARCHIK. Senator, with the familiarity that I do have with 

the law, I believe Congress has specified how that money is to be 

handled on that, and I would defer to implementation of the law, 

should I be confirmed. 

Senator BARRASSO. When you were working for the people of 

Pennsylvania, you felt, if there was an obligation to the people of 

Pennsylvania, they would have a right to get that money. 

Mr. PIZARCHIK. Again, Senator—— 

[Laughter.] 

Mr. PIZARCHIK [continuing]. If confirmed, I will execute the law. 

I understand Wyoming’s position on that. I understand the other 

States’ position. But at this point, it is not appropriate for me to 

speculate. 

Senator BARRASSO. You talk about executing the law, and I am 

going to read a little bit from the law because the bill that is signed 

into law required that the States be paid back money owed in 

seven equal installments. I will read it. Quote: ‘‘The Secretary shall 

make payments to States or Indian tribes for the amount due for 

the aggregate unappropriated amounts allocated to the State or Indian tribe,’’ and then it says under these subparagraphs. ‘‘Payments under subparagraph (a) shall be made in seven equal annual 

installments beginning with fiscal year 2008.’’ Seven equal annual 

installments beginning fiscal year 2008. 

The Interior Solicitor interpreted that stating that what Congress meant was that the funds must be paid back in the form of 

a grant and not in seven equal installments. When you talk about 

the law, what is the interpretation of ‘‘seven equal installments’’? 

I mean, the trick question is do you agree or disagree with the Solicitor’s opinion. I do not want to put you in that position. 

But I think Congress tries to write laws and we try to be very 

clear, and then the administration, whichever administration it is, 

comes up with different interpretations. So I would like to hold you 

to your statement of I will follow the law and hopefully not try to 

reinterpret the law as written by the Members of the House and 

the Senate. 

So thank you very much. 

Thank you, Mr. Chairman. My time has expired. 

Mr. PIZARCHIK. Thank you, Senator. 

Senator MENENDEZ. Thank you, Senator. 

Senator Cantwell. 

Senator CANTWELL. Thank you, Mr. Chairman. 
21 

Mr. Norris, congratulations on your nomination. It is good to 

see—I think your family was here. It is good to have them with us 

in Washington, DC. 

There is a tremendous amount on FERC’s plate, obviously, in the 

deregulation of energy markets, being a policeman on the beat and 

new technologies and obviously our aging infrastructure. Certainly 

we have had a chance to talk and I am impressed with your background. 

But I wanted to talk to you about there are some who want to 

give FERC a very new and very different and very large responsibility to police a new multi-trillion dollar carbon market. I personally have yet to hear a compelling case from anyone—I should say 

anyone that does not work on Wall Street—why we should set up 

this giant trading system. But suppose that we did. This is, obviously, a challenge in having predictable and stable carbon prices. 

Do you think FERC is up to the task of regulating a new trillion 

dollar carbon market? How many new employees would that take, 

and what would the structure need to be for FERC to do a good 

job of that? 

Mr. NORRIS. Thank you, Senator, for the question and for your 

kind remarks. 

Is FERC up to the task? I think FERC has a great deal of talented, professional citizens who work there. I think this will be a 

challenging task for whatever agency is delegated this responsibility from Congress, should it delegate that responsibility. Having 

worked for a State independent regulatory agency, I often found 

myself frustrated because we would do things and have expertise 

there that could be very useful to policymakers, but because of the 

independent regulatory agency aspect of us, we are not involved in 

some of those decisions. 

Let me get back to the point here. The point is I think FERC is 

capable. I think there are a number of agencies that are capable 

of doing that. It will take significant resources of smart, intelligent, 

committed people to get it done. I have no reason to think the employees of FERC and the people we would have to add there could 

not do that job, but I do not know as I would advocate it is a better 

place than someplace else. I think we will have to leave that decision to you. 

Senator CANTWELL. How many people do you think it would really take to police carbon markets? 

Mr. NORRIS. I have not studied it at all. I have heard, I think, 

1,100 or 1,400 additional employees just in general conversation, 

but I have no background to be able to tell you if that is accurate 

or what it will take. But if it is going to take that much at FERC, 

it would probably take that much wherever you decide to put it. 

Senator CANTWELL. If I could switch to another subject about 

natural gas refunds. Last fall, five of the FERC commissioners 

were all on record supporting legislation to change the process for 

issuing refunds to consumers for unjust and unreasonable natural 

gas rates. This change basically would allow the effective date for 

the overcharge to be the date of the filing of the case as opposed 

to current law which only allows the refunds to start at the date 

the case is completed. What happens is, obviously, people change 
22 

their practice once they are ruled against, and then obviously, all 

of that overcharge is not returned to the consumer. 

So in January, Chairman Kelliher sent a letter to the Energy 

Committee recommending that we consider the change here, and 

under the current law, it is estimated that natural gas pipelines 

overcharged consumers by something like $3.7 billion. This is just 

for a 5-year period from 2003 to 2007. So we are talking about significant problems here. 

So we have, obviously, had legislation on this. So I just wanted 

to find out whether you support changing that effective date for the 

natural gas pipeline to the date the cases are filed. 

Mr. NORRIS. I mean, I think the authority in the Federal Power 

Act to go retroactive with regard to electric rates has been effective. 

I think it has worked effectively and worked well. There is certainly a deterrent effect, as you said in your remarks. Whether that 

is necessary in the natural gas market or not, I do not know other 

than to say we have to have adequate tools to protect consumers 

and use those responsibly. So I do not know if I would advocate one 

way or another in terms of the change in the law, but I think if 

given that authority, FERC would use it effectively to make consumers are treated fairly, and it could be a deterrent effect. 

Senator CANTWELL. But you think it has been working well in 

other areas that currently FERC has the authority on. 

Mr. NORRIS. FERC, I believe, has authority under the Federal 

Power Act with regard to retroactivity. 

Senator CANTWELL. Electricity and—— 

Mr. NORRIS. Electricity, yes. 

Senator CANTWELL. You think it works well there. 

Mr. NORRIS. To my knowledge, it has worked well there, yes. 

Senator CANTWELL. I thank the chairman. 

Senator MENENDEZ. Thank you, Senator Cantwell. 

Since I see no other members here, two last questions. 

Mr. Norris, you and I talked about regional transmission organizations, RTOs. My own view is they often do not adequately protect 

consumers. Now, I am aware that FERC has found parties to have 

engaged market manipulation at times, and while the commission 

has imposed penalties, I am not aware that FERC has ordered refunds in any of those cases. This suggests to me that consumers 

failed to receive some of the much-needed relief when there were 

clearly unjust and unreasonable rates as determined by the commission itself. 

So do you believe as a general rule that consumer refunds should 

accompany any commission finding of market manipulation? 

Mr. NORRIS. I think you would have to review the facts of the 

case. I think it can be used at appropriate times to deter inappropriate behavior. 

Senator MENENDEZ. Sometimes penalties are just simply a cost 

of doing business unless the penalties are large enough in which 

the excess profits, because of market manipulation, were eliminated by virtue of the penalty. Then the penalty is fine. It does not 

do much for the consumer but maybe it acts as a deterrent. 

My personal view is that if the commission gets to the point that 

they find that, in fact, parties have been engaged in market manipulation, that penalties that basically leave them short of the con-
23 

sequences of saying, well, I will get that penalty and I will go back 

to it again because I will make a lot more than whatever the penalty is does not really act, one, as a deterrent and, two, does not 

do very much for consumers. 

Mr. NORRIS. I mean, FERC’s authority now for a million-dollara-day civil penalty I think has been regarded as an effective deterrent, and whether more authority is needed for penalties, I will obviously leave it to this body to—— 

Senator MENENDEZ. I do not know whether it is a question of 

more authority. It is whether what the commission does with its 

authority. I am just urging you to consider that when there is a 

determination of market manipulation, that in fact the commission 

use its authority both in its penalty authority, as well as in its rebate authority to consumers as a very strong deterrent not to have 

market manipulation. So I hope you will consider that. I hope you 

will consider that. 

Mr. NORRIS. Absolutely. 

Senator MENENDEZ. That is about as easy as it gets. 

[Laughter.] 

Mr. NORRIS. You are asking us to do our job, and I consider that 

part of the job, yes. 

Senator MENENDEZ. Mr. Pizarchik, last question to you. I had 

asked you the question. I just want to remind you what it is. Both 

the EPA, the Department of the Interior, and the Army Corps of 

Engineers came to an agreement on how to protect people from the 

disastrous effects of mountaintop removal. It stated that these 

three agencies, one of which you will represent most particularly, 

if you are approved, will implement a plan that will minimize the 

environmental impacts of mountaintop removal mining in the short 

run and tighten regulations in the long run. 

How would you work to implement that plan, and what ideas do 

you have as it relates to tightening mountaintop removal regulations? 

Mr. PIZARCHIK. Senator, if confirmed, I will get involved in that 

project and learn more about the different perspectives held by the 

Environmental Protection Agency, the Army Corps of Engineers, as 

well as the other stakeholders of interest, the citizens, environmentalists in those areas, or the State agencies that regulate the 

actual mining activities that occur, as well as the agency. Getting 

involved and getting a better handle on the details of that, how 

that is actually being implemented, I think, and getting an understanding of the facts would be the first basis to determine what has 

transpired in the past, has that activity been done in accordance 

with the law as enacted by Congress and the regulations adopted 

by the State and Federal agencies, and then looking at those facts 

and deciding what would be the appropriate action to take at that 

time. It is my understanding those agencies are currently working 

on that with the MOU that they have announced. I have not been 

privy to those details or what is going on. So my first step would 

be getting involved to learn more about the facts and details of 

that. 

Senator MENENDEZ. I appreciate your answer, but there is one 

common goal that the three agencies came to in their memorandum 

of understanding, and that is, that they will institute a plan that 
24 

minimizes the environmental impacts in the short run and tightens 

the regulations in the long run. So I hope that, if confirmed, you 

are going to pursue that with the vigor of what the agreement intended. 

Mr. PIZARCHIK. Senator, without knowing the nuances and the 

details of that, but if confirmed, I will be working for the President 

and I will be carrying out the course charted by the administration 

on that. 

Senator MENENDEZ. All right. With that, I see no other members 

present, but members will have until 5 o’clock tomorrow to submit 

additional questions for the record. If they are submitted, we urge 

the nominees to answer them as expeditiously as possible. 

With that, the committee stands adjourned. 

[Whereupon, at 11:05 a.m., the hearing was adjourned.] 
(25) 

APPENDIX 

RESPONSES TO ADDITIONAL QUESTIONS

RESPONSES OF JOSE ANTONIO GARCIA TO QUESTIONS FROM SENATOR MURKOWSKI

INDIAN ENERGY

Question 1. In the Energy Policy Act of 2005, Congress approved an Indian Energy title with some grant aid to develop energy projects on Indian lands, tribal reservation lands in the Lower 48 and on Native corporation lands in Alaska, plus provided $2 billion in loan guarantee money to help Indian energy projects proceed. 

While the office of Indian/tribal energy has made a few grants in the past two years, 

the Department’s response to make this program work has been truly 

underwhelming for those of us from Western states. 

a. What is your view of what should be done with the Indian Energy program? 

b. Do we need to rewrite the law by adopting new amendments during Senate 

consideration of a pending energy bill? 

c. Is the problem purely that we have not appropriated enough funds, even though 

the administration sought very little funding for implementation in its FY 2010 

budget? 

d. What can we do and what would you propose that we do to help Indian energy 

project assistance proceed? 

Answer. As I understand it, the Office of Minority Economic Impact is not directly 

responsible for the Indian Energy program, but I do believe that this office should 

play a key role in championing diversity and assuring that program offices across 

the Department routinely reach out to native-owned small businesses to assure 

their participation in energy and technology development opportunities. This is particularly important now as we work to build a 21st century economy powered by 

innovative and sustainable clean energy. If confirmed, I look forward to working 

with my colleagues in the Department to make energy projects for rural and native 

communities a greater priority, in the lower 48 states as well as in Alaska and Hawaii. 

Just this past week, Secretary Chu announced up to $13.6 million in multi-year 

funding for new clean energy projects on tribal lands, including over $3 million in 

Alaska. As I understand the overall DOE budget at this point, I believe there is sufficient authority and funding to make the Indian Energy Program work. If confirmed, I will certainly work with others in the Department to encourage effective 

implementation of the Department’s American Indian and Alaska Native Tribal 

Government Policy. 

RENEWABLE ENERGY ON NATIVE LANDS

Question 2. In Alaska we have a host of excellent potential renewable energy 

projects on Native-owned lands. The Fire Island wind farm owned by Cook Inlet Regional Corp., the Lake Chakachamna lake-tap hydroelectric project being pursued 

by TDX Power, a subsidy of the St. Paul Native village corporation, small hydro development at Thayer Creek near Angoon being pursued by the Kootzoowoo Native 

village corporation of Angoon, to name just three. While there is no program yet approved to provide actual grant aid nationwide for renewable energy project construction, there is such aid for Alaska. In Sect. 803 of the Energy Independence and Security Act of 2007, such aid was authorized, but it has not been funded and the Administration did not support such funding as part of the stimulus bill earlier this 

winter. What is your view about whether Congress should make grant assistance 

available for construction of Native energy projects both in Alaska and nationwide? 

Answer. If Congress appropriates funds for Section 803, I would look forward to 

working with the leadership of the Department to invest those funds responsibly. 
26 

RESPONSE OF JOSEPH G. PIZARCHIK TO QUESTION FROM SENATOR BINGAMAN

Question 1. The Committee has received a number of complaints from environmental groups and citizens about policies you may have promoted or actions you 

may have taken as Director of Pennsylvania’s Bureau of Mining and Reclamation. 

Specifically, these complaints allege that you—— 

• Promoted the use of surface coal mines for disposal of coal ash and resisted 

adopting safeguards recommended by the National Academy of Sciences; • Weakened Pennsylvania’s stream buffer rule, allowing the filling of stream valleys with mine spoils; • Failed to require sufficient bonding for coal mines and resisted correcting bonding deficiencies; 

• Promoted long-wall mining; and 

• Resisted public participation and transparent decision-making. 

Please respond to these assertions. 

Answer. Thank you, Mr. Chairman, for giving me the opportunity to address these 

assertions. Before I address each of these points below, let me first say that none 

of them is true. It is important to provide you with some detail in my response. 

Coal Ash.—I have not promoted the use of surface coal mines for disposal of coal 

ash; in fact, I have consistently taken the position that Pennsylvania mines are not 

dumps to be used for the disposal of waste. However, the beneficial use of certified 

coal ash, i.e., only that coal ash that meets certain chemical and physical requirements, for mine reclamation was authorized in 1986 amendments to the Pennsylvania Solid Waste Management Act, and Pennsylvania’s program for the use of coal 

ash was developed, and has been in use, since the mid-to late 1980’s. That program 

does fall under my jurisdiction as Director of the Bureau of Mining and Reclamation, and I am responsible for its implementation. 

Under Pennsylvania State law and regulations, the use of coal ash for reclamation 

activities is stringently regulated. Applications made for such beneficial uses must 

include a detailed operational plan, with identification of the ash source; a certification from the ash generator; amount of ash to be used; purposes of the ash utilization; operational details of how the ash is to be handled and incorporated into the 

site; a demonstration that the ash is chemically and physically suitable for the proposed use; documentation of the hydrogeology of the use area; and a monitoring program, including background data collection, designed to show any influence of ash 

use on surface and groundwater quality. In addition, public notice and participation 

are an integral part of the review process for all beneficial uses of coal ash on mine 

sites. 

During my tenure, we carried out a self-examination of the program, and that examination, along with consideration of citizen concerns and scientific analyses, led 

us to change the State’s policies governing use of coal ash at mine sites. These 

changes include more stringent and increased ground water sampling; improved 

sampling techniques; more stringent ash testing and monitoring requirements; and 

the addition of controls for temporary storage of ash. The coal ash approved by the 

PADEP mining program for the use at coal mines has occurred on a site-specific 

basis to facilitate reclamation such as the elimination of dangerous highwalls or 

abandoned pits, to facilitate revegetation of sites lacking suitable soil, or to improve 

water quality previously degraded by historic unregulated mining. 

Stream Buffer Zone.—I have not weakened Pennsylvania’s longstanding stream 

buffer zone rule but have diligently implemented the law, which does not allow the 

filling of stream valleys. 

The State’s stream buffer zone regulation has remained unchanged for over 20 

years. Under the regulation, coal-mine operators in Pennsylvania cannot put mine 

spoil into streams. Filling streams with spoil would violate State law as well as adversely affect streams’ aquatic communities. In 1994, the Pennsylvania General Assembly amended the Coal Refuse Disposal Control Act, replacing the absolute prohibition on disposing of coal refuse within 100 feet of any stream with a variance procedure that allows for certain streams to be put into a pipe or underdrain and then 

covered with coal refuse, provided the operator mitigated adverse impacts by restoring or improving other streams, but those amendments pre-date my tenure as Director of the Bureau of Mining and Reclamation. 

Bonding.—I have not failed to require sufficient bonding for coal mines, nor have 

I resisted correcting bonding deficiencies, but have spent significant time improving 

the financial guarantee system. 

In fact, beginning with my service as program counsel in 1992, I participated in 

the drafting of amendments to Pennsylvania’s Surface Mining Conservation and 

Reclamation Act and regulations to address shortfalls in Pennsylvania’s now-defunct 
27 

alternate bonding system for surface coal mines. When Pennsylvania terminated 

this alternate bonding system, I helped draft the appropriation legislation that authorized conversion assistance financial guarantees that prevented defaults by mine 

operators due to changes in the State’s bonding requirements after permits had 

been issued. I developed the legal basis and helped draft the documents for Pennsylvania’s trust fund program, the first program in the country that provided a 

means for the State to perpetually treat post-mining discharges in the event an operator defaulted on its obligation. 

I have proactively sought such funding as well. In 2003, I notified 30 mine operators holding 59 permits that they must post additional funds to guarantee the State 

could treat their discharges in perpetuity. From the time the State began tracking 

it in 2007, the total amount of bond posted has grown from about $122 million to 

approximately $264 million. Additionally, during my tenure the bond rate guidelines 

for calculating surface mine reclamation bonds have been adjusted annually to reflect the State’s actual costs for completing reclamation; bond rates for underground 

mines were adjusted for the first time in over 20 years. I led the effort in Pennsylvania to develop a legally enforceable funding stream to pay for treatment of discharges on sites forfeited under the defunct alternate bonding system, mentioned 

above. Through my efforts, a consensus solution was developed and implemented 

with input from the regulated community, the Mining and Reclamation Advisory 

Board, the public, and members of the General Assembly. 

Longwall Mining.—I have not promoted longwall mining but have advocated for 

landowner protections and the use of science-based decision-making. 

In fact, as program counsel and Director, I worked on two rulemakings designed 

to implement landowner protections from the 1994 amendments to the State statute 

and advocated for an interpretation of the provisions that required operators to repair or compensate for damage to all dwellings in place at the time of mining. This 

interpretation provided more inclusive coverage and enabled the State to demonstrate that its subsidence program was as effective as federal counterpart regulations. I also led the team that developed the surface water protection policy, which 

is based on science. Whole areas of the State are off limits to mining because of excessive risk to streams posed by longwall mining-induced subsidence. At the same 

time, sound science was used to identify the areas where responsible longwall mining would not threaten stream integrity. As Director, I have steadfastly supported 

decisions to deny longwall mining plans that would have resulted in permanent flow 

loss in overlying streams. 

Public Participation and Transparency.—Finally, I have not resisted public participation and transparent decision-making but have been an advocate for increased 

public participation during my tenure as Director. 

During my tenure as Director, the Pennsylvania Bureau of Mining and Reclamation has routinely used email distribution lists—in fact it has three separate lists— 

to notify interested persons and organizations of draft policies, regulations, and program changes. BMR routinely answers public information requests without requiring the submittal of a formal Right to Know Request, which is the State’s version 

of the Freedom of Information Act. Since 2002, we have answered over 1,100 such 

requests while formal requests have been, I believe, less than a dozen. 

I have also provided opportunities for public participation in the drafting of policies and regulations that are over and above those required by State policy or law. 

For example, currently the State is conducting voluntary meetings with coal ash 

stakeholders, including the Environmental Integrity Project, Earth Justice, Mountain Watershed Association, Sierra Club and others to obtain their input on establishing regulatory trigger mechanisms for when to institute site assessments and 

when to initiate corrective action in the event coal ash used at a mine site begins 

to leach pollutants that could affect ground water. These meetings are not required 

by law; I elected to hold them in order to obtain more information and a better understanding of stakeholder views on these two points. I have also held similar meetings with other interested groups that have resulted in input and information considered in developing other regulations and standards. 

RESPONSES OF JOSEPH G. PIZARCHIK TO QUESTIONS FROM SENATOR MURKOWSKI

STATE ROLE IN INTERAGENCY ACTION PLAN ON SURFACE MINING

Question 2. The Interior Department recently signed an MOU with EPA and the 

Corps of Engineers to develop an interagency action plan on surface coal mining. 

Among the ‘‘short term actions’’ identified, OSM has been tasked with determining 

how it may alter agency oversight of state permitting, enforcement, and regulatory 

activities. 
28 

How do you envision these directives aligning with the exclusive jurisdiction vested in the states under the Surface Mining Control and Reclamation Act for the regulation of coal mining operations? 

Do you believe that there should be an official role for the states in the process 

of developing any recommendations or reaching any decisions in the context of this 

interagency action plan? 

Answer. The Surface Mining Control and Reclamation Act, which incorporated the 

concept of state primacy, envisions OSM and the states working together cooperatively. I believe that it is critical to the success of the interagency action plan for 

state regulatory authorities to participate in developing any recommendations. 

OPPORTUNITY TO RESPOND TO CRITICISM

Question 3. The Mountain Watershed Association has said, in opposing your nomination, that ‘‘we need a consensus builder and someone who thinks outside of the 

box to help solve this nation’s energy challenges, not someone who totes the company line regardless of the impacts.’’ Do you care to respond to their criticisms? 

Answer. I do not agree with this assessment of my approach. I have worked with 

stakeholders to reach solutions on a variety of matters during my tenure. For example, I initiated a process of face-to-face meetings that, to my knowledge, had not 

been used in Pennsylvania to resolve program differences between the State, the 

federal government, citizens, and the regulated community. These meetings and the 

candid discussions that ensued led to a better understanding by all of the other 

stakeholders’ positions and views. In these instances, my initiation of such a process 

led to successful resolution of the issues—without resort to litigation. If confirmed, 

I hope to utilize such innovative means and foster cooperation among stakeholders 

as Director of the Office of Surface Mining Reclamation and Enforcement. 

COOPERATIVE FEDERALISM APPROACH TAKEN BY SMCRA

Question 4. Coming from a State program, you have clearly developed an understanding of the meaning and importance of State primacy, which allows States to 

have exclusive regulatory jurisdiction within their respective borders. 

If you are confirmed as OSM Director, will you pledge to respect the longstanding 

principle of state primacy established in SMCRA? 

What specific role do you see the states playing under the Act and how do you 

envision federal oversight in light of this role? 

Answer. I recognize and fully support the importance of state primacy. The states 

have the primary responsibility for implementing SMCRA’s requirements, and OSM 

must ensure that the states’ implementation is appropriate. As I noted at my confirmation hearing, this can and should be done cooperatively. If confirmed, I will 

seek to ensure that it is. 

OPPORTUNITY FOR PUBLIC COMMENT ON RULEMAKINGS

Question 5. The Administrative Procedure Act establishes a process for federal 

agencies to follow regarding changes to their rules and allowing for public notice 

and comment on those decisions. When taking major policy actions, will you commit 

to do so in a transparent and open manner that allows public participation through 

the Administrative Procedures Act process? 

Answer. During my tenure as Director of the Pennsylvania Bureau of Mining and 

Reclamation, I have been a strong proponent of increasing public participation in 

the processes under my management jurisdiction. If confirmed, I commit to ensuring 

that OSM’s rulemaking process fully complies with the public participation provisions of the Administrative Procedure Act. 

1872 MINING LAW REFORM

Question 6. This Committee has jurisdiction over the 1872 Mining Law, and may 

consider changes to that statute in the coming months. While not directly related, 

you have some valuable experience in the areas we’ll be considering—you were one 

of the authors of Pennsylvania’s Environmental Good Samaritan Act and you were 

actively involved in the administration of that State’s abandoned mine clean up program. While there is not necessarily an explicit role for OSM, but understanding 

the experience you bring to the table, will you commit to working constructively 

with us on developing effective reforms to the 1872 Mining Law? 

Answer. Yes. I am aware that Secretary Salazar has indicated that reform of the 

1872 Mining Law is a priority. I stand prepared, if confirmed, to work constructively 

and in any capacity needed to bring this law into the 21st century. 
29 

RESPONSES OF JOSEPH G. PIZARCHIK TO QUESTIONS FROM SENATOR WYDEN

Question 7. Coal ash disposal in coal mines is a controversial issue in Pennsylvania and elsewhere. In 2005, the National Research Council (NRC) completed a 

study concluding while disposal in coal mines might serve as a possible disposal alternative to a vexing environmental problem, it could pose significant environmental 

risks if not properly carried out. During your tenure, how many mines have been 

permitted to receive coal ash in Pennsylvania to date, on what dates, and for what 

volumes of waste? What changes were made in your program and regulations following release of the NRC report to conform to its recommendations? 

Answer. As the chart below indicates, since my tenure as Director began in 2002, 

21 permits were issued or amended for coal ash use at mines. An additional eight 

reclamation contracts were issued that utilized coal ash. The reclamation contracts 

are short-term projects (usually one year) that typically use small volumes of coal 

ash to manufacture soil or to stabilize the surface. For comparison, approximately 

170 mine sites and reclamation contracts have been issued under this program for 

coal ash use approval since 1988. An average of about 50 sites are utilized every 

year with the others remaining inactive or completed. 

Volumes of ash placed at each site vary due to methods of compaction and differing uses, but can range from a few hundred tons for soil amendments to several 

million tons used to fill abandoned pits. Individual site volume is generally tracked 

on a site-specific basis through District Mining Offices and is not readily available 

in our central office. However, the volume of coal ash used collectively for mine sites 

in Pennsylvania was tracked beginning in 2007, when an aggregate of 11.4 million 

tons were used, and 2008, when 11.0 million tons were used. 

Mine permits issued or amended for coal ash beneficial use since 2002 

02020201 Robindale Energy Svc Inc. Renton 2002 

03050105 Amerikohl Mining Inc. George 2006 

11020202 Ebensburg Power Co. Nanty Glo West 2002 

11070202 Ebensburg Power Co. Nanty Glo East 2007 

13070101 Keystone Anthracite Marketing Corp. No 2 Strip 2007 

16070103 RFI Energy RFI 548 North 2007 

17010102 Compass Coal Co. Camp Run Mine 2002 

17030112 U. S. Operating Service North Camp Run Mine 2003 

17990103 River Hill Coal Co. Kasubick 2003 

24020102 P & N Coal Co Inc. Benezette 2003 

24030103 Amfire Mining Co LLC KPB 127 Buhler West 2003 

43020103 Ben Hal Mining Co. Schumann 2003 

61970102 Rusnak Coal Co. Hawk Run Mine 2003 

10030101 Quality Aggregates Hindman 2003 

11940201 Amfire Mining, LLC St. Michael Pile 2003 

11070201 Fuel Recovery Inc. Lilly Refuse Pile 2007 

11070203 Ridge Energy, Inc. Marstaller Pile 2007 

32040202 Robindale Energy Svc., Inc. Charles Refuse Pile 2004 

49050101 Farragut Anthracite Farragut Mine 2005 

56070201 Robindale Energy, Inc. Penn Pocahontas 2007 

16090101 RFI Energy 548 NORTH 2 MINE 2009 

Reclamation Contracts—not mine sites 

10-06-02(GFCC) Quality Aggregates Inc. Marett Project 2006 
30 

Mine permits issued or amended for coal ash beneficial use since 2002—Continued 

32-03-02 Robindale Energy Svc Inc. Blacklick GFCC 2003 

32-04-01 Robindale Energy Services, Inc. Heilwood Site 2004 

32-06-01 (NCC) Gator Coal, LP 2006 

32-07-05 Robindale Energy Svc Inc. Ballas Refuse Site 2007 

65-05-04(GFCC) Bedrock Mines LP 2005 

65-06-02 GFCC) Robindale Energy, Inc Whitney 2006 

11-07-01 Robindale Energy Services, Inc. Beaverdale Site 2007 

Following release of the NRC report and after consideration of citizen concerns, 

we implemented the following changes to the program for use of ash at mines: 

• Background groundwater sampling was doubled from six to at least twelve 

monthly samples covering the complete hydrologic cycle. 

• Groundwater sampling methods have been expanded from 27 to 40 different 

testing parameters. 

• Groundwater sampling of all 40 parameters now occurs every quarter instead 

of once per year. 

• Water samples collected are tested for total and dissolved metals instead of just 

total metals. 

• Sampling techniques have been improved, including purging of monitoring wells 

to improve quality of the data. 

• Monitoring must include three or more downgradient points and at least one 

upgradient to obtain the necessary data. 

• Monitoring will occur for at least 10 years after ash placement stops. 

• Testing of ash for use approval now requires leaching parameters for 32 substances, up from 20, and is a centralized, standardized process to ensure consistency. 

• Ash testing at the generation facility doubled to at least four times per year. 

• Acceptable leaching limits were lowered for arsenic, lead, selenium and boron. 

• Controls for temporary storage will be required. 

• Added assessment procedures for when monitoring indicates a potential problem. 

• Added corrective action procedures should the assessment find a problem 

caused by the ash. 

• Amount of ash used at a mine is to be reported by generator and mine operator. 

• A 50% increase in the amount of ash to be used on a mine requires new public 

notice. 

• Ash generated from fuels other than coal or waste coal are required to obtain 

a waste general permit approval and mine suitability determination. 

Question 8. An extensive 3-year study by the Clean Air Taskforce of 15 mines 

where the Pennsylvania Department of Environmental Protection (PADEP) permitted the disposal of coal ash, entitled Impacts on Water Quality from Placement 

of Coal Combustion Waste in Pennsylvania Coal Mines was completed in 2007 and 

concluded that PADEP’s data indicated that ash is contaminating nearby water supplies in two-thirds (10) of the mines studied with arsenic, lead, cadmium, selenium, 

nickel, zinc, sulfate, chloride, manganese, boron and other contaminants exceeding 

drinking water standards, health advisories, or water quality standards often by orders of magnitude. In your testimony before the Committee, you indicated that your 

agency had reviewed the claims made in the report and found them to be without 

basis and that no additional pollution was attributable to ash disposal. Please confirm whether this is, in fact, your view and please provide the technical analysis 

that supports your position. 

Answer. I did indicate that the PADEP review of the allegations did not find pollution that resulted from the coal ash placed at the sites. The PADEP response to 

the allegations of pollution from the placement of coal ash and the PADEP response 

to Environmental Integrity Project allegations are available at: http:// 

www.dep.state.pa.us/dep/deputate/minres/bmr/programs/beneficial.htm, and include 

the following titles: 

• PDEP Response to Clean Air Task Force Report (2007); 
31 

* Documents have been retained in committee files. 

• PADEP Response to EIP Allegations of Lead Pollution Related to BD Mining 

(2009) 

• PADEP Response to EIP Allegations to Trace Metal Pollution Related to 

McDermott and Ernest (2009) 

For your convenience, I am also including these documents as attachment A* to 

these responses. 

The agency has also produced a publication entitled ‘‘Coal Ash Beneficial Use in 

Mine Reclamation and Mine Drainage Remediation in Pennsylvania (2004)’’ that 

can also be accessed on the website. This publication is intended as a peer-reviewed 

document on the beneficial use of coal ash in mine reclamation and mine drainage 

remediation in Pennsylvania. 

Question 9. It is my understanding that permits issued under the Pennsylvania 

program for the beneficial use of coal ash in mines have been found deficient by an 

Administrative Law Judge in your own department and by judges of the Interior 

Board of Land Appeals (IBLA). In Citizen Advocates United to Safeguard the Environment Inc., v. PADEP, EHB Docket No. 2006-005-L (Consolidated with 2005-329- 

L) (Issued Nov. 2, 2007), a state administrative law judge found that a monitoring 

system approved by the Department for a mine reclamation site permitted to take 

10 million cubic yards of residual wastes, primarily a river dredge-coal ash mixture, 

was not capable of detecting offsite groundwater contamination from the waste despite offsite drinking water wells found in all directions around the site. In Robert 

Gadinski, 177 I.B.L.A. 373 (2009), the IBLA sided with a citizen and groundwater 

scientist and against PADEP finding that the public wells used in Tremont, PA are 

potentially threatened by the failure to characterize and sufficiently monitor 

groundwater flows from a nearby ash minefill. Do you agree that such deficiencies 

in a mine ash placement permit, as identified in these decisions, which can lead to 

the contamination of offsite water supplies, are a fundamental violation of SMCRA? 

If not, why not? Does SMCRA require the issuance of permits for surface mining 

that demonstrate clearly, through effective characterization, monitoring and safeguards, that such damage will be avoided? What corrective actions has the Department taken, or in the IBLA case, does it intend to take, as a result of these decisions? 

Answer. Before I answer your specific questions, let me offer some clarification regarding the two decisions that you mention. 

First, Citizen Advocates United to Safeguard the Environment Inc., v. PADEP did 

not involve the use of coal ash at a permitted coal mine, but was an appeal from 

a Determination of Applicability of a Residual Waste Beneficial Use General Permit 

issued by the PADEP’s Waste Program. Further, the site itself is a Brownfield Remediation site involving an old landfill, abandoned surface mining areas, and old 

deep-mining impacts. As Director of the Bureau of Mining and Reclamation and its 

programs, I have no authority for permits issued by Pennsylvania’s Waste Program 

or over actions taken by the Brownfields Remediation Program or the Bureau of 

Abandoned Mine Reclamation. SMCRA was not applicable to this site because it 

was a Brownfield site being remediated under a consent order and agreement pursuant to the Land Recycling and Environmental Remediation Standards Act, 35 P.S. 

sec. 6026.101 et seq. 

My understanding is that the EHB upheld the General Permit but considered the 

groundwater monitoring plan insufficient primarily because of the complexity of the 

site, with its underground mine pools, draining of pools to a mine tunnel, and other 

complicating hydrologic features. The expert testimony raised some questions about 

whether additional monitoring wells and characterization of the site was needed, 

and the EHB remanded to PADEP for the purpose of improving the groundwater 

monitoring plan. 

Second, the appeal in Robert Gadinski was from an OSM informal review and approval of a PADEP response to a Ten Day Notice that there was no violation because no contamination of the public water supply well had occurred. The IBLA decision involved the OSM standard of review, and the question was whether the 

record (i.e., the data provided by the State to OSM) was sufficient for OSM to reach 

its conclusion. The IBLA determined that it was not, and that OSM should have 

ordered a federal inspection pursuant to 30 CFR 842.11(b). 

The IBLA made no finding regarding contamination of water supply wells at the 

site. While the IBLA raised the issue of whether the hydrologic balance of the site 

had been impacted by ash placement activities, it made no finding to this effect. Regardless, the State was not informed of this appeal to the IBLA by OSM, and 
32 

PADEP did not have any opportunity to explain its investigation or supplement the 

record before the IBLA. 

With regard to your specific questions, I agree that failure to properly characterize a specific coal ash as suitable for use at a permitted mine site and failure 

to properly characterize a mine site before the regulatory authority authorizes the 

placement of mine ash could have the potential to lead to contamination of offsite 

water supplies. Contamination of offsite water supplies is not authorized by 

SMCRA. Further, when permitting surface coal mines, PADEP will not issue a surface coal mining permit if there is evidence that the proposed mining will adversely 

affect a public water supply. 

As a result of the Gadinski decision, the State has met with the OSM’s Harrisburg Field Office regarding an investigation as to whether the hydrologic balance 

of the site has been impacted and has proposed that a thorough joint investigation 

be performed. I expect that investigation to begin once approvals from OSM are received. I have also arranged with OSM that the State bureau will be informed of 

any similar federal administrative appeals so that PADEP can intervene and 

present its investigation and expert findings. This cooperative approach should significantly reduce the time needed to resolve citizen complaints and should provide 

IBLA the information necessary to render a decision. 

Question 10. It is my understanding that according to Pennsylvania Department 

of Environmental Protection (PADEP), one of the primary justifications for approval 

of the dumping of millions of tons of coal combustion waste in mines is to neutralize 

or cure acid mine drainage. How many mines in Pennsylvania have been successfully remediated or cleaned up by this process? Can you please provide the committee with a list of these mines? Do you require long-term monitoring at these sites 

to ensure that the alkalinity of the coal ashes is not exhausted resulting in the release of metals and other ash constituents to water at these sites. 

Answer. As I noted in response to a previous question, the State’s mining program 

does not allow permitted mines to be used as dumps for coal combustion wastes or 

other wastes. Only coal ash that qualifies for use certification can be placed at a 

permitted coal mine in furtherance of the reclamation of the mine. I understand 

that there have been 33 mines where coal ash has been approved for use as alkaline 

addition, and I am providing a list of those mines below. Unfortunately, the results 

of the use of ash at these sites are not maintained in PADEP central office files, 

and I have requested that our district offices identify sites successfully addressed. 

Specific examples that I am aware of where the removal of waste coal and reclamation with coal ash has improved water quality include the Leechburg site and the 

Revloc site, both listed below. As of April 18, 2009, PADEP requires monitoring to 

continue for 10 years after the last year of ash placement. 
33 

Alkaline Addition sites 

02020201 Robindale Energy Svc Inc. Renton Plum Borough 11020202 Ebensburg Power Co. Nanty Glo West Nanty Glo Borough 11070202 Ebensburg Power Co. Nanty Glo East Nanty Glo Borough 11900201 Maple Coal Company, Inc. Colver Barr 11970201 Maple Coal Company, Inc. Rail Yard Site Barr 32950201 Cambria Reclamation Corp. Ernest White 32950202 Cambria Reclamation, Inc. Lucerne Center 56743701 Robindale Energy Services, Inc. Custom Coals Laurel Shade 24020102 P & N Coal Co Inc. Benezette BENEZETTE 24030103 Amfire Mining Co LLC KPB 127 Buhler West HORTON 43020103 Ben Hal Mining Co. Schumann SANDY LAKE TWP 61970102 Rusnak Coal Co. Hawk Run Mine IRWIN 10-06-02 Quality Aggregates Inc. Marett Project ALLEGHENY 17990107 River Hill Coal Co. Mid-Penn #1 Bigler 11833026 Greenley Energy Holdings of PA Mine 42 Scalp Level Borough 11880201 Ebensburg Power Co. Revloc Cambria 11890201 Greenley Energy Holdings of PA Mine 42 A Scalp Level Borough 11930102 EP Bender Coal Company 54 Job Dean 11960202 Ebensburg Power Co. Revloc 2 Cambria 11980103 Laurel Land Development McFadden No 2 Mine Blacklick 16910104 TDK COAL SALES INC SANDY HOLLOW MINE MADISON 17950111 SKY HAVEN COAL INC BLOOM 1 MINE Bigler 17950115 LARSON ENT INC SWAMP POODLE MINE Morris /Cooper 17970101 Sky Haven Coal Inc. E. M. Brown #1 Lawrence 17980114 LARSON ENT INC GRAHAM 2 MINE Graham 32940105 Kent Coal Mining Company Lucerne #2 Center 32980108 Amerikohl Mining, Inc. JACKSONVILLE SURF MINE Young 65050102 Bedrock Mines Marco Washington 32-00-04 Amerikohl Mining, Inc. Ernest Refuse Area 4 Rayne 32-98-01 Amerikohl Mining, Inc. JACKSONVILLE HILL SITE Young 33-00-02 ACV POWER CORP Soldier Project WINSLOW CO&A Leechburg site 11950102 Laurel Land Development McDermott Jackson 
34 

Question 11. How many of the mines where coal ash disposal has occurred have 

long-term monitoring (defined in federal waste regulations as 30-year post-closure 

monitoring) to ensure that hazardous chemicals do not escape the disposal areas 

and enter water supplies? 

Answer. To clarify, coal ash disposal does not occur at permitted coal mines in 

Pennsylvania but is carried out instead in landfills. Permits for this type of disposal 

are issued by PADEP’s Waste Program, not the Bureau of Mining and Reclamation, 

in accordance with the Solid Waste Management Act, the Clean Streams Law, and 

the regulations promulgated pursuant to those statutes. 

As I noted in response to a previous question, permitting the use of certified ash— 

ash that has been certified to meet certain chemical and physical requirements— 

for placement as part of the reclamation of mines began in the mid-to late 1980s. 

All sites that are currently using ash for reclamation purposes will be required to 

be monitored for at least 10 years after placement of ash concludes. 

Question 12. Are there specific corrective action standards in the permits for these 

sites that require cleanup of contamination from ash if it exceeds certain levels? 

Please provide a list of those permits. 

Answer. The permits contain monitoring requirements for the coal ash and for the 

groundwater and surface water sampling points and reporting requirements for updated maps and volumes each year. The permits do not contain corrective action 

standards, but as noted in my response to a previous question, the ash must be certified to meet certain quality standards, including a dry weight analysis and leachate values, before it can be used for reclamation purposes. The current frequency 

for testing these samples is 4 times per year, and a pattern of exceedance of these 

quality standards will eliminate the source from use in a reclamation project. A onetime exceedance triggers increased sampling and an investigation as to the cause 

of the result. 

For water monitoring, samples are submitted quarterly. The data is assessed to 

see if any degradation trends are occurring. An anomalous sample result is investigated first by the operator (through a resample) and then, if necessary, by the 

agency. 

Currently, typical compliance actions related to coal ash use are related to missed, 

late or incomplete sampling rounds or reporting. There are instances in which ash 

sources ceased to be used due to exceeding parameters; placed ash material was required to be amended due to a low pH caused by a generator malfunction; and on 

various occasions, operators on site were cited for failure to follow operation procedures (such as requirements for compaction, dust suppression, temporary stockpiles, 

etc.). The Department has not taken corrective action for remediation of groundwater because no polluting events have been attributable to coal ash beneficial use. 

Question 13. How many of these mines have bonds or other financial assurance 

specifically directed to ensure that hazardous chemicals in the ash, should they escape into water supplies, can be remediated by the mine owner or the utility dumping the waste and not the taxpayer? 

Answer. Permitted coal mines are not used as dumps for chemically hazardous 

ash. Ash used for reclamation purposes must be tested and certified for the specified 

use before it can be used at a mine. The mine operator must demonstrate, and the 

State must find, that there is no presumptive evidence of potential pollution from 

the ash before the permit will be amended to allow the use of coal ash for reclamation activities. Permit amendments are subject to public notice, comment, and appeal. Because there is no evidence of pollution resulting from coal ash used for these 

reclamation purposes, no bond is required to be posted to pay for corrective action. 

Should site monitoring determine that coal ash is causing pollution, PADEP has authority to require the mine operator to post the bond necessary to complete corrective action and has used that authority when coal mining has caused water pollution. If the operator does not post the additional bond, the State will proceed to forfeiture, ultimately resulting in the permittee and all owners and controllers being 

banned from domestic coal mining. 

Question 14. How many of the surface mines in Pennsylvania where coal ash disposal has occurred have liners to ensure that toxic chemicals in the ash do not migrate from the disposal site? 

Answer. To my knowledge, three coal refuse disposal/ash placement sites are lined 

with either clay or synthetic lining. These sites are: 

• EME Homer City, generation site; 

• Rosebud Mining Co., Lady Jane Preparation Plant; and 

• TJS Mining, CRD #2 
35 

Question 15. How many of these coal ash disposal sites are required to dispose 

of the toxic industrial waste above the seasonal high groundwater table so that 

groundwater doesn’t come into contact with the toxic materials and is not thereby 

contaminated by heavy metals that can leach out of the waste? 

Answer. Again, coal ash that has been approved by the PADEP mining program 

for use in a reclamation project is tested and certified for the specified use before 

it can be used at a mine; permitted coal mines are not used as dumps for chemically 

hazardous waste. Nevertheless, it is my understanding that in every coal mine site 

where coal ash use has been approved, it is placed above the local groundwater 

table. No other ash placement occurs within the saturated zone (or groundwater 

table). All collected/perched water is required to be removed from a pit prior to ash 

placement at a mine site. All best management practices employed minimize the 

contact of ash with runoff water. 

Question 16. As discussed in detail in the NRC report, substantive improvements 

are needed in the leach tests used to characterize coal combustion wastes placed in 

mines. You indicated that you have incorporated the recommendations of the NRC 

report into your mine ash placement program. Can you tell us what improvements 

are being made to the test(s) that you will require for coal ashes placed in mines 

under your program? 

Answer. In this instance, for the reasons discussed below, we are continuing to 

use the best currently available, EPA-approved test. I apologize, as I could have 

been more precise in my testimony. 

Unfortunately, no test yet exists to characterize coal ash as if it were placed in 

a mine before it is actually placed in a mine, so it would be impossible to implement 

such a test. The PADEP uses the Synthetic Precipitation Leaching Procedure, or 

SPLP, which is deemed more representative of the leaching conditions of rock/soil 

material than the Toxicity Characteristic Leachate Procedure, which is used for 

solid waste at landfills. While there are some concerns about the validity of the 

SPLP testing under real-world conditions, this test remains in widespread use. 

The continued use of the SPLP test has proven to be effective in Pennsylvania 

in predicting whether harmful substances will leach out of the certified ash once it 

is placed in the coal mine environment. We have been successfully using this test 

on permitted coal mine sites for approximately 20 years. 

PADEP staff has extensive experience in leach testing and has examined protocols 

in various laboratory settings. While the NRC recommends alternate methods that 

require a higher degree of skill by the collector and the laboratory, which leads to 

higher costs, these new types of batch, column, and multipoint leach tests have not 

been used extensively enough to evaluate their effectiveness. The NRC report concedes that more research is needed in the area of predicting characteristics through 

leach testing. Both the Pennsylvania Waste and Mining programs attempt to keep 

abreast of all new research results related to this topic and are willing to examine 

new tests for feasibility and to make necessary changes to the procedures if warranted. 

The new leaching tests that have been proposed for use by some environmental 

groups are still under development; methods have not been standardized and labs 

are not equipped to conduct these tests. When these issues are overcome, it is expected that new and better leach tests will be adopted by various environmental 

agencies as a new standard. In addition, local industry representatives for coalburning energy plants have expressed interest in conducting additional research 

and monitoring of coal ash placement areas to help answer some questions regarding long-term chemical and physical stability of the ash material. 

Question 17. As noted in the NRC report, coal ash disposal practices are not clearly covered at the Federal level by either the Surface Mining Control and Reclamation Act (SMCRA) nor the Resource Conservation and Recovery Act (RCRA) and 

their respective regulatory regimes. As a state regulator who has permitted this 

practice and as someone being nominated to be in charge of implementing SMCRA, 

what is your view on what actions should be taken at the federal level to adopt national standards for both the disposal of coal combustion wastes and their use in 

mine reclamation? 

Answer. Based on my experience, it is clear that not all coal ash is the same nor 

is all coal ash suitable for use at mine sites, either coal or other types of mines. 

It is also clear that not all mines are suitable for the placement of coal ash. The 

chemical and physical properties of ash can vary significantly due to the source of 

the coal, the combustion technology used, the pollution controls, and the types of 

other fuels used. If confirmed, I look forward to working with others in the Administration and in Congress toward developing policies on how to best manage coal ash 

use and disposal based on sound science and crafted to protect the public and the 

environment. 
36 

Question 18. Following the 2008 TVA ash disaster, the U.S. Environmental Protection Agency announced in March of this year that it intended to issue regulations 

governing coal ash disposal. Given your extensive experience with the disposal and 

regulation coal ash what is your view on whether coal ash disposal should be regulated by U.S. EPA under the Solid Waste Disposal Act or RCRA and if it should 

be regulated, to what extent? If confirmed as the Director, what role do you intend 

to play in EPA’s rulemaking effort? What role should EPA and the standards that 

it promulgates play in the regulation of coal ash in surface mines? 

Answer. As I noted in my response to the previous question, my experience as a 

state regulator has led me to conclude that not all coal ash is created equal. Consequently, the regulation and management of coal ash should be based on the chemical and physical properties of the ash and the character of the site where it would 

be placed. If confirmed as Director, it is my intention to actively engage with others 

in the Administration and to work cooperatively in the development of a practical 

and protective regulatory framework for the management of coal combustion residues in order to protect the environment and the public. 

Question 19. In a letter to the Committee the Sierra Club and Earth Justice contend that in 2001, as primary regulatory counsel, you supervised the drafting of 

state regulations that weakened the state’s stream buffer zone rule allowing the filling of stream valleys in Pennsylvania. What role did you play in drafting the Pennsylvania regulations on stream buffer zones? On April 27, 2009, Interior Secretary 

Salazar announced that the Interior Department would move to rescind the 1983 

Federal stream buffer rule allowing valley fill and mountaintop removal. Do you believe that the existing Federal stream buffer zone rule should be revised and if so, 

in what way? 

Answer. The Pennsylvania mining program has two stream buffer zone rules. The 

rule that applies to coal mining has not been changed in over twenty years, and 

requires the applicant that seeks a variance to demonstrate ‘‘beyond a reasonable 

doubt’’ that there will be no ‘‘adverse hydrologic impacts, water quality impacts or 

other environmental resource impacts . . . .’’ 25 Pa. Code 86.102(12). For example, 

at my direction, violation of this rule as a basis for permit denial was added to the 

permit denial letter where an applicant proposed using spoil to bury one and a half 

mile of streams. 

The other SBZ rule applies solely to coal refuse disposal, and appears in the Coal 

Refuse Disposal Control Act (CRDCA), 52 P.S. section 30.56a(5), and in the coal 

refuse disposal regulations, 25 Pa. Code 90.49. As program counsel, I assisted the 

Department in drafting changes to the regulations that were necessary to ensure 

that those regulations were consistent with requirements contained in amendments 

to the State statute that were enacted in 1994 to authorize variances with required 

prevention or mitigation of adverse impacts. As counsel, my role was also to ensure 

that the revised regulations were not inconsistent with and were as effective as federal SMCRA and that the revised regulations did not violate the federal Clean 

Water Act and would not contribute to violation of applicable state and federal 

water quality standards. I approved the revised regulations for form and legality. 

Those revised regulations were approved by OSM and the Environmental Protection Agency, with input from the U.S. Fish and Wildlife Service and the Army Corps 

of Engineers. 

With regard to the stream buffer zone rule, I believe that Secretary Salazar announced in April that he was asking the district court to vacate and remand the 

Bush Administration’s last minute change to the 1983 stream buffer zone regulations. During the public comment period on that Bush Administration proposal to 

change the 1983 regulation, my program provided comments indicating that Pennsylvania did not support the proposal. 

Question 20. In letters to the Committee from the Sierra Club/Earth Justice and 

PennFuture, the groups contends that the Pennsylvania coal program under your 

leadership had significant deficiencies in its bonding program. They contend that 

you did not take action to correct these deficiencies until the program was found 

insufficient by a Federal Appeals Court (Pennsylvania Federation of Sportsmen’s 

Clubs, Inc. V. Kempthorne, 497 F.3d 377 (3d Cir. 2007). However, despite recent 

changes, the result, they contend, is a program that is still not in conformance with 

SMRCA requirements for financial guarantees to reclaim land and prevent water 

pollution from coal mining. Do you believe that the Pennsylvania bonding program 

fully complies with the letter and intent of SMCRA, and if so, on what basis? 

Answer. I believe the Pennsylvania bonding program fully complies with the letter 

and intent of SMCRA. Program amendments submitted to OSM on August 1, 2008, 

provide a detailed explanation of how the State’s bonding is consistent with and as 

effective as federal law. This information can be accessed at the following link: 
37 

http://www.dep.state.pa.us/dep/deputate/minres/bmr/bonding/ResponseltolPart732lNotices/Submittal/Noticeslfolder01.htm 

The program amendment describes the changes PADEP made to its bonding program and explains how the changes meet the federal standards. PADEP terminated 

the alternate bonding system to halt the accumulation of more reclamation costs. 

All mine operators must post bonds equal to the full cost of the amount it would 

take the State to complete reclamation. PADEP demonstrated that it has sufficient 

money to complete the land reclamation on the forfeited sites, to build mine drainage treatment systems on sites forfeited under the defunct alternate bonding system, and that it has a legally enforceable mechanism in place to generate the funds 

necessary to perpetually treat these discharges. The program amendment addresses 

the Part 732 Notices and the required demonstration and or program amendment 

codified in 30 CFR section 938.16(h). 

An update of the status of efforts on implementing these changes is also available 

at: http://www.dep.state.pa.us/dep/deputate/minres/bmr/bonding/PrimacylABSlBondlForfeiturelUpdatelJanuaryl2009/PrimacylABSlBondlJanl2009.htm. 

During my tenure as program counsel and as Director, I have worked extensively 

on correcting identified deficiencies. Beginning in 1992 I participated in drafting 

amendments to the State’s version of SMCRA and regulations to address shortfalls 

in the State’s now-defunct alternate bonding system for surface coal mines. When 

Pennsylvania terminated this alternate bonding system, I helped draft the appropriation legislation that authorized conversion assistance financial guarantees that 

prevented defaults by mine operators due to changes in the State’s bonding requirements after permits had been issued. I developed the legal basis and helped draft 

the documents for Pennsylvania’s trust fund program, the first program in the country that provided a means for the State to perpetually treat post-mining discharges 

in the event an operator defaulted on its obligation. 

I have proactively sought such funding as well. In 2003, I notified 30 mine operators holding 59 permits that they were required to post additional funds to guarantee the State could treat their discharges in perpetuity. From the time the State 

began tracking the amount of bond posted in 2007, the total amount has grown from 

about $122 million to approximately $264 million. Additionally, during my tenure, 

the bond rate guidelines for calculating surface mine reclamation bonds have been 

adjusted annually to reflect the State’s actual costs for completing reclamation; bond 

rates for underground mines were adjusted for the first time in over 20 years. I led 

the effort in Pennsylvania to develop a legally enforceable funding stream to pay 

for treatment of discharges on sites forfeited under the defunct alternate bonding 

system mentioned above. Through my efforts, a consensus solution was developed 

and implemented with input from the regulated community, the Mining and Reclamation Advisory Board, the public, and members of the General Assembly. 

Question 21. In your testimony before the Committee, you testified that you carried out a policy of transparency and openness. In a letter to the Committee from 

a number of Pennsylvania citizens (Citizens letter), the claim is made that you were 

resistant to citizen input by limiting public testimony in permitting proceedings and 

holding hearings only during agency work day hours. In addition, the Sierra Club/ 

Earth Justice and PennFuture letters contend that you joined with the Bush Administration in attempting to prevent citizens from obtaining information under the 

Freedom of Information Act (FOIA) by claiming in an amicus curiae filing before 

the Third Circuit that correspondence between PADEP and the Office of Surface 

Mining was eligible for protection from public disclosure as ‘‘intra-agency memorandums or letters.’’ 

Did you take or recommend such actions? 

How will you, if confirmed as Director of OSM, specifically address these issues 

and promote meaningful participation of citizens in permitting proceedings and 

rulemakings, promote transparency in decision-making by providing full access to 

agency documents, and ensure access to public meetings for members of the working 

public? 

Answer. During my tenure as Director, the State mining program operated with 

serious fiscal limitations due to reduced state and federal funding. My program was 

under a Department-wide policy that prohibited the payment of overtime, which was 

required for State employees who would attend evening public hearings. A decision 

was made at the Department level that foregoing evening public hearings was one 

option that could save funds and have the least adverse impact on our programs. 

During briefings with Congress, I and my counterparts in other states that were experiencing similar funding shortfalls apprised staff of how limited funding was adversely affecting our ability to effectively implement SMCRA. Congress ultimately 

appropriated additional funds in the 2008-2009 fiscal year, but State revenue is still 
38 

suffering. PADEP is holding, when requested, evening public hearings with management staff, which does not require payment of overtime. 

I did not recommend that the State file the amicus curiae brief with the Third 

Circuit regarding the Freedom of Information Act litigation. Moreover, I did not participate in the development or implementation of litigation strategy regarding the 

freedom of information request. As I noted in response to a previous question, if confirmed as Director I will dutifully implement the relevant federal laws and the Administration’s policies regarding these matters. 

Question 22. The Citizens letter also claims that you have ‘‘shown little regard 

for SMCRA’s purpose to minimize harm’’ in developing Pennsylvania’s regulations 

regarding long-wall mining. Specifically, the letter claims that you were insensitive 

to the impact on landowners from subsidence due to long-wall mining. The letter 

asserts that you defended the impacts based upon the prior sale of mineral rights 

regardless of the fact that the technology now being employed, long-wall mining, 

and its potentially destructive consequences did not exist at the time of the transfer 

of such rights. What is your position on land owner rights where long-wall mining 

is occurring? And what is your interpretation of the minimization of harm obligations under SMCRA? 

Answer. I understand the impacts of longwall mining can be very traumatic and 

stressful to landowners. However, it is my understanding that Pennsylvania’s statutes and property law limited what PADEP could do through a rulemaking. It is 

true that longwall mining did not exist when the mineral and surface support rights 

were severed from the surface, but it is also true that high extraction mining did 

occur then and did damage surface structures. I have taken steps that are sensitive 

to landowners. For example, as Bureau Director, I issued a memorandum clarifying 

that, where enforceable building codes are in effect, repairs must meet applicable 

standards regardless of whether or not the damaged structure was constructed according to code. It also specified that, when compensation is offered as settlement, 

the amount must be sufficient to repair or replace the damaged structure in accordance with the applicable building code. 

As program counsel and director, I worked on two rulemakings designed to implement landowner protections from the 1994 amendments to the State statute and advocated for an interpretation of the provisions that required operators to repair or 

compensate for damage to all dwellings in place at the time of mining. This interpretation provided more inclusive coverage and enabled the State to demonstrate 

that its subsidence program was as effective as federal counterpart regulations. 

Section 516(b)(1) of the Act provides that the operator of an underground coal 

mine (but not longwall mining) prevent subsidence causing material damage to the 

extent technologically and economically feasible. Section 516(b)(11) provides operators of all underground mines must, to ‘‘the extent possible using the best technology currently available, minimize disturbances and adverse impacts of the operation on fish, wildlife, and related environmental values.’’ I fully support all of these 

federal statutes and the implementing regulations. 

RESPONSE OF JOSEPH G. PIZARCHIK TO QUESTION FROM SENATOR SHAHEEN

Question 23. I have heard from a number of concerned environmental groups 

about the environmental impacts associated with surface mining, particularly as it 

pertains to mountaintop mining and surfacing mining involving valley fills. 

Several studies have shown that mountaintop removal is having a significant impact on watersheds in the Appalachian regions where it is being conducted. Selenium, mercury, lead, and other heavy metals and chemicals are released during the 

surface mining process into the watersheds of central Appalachia and are harmful 

to ecosystems and water quality. The studies also illustrate that there are severe 

ecologic and hydrologic impacts from mountaintop removal operations. 

As Director of the Office of Surface Mining Reclamation and Enforcement, to what 

degree will science and science-based reporting affect policy decision-making within 

OSMRE? 

Answer. If confirmed as Director, I will ensure that the Office of Surface Mining 

Reclamation and Enforcement uses sound science-based information to administer 

the requirements of the Surface Mining Control and Reclamation Act of 1977 and 

to implement the applicable policies of the President and the Administration. The 

better understanding we have of the environmental impacts of mining and the processes that cause such impacts, the better we will be able to target our policies to 

achieve our policy goals. 
39 

RESPONSES OF JOSEPH G. PIZARCHIK TO QUESTIONS FROM SENATOR BARRASSO

Question 24. The Mineral Leasing Act provides for the deferred payment of bonus 

bids for coal leases in equal installments. Under current regulations, federal coal 

lessees pay the bonus in five equal installments. The current system makes sense 

because cost is so significant—in Wyoming bonus bids for a federal coal lease can 

cost hundreds of millions of dollars. 

The Interior Appropriations bill passed by the House requires full payment up 

front. Requiring payment of the bonus bid in one up front payment would undermine domestic coal production, disadvantage smaller companies that lack the financial resources, and likely reduce government revenues from coal leasing in the long 

run. 

• Given your experience with coal mining in Pennsylvania, do you think requiring 

total payment of bonus bids up front—which could be tens to hundreds of millions of dollars—could discourage investment? • Do you believe smaller companies would be at a disadvantage? 

Answer. Because the coal in Pennsylvania is virtually all privately owned, my experience in the State does not involve federal coal leases or bonus bids for coal. Additionally, the Bureau of Land Management in the Department, not the OSM, implements the Mineral Leasing Act provisions under which these payments are made. 

Therefore, if confirmed, I do not expect to have any involvement in determining the 

payment structure for federal coal leases. 

Question 25. In March 2006, the Wyoming Secretary of State submitted an 

amendment to its Coal Regulatory Program (referred to as Wyoming Rule Package 

1-U) proposing changes to the rules concerning self-bonding requirements. The rule 

included important additions and revisions designed to address Wyoming-specific 

circumstances taking into account the substantially larger size of the surface coal 

mines in the state. 

It is my understanding the Solicitor’s office approved the final rule in March 2009. 

OSM management then returned the rule to the Western Region for additional 

changes. The State of Wyoming has worked with OSM on this rule for over three 

years. 

• Is it a normal part of the process to send it back to the Western region after 

the Solicitor’s office approves a final rule? 

Answer. I have been informed that the Solicitor’s Office provides advice, counsel, 

and legal representation to OSM, including reviewing draft regulations to ensure 

legal sufficiency. The Solicitor’s Office staff does not approve or disapprove program 

amendments but reviews proposed decisions, the legal basis for those decisions, and 

advises its clients of any relevant findings before publication. 

• Why was it sent back to the region for further changes? 

Answer. I understand that once review in the Washington Office was completed, 

the document was returned to the Western Region for final preparation, after which 

it will ultimately be submitted to the OSM Director for a decision. 

• What steps remain in the approval process? 

Answer: I am informed that the remaining steps are a decision by the OSM Director, and publication in the Federal Register. 

• Do you commit to finalizing the Wyoming Rule Package 1-U in a timely fashion? 

Answer. Yes. If confirmed, I will commit to ensuring that a final decision is made 

in a timely fashion. 

RESPONSES OF JOSEPH G. PIZARCHIK TO QUESTIONS FROM SENATOR SANDERS

Question 26. Several environmental groups, including The Environmental Integrity Project, Earthjustice, and the Sierra Club have raised concerns regarding your 

nomination. Particularly they have raised concerns about a lack of transparency and 

citizen input opportunities during your time working as a state official in Pennsylvania. How do you respond, and are you willing to commit that in your role as Director of the Office of Surface Mining Reclamation and Enforcement you will be a 

strong supporter of federal laws requiring transparency and public accountability in 

decision-making, such as the National Environmental Policy Act and the Freedom 

of Information Act? 

Answer. As I noted in response to an earlier question, I have not resisted public 

participation and transparent decision-making but have been an advocate for in-
40 

creased public participation during my tenure as Director. If confirmed as Director 

of the Office of Surface Mining Reclamation and Enforcement, I will comply with 

the federal laws requiring transparency and public participation and be a strong 

supporter of transparency in government decisionmaking. 

During my tenure as Director, the Pennsylvania Bureau of Mining and Reclamation has routinely used email distribution lists—in fact it has three separate lists— 

to notify interested persons and organizations of draft policies, regulations, and program changes. BMR routinely answers public information requests without requiring the submittal of a formal Right to Know Request, which is the State’s version 

of the Freedom of Information Act. Since 2002, we have answered over 1,100 such 

requests while formal requests have been, I believe, less than a dozen. 

I have also provided opportunities for public participation in the drafting of policies and regulations that are over and above those required by State policy or law. 

For example, currently the State is conducting voluntary meetings with coal ash 

stakeholders, including the Environmental Integrity Project, Earthjustice, Mountain 

Watershed Association, Sierra Club and others to obtain their input on establishing 

regulatory trigger mechanisms for when to institute site assessments and when to 

initiate corrective action in the event coal ash used at a mine site begins to leach 

pollutants that could affect ground water. These meetings are not required by law; 

I elected to hold them in order to obtain more information and a better understanding of stakeholder views on these two points. I have also held similar meetings 

with other interested groups that has resulted in input and information considered 

in developing other regulations and standards. 

Question 27. What are your views on mountaintop mining and its impacts on surrounding communities and water quality? 

Answer. The Pennsylvania Department of Environmental Protection, in which my 

State Bureau of Mining and Reclamation resides, does not authorize mountain top 

removal mining in Pennsylvania. If confirmed, I will become more familiar with how 

the practice has been conducted and its impacts. I am also aware that Secretary 

Salazar and others within the Administration have recently taken steps to ensure 

that the federal agencies involved in these activities are coordinating efforts and 

making real progress toward reducing the environmental impacts of mountaintop 

coal mining. Should I be confirmed, I will work to ensure that these goals are met. 

Question 28. Do you believe that water quality can be negatively impacted by the 

practice of using coal mines as storage sites for coal combustion wastes? 

Answer. Water quality can be negatively impacted. However, it depends on several factors, because not all coal combustion residues possess the same chemical and 

physical properties and not all mines are suitable for the use of coal combustion residues. Depending on the properties of the coal combustion residues and the characteristics of a particular coal mine, some coal combustion residues could be safely 

stored at some mines, but not all residues could be safely stored at all mines. 

RESPONSES OF JOSEPH G. PIZARCHIK TO QUESTIONS FROM SENATOR MENENDEZ

Question 29. The Administration has expressed an intention to tighten regulations 

on mountaintop removal mining. Specifically, what aspects of the practice do you 

think need further regulation? Would you be supportive of banning the practice or 

do you think the practice can continue without public health or environmental 

harms? 

Answer. As a state regulator in the Commonwealth of Pennsylvania, I have no 

direct experience with mountaintop removal because those types of mines do not 

occur in my home state. However, if confirmed, I will become informed on the practice and current issues surrounding this type of surface mining. As I said in my confirmation hearing, it is my intent to work with the Environmental Protection Agency, U.S. Army Corps of Engineers, and the Administration to carry out the Surface 

Mining Control and Reclamation Act (SMCRA), Clean Water Act, and related environmental statutes effectively. Should I be confirmed, I will carefully and thoroughly 

research the issues with the other federal agencies and stakeholders. Only after 

such a review, can I judge if additional or revised SMCRA regulations are necessary. 

Question 30. According to the Office of Surface Mining Reclamation and Enforcement website the Surface Mining Control and Reclamation Act ‘‘ensures that coal 

mining operations are conducted in an environmentally responsible manner and 

that the land is adequately reclaimed during and following the mining process.’’ Can 

land be ‘‘adequately reclaimed’’ following a mountaintop removal operation? 

Answer. As I noted in the response to the previous question, I have no experience 

judging mountaintop removal reclamation because it does not occur in Pennsylvania. I do understand that Congress authorized steep slope and mountain-top re-
41 

moval mining in SMCRA under certain conditions. However, there are many performance standards and reclamation requirements that apply under SMCRA. If confirmed, I will work to address the concerns raised about ensuring adequate reclamation following a mountaintop removal operation. 

I am also aware that Secretary Salazar and others within the Administration 

have recently taken steps to ensure that the federal agencies involved in these activities are coordinating efforts and making real progress toward reducing the environmental impacts of mountaintop coal mining. Should I be confirmed, I will also 

work to make sure that these goals are met. 

Question 31. The Department of the Interior recently rejected the Bush Administration interpretation of the Stream Buffer Zone Rule (SBZ) and said the department would return to the original intent—to prevent mining within a 100-foot buffer 

zone along intermittent and perennial streams. How will you enforce this interpretation? Are there any current mining operations that will have to cease or change 

their practices to be in compliance? 

Answer. As a result of the recent decision by the District Court for the District 

of Columbia on August 12th, it is my understanding that the Department is working 

with the Office of the Solicitor to chart a path forward. If confirmed, I will be guided 

and informed by the statutes, regulations, and best science to make decisions about 

interpretations of the Stream Buffer Zone rule. 

Question 32. Coal ash disposal is a highly controversial topic. Approximately how 

many mines have been permitted to receive coal ash in Pennsylvania to date? Are 

these mines required to set aside funds to remediate damages if toxins should leach 

onto water supplies? How are these mines being monitored to ensure that hazardous 

chemicals do not escape? Are these mines required to have liners to ensure that 

toxic chemicals in the ash do not migrate from the disposal site? How will you apply 

your work on coal ash disposal in Pennsylvania to your work in the federal government? 

Answer. Approximately 170 mine sites and reclamation contracts have been 

issued under Pennsylvania’s program to date. An average of about 50 sites are utilized every year with the others remaining inactive or completed. Because not all 

coal ash is the same, coal ash must be tested to determine whether it has the chemical and physical properties that make it environmentally acceptable to use at a 

mine for the specific reclamation purpose. If it is found acceptable, it is certified for 

use. The individual mine site is also evaluated to determine whether the certified 

ash can be safely used at the mine. Pennsylvania law requires that the mine operator, either in the permit application or in the permit amendment application, demonstrate that there is no presumptive evidence of potential pollution of the waters 

of the Commonwealth and PADEP must make such a written finding before coal 

ash can be allowed to be used on the mine. Because there is no evidence of pollution 

resulting from coal ash used for these reclamation purposes, no bond is required to 

be posted to pay for corrective action. Should site monitoring determine that coal 

ash is causing pollution, PADEP has authority to require the mine operator to post 

the bond necessary to complete corrective action and has used that authority when 

coal mining has caused water pollution. If the operator does not post the additional 

bond, the State will proceed to forfeiture, ultimately resulting in the permittee and 

all owners and controllers being banned from domestic coal mining. 

In addition, as part of the permit approval process the mine operator is required 

to establish a groundwater monitoring plan that will be in place for at least 10 

years after placement of the ash concludes. The mine operator is required to collect 

water samples and have them tested for certain parameters. In April 2009, the 

groundwater monitoring was increased from annually to quarterly. The number of 

parameters tested was increased to 40 (previously, testing covered 27 different parameters). PADEP also periodically collects and tests groundwater samples. The certified ash the PADEP mining program has approved for the specific reclamation use 

on a mine has been placed above the sites’ groundwater table, and liners have not 

been required. If confirmed as the Director of the Office of Surface Mining Reclamation and Enforcement, I will use my experience with coal ash in Pennsylvania to 

be actively engaged within the Administration in the development of a scientifically 

sound, practical, and protective approach for the management of coal combustion 

residues in order to protect the environment and the public. 
42 

1Preventing Undue Discrimination and Preference in Transmission Service, Order No. 890, 

72 FR 12,266 (Mar. 15, 2007). 

RESPONSES OF JOHN R. NORRIS TO QUESTIONS FROM SENATOR MURKOWSKI

FUTURE ENERGY NEEDS

Question 1. What are your views on the future role of baseload coal-fired and nuclear power generation? Do you agree with Chairman Wellinghoff’s statements that 

the nation’s future power needs can be fully met by renewable energy sources and 

efficiency improvements? 

Answer. The nation currently depends on our existing coal and nuclear generation 

facilities to ensure a reliable supply of electricity. At the moment, about 70 percent 

of the electricity generated in the U.S. comes from these sources and it is likely that 

the country will continue to rely heavily on coal and nuclear energy resources for 

many years to come. Decisions to build new coal and nuclear generation facilities 

will be made as result of market forces. The markets are likely to be influenced by 

the amount of new renewable generation available, the availability of capital and 

most importantly legislation Congress may enact to address carbon dioxide emissions, transmission infrastructure improvements, demand response and a host of 

other issues. That being said, I cannot predict how much new conventional nuclear 

and coal fired generation may be built. In any event, my understanding of Chairman Wellinghoff’s view (as stated, for example, at an August 6, 2009, hearing of the 

Senate Committee on Environment and Public Works) is not that our power needs 

can be fully met by renewable energy sources and efficiency improvements but that, 

depending on factors such as the structure and function of our energy markets and 

whether climate change legislation is adopted by Congress, it may be possible to use 

resources such as renewable energy (including solar, wind, geothermal, 

hydrokinetics and biomass), energy efficiency, demand response and natural gas to 

transition to a low-carbon energy future. 

TRANSMISSION (GENERAL)

Question 2. In your opinion, what are the current obstacles to financing and siting 

new transmission? 

Answer. First, the question of whether there is going to be a federal renewable 

energy standard (RES) and/or a national carbon policy needs to be decided since 

these policies will significantly impact renewable energy demand and any economic 

decisions concerning energy supply choices. Assuming there are both a RES and a 

carbon policy, there are several obstacles to financing and siting new transmission. 

One of the primary issues is ‘‘who pays’’ or cost allocation. Without giving FERC 

the ability to properly allocate costs, new national policies like a RES or carbon reduction will not be properly implemented. Besides cost allocation, some of the obstacles to siting new transmission infrastructure include: the lack of a regional and national coordinated planning process; delays in federal land right-of-way approvals; 

and delays in state utility commission approvals. Under the Commission’s current 

backstop siting authority, the single largest obstacle to the siting of new transmission is the 4th Circuit Court of Appeals decision that limits the Commission’s 

authority to instances where a state has not made a siting decision within one year. 

An individual State’s decision to deny a project within its boundaries, can prevent 

the construction of new transmission even when these projects may be in the national public interest. 

Question 3. Absent legislative changes, how can FERC and the states work most 

effectively to expedite planning and siting of multi-state transmission projects and 

provide regulatory certainty on cost recovery? What actions can FERC take under 

its existing statutory authority in these areas? 

Answer. With regard to transmission planning, in Order No. 890 the Commission 

required jurisdictional utilities to engage in regional planning to ensure adequate 

and reliable transmission service within regional markets.1 States have generally 

been very supportive of this requirement for regional transmission planning. Order 

No. 890 requires all transmission providers to develop an open and coordinated 

transmission planning process that involves ongoing coordination and input from 

stakeholders, including state and local retail regulatory entities. This process provides an ongoing opportunity for states to work with utilities in planning as well 

as with the FERC in addressing transmission related issues since they often choose 

also to participate in Commission proceedings related to planning and cost allocation for transmission in interstate commerce. 

Order 890-A further required transmission providers to address issues involving 

comparable treatment of resources in the planning process, cost allocation and re-
43 

gional coordination. To evaluate the effectiveness of the implementation of the regional transmission planning process and address issues, the Commission has 

scheduled a second series of regional technical conferences to begin in September 

of this year. These conferences will involve all stakeholders, including state and 

local retail regulators in addressing regional transmission planning, coordination, 

and cost allocation issues. The Commission seeks, through stakeholder feedback at 

these conferences, to determine if further refinements to the planning process are 

necessary. 

With regard to transmission siting please see my response to your question #6. 

Question 4. Chairman Wellinghoff has stated that one of his priorities is to integrate renewable, efficiency and demand response into the interstate grid—do you 

share that goal? If so, what specifically would that entail in the way of new policies 

and programs from FERC? 

Answer. Yes, I support the Chairman’s goal of integrating renewable, efficiency 

and demand response into the interstate electricity grid. In that regard, the Commission is undertaking several initiatives that would help achieve the Chairman’s 

goal. These include: 

• Renewables.—FERC staff is conducting a technical study to determine the appropriate metrics for use in assessing the reliability impact of integrating large 

amounts of variable renewable power generation into power grids. 

• Efficiency.—To support participation of energy efficiency resources in wholesale 

electricity markets, the Commission has accepted proposals by ISO-New England and PJM to allow energy efficiency resources to receive capacity payments 

in exchange for taking on capacity obligations in their respective capacity markets. 

• FERC recently issued a Smart Grid Policy Statement to prioritize and accelerate the development and adoption of interoperability standards and protocols 

necessary to ensure smart-grid functionality and interoperability in interstate 

transmission and in wholesale electricity markets. Such standards are important for unlocking the potential efficiency benefits of the Smart Grid. 

• Demand Response.—FERC recently completed a rulemaking ordering the removal of specific barriers to the participation of demand response in the organized wholesale markets (Order No. 719, October 2008). In addition, it directed 

each RTO and ISO to submit, and each has now submitted, a report identifying 

and explaining how it will remove any remaining barriers to demand response 

in cooperation with its stakeholders. Also, the Commission is developing a National Action Plan on demand response, as required by the 2007 Energy Independence and Security Act. This plan will facilitate the development of demand 

response as a resource and business area through increased communication of 

its benefits to consumers and stakeholders. 

Going forward, I support Chairman Wellinghoff’s recent Congressional testimony 

on reforming national transmission policy, in which he called on Congress to enact 

legislation that will: 

• Enable transmission developers to invoke federal authority to site transmission 

facilities where necessary to interconnect renewable power to the electric transmission grid, after states have had an opportunity to address the proposal first; 

• Clarify FERC’s authority to ensure that state and regional planning is consistent with national energy goals; and 

• Clarify FERC’s authority to allocate the costs of transmission infrastructure 

necessary to accommodate the Nation’s renewable energy potential to all loadserving entities within an interconnection, when it is appropriate to do so. 

TRANSMISSION SITING

Question 5. Do you believe that transmission should be an asset for all generation 

resources? What is your view of efforts to mandate that new transmission be limited 

to renewable or low-carbon emitting resources? 

Answer. I believe that improvements to the interstate electric transmission grid 

can be an asset for all generation resources. New transmission facilities clearly are 

necessary in order to deliver renewable and low-carbon emitting resources to the 

market. At the same time, increasing the flexibility and the reliability of the grid, 

as well as reducing congestion, can result in the more efficient use of generation 

from other resources, with resultant benefits to consumers and the environment. 

Question 6. Although the provisions are different, S. 1462, the American Clean 

Energy Leadership Act of 2009 reported by this Committee and H.R. 2454, the 

American Clean Energy and Security Act of 2009 passed by the House of Represent-
44 

atives, would give FERC additional authority over transmission siting, including the 

ability to consider applications where a state denies a siting permit. 

a. Do you support providing additional siting authority to FERC? 

Answer. Yes. I believe that there is a national interest in the siting of interstate 

electric transmission facilities that warrants a federal role, although I also believe 

that federal authority should be exercised, to the maximum extent possible, with 

due regard for the concerns of the states. 

b. S. 1462 provides FERC with backstop siting authority for those projects that 

are identified in the planning process as High Priority National Transmission 

Projects if a state fails to act within one year on the application or if the state rejects that application. Do you support this Committee’s approach to transmission 

siting? 

Answer. Yes. While, as a former state regulator, I am confident that the states 

will render appropriate decisions on proposed interstate electric transmission facilities in the vast majority of cases, the strong national interest in an efficient interstate electric transmission grid justifies providing FERC backup authority. 

c. H.R. 2454, as passed by the House, leaves the National Interest Electric Transmission Corridor process from the Energy Policy Act of 2005 largely intact for the 

Eastern Interconnection. The process for federal siting in the Western Interconnection is, like the Senate language, tied into the new planning process. Do you believe 

federal siting authority in the area of transmission should be uniform in the Eastern and Western Interconnection? 

Answer. As a general matter, a uniform approach to federal transmission siting 

would appear easiest to administer and most likely to provide consistent, predictable 

regulation. That said, I believe that there is more than one possible approach to 

transmission siting and that FERC will be able to fulfill whatever role Congress 

chooses to give it. 

TRANSMISSION COST-ALLOCATION

Question 7. What, in your opinion, should be the standard or principle that governs who should be assessed costs for new transmission lines? 

Answer. I do not think a ‘‘cookie-cutter’’ approach works when it comes to allocating transmission costs. Rather, I believe the Commission needs to have the flexibility to apply a cost allocation methodology that addresses the circumstances of the 

case. As a general matter, I think that the beneficiaries of a transmission project 

should bear the costs of that project. However, I also think that at times it is appropriate to broadly construe who are the beneficiaries of a project, e.g., those who benefit from a project that helps meet a renewable portfolio standard. I also think it 

is important when allocating costs to balance the state, regional and, if applicable, 

national goals for developing renewable energy and reducing carbon emissions, as 

well as to weigh the reliability and economic benefits created by the transmission 

upgrade. 

Question 8. One issue this Committee really grappled with during consideration 

of S. 1462 was the issue of cost-allocation for new transmission projects. The House 

found this issue to be so complex that it did not even address it in H.R. 2454. As 

initially drafted, the transmission legislation allowed for the broad allocation of 

transmission costs—what some deemed the ‘‘socialization’’ of costs—to make projects 

more economical. During markup, the Committee adopted an amendment offered by 

Senator Corker, by a vote of 13-9, 

a. Please offer your perspectives on the issue of ‘‘socializing’’ the costs of building 

new backbone interstate transmission. 

b. Under this socialization concept, is it true that entities could be charged for 

the costs of building new transmission, even though they do not actually use that 

transmission to move power or receive power? 

c. What would be the basis for such charges? What benefit would an entity receive 

from a new transmission line if it does not use that line for transmission service? 

Answer. As a general matter, I believe that the decision on whether to allocate 

transmission costs broadly should be made on a case-by-case basis, depending on the 

circumstances of each case. As noted in my response to Question 7 above, I do not 

think a ‘‘cookie-cutter’’ approach works when it comes to transmission cost allocation. I also believe that a broad allocation of transmission costs would be supported 

by the establishment of national renewable energy or carbon policies affecting the 

need for new transmission lines. While it is possible under a broad allocation of 
45 

2 Energy Policy Act of 2005, Pub. L. No. 109-58, 119 Stat. 594, 315 and 1283 (2005) (codified 

at Federal Power Act § 219, 16 U.S.C. § 824s (2006)). 3 16 U.S.C. § 824d (2006). 

costs that entities that will not actually use a particular new transmission line could 

be charged for a portion of the costs of building that transmission, I do not believe 

such a result is typical nor is it an outcome I desire. However, I believe it is appropriate in certain instances to broadly construe who are the beneficiaries of a project, 

which may extend to include entities beyond those who directly use a line. This approach may be appropriate in instances where a transmission upgrade includes general reliability or economic benefits (e.g., upgrades to relieve a transmission constraint on one part of a system can produce reliability or economic benefits on other 

parts of the system), or where there is shared responsibility for any national goals 

or mandates. 

TRANSMISSION (INCENTIVES)

Question 9. FERC’s authority to provide incentive based rate treatment to promote construction of new or upgraded transmission facilities to address reliability 

and accommodate the integration of renewable resources can assist transmission investment. 

a. In your opinion, has the Commission given appropriate incentives to promote 

investments in transmission? 

Answer. In general, I believe that the Commission’s policy of evaluating whether 

incentives are necessary to encourage new transmission investment on a case-bycase basis has enabled the Commission to grant incentives in appropriate cases to 

promote investment in needed transmission. 

b. What types of projects do you see as meriting incentive-based rate treatment? 

Answer. As a general matter, I find reasonable the Commission’s current case-by 

case approach of determining which projects merit incentives. First and foremost, 

the Commission considers whether a project ensures reliability or reduces congestion, consistent with Section 1241 of the Energy Policy Act of 2005.2 In addition, 

the Commission requires an applicant to demonstrate that the total package of incentives is tailored to address the demonstrable risks or challenges faced by the applicant in undertaking the project. Finally, the applicant has to demonstrate under 

section 205 of the Federal Power Act3 that the rates it will charge to consumers are 

just and reasonable and that costs were prudently incurred. I believe that additional 

incentives may be appropriate in some cases where the project advances important 

national policy. 

c. Are there additional criteria that you think more fairly determines the merits 

of a project seeking incentives? 

Answer. I believe the criteria the Commission uses in its current analysis is appropriate for determining whether incentives are warranted for a transmission 

project in most cases. However, if confirmed, I am open to considering additional 

criteria for determining whether a project merits incentives, particularly when the 

criteria advance national policy goals, such as providing access for renewable resources to the interstate grid. 

TRANSMISSION (PLANNING)

Question 10. Chairman Wellinghoff has announced that FERC will be conducting 

several regional technical conferences on transmission planning: 

a.Is it your impression that the regional planning process under Order 890 is not 

working well? If so, where is it coming up short of expectations? 

b. Are these technical conferences going to explore the possibility of creating an 

interconnection-wide planning process? Do you support such an exploration? 

Answer. Commission staff is holding a series of three technical conferences on regional transmission planning in Phoenix, Philadelphia and Atlanta in September. 

‘‘As stated in an August 3, 2009 Commission notice, The focus of the 2009 regional 

technical conferences will be: (1) to determine the progress and benefits realized by 

each transmission provider’s transmission planning process, obtain customer and 

other stakeholder input, and discuss any areas that may need improvement; (2) to 

examine whether existing transmission planning processes adequately consider 

needs and solutions on a regional or interconnection-wide basis to ensure adequate 

and reliable supplies at just and reasonable rates; and (3) to explore whether exist-
46 

ing processes are sufficient to meet emerging challenges to the transmission system, 

such as the development of inter-regional transmission facilities, the integration of 

large amounts of location-constrained generation, and the interconnection of distributed energy resources.’’ 

While, as a general matter, I believe that the current planning processes are 

working well, I have an open mind as to where and how there may be room for improvement in these processes. I believe that the upcoming conferences and the subsequent written comments that will be filed with the Commission will help inform 

my thinking on this matter should I be confirmed. Finally, I believe that the Commission, the states and market participants benefit from exploring all options, including the possibility of creating an interconnection-wide planning process. 

CONGESTION ON INTERCONNECTION QUEUE

Question 11. The focus on interconnecting renewable resources to the transmission grid has created significant back logs in some interconnection queues, creating additional congestion and reliability concerns. There is concern that FERC’s 

current interconnection policies do not adequately address these issues and projects 

that are not viable or not developing as rapidly as others are clogging the queues. 

How should FERC update its current interconnection policies to ensure that viable 

projects addressing the needs of all generating resources, including renewable resources, are not stuck in the interconnection queues? 

Answer. In Order No. 890, the Commission encouraged transmission providers to 

file queue reform proposals when they encounter queue problems. Additionally, the 

Commission held a technical conference on queue reform issues and issued a subsequent order on March 20, 2008, giving further guidance on its flexibility to entertain 

queue reform proposals. In the past two years, the Commission has approved major 

queue reform proposals filed by the California ISO (to address interconnection 

queue problems), the Bonneville Power Administration (to address transmission 

queue problems), Northwestern Corporation (to address transmission and interconnection queue problems), the Southwest Power Pool (to address interconnection 

queue problems) and the Midwest ISO (to address interconnection queue problems). 

It is my understanding that most if not all of these queue reform filings were made 

to address large numbers of requests from renewables that are trying to obtain service. Similarly, the Commission has demonstrated flexibility to address narrower 

queue issues by granting waivers of tariff requirements. For example, in August 

2009 the Commission granted a tariff waiver to El Paso Electric Company to allow 

it to interconnect a solar power generator that will assist it in meeting a State of 

New Mexico RPS requirement. Given these actions, I believe that the Commission 

has taken positive steps to assist industry efforts to address the queue backlog, but 

nevertheless, should continue to work with the RTOs/ISOs, other planning entities 

and stakeholders to identify additional reform proposals to move critical projects 

through the queue. 

RENEWABLE ELECTRICITY STANDARD

Question 12. In a report last year, the California Public Utility Commission noted 

that ‘‘flexible resources such as fossil peaker plants, dispatchable demand response, 

and energy storage will likely be needed to provide grid support services for intermittent renewable resources.’’ According to the CAISO’s analysis of a 20% RPS, ‘‘as 

wind generation further increases, the amount of variability will increase non-linearly. . .an increase of the RPS to 33% could more than double the integration 

problems and costs.’’ As a FERC Commissioner, how would you avoid these integration problems and associated costs if Congress enacts a federal RES mandate? 

Answer. The amount and type of ‘‘grid support services’’ needed to accommodate 

the variability of renewable resources are influenced by the Commission approved 

Reliability Standard. The ‘‘users, owners and operators’’ of the interconnected electric energy transmission network must plan for and provide sufficient ‘‘grid support 

services’’ to at least achieve the requirements of those Reliability Standards. As 

such, I would assure the costs are consistent with achieving reliable operation by 

assuring that those Reliability Standards are technically sound and necessary for 

reliability and by assuring that all resources and entities are doing their part in 

supplying the services and not requiring or using more services than are appropriate to assure system reliability. 

RENEWABLE ENERGY STANDARD

Question 13. S. 1462, the American Clean Energy Leadership Act of 2009 reported 

by this Committee and H.R. 2454, the American Clean Energy and Security Act of 

2009 passed by the House both contain new federal Renewable Electricity Stand-
47 

ards. However, S. 1462 tasks the Department of Energy with running the new program, while H.R. 2454 gives this responsibility to FERC. As a FERC candidate, I 

assume you believe FERC is the appropriate agency to manage the RES, correct? 

If so, why do you think FERC is the most effective agency to play this role? 

Answer. Yes, I believe that FERC is the appropriate agency to manage a federal 

renewable electricity standard program. Because of FERC’s experience regulating 

complicated wholesale energy markets and the electric industry, the agency has an 

unusual combination of skills, knowledge, access to data, and expertise that make 

it well suited to effectively manage a transparent national market for the sale or 

trade of renewable energy credits and energy efficiency credits. Furthermore, FERC 

has experience in administering civil penalty provisions to enforce the proper functioning of these markets. 

CYBERSECURITY

Question 14. S. 1462, as reported by this Committee, provides DOE with the authority to deal with cybersecurity threats and FERC with the authority to deal with 

cybersecurity vulnerabilities. Do you support this shared responsibility? 

Answer. I take the task of dealing with cyber security threats and vulnerabilities 

very seriously and, if confirmed, will do all I am able to make sure FERC meets 

the nation’s needs in whatever cyber security responsibilities Congress delegates to 

the FERC. 

My understanding is that the FERC Chairman supports legislation giving FERC 

authority to require actions to address existing, known cyber security threats to the 

reliability of the bulk power system and also authority to require actions to address 

future cyber or other threats to the reliability of the bulk power system if the President or his designee determines that a national security threat exists. FERC representatives also have pointed out that such authority, if limited to the bulk power 

system, would leave a gap in Federal authority to protect facilities that do not come 

within the definition of bulk power system as that term is defined in the Federal 

Power Act. 

S. 1462 would give the FERC authority to order actions to protect critical electric 

infrastructure against cyber vulnerabilities. Critical electric infrastructure is defined 

to include systems and assets used for generation, transmission or distribution of 

electric energy affecting interstate commerce that, as determined by FERC or the 

Secretary of DOE, are so vital that their incapacity or destruction would have a debilitating impact on national security, national economic security, or national public 

health or safety. S. 1462 also would give the Secretary of Energy authority to require immediate actions as needed to protect critical electric infrastructure against 

cyber security threats. If confirmed as a FERC Commissioner and if S. 1462 is enacted, I would do all I could to see that the FERC implements its authority effectively to protect against cyber vulnerabilities. 

Question 15. How can FERC work most effectively with NERC on cyber security 

protection? What guidance or direction should FERC provide to NERC on these matters? What input would you seek from industry on these issues? 

Answer. The primary means that FERC works with NERC is through the FPA 

Section 215 process. Throughout this process, FERC can direct NERC to either create or modify a cybersecurity standard that becomes mandatory and enforceable to 

all users, owners, and operators of the bulk power system. However, FERC cannot 

author or modify these standards, but must rely on an industry self-regulatory organization—the Electric Reliability Organization—to develop and propose standards 

for its approval. (The North American Electric Reliability Corporation, or NERC has 

been certified by FERC as the ERO.) These standards are developed through a consensus-based process whereby all users, owners, and operators are afforded the opportunity to provide input and then to subsequently vote on the draft standard before it is submitted to FERC for approval. In this manner, FERC works directly 

with NERC to provide both guidance and directives to create or modify the standards in order to make them more effective. When issuing a directive for a new or 

modified cybersecurity standard, FERC can and has employed the rulemaking procedure first issuing a preliminary assessment, then a notice of proposed rulemaking 

and lastly a final rule. During the process, FERC solicits, considers, and answers 

the comments of industry before issuing a final rule. 

The FPA Section 215 process however, is not adequate to protect against cyber 

or physical security vulnerabilities and threats that endanger national security. Because the standards development process is open, inclusive, and controlled by stakeholder ballot it is also non-confidential, slow, and not necessarily responsive to 

FERC’s directives. These factors make it inadequate for use when protecting national security. 
48 

SMART GRID

Question 16. Pursuant to the Energy Independence and Security Act of 2007 

(EISA), FERC is directed to promulgate rules for the smart grid once ‘‘consensus’’ 

has been reached by the collaborative on protocols being conducted by the Commerce Department’s National Institute on Standards and Technology: 

a. How do you define ‘‘consensus’’? Does it require all involved stakeholders to 

agree to the protocols in question? 

Answer. The standard definition of ‘‘consensus’’ is a general accord or agreement. 

To me, this does not imply unanimity. Thus, I do not think that all stakeholders 

involved in NIST’s process must be in agreement before FERC promulgates rules 

on smart grid interoperability standards. That said, I recognize that the question 

of consensus around smart grid standards is difficult. If confirmed, I will weigh the 

many perspectives involved when determining when or if particular standards 

should be adopted. 

b. Would FERC follow the usual notice and comment process to promulgate rules 

under this provision? 

Answer. I assume that FERC would rely on all the customary rulemaking processes when adopting smart grid standards including notice and comment procedures, as required by the Administrative Procedure Act. 

c. What would be the effect of any such rules? Do you anticipate that FERC would 

require utilities to adopt any standards or measures reflected in such rules? 

Answer. According to FERC’s Smart Grid Policy Statement issued in July, EISA 

does not give FERC authority to make any smart grid standards mandatory or to 

enforce any standards that are adopted. The Policy Statement also notes that EISA 

does not authorize FERC to direct states to implement any particular policies or 

programs, although states could on their own initiative implement and enforce any 

pertinent interoperability standards. If the FERC were to make smart grid standards mandatory, it would have to rely on authority that already exists in the Federal Power Act. I expect that FERC would weigh the importance of particular interoperability standards and the nature and scope of its jurisdictional powers when determining whether to require utilities to adopt any. 

d. Would any such standards or measures be treated, after promulgation, as reliability standards under section 215 of the Federal Power Act? For example, would 

the first level of enforcement of any such standards or measures be conducted by 

NERC, subject to FERC oversight? Or would FERC be the first line of oversight and 

enforcement? 

Answer. My understanding is that only those standards filed by NERC and approved by FERC under Federal Power Act section 215 would be treated as Commission-approved reliability standards and enforced pursuant to that provision. As is 

currently the case, NERC may enforce reliability standards, subject to FERC oversight, and the Commission may also order compliance with reliability standards and 

impose penalties on its own motion or in response to a complaint. I have not yet 

had the chance to familiarize myself with this area enough to suggest options for 

enforcement of standards that have not been approved under section 215. 

e. How would you approach the regulatory effort in Smart Grid areas where there 

are no NIST endorsed standards? 

Answer. In terms of standards development, if confirmed, I might pursue informal 

discussions with NIST about the need for additional standards and the status of the 

development of such standards. In terms of rate regulation, the approach taken by 

the FERC in its Smart Grid Policy Statement appears reasonable. There, the Commission determined to accept rate filings submitted by public utilities to recover the 

costs of their smart grid deployments during the period of smart grid standards development if (among other things) the utilities are able to demonstrate that they 

have made appropriate protections to guard against security vulnerabilities and 

stranded investments. If confirmed, I would support this method of guiding utility 

activity in the absence of technical certainty. 

f. Before consensus is reached and a rulemaking is issued, how can FERC most 

effectively coordinate with the states clearly define what is under the authority of 

the states and FERC? 

Answer. As a former state commissioner and member of NARUC, I believe that 

the NARUC/FERC Smart Grid Collaborative is an effective body for purposes of dis-
49 

cussing and coordinating the boundaries between federal and state authority in this 

area. If confirmed, I would support additional collaboration through this body. 

Question 17. On July 16, 2009, FERC released a policy statement outlining how 

the Commission intends to facilitate smart grid technologies. In particular, FERC 

found that ‘‘EISA grants the Commission the authority to adopt smart grid standards—such as meter communications protocols or standards—that affect all facilities, including those that relate to distribution facilities and devices deployed at the 

distribution level.’’ 

a. Do you agree that standards for smart grid systems are in the national interest? 

Answer. Yes, I do believe that the continued development of standards for smart 

grid devices and systems will help to further the deployment of technologies that 

promote the nation’s energy independence, offer opportunities to reduce the demand 

for electricity, and ensure a reliable and secure electricity infrastructure, among 

other goals. 

b. Do you believe that FERC has the jurisdictional authority to set appropriate 

national smart grid standards at the distribution level? What about facilities owned 

or operated by municipalities and electric cooperatives? 

Answer. EISA section 1305(d) provides that FERC shall adopt certain interoperability standards and protocols, namely those that ‘‘may be necessary to insure 

smart-grid functionality and interoperability in interstate transmission of electric 

power, and regional and wholesale electricity markets.’’ I believe this language indicates that FERC is authorized to adopt standards that apply throughout the electricity system. If this were not the case, then it is difficult to understand how interoperability could be assured, as two-way communications will cross between the 

transmission and distribution systems. The specifics of who owns or operates particular equipment do not influence the necessity for various devices and systems to 

be able to communicate. In order for interoperability standards to be effective, they 

will need to apply to any equipment involved in inter-system communication, as appropriate for each application. 

Question 18. Some in the industry would like to accelerate the Smart Grid rulemaking process. However, in comments before NARUC this past February you stated that Smart Grid should be carried out ‘‘incrementally’’ and that there will have 

to be ‘‘some type of rate impact cushion’’ to protect consumers. Please explain. 

Answer. My comments during the NARUC winter meeting were not directed toward the interoperability standards development and rulemaking process. Rather, 

these particular comments were directed toward the actual deployment of smart 

grid technologies. Even assuming that interoperability standards can be developed 

more rapidly, the question remains as to how rapidly to deploy new smart grid 

equipment that adheres to those standards, including how quickly to replace existing equipment and what the cost impact of various replacement rates might be on 

consumers. While it may sometimes be necessary to replace current, non-compliant 

equipment that still has years of remaining life with new smart grid equipment in 

order to achieve certain smart grid capabilities, we should not assume that this will 

true for every smart grid application. The costs and benefits of such replacement 

should be considered in each case. 

I believe that the FERC recognized this in its smart grid policy statement. It 

stressed the need for an appropriate migration plan to minimize the stranded costs 

of legacy systems as they are replaced with smart grid systems. In other words, the 

actual deployment of smart grid equipment must be carried out in a thoughtful 

manner that balances the costs and benefits to consumers. Accelerating the standards development process will certainly help with that effort, but it does not eliminate the need for a thoughtful approach to actual smart grid deployment decisions. 

HYDROPOWER

Question 19. Do you consider hydropower to be a renewable resource? Please state 

your views on the hydropower resource and its contribution and value to the nation’s energy mix. 

Answer. Yes, I believe hydropower is a renewable resource, although I believe 

that limiting its use in meeting a federal renewable energy requirement is a decision for the Congress to make. In fact, it is the largest renewable resource in the 

U.S., providing about 8 percent of the nation’s electricity. Analysts say that capacity 

can double in 30 years, rivaling the growth predicted for the nuclear power industry 

and at a fraction of the cost. The Federal Energy Regulatory Commission is review-
50 

ing more than 30,000 megawatts worth of new projects, equal to a third of all existing hydropower capacity and big enough to power the New York metropolitan area. 

Question 20. The hydropower industry is undergoing a transformation. Recent reports, as well as permit and license applications at the Commission, demonstrate 

that thousands of megawatts of this clean, emission-free power can be tapped from 

a variety of sources such as capacity additions and efficiency improvements; pumped 

storage; small hydro; powering existing non-powered dams; and ocean, tidal and 

instream hydrokinetics As the agency responsible for permitting and licensing hydropower projects, what can FERC do to promote and enact policies supporting 

hydropower’s development potential? 

Answer. The FERC has been proactive in assisting in the development of all types 

of hydropower projects to assure the environmentally acceptable growth of this renewable resource. FERC has been especially active in the hydrokinetic area. Since 

the Commission’s first technical conference to discuss hydrokinetic challenges in 

2006, staff has responded by: (1) discouraging the ‘‘hoarding’’ of permits that would 

prevent timely project development; and (2) developing and implementing an expedited licensing process for hydrokinetic pilot projects. 

Because the complexity of the regulatory environment for hydrokinetic projects, 

as well as the lack of information regarding their environmental effects, were identified as challenges to their orderly development, the Commission has worked to 

reach out to other agencies to better define relationships. In 2008, Memoranda of 

Understanding (MOU) to better coordinate siting in state waters were signed with 

both Oregon and Washington. In 2009, the Commission and the Department of Interior signed an MOU clarifying the jurisdictional responsibilities of each agency and 

committing to work together to streamline the authorization process for projects on 

the Outer Continental Shelf and both staffs have produced a guidance document 

with details on how the agencies will implement the MOU. Commission staff has 

met repeatedly with representatives from the Army Corps of Engineers, the U.S. 

Coast Guard, the U.S. Navy, the U.S. Committee on the Marine Transportation System, EPA, and the National Oceanographic and Atmospheric Administration, concerning programmatic concerns as well as project-specific procedures. The Commission has also participated in the international effort to identify environmental effects and solutions. FERC and MMS staffs are co-chairing, on behalf of the Department of Energy, an International Energy Agency-Ocean Energy Systems annex that 

is working to develop a database of environmental information. 

In addition to its extensive work on hydrokinetic policy, the Commission has continued to support the development of small and incremental hydro. The FERC 

website contains guidance on small hydro development and provides a hotline for 

applicants. The Commission has also published an informative brochure targeting 

developers of small hydro projects. 

Finally, if confirmed, I would continue to promote the Commission staff’s opendoor policy with regard to maintaining a dialogue with the hydro industry and other 

stakeholders. Staff periodically provides outreach events in states and for specific 

projects, meets with potential developers, continually updates the public website, 

and recently published a citizens’ guide to hydropower licensing. The Commission 

should continue to proactively communicate with the public and work to address 

challenges in new hydropower development. 1. 

Question 21. As we seek to increase renewable power generation, one question 

that has been raised is the ability to integrate variable sources of power on the grid. 

What are your thoughts on these integration issues and the role both conventional 

hydropower and pumped storage have to play in addressing them? 

Answer. Conventional hydropower and pumped storage power have characteristics 

that can accommodate the variable characteristics associated with renewable resources. They are more flexible than most conventional generation in their ability 

to start quickly, have good governor response and can increase their output quickly 

to accommodate rapid increases or decreases in the differences between demand and 

resources for any reason. 

Question 22. This year, FERC signed an MOU with the Minerals Management 

Service setting forth an agreement on a process of lease sales, permitting, and licensing of hydrokinetic projects on the Outer Continental Shelf. Do you believe any 

additional follow-up by the agencies is necessary in order to ensure that this process 

works smoothly and provides energy developers the certainty needed to move forward on these projects? Can FERC do anything more under its authority to aid this 

developing industry? 

Answer. I have not had the opportunity to familiarize myself with this matter in 

great detail. However, if confirmed, I will be open to considering proposals to aid 

the development of the new hydrokinetic industry. Also, it is my understanding that 

the staffs of the MMS and FERC have developed a guidance document explaining 
51 

to the public how the two agencies’ processes for regulating hydropower projects on 

the Outer Continental shelf will interrelate, and that this document is available on 

the Commission’s website. 

Question 23. In Alaska we have nearly 250 sites that hold good potential for conventional hydroelectric development. But there appears to be growing interest in 

companies and municipalities to file for preliminary licenses that allow holders 

three years to investigate the feasibility of projects. Do you have any feeling whether that period should be expanded to perhaps 5 years to give holders more time to 

advance to the second, construction phase for hydro projects. Do you have an opinion on whether three years is too long, too short, or about right for preliminary licenses? I ask that because of a current filing issue before the commission involving 

a license for a part of the potential Thomas Bay hydro project near Petersburg, 

Alaska. 

Answer. The Federal Power Act (FPA) limits the maximum term of a preliminary 

permit to three years. I understand that many developers of conventional and 

hydrokinetic projects are not able to perfect a license application prior to the expiration date of their 3-year preliminary permit. This introduces uncertainty for these 

developers as to whether they will be successful in maintaining priority of application for a license by obtaining a subsequent preliminary permit while they complete 

their license application. This can have a negative effect on the ability to finance 

the project. The FPA also requires the Commission to give preference to municipal 

entities when granting preliminary permits. This fact adds additional uncertainty 

as to whether a private developer will be successful in obtaining a subsequent preliminary permit. Under the Commission’s Integrated Licensing Process (the current 

default licensing process), it could take more than the three years afforded by a preliminary permit to perfect an application for license, especially if two years of studies are necessary. For that reason, a longer permit term may be warranted. 

DEMAND RESPONSE

Question 24. How would you define the term ‘‘wholesale demand response’’? Isn’t 

all demand response really retail in nature, since it involves reductions in consumption by end users of electricity? If you do believe demand response is essentially retail in nature, do you think FERC ought to coordinate its demand response policy 

with those of the states? 

Answer. I agree that ultimately most demand response is retail in nature. However, it is also the case that a utility that is a wholesale buyer of power can reduce 

its own demand for the energy purchased from others. It can do this in at least two 

ways. One, it can call on its own retail customers to reduce their demand, which 

we would call retail demand response. Second, if it has electric generation of its 

own, it can use more of its own generation when this costs less than buying from 

others in the wholesale market. The second way involves no demand response by 

a retail customer. Either way, the utility’s action reduces its demand for energy in 

the wholesale market, which is what I call a wholesale demand response. The term 

also is often used for demand response offered by both wholesale and retail customers into organized ancillary services markets and capacity markets. 

Wholesale demand response can also refer to other actions. If the utility is in an 

RTO or ISO, it may bid that wholesale demand response into the RTO’s or ISO’s 

organized market and be compensated according to the wholesale market rates approved by the FERC. Alternatively, a third-party curtailment service provider may 

aggregate the demand responses of that utility’s retail customers and bid this demand response into the FERC-regulated market. Wholesale demand response may 

also refer to participation by either retail or wholesale power buyers in various demand response programs offered by RTOs and ISOs and approved by the FERC, including the emergency and economic load response programs. 

Regardless of whether all demand response is considered retail in nature, I believe that it is important for the Commission to coordinate its demand response policies with the states. Because many demand response programs can be affected by 

both state and federal jurisdictions, I support the NARUC-FERC Demand Response 

Collaborative established by the FERC and the National Association of Regulatory 

Utility Commissioners as a forum to discuss common demand response issues. 

Question 25. When you were the Chairman of the Iowa Utilities Board (IUB), the 

IUB issued some orders granting waivers for a requirement that utilities inform 

electricity customers on the importance of peak usage reduction. According to the 

IUB, ‘‘additional language might increase confusion and send a mixed message to 

customers.’’ 

a. As a FERC Commissioner, how would you avoid confusing customers and educate the public on the benefits of peak demand reduction? 
52 

Answer. During the time I was Chairman, the Iowa Utilities Board (IUB) granted 

to MidAmerican Energy Company (MidAmerican) temporary waivers of 199 IAC 

20.11, which provides that each electric utility is to inform its customers of the significance of reduction in the consumption of electricity during hours of peak demand. The IUB found that language in the peak alert notice regarding delaying the 

need to build generating facilities or buy additional power could be confusing to customers in light of the publicity that surrounded MidAmerican’s generation investments, which included coal, gas, and wind facilities. In each of its orders on the subject, the IUB encouraged MidAmerican to continue to educate customers about the 

benefits of energy efficiency programs that conserve energy throughout the year, not 

just at times of peak usage. With each waiver filing made by MidAmerican the company included examples of communications to customers regarding various energy 

efficiency programs, including the importance of energy efficiency efforts throughout 

the year. MidAmerican had and continues to have an extensive program of energy 

efficiency measures offered to customers that were approved by the IUB in 

MidAmerican’s energy efficiency plan, with ongoing monitoring and evaluation efforts by the IUB that included periodic reports detailing the success of each measure. 

FERC is currently engaged in the development of the National Action Plan on Demand Response. According to the statute directing this Plan, an important component of the Plan is the identification of requirements for implementation of a national communications program that includes broad-based customer education and 

support. I believe a principal goal of the communications program should be to educate the public about the benefits of peak demand reduction. 

b. How would you avoid sending mixed messages when rolling out new technologies and rate designs while also encouraging conservation and efficiency? 

Answer. I believe that to meet the future energy needs of the American consumer 

and the U.S. economy while coping with climate change at a reasonable cost, we 

need to use all available cost-effective resources, including conservation and energy 

efficiency together with various new technologies and rate designs. If confirmed as 

a FERC commissioner, I would make it clear that these programs are not at odds 

but are complementary and highly necessary for our energy future. 

c. How can FERC encourage consumer behavioral changes and technology adoption that could decrease peak demand? 

Answer. In several ways, the FERC has and can in the future encourage consumer behavioral changes and technology adoption that could decrease peak demand. FERC has been engaged for several years in efforts to remove barriers to demand response in the markets it regulates. One way to encourage customer behavioral changes and technology adoption is to send accurate price signals. In its recent 

Order No. 719, FERC took a number of steps to ensure that the wholesale prices 

accurately reflect the value of energy during periods of operating reserve shortages. 

FERC has also called for comparability between generation and demand resources 

in the reliability standards it has approved. Also, at the direction of Congress, it 

produces a comprehensive informational report each year on demand response and 

advanced metering. Recently, also at the direction of Congress, the FERC issued a 

National Assessment of Demand Response Potential and is now in the process of 

producing a National Action Plan on Demand Response. The Plan is required by law 

to identify actions to achieve demand response goals by (1) identifying requirements 

for technical assistance to States to allow them to maximize the amount of demand 

response resources that can be developed and deployed; (2) identifying requirements 

for implementation of a national communications program that includes broad-based 

customer education and support; and (3) identifying analytical tools, information, 

model regulatory provisions, model contracts, and other support materials for use 

by customers, States, utilities and demand response providers. 

CLIMATE CHANGE

Question 26. The House-passed climate legislation would give FERC the oversight 

responsibility for trading in greenhouse gas emission allowances. Do you support 

this provision? 

a. If so, why do you think FERC is the appropriate and most effective agency to 

play this role? 

b. Will FERC require a significant increase in personnel and spending authority 

to oversee and regulate the allowance trading markets? 
53 

Answer. FERC has the benefit of many years of experience and expertise in regulating complex markets and if given this responsibility would carry it out effectively. 

Whichever agency is delegated this authority will need significant personnel and 

spending authority to oversee and regulate the allowance-trading market. 

Question 27. In comments before NARUC this past February you stated that there 

is a ‘‘tremendous disconnect between the ability to achieve carbon reduction and the 

means to do it.’’ You further cautioned that we ‘‘shouldn’t put an emphasis on carbon reduction at the expense of the customer’s bill.’’ Please elaborate. 

Answer. I believe there is a lot of misunderstanding about the current technology, 

our capacity to fully integrate renewable energy onto the grid, our ability to sequester carbon, our ability to store energy and more. These and other technological possibilities offer great hope to achieving long term carbon reduction but they will take 

varying degrees of time and investment to achieve full utilization. I believe there 

is still a disconnect for a lot of people in understanding what is possible now and 

what will be possible in the near and long term future. I am optimistic in America’s 

ability to meet the challenge of reducing our carbon output to sustainable levels. We 

also have to be vigilant at minimizing the costs to consumers while at the same 

time setting high but achievable goals, adequately funding research and development of new carbon reduction technologies, and maximizing efficiencies through 

such efforts as good transmission planning, energy conservation, demand response, 

energy efficiency and more. 

MARKET MANIPULATION

Question 28. S. 1462, as reported by this Committee, provides ‘‘cease and desist’’ 

authority to FERC to invalidate a transaction if it determines that an entity is manipulating, has manipulated, or is attempting to manipulate the wholesale electric 

energy markets. In some cases, the Commission can take such action without providing prior notice and an opportunity for hearing. There is concern that providing 

FERC with such broad, unrestrained authority could deny due process and chill 

competitive electricity markets. Do you believe FERC needs such new authority or 

is the current authority sufficient to deal with energy market manipulation? 

Answer. Whatever authority Congress delegates to FERC to enforce a fair wholesale electric Energy market should be exercised with great respect for due process 

and recognition of the impact it may have on the competitive electricity market. I 

believe the cease and desist authority being contemplated is a valuable tool to assist 

the Commission in ensuring that markets are well-functioning and free of market 

manipulation. FERC’s current authority to prohibit market manipulation does not 

currently enable FERC to prevent a suspected manipulator from dissipating assets 

during the pendency of an investigation. FERC’s inability to do that may ultimately 

result in the manipulator escaping with its gains. 

ORGANIZED MARKETS

Question 29. What is the appropriate path forward with respect to organized and 

bilateral markets? Can and should they co-exist or should all utilities ultimately be 

in organized markets? 

Answer. I believe that organized and bilateral markets can and should co-exist. 

As long as FERC continues to work to improve competition in both organized and 

bilateral markets, through such efforts as open-access transmission tariff reform, 

market-based rate reform, and its Competition Final Rule (Order No. 719), there is 

no reason why FERC should attempt to impose a single market structure on all regions. Both organized and bilateral market structures are capable of supporting 

competitive markets. 

Question 30. Do you think that FERC’s oversight of electricity markets is sufficient to ensure that the wholesale electric rates meet the ‘‘just and reasonable 

standard’’ of the Federal Power Act? If so, what is the basis for this conclusion? If 

not, how could FERC do a better job? 

Answer. Yes, I believe that FERC’s oversight of electricity markets is sufficient 

to ensure just and reasonable wholesale electric rates. In addition to recently 

strengthening competition in the electric power markets through its Competition 

Final Rule issued in 2008 (Order No. 719) and its 2007 order to prevent undue discrimination and preference in transmission service (Order No. 890), FERC now more 

closely monitors these markets for anomalous market behavior. 

Question 31. Do you think that, based on currently available data, the wholesale 

electricity markets operated by Regional Transmission Organizations (RTOs) are 

achieving net benefits for consumers? If so, what is the basis for this conclusion? 

If not, are there actions, other than those identified in Order 719, which FERC can 

take to better protect consumers in the RTO markets? 
54 

Answer. I have not had the opportunity to work directly with all the RTOs, therefore I am currently unable to speak authoritatively about the benefits of each. However, I have had the opportunity to work with the Midwest ISO. Having served on 

the Board of Directors of the Organization of Midwest ISO States from 2005 through 

January of 2009, I am familiar with the benefits achieved through the Midwest ISO 

operations. I would like to limit my comments to their benefits, but I assume that 

other RTOs can demonstrate similar benefits (however they may be limited by other 

factors such as the scale of the organization). 

For example performance measures for Midwest ISO would indicate the following: 

1. Improved reliability through reductions in both the average size of outages 

and the average duration of outages. The systems developed by the Midwest 

ISO exceed the North American Electric Company (NERC) standards. 

2. Increased economic efficiency in the commitment of generation units and 

dispatch of energy by combining 23 individual regions into one single region. 

3. Improved dispatch of support services such as regulation, operating reserves and supplemental reserves. The formation of the Midwest ISO along with 

the implementation of an Ancillary Services Market allowed the Midwest ISO 

to improve the dispatch of these services. 

4. Investment in generation has been deferred because the scale and geographic diversity of the Midwest ISO has enabled the reserve margin to be 

about 2.7% less than what it would have been without the Midwest ISO. 

5. More efficient regional transmission planning has been implemented. 

Question 32. Last September, the Government Accountability Office released a 

study finding, among other things, that FERC ‘‘has not conducted an empirical analysis to measure whether RTOs have achieved these expected benefits or how RTOs 

or restructuring efforts more generally have affected consumer electricity prices, 

costs of production, or infrastructure investment. . .’’ FERC has since reported that 

it is working on developing standardized performance measures for RTOs. What do 

you see as the most critical measures of success for these markets? 

Answer. While the standardized measures are under development, in my opinion, 

the most critical measures of success for these markets are as follows: (1) customer 

benefits, in particular reduced customer costs; (2) reliability, specifically long-term 

reliability as measured by increasing capacity available for peak load conditions and 

short-term reliability as measured by no violations of NERC or regional reliability 

standards and success in implementing tools such as security constrained economic 

dispatch, security constrained unit commitment, state estimators and rapid response protocols for system emergencies; (3) improved system efficiency and diversity as measured by increased transmission flows, efficient dispatch, increased plant 

availability, and increased transmission capacity additions, interconnections and 

MW of renewable and demand resources added; and (4) increased competition as 

measured by new resources and new facilities being added to RTO markets. If confirmed, I look forward to reviewing what is developed by the FERC staff and working with my colleagues to develop effective measures. 

Question 33. Do you think the indicators provided by the RTO market monitors 

in their annual reports are adequate measures of the competitiveness of the wholesale electricity markets? If not, what improvements could be made to these reports? 

Answer. Yes, I think that the indicators used by the RTO market monitors are 

adequate for evaluating RTO/ISO market competitiveness. The RTO market monitors provide extensive data and analysis on the competitiveness of wholesale electric markets in their annual reports, by looking at, for example, ease of entry for 

new resources, price trends, transmission additions, and the liquidity of the market, 

among many other indicators. 

Question 34. Do you think that there is an adequate level of transparency in the 

pricing and other relevant data from the electricity markets, especially those operated by RTOs? 

Answer. FERC has made efforts to increase the transparency of electricity markets including RTO markets. Currently, prices for all power sales within the Commission’s jurisdiction are reported quarterly to the Commission and available to the 

public, and all RTOs post location-specific prices for the public on an hourly basis. 

FERC has also recently improved transparency in regional markets through reforms 

to its Open Access Transmission Tariff. FERC is also in the process of implementing 

Order No. 719 to increase transparency with respect to demand response and longterm power contracting. Whether these efforts are providing an adequate level of 

transparency, if confirmed, is a topic I will consider closely as I become more familiar with the numerous data resources available. 
55 

Question 35. What is your assessment of the success of pricing incentives in the 

RTO markets, such as locational pricing differentials, to spur infrastructure development and address transmission congestion? 

Answer. The organized energy markets in most RTOs rely on Locational Marginal 

Pricing (or LMP), which is a system that allows prices to vary at different locations 

and at different times to reflect the market conditions and costs of meeting demand 

in those areas. The LMP system sends price signals to market participants regarding where generation resources are most needed, where reductions in demand are 

most valuable, and where transmission constraints are the most severe. The transmission planning processes employed by the RTOs considers the congestion price 

signals in developing transmission expansion plans. Of course, the ability to pursue 

upgrades identified in those transmission expansion plans would require a number 

of regulatory approvals in the states that they traverse. So, while the price signals 

sent by the RTOs’ markets are an important factor in encouraging efficient transmission expansions where they are needed, they alone are not sufficient to develop 

infrastructure; other factors also are important. 

FERC AUTHORITIES

Question 36. S. 1462, the American Clean Energy Leadership Act of 2009 reported 

by this Committee and H.R. 2454, the American Clean Energy and Security Act of 

2009 passed by the House of Representatives, provide FERC with extensive new authority in areas such as renewables, energy efficiency, demand-side management, 

retail consumer interests and climate change. If confirmed, how do you intend to 

reach out to the states to help promote regulatory certainty? 

Answer. As a former President of the Organization of MISO States and previously 

active member of NARUC, I understand the value of federal coordination with 

states to promote regulatory certainty. The recent Smart Grid Collaborative, a joint 

effort between NARUC and FERC to develop the criteria for establishing preconditions under which Smart Grid projects would be funded through the American 

Recovery and Reinvestment Act of 2009, is an excellent model of a collaborative effort between the federal government and the states that will help to provide regulatory certainty. If confirmed, I will get involved in or encourage additional collaborative efforts, communications, and outreach projects with states for any new areas 

of FERC authority. 

OCEAN MARINE RENEWABLE ENERGY

Question 37. Another hydro power issue is how to proceed to encourage the development of marine hydrokinetic power. FERC and the Minerals Management Service 

signed an MOU this spring to work out permitting issues between your two agencies 

for ocean wave, tidal and current projects. Alaska, of course, has dozens of great 

sites for such projects. If you are aware of the terms of the agreement, what is your 

opinion about it? Will it work in your view to permit enough permitting and siting 

certainty to allow projects to be financed and proceed in a timely manner? If not, 

what would you as a commission like to see done to further marine renewable energy in the future? 

Answer. I am not familiar with the details of the document, but am generally 

aware that it reflects an agreement between Chairman Wellinghoff and Secretary 

of the Interior Salazar that the Commission and the Minerals Management Service 

can without conflict exercise their respective responsibilities with respect to the development of appropriate hydrokinetic projects on the Outer Continental Shelf. I 

support this outcome. If confirmed, I will become more familiar with this issue. 

ALASKA GAS PIPELINE PROJECT

Question 38. The biggest potential energy project on the horizon in the country 

is construction of an Alaska natural gas pipeline project. FERC back in 2005 issued 

an order to permit in-state use of the gas, offtake points, and to deal with pipeline 

expansion issues. At this time I don’t see the need for additional FERC rulings on 

those issues. But for this project to proceed, FERC will have to devote considerable 

staff and effort to rapidly processing any application for a line certificate, perhaps 

after next year’s open season periods end. Do you commit as a commissioner to do 

everything possible to complete timely review of a certificate request for any project 

that successfully finishes an open season process? Do you have any ideas on any 

changes Congress should be making either in the loan guarantee program or in a 

regulatory way to further the chances for this project? 

Answer. I commit to doing whatever I can to ensure the completion of timely review of any application for an Alaska natural gas transportation project that is filed 

with the Commission. It is my understanding that in the Alaska Natural Gas Pipe-
56 

line Act of 2004, Congress mandated that FERC issue a final environmental impact 

statement (EIS) no later than 18 months after receipt of a complete application for 

an Alaska natural gas pipeline project, and that FERC issue a final order no later 

than 60 days after issuance of the EIS. I am confident that FERC and its staff will 

make every effort to meet these deadlines. 

LNG

Question 39. On January 15th of this year FERC issued a final environmental impact statement for an application to build a liquefied natural gas facility in Sparrows Point, Maryland. This decision came nearly 2 years after the application was 

filed with FERC. The State of Maryland has appealed this decision and requested 

a rehearing of the decision. What is your position on matters of upholding or overturning prior FERC decisions such as this one? 

Answer. If confirmed as a Commissioner, my obligation would be to decide all 

matters based on the record before the Commission, applicable legal standards, and 

appropriate policy considerations. I would vote to affirm or overturn decisions made 

prior to my joining the Commission based on an objective consideration of these 

matters. 

Question 40. Since the passage of the Energy Policy Act of 2005, only one LNG 

application has been granted a final environmental impact statement under the 

rules promulgated as a result of this law. The EPACT 2005 process was designed 

to front load the design and review of facility plans. This committee and the Congress also recognized the need to expedite review of those applications. Since that 

exhaustive process has taken over 2 years to date and is currently pending rehearing, what is your view on a reasonable duration of time before a rehearing should 

be completed? 

Answer. Because the time needed for the Commission to act on rehearing in a 

given case will depend on the extent and the complexity of the matters raised on 

rehearing, and because I do not yet have extensive experience with the Commission’s review process, I cannot suggest a generally applicable deadline for the Commission to act on requests for rehearing. However, I do believe that the Commission 

should act as quickly as possible, and it is my understanding that the Commission’s 

policy is to do that. 

RESPONSES OF JOHN R. NORRIS TO QUESTIONS FROM SENATOR WYDEN

Question 1. The energy bill recently reported out of the Senate Committee on Energy and Natural Resources expands FERC’s authority with regard to the nation’s 

electric grid. Given your experience in leading the utilities in the State of Iowa to 

modernize the electric infrastructure and to build additional sources of renewable 

energy, what do you believe FERC’s role should be in fostering the modernization 

of the electric grid by the power utilities? 

Answer. FERC should take a leadership role to foster modernization of the electric 

grid in the following ways: (1) create better federal/state/industry coordination to 

implement new energy efficient technologies, (2) accommodate the transmission 

needs of all generation types, including renewables, (3) encourage additional demand-side management programs, and (4) continue to emphasize planning to enable 

expansion of the interstate transmission system. 

Question 2. What will you do as FERC Commissioner to encourage the use of innovative solutions for electric grid improvements and modernization? Specifically 

how will you promote the use of storage technologies to integrate intermittent 

sources of renewable energy, such as wind and solar, into the grid; alleviate the 

need for additional generation through peak shaving; and minimize the need for additional transmission capacity? 

Answer. As you mention, there are many potential benefits of bulk energy storage, 

from supporting the integration of intermittent renewable generation to enabling a 

more efficient use of existing generation and transmission facilities. It is important 

to recognize, moreover, that there is a wide array of storage technologies that perform different functions and, as a result, may be able to provide existing services 

in a better way. For example, there is growing evidence through pilot projects that 

fly-wheel energy storage devices and utility-scale batteries may be better suited 

than traditional generation to provide certain ancillary services like frequency regulation. However, most current regulatory practices and structures were designed 

during a time when these new storage technologies were simply not available. As 

a FERC Commissioner I will strive to identify and seek to address barriers that unduly hamper the development of new storage capacity, in all of its useful forms. Specifically, I will support reforms that enable all resources, whether supply-side or de-
57 

mand-side, to participate on a comparable basis in the energy markets regulated by 

the Commission. 

Question 3. As energy storage systems are added into the electric grid infrastructures, some issues have arisen as to whether the costs of these storage systems can 

be included in transmission rates or whether they should be treated as generation 

assets. Do you believe that the costs of storage systems should be allowed as part 

of the electric grid infrastructure? If so, under what circumstances or conditions 

should they be allowed? 

Answer. Given the variety of storage systems, such as short-term flywheel systems and long-term pumped storage systems and their different possible uses, I believe that storage systems need to be evaluated on a case-by-case basis when determining whether they should be included in transmission rates or be treated as generation assets. If confirmed, I will pay close attention to the complicated issue of 

how costs are allocated for storage systems used to sell electricity in energy markets. 

Question 4. FERC recently issued a report assessing the potential for demand-response to reduce peak demand (A National Assessment of Demand Response Potential, FERC Staff Report, June, 2009). The only new technologies that were considered in the report were advanced metering and direct load control. Based on this 

report, FERC must now create a National Action Plan. 

Answer. The FERC staff report, National Assessment of Demand Response Potential (Assessment), analyzed quantitatively the potential for realizing the nation’s demand response potential using advanced metering and direct load control. It did recognize, in Chapter IV, that technologies other than advanced metering and direct 

load control may have significant potential to reduce demand. These technologies include emerging smart grid technologies, distributed energy resources, targeted energy efficiency programs, and technology-enabled demand response programs with 

the capability of providing ancillary services in wholesale markets (and increasing 

electric system flexibility to help accommodate variable resources such as wind generation.) However, the demand response achievable with these other technologies 

was not assessed quantitatively because there was not sufficient experience with 

these resources to estimate their potential reliably. However, the Commission has 

considered and should continue to consider opportunities to allow these other technologies to prove themselves. 

Question 5. Since the scope of this report was somewhat limited, thus limiting its 

range of solutions, what will you do as a Commissioner to ensure that the National 

Action Plan, which will set the course of action for the next 5 to 10 years, has a 

more forward-looking scope? 

Answer. If confirmed as a FERC Commissioner, I will pursue opportunities to 

allow a broad range of demand response technologies to prove themselves. Nothing 

in section 529 of the Energy Independence and Security Act of 2007 (EISA) requires 

the Commission to limit the scope of its National Action Plan on Demand Response 

to the technologies identified in the National Assessment. Further, in forming the 

Action Plan, the Commission should—and I understand has already begun to—solicit and accept input from a broad range of industry stakeholders, including proponents of all demand response technologies. If confirmed, I would support that approach. 

Question 6. What will you do to ensure that the Demand Response National Action Plan makes recommendations that new technologies be considered for their potential in alleviating peak demand as well as providing increased reliability, specifically what will you do as a FERC Commissioner to include renewable sources of energy and storage systems in solutions that reduce the peak demand for electricity? 

Answer. If confirmed as a Commissioner, I will ensure that the recommendations 

of the Demand Response National Action Plan consider new technologies—such as 

smart grid applications, electric storage technologies, and energy efficiency programs—based on their potential to reduce peak demand in a cost-effective manner. 

Reliability is paramount, however, as the costs to the nation of a major blackout 

are huge and long-lasting, so that every technology should be required to be fully 

tested, cybersecure, and maintain its performance throughout a reasonable performance life in a reliable manner. If confirmed, I will endeavor to provide consumers 

with the opportunity to select from a full range of resources that best meet their 

overall goals and energy needs by ensuring that all resources, including renewable 

sources of energy and storage systems, are able to be considered if they are reliable. 

Question 7. Although statutorily authorized to establish an Office of Public Participation (16 USC § 825q-1), FERC has never established such an office. This office 

would coordinate assistance to the public for people who wish to intervene or participate in matters before the Commission. Because the office would also provide 

compensation for fees of attorneys and expert witnesses, it would serve to let other 
58 

voices be heard. Do you agree that FERC should establish the Office of Public Participation? 

Answer. Participation by the public and stakeholders is a critical part of the 

FERC decision-making process, and is consistent with FERC’s responsibility under 

the Federal Power Act to protect the public interest. If confirmed, I will look into 

ways, including the possible establishment of the Office of Public Participation, to 

ensure that the public has sufficient and appropriate participation in FERC processes. Question 8. If confirmed, what steps will you take to help ensure that the office 

is created and properly staffed? 

Answer. If confirmed, I will carefully evaluate whether the Office of Public Participation should be established and, if so, how that office should be structured and 

staffed to provide effective assistance to interests that may be underrepresented before the Commission. Specifically, if the Office of Public Participation is established, 

I will examine whether the office staff should include attorneys, technical and financial analysts, and/or engineers. 

Question 9. What additional statutory authority, if any, do you believe the Commission would require to ensure that all of FERC’s jurisdictional responsibilities for 

electricity, natural gas, and oil pipelines were covered by the Office of Public Participation? 

Answer. Participation by the public and stakeholders is a key part of the FERC 

decision making process. If confirmed, I will look into whether FERC has the necessary authorities to ensure sufficient and appropriate participation by the public 

in the FERC process. 

Question 10. FERC insists, as a matter of policy, that even when multiple natural 

gas projects are being proposed to serve the same market it need not determine 

which of the projects are actually needed to serve the market, or which would best 

serve that market. In Oregon, three separate LNG terminals and two pipelines from 

the Rocky Mountains have all been proposed and are currently being permitted. The 

quantity of gas proposed to be delivered by these projects dwarfs the actual amount 

of gas that can (1) be used in the Northwest, and (2) can even be transported in 

the existing interstate pipelines to which they will connect. Why shouldn’t FERC 

look at which projects are truly needed, and which will, in fact, best serve that market? 

Answer. The projects in Oregon that you refer to are currently pending before 

FERC, so it would not be appropriate for me to comment on those specific projects. 

To date, the Commission has taken the position that its role is to determine whether a proposal is environmentally acceptable, safe and secure, and to approve only 

those projects which are found to be in the public interest. Ultimately, the market 

and the customers of that project will decide whether the projects are commercially 

viable enough to move forward. While I agree generally with the notion that markets largely will decide which of several projects might ultimately be built, I also 

believe that the Commission could take steps to better understand the cumulative 

effects of multiple projects and factor that understanding into its decision process. 

Question 11. In response to questions for the record during the Committee’s 2005 

hearing on LNG permitting, the former Director of the Office of Energy Projects testified that ‘‘The Commission is supportive of competition within the energy industry 

and of the idea that the market drives infrastructure development. Past experience, 

particularly since the restructuring on the gas industry following Order No. 636, has 

demonstrated that market forces can serve the same end as a competitive or 

‘‘Ashbacker’’ hearing. Where the Commission approves multiple projects to serve a 

similar market, only an economically viable project will actually be built, i.e., only 

where customer commitments ensure new service will fulfill a genuine need.’’ This 

continues to be the Commission’s policy. How is this policy consistent with the obligation of the Commission to make an affirmative finding of public convenience and 

necessity under the Natural Gas Act? Do you agree with this policy that competitive 

or ‘‘Ashbacker’’ hearings need never be conducted where multiple projects are proposed for a given market? Are there circumstances where you believe that it is ever 

appropriate for the Commission to conduct competitive or ‘‘Ashbacker’’ hearings 

where multiple projects are being proposed to serve a single market? If so, when? 

Answer. I do believe that the market can be an effective arbiter in selecting between competing energy infrastructure projects. Consumers are in the best position 

to decide whether, and under what conditions, they will support a given project. I 

do not think that it is necessarily inconsistent with the Commission’s obligation to 

make a finding that a proposed project is consistent with the public convenience and 

necessity if, after ensuring that proposed projects meet exacting safety and environmental standards, the Commission allows demand to determine whether one or 

more competing projects has the public support, and thus the financial wherewithal, 
59 

to be built. That said, I do not understand it to be the Commission’s policy that an 

Ashbacker hearing is never appropriate, nor do I believe that to be the case. Rather, 

I think that Ashbacker hearings are one of the regulatory tools that the Commission 

may elect to use. I cannot identify the specific circumstances in which I would deem 

an Ashbacker hearing to be the best method for dealing with competing energy infrastructure projects, but I will have an open mind on the matter. 

RESPONSES OF JOHN R. NORRIS TO QUESTIONS FROM SENATOR BARRASSO

The Energy and Natural Resources Committee approved legislation that expands 

FERC’s eminent domain authority. It allows FERC to override State rejections of 

proposed transmission lines. 

Question 1. Do you believe FERC should have the authority to override a State 

rejection of a transmission proposal? 

Answer. Siting of interstate transmission lines is often a very contentious process 

at the state level. There are a variety of reasons for a state’s rejection of a transmission proposal including, but not limited to, local opposition and parochial interests. In the Energy Policy Act of 2005 Congress determined that it is in the national 

interest to site, build, and maintain a robust interstate electric transmission system 

to ensure a secure and reliable supply of electricity and integrate renewable energy. 

FERC has the necessary expertise to review and make national public interest determinations for electric transmission projects, since the Commission has extensive 

experience successfully siting linear infrastructure projects under the Natural Gas 

Act. 

In the case of transmission siting, interstate benefits must be carefully considered 

when siting decisions are made. These include consideration of whether the line is 

needed to relieve congestion, improve system reliability, access renewable generation, or meet growing energy demand. Some states will not (or cannot) take into account these regional or national benefits when making a siting decision. Accordingly, it is quite probable that a single state could prevent construction of a needed 

interstate transmission project by simply denying approval within its state borders. 

Authority to override a state’s rejection of a transmission proposal does not guarantee that a particular proposal would be approved by FERC. The Commission 

could also deny the same project. Under FERC’s siting authority and permit review 

process, consideration of an application before the Commission requires a careful 

evaluation of all stakeholders’ interests and concerns, including the record supporting a state’s public interest determination. 

Question 2. Do you believe Washington is better qualified to make transmission 

siting decisions than State and local officials? 

Answer. States are best qualified to make certain transmission siting decisions 

particularly for intrastate proposals, and it should be the Commission’s preference 

that states retain primacy in siting such transmission projects. However, it has 

proven to be a more daunting challenge for states to make siting decisions on interstate transmission facilities due to opposition or lack of statutory authority to consider regional or national benefits when making public interest determinations. In 

those instances, FERC’s expertise and experience in making national public interest 

determinations could better facilitate the siting of needed interstate transmission 

projects. 

RESPONSES OF JOHN R. NORRIS TO QUESTIONS FROM SENATOR SHAHEEN

I was pleased to read in your testimony about your commitment to containing 

costs in order to protect consumers. I wholeheartedly agree with this goal. As we 

discussed in our meeting earlier this week, a key issue before the FERC regards 

the approval of favorable return on equity incentives when constructing new transmission lines. 

While I agree that improvements to our nation’s transmission system are necessary to ensure reliability, connect renewable energy and make smart grid improvements; I am troubled by what some see as a prolific use of rate incentives by 

the FERC for new transmission projects. 

In EPAct 2005, Congress authorized the FERC to establish higher incentive-based 

rate treatments for new transmission. FERC finalized its rule to provide for these 

incentive rates to encourage improvements and investments in new transmission in 

July, 2006. 

FERC has long had the authority to regulate the rates, terms, and conditions of 

wholesale electricity transmission. Typically, FERC has approved an average rate 

of return of 11% on equity for utilities’ investments in transmission and generation. 

However, under FERC’s incentive rate making rules, utilities have been able to re-
60 

ceive return on equity rates approaching 14 percent. These incentives are borne directly by ratepayers. 

Question 1. How risky do you think it is to build new transmission lines? 

Answer. The risks associated with building a new transmission line vary depending on the specifics of a project and in some cases the risks can be substantial. This 

is the reason for the Commission’s current approach of reviewing requests for incentives on a case-by-case basis. 

Generally speaking, I think incentive rates implies the need for a greater return 

to reflect a higher than average investment risk. I believe it would be my responsibility as a member of the Commission to see that any incentive rate award is justified by a showing of a higher than average risk associated with a specific transmission project. 

Question 2. From an investment standpoint, do you think transmission facilities 

are good investments? 

Answer. As a general matter, I believe that transmission projects can be good investments. However, a decision whether or not to undertake investment in a particular project depends on many factors, and is highly dependent upon the specific 

facts and circumstances of each individual transmission project. 

Question 3. In your view, is there a lack of investment capital for new transmission? 

Answer. I believe that there is a continued need for investment in new transmission. Historically, investment in transmission facilities in real dollar terms has 

declined significantly in the past few decades. This decline in transmission investment in real dollars has occurred while the electric load using the Nation’s grid has 

increased. Further, the aging infrastructure has to be updated to provide reliable 

and affordable service, to accommodate increased consumer demand, and accommodate large amounts of renewable generation. 

Given the current investment climate, utilities may cancel or defer spending on 

transmission projects because they need to access very large amounts of capital at 

a higher cost, in addition to facing tougher competition in the debt and equity markets for limited capital over the next several years. 

Question 4. Would you agree that once siting, permitting and regulatory approval 

have been completed, the risks for most transmission projects is relatively low? 

Answer. Even though siting, permitting and regulatory approvals may reduce the 

risk faced by transmission projects, there are several other types of risks and challenges that a transmission project faces that will continue to exist. 

Question 5. Do you think the return on equity incentives should be tied to the 

risks of getting the transmission facility approved? 

Answer. As discussed in my previous responses, the risk of regulatory approval 

should be one, but not the only, factor considered when determining a request for 

return on equity incentives. The Commission’s case-by-case approach enables it to 

determine the appropriate return on equity commensurate with the risks and challenges of a particular project. If confirmed, I am committed to weighing all relevant 

factors when examining the risks associated with a transmission project. 

Question 6. In your view, what are the risks that would justify additional incentives for owners of new transmission facilities? 

Answer. In my view projects that advance national policy goals, such as providing 

access for renewable resources to the interstate grid, and face higher than normal 

risks and challenges may warrant additional incentives for transmission facilities. 

I believe the Commission’s existing case-by-case approach enables it to review the 

specific facts and circumstances of an individual project in order to determine 

whether additional incentives are warranted. 

Please also see my answer to question 3 above. 

Question 7. Section 1241 of EPAct 2005 authorized FERC to establish incentivebased rates for new transmission facilities ‘‘for the purpose of benefiting consumers 

by ensuring reliability and reducing the cost of delivered power by reducing transmission congestion.’’ Would you agree that unless a transmission project ensures reliability or reduces congestion, there is no basis for a rate incentive? 

Answer. In addition to Section 1241 of the Energy Policy Act of 2005, which you 

cite, the Commission has broad authority under section 205 of the Federal Power 

Act to encourage investment in transmission through the application of incentive 

pricing for projects that may provide benefits to consumers other than ensuring reliability and reducing the cost of delivered power by reducing transmission congestion. For example, an entity is not precluded from seeking incentives from the Commission for transmission facilities to interconnect large amounts of renewable power 

to the transmission grid. If confirmed, I will ensure that any actions are well 

grounded in authorities granted to FERC by Congress. 
61 

1Promoting Transmission Investment through Pricing Reform, Order No. 679, FERC Stats. & 

Regs. ¶ 31,222, at P 289-292, order on reh’g, Order No. 679-A, FERC Stats. & Regs. ¶ 31,236 

(2006), order on reh’g, 119 FERC ¶ 61,062 (2007). 

Question 8. In one recent case, the FERC approved a return on equity of 14.3 percent for a proposed transmission project (Allegheny and AEP’s PATH project). In her 

partial dissent, Commissioner Kelly noted that FERC made the determination about 

the 14.3 percent return on equity without holding an evidentiary hearing, which has 

been traditionally been FERC’s practice. Commissioner Kelly stated by skipping the 

evidentiary hearing and making a determination on the return on equity directly 

in the order, it ‘‘reinforces the notion that the Commission has adopted an ad hoc 

approach to granting transmission incentives in general.’’ 

Would you agree that evidentiary hearings, where parties have the opportunity 

for cross-examination, rebuttal, and oral argument, are essential elements when 

making return of equity decisions? 

Answer. Evidentiary hearings are one of the ways the Commission can choose to 

decide the return of equity for an applicant. The issue of whether a case needs to 

be set for evidentiary hearing depends on the adequacy of the record before the 

Commission and whether the Commission has sufficient facts to decide the case. If 

the Commission has a sufficient record upon which to make a reasoned decision, 

there may not be need to obtain additional information or hold a hearing. If confirmed, I would support an evidentiary hearing in any case where I felt such a hearing is necessary to receive needed information in order to reach a reasonable and 

well informed decision. 

A compounding factor for me is the escalating costs of transmission 

projects. One such project is the Middletown to Norwalk, Connecticut transmission project. In 2004, the project was estimated to cost $690 million. 

That figure now stands in excess of $1.3 billion. In New England, we share 

in transmission upgrades regardless of where the project is built, so these 

cost escalations have a direct impact on New Hampshire rate payers. 

For this project, FERC granted a 50 basis point incentive for the underground portion of the project for using advanced technologies. However, at 

this point the project was well into the construction phase and there was 

little doubt the project would not be built without the additional incentives. 

Additionally, Connecticut law requires that underground transmission lines 

must be used to the maximum extent possible and the Connecticut Siting 

Council (‘‘CSC’’) ordered in April of 2005 that the only acceptable method 

for construction of this project was to install 24 miles of underground XLPE 

cable. Therefore, no incentive was needed to encourage the use of this advanced technology, it was the only way the project would be allowed to be 

built. 

It should also be noted that this project was already granted a 50 basis 

point return on equity (ROE) incentive that is give to projects build by 

Transmission Owners who have joined Regional Transmission Organizations such as ISO-NE and 100 basis points awarded to all new transmission 

projects in New England. These incentives were granted to the entire final 

cost of the project. 

The total ROE on the project is difficult to calculate (as the 50 basis 

points adder for the use of advanced technology was only applied to the underground portion of the project), however a good estimate would be 12.5% 

to 12.7%. 

Not only are the ROE incentives questionable, but they are compounded, 

in my view, by the higher costs of the project—which effectively doubled. 

Question 9. Do you believe return on equity incentives should be applied in cases 

where state law required advanced technologies to be used or the technologies are 

not truly advanced? 

Answer. In Order No. 679, the Commission explained that to the extent that applicants seek additional incentives for advanced technologies, the Commission will 

consider the propriety of such incentives on a case-by-case basis.1 If confirmed, I will 

examine each-case to determine whether an applicant has justified its request for 

additional incentives for using advanced technologies. 

Question 10. Do you think it is appropriate for return on equity incentives to 

apply to estimated costs of a project and not be applied for cost over runs? 

Answer. As a general matter, I support the Commission’s established policy for 

ensuring that only prudently incurred costs are recovered under section 205 of the 

Federal Power Act. 
62 

2Order No. 679 at P 93. 

3Order No. 679-A at 65. 

4 Id. at P 27. 

However, the specific issue you raise is pending before the Commission on rehearing and to avoid prejudging the issue, I cannot discuss it further at this time. 

Question 11. Do you agree that a case-by-case analysis is critical for determining 

whether ROE incentives are, in fact, truly necessary? 

Answer. I find reasonable the Commission’s current approach of determining the 

level of the return on equity on a case-by-case basis when an application for an incentive-based return on equity is filed with the Commission.2 This approach enables 

the Commission to authorize a unique return on equity appropriate to the specific 

facts and circumstances of each case.3

Moreover, the Commission requires an applicant to demonstrate that the total 

package of incentives is tailored to address the demonstrable risks or challenges 

faced by the applicant in undertaking the project. Therefore, if some of the incentives in the package reduce the risks of the project, that fact should be taken into 

account by the Commission in any request for an enhanced return on equity.4

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