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[Senate Hearing 114-65]
[From the U.S. Government Publishing Office]

                                                         S. Hrg. 114-65

                   ENERGY INFRASTRUCTURE LEGISLATION

=======================================================================

                                HEARING

                               before the

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                                   on

                   ENERGY INFRASTRUCTURE LEGISLATION

                               ----------                              

                              MAY 14, 2015

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                       Printed for the use of the
               Committee on Energy and Natural Resources

                                                         S. Hrg. 114-65

                   ENERGY INFRASTRUCTURE LEGISLATION

=======================================================================

                                HEARING

                               before the
                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                                   on

                   ENERGY INFRASTRUCTURE LEGISLATION

                               __________

                              MAY 14, 2015

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                       Printed for the use of the
               Committee on Energy and Natural Resources
 
 
 
 
                                   ______

                         U.S. GOVERNMENT PUBLISHING OFFICE 

95-277                         WASHINGTON : 2015 
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               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                    LISA MURKOWSKI, Alaska, Chairman
JOHN BARRASSO, Wyoming               MARIA CANTWELL, Washington
JAMES E. RISCH, Idaho                RON WYDEN, Oregon
MIKE LEE, Utah                       BERNARD SANDERS, Vermont
JEFF FLAKE, Arizona                  DEBBIE STABENOW, Michigan
STEVE DAINES, Montana                AL FRANKEN, Minnesota
BILL CASSIDY, Louisiana              JOE MANCHIN III, West Virginia
CORY GARDNER, Colorado               MARTIN HEINRICH, New Mexico
ROB PORTMAN, Ohio                    MAZIE K. HIRONO, Hawaii
JOHN HOEVEN, North Dakota            ANGUS S. KING, Jr., Maine
LAMAR ALEXANDER, Tennessee           ELIZABETH WARREN, Massachusetts
SHELLEY MOORE CAPITO, West Virginia
                    Karen K. Billups, Staff Director
                Patrick J. McCormick III, Chief Counsel
                   Colin Hayes, Deputy Staff Director
           Angela Becker-Dippmann, Democratic Staff Director
                Sam E. Fowler, Democratic Chief Counsel
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                            C O N T E N T S

                              ----------                              

                           OPENING STATEMENTS

                                                                   Page
Murkowski, Hon. Lisa, Chairman, and a U.S. Senator from Alaska...     1
Cantwell, Hon. Maria, Ranking Member, and a U.S. Senator from 
  Washington.....................................................     2

                               WITNESSES

Bowman, Erica, Vice President, Research and Policy Analysis, 
  America's Natural Gas Alliance.................................     5
Weisgall, Jonathan M., Vice President, Legislative and Regulatory 
  Affairs, Berkshire Hathaway Energy.............................    19
Ericson, Amy, President, Alstom Inc..............................    39
Dotson, Greg, Vice President for Energy Policy, Center for 
  American Progress..............................................    46
Hunter, James L., Utility Department Director, International 
  Brotherhood of Electrical Workers..............................    54
Kalk, Dr. Brian P., Commissioner, North Dakota Public Service 
  Commission.....................................................    60

          ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED

Alliance for Industrial Efficiency, et al
    Statement for the Record.....................................   202
Alliance for Industrial Efficiency, et al, regarding S. 1201
    Statement for the Record.....................................   204
American Public Power Association
    Statement for the Record.....................................   207
Americans for a Clean Energy Grid
    Statement for the Record.....................................   220
Barrasso, Hon. John
    Economic Report of the President dated February 2015.........    78
Bowman, Erica
    Opening Statement............................................     5
    Written Testimony............................................     7
    Responses to Questions for the Record........................   124
Bureau of Land Management, U.S. Department of the Interior
    Statement for the Record.....................................   221
Cantwell, Hon. Maria
    Opening Statement............................................     2
    Report entitled ``A Forward-Looking Agenda for the Nation's 
      Public Utility Commissions'' by Greg Dotson and Ben 
      Bovarnick dated May 2015...................................    94
Cassidy, Hon. Bill
    Statement for the Record.....................................   233
Distribution Contractors Association
    Statement for the Record.....................................   235
Dotson, Greg
    Opening Statement............................................    46
    Written Testimony............................................    48
    Responses to Questions for the Record........................   179
Ericson, Amy
    Opening Statement............................................    39
    Written Testimony............................................    41
    Responses to Questions for the Record........................   175
Gardner, Hon. Cory
    Statement for the Record.....................................   236
Gas Processors Association
    Statement for the Record.....................................   237
Gridwise Alliance regarding the Grid Modernization Act of 2015
    Statement for the Record.....................................   239
Gridwise Alliance regarding the Next Generation Electric Systems 
  Act
    Statement for the Record.....................................   240
Heat is Power Association regarding S. 1037
    Statement for the Record.....................................   241
Heat is Power Association
    Statement for the Record.....................................   242
Heinrich, Hon. Martin
    Statement for the Record.....................................   243
Hirono, Hon. Mazie K.
    Statement for the Record.....................................   244
Hunter, Jim
    Opening Statement............................................    54
    Written Testimony............................................    56
    Responses to Questions for the Record........................   192
International District Energy Association
    Statement for the Record.....................................   245
Interstate Natural Gas Association of America
    Statement for the Record.....................................   247
Kalk, Dr. Brian P.
    Opening Statement............................................    60
    Written Testimony............................................    62
    Responses to Questions for the Record........................   195
The Latino Coalition
    Statement for the Record.....................................   249
Murkowski, Hon. Lisa
    Opening Statement............................................     1
The Pew Charitable Trusts
    Statement for the Record.....................................   251
Plastics Pipe Institute
    Statement for the Record.....................................   252
Shaheen, Hon. Jeanne
    Statement for the Record.....................................   253
    S. 1201 Bill Summary.........................................   255
Union of Concerned Scientists
    Article: Congress Can Empower Energy Innovation Far and Wide. 
      Here's How by Mike Jacobs dated May 14, 2015...............   256
Union of Concerned Scientists
    Statement for the Record.....................................   261
Union of Concerned Scientists regarding S. 1213
    Statement for the Record.....................................   264
Western Energy Alliance
    Statement for the Record.....................................   266
The Wilderness Society
    Statement for the Record.....................................   267
Wires, LLC
    Statement for the Record.....................................   270
Wires (Letter to Senator Heinrich)...............................   280
Weisgall, Jonathan M.
    Opening Statement............................................    19
    Written Testimony............................................    21
    Responses to Questions for the Record........................   129

    The text for each of the bills addressed in this hearing 
can be found on the committee's website at: http://
www.energy.senate.gov/public/index.cfm/hearings-and-business-
meetings?ID=e7041c11-7a96-401c-ba41-3c0142353934.

 
                   ENERGY INFRASTRUCTURE LEGISLATION

                              ----------                              

                         THURSDAY, MAY 14, 2015

                                       U.S. Senate,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:08 a.m. in 
room SD-366, Dirksen Senate Office Building, Hon. Lisa 
Murkowski, Chairman of the Committee, presiding.

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

    The Chairman. Good morning. We will call to order the 
meeting of the Energy Committee.
    We are moving forward in the second of our series of four 
legislative hearings regarding the broad and hopefully, 
bipartisan, energy bill that our Committee is assembling.
    The 22 bills included in the notice for this week's hearing 
address challenges related to energy infrastructure. My 
expectation and at the very least, my hope, is that the best 
ideas expressed in these bills we are considering today will 
ultimately become provisions of the broader bill that we intend 
to move later this summer.
    When I think about energy infrastructure, the first thing 
that comes to my mind is the energy midstream which are the 
facilities that move energy all over the country from where it 
is produced to where it is used by families and businesses such 
as natural gas pipelines or electric transmission lines. These 
systems are complex yet required to work seamlessly. The 
expectation is that they are always going to work. Also called 
to mind are other softer elements of the energy infrastructure 
such as the quality, size and expertise of America's energy 
workforce. Our witnesses this morning are qualified to address 
each of these topics.
    It is clear from reviewing the bills on our agenda this 
morning many Senators believe that our energy infrastructure 
faces challenges that require our attention. We have diverse 
ideas about how to strengthen the nation's energy 
infrastructure, and we are focused on a wide variety of topics.
    Equally clear from my conversations with members on both 
sides of the aisle, however, is that we all recognize that the 
vast majority of the nation's energy infrastructure is 
privately owned. It is built, maintained, expanded and improved 
largely with private investment.
    As I see it the key question presented for all of these 
bills and for energy infrastructure generally is what is the 
proper role of Federal policies in private sector investment? 
While many Senators agree that energy infrastructure must be 
improved, there are a variety of open questions that need to be 
addressed. These questions include things like what qualifies 
as an infrastructure improvement? Are legal and regulatory 
barriers standing in the way of technological improvements and 
advancements? How do we ensure that Federal permitting is more 
timely, consistent and certain while continuing to meet all the 
requirements of the law?
    Finally, it is obvious Senators are prepared to give 
significant attention to Federal law governing electricity and 
the uniquely critical grid infrastructure.
    Our hearing in March on the state of technological 
innovation related to the electric grid established that a 
cumulative investment of between $300 and $500 billion over the 
next 20 years will be required. How will Federal law and policy 
influence that investment, and how can we ensure that Federal 
policies lead to positive change? Further how can we avoid the 
unintended consequences of reliability losses, unwarranted or 
undisclosed price increases inhibiting technological innovation 
or stifling customer preferences?
    Those are the questions that we are seeking answers to, and 
I hope that today's hearing will prove useful in this regard.
    We have already learned that today's developments in 
electricity have tremendous potential but also present a number 
of challenges such as smoothing out the intermittency of 
variable weather dependent generation. With the rise of 
distributed generation and smart grid technologies, Americans 
are gaining more control over how they use and consume 
electricity but the grid must be even more closely integrated 
as a result.
    As eager as we all are to contribute to the arrival of a 
smarter, more futuristic energy infrastructure, I think we 
policy makers must first do no harm. This maxim holds true for 
our efforts regarding the construction, security and regulation 
of pipelines, transportation, information technology and other 
infrastructure as well. I hope this Committee can continue with 
the deliberative approach that we have employed in all of the 
hearings leading up to today. I thank our witnesses in advance 
for their contribution to that end.
    With that, I will turn to our Ranking Member, Senator 
Cantwell, for her comments, and then we will move to the panel 
of witnesses assembled this morning.

 STATEMENT OF HON. MARIA CANTWELL, U.S. SENATOR FROM WASHINGTON

    Senator Cantwell. Thank you, Chairman Murkowski, and I so 
appreciate that we are having a hearing today on energy 
infrastructure. It is probably one of the most important and 
also complicated areas that we are going to try to deal with in 
energy legislation.
    The vast majority of our energy infrastructure in the U.S. 
is owned by private industry. And it is governed by a patchwork 
of Federal, state and local laws, which collectively determine 
the level of investment this infrastructure attracts and the 
competitive conditions by which it is operated.
    When Secretary Moniz was here last month to talk about the 
Quadrennial Energy Review, he made a very compelling case that 
we are at an energy crossroad. The dynamic and changing nature 
of our domestic resource mix--and not just expanded supplies of 
natural gas, but also the growth of distributed generation--is 
creating both new challenges and great opportunities.
    When you add extreme weather events and the changing 
climate as variables, we need to consider resilience in our 
infrastructure investment, making sure that we also are making 
it part of a key energy security equation.
    In reviewing the status of our energy infrastructure, I 
believe the Quadrennial Energy Review did us a service in 
mapping out some of the most pressing challenges and 
opportunities. Specifically it recommended five major 
priorities.
    One, taking steps to bolster the resilience, reliability, 
safety, and security of our infrastructure. Second, modernizing 
our electric grid. Third, modernizing our energy security 
infrastructure, like the Strategic Petroleum Reserve, to keep 
pace with the changes in the energy picture. In addition, 
improving our shared transportation infrastructure for energy 
commodities like rail and barge, and, lastly, better 
integrating North American energy markets.
    While looking at our agenda today, it is clear that 
Senators across the board recognize that upgrading our grid 
infrastructure will enable the integration of new technologies 
that benefit our competitiveness and benefit consumers. We have 
numerous bills dealing with grid modernization. This is because 
smart, targeted Federal investments that cultivate public-
private partnerships for research, development, and 
demonstration will pave the way toward new solutions.
    This is something, I think, that is unique to the U.S. 
economy and a huge economic opportunity.
    That is what is required to generate the kind of trillion-
dollar private-sector investment needed to retrofit our energy 
infrastructure and to keep pace with the needs of a 21st-
century economy and security.
    As such, I look forward to the testimony of all our 
witnesses on this subject.
    In particular, I am pleased to welcome Ms. Ericson, our 
witness from Alstom. The Alstom Grid Center of Excellence is 
located in Redmond, Washington. They have a great story, and I 
look forward to hearing more about them today.
    There are many opportunities associated with the grid, as a 
platform for both security and innovation. And I know we are 
going to have a hearing later on workforce issues, but I hope 
to touch a little bit on that today. It has definitely gotten 
my attention that the energy industry is expected to add 1.5 
million workers in the next 15 years, and about 200,000 more 
workers with computer science and math skills are projected to 
be needed.
    I want to ensure we have that energy workforce for 
tomorrow, so we can take advantage of that huge investment 
opportunity. And I want to make sure we are delivering the 
right workers with the right skills. I think that we have a lot 
of opportunity with the Department of Energy on that.
    The grid is obviously a topic of interest to members on 
both sides of the aisle. But, judging by the wide range of 
proposals before us--especially with respect to amending PURPA, 
the Public Utility Regulatory Policy Act of 1978--the Committee 
also has a significant amount of work to do, to figure out the 
right approach to creating conditions for innovation in the 
electric distribution system.
    Obviously the topic goes hand-in-hand with what we want to 
do on the grid in cybersecurity. And Senators Risch and 
Heinrich have a proposal, which mirrors legislation this 
Committee has reported on a few prior occasions. I have also 
introduced the Enhanced Grid Security Act to tackle this 
important subject. Getting this right and getting cybersecurity 
right will be important to everyone.
    Finally, we have on the agenda today a number of siting and 
permitting proposals. There is undoubtedly room for improvement 
in our process, especially with respect to integrating 
coordination and how we can move these processes along. We have 
a number of very significant policy suggestions before us, 
like: creating additional Federal authority for oil pipelines 
at FERC, making it easier to site pipelines in National Parks, 
rewriting an executive order on cross-border infrastructure 
projects--obviously none of which I support.
    We also have two diametrically opposed approaches to 
electric transmission siting. I think you will remember the 
markup we had when we had a siting discussion before, in 2009. 
There were approximately a dozen amendments and it took two 
days. I am sure when we get to those issues again, there will 
be similar discussions with a wide range of approaches of what 
to do.
    But clearly we are here because we want to move our 
infrastructure investments forward. We want the U.S. to 
continue to grow a strong and resilient infrastructure for our 
energy needs and to seize the economic opportunities available 
to the United States, as we look at smart grid leadership 
around the globe.
    So, thank you, Madam Chair for holding this hearing, and I 
look forward to the testimony of our witnesses.
    The Chairman. Thank you, Senator Cantwell.
    This morning we have a diverse group of panelists that have 
come before the Committee.
    We will begin with Ms. Erica Bowman. Ms. Bowman is the Vice 
President of Research and Policy Analysis and Chief Economist 
at America's Natural Gas Alliance. She is going to start us off 
with a discussion of everything from LNG export facilities to 
new and expanded pipelines.
    She will be followed by Mr. Jonathan Weisgall, who is the 
Vice President of Legislative and Regulatory Affairs at 
Berkshire Hathaway Energy, to provide a view from a company 
that owns significant critical infrastructure and also faces 
challenges because of an outmoded Federal purchase obligation.
    Ms. Amy Ericson will be next in the lineup. She is Alstom's 
Country President for the United States and she is here to 
offer the views of one, as her company has put it, who is 
engaged with U.S. policy stakeholders while directly supporting 
pursuit of new business opportunities in the areas of thermal 
and renewable power generation and electricity transmission and 
distribution.
    We also have with us this morning Mr. Greg Dotson. Mr. 
Dotson is the Vice President for Energy Policy at the Center 
for American Progress. He is here to share the perspective of 
one of the many good think tanks based here in Washington, DC. 
We appreciate you being with us.
    Mr. Jim Hunter is the Utility Department Director at the 
International Brotherhood of Electrical Workers which 
represents more than 220,000 union members who are part of our 
nation's electric industry workforce. He will ensure that we 
keep the perspective of the workforce firmly in mind as we 
debate the changes to electricity laws which we greatly 
appreciate.
    Finally, we have the Honorable Brian Kalk, who is a 
Commissioner on the North Dakota Public Service Commission. Dr. 
Kalk will present a state perspective this morning which is 
invaluable because state retail regulation is central to the 
health of the electric sector and because so many of the bills 
that are up for discussion today instruct states to examine or 
reexamine their own policy. So we will look forward to that 
state's perspective as well.
    Again, thank you each for joining us here this morning. Let 
us begin with Ms. Bowman.
    Each of you will be afforded five minutes. Your full 
testimony will be included as part of the record, and then we 
will have an opportunity for questions to each of you.
    Ms. Bowman, welcome.

STATEMENT OF ERICA BOWMAN, VICE PRESIDENT, RESEARCH AND POLICY 
            ANALYSIS, AMERICA'S NATURAL GAS ALLIANCE

    Ms. Bowman. Chairman Murkowski, Ranking Member Cantwell and 
members of the Committee, thank you for the opportunity to 
testify this morning.
    We are at a pivotal moment in determining our nation's 
energy future. The topic of today's legislative hearing is an 
important and timely one strengthening our nation's energy 
infrastructure.
    Over the past decade we've experienced a paradigm shift in 
our energy landscape. As a result of the technological 
innovations and the ingenuity of the men and women of the oil 
and natural gas industry, our nation has moved from a posture 
of scarcity to one of abundance. The U.S. is now the world's 
leading producer of natural gas. This shale revolution has 
helped--driven economic growth, fostered environmental 
stewardship and strengthened America's energy security.
    So the question before this Committee is how do we ensure 
that America takes full advantage of the opportunity presented 
by the abundance of this clean, affordable, reliable and 
domestic resource?
    ANGA has a few ideas about this that I'd like to share with 
the Committee, but first I think it is important to set the 
stage and put into perspective exactly what I'm describing when 
I talk about the shale revolution and the benefits that flow 
from it.
    U.S. natural gas consumption in 2014 totaled 27 trillion 
cubic feet. The total volume of natural gas reserves 
recoverable using existing technology is more than 100 times 
greater, over two thousand eight hundred trillion cubic feet. 
And the Energy Information Administration recently projected 
that domestic natural gas production and stable prices will 
remain for decades to come even with increasing natural gas 
consumption for power generation, manufacturing, heating and 
export.
    The greater use of natural gas in America will continue to 
spur economic growth, create good paying American jobs, help 
our clean--help clean our environment and strengthen our energy 
security. These new infrastructure projects will create 
employment and economic benefits, but the economic benefit from 
infrastructure development itself is only one small part of a 
much larger equation.
    It is widely recognized that the oil and natural gas sector 
provided the primary source of economic growth during the great 
recession, and this significant contribution is expected to 
continue.
    In 2012 the sector contributed $238 billion to gross 
domestic product. This is projected to grow to $475 billion by 
2025.
    That economic activity fueled additional growth in the NG 
sectors as well such as the petrochemical manufacturing which 
contributed $7 billion in 2012 and is expected to grow seven 
fold to $51 billion in 2025.
    In fact just this week Energy Secretary Ernie Moniz 
credited low cost natural gas with contributing to the 
revitalization of our nation's manufacturing sector.
    Pipelines also link our natural gas supplies to electric 
generators. Natural gas use in power generation has been 
credited with reducing both criteria pollutants and greenhouse 
gas emissions. Researchers at the National Oceanic and 
Atmospheric Administration found that the increased use of 
natural gas in power generation has led to 40 percent less 
nitrogen oxide emissions and 44 percent less sulfur dioxide 
emissions since 1997.
    Additionally EIA found that increased use of natural gas 
has reduced overall greenhouse gas emissions by 212 million 
metric tons in 2013 when compared to 2005 levels.
    In addition to these increased domestic uses our abundant 
supplies enable our nation to export to our allies abroad. 
Exporting U.S. natural gas is a win/win proposition that will 
strengthen the economy, improve our trade balance and allow us 
to be a global energy leader.
    The Council of Economic Advisors 2015 Annual Report found 
that LNG exports will increase domestic production and create 
more jobs. Further, the report found that exporting U.S. 
natural gas will lower the prices around the world which will 
have a positive geopolitical impact on the United States.
    U.S. LNG export capacity will enable bidirectional 
capability in the global marketplace and support the buildout 
of domestic energy infrastructure which strengthens our 
nation's energy resiliency.
    A world class pipeline infrastructure system is the link 
enabling the U.S. economy and environment to realize the 
benefits of the shale energy revolution. In order to achieve 
the necessary expansion and improvement in our pipeline 
infrastructure system we need to reform the process for getting 
pipelines sited and built. This requires improvements in the 
permitting process at the Federal level as well as political 
will and action at the state and local levels.
    I look forward to answering questions about the benefits 
natural gas can provide and the changes we believe will benefit 
infrastructure development.
    Thank you.
    [The prepared statement of Ms. Bowman follows:]
   
   [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
   
   
    
    The Chairman. Thank you, Ms. Bowman.
    Mr. Weisgall, welcome.

STATEMENT OF JONATHAN M. WEISGALL, VICE PRESIDENT, LEGISLATIVE 
       AND REGULATORY AFFAIRS, BERKSHIRE HATHAWAY ENERGY

    Mr. Weisgall. Thank you. My name is Jonathan Weisgall with 
Berkshire Hathaway Energy. We own three regulated utilities 
that serve 5.3 million customers in 11 states.
    In addition to our geothermal facilities which is how we 
started years ago, we have invested over $16 billion in the 
last decade in wind and solar projects in nine states.
    I want to hit on three issues today.
    The first is PURPA modernization. Among other things PURPA 
mandated utilities to buy renewable energy from QFs, qualifying 
facilities. 37 years later renewable energy is flourishing and 
we are among its strongest proponents. Our projects, however, 
have been driven by policies other than PURPA such as state 
renewable portfolio mandates, Federal tax incentives, 
technological improvements and stricter EPA air regulations.
    PURPA as it exists today is imposing significant and 
unnecessary costs on utility customers. It requires utilities 
to buy energy from a QF regardless of need. PURPA contracts are 
not subject to the same resource planning and cost scrutiny as 
other utility decisions and they can cause operating 
inefficiencies and reliability issues because the host utility 
has no control over where they are sited or integrated into its 
system.
    Let me give you a specific example. The long range plan for 
our PacifiCorp utility, approved by our state regulators, shows 
no need for additional generation until 2028. However over the 
next 10 years PacifiCorp must purchase 39 million megawatt 
hours under its PURPA obligations at an average price of $66 
per megawatt hour. The average market price today is $38, 43 
percent lower.
    This means that our customers must pay $1.1 billion above 
market for PURPA mandated power they don't even need. And this 
is not an isolated example. Other Western utilities are facing 
similar dilemmas.
    PURPA and the FERC implementing regulations have not kept 
pace with market changes. New imbalanced market structures and 
FERC's interconnection rules for smaller facilities now allow 
QFs of all sizes to compete in wholesale markets and utility 
competitive solicitations.
    We have two suggestions for modernizing PURPA explained 
more fully in my written testimony.
    The first is to expand the definition of comparable markets 
to include voluntary, auction based, energy imbalance markets 
as one that meet threshold competitive requirements so that 
utilities participating in these markets are relieved of 
PURPA's mandatory purchase obligation.
    The second is to eliminate the rebuttable presumption in 
FERC Order 688 which established that QFs smaller than 20 
megawatts lack access to competitive markets.
    I urge you to consider these and other proposals that we 
and the Edison Electric Institute support.
    Examples include Senator Risch's S. 1037 which would 
terminate the mandatory purchase obligation if a state 
determines that additional generation is not needed or a 
measure to prevent large QF projects from being divided into 
smaller ones to essentially gain what is called the FERC One 
Mile Rule.
    My second issue covers transmission. Berkshire Hathaway 
Energy and Edison Electric Institute and many others have long 
supported measures to better coordinate Federal permitting and 
siting for interstate transmission projects on public lands.
    Congress sought to improve the process in 2005 when it 
added Section 216H to the Federal Power Act giving the 
Department of Energy new Federal lead agency authority. That 
hasn't worked.
    We believe the best way to improve Federal transmission 
siting and permitting is to enhance the role of FERC which, 
after all, already has this job in overseeing permitting of 
interstate natural gas pipelines.
    We're pleased you're considering two bills in this area.
    If you don't adopt S. 1017 which would transfer that DOE 
function to FERC, we do support your bill, Chairman Murkowski, 
S. 1217 which would codify the rapid response team for 
transmission and create a transmission ombudsman within FERC.
    My third issue concerns the need to minimize cost shifting 
among customers. A growing number of whom are generating their 
own energy through distributed generation, DG. But these 
customers are still connected to the grid--when their DG 
systems generate more energy than they need the grid takes the 
excess. When their systems aren't generating, they of course, 
still need the grid. Proper rate structures and tariffs must be 
designed for these customers. For example, under so called net 
metering tariffs a customer can end up paying nothing towards a 
utility's fixed costs leaving non-solar customers to make up 
the difference.
    We support Chairman Murkowski's S. 1219 which encourages 
state PUCs to examine cost shifting and determine whether net 
metering rates are just and reasonable and not unduly 
preferential or discriminatory.
    The issue of rooftop solar has led to extreme rhetoric on 
all sides, but the issue is not pro-solar or anti-solar, it's 
about equitable cost allocation among all customers.
    For customers who want to generate their own power the 
issue is how to accommodate them in the most cost effective 
manner that is fair to them and to other customers who do not 
and cannot generate their own power.
    So in the end with proper rate design the utilities should 
be agnostic as to whether a customer generates its own power.
    Thanks for the opportunity to share our views with you, and 
I look forward to answering any questions you may have.
    [The prepared statement of Mr. Weisgall follows:]
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    The Chairman. Thank you, Mr. Weisgall.
    Ms. Ericson, welcome.

        STATEMENT OF AMY ERICSON, PRESIDENT, ALSTOM INC.

    Ms. Ericson. Good morning, Chairwoman Murkowski, Ranking 
Member Cantwell and distinguished members of this Committee. 
I'm Amy Ericson, President of Alstom, Inc. I appreciate the 
opportunity to testify at today's hearing.
    Alstom is a technology developer across the power 
generation, transmission and distribution sectors. We've served 
the U.S. power industry for over 100 years, and Alstom Grid has 
been active in the U.S. grid software technology sector for 
more than 35 years.
    Our grid business employs approximately 1,100 people in the 
U.S. with over 500 of those at our global smart grid center of 
excellence in Redmond, Washington.
    The U.S. electric industry is undergoing a transformation 
unlike anything that we've experienced in the past 100 years. 
This transformation will create opportunities to enhance 
reliability, efficiency, resiliency and flexibility of the 
electric system as well as strengthen our nation's global 
competitive advantage.
    I would like to highlight the role we play as a technology 
provider and touch on key trends driving change in the 
industry. These include an aging grid infrastructure which must 
respond to the challenges of a changing energy mix with the 
growing use of natural gas, renewable energy and distributed 
energy resources including energy storage as well as the need 
for increased resiliency to respond to severe weather events.
    The first step in developing technology is to listen 
carefully to our customers which include America's electric 
utilities and regional transmission organizations and 
independent system operators. We must thoroughly understand 
their needs, their expectations and their challenges.
    When it comes to power supply our customers consistently 
cite three must have requirements, reliability, affordability 
and sustainability. As we look forward we also see a clear need 
for more flexible and adaptable power system capable of meeting 
evolving requirements.
    To be truly transformational and create an interconnected 
21st century grid public and private partnerships are essential 
to the continuation of extensive R and D and the expansion of 
pilot projects to test and prove out cutting edge concepts. 
That's why Senator Cantwell's Grid Modernization legislation is 
so important; however, I do want to underscore that we can make 
great strides in modernizing the grid even today, and we see 
this from coast to coast.
    We need to begin with the basics, for example, upgrading 
from older analog systems to state of the art digital 
technology. This will build the foundation for application of 
the advanced smart grid technologies currently in 
demonstration. We should not wait to begin the upgrades as this 
is an incremental process that will take time to implement.
    The digital technology we provide enables electric 
utilities, RTOs and ISOs to manage this change which in turn 
benefits the consumers. Deployment and advancement of smart 
grid technologies should be our first priority. It represents a 
set of critical, enabling technologies that can reduce the 
challenges associated with modernizing the grid and optimizing 
our electric systems.
    Smart grids give utility operators greater visibility, 
greater operational flexibility and reliability allowing them 
to make rapid system responses to changing circumstances in 
their electric system. Smart grids also give consumers real 
time information on their energy usage allowing them to make 
informed decisions. Additionally smart grids are key to the 
seamless integration of distributed and renewable energy 
resources, perhaps the most significant trend we're seeing 
today.
    The DOE has noted that weather related grid disruptions 
have doubled between 2000 and 2014 highlighting the need for 
hardening the grid. Smart grid and microgrid innovation can 
improve grid resilience and speed power restoration.
    We strongly support Senator Cantwell's proposal because it 
reinforces the strong partnership between the public and 
private sectors in delivering a more modern grid. In addition 
the legislation provides tools for states to conduct analysis 
of their changing energy mix, develop performance metrics and 
assist in distribution planning.
    In conclusion, Congress has an important role to play in 
advancing the modernization of our nation's electric grid. The 
public/private technology collaborations that would result from 
Senator Cantwell's bill will drive economic growth, strengthen 
our nation's global competitiveness and create highly skilled 
jobs.
    Chairwoman Murkowski, Ranking Member Cantwell, thank you 
for this opportunity to testify today and I look forward to 
answering your questions.
    [The prepared statement of Ms. Ericson follows:]
    
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    The Chairman. Thank you, Ms. Ericson.
    Mr. Dotson, welcome.

  STATEMENT OF GREG DOTSON, VICE PRESIDENT FOR ENERGY POLICY, 
                  CENTER FOR AMERICAN PROGRESS

    Mr. Dotson. Thank you.
    Chairman Murkowski, Senator Cantwell and members of the 
Committee, my name is Greg Dotson and I'm pleased to testify 
today on behalf of the Center for American Progress, a 
nonprofit think tank dedicated to improving the lives of 
Americans through progressive ideas and actions.
    Energy infrastructure forms the backbone of the U.S. 
economy. We often talk about keeping the lights on but of 
course, energy also makes possible the most basic of services, 
drinking water, health care, food production, banking. The 
importance of energy infrastructure cannot be overstated, and 
given the high capital cost and long useful life of energy 
infrastructure the energy policies Congress establishes today 
will help determine and shape our children and grandchildren's 
economic and environmental futures. Therefore the Center for 
American Progress urges the Committee to develop a clean energy 
policy that responds to today's needs and also anticipates 
tomorrow's challenges.
    As we consider policies to serve us in the coming decades 
we should be asking some fundamental questions about what we 
hope to achieve. Will we harness the vast potential of 
renewable energy sources like wind and solar to power our 
communities and create jobs? Will we substantially reduce 
pollution and enjoy a healthier, more sustainable America? Will 
we build a resilient nation that's ready for the challenges of 
the future? Will we seize opportunities to empower American 
families and businesses to take control of their energy use? 
Any energy bill Congress produces should be judged by how it 
proposes to answer these questions.
    I was pleased to see the comments of Chairman Murkowski 
last week stating the Committee would strive to produce a 
bipartisan energy bill that addresses climate change with 
renewable energy, efficiency and otherwise cutting emissions. A 
commitment to cutting carbon pollution is the key to a sensible 
energy policy.
    I am providing a lengthier statement for the record, but 
I'd like to highlight just a few of the bills that are being 
examined today.
    Senator Cantwell's legislation, S. 1243, would take needed 
steps to modernize the grid by advancing energy storage, 
developing model grid architectures and conducting 
demonstration projects for advanced control of the electric 
distribution system. S. 1243 also amends the Public Utility 
Regulatory Policies Act or PURPA, to ensure that utilities 
prepare for a changing climate. According to the Department of 
Energy's recent Quadrennial Energy Review, extreme weather and 
climate change is a leading environmental risk to electricity 
transmission, storage and distribution systems. If you want to 
know just how important Senator Cantwell's proposal is, just 
ask the residents of New York and New Jersey who endured 
Hurricane Sandy and its aftermath. That storm caused power 
outages for more than 8.5 million customers, and 1.3 million 
households were without electricity for over a week. All that 
because the utility wasn't prepared to withstand a hurricane 
that many have linked to climate change.
    S. 1210, introduced by Senator King, focuses on a key 
aspect of the future of our electricity grid. Across the 
country more and more Americans are embracing rooftop solar 
panels as a way to generate their own electricity, save money 
and cut pollution. This is creating thousands of new jobs and 
empowering American households like never before, and the 
potential is huge.
    In 42 of the nation's 50 largest cities a typically sized, 
solar PV system is now less expensive than power from a 
utility. The rapid growth of distributed solar power threatens 
the traditional business model, most investor owned, electric 
utilities.
    In March Joby Warrick of the Washington Post wrote an 
article entitled, ``Utilities wage campaign against rooftop 
solar.'' The article details the quote, ``determined campaign 
to stop the home solar insurgency that is rattling the board 
rooms of the country's government regulated electric 
monopolies.''
    In February 2015 the Salt River Project, the large utility 
in Arizona, approved a $600 per year fee on any customer adding 
a new rooftop solar system. Before this dramatic step the same 
utility had actually been financially encouraging its 
ratepayers to install solar panels. Congress has a role to play 
in protecting consumer's rights to install solar PV systems 
without paying exorbitant fees to electric utilities that want 
to preserve their current business models.
    I'd like to urge the Committee to be thoughtful about 
removing protections for our National Parks and other public 
lands. It's clear that some in industry will argue that it 
should be easy to build industrial projects in the National 
Parks. This is a deeply unpopular idea with the American 
people, and since these projects are essentially permanent, 
Congress should not remove protections that the public have 
come to rely on.
    Finally, I was troubled to see the Committee is considering 
legislation that would allow the Keystone XL pipeline to be 
subsequently approved even if the State Department denies it in 
the coming months. That would be a mistake.
    Today the Center for American Progress is releasing a new 
report recommending several improvements to PURPA. I would 
commend it to you for your review.
    And the Center for American Progress would welcome the 
opportunity to work with the Committee as it continues to 
consider comprehensive energy legislation.
    [The prepared statement of Mr. Dotson follows:]
    
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    The Chairman. Thank you, Mr. Dotson.
    Mr. Hunter, welcome.

  STATEMENT OF JAMES L. HUNTER, UTILITY DEPARTMENT DIRECTOR, 
        INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS

    Mr. Hunter. Thank you.
    Good morning, Ms. Chairman, members of the Committee, 
Ranking Member. My name is Jim Hunter. I'm the Director of the 
International Brotherhood of Electrical Workers Utility 
Department. I've been asked by our President Ed Hill to speak 
today on behalf of the IBEW, and I want to thank you for 
inviting us.
    The IBEW represents about 720,000 members in the U.S. and 
Canada. 220,000 of those are in the utility business. That's 
electric, gas and water.
    I personally have worked in the industry now for over 42 
years. The energy sector is facing a large number of 
retirements over the next few years. According to industry 
experts at the Center for Energy Workforce Development, the 
average worker is about 53 years old. Over the next ten years 
55 percent of those will be needed to be replaced. They'll be 
retirement age.
    My point in talking about the large number of people 
leaving the industry is to talk about how we replace and train 
those employees. The joint apprenticeship model works. Earn 
while you learn.
    The IBEW in conjunction with several of our utility 
partners have formed the National Utility Industry Training 
Fund, NUITF. We're a nonprofit, 501(c)3. Our model provides a 
standardized curriculum of certifications that are nationally 
recognized.
    We're using the construction model from the National Joint 
Apprenticeship Training Committee for alignment and substation 
mechanic curriculum, and we have utilized a boot camp 
technology to filter possible new hires coming into the 
companies. Our programs are DOL-certified, and combine 
classroom training with sophisticated, online simulations and 
workbooks. New employees learn from a seasoned veteran while 
earning a living wage and benefits.
    You know, many people are not cut out for college and want 
to start working right out of high school or when they get out 
of the military. Jobs in the electric and gas sectors provide a 
good, secure and decent wage and benefits. The push for 
community colleges is great, but there needs to be some 
emphasis placed on programs such as ours as an alternative.
    President Hill has always said many times that kids need to 
be taught how to work. We understand that being taught by an 
experienced craftsman is by far a better way to convey those 
skills. Joint apprenticeships work and they work well.
    The idea of working while learning a trade from a master 
craftsman dates back to ancient times. Many inner city kids 
don't have the funding to go to community college or even our 
boot camps, so financial aid is an important factor here.
    We've been working with Senator Cantwell on a training bill 
that we believe her bill, S. 1304, recognizes joint 
apprenticeships programs and their importance. And we 
appreciate that.
    Just a moment to talk about comprehensive legislation that 
you all are looking at.
    The IBEW firmly believes that comprehensive legislation is 
needed. Our markets are broken. Our base load plants, 
especially coal and nuclear, are in jeopardy of closing in many 
cases. The reliability of the grid will depend on Congress 
fixing the markets. We must incorporate renewables and energy 
efficiencies into the grid in an organized and fair manner. The 
utility must supply the needed generation 24/7, including 
variable sources. The reliability customers have come to expect 
comes at a cost. And we cannot rely on a patchwork of rules to 
provide the level of reliability we've come to expect.
    I've included a slide from a recent EPRI report. The slide 
is of a net zero home in California. The important thing to 
take away from the slide is the line at the top. That's the 
level of generation that must be ready at all times to ensure a 
safe, reliable system, and the question is who pays for that 
reliability?
    I'd also like to comment on transmission siting. Backstop 
siting authority is essential to ensure a reliable grid to use 
renewables efficiently. Siting of transmission is the most 
difficult part of any transmission project, and it becomes a 
local, political quagmire if there's not some type of federal 
backstop authority.
    Thank you.
    [The prepared statement of Mr. Hunter follows:]
    
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    The Chairman. Thank you, Mr. Hunter.
    Dr. Kalk, welcome to the Committee.

  STATEMENT OF DR. BRIAN P. KALK, COMMISSIONER, NORTH DAKOTA 
                   PUBLIC SERVICE COMMISSION

    Dr. Kalk. Thank you, Madam Chair, Ranking Member Cantwell 
and Committee members. I really appreciate this opportunity. My 
name is Brian Kalk, Commissioner for North Dakota and my wife 
told me to make sure I say hello to Senator Hoeven. So, good to 
see you again, Senator.
    I hold the portfolios for electric generation in 
transmission, pipeline safety and rate regulation. I also chair 
the Clean Coal Subcommittee for NARUC.
    Over the past three years the North Dakota PSC has sited 
over $4 billion of energy resources including jurisdiction 
electric and liquid transmission lines, wind farms, natural gas 
processing plants and peaking facilities. These energy 
resources coupled with our fleet of coal and hydroelectric 
power make North Dakota an all of the above energy producer. 
We've approved updates to our fleet of coal generation ensuring 
they're in compliance with existing federal laws.
    The North Dakota PSC supports all energy markets but 
strongly believes the final determination of a state's energy 
portfolio mix and resulting impact on rates should be left to 
each state's regulator and not be affected by neighboring 
states or federal policies.
    All types of energy production are becoming more efficient. 
Capacity factors for wind are over 50 percent. Natural gas 
plants are ever improving. Solar shows promise, but we must 
always remember that base load power is always going to be 
critical.
    I also urge your support for expanding CO2 utilization 
research funding to continue the development of technologies 
that advance the use of coal. The Kemper County Energy Facility 
shows promise. It uses lignite coal, a strategic resource, 
captures the CO2 for enhanced oil recovery, produces ammonia 
and sulfuric acid and provides 582 megawatts of base load 
power.
    North Dakota has experienced unprecedented expansion in the 
amount of transmission siting applications. Our existing 
process continues to work smoothly, but even with North 
Dakota's diligence in processing applications hurdles beyond 
the state's control can occur to slow the siting process.
    When a Federal nexus exists triggering the implementation 
of NEPA, analysis can take extended periods of time. It would 
be imprudent to render a final decision without a complete NEPA 
analysis. Legislation should not be implemented that would 
penalize states for expanded timeframe of approval when it is 
the federal agencies that are the actual delay.
    We would strongly object to any efforts to move the siting 
of jurisdiction electric transmission lines to the Federal 
level; however, we would support any efforts to decrease the 
timeframe of Federal agency's review on multijurisdictional 
projects.
    North Dakota, as we know, is located next to Canada. We 
have also experienced delays in Federal approval on pipeline 
border crossings, and fully support efforts to streamline and 
expedite energy infrastructure projects between the U.S. and 
Canada.
    I believe the states, not the Federal Government, ought to 
have jurisdiction over the retail rates and services. The 
states have been and will be the laboratories for innovation 
for retail electric supply. Some innovations work well in one 
state, but perhaps not in others depending on each unique 
circumstance.
    While PURPA attempts to address this situation there have 
been situations where federal regulators have attempted to use 
PURPA to undermine state jurisdiction.
    The development of the power grid should be done by 
professionals and remain consistent with least cost planning 
and need. It's important to ensure that North Dakota and the 
rest of our states have the necessary power to provide and 
maintain base load power and have sufficient ancillary services 
to ensure continued operation of our electric system. While 
North Dakota utilizes a full range of energy resources, concern 
exists with integrating renewables ensuring the system wide 
reliability is maintained.
    The need for power must always be the key consideration. 
There is construction. The construction of QFs by companies 
does not take into account if there is an actual need for the 
power in the state. The continuation of the mandatory purchase 
obligation as it exists today can impose significant, 
unnecessary costs to consumers.
    In summary, North Dakota appreciates continued Federal 
effort to expedite products that are multijurisdictional. North 
Dakota supports and practices an all of the above energy 
policy. Lowest cost and need are the bedrock principle of 
public utility ratemaking. There definitely is a place for 
renewables in the power grid but we must not forget about base 
load power.
    Finally, as a retired Marine and veteran of Desert Storm in 
Iraq, I'd like to thank the Committee for your work on 
increasing the energy security of our country. I truly believe 
that energy security for the United States not only enhances 
our foreign policy options but will result in less impact to 
rate payers and a more reliable power grid.
    Thank you, Madam Chair, for the opportunity. I'd be happy 
to answer any questions.
    [The prepared statement of Dr. Kalk follows:]
    
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    The Chairman. Thank you, Dr. Kalk. I appreciate the 
testimony of each of you here this morning. We have lots to 
talk about. Let me start with you, Dr. Kalk.
    You have noted that one area that is a little bit 
problematic here in constructing the transmission 
infrastructure is this disconnect between the Federal NEPA 
process and the state regulatory process. As I mentioned in my 
opening, a lot of what you see with the measures that we will 
be considering put requirements on our state and our state 
regulators. That can end up being some of the problem here.
    Can you give some examples of where and how the Federal 
NEPA process has delayed the state process and ultimately then 
the project? More importantly, what can we do to address that? 
As a state regulator what would you suggest that we do to 
address it?
    Dr. Kalk. Thank you, Madam Chair, for the question.
    A specific example I would talk about is North Dakota needs 
more electricity right now. And Basin Electric, one of our 
rural co-ops, put an application in for a 250 mile, 345 kV line 
in the central part of the state to the Northwest.
    The Public Service Commission went out and we held three 
different hearings along the route. We worked with our state to 
make sure that it met with the Fish and Wildlife goals, our 
North Dakota game and fish goals, and our state historical 
society. But because it was a co-op there was a Federal nexus 
created because they get our U.S. dollars.
    And so North Dakota, we completed our siting hearings. We 
had North Dakota agencies on board, but the final NEPA review 
was not completed and that NEPA review took an extra six to 
eight months until we finally got the NEPA approval.
    And the state, we put the order out there saying we approve 
it contingent upon final record of no impact, if you will. But 
I would say that these agencies, it seems in conversation with 
them, they have the data. All they have to do is to make a 
decision. So once they've collected the data, anything that 
this body can do to get them to analyze and make the decision. 
In North Dakota we make decisions. You get the data in front of 
you, you make the decisions. My frustration with the Federal 
agencies is they have the data, but they refuse to pull the 
trigger and make the decision and then move the process 
forward.
    When I was in----
    The Chairman. So maybe some timelines might be helpful?
    Dr. Kalk. Yes, Ma'am.
    When I was the Environmental Compliance Officer at Camp 
Pendleton everything we did had a Federal nexus. We would still 
remain close to the timeline. We'd follow the process and make 
decisions.
    The Chairman. Thank you. I appreciate that.
    Ms. Bowman, I wanted to ask you about siting issues because 
that has been raised by several this morning and siting on our 
public lands. Under the current statutory framework for siting 
natural gas pipelines across our National Park Service lands 
can you give me, I do not know if there is a typical time 
frame? Some kind of an understanding in terms of the timing 
that it takes to approve a right-of-way for a pipeline project 
going through National Park Service lands, and then what this 
does in terms of impacting the project itself? Because what we 
are doing is we are creating delays here, but I do not have a 
sense as to what kind of a time frame we are actually talking 
about.
    Ms. Bowman. Alright. So one of the largest issues with 
respect to siting a pipeline through National Park lands is 
that the project developer needs to go to Congress so that they 
get the statutory authority to the Secretary of the Department 
of the Interior. And different projects across the country, I 
believe one in Alaska where it was sited in Denali.
    The Chairman. We have got the corridor sited, yes.
    Ms. Bowman. Yeah, that took four years for that authority 
to be given. And only then can you start the real permitting 
process at the end----
    The Chairman. Was Alaska's example what we see in the lower 
48 as well on our Park Service lands?
    Ms. Bowman. There's another example in New York City where 
it's a three mile pipeline, and it took one and a half years to 
get that authority. So you're waiting 1\1/2\ to 4 years to 
get----
    The Chairman. And that is just to get the permit. That is 
nothing more than just the authority.
    Ms. Bowman. That's not even the permit. That's to give the 
authority to the Department of Interior Secretary so that then 
they can go through the process to get the permit.
    So then they waited, at least in New York project, another 
19 months before the permit was given, and now it's finally 
under construction.
    The Chairman. Thank you.
    Mr. Weisgall, I appreciated your comments about the bill 
that I have introduced, S. 1217, on the transmission and 
siting. I know we think it is going to be important to allow 
FERC to operate in this ombudsman type role, if you will, when 
it comes to agency coordination and to address problems that 
may be presenting in the process. The question that I have for 
you is related to corridors. The national interest electric 
transmission corridor designations and the transmission siting 
process that was called for in EPACT '05, those have been 
overturned. Are corridor designations still relevant today? How 
big of a deal is that?
    Mr. Weisgall. The process really hasn't worked, so I think 
they are less relevant then to some extent. I mean, what we're 
proposing here, and in response a little bit to Commissioner 
Kalk from North Dakota, we're not proposing here a greater 
Federal role. The idea here is an improved Federal role.
    You know, a lot of the transmission issues we're looking at 
do not involve national parks, but there's still at least BLM, 
Fish and Wildlife and Forest Service. So you've got three 
different Federal agencies there.
    So it's really, you know, we had this rapid response team 
that was designed to expedite the process. It was certainly the 
right idea. I mean, you need coordination.
    There is as many as nine or ten Federal agencies at any 
time on transmission. This is, of course, largely a western 
issue where's there's much more Federal land. So we've been 
frustrated.
    We've got one segment of our energy gateway project, 
Gateway West, we're now ten years and waiting. And part of the 
problem there is we'll go through a review with, let's say, 
BLM, but then there will be a new regulation. And nothing is 
grandfathered as such. So you, kind of, start over again. 
That's what we're doing.
    I don't have draft language there, but think about that 
grandfathering point. That if you're going through a lengthy 
transmission approval process with one of the Federal 
Government agencies. You get that approval, and then you've got 
to change through a new policy, a new manual, something new, at 
the agency.
    Something needs to be grandfathered because otherwise 
you're just playing this over and over again, and it's 
Groundhog Day. I mean, you've just got to start over from the 
beginning.
    So that's some of the challenges that we face. And ten 
years is, I mean, it's really hard to work with those kinds of 
timeframes.
    The Chairman. I would think it is not doable most of the 
time. I appreciate that perspective. Thank you.
    Senator Cantwell.
    Senator Cantwell. Thank you, Madam Chair.
    I would actually like to continue with Mr. Weisgall because 
the Quadrennial Energy Review that we had a hearing on a few 
weeks ago with the Secretary was all about infrastructure 
improvements. Rail infrastructure has close to a 4000 percent 
increase in transporting crude by rail. This is a big issue in 
the Pacific Northwest.
    I also noted that roughly 40 percent of what is moved by 
rail is coal; in fact, 68 percent of coal used for generating 
electricity is delivered to the power plants by rail. Is it not 
the case you have three utilities who are substantial coal 
generators? And Berkshire Hathaway also owns BNSF, the largest 
rail carrier of powder-basin coal?
    So isn't it the case that getting rid of this PURPA 
requirement would greatly benefit your company financially and 
your profit margin by reducing competition for central station 
generation?
    Mr. Weisgall. I would say the answer is an unqualified no, 
Senator. Let me try to explain.
    What we're trying, our legislative proposal by including an 
energy imbalanced market as a comparable market is actually 
designed to enhance the role of renewables. This market 
structure that we have entered into with the California ISOs 
has been endorsed by Natural Resources Defense Council, the 
American Wind Energy Association, Solar Energy Industries 
Association. They see a greater role for renewables with an 
enhanced geographic footprint to get rid of some of the 
balkanization that exists today in the West. Our view would be 
that by including this energy imbalanced market in PURPA you 
will have more entrants into that energy imbalanced market. 
That's going to be good for renewables. So if we can get more 
renewables on the grid, fewer greenhouse gas emission 
reductions and lower cost to customers, that's a trifecta.
    Yes, our company does have coal resources. We're at 35 
percent overall today. We anticipate going down to 26 percent 
coal.
    Senator Cantwell. So you--I just want----
    Mr. Weisgall. But for renewables we think that this is a 
big plus for renewables, just not for high cost renewables.
    Senator Cantwell. You think changing the PURPA 
requirement--that was about diversifying energy sources so that 
people could get renewables--so you think retracting that 
language is good for renewables?
    Mr. Weisgall. It doesn't retract the language. It simply 
includes a new, comparable market provision which Congress 
itself put in. In 2005 Congress spelled out two areas where 
there would be the mandatory purchase obligation would be 
removed and a third area called comparable markets. We're 
coming in with an example of that comparable market. All you 
need to do is look at the interest groups that support this 
energy imbalanced market that sees how a larger footprint is 
good for renewables.
    Senator Cantwell. Well, I can tell you one big group of 
people that does not support such a change and it is the 
Pacific Northwest. The Pacific Northwest is not going to 
support another cooked up scheme from California ISOs about 
energy markets. Okay? We are not getting screwed over again by 
another ENRON style scheme, like: ``look over here, but don't 
pay attention to what is really going on over here.''
    I see you making money on the repeal of this PURPA 
language. To me, it is bothersome to say nothing of oil trains 
and your slow response in removing old oil trains. Now you are 
coming here and trying to undo a very important law.
    I hope we can get some information from you about exactly 
how you think that that is not going to disadvantage the people 
moving forward. I would love to get Berkshire Hathaway on the 
record, supporting a more aggressive removal of the DOT-111 and 
CPC-1232 trains which you own and commiting to better pricing 
for agricultural products that are getting pushed off the rails 
because of all of these energy resources. All of these are big 
questions right in your wheelhouse, and I hope that you can 
help us get some resolution to them. I say that because I see 
you are the Vice President for Legislative and Regulatory 
Affairs, and these issues, as they relate to the Quadrennial 
Energy Review, are exactly what the Secretary of Energy says we 
need to deal with as far as energy infrastructure.
    Mr. Weisgall. Two very quick points.
    Number one, I appreciate the reference to Berkshire 
Hathaway Energy, to Berkshire Hathaway. We are with Berkshire 
Hathaway Energy. I really can't speak for Burlington Northern.
    Second point, I would like to work with you on these issues 
because we've seen already in the first five months of this 
energy imbalance market tremendous cost savings for customers. 
So going to your point about enhanced profits, we're customer 
centric. If we see cost savings that's good, but I appreciate 
your comments and would like to follow up with you.
    Senator Cantwell. I am sure that is exactly how ENRON sold 
their plan to the Californians, and why they should have 
created that market as well. We all know how that story ended.
    Thank you, Madam Chair.
    Mr. Weisgall. Well, there are, you know, a number of 
entrants in energy imbalance marketing including Puget Sound 
Energy and other utilities are looking, so it's an evolving 
issue. And an evolving market. So far it's worked very well for 
our customers.
    The Chairman. Let us go to Senator Capito.
    Senator Capito. Thank you, Madam Chair.
    I want to thank the members of the panel for being with us 
here today. It is, obviously, a very important issue. There are 
lots of bills out there.
    I want to start with Ms. Bowman. I would like to thank ANGA 
for supporting S. 1210, which is my bill, the permitting reform 
bill, that I introduced with Senators Cassidy and Heitkamp last 
week.
    I have heard a repeating theme, maybe not everybody on the 
panel has mentioned this, but the stalling out or the length of 
time of the permitting creating so much uncertainty at a time 
when we have a critical need for new and improved and expanded 
infrastructure.
    Dr. Kalk, you said in your statement, I think in response 
to a question, ``the agencies have the data, they just need to 
make the decision.''
    That is what my bill really is about. It is about creating 
timelines. It is not about running roughshod over any kind of 
environmental review or anything. It is just trying to move the 
process along to keep it from stalling out.
    Ms. Bowman, I would like to ask specifically how do you 
think that would help and what kind of results could we see by 
having specific timelines to meet the permitting process?
    Ms. Bowman. Thank you, Senator, and thank you very much for 
your bill.
    One of the biggest things that we see as an improvement 
from what your bill lays out is obviously, streamlining the 
permitting process, but allowing for or pushing toward a 
concurrent review.
    Senator Capito. Right, that is in the bill.
    Ms. Bowman. Among the agencies. That's something that is 
very important because it really helps move the decision 
process along.
    But also the other point here is that you kind of create, 
establish an early detector system for issues. And that really 
enables us, especially in this environment where there's a lot 
of activism at the state and local level, if we get issued 
identified early and start working on resolutions around those 
issues with the agencies that will greatly improve our 
timelines.
    So, thank you for the bill, and we look forward to hoping 
that gets into law.
    Senator Capito. Thank you, thank you very much.
    Mr. Hunter, I wanted to ask you a question as well. You 
were mentioning a lot about the workforce of tomorrow, and 
certainly we have seen in West Virginia and Pennsylvania a 
massive increase in natural gas production. One of the issues 
has been the workforce.
    Obviously it comes in a part of West Virginia that we had 
had massive population decline because the steel industry had 
declined and our workforce had declined. It irks, I think, a 
lot of West Virginians when they are driving through Marshall 
County and they see all of the Texas and Oklahoma license 
plates because we want to see this development occur.
    You mentioned ways to increase that workforce. How do you 
see that developing in that particular region across the 
country, and is it any different anywhere else?
    Mr. Hunter. Well I appreciate the question. I can tell you 
most of those plates are also non-union, so we don't like them 
being there either. [Laughter.]
    But what we're seeing is we've got a massive amount of 
retirements in the energy industry.
    Senator Capito. Right.
    Mr. Hunter. Especially in gas and utilities. So all we have 
been trying to say is that the idea of a joint apprenticeship 
program where somebody is coming right out of school, getting a 
job, working. The utilities, you know, we've worked closely 
with AEP and others. I mean, we are definitely hiring. The 
utility industry is hiring. And they're jobs where you stay 
home. You're not traveling thousands of miles away. So we think 
that just this, trying to keep the utilities profitable. They 
are in the hiring mode. We think is a good opportunity for a 
lot of people.
    We just had Detroit as a for instance. We had a large 
granite DTE. They turned around they hired 48 people, a lot of 
them were long term unemployed that we got from the Workforce 
Investment Boards that had been unemployed for over 18 months. 
Our last group, half of them were retired or veterans.
    Senator Capito. Thank you.
    Do you have concerns with the President's Clean Power Plan? 
Obviously that is going to influence. It is a different topic, 
but it definitely is something in my state with the metrics 
there who are very concerned about our power generation 
abilities. Have you all weighed in on that?
    Mr. Hunter. Yes, we have, and you know, we're already 
closing 60,000 megawatts because of MAFs. And now to turn 
around and take the possibility of another 50,000 megawatts of 
coal being retired, we're concerned about reliability as well 
as jobs. We don't think it's a good idea at all.
    Senator Capito. Alright, thank you very much.
    The Chairman. Thank you, Senator Capito.
    Senator Franken.
    Senator Franken. Thank you, Madam Chair.
    The Department of Energy recently released the first 
installment of the Quadrennial Energy Review. According to that 
report weather was responsible for half of the reported grid 
outages between 2011 and '14, and those outages resulted in the 
vast majority of customer interruption hours. In the future 
electric utility customers will likely see even more frequent 
and longer duration outages as a result of extreme weather 
events which are becoming more severe because of climate 
change.
    So now more than ever it is essential that we minimize the 
impact of weather-related grid outages to American households 
and businesses. That is why I joined Ranking Member Cantwell 
and other members of the Committee in support of the Grid 
Modernization Act which will help make the grid more flexible, 
efficient and resilient. For anyone. What can utilities and 
regulators do now to reduce the likelihood of weather-related 
outages and to ensure that customers get their power back on as 
quickly as possible during such an event?
    Mr. Dotson. Senator, I'd love to answer that question. I 
think it's going to depend on the various state and various 
utility. When you look back at Hurricane Sandy, I think a lot 
of people ask questions. Did it make sense to have substations 
that were below the 50 level, 50 year flood plain in the city 
and that turned out to be a mistake? And I think New York is 
doing a lot to try and address that so they do have a system 
that's more resilient.
    In other parts of the country, you know, in the south you 
have a situation where water, it's getting so hot during some 
parts of the year that it can no longer be used to cool thermal 
power plants. That's a very serious issue, and steps can be 
taken there to diversify generation or to install different 
cooling systems to address it. So I think it's a question that 
going to be a site specific, but it's one that I support the 
legislation because I think it's important to be asking those 
questions today.
    Mr. Weisgall. Quick answer.
    Senator Franken. Sure.
    Mr. Weisgall. It's a very good question. Our three 
utilities are members of what's called the Spare Transformer 
Equipment Program which is called STEP. Edison Electric 
Institute CEIs and CEOs are very aware of this issue, and 
they've actually put together a list of action items concerning 
more engagement with government partners to deal with these 
potential outages. They can be regional events. They could even 
be longer. But more engagement with the Federal Government, 
better coordination with railroads, just in terms of having to 
move transformers if there's these kinds of even more serious 
issues, even getting into DOD air lift capability. So there 
could well be a role there for Congress to have an overlay to 
assist in this area, but certainly it is an important one.
    Ms. Ericson. I think that there are suites of technologies 
out there that are being demonstrated right now by the 
utilities, granted on a, or by the ISOs and the utilities, on a 
regional basis because each region has its own needs and 
challenges. It's happening at both the transmission and the 
distribution level, different sets of technologies.
    Senator Franken. I want to talk about distributed energy, 
but continue.
    Ms. Ericson. At the transmission level which is the big 
grid level, the focus has been how can we take all of this 
wonderful big data that is available and the data analytics 
that are available now and use that information to get 
instantaneous readings and therefore actually be able to 
prevent blackouts and certainly keep them from cascading?
    And then on the reverse side there's been a lot of 
automation that has gone into the system that helps to automate 
part of the restoration process, and the lines people, the 
dispatch crews that are out there, are all equipped digitally 
now. They have a lot of remote information, a lot of 
telecommunications, IT information, that is speeding up the 
restoration process.
    On the distribution level there are a couple of things. We 
need a lot of work here, and obviously a lot more is happening 
at the distribution level. The part of the reason that we're 
seeing the trend towards microgrids, obviously, is because 
people want to be self-generating. They want to be self-
managing. They want to be self-storing, and they want to be 
able to disconnect to protect themselves. And that technology, 
again, in demonstration in many places needs to be integrated 
into the bigger transmission level. We have bulk resources, 
distributed energy resources. We have microgrids. We have 
energy storage. And for the sake of efficiency, for the sake of 
optimizing power flow and for the sake of reliability and being 
able for each level to help each other out, they need 
integration technology. That is still the evolving area.
    Senator Franken. Thank you.
    Madam Chair, the panel has rudely used all my time by 
directly answering my question in a productive way. [Laughter.]
    Thank you. I will submit questions for the record.
    The Chairman. Great, thank you, Senator Franken.
    Senator Portman.
    Senator Portman. Thank you, Madam Chairman.
    Don't you hate when they do that? You know, actually 
provide great information? [Laughter.]
    First of all thanks for holding these hearings. This, as 
you know, is a hearing that is part of the comprehensive look 
at energy, and I am excited about being a part of it. I thank 
the Chair and Ranking Member for bringing us together last week 
on energy efficiency and this week on infrastructure, two 
really important topics.
    Last week we talked about a whole bunch of bills including 
S. 720, which is the Shaheen/Portman now Portman/Shaheen bill. 
We are pleased to have heard from the Chair that we are going 
to be able to have a mark up on that legislation.
    Today there are a whole bunch of great bills including the 
Chair's bill, S. 1225, I think has a lot of promise. Senator 
Hoeven's bill, S. 1228 with regard to permitting.
    What I am hearing today from you guys is there is going to 
be a whole lot of opportunity here for some exciting 
infrastructure projects around the country related to energy, 
and we have to get it moving.
    Jim, I appreciate your coming back before this panel again. 
You came in at the request of Senator Manchin and myself to 
talk about reliability, and I listened carefully to your 
comments today on that. It is about jobs, and it is about grid 
reliability in terms of these regulations.
    On the permitting front these investments that you all are 
talking about, billions of dollars of energy infrastructure are 
running into real problems which are that our permitting system 
in this country is way out of date. If you look at the World 
Bank study they do every year, what the best place to do 
business, the ease of doing business? We now rank 41st in the 
world in terms of siting projects. And I am not just talking 
about energy. I am talking about any kind of permitting.
    I have joined with a bunch of my colleagues, including 
Senator King who I see here across from us, Senator McCaskill 
and others to put forth a bipartisan bill to streamline this 
process, consolidate it and make sure that we are not falling 
behind. This first came to my attention, frankly because of an 
energy project in Ohio. It was a hydro plant along the Ohio 
River, and I learned that some energy projects have as many as 
35 different Federal permits you have got to go through. We 
have heard a lot about that today. So my goal today is to try 
to figure out, how do we help with regard to energy? But it is 
broader than that.
    I had a company come see me last week. They are trying to 
build a pipeline. You know, we have got some real energy 
possibilities in Ohio now with Utica and Marcellus.
    They told me that in order to build the project that they 
would like to build in my state which would be a great benefit 
to our economy, they would be required to secure up to 1,900 
separate permits from multiple Federal agencies including FERC, 
the Army Corps of Engineers, Fish and Wildlife, NOAA, Forest 
Service, BLM, National Park Service and so on. Frankly the 
uncertainty around that, the time commitment to it and the 
legal liability potential, you know, the statute of limitations 
being six years and so on, makes it very tough for them to get 
the kind of investors they need to move forward on that.
    So I would encourage you all to look at S. 280. We 
introduced it again this year, Senators Manchin, King, 
McCaskill and others, and we had it marked up last week in the 
Governmental Affairs Committee. The markup after some work over 
the last several months with OMB and others ended up being a 12 
to 1 bipartisan vote. So I hope it can be part of this broader 
package we are talking about.
    It goes beyond just energy, but it relates directly to what 
we have heard about today. Dr. Kalk and Ms. Bowman both have 
talked about deadlines for requested reviews for instance 
today. That is one of the big parts of this legislation.
    So my question to you, Amy and to you, Erica, because you 
have got some Buckeye roots, I have to ask you a question being 
an Ohioan. Would this help? I mean, you testified that the 
electric industry is undergoing this transformation and all the 
reasons for it. We know some are market-based. Some are 
government policy-based. Do you have concerns that the 
permitting system might delay or even jeopardize the 
construction of some of this new infrastructure that we need?
    Maybe we could start with you, Erica?
    Ms. Bowman. I absolutely do think that permitting 
streamlining is required and needed. At least on the pipeline 
side of things, we're really experiencing, it's not only about 
permitting, but it's also about activism on the other end. And 
this is not about us. But we want a very transparent process. 
We want to maintain a good process with respect to review to 
make certain that all the due diligence is given and that 
whatever project is before whichever agency that they have the 
time that they need to do the analysis correctly.
    But what's really happening, at least from our perspective, 
is that we're getting a lot of activism that really, it's not 
about the project. It's about ideology, and that becomes very 
difficult. And they're using the regulatory process as a way to 
hamper development. And that's something that we really need to 
move beyond as much as possible.
    Senator Portman. Ms. Ericson.
    Ms. Ericson. Yeah, I think that the grid accommodated 
policy and regulatory changes in the 80s and 90s. It needs to 
continue to evolve to be flexible and be able to accommodate 
future changes.
    I'll just remind you as we move in the concept of an 
integrated grid for the purposes of sustainability, reliability 
and affordability, we can't think about all of those different 
levels in isolation. We have to look at them as an 
interconnection, and all of those systems will be 
interconnected.
    So to answer your question I think that the policies that 
are affecting them need to be interconnected too. Be it in the 
permitting area, in all areas the policies need to be 
interconnected as well across the Federal, state, local levels.
    Senator Portman. Thank you. Thank you, all.
    Thank you, Madam Chair.
    The Chairman. Thank you.
    Senator King.
    Senator King. Thank you, Madam Chair.
    First Ms. Ericson, of all the witnesses I have ever seen, 
you are the first one that hit the five minutes right on the 
nose. [Laughter.]
    You are obviously a very well organized person.
    I want to associate myself with Senator Portman's comments 
as someone who has worked in the energy field for over 30 
years. I know about permitting and how it can, I believe, 
unnecessarily delay projects. We can have the bio way set in 
Maine. I wanted the toughest environmental laws in the country 
but the most timely and predictable permitting process. And I 
think you can have those two things. A timely and predictable, 
environmental permitting process is, in no way, inconsistent 
with environmental protection.
    Second, I just want to mention, Madam Chair, because this 
is a hearing on the bills that are coming up. One of the bills 
that I have submitted is a bill that would limit natural gas 
exports, essentially, to ten percent of domestic production. 
The basis of that was testimony that we had at a prior hearing 
on behalf of the idea of exporting natural gas. I am gravely 
concerned about unlimited exports adversely affecting prices in 
our domestic market. The ten percent figure came from the 
testimony of the advocate for exporting who assured me when I 
asked him, will this affect domestic prices? He said, ``all of 
our studies say it will never exceed nine percent of domestic 
production and there will be a minimal effect on consumer 
prices in the U.S.'' So I took him at his word and wrote a bill 
to that effect. That is the origin of that, and I think this is 
a very important issue. I am not opposed to exports, but I 
think we need to be very, very cognizant of possible impacts on 
domestic manufacturing and our domestic consumers.
    Thirdly, and I know it has been addressed in some of the 
testimony, and Mr. Dotson, you touched upon it. I have 
submitted a bill on distributed energy resources, and 
essentially the purpose of this bill is to provide guidance and 
a strategy for going forward with something that is going to 
happen anyway.
    There is no question in my mind that rooftop solar, 
storage, conservation, demand response is going to happen in 
this country sooner than we think. The only question is whether 
it is going to happen in a thoughtful, deliberate, rational, 
process or we are going to have little brush fire wars in all 
50 states.
    My bill is not in any way anti-utility. I understand, as 
having worked in this industry, that the utilities and the rate 
payers need to be protected in terms of their investment in the 
grid and the cost of delivering the grid and having the grid, 
in effect, being the backup. On the other hand, what the bill 
talks about is that those charges shall be just and reasonable 
and shall take into account the benefits of distributed 
generation as well as the costs. It is not one side of the 
ledger, and that is really the purpose of the bill, Madam 
Chair, because I think this is such an important issue.
    It really is also a sovereignty issue. One of the first 
people to come and visit me when we proposed this bill was a 
member of the Tea Party in the Southeastern part of the United 
States. They view this as an individual sovereignty issue. 
People have a right to generate their own electricity and not 
be stifled by arbitrary costs and charging fixed charges in a 
case that would basically be designed to discourage these kinds 
of development. I believe that what we are trying to do here is 
create, as they say, a path toward a fair and rational 
allocation of costs.
    Mr. Weisgall, you talked in the end that you said the cost 
should be just and reasonable. I have no disagreement with that 
as long as those costs are rationally and fairly applied 
running in both directions. I think, unfortunately, we have to 
move in this case from simplicity to complexity because, I 
believe, net metering is a good technique now but I do not 
think it is the long term answer. And we have to talk about 
unbundling rates, time of day usage, to provide the right price 
signals to customers in order to incent the kind of activities 
that will benefit both the customers and the grid making it 
more secure.
    As a member of the Intelligence and Armed Services 
Committee and I'm running out of time, I am not going to be 
quite as good as you, Ms. Ericson, but we have got a national 
security issue here. To the extent that the grid can be 
decentralized and self healing, we are much better off from a 
national security point of view than the old model of the 
centralized grid that a cyber attack or Hurricane Sandy can 
take out and take out millions of people at once.
    So that is my marker, Madam Chair. I think we have, if my 
mail is any indication, hit on something important. I look 
forward to working with you as we work through this bill. I 
think distributed energy is a huge part of our energy future in 
the country, and we have to be sure that we get it right.
    Thank you, and if you can find a question in there you are 
welcome to it. [Laughter.]
    But I appreciate the witnesses and appreciate your 
testimony. Thank you.
    Thank you, Madam Chair.
    The Chairman. Thank you, Senator King. I think we all agree 
we need to try to get it right.
    Senator Barrasso.
    Senator Barrasso. Thank you, Madam Chairman.
    Ms. Bowman, to this question of LNG exports. In your 
testimony you noted that the President's Council on Economic 
Advisors issued a report in February. Madam Chairman, I would 
like to introduce that report for the record.
    The Chairman. Duly noted.
    [The information referred to follows:]
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Senator Barrasso. It discussed the benefits of LNG exports. 
Could you just briefly explain exactly what President Obama's 
Economic Advisors had to say about LNG exports?
    Ms. Bowman. Sure. So they noted many benefits to the export 
of LNG. One of which was that with LNG exports coming from the 
United States to other areas of the world it's going to 
increase domestic production. So all the economic benefits that 
comes from increased production will flow back to the United 
States economy.
    Additionally it found that by the U.S. exporting to the 
global marketplace it would reduce LNG prices worldwide which 
really creates some geopolitical advantages to the United 
States because we become a much larger player in the energy 
landscape of the world.
    Additionally, it talked about when LNG from the U.S. is 
used regionally across the world and it's displacing coal 
generation that it has the opportunity for emission reductions.
    I think the one thing that the Council didn't talk about 
but there is a study done by the National Energy Technology 
Laboratory where it's not just about displacing regional coal 
across the--or across the world, but rather also regional gas 
from Russian pipelines because their pipelines are very leaky. 
And by delivering U.S. LNG to Europe and to Asia you actually 
have a net GHD benefit.
    Senator Barrasso. Thank you.
    Ms. Bowman. But additionally to that one thing too that 
while they talked about the increased domestic production they 
also mentioned that the U.S. manufacturing renaissance would 
not be hurt by the start of U.S. LNG exports.
    I think one thing that can be offered with respect to that 
too is that when you increase your domestic production of 
natural gas you're also bringing out natural gas liquids as co-
products. And because you're increasing the supply of those 
natural gas liquids, you're basically creating a more stable 
price for those feed stocks to the U.S. manufacturing companies 
which really leads to stability and encourages the renaissance 
that we're seeing.
    Senator Barrasso. Great, thank you so much.
    I also wanted to touch on my bill, S. 411, the Natural Gas 
Gathering Enhancement Act, and related legislation. The fact is 
the United States, I think, needs more oil and gas pipelines. 
We are the world's largest producer of oil and gas, and we need 
a safe and reliable way to transport this energy to market, as 
a number of you have testified. We need more pipelines where 
oil and gas is produced in states like Wyoming and North 
Dakota, but we also need more pipelines where the oil and gas 
is consumed including New England.
    I think it is fair to say that the permitting process that 
we have heard today for pipelines is broken. After more than 
6\1/2\ years we still do not have a decision on the Keystone XL 
pipeline. This is absurd.
    But over the last five years we have seen significant 
amounts of natural gas vented and flared in states like North 
Dakota while New England continues to experience a shortage of 
natural gas, and this results in some of the highest energy 
prices in the country. Senators Heitkamp, Hoeven, Enzi and I 
have tried to address this problem by making it easier to 
capture natural gas that would otherwise be vented and flared. 
The bipartisan bill expedites the permitting process, gives 
some certainty for natural gas gathering lines. I think it is 
critically important.
    My question, Ms. Bowman, is will you discuss some of the 
obstacles that oil and gas producers are facing today when 
siting gathering lines on Federal and Indian land.
    Ms. Bowman. Sure. And really the main obstacle there is is 
the timeline for the permits. So the right of way permits, 
traditionally, have taken about four to six months. And then 
you have the sundry permits as well. They're a little bit less 
intensive, and they have historically taken around two to four 
months to get through the approval process, or the permitting 
process I should say. But recently those times have 
significantly increased to more than doubling. So you're 
waiting six, you're waiting 12 to 14 months, and you're waiting 
up to a year for a sundry permit approval.
    Given that in these areas that you have a lot of co-
products coming from the well so you may be, actually, 
directing your well towards oil, you will drill that well. You 
don't have the gathering lines in place, so you are flaring 
that associated gas. Well, that doesn't lead to anything good 
in any real way because you're denying the consumers the 
benefits that come with natural gas. So by basically increasing 
your permitting time while maintaining the proper review 
process, you're able to deliver a very clean fuel to customers 
that delivers cost savings and environmental benefits as well 
as energy security. So it makes a lot of sense to get the 
permits moved through the processes as quickly as can be given 
the timelines that are currently there.
    Senator Barrasso. Thank you.
    Thank you, Madam Chairman.
    The Chairman. Thank you.
    Senator Hoeven.
    Senator Hoeven. Thank you, Madam Chairman, and I want to 
welcome all of our witnesses.
    In particular I would like to welcome Commissioner Brian 
Kalk from North Dakota. PSC Commissioner Kalk was a 
distinguished Marine with a 20-plus year career in the Marine 
Corps. He retired, I believe, with the rank of Major, and did 
an outstanding job serving our country both here at home and 
overseas. He has been elected to our PSC a number of times and 
does a tremendous job, and he also has instructed at North 
Dakota State University on energy and other issues. So 
Commissioner Kalk really brings tremendous expertise in the 
field of energy.
    I guess where I would like to start, Commissioner, with you 
is we need energy infrastructure to build the right kind of 
energy plan for this country, and that is a real challenge. I 
sponsored the Keystone XL pipeline legislation which we passed 
in the Senate with well more than 60 votes. The President has 
vetoed that legislation and held the decision up for six years.
    So talk for just a minute about how we can build the kind 
of energy plan that we need for this country? How are we 
stimulating that investment in North Dakota, and how can we 
generate that in--and again, it's private investment building, 
a lot of this infrastructure? How do we get this infrastructure 
going? What are you doing in North Dakota? What can we do 
nationally?
    Dr. Kalk. Thank you, Senator, for the question.
    I guess, to dovetail a little bit, Senator Murkowski 
questioned me about the NEPA process and expediting that. 
That's a big piece of it. On the pipelines particularly, in 
North Dakota we've held numerous hearings on pipeline 
infrastructure. We've held the hearings of approved projects. 
There's border crossings from North Dakota to Canada that are 
being held up by the current Administration.
    And one thing that we've got to have is the pipelines to be 
able to move the product from North Dakota to other parts of 
the country whether it's crude, whether it's natural gas. We're 
able to do the work right now in the state, but it's very 
frustrating when we don't have the approval to move it outside 
of our borders. It's not only Canada. We're having some 
challenges in Minnesota, quite honestly, and South Dakota. 
That's just the way it works. But anything that we can do to 
get the pipelines built. Pipelines are, by far, the safest way, 
the most efficient way to move a product. Until we get the 
pipeline infrastructure built, we're going to have stress on 
our roads from trucks and safety concerns. You've seen rail 
concerns because of capacity. The pipelines are absolutely 
critical to be built, and that's where it's very frustrating.
    I think that one of my colleagues, down the way, talked 
about the will. You have to have states that have the will to 
build the infrastructure, and they have to truly believe it's 
good for the nation. That's where I think it comes down to get 
the data, make the decision and move it forward.
    Senator Hoeven. So, the issue is delay, right?
    I think you have made that point clearly as have others. In 
many cases this is private investment, billions of dollars, 
vital energy infrastructure we need, to move product more cost 
effectively and more safely and the problem is delay on the 
part of the Federal Government. Right? So legislation that we 
are putting forward, like my North American Energy 
Infrastructure Act and the Keystone legislation, the 
legislation of Senator Barrasso, our Chairman. All of this 
legislation that has been brought up today, that is designed to 
cut through this delay and thatwould make a significant 
difference in your opinion, in terms of both moving energy more safely 
and more cost effectively?
    Dr. Kalk. Yes, Senator, I believe that is the case.
    I would even add that in North Dakota we work with the 
companies. If we've got a concern about a certain river 
crossing or certain safety concerns, we'll ask the company, 
extra shut off valves and increase their emergency response 
plans, and they always do it.
    So in these agencies causing the delay, if there's 
something they don't like, they need to say what the companies 
need to do to fix it. We don't automatically approve things. We 
bring out the concerns and they address them.
    Senator Hoeven. So one issue is delay, and that is a huge 
issue which we need to cut through.
    The other is duplication, and what I want to bring up as an 
example is the fracking rules. I want to talk about the 
fracking rules in North Dakota and now the Department of 
Interior has come with a whole Federal regime on fracking, so 
now the energy producer faces duplicate regulation. Wouldn't it 
make sense to have just one regulator? Have the state be a 
primary regulator? And if they are covering the issues as far 
as safety and transparency, wouldn't it make more sense to have 
one rather than duplicate that regulation?
    Dr. Kalk. Absolutely, Senator.
    North Dakota was the leader in setting up fracking rules. 
We were also a leader in putting up CO2 storage and 
pore spaces. We've done the things we need to do in the state, 
and we've created the certainty in the state, but people need 
to do things. When the Federal Government comes out with 
additional layers that contradict the states, that's not the 
way this is designed. I talked in my testimony about states' 
rights and about we have to do things as a state. That's the 
way it should be, and I agree with you, Senator.
    Senator Hoeven. You said a very important term there, 
``certainty''. So we can get billions invested, a growing 
economy, and job creation by giving certainty to industry so 
they can make that investment. So that's what you mean when you 
say certainty, right?
    Dr. Kalk. Absolutely, Senator. And it's not only the 
company's certainty, it's the ratepayers and those who use the 
products. They should be able to know that the price of gas is 
going to stay in a certain range. They should be able to know 
they're electricity costs are not going to spike. And we've got 
these projects that get held up. You know, we have a growing 
need for power in North Dakota. The country always needs more 
energy. So it's not just a certainty for the investors. It's 
certainty for the ratepayers.
    Senator Hoeven. And also protection for ratepayers and 
customers in terms of, again, talk about the hydraulic 
fracturing. I mean, you require transparency. You require that 
they use frack focus. You require that they have integrity in 
their wells and the cement seals and all those things. The very 
same things now that the Department of Interior is calling for 
in their regulation. Isn't that the case?
    Dr. Kalk. That is absolutely correct, Senator. The state 
continues to do a good job, and our biggest threat is not 
anything other than the Federal Government in our energy 
development.
    Senator Hoeven. Thank you, again, to all of you, thank you 
for being here, particularly our Commissioner, thank you.
    The Chairman. Thank you, Senator Hoeven.
    Senator Flake.
    Senator Flake. Commissioner, sticking with you for a minute 
and kind of on the same theme. We have heard other members say 
that or discuss the Federal Government coming in and 
establishing utility rates in certain areas. You, in your 
testimony, dealt with some of that. Do you want to elaborate? 
Who is in the best position to determine what those rates ought 
to be?
    Dr. Kalk. Senator, I always believe the states are in the 
best position to do that, and it is becoming increasingly 
challenging, not only with potential Federal rules, but 
different states have different policies. And that's their 
right. I respect that. But it becomes challenging when a 
certain state passes a renewable mandate and that state builds 
the infrastructure no matter what the cost and need is. And 
you've got an integrated grid which then that power then flows 
to neighboring states. This is a very big challenge.
    And so it goes back to state regulators have to understand 
what the impact is to their ratepayers. They have to develop 
the renewables as appropriate, but we can't forget about base 
load power.
    We talked about reliability and sustainability of the grid. 
The coldest day in North Dakota, the wind is not blowing. When 
we have these biggy weather events, it's base load power that 
gets us through those.
    Senator Flake. Mr. Dotson, you mentioned that some of the 
cost now imposed on solar is dampening demand or enthusiasm for 
solar.
    Mr. Dotson. That's right.
    Senator Flake. But we recognize and other testimony has 
said that we have got the grid to worry about. Somebody has to 
maintain it. How would you propose that be done if it is not 
charged to solar customers?
    Mr. Dotson. Thank you very much for the question.
    I think, I wouldn't preclude any charge to customers, but I 
would say that I think the public utility commissions are best 
suited with what's the appropriate rate structure to ensure 
that we are getting rooftop solar deployed, that people do have 
that option at the same time that we're able to allow electric 
utilities to function.
    Senator Flake. So that, but that speaks to the utility 
commissions at the state level making that decision----
    Mr. Dotson. Yeah and I think there could be a stronger 
Federal role. I mean the Federal Power Act of 1935 established 
this line between Federal regulators and state regulators and 
left retail sales largely to the state regulators. But there's 
a lot of issues that are now blurring the lines whether it's 
cyber security, smart grid or this issued of distributed 
generation. And so, Congress, there's no constitutional reason 
that Congress can't consider this.
    The Supreme Court in Mississippi verses FERC examined this 
and said certainly Congress has the authority to step in on a 
retail issues where appropriate. And if you look at other 
issues, for example, real estate transactions where that's also 
traditionally a state issue, but when the Federal Government 
has found problems they've been able to step in whether it's 
lead based paint or whether it's disclosure of home mortgage 
products. And this is an example where, I think, it's not 
inappropriate for Congress to think about what is the best 
approach to ensure we're getting an outcome we want.
    Senator Flake. Anybody else have thoughts there? Go ahead.
    Mr. Hunter. Well, I think our biggest issue always, and 
understand IBEW installs solar. We install wind. We're not in 
any way anti-renewables. But we have to have the grid working, 
and we can't install. We've got a problem right now in Hawaii 
where there's so much solar installed the grid simply is not 
working. And you still have to sit there as soon as the sun 
goes down, have the available power.
    And what we're seeing in many, many states now is that, 
especially when it's deregulated, your generation issitting 
there all day long not getting paid, not earning any money, and as soon 
as the sun starts to drop, which is normally the same time that you hit 
your peak load, all this generation is required on the grid. So how we 
phase those in together and how we make the grid work, I think, is what 
we feel is very important.
    Senator Flake. Thank you, Madam Chair.
    The Chairman. Well this is probably the question of the 
hour here or the hours, and I think we recognize that we are at 
this very interesting point in time. We have had a system in 
place for decades, if not more, where you have your utilities 
that provide for the power and your obligation as the consumer 
or the ratepayer is to pay your bill once a month.
    Now with this whole concept of distributed generation and 
what an individual may be producing on their own, Senator King 
used the term, said that this was an issue almost of 
sovereignty. It is my right to be able to generate my own 
power. I think we do need to acknowledge that you may want to 
generate your own power through your rooftop solar, but then 
when that does not provide you everything that you need, you 
still want the benefits that the grid has provided.
    So those who do not have the rooftop solar panels, in 
effect, are ending up subsidizing those that can afford to put 
the rooftop solar on their homes.
    So how we balance all these, I think, is so much of the 
discussion that we are at today, and it is not something that 
we have had to wrestle with in years before. When we were 
dealing with the last energy bill that this Committee had in 
front of us, we were just not at that place where we were all 
talking distributed generation and the impact on reliability 
and security of the grid. So this is why, as much as anything, 
this discussion that this Committee is engaged in right now and 
some of the decisions moving forward are so critical because 
things are changing.
    Mr. Weisgall, do you want to jump in here?
    Mr. Weisgall. Well, the dilemma reminds me of a comment 
that the former chairman of this Committee made which was, you 
know, everybody wants to go to heaven. Nobody wants to die. 
[Laughter.]
    And it's a real challenge of how we get there.
    With respect to Senator Flake's question, I mean, one thing 
the utilities are coping with is, you know, we hear our 
customers. They want solar. They want that sovereignty.
    We're working on utility scale solar. We're working on 
community solar. That's another whole big topic where, again, 
we're looking at how can we accomplish this in the most 
affordable way to customers, as Ms. Ericson has said. That's 
our job as a utility, to get that energy in the most affordable 
way and keep it reliable as well.
    So you're absolutely right. Those are the challenges, but I 
think some of the proposals you have here today are the best 
ways to tweak those.
    The Chairman. This is not easy, but nobody said it was 
going to be easy when we started, so we will just keep working 
through it.
    Ms. Ericson, I wanted to ask you a question about the 
interoperability standards. As you know back in the '07 Energy 
bill, NIST, the National Institute of Standards and 
Technologies, through the stakeholder effort, was asked to 
produce interoperability standards. FERC then was supposed to 
adopt the NIST standards upon a finding of sufficient 
consensus, but there were a couple of technical conferences and 
the Commission basically came out and said we don't have 
sufficient consensus here for these NIST interoperability 
standards due to opposition from industry, due to cyber issues.
    So the question that I would have for you this morning is 
whether or not you think it is still important. Is there a need 
for a smart grid interoperability standards today? What might 
they look like? What would the process look like after what we 
saw with the failure of the earlier attempt?
    In response to somebody's question previously you said, 
look, everything needs to be knit together. So I am assuming 
your answer is going to be yes. If so, how would you envision 
that process going forward?
    Ms. Ericson. You're right. My answer is yes. 
Interoperability is still a good idea, and we do work with the 
Office of Electricity in DOE. We work with NIST. It is 
difficult with the different players and this whole vast 
structure to get consensus but I think we just have to come 
back together again and try it with the leadership of the 
Department of Energy, with the leadership of NIST and frankly, 
with the leadership of some of the state and local authorities. 
But yes, we have to do it.
    The Chairman. Okay.
    Ms. Ericson. The interconnection, both the benefits and the 
risks associated with the interconnection, will be better with 
this interoperability capability.
    The Chairman. I appreciate it.
    Senator Risch, you have returned.
    Senator Risch. Thank you very much, I have returned.
    First of all, Mr. Weisgall, I appreciate your comments 
about moving the goal post by the government as you try to get 
through one of these things. Of course, it is a fallout from 
two different things.
    Number one, the permitting process takes so long. Secondly, 
the people who do that change and the philosophy changes and 
that is what happens when you are a government of people 
instead of laws. A new person comes into the position, and the 
goal post gets changed, and we are seeing that. We see it over 
and over and over again, and it is incredibly frustrating for 
people trying to do business.
    I am going to talk just very briefly, Madam Chairman, about 
the bill I have proposed, Senate bill 1037, which is a bill 
that expands the provisions for termination of the mandatory 
purchase requirements under PURPA.
    PURPA was enacted by Congress in 1978, and it was designed 
to increase our energy independence at a time when we were in a 
real energy crisis. To that end, of course, the PURPA law 
required that utilities purchase power that was generated by 
non-typical traditional utility companies, and it was required 
to be purchased at full voided cost. Of course, the purpose of 
that was to attempt to generate more electricity which it did.
    At the same time the Federal Government, over a period of 
years, enacted massive financial incentives to the tax code 
which spurred incentive in different types of energy projects.
    Now you had two things going on. Number one, the utilities 
were forced to purchase the electricity that was generated. 
Secondly, it was required to be purchased at full voided cost. 
Thirdly, you had the incentives with the tax code which worked 
incredibly well.
    We have gotten to a point that no one imagined. It is hard 
to believe that they passed a Federal law with people not being 
able to see all the things that could happen as a result of it. 
They passed this Federal law thinking that we would always need 
every kilowatt of electricity that was generated. Now the need 
is not what was not covered in the original law, but is now 
something that should be considered.
    What this bill does is it brings need into the equation, 
and its need to be determined by the state public utility 
regulators which, Dr. Kalk will be happy with, but if you 
worship at the altar of a strong, central government that 
should control everything, you will not like. In any event it 
now puts needs into it.
    The best example I can give of this law of unintended 
consequences which has bit us is that our local utility in 
Southwestern Idaho, Idaho Power, has no need for additional 
generation until 2021. Yet at the same time they have had as 
many as 73 proposed, mandatory purchase solar projects that it 
has exceeded a thousand megawatts that they had to deal with. 
So the combined cost to the customers of Idaho Power would have 
been $2.7 billion. What has happened is the consumer, as 
always, winds up paying the whole tab. At one end they are 
paying these tax subsidies to get people to go out and generate 
this electricity, then at the other end they are paying as a 
customer of the utility for the energy that was generated at 
this full voided cost. So it is the consumer who is really 
picking up the tab here, and this is designed to change that. 
It is designed to shift this over, to a large extent, to the 
states.
    I know it is going to come as a horrendous shock to people 
in this town, but the states actually can make these kinds of 
decisions and in the best interest of their local utility. This 
is what happens every time the Federal Government muddles in 
the free market system, and it always happens when the 
government tries to pass a one size fits all rule which is 
exactly what this is.
    So that is what this does, Madam Chairman, and what it does 
is recognizes the reality of today's marketplace.
    Thank you very much.
    The Chairman. Thank you. I appreciate your leadership on 
that.
    Would anyone care to respond to Senator Risch's comments?
    Mr. Weisgall. One quick footnote. I think the bill is an 
excellent one. I agree with all of your comments. One of our 
utilities is in the identical position of Idaho Power.
    I would only suggest you look at one criterion, which is 
need. Our proposal looks at other criteria as well. Is there a 
competitive market out there for a QF? Are there competitive 
solicitations? If there are, there's just no need for this 
mandate. So we would urge you to use your bill as a starting 
point and look at other suggestions out there that are 
complementary to what your bill does and in no way would 
contradict what you're trying to do.
    Senator Risch. Madam Chairman, first of all, Ithink that is 
a really good suggestion. I certainly have no pride of authorship in 
this, and I am willing to look at other things. The playing field has 
changed since 1978, and that is what this is aimed at and it is aimed 
at trying to pick up some of the realities that are out there in the 
marketplace today. Thank you for that input, and look forward to 
further input from you.
    Thank you, Madam Chair.
    The Chairman. Senator Risch, thank you.
    Senator Risch. Does anyone else have a comment?
    The Chairman. Yes, does anyone else want to weigh in?
    Senator Risch. Thank you.
    The Chairman. Thank you.
    We have a couple of votes that are coming up here in just a 
few moments.
    Mr. Hunter, I did not ask any questions of you, but I want 
to thank you also, again, you came before this Committee 
before. I think your testimony contributed significantly to 
what we had in front of us about a year ago when we were 
discussing the issue of reliability. I also think not only the 
comments that you have provided in your written testimony, but 
your comments here before the Committee today are a plain truth 
on this; when we are talking about reliability and 
affordability, you are not only speaking from the perspective 
of representing those men and women who make things happen on 
the job, on the ground, the jobs that are associated with these 
energy infrastructure issues. You also represent those men and 
women that when they get these statements every month they pay 
attention to them because how much they are paying on a monthly 
basis matters to them and their family. When it goes up a 
little bit you can deal with it a little bit, but when it goes 
up considerably this has impact.
    I think far too often as we talk about the amazing changes 
that are going on right now within the energy sector and the 
great excitement about the possibilities that we have for a 
newly imagined energy future, it is all very exciting. It is 
all very dynamic, but I do not want us to get carried away with 
the excitement and forget that affordability has to be a 
critical component, an absolutely critical, if not the driving 
piece of this.
    In my State of Alaska we have some of the highest energy 
costs in the country, and I want to figure out everything that 
I can to bring renewable opportunities to them, to bring 
innovative energy opportunities to them, to figure out how we 
work this whole micro grid concept so that it is real and 
meaningful and lived out in our communities.
    But at the end of the day if I promise them this great new 
technology, their first question to me is going to be how much 
is it going to cost? Because if it is a heck of a lot more, 
come back when you can get the price down, Lisa. So these are 
so many of the considerations that we have in front of us.
    Senator Cantwell, we have wrapped up on this side, but I 
know you have been over in the Finance Committee jumping back 
and forth, as have many of our members this morning. So I will 
give you the last round.
    Senator Cantwell. Thank you.
    The Chairman. And you may wrap up as you see it.
    Senator Cantwell. Well, thank you.
    I just wanted to add a couple of things. Mr. Dotson's 
organization has authored a report on PURPA, and I hope we can 
submit that for the record.
    The Chairman. We will put it in.
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    Senator Cantwell. I want to make mention of the fact that 
FERC is investigating price spikes in the California ISO Energy 
Wholesale Market. And the notion that the California ISOs are 
the ``Holy Grail'' for the Pacific Northwest is one that I will 
always have more to say about that. And I will always fight for 
cheap hydropower.
    Again, I appreciate the testimony of the witnesses here.
    Mr. Hunter described the energy sector with a workforce 
that is retiring at a rate higher than 50 percent; so it's 
clear we need to focus on this.
    Ms. Ericson knows that there are many models here on how to 
generate this workforce that she is looking at and some of the 
things that she has done with Alstom. I hope that we will 
incorporate all of that into how we move forward on preparing 
for what the Secretary in the Quadrennial Energy Review said 
will be a huge demand and need for skilled workers in these 
areas. This presents an exciting opportunity for many in the 
United States of America.
    I think we have to figure out how to target these programs 
and get them right, and make sure that we meet the ever-
increasing economic opportunity with the skill that will be 
required.
    I look forward to working with you on all of that, and I 
very much appreciate the testimony from our witnesses today.
    The Chairman. Thank you, Senator Cantwell, and thank you 
again to each of our witnesses. We appreciate your comments. If 
members have additional questions they might want to have you 
respond to, we would hope that you would give us that time as 
well. Again, thank you very much and we stand adjourned.
    [Whereupon, at 11:57 a.m. the hearing was adjourned.]
    
    
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