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[Senate Hearing 114-308]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 114-308

   ISLANDED ENERGY SYSTEMS: ENERGY AND INFRASTRUCTURE CHALLENGES AND 
       OPPORTUNITIES IN ALASKA, HAWAII, AND THE U.S. TERRITORIES

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

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                                   ON

   ISLANDED ENERGY SYSTEMS: ENERGY AND INFRASTRUCTURE CHALLENGES AND 
       OPPORTUNITIES IN ALASKA, HAWAII, AND THE U.S. TERRITORIES

                               __________

                         TUESDAY, JULY 14, 2015

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

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

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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
                     Isaac Edwards, Senior Counsel
           Angela Becker-Dippmann, Democratic Staff Director
                Sam E. Fowler, Democratic Chief Counsel
       Allen Stayman, Democratic Senior Professional Staff Member
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
                            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.....................................................     3
Hirono, Hon. Mazie K., a U.S. Senator from Hawaii................     4

                               WITNESSES

Kia'aina, Hon. Esther, Assistant Secretary for Insular Areas, 
  U.S. Department of the Interior................................     6
Underwood, Hon. Robert, President, University of Guam, and former 
  Guam Delegate, U.S. House of Representatives...................    20
Glick, Mark, State Energy Administrator, Department of Business, 
  Economnic Development, and Tourism, State of Hawaii............    25
Hodge, Jr., Hugo, Executive Director/CEO, Virgin Islands Water 
  and Power Authority............................................    33
Kohler, Meera, President and CEO, Alaska Village Electric 
  Cooperative, Inc...............................................    41

          ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED

American Public Power Association:
    Statement for the Record.....................................    83
Cantwell, Hon. Maria:
    Opening Statement............................................     3
Glick, Mark:
    Opening Statement............................................    25
    Written Testimony............................................    27
    Responses to Questions for the Record........................    67
Hirono, Hon. Mazie K.:
    Opening Statement............................................     4
Hodge, Jr., Hugo:
    Opening Statement............................................    33
    Written Testimony............................................    35
    Responses to Questions for the Record........................    75
Kia'aina, Hon. Esther:
    Opening Statement............................................     6
    Written Testimony............................................     8
    Responses to Questions for the Record........................    64
Kohler, Meera:
    Opening Statement............................................    41
    Written Testimony............................................    43
    Responses to Questions for the Record........................    80
Murkowski, Hon. Lisa:
    Opening Statement............................................     1
Underwood, Hon. Robert:
    Opening Statement............................................    20
    Written Testimony............................................    22
    Responses to Questions for the Record........................    66
Wittrig, PhD, T. Stephen:
    Statement for the Record.....................................    85
 
   ISLANDED ENERGY SYSTEMS: ENERGY AND INFRASTRUCTURE CHALLENGES AND 
       OPPORTUNITIES IN ALASKA, HAWAII, AND THE U.S. TERRITORIES

                              ----------                              

                         TUESDAY, JULY 14, 2015

                                        U.S. Senate
                  Committee on Energy and Natural Resources
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:06 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. Welcome, and good morning. We are at order 
today in the committee. We are looking at the unique energy 
challenges that face those who live in the remote and isolated 
areas that are not connected to our national grid. Alaska, 
Hawaii, and our territories--these areas are largely dependent 
on imported diesel fuel for their energy needs. The cost of 
importing that fuel adds significantly to the overall cost of 
electricity, and in the case of Alaska, it also adds to the 
cost of space heat.
    Most remote locations pay at least twice the national 
average for electricity. In parts of my state we see rates that 
can reach 10 times the national average as a result of the need 
to import fuel, so when we talk about energy challenges, for us 
this is every bit as important as anything else that we face. 
Alaska, of course, is not alone in this. In our isolated areas, 
in our islands that are reliant on imported energy, this is 
probably the most debilitating aspect of their ability to have 
an economy at all.
    While the nation's regional grids have a diverse set of 
energy sources to draw from, most isolated areas simply do not 
have that luxury. Instead their energy costs are directly tied 
to the price of oil. Lower prices are providing some relief 
right now, but energy source diversity is the best and most 
stable option over the long term. In many parts of our state, 
the fuel barge comes in once a year, twice a year maybe. 
Sometimes it does not come when you expect it because you 
cannot get the barges up the river, but effectively what 
happens is the communities are locked into the price of fuel at 
the time that it was contracted. So if you contract for the 
fuel in July and the prices are reasonable, you enjoy those 
reasonable prices until the next shipment comes, which may be a 
year later.
    I asked this morning to see what the people in Bethel paid 
for their energy costs. In the summer of '13, heating fuel was 
going for $6.09, diesel was going for $6.51 and gas was at 
$6.85. In October of '14 we were looking at heating oil at 
$6.20, diesel at $6.82 and gas at $6.79. We see the low prices 
around the country. Everyone was benefiting from the low 
prices, but not so much for those of us in Alaska. We are still 
seeing price comparisons that simply do not add up.
    It is important that we look at remote and isolated energy 
systems in a holistic manner, not just from a cents per 
kilowatt hour perspective. In all but a few of the communities 
served by remote energy systems, economies of scale are simply 
not a reality. Further, the isolated nature of these energy 
systems means that they must bear the entire burden of ensuring 
reliability within the community. The ability to support these 
energy systems directly depends on the underlying economy, and 
at the same time, the cost of energy drives that economy.
    I was in Pelican over the 4th of July break. Pelican, 
Alaska is down in the southeastern part of the state, a very 
small community, with 100 or so people. It is only accessible 
by boat or by float plane. It was founded as a commercial fish 
processing site back in the mid-1930's. It processed one 
million pounds of fish back in 1942, but over the years they 
have languished as the fish went elsewhere, and they went 
elsewhere for some pretty simple reasons: ice. If you do not 
have ice to keep your fish chilled after you have harvested 
them, you do not have a product.
    Making ice takes energy, and without competitive energy, 
the community could not provide the ice necessary to support 
quality-based fisheries. The good news for Pelican is that they 
have a small hydro project that has put Pelican back on the map 
processing small bits of fish that are coming in, and the fish 
are no longer going by this community. It is in part due to the 
fact that they have energy to the school, to the water plant, 
and now to the fish processors there.
    Pelican, in my mind, is an example of how we need to think 
about energy in these systems. We need to focus on solutions to 
the problems at hand where energy sources match what the 
community needs and what the community can sustain, and not 
simply what is desired for them. From a Federal perspective, we 
must ensure that our programs do not leave these areas on the 
sidelines.
    I note that the DOE's definition of a microgrid requires 
the microgrid to be able to disconnect and connect to a larger 
grid. Well, that is just not possible for those of us in the 
non-contiguous parts of the United States. We have legislation 
before the committee, S. 1227, to ensure that the development 
of microgrid technology includes isolated communities, and 
hopefully that will become part of our larger energy package.
    Finally, I would note that this hearing occurs at the time 
the Pacific Power Association, which is the umbrella 
organization for the power companies in the Pacific Islands, 
including those in the U.S. territories and freely associated 
states, is holding its 24th annual conference in the Marshall 
Islands. That is a coincidence, not a matter of coordination, 
but it is good to know that the issue of remote and isolated 
energy systems will be highlighted across the globe this week.
    The issues associated with islanded energy systems deserve 
our attention. Energy can be a staggering cost and a staggering 
burden for the people who live in these areas, so I am pleased 
that we have set aside time this morning to explore what can be 
done at the Federal level to help find lower cost solutions to 
them.
    Senator Cantwell, I am going to now turn to you for your 
comments, but I also want to recognize our colleague, Senator 
Hirono, a fellow offshore senator. We have had an opportunity 
in the past to discuss the challenges that are unique to your 
smaller state and my larger state. While we are at least 
connected to the mainland, we are clearly islanded in the sense 
that we are disconnected from the rest of America. I do 
appreciate working together with you, so if you would also like 
to make a comment after Senator Cantwell, we would be certainly 
happy to hear from you as well.
    With that, let us go to Senator Cantwell.

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

    Senator Cantwell. Thank you, Chairwoman Murkowski, for 
holding this important oversight hearing, and I welcome the 
witnesses, including our former colleague, Congressman 
Underwood. Thank you so much for being here. And the Assistant 
Secretary, thank you for being here. I look forward to hearing 
everyone's testimony about the challenges of reliable and 
affordable energy in remote communities in rural Alaska, 
islands such as Hawaii, and a number of our U.S. territories.
    To me this is very important because energy is the 
lifeblood of any economy. Alaska and Hawaii have challenges as 
it relates to reliable energy sources, and coming from a state 
where we have seen cheap hydro build an economy over and over 
again, I just think this is such an incredibly important issue 
to how your economies grow in the future.
    This committee has jurisdiction over relations between U.S. 
and the communities of our fellow citizens and nationals who 
live in the territories. Part of our responsibility is ensuring 
that these communities have viable economies and that means a 
need for reliable and affordable energy. We need to look no 
further than Puerto Rico where electricity costs are over twice 
the national average, and the public utility is carrying a debt 
of about $9 billion, to see the consequences of high dependence 
on costly energy and old equipment.
    In other territories or in isolated communities in Alaska, 
electricity costs are typically three to five times the average 
of the lower 48 states, and this constitutes a significant 
challenge to economic development. Two summers ago, Chairman 
Murkowski and I traveled to remote areas of Alaska, and I saw 
firsthand the challenges that they face in getting an energy 
supply and building an economy with these energy challenges, 
particularly in the winter months. It is a very, very 
challenging situation.
    These communities export cash to operate and maintain their 
oil-based electric and transportation equipment. Newer, lower-
cost electricity generation and transportation technologies are 
increasingly available, but there are typically two barriers to 
deployment: a lack of technical expertise to operate and 
maintain these new technologies, and these are typically lower 
income communities which often lack the capital resources 
needed to finance the transition to less expensive fuel and 
equipment.
    So, partnering with the Federal Government offers ways to 
overcome these challenges. First, making sure that we tap into 
technical expertise at the Department of Energy and its 
laboratories. And second, assuring that these communities can 
leverage the grant programs administered by the Interior 
Department's Office of Insular Areas, such as the Empowering 
Insular Communities Program and Maintenance Assistance 
Programs. Similarly, the Office helped establish the Pacific 
Power Association to help island utility officials to learn 
more and to share their best practices in meeting the 
challenges of reliable and affordable electricity in these 
remote communities.
    I am glad to have this important hearing today, and thank 
you again for having this and affording our colleague, Senator 
Hirono, a few minutes for her comments.

    STATEMENT OF HON. MAZIE HIRONO, U.S. SENATOR FROM HAWAII

    Senator Hirono. Thank you, Senator Cantwell. Thank you, 
Chair Murkowski. I am glad that, Senator Cantwell, you 
mentioned the high energy costs in Puerto Rico are twice what 
the national average is. In Hawaii it is three times higher as 
Alaska is well aware. Senator Murkowski, our two states could 
become test beds for how we can provide affordable and, in our 
case, renewable energy to remote areas, something that you and 
I are very familiar with.
    Aloha to my friend, Bob Underwood, President of the 
University of Guam and former delegate to the U.S. House of 
Representatives. And, of course, I am really pleased to welcome 
Mark Glick, the Administrator of the Hawaii State Energy 
Office, as one of our witnesses today. I am also pleased to see 
our Assistant Secretary, Esther Kia'aina, another friend who 
served as first deputy for Hawaii's Department of Land and 
Natural Resources among positions of public service to the 
State of Hawaii.
    It is incredibly important that we are holding this hearing 
on islanded energy systems. The people of Hawaii understand the 
unique challenges that come with living on our islands, but our 
energy challenges loom especially large. Families and 
businesses in Hawaii are well aware that they face the most 
expensive energy costs in the country.
    With oil accounting for 80 percent of the energy needs of 
our state, the people of Hawaii are acutely aware that there be 
must new alternatives to the volatile prices and vulnerable 
supply of the global oil trade. We can address our energy needs 
in ways that are much cleaner using Hawaii's own renewable 
resources.
    In 2008, with the advice and support of the Department of 
Energy, our state established the Hawaii Clean Energy 
Initiative, a groundbreaking State/Federal partnership. We set 
a goal for 40 percent of our energy to come from renewables by 
2030, and in June of this year the Governor of Hawaii signed 
into law an expansion of that goal to--listen to this--100 
percent renewable electricity by 2045. This is the most 
ambitious plan and goal in the country. Can we get there? Mr. 
Glick is here to tell us how we are going to do that. 
[Laughter.]
    Hawaii has already more than doubled its use of renewable 
electricity in 6 years to 21 percent. Hawaii also set a goal 
requiring a 30 percent improvement in energy efficiency by 
2030. According to the Hawaii State Energy Office, the standard 
has resulted in the equivalent of $405 million in energy 
savings for Hawaii's homes, farms, and businesses. Hawaii has 
also established an on-bill financing program to help consumers 
cut their energy costs by investing in clean energy.
    Hawaii has benefited from the partnership of the state, the 
utilities, and the military in finding solutions for an 
affordable lower carbon energy future. It will help keep at 
home more than the $5 billion per year that we currently spend 
on importing energy. So not paying for importing oil and 
becoming more energy self-sufficient will, of course, mean more 
money; that $5 billion is circulating in our own economy, 
creating jobs, raising wages, and helping families make ends 
meet.
    It is great that we are focusing today on how Hawaii and 
other islanded areas deal with a high dependence on oil, high 
energy prices, and the reduced reliability of energy supply 
that comes from not being able to connect our electrical grids 
and pipelines with neighboring states. At the same time, Hawaii 
is on the forefront of addressing questions that will need 
answers all across the state and territories of the U.S.: how 
to use energy more efficiently in our homes, vehicles, and 
businesses; how to get affordable energy from increasingly 
renewable sources; and how to integrate new resources of energy 
in the energy infrastructure that supports our daily lives.
    Thank you, and I look forward to the testimony of our 
witnesses. Thank you, Madam Chair.
    The Chairman. Thank you, Senator Hirono.
    We will now turn to our panel this morning, and welcome to 
each of you. I will do quick introductions and then we will 
hear testimony. I would ask that you try to keep your comments 
limited to 5 minutes. Your full statement will be included as 
part of the record, and then we will have an opportunity for 
questions after that.
    We will begin the panel this morning with the Honorable 
Esther Kia'aina, who is the Assistant Secretary for Insular 
Affairs. As head of the Office of Insular Affairs, Ms. Kia'aina 
oversees the United States Government's relationship with 
American Samoa, the Northern Mariana Islands, Guam, and the 
U.S. Virgin Islands, as well as financial assistance to Palau, 
the Marshall Islands, and the Federated States of Micronesia 
through our Compacts of Free Association. Welcome.
    We next have the Honorable Robert Underwood. Mr. Underwood 
currently serves as the President of the University of Guam, 
but, as has been noted, is a former colleague here. He was the 
Delegate from Guam to the U.S. House of Representatives.
    We are also joined by Mr. Mark Glick, who is the 
Administrator for Hawaii's State Energy Office, tasked with 
growing Hawaii's clean energy sector. Mr. Glick has been there 
since 2011.
    We also have Mr. Hugo Hodge. Mr. Hodge is the Executive 
Director for the Virgin Islands Water and Power Authority, the 
public power utility for the U.S. Virgin Islands. He is also on 
the Board of Directors of the American Public Power 
Association; the Co-Director of the Energy Development in 
Island Nations, a U.S. Virgin Islands (USVI) Initiative; and, 
the Chairman of the Caribbean Electric Utility Service 
Corporation. Welcome to you.
    Finally, we have Ms. Meera Kohler. Meera and I were on the 
plane yesterday coming from Alaska, so I know that she also is 
clearheaded and not foggy this morning from jet lag. Ms. Kohler 
has come before this committee several times. She has been the 
President and CEO of the Alaska Village Electric Cooperative 
(AVEC) since 2000 and has 36 years in the electric utility 
business. AVEC serves a population of about 30,000 people 
across 56 communities with 49 power plants. She is a great 
friend and one who clearly understands the challenges that we 
face in Alaska. So thank you for making the long haul.
    To each of you this morning, welcome, and let us begin with 
the Honorable Esther Kia'aina. Welcome.

  STATEMENT OF HON. ESTHER KIA'AINA, ASSISTANT SECRETARY FOR 
         INSULAR AREAS, U.S. DEPARTMENT OF THE INTERIOR

    Ms. Kia'aina. Thank you so much. Chairwoman Murkowski and 
members of the Committee, I thank you for the opportunity to 
testify on the energy efforts of the Department of the 
Interior's Office of Insular Affairs (OIA) in the U.S. 
territories.
    The U.S. territories face higher energy costs than the rest 
of the nation, about three times higher than the U.S. national 
average. The territories are also nearly 100 percent dependent 
on imported fossil fuels for electricity generation. To combat 
these high cost of electricity, the Office of Insular Affairs 
entered into an interagency agreement with the U.S. Department 
of Energy's National Renewable Energy Laboratory, or NREL, in 
2010 to help the territories of American Samoa, Guam, and the 
Northern Mariana Islands: (1) establish baseline energy system 
data; (2) form energy task forces; (3) develop long-term 
strategic energy plans; and (4) formulate energy action plans. 
I am pleased to say that all of these objectives have been 
completed, and we are in the implementation stages of the 
energy action plans which are living documents that are updated 
regularly as circumstances change.
    On a slightly different track, the U.S. Virgin Islands was 
selected as the pilot project for the Energy Development in 
Island Nations, or EDIN, an initiative of the Department of 
Energy. Interior and the Department of Energy provided 
technical assistance to the USVI throughout the initiative, and 
in September 2011, NREL published the U.S. Virgin Islands 
Energy Road Map which outlines a path for achieving the 
territory's goal of reducing its dependence on fossil fuel by 
60 percent by 2025. As of December 2013, the territory has 
already achieved a 20 percent reduction in fossil fuel energy 
consumption, a third of its goal.
    OIA's current priority is assisting the territorial 
governments with the implementation of their energy plans 
through our Empowering Insular Communities Grant Program at 
about $3 million annually. Some project highlights include 
funding support for geothermal exploration drilling programs in 
American Samoa and the Northern Marianas, a wind pilot project 
in Guam, solar panel systems for the hospitals on Guam and 
Northern Marianas, and the integration of a hybrid renewable 
energy system in American Samoa to bring the Manu'a Islands 
close to 100 percent renewable by 2016.
    The greatest challenge we face is the lack of funding for 
high priority projects identified in the energy plans. Some of 
the projects must be supplemented with funding from our OIA's 
Capital Improvement Project, Technical Assistance Program, as 
well as our Maintenance Assistance Program, all which are 
already stretched thin. Another challenge is funding for Puerto 
Rico. Public Law 113-235 included a provision for energy 
planning in Puerto Rico that would be funded by the Office of 
Insular Affairs. NREL's cost estimate for including Puerto Rico 
is $331,000 for planning purposes. With no appropriation for 
this effort, OIA's Energy Grant Program would likely suffer for 
the other territories.
    Although the challenges are many, we feel there are still 
significant opportunities for the territories to reduce the 
cost of electricity, diversify their supply of energy, and 
become less dependent on imported diesel fuel. The President's 
2016 budget includes $4.4 million for pursuing sustainable 
energy strategies already identified in the territories' 
strategic energy plans. Solutions to energy issues are always 
pressing with significance for the environment, financing of 
territorial governments, and the well-being of island societies 
as a whole.
    Thank you so much for the opportunity to testify on our 
energy initiatives in the U.S. territories. With me to help in 
the answering of any technical aspects of my testimony is Scott 
Haase, who is the NREL liaison to the Department of the 
Interior. Thank you very much.
    [The prepared statement of Ms. Kia'aina follows:]
    
    
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]    
  
    
    The Chairman. Mr. Underwood, welcome.

 STATEMENT OF HON. ROBERT UNDERWOOD, PRESIDENT, UNIVERSITY OF 
 GUAM, AND FORMER GUAM DELEGATE, U.S. HOUSE OF REPRESENTATIVES

    Congressman Underwood. Thank you. Hafa adai. Good morning, 
Senator Murkowski, Madam Chair, and members of the committee. 
It is an honor to be asked to share some ideas and perspectives 
on energy issues in remote areas, especially island 
communities. I am President of the University of Guam since 
2008 and former Congressional Delegate, as has been mentioned. 
Part of the initiative as President is to establish the Center 
for Island Sustainability to kind of function as an honest 
broker on issues related to the sustainability of the islands 
in what we consider our greatest challenge, which is to try to 
figure out how to sustain our economy, our way of life, and our 
environmental resources at the same time.
    Our greatest export from Guam is money. As soon as we get 
it, we export it, and $300 million a year, which is roughly 
seven and a half to 8 percent of our total, what we call our 
gross island product, goes to fossil fuel. As you have pointed 
out, Madam Chair as well as Senator Hirono, if we were able to 
capture portions of that export through efficiencies and 
through the establishment of renewables, we could keep the 
money circulating in the Guam economy, generate jobs, improve 
the quality of our lives, and make significant strides toward 
energy independence. And that is the holistic approach that we 
think is necessary for people to understand.
    Power generation on Guam is provided by local companies 
which face significant challenges to keep power constant and 
consistent due to infrastructure issues, and the fact that we 
are disconnected from a greater grid, a national grid, a 
continental grid. They also must try to maintain policies which 
are able to pay back their long-term indebtedness.
    In most instances, the power companies are the drivers of 
energy policy rather than the entire society, and this is 
because they exist in a power vacuum. I hate to use that term, 
but that is exactly what happens in many of the islands. 
Consequently, strategic planning which engages energy issues as 
a long-term social and economic issue as well as dealing with 
technological innovations is incoherent and is really driven by 
occasional Federal initiatives. Some of the initiatives 
outlined by the Assistant Secretary have been very helpful, and 
there are others by the U.S. Department of Energy, and 
sometimes by the U.S. EPA. But looking at it from an island 
perspective, what happens is that you see various initiatives 
coming back and forth, and you are not sure which ones are 
really indicative of the entire Federal policy toward energy in 
the insular areas.
    Financing innovative technologies is complicated by, of 
course, capital shortages and the notion, very common, that 
innovative technologies is a Federal or external 
responsibility. Island power systems effectively must, of 
course, function as micro or minigrids. While our solutions to 
this are simple--well, they are simple to say, not simple to 
carry out--we need strategic planning which is holistically 
based and focuses on greater energy independence and the 
positive consequences which include economic growth and 
sustainability.
    We need to understand the concept of ``indigenous energy,'' 
bringing back using technology to help build independence. In 
the experiences of the islands, the introduction of technology 
usually means greater dependence on the outside world. Energy 
technology, renewables, actually reverses that trajectory.
    We need to adopt strong, but achievable, goals which reward 
innovation and spur participation rather than skepticism and 
opposition. This means we need renewable energy portfolio 
standards which are realistically arrived at but which have 
rewards and consequences. We need capacity building which is 
based on people, not just on infrastructure, and education for 
the work force and community outreach which enhances energy 
literacy, which goes further than just computing the dollars 
and cents computation of kWs, as you mentioned in your opening 
statement, Senator Murkowski.
    Federal policy initiative and activities must be coherent 
and consistent. A multiplicity of funding sources and 
regulators and technical assistance possibilities do not 
facilitate coherence in small communities, but rather the 
creation of silos within those small communities. There is very 
little followup on the ground by any Federal agency relating to 
energy in spite of its importance, which means the deploying of 
individuals from agencies to help us and to help those islands. 
The Federal Government should provide not only seed funding and 
technical assistance for some innovative projects but also the 
establishment of green funds themselves which are sustainable.
    Last, we want to call for development of not just an all-
island, but an all-islands, solution and network. Individual 
communities must develop their own coherent policies and 
initiatives for individual sustainability; however, we must 
join all-islands networks to share best practices and to avoid 
redoing what has been done before. We have done this through 
the establishment of the Center for Island Sustainability and 
our annual conferences. We have also reached out to remote 
communities in Alaska through our relationship with the center 
at the University of Alaska-Fairbanks, which I visited last 
year.
    The committee's efforts and the efforts of our partners, 
particularly under the leadership of the Office of Insular 
Affairs and other Federal agencies, will be greatly enhanced by 
adopting policies which reward demonstrated collaboration, 
successful projects, and which build that human capacity. A key 
factor in this is to not just look at territories as political 
jurisdictions, but to adopt an all-islands approach through the 
participation of islands, whether they are in the Pacific, the 
Caribbean, off the coast of Alaska, or the New England 
coastline.
    I will be happy to answer any questions. Thank you very 
much.
    [The prepared statement of Congressman Underwood follows:]
    
    
  [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]  
    
    
    The Chairman. Thank you, Congressman Underwood.
    Mr. Glick, welcome.

STATEMENT OF MARK GLICK, STATE ENERGY ADMINISTRATOR, DEPARTMENT 
OF BUSINESS, ECONOMIC DEVELOPMENT, AND TOURISM, STATE OF HAWAII

    Mr. Glick. Thank you. Good morning, Chair Murkowski and 
members of the committee. Thank you for inviting me to testify 
before you today about Hawaii's energy ecosystem and the 
challenges and opportunities faced in operating islanded energy 
systems in the Hawaiian archipelago.
    First, the state views our annual expenditure of about $5 
billion a year on imported oil as a tax on growth in Hawaii 
that imposes a significant burden on our residents and 
businesses. Economics and energy security have driven our push 
for clean energy with substantial progress for energy 
transformation finally taking root, once a bipartisan collage 
of policymakers in Hawaii's congressional delegation and our 
Statehouse decided to take bold action. This was embodied in 
the 2008 Memorandum of Agreement between the U.S. Department of 
Energy and Hawaii and the subsequent passage in 2009 of the 
nation's strong renewable portfolio and energy efficiency 
portfolio standards, something we call the Hawaii Clean Energy 
Initiative, as Senator Hirono mentioned in her remarks.
    In 2013, the Governor established energy policy directives 
to offer guidance and clarity for actions necessary to fulfill 
Hawaii's energy transformation. I would like to emphasize 
directives calling for a diversified energy portfolio and 
relying on clean energy solutions in which the market decides 
winners and losers, and the results have been strong. The 
renewable portfolio topped 21 percent at the end of last year, 
well ahead of the 2015 interim target of 15 percent, and the 
state has reduced electricity demand by more than 15,000 
gigawatt hours. To do this, we used the winning strategy of 
paying off infrastructure costs through energy savings, and 
Hawaii has led the nation for three consecutive years in the 
per capita value of energy savings performance contracts.
    Hawaii also leads the nation in solar capacity per capita, 
even though our isolated grid cannot absorb the percentage of 
intermittent renewables through the interconnection with the 
regional grid as is done on the mainland. So to address these 
technical challenges and costs associated with incorporating 
this increasingly large percentage of renewables, our electric 
utilities are working with the host partners to test and work 
on specifications of fast trip, inverter functionality to avoid 
transient over voltage events, Midwich distribution circuit to 
determine proactively the amount of distributed energy 
resources that can be hosted on each circuit, and work with 
inverter manufacturers to bring to market advanced inverter 
functionality to manage voltage levels to customers.
    Now, to support these solutions, our office, the Hawaii 
State Energy Office, focuses more these days on utility 
resource planning, rate design, and price signals to inform 
energy stakeholders on the optimal configuration to achieve a 
growing portfolio of renewable resources. One example I would 
like to cite is our modeling of load balancing and storage 
resources from higher penetrations of electric vehicles.
    If we assume 120,000 electric vehicles are operating when 
we achieve a 70 percent renewable portfolio, peak energy 
demand, electric demand, would increase by as much as 20 
percent, resulting in a 10 percent increase and our need for 
energy storage. However, if those 120,000 electric vehicles are 
supported by smart charging and advanced systems to be 
connected to the grid, energy storage requirements might 
actually be decreased by 10 percent.
    Now, the fact that we are the most isolated population 
concentration in the world makes energy resiliency and disaster 
recovery an even greater concern. Renewable energy and 
distributed energy offers great energy resilience, and we have 
also taken concrete steps to ensure that Hawaii's clean energy 
transformation is realized by all demographics and communities 
throughout the state. That is why our new securitized rate 
reduction bond and On Bill Repayment Green Financing Program 
targeting the undeserved residential customers, renters and 
non-profits, is so important.
    So in conclusion, Hawaii has been able to leverage our 
isolation and the challenges faced in the arena of clean energy 
to great advantage. Hawaii has been able to attract 
international investment from governments and corporations who 
see Hawaii as a bellwether for renewable energy solutions 
before rolling out to international markets, and this success 
has prompted the state to rethink the potential of Hawaii's 
clean energy transformation.
    The offshoot was the passage of the bill that Senator 
Hirono had mentioned signed by Governor Ige in June of this 
year calling for Hawaii's electric utilities to accelerate the 
2020 interim RPS target or renewables from 25 percent to 30 
percent, and, of course, go to 100 percent renewable energy by 
2045. Our continued refinements of these targets assist in 
resource optimization and prevents costly overbuilds, and sets 
a clear, unambiguous goal of generating 100 percent electricity 
from its renewable sources. Our approach in setting targets for 
utilities is a practical approach to furthering the state's 
energy policies.
    So thank you for this opportunity to highlight Hawaii's 
clean energy leadership and to share some of the lessons we 
have learned in pursuing our clean energy transformation.
    [The prepared statement of Mr. Glick follows:]
    
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    The Chairman. Mr. Hodge, welcome.

 STATEMENT OF HUGO HODGE, JR., EXECUTIVE DIRECTOR/CEO, VIRGIN 
               ISLANDS WATER AND POWER AUTHORITY

    Mr. Hodge. Good morning, Honorable Chairwoman Lisa 
Murkowski and other honorable members of the Committee on 
Energy and Natural Resources. My name is Hugo V. Hodge Jr., and 
I am the Executive Director/Chief Executive Officer of the 
Virgin Islands Water and Power Authority (VIWAPA). On behalf of 
the Governor of the Virgin Islands, the Honorable Kenneth E. 
Mapp, the Virgin Islands Delegate to Congress, the Honorable 
Stacey Plaskett, and the members of the 31st Legislature of the 
Virgin Islands, and the Governing Board of the VIWAPA, we thank 
you for this invitation.
    To say that volatile oil prices have placed an undue burden 
on the businesses and residents of the U.S. Virgin Islands and 
the overall economy of the territory is an understatement. 
Since approximately 2003 when fuel oil prices began an 
unprecedented climb, electric customers have struggled to pay 
for electric services, spending approximately 9 percent of 
their income on these services versus the 2-percent paid by 
their mainland counterparts.
    At one point in time, the average price of energy paid by 
the U.S. Virgin Islands consumer climbed to a high of $0.51 per 
kilowatt hour, five times the U.S. average. While the territory 
has received some relief in recent months due to the recent 
decline in oil prices which has reduced the current electric 
rate to $0.32 per kilowatt hour for residential customers and 
$0.35 per kilowatt hour for commercial customers, analysts are 
divided on how long this respite from high fuel prices will 
last. One thing is certain, however. Prices will elevate again, 
so the urgency remains the same.
    Like most other Caribbean islands, the USVI has no 
conventional energy resources to meet its energy needs. While 
U.S. mainland utilities can connect to grids to purchase power 
from other utilities in the continental United States, island 
utilities are small, isolated, and are not interconnected to a 
grid comprised of other utilities. This is primarily due to 
their separation by water and the depth of the ocean floor, 
which makes interconnection via underwater electric cables 
technologically and economically unfeasible. As a result, 
island utilities have historically purchased small simple cycle 
generating units that are oil-fueled.
    From the mid-1980's to approximately September 2003, the 
inflation-adjusted price of a barrel of crude oil on the NYMEX 
was generally under $25 a barrel. The attraction of low cost 
fuel, combined with the economies of scale, provided the 
framework for island utilities to purchase these small 
generating system. In many islands that are comprised of 
several small islands separated by water, duplicate generating 
systems and increased reserves are required to meet the need 
for electrical services. VIWAPA, for example, has two separate 
generating systems--one to serve the islands of St. Thomas, St. 
John, Water Island, and Hassel Island, and another separate 
system serves the island of St. Croix.
    During 2003, oil prices globally began to steadily rise. 
The price per barrel paid for by the Authority was 
approximately $22 a barrel. At its highest, we have paid $141 
per barrel. The result of these massive spikes caused operating 
cash shortfalls, flat to declining sales in electricity, and 
larger outstanding receivables, resulting in deferred 
maintenance on our generating equipment. I provide a table 
showing the rise of fuel prices.
    So what we have done since that point is we have pursued 
every available option to reduce the cost of electric services 
to our customers and jump start the economy. We have pursued 
alternative and renewable sources tirelessly for almost 10 
years now, and tangible relief is finally on the horizon. 
VIWAPA could not, however, have made the advances it has 
without a number of public and private partnerships.
    Chief among our supporters have been the Department of 
Interior, the Department of Energy through its National 
Renewable Energy Laboratory, the Federal Emergency Management 
Agency, and the U.S. Department of Agriculture, and RUS, which 
have provided the following assistance. DOE through NREL helped 
to identify the territory's baseline energy use and how the 
USVI could best meet its goal to cut fossil fuels by 60 percent 
by 2025. VIWAPA, as an EDIN partner, has been able to tap into 
a broad spectrum of technical assistance and project 
development support from DOE and NREL. DOI provided a $500,000 
grant for VIWAPA to prepare an Integrated Resource Plan that 
will provide the roadmap for responding to future generation 
needs. FEMA has provided funding for hazard mitigation projects 
that have assisted VIWAPA with burying power lines that serve 
areas critical to the territory's infrastructure. RUS has 
approved a loan that will allow VIWAPA to implement Distributed 
Automation Technology, a smart grid capital improvement 
project, and AMI, Advanced Metering Infrastructure. The closing 
on this loan has, however, been delayed. Any assistance the 
committee can provide to close the loan would be appreciated.
    Throughout the rest of the testimony I highlight some of 
the things we have implemented. We were 100 percent dependent 
on fuel oil. Now we have about 8.2 megawatts of grid type solar 
and about 15 megawatts of net metering, bringing our renewable 
portfolio to just about 22, 23 percent currently. We also have 
another six megawatts of solar power we have contracted for to 
be built on the island of St. Croix. We have a seven-megawatt 
biofuel project on St. Croix contracted to be built by the end 
of 2016, and we are currently doing a massive undertaking of 
converting all of our power generation to use of LPG, or 
propane. The conversions of the units allow for both LNG and 
LPG, and we expect to see a significant reduction in costs as a 
result.
    The Island of St. Croix will be benefiting from that 
project as early as next month. We plan to introduce propane to 
the storage facilities the end of July and produce energy in 
August. I am pleased to report that. The St. Thomas project is 
behind waiting for the issuance of an Army Corps of Engineer's 
permit, and we know they are doing their utmost to produce the 
permit. However, the permitting staff for the region, which 
reviews the permits, is inundated with other requests.
    I would like to thank you for the opportunity to appear 
before the committee, and I am here to answer any questions you 
may have.
    [The prepared statement of Mr. Hodge follows:]
    
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    The Chairman. Thank you, Mr. Hodge.
    Welcome, Ms. Kohler.

 STATEMENT OF MEERA KOHLER, PRESIDENT AND CEO, ALASKA VILLAGE 
                   ELECTRIC COOPERATIVE, INC.

    Ms. Kohler. Thank you. Good morning. My appreciation to 
Chairwoman Murkowski for inviting me here today and to all the 
members of the Committee for tolerating hearing a little bit 
about Alaska.
    You have already had a brief introduction to AVEC, the 
Alaska Village Electric Coop. We are a non-profit electric 
utility that serves 56 communities, and we do so by operating 
49 independent power plants. The reason we have to do that is 
because none of our communities are connected to each other, or 
very few of them are, although we have been on a mission for 
the last several years to try and interconnect our communities 
because that is how we can achieve economies of scale as well 
as allow us to integrate some wind power.
    We actually are leaders in the development of wind power in 
Alaska. We own 34 wind turbines that serve 15 communities. We 
are able to achieve capacity reduction or diesel reduction of 
up to 30 percent in some of those communities, which is 
technologically a very challenging feat. Nonetheless, it is a 
mission that we do have to reduce our diesel consumption 
substantially.
    I think, as was pointed out, the export of Alaskan dollars 
for fossil fuels is considerable. A very brief study that we 
did a few years ago shows that we are exporting $3 billion a 
year in fossil fuels used to power electricity and heat in our 
communities. We are, of course, an Arctic state, and as a 
result, heat is a very critical factor that has to be provided.
    What we will find in Village Alaska and some of our 
smallest rural communities, over 20 percent of the population 
spends literally 50 percent or more of their disposal income on 
energy, and that is just electricity and heat. That is not 
supportable. You cannot have any type of economic development 
when you have energy that is crippling the economy.
    Across the State of Alaska we have electric rates ranging 
from $0.10 a kilowatt hour in southeast Alaska where they have 
renewable hydro electricity up to over $1 a kilowatt hour in 
many of our communities where fuel has to be flown in. As 
Senator Murkowski mentioned, our river systems are changing. 
They are becoming shallower, and more and more communities are 
unable to be reached by barge traffic during the very brief 
summer season when we are ice free. So as a result, our 
challenges in Alaska truly are formidable.
    These small local facilities do not have economies of scale 
because you are serving populations of just a few hundred. Our 
average village community in AVEC is 450, but if you look 
across the state where we have more than 200 microgrids as it 
were that are completely islanded, the average population in 
those villages really is more like 200. So when you are trying 
to develop a reliable energy system to serve such a small 
population, you actually wind up with a huge amount of 
redundancy.
    We have typically three to four diesel generators in a 
village. They are sized such that they can pick up the loads 
during any one part of the season of the year. You have to be 
able to count upon having one generator down for planned 
maintenance and having another one break down unexpectedly, so 
you have to have at least triple redundancy in each of these 
communities.
    As a result, our actual installed cost per service in our 
villages is five times or more that of the lower 48. So 
typically over here, the lower 48, you see a capital cost of 
about $2,500 per service. In our villages, it is more than 
$17,000 per village--per service. Those disparities result in 
very high non-fuel costs of power as well, so typically in one 
of our villages we are looking at over $0.60 per kilowatt hour 
for the first thousand kilowatt hours, as it were.
    We must have affordable energy if we are going to have 
economic development. We must have jobs. We must be able to 
provide essential services. The State of Alaska has been a 
significant player. They have funded several programs to 
improve the cost of electricity. They have a renewable fund 
that has been in operation since 2008 and has plugged almost 
$300 million into developing renewable energy systems. They 
have innovative financing options for large-scale construction, 
they have a revolving Power Project Fund, and they have the 
power cost equalization to reduce the cost of residential 
electricity for the first 500 kilowatt hours, but Federal help 
is desperately needed in Alaska. We do not have a transmission 
grid. We would love to have a grid to be able to connect and 
disconnect to, so that is something that certainly should be on 
the plate in the future. The Energy Independence and Security 
Act has got the potential to be a huge player in Alaska, so we 
urge you to consider funding elements of that act so that we 
can have the Federal support that we need across Alaska.
    With that, I stand ready to answer questions, and yield the 
floor back to Chairman Murkowski.
    [The prepared statement of Ms. Kohler follows:]
    
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    The Chairman. Thank you, Meera. I appreciate you being here 
and for your testimony this morning.
    I have several questions this morning. Let me start with 
you first, Assistant Secretary. Under the Omnibus 
Appropriations bill from 2015, the Secretary of the Interior 
was directed to establish energy action plans for the 
territories which you mentioned in your comments. It also 
included Puerto Rico, but Puerto Rico is not yet included in 
the process. Where are we with Puerto Rico's inclusion?
    Obviously Puerto Rico is clearly and keenly in the news 
right now. We are all very engaged in these issues that are 
very, very difficult for Puerto Rico. I have noted that as 
difficult as the economy is right now, unless we can deliver 
and work with the people of Puerto Rico on some energy 
solutions, it is going to continue to be a tough set of facts 
there. So where are we on the energy action plan for Puerto 
Rico?
    Ms. Kia'aina. Thank you, Chairwoman, for that question. 
When the law was passed, our Fiscal Year 2015 budget did not 
take into account Puerto Rico, so the $3 million that we 
received went to other areas in the other territories. As I 
stated in my testimony, the plan estimated by NREL will cost 
$330,000. We believe that if we received our full funding for 
Fiscal Year 2016, which is $4.4 million, we would be able to 
accommodate Puerto Rico in the upcoming Fiscal Year.
    The Chairman. So to this point in time, there has been 
nothing done to pursue an energy action plan for Puerto Rico. 
Is that correct?
    Ms. Kia'aina. That is correct; however, there is NREL and 
there is the U.S. Department of Energy. I have been in contact 
with the U.S. Department of Energy, and they actually have told 
me that a plan may not be necessary because they have already 
done a lot of work in Puerto Rico. So I commit to you after 
this hearing--well, first, let me just say for Fiscal Year 
2016, we can fund it if we get an increase in appropriation.
    With regard to what can DOI and U.S. DOE do now, I need to 
followup with my colleague at the Department of Energy, who is 
already active in Hawaii and the Virgin Islands and has said 
that a lot of ground work has been made in Puerto Rico. And so, 
they may have the discretionary authority to do that plan. That 
is something I will followup with your staff as well as with 
the Department of Energy.
    The Chairman. I would appreciate you doing that. We had 
invited representatives from NREL or DOE to attend this morning 
to speak to some of these issues, so hopefully they are on 
alert that these are questions that we would like to have 
addressed. I am sure that the people of Puerto Rico would like 
to know that there is a plan that is out there.
    Nobody has really talked this morning about storage 
capacity, and I know that for the areas that you all represent 
and are engaged in, the ability to store energy from these 
intermittent sources is really going to be the future here. 
What level of engagement have you had with the Department of 
Energy on these microgrid technologies that you are working on 
to improve storage capacity? Has there been much work either in 
Alaska, Hawaii, or the territories? Mr. Glick?
    Mr. Glick. Chairman Murkowski, the Department of Energy has 
provided a great deal of technical assistance through some of 
the analyses that we talked about. The Oahu wind integration 
study, as well as the solar integration study did talk about 
amounts of storage that would be necessary to smooth out 
frequency disruptions and other technical problems created 
through intermittent power. So there have been RFPs that have 
been put together by the utility to solicit that amount of 
storage for our systems, but we also believe that it is 
important to do grid modernization, which will relieve a lot of 
demand for storage through these trip inverters and other 
technologies I discussed, which are a lot less expensive. So we 
have to do both.
    The Chairman. Mr. Hodge?
    Mr. Hodge. Yes, good morning again. We have been talking to 
the Department of Energy about a microgrid system for the 
island of St. John. It is an isolated part of our grid, it is 
served by underwater submarine cables, it is about eight 
megawatts in total, and we believe that the island is ideal for 
a microgrid system with distributed generation and storage. We 
have asked for their assistance, and I believe we are just 
about close to getting some technical assistance in studying 
how we can do our microgrid system for that island.
    We also look at other mechanisms for our utilities scale. 
Solar, we use some of the European standards, the low voltage 
ride through, the frequency support, and some of the other 
technologies that are in the inverters that are not predominant 
in the U.S. markets, but that are more prevalent in the other 
countries that utilize the renewables.
    The Chairman. Let us go to Senator Cantwell.
    Senator Cantwell. Thank you, Madam Chair. The Napaskiak. Is 
that where we----
    The Chairman. That is where we were.
    Senator Cantwell. So Senator Murkowski and I were at 
Napaskiak two summers ago. Ms. Kohler, one of the things that 
you said that struck me is this nexus between economic 
development--energy costs and economic development. You are not 
going to grow an economy if you do not have basic energy costs 
that are competitive for people to establish businesses there. 
So this is, to me, a very critical issue. One of the things I 
mentioned in my statement was about the two challenges that we 
have, both the technical barriers on the ground and in the 
workforce and then the financial investments or the structure 
to deploy that.
    Of the programs that we currently operate at the Federal 
level, what are the holes? Why does this not work to try to 
test or deploy other technologies, or maybe you think they are 
working fine?
    Ms. Kohler. Well, I would like to say they are working 
fine, but the reality of the matter is that when you are 
looking at--you mentioned Napaskiak, and that is a standalone 
community that operates their own electric system. When you are 
that small you do not have access to technical resources that 
you can afford, and so you rely upon other entities, such as 
the State of Alaska through the Alaska Energy Authority, for 
assistance.
    Now, on the other hand, in our communities, the AVEC 
communities, because we are headquartered in a single location, 
we have the technical staff and the engineering resources and 
so forth to provide the support services we need for our own 
communities. You still have a real issue with local capacity. 
When we install wind turbines, for example, in our communities, 
we actually send individuals that are residents in those 
communities, typically one or two people, to extensive wind 
training so that they actually become wind smiths, as it were. 
They are supported by journeymen level staff out of our own 
office, but it makes for very expensive alternatives.
    U.S. DOE has not really played a major part, but the Denali 
Commission has been a very strong supporter and has provided 
funding for renewables and for training as part of the 
operation of those renewables. I know that very recently the 
Alaska Center for Energy and Power is working with U.S. DOE to 
put together a modest innovative program to develop storage 
alternatives.
    The storage that we use to operate our wind turbines really 
is a diversion off that excess electricity into heat sources. 
We actually use the electricity as heat to supplant diesel in 
public projects, water treatment plants and so forth. So we do 
effectively use it, although the best value for that 
electricity would be as electricity. But until storage becomes 
more of a mainstream event, as it were, we cannot afford to 
invest in it.
    Senator Cantwell. So financing really is an issue.
    Ms. Kohler. Financing is the hugest issue of all, yes.
    Senator Cantwell. And that seems to me to be the crux of 
this--I am not saying the complexity of Alaska and its 
temperature is not a very challenging issue, but it does not 
seem to me that these problems are about getting a national lab 
to tell us what we need to do here. It is more about whether 
the tools are there for the communities to build capacity that 
they do not have to begin with because of remoteness or the 
lack of a business interest. It seems to me that the financial 
tools that we are making available seems to be a very critical 
issue. You are nodding your head. You agree?
    Ms. Kohler. I am agreeing with you 100 percent.
    Senator Cantwell. Okay. Mr. Underwood, Mr. Glick, or Mr. 
Hodge?
    Congressman Underwood. Yes, that is exactly it. I think the 
main issue we are--and certainly in small island societies, you 
are waiting for some technological innovation to come along to 
solve your problem instead of--and what happens is that the 
shifting of the responsibility of, well, how do you finance 
some of these things, and how do you finance innovations and 
adopt them into your island society that has shifted. It 
shifted to other places, and you are just kind of waiting for 
something to happen. I would argue that and I would urge that 
Federal agencies spend as much time giving some island 
communities as much technical assistance on how to finance 
things as much as technological advice or advice on new 
techniques.
    Also, just to speak briefly to the point about storage. 
That is also a very critical issue, and I am eager to hear what 
the others have done with this issue because the inability to 
store from solar panels is one of the biggest reasons why some 
people argue you should not adopt solar panels now until you 
get that level of technology. I just--I do not accept that. I 
think there must be ways of managing that grid and power 
consumption throughout the day in order to manage that, so that 
storage issue.
    But just to speak briefly again to the issue of technical 
assistance, and financing, and developing models for that is 
really as much a key as is advice on new technologies.
    Senator Cantwell. Well, I am a big--oh, Mr. Hodge, did you 
want to say something?
    Mr. Hodge. Yes. I would like to say that having the utility 
be a part of the plan is critical because how we have tackled 
the issues of financing is by using the PPA model. So where the 
utility or the government could not outright finance the 
project or do the borrowing for the project, our utility can 
use a mechanism called a power purchase agreement to pledge the 
repayment over a period of time via the rates for that 
reduction in cost.
    For our LPG conversion, we had a worldwide company, VITOL, 
put up all of the upfront costs, the $150 million, the 
conversion, of all of our units, all the facility, build all 
the infrastructure. And then over a period of just 10 years, we 
can repay this debt via a small add-on to our cost of buying 
the propane from the Gulf, so it is U.S. fuel. And the PPA 
model we have used for our solar projects with 25-year PPAs. We 
have got $0.13, $0.14 for solar energy on a utility scale. We 
have utilized it for our bio fuel project.
    We do not have the capital to go out and do large purchases 
or utility-owned systems, but by using the PPA model, which 
does require that you maintain investment-grade, which is a 
challenge for some utilities but that is the way we handle that 
issue.
    Senator Cantwell. Well, I was going to say I am a big fan 
of public power in general, and we had one utility in our area, 
Parkland, which is in Pierce County, that basically put all its 
utilities underground. So here is a little utility that decided 
what was in the best interest of those rate payers was an 
investment in securing their delivery system because of our 
winds and storms. They decided to finance that and move ahead.
    So I like having the public models in the marketplace, 
because I think that they keep a keen eye on the interest of 
cost-based power in delivering the resource to the community 
that allows the community to grow. While I am a very big 
supporter of Power Africa in the context of the United States 
doing all it can to take U.S. technology and promote it in 
other areas, it is an embarrassment that we are not spending 
more time and energy in the United States of America and our 
territories providing real solutions to the people that live 
within our boundaries. We have got to do this.
    Madam Chair, I am all ears about the solutions that we can 
seek to do this. This is something that we should do, and it 
should be a commitment by this government to get it done. Thank 
you.
    The Chairman. Well, you are singing to the choir here. 
[Laughter.] Let us have Senator Hirono join.
    Senator Hirono. Thank you very much, Madam Chair, and I 
echo those sentiments about singing to the choir.
    I am a proponent of the setting of national renewable 
energy and efficiency standards to encourage the private sector 
to step forward with R&D. Mr. Glick, I note in your testimony 
that you say that Hawaii has been able to attract international 
investment from governments and corporations. They see Hawaii 
as a bellwether for renewable energy. So I wanted to have you 
talk a little bit more about how Hawaii has spurred this kind 
of activity on the part of the private sector.
    Mr. Glick. For us, clean energy, as you know, Senator 
Hirono, has been all about rebuilding our economy and creating 
this new clean energy sector. Part of it is attracting 
innovation. With us in Hawaii as being an emerging test bed, 
companies like Hitachi with support from the Ministry of 
Economy and Trade and Industry in Japan have been funneling 
dollars. About $40 million came to Maui for the smart grid 
project called Great Maui that is building a microgrid and a 
smart grid network--also developing bigger networks of electric 
vehicles and fast charging networks. A very important project 
which we expect will expand.
    Through the Hawaii-Okinawa Agreement which was just signed 
last week, we are hoping to identify additional projects that 
could be brought to Hawaii and also shared resources, some that 
would be developed in Japan as well. I think that is the kind 
of model that we see in the future continuing to find 
collaborative projects to test the boundaries of how we 
integrate more renewables, how do we build smarter clean 
transportation systems using clean energy, and trying to track 
those dollars on very large-scale real world demonstrations.
    Senator Hirono. We have heard from some of the other 
witnesses how expensive energy is in their localities. So, 
again, Mr. Glick, Hawaii created the Green Energy Market 
Securitization Program, or GEMS, to help more people invest in 
renewable energy. This is particularly important to people who 
do not have the money up front to buy solar panels, for 
example, but who are interested in saving money in the long 
term by generating their own power. Can you elaborate on how 
the GEMS Program works in engaging with the public and 
providing financing options to people, including renters and 
non-profit organizations, and do you think this approach could 
be used in other territories and other states?
    Mr. Glick. Thank you, Senator Hirono. Certainly the GEMS 
approach, we use rate reduction bonds that are securitized. 
They are backed in our case by security from the Public 
Benefits Fund, which comes from everybody's electricity bill, a 
small surcharge. We are able to utilize some of that back, 
repay the loans. We are able to get triple A financing, so 
very, very low cost of money.
    We then build loan programs around it. It is hard getting 
small commercial non-profit organizations and also the 
residential market. Those loan products have just been rolled 
out this summer, and we expect a lot of people to take 
advantage of that. Very low interest rates on the low side, 
five to six percent, on the high side, nine percent. But 
compared to other programs, particularly for those who have had 
difficulty getting financing for solar projects, it is really 
the only way that they have been able to get financing.
    And then, of course, tying it to your electricity bill 
repayment really reduces the risk of default, so I think that 
is another thing that can be incorporated. I know many states 
have had difficulty getting on bill programs instituted, and 
that is done pretty much on state-by-state level so far. But on 
bill does reduce risk of repayment, so we see that as an 
important model.
    As far as the overall capitalization and how bond programs 
like GEMS could be expanded, we know that the State Energy 
Program through states and the state energy offices have 
managed $2.1 billion in loans. Perhaps the State Energy Program 
through some kind of mechanism like GEMS could funnel 
additional dollars. In Hawaii, we think our clean energy 
installations will exceed $20 billion in capitalization, so we 
need to find more means of financing to make it more 
affordable.
    Senator Hirono. Madam Chair, it seems as though my time is 
up, although it did not feel like five minutes. Is this right? 
Do you mind if I just ask Ms. Kia'aina whether a GEMS kind of a 
model could work in the other areas, territories?
    Ms. Kia'aina. I think some of my other colleagues in the 
territories might be better able to answer that question, but 
just let me say in general our energy program is so small, $3 
million. So I would promote greater dialog with the private 
sector, and I took notice of Hitachi, Mr. Glick, because in the 
Pacific territories, Japan is a close neighbor. They have 
committed $450 million just recently for climate change and 
other types of funding specifically for independent Pacific 
Island nations, including Micronesia. And so, my head was 
thinking here with regard to some Kokua we could use for our 
energy initiatives.
    That is something we will contemplate, but, again, I defer 
to my other colleagues directly from the territories because 
they are on the front lines, and they are probably already 
working with the private sector.
    Senator Hirono. If it is all right with the chair, if 
anybody else wants to chime in.
    Congressman Underwood. Yes, I think that is a--that is a 
possibility, and it goes back to the whole point about how to 
finance these things in the small island territories. I think 
there is kind of a common perception that OIA is going to fund 
some of this, or that they are going to create some kind of 
financing mechanism. But it is not there, and we recognize 
that. At least I recognize that. I am not sure that everyone 
does.
    But this is the kind of promising thing that I think could 
come from an all-islands approach where we are constantly 
having these dialogs. I should not have to go to Washington, 
DC. to hear about it when I can just go to Honolulu. 
[Laughter.]
    Senator Hirano. Mr. Hodge.
    Mr. Hodge. Yes, we have used on bill financing for our 
solar water heater program, so I am sure somewhat the model can 
work. I am not familiar with the GEMS Program and what the 
surcharge is on a per kilowatt hour basis that is used to 
backstop the financing or the debt, and I guess it would be 
also dependent on the scale and size of the billing. So if you 
have two million customers, a small surcharge would be much 
different with 50,000 customers to backstop that kind of an 
endeavor. But I will do some more research to see if it is 
applicable for our small territory.
    Senator Hirono. Thank you. Did you want to add something?
    Ms. Kohler. If I could just add, there really is not a lot 
of private party interest in providing or looking for solutions 
for our small villages because the economies of scale again are 
so poor. The average village sells, you know, 1.3 million 
kilowatt hours. There is just not enough to be able to amortize 
an investment of any size, so I do not really see that it would 
have a lot of potential application for our villages.
    Senator Hirono. I think you definitely have a very unique 
situation, and that is why you have a wonderful senator who is 
going to address some of those needs. Thank you very much, 
Madam Chair.
    The Chairman. Thank you. I think it is valuable when we 
have hearings such as this for us not only to hear the 
different projects and proposals that are underway and the 
challenges, but how you are facing those, and to share a little 
bit of best practices. I would agree with you, Mr. Underwood. 
You should not have to come all the way to Washington, DC. to 
find these, but hopefully we gain from one another as we try to 
find these solutions that are oftentimes very unique.
    But then you think not necessarily so. Just because it is 
perhaps colder and darker in Alaska when you are trying to make 
application to an area that is so isolated, and remote, and 
small, there are applications not only with our territories, 
but I think about the value of what we are doing in Alaska and 
sharing it with other Arctic nations who are also dealing with 
cold, and remote, and small populations. Again, sharing some of 
these best practices that are innovative to where we are.
    You mentioned, Ms. Kohler, the triple redundancy that we 
face in Alaska and the need to have the backup generating 
capacity because if you are not part of anybody's else's grid 
when power goes out, power goes out. If you are in a cold 
place, if it goes out for a period of time, not only do you 
face the loss of your infrastructure through broken pipes and 
damage, but you could face loss of life. So for us, it is 
pretty critical.
    I am just curious with the other systems that we are 
talking about whether it is in Guam or in our Caribbean 
islands, are you also in a situation where it is effectively 
triple redundancy for your backup generation capacity?
    Mr. Hodge. Yes, ma'am, it is, and----
    The Chairman. Tell me how that adds then to the cost to 
your rate payers.
    Mr. Hodge. We have to have that redundancy in our 
generation. We use the N-minus-one criteria, so we have to be 
able to serve all of our load if our two largest units are 
offline, and you have to have that kind of criteria given that 
you have no interconnection with the grid.
    We are doing a conversion right now to LPG, and we are 
converting units one at a time. Because there is no grid, we 
are doing that while we are still trying to meet the N-minus-
one criteria, which is even that much more challenging to make 
change and to affect change. We have not even discussed the 
water side of it, because there are some synergies between 
water and electricity that I know that everyone kind of gets 
into on a regular basis.
    But definitely there are reliability requirements on an 
island grid, and we do collaborate. I think there is an island 
and a grid in Alaska called Kodiak, Alaska that I have spent 
some time speaking with their wind--that they have put out a 
grid through DOE and NREL. They put us together since we have 
some similar characteristics, so there are some synergies 
between the territories and the State of Alaska as well.
    The Chairman. Mr. Underwood?
    Congressman Underwood. Yes. I cannot say that I do not know 
whether we have double or triple redundancy, but we do have 
redundancy because the--and we also have issues with resiliency 
in connection with our natural disasters. That really leaves a 
great deal of challenges to the power companies.
    But part of that is, again, an issue of energy literacy, 
people understanding that and then people changing their habits 
on how the use power throughout the day so that you do not need 
that level of redundancy. So, you know, we have a smart grid, 
you also need smart people in order to use those grids, and 
that speaks to the issue of capacity building and energy 
literacy, which, of course, speaking as an educator, I am 
really trying to present to all the authorities and 
policymakers on that.
    The Chairman. Senator Cantwell?
    Senator Cantwell. Thank you, Madam Chair. Ms. Kia'aina, 
this issue of financing or just where we are with current 
programs and gaps, you obviously see this issue from the 
perspective of the assistance provider, and you see what these 
individuals are requesting. You know what we can and cannot do. 
Do you have specific ideas about what you think we should do to 
improve that?
    Ms. Kia'aina. Well, the easiest answer, of course, is for 
our energy program of $3 million, it would be nice to see an 
increase not only just to help in the implementation of all of 
the energy plans, but to take into account Puerto Rico.
    Apart from our direct funding for energy initiatives, we 
actually tap from our other programs right now maintenance 
assistance, which is only a $1 million program. We provide 
technical expertise, apprenticeship programs and staff 
training. We also take money from our general technical 
assistance program, as well as our capital improvement 
projects. So what we are doing is pulling from other areas that 
are already stretched thin.
    I would also say that with regard to the Department of 
Energy's involvement, whether it be the energy as a whole or 
NREL, if there is increased funding to that Department, I ask 
that it specifically by designated for the U.S. territories and 
Puerto Rico because very often other agencies put it in the 
national pot, and the territories are unable to compete. The 
Office of Insular Affairs is one of the only unique programs in 
the Federal Executive Branch that actually has the territories 
competing for a set pot of funding.
    So absolutely increased funding would help. I believe that 
our energy program is the best return on investment for our 
entire program, and helping the islands will not just help in 
energy, but the totality of their economy.
    Senator Cantwell. On this point about empowering them to 
help secure financing, do you see solutions in these individual 
territories or states that you think are just a matter of 
whether they can be deployed?
    Ms. Kia'aina. You know, that is a very difficult question 
to answer because our mission is the overall Federal 
relationship with the territories. So while we are talking 
about energy, I believe that our government's failure to help 
in the overall economic conditions of each of the insular areas 
would be hurtful to energy initiatives because they are all 
intertwined. For example, if a government does not have enough 
revenues to fund its portion of energy initiatives, then the 
burden will transfer to the Federal Government. So for my role, 
I have a dual purpose. I not only help on energy initiatives, 
but I help on the overall front on a multitude: health, 
education.
    Senator Cantwell. Which I think to your point then, says 
you are uniquely qualified. I do not know if you have 
quantified that in a study, the analysis of the lack of 
investment in energy, then the consequences, cost, and expense 
to the U.S. Government because we do not.
    Ms. Kia'aina. That is correct.
    Senator Cantwell. So if you have any data on that, we would 
love to see it.
    Ms. Kia'aina. Thank you so much. We will followup with 
that, Senator.
    Senator Cantwell. I did not mean to cut you off, but I had 
forgotten that your position was so broad. You were covering 
the consequences of lack of investment as well, so, if there 
was anything you wanted to add about how we should look at 
financing?
    Ms. Kia'aina. Financing for me is making the territorial 
governments efficient so that they could derive enough revenues 
to help with funding their local government. It is promoting 
economic opportunity so that their private sector could also 
help. Part of our mission is also quality of life issues to 
ensure that the health, education, and natural resources are 
protected.
    Our mission at OIA is formidable. We work across the 
Executive Branch with other agencies, but part of the 
challenge, quite frankly, is that we always get the answer from 
every agency that if we do not provide funding, whether it be 
for travel, or for detailees, or for money to do studies, for 
example, GDP. We have to give the Department of Commerce money 
to do GDP.
    So in short, the OIA is being used as a funding source for 
what the Federal Government in its totality should be doing. I 
myself believe it is unfair. Some of it is statutory in nature. 
It is only inclusive of the 50 states, and sometimes it is not. 
It is the agencies that are telling us they will not do this 
until we give them money. The GDP numbers, for example, in the 
totality of the economy is nearly $1 million, and that pot is 
taken out of our $50 million Technical Assistance Program, and 
that is money that could be used for energy initiatives.
    Senator Cantwell. Thank you for that illumination. I am not 
sure I wanted to hear that, but nevertheless, I am glad to 
understand it. Just mark me down as somebody who believes in 
flat organizational structures. I think that an information age 
is about empowering people at the lowest level, not a hierarchy 
bureaucracy all the way from Washington, DC. trying to tell 
somebody how to implement solutions. That is not going to work. 
I think we see that in Puerto Rico at the moment, and it is not 
going to be successful. So I think we need to rethink some of 
these issues. Thank you.
    Ms. Kia'aina. Thank you.
    The Chairman. Senator Hirono?
    Senator Hirono. Thank you, Madam Chair. Ms. Kia'aina, I am 
glad that you mentioned our country's responsibility to do more 
to invest in the territories and to help create more economic 
opportunities there, because it is all interconnected. I know 
that your mission also incorporates the concerns under the 
compact of free association. Since that has been brought up, I 
did want to make the point that I do not think that our country 
is meeting its obligations under our compacts, and that this is 
something that the State of Hawaii as well as Guam and other 
impacted states because of these compacts, that we need to do a 
lot more to provide resources to states such as Hawaii, and 
places such as Guam, Arkansas probably.
    The impact of compact migrants in our states is large, and 
we do not provide enough resources to help a state like Hawaii, 
as I mentioned, to meet our country's obligations toward our 
compact migrants. So I did want to take the time to mention 
that.
    While I have you, Ms. Kia'aina, has the Department of 
Interior applied any of the lessons that were learned from 
DOE's planning and technical assistance in developing the 
Hawaii Clean Energy Initiative in Interior's efforts to assist 
the U.S. territories in their energy planning efforts? Perhaps 
you could talk a little bit about those lessons learned that 
enabled you to work with the territories?
    Ms. Kia'aina. Sure. If you do not mind, I would like to 
defer that question to our NREL liaison. NREL falls under the 
Department of Energy, and so our whole direction for our energy 
planning process is provided by NREL. Recently we have reached 
out directly to the U.S. Department of Energy because they also 
have their own resources. They have an Office of Energy 
Efficiency, and that was the division that I spoke to with 
regard to the chairwoman. There seems to be a disconnect right 
now with regard to what the Department has done for Puerto 
Rico, and we will followup on that.
    Scott, could you please answer that question?
    Mr. Haase: Thank you. Scott Haase. I am a senior program 
manager with the National Renewable Energy Laboratory, and I 
manage our relationship with the Department of the Interior.
    So the team that worked on the HCI, EDIN, and the 
territorial work, we all work together. It is many of the same 
people that have been working across these island communities. 
So there have been significant lessons learned that have 
carried forward throughout from technical assistance, the 
planning side, looking at financing options and mechanisms. So, 
yes, there has been a great deal of cross-fertilization.
    Senator Hirono. Well, Mr. Hodge, I note that the Virgin 
Islands have been able to meet its energy reduction goals much 
more quickly than anticipated. In 2011 you had a goal of 60 
percent reduction of fossil fuel, and by 2013 you had already 
reached a 20 percent reduction. How did you do that?
    Mr. Hodge. We aggressively sought for diversification of 
our resources. We issued some RFPs for renewable energy, and 
the first one was a broad RFP for any kind of technology. That 
one was failed, so we found that more concentrated requests 
would be better served for our needs. So we did one for solar, 
and we received some really good bids. We had assistance from 
NREL and DOE in the evaluation of such, and we received eight 
megawatts of grid-tied solar on the grid right now from that 
process, and six more soon to come.
    We also had an aggressive net metering program. I cannot 
say that I think all aspects of the program are in the best 
interest of all rate payers, but it has served the purpose of 
jump starting the program. And we do have about 50 megawatts of 
net metering on the grid right now, so between both of them we 
are 23 percent of our peak demand. So those two have done that, 
but we also have, like I said, six megawatts of solar in the 
wings that have already been signed, PPAs, and seven megawatts 
of biofuel that have been signed, as well as we are negotiating 
about seven to ten megawatts of wind. So we are pretty much on 
the right path of getting to our goals.
    Part of the 60 percent is energy efficiency, and we have 
done some advances in that arena as well. We definitely--you 
know, I guess being that I sit on some positions in the region 
in the Caribbean and whatnot, I see a lot of studies and a lot 
of examinations of what can be done. To finally have somewhere 
and it be ours that have the actual projects built, shoveling 
dirt, construction on the way, and almost complete is something 
that we need to see more of rather than just the studies of 
what we can do, and spend a lot of money for those studies.
    Senator Hirono. Yes, hear, hear. Thank you, Madam Chair.
    The Chairman. Ms. Kohler, we talk a lot about the price of 
energy, and we talk about per kilowatt hour, but we also have 
the issue of heating. Can you speak to what you see as perhaps 
some of the more innovative approaches to how we can deal with 
space heat and the ways that the cost of space heating can be 
brought down in some of the villages that are part of your 
oversight with AVEC?
    Ms. Kohler. Thank you, Chairwoman Murkowski. Space heat is 
the primary consumer of BTUs at this particular point in time 
and typically represents about three-quarters of the energy 
consumption in a home or a business. So obviously it is a very 
critical need to reduce that reliance.
    In terms of alternatives to diesel fuel, we do not have a 
lot of biomass in the State of Alaska. In parts of Alaska, of 
course, is that you have got these beautiful forested sections 
that must yield a lot of biomass, but that is not true in 
Village Alaska. If there is any wood in the region at all, it 
is typically just driftwood that is floating down the rivers 
from more biomass intense communities. So that does not become 
a very major alternative.
    What we have seen happen is very high efficiency heating 
systems going on where typically you may get something in the 
order of 92 to 95 percent efficiency from a Toyostove, laser 
electric stove. Extensive efforts at weatherization of homes 
and businesses. We have actually partnered, we were able to get 
a very modest $200,000 from USDA for Rural Business Enterprise 
grants, and we have actually put together a commercial energy 
audit program because we believe that there are efficiencies of 
30-plus percent to be gained in terms of the BTU content of 
space heating. That has moved ahead, and we have got some 
really good results from that that tell you what can be done to 
conserve heat. We believe that heat consumption can be reduced 
by a third or better just through energy efficiency and 
conservation measures.
    We also utilize waste heat, so we recover heat from our 
diesel gensets. It is a very high priority for us to recover 
that heat and to distribute it to typically public buildings 
that are nearby the power plant. We are looking right now at 
what we can do to recover wasted heat from exhaust systems. 
That is 30 percent of the heat utilization of a genset. It 
comes out of the exhaust system or is just wasted up there. So 
we are looking to recover that as well, the objective being to 
drive down the overall consumption of diesel in a specific 
community.
    There are some biomass combined heat and power projects 
that are very much experimental, emerging technology. We do 
have some of those installed across rural Alaska, and we are 
hopeful that they are going to yield some good results.
    We are also looking at heat pumps. That typically, though, 
is really more viable in the more temperate parts of Alaska, so 
in south central. I am sure you are aware of the seawater heat 
pump system that they have in Seward. That is a technology that 
is potentially transferable. I believe that heat pump 
technology is progressing rapidly. I think we are going to see 
more air-to-air heat conversion where you can utilize recycled 
heat within a building.
    But those are all the emerging technologies, and those 
emerging technologies have to be carefully fostered for them to 
develop into something that is commercially viable across a 
broad scale. Once they are commercially viable, the cost 
becomes much more affordable, and then they can be deployed 
much more ubiquitously.
    The Chairman. Yes. I was out in Kwigillingok and was able 
to celebrate with the community there. I think it was either 
their first or their second day of being completely diesel 
free. They had three wind turbines, and the wind was kicking 
up. They had a little battery storage unit that was not much to 
speak of in terms of size, and then they had--I believe there 
were 25 different clay heating stoves within the homes, and you 
go inside roasty toasty.
    But you think about just this little microcosm out there in 
an area where your costs up to this point are almost 
prohibitive for sustainability of a village, and you see what 
they are doing. I was in Egegik last week where they are 
putting in a run of river hydrokinetic turbine. It is going to 
be in the river. It should be in right now. It was in last year 
for a brief moment in time.
    Again, a private entity is making this investment and 
realized that they needed to reconfigure. They went out and 
adjusted it. It is going to be back in the water and plugged 
into Egegik by the 15th, so that is just in a few days. You 
combine that with the five wind turbines that they have, the 
solar panels that they have, and, again, a sustainable 
community where they have struggled for so many years.
    Mr. Hodge, you mentioned Kodiak. Kodiak is an amazing 
example of how you can utilize all of your renewable assets, 
whether it is the wind, the hydro. They are blessed with great 
hydro out there, but this is a major seaport, a major fishing 
community. To know that they, too, can be off diesel is a 
future for them that is really quite vibrant.
    I think about all the technologies that we have being 
considered in laboratories, and how you work to get them to 
commercialization. And I say, okay, that is nice. We are 
actually making things happen on the ground. I think that some 
of our laboratories should be looking to what we are pioneering 
because we have to, because the alternatives are just not 
working for us. You cannot be a sustainable community if folks 
cannot afford the heat or the electricity, so you figure it 
out.
    Sometimes it takes a little bit of duct tape. Sometimes it 
takes begging for dollars from the state, and the tribes, and 
the feds. But you piece it together with some really, really 
bright innovative people and through your universities. We are 
blessed with the University of Alaska, and I am sure we are 
where you are, Dr. Underwood, in Guam. But we are really 
pioneering this whole concept of microgrid, and Senator 
Cantwell and I were just talking back here about we have got 
this very generous eye to the rest of the world in how we can 
help facilitate energy solutions in Africa and elsewhere.
    Again, I think to a certain extent charity begins at home, 
and I recognize that we definitely have energy needs that are 
not being met yet, but with a little bit of assistance, and I 
think looking to the experts, looking to the innovators, this 
is where it is really happening. And so, I commend you all.
    Mr. Glick, you have got a high standard up there to reach 
Hawaii's renewable energy goals, how you are going to be 
dealing with the distributed generation aspect of it and the 
integration of all of your renewables. Many in the country are 
looking to you for the example and the leadership. You are kind 
of pioneering here, so we wish you well in that and are eager 
to know how we can be helpful and be off assistance.
    Meera, you mentioned resourcing and some of the programs 
that are out there, and we have had a little bit of 
conversation about that today. We have a Renewable Energy 
Deployment Fund, a fund that I established through legislation 
some years ago. It is a nice idea, but you have got to have the 
dollars that are in it so that we can help our states, we can 
help our territories, so we can help make a difference and 
making sure that there is a level of sustainability that our 
economies can thrive.
    I appreciate the leadership from each of you and the 
opportunity for you to share a little bit of the best practices 
and some of the challenges. Hopefully you inspire not only 
others, but you have learned from one another and you are going 
to take some good ideas back to Guam, the Caribbean, Alaska, 
Hawaii, and throughout all of our areas here.
    With that, I thank you all, and we stand adjourned.
    [Whereupon, at 11:44 a.m., the hearing was adjourned.]

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