[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]


 
    RENEWABLE ENERGY: COMPLEMENTARY POLICIES FOR CLIMATE LEGISLATION

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

                                HEARING

                               BEFORE THE

                 SUBCOMMITTEE ON ENERGY AND ENVIRONMENT

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                           FEBRUARY 26, 2009

                               __________

                            Serial No. 111-6


      Printed for the use of the Committee on Energy and Commerce

                        energycommerce.house.gov



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                    COMMITTEE ON ENERGY AND COMMERCE

                 HENRY A. WAXMAN, California, Chairman

JOHN D. DINGELL, Michigan            JOE BARTON, Texas
  Chairman Emeritus                    Ranking Member
EDWARD J. MARKEY, Massachusetts      RALPH M. HALL, Texas
RICK BOUCHER, Virginia               FRED UPTON, Michigan
FRANK PALLONE, Jr., New Jersey       CLIFF STEARNS, Florida
BART GORDON, Tennessee               NATHAN DEAL, Georgia
BOBBY L. RUSH, Illinois              ED WHITFIELD, Kentucky
ANNA G. ESHOO, California            JOHN SHIMKUS, Illinois
BART STUPAK, Michigan                JOHN B. SHADEGG, Arizona
ELIOT L. ENGEL, New York             ROY BLUNT, Missouri
GENE GREEN, Texas                    STEVE BUYER, Indiana
DIANA DeGETTE, Colorado              GEORGE RADANOVICH, California
  Vice Chairman                      JOSEPH R. PITTS, Pennsylvania
LOIS CAPPS, California               MARY BONO MACK, California
MICHAEL F. DOYLE, Pennsylvania       GREG WALDEN, Oregon
JANE HARMAN, California              LEE TERRY, Nebraska
TOM ALLEN, Maine                     MIKE ROGERS, Michigan
JAN SCHAKOWSKY, Illinois             SUE WILKINS MYRICK, North Carolina
HILDA L. SOLIS, California           JOHN SULLIVAN, Oklahoma
CHARLES A. GONZALEZ, Texas           TIM MURPHY, Pennsylvania
JAY INSLEE, Washington               MICHAEL C. BURGESS, Texas
TAMMY BALDWIN, Wisconsin             MARSHA BLACKBURN, Tennessee
MIKE ROSS, Arkansas                  PHIL GINGREY, Georgia
ANTHONY D. WEINER, New York          STEVE SCALISE, Louisiana
JIM MATHESON, Utah                   PARKER GRIFFITH, Alabama
G.K. BUTTERFIELD, North Carolina     ROBERT E. LATTA, Ohio
CHARLIE MELANCON, Louisiana
JOHN BARROW, Georgia
BARON P. HILL, Indiana
DORIS O. MATSUI, California
DONNA CHRISTENSEN, Virgin Islands
KATHY CASTOR, Florida
JOHN P. SARBANES, Maryland
CHRISTOPHER MURPHY, Connecticut
ZACHARY T. SPACE, Ohio
JERRY McNERNEY, California
BETTY SUTTON, Ohio
BRUCE BRALEY, Iowa
PETER WELCH, Vermont

                                  (ii)
                 Subcommittee on Energy and Environment

               EDWARD J. MARKEY, Massachusetts, Chairman
MICHAEL F. DOYLE, Pennsylvania       DENNIS HASTERT, Illinois
G.K. BUTTERFIELD, North Carolina          Ranking Member
CHARLIE MELANCON, Louisiana          RALPH M. HALL, Texas
BARON HILL, Indiana                  FRED UPTON, Michigan
DORIS O. MATSUI, California          ED WHITFIELD, Kentucky
JERRY McNERNEY, California           JOHN SHIMKUS, Illinois
PETER WELCH, Vermont                 HEATHER WILSON, New Mexico
JOHN D. DINGELL, Michigan            JOHN B. SHADEGG, Arizona
RICK BOUCHER, Virginia               CHARLES W. ``CHIP'' PICKERING, 
FRANK PALLONE, New Jersey                Mississippi
ELIOT ENGEL, New York                STEVE BUYER, Indiana
GENE GREEN, Texas                    GREG WALDEN, Oregon
LOIS CAPPS, California               SUE WILKINS MYRICK, North Carolina
JANE HARMAN, California              JOHN SULLIVAN, Oklahoma
CHARLES A. GONZALEZ, Texas           MICHAEL C. BURGESS, Texas
TAMMY BALDWIN, Wisconsin
MIKE ROSS, Arkansas
JIM MATHESON, Utah
JOHN BARROW, Georgia
  


                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Edward J. Markey, a Representative in Congress from the 
  Commonwealth of Massachussetts, opening statement..............     1
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, opening statement....................................     6
Hon. John D. Dingell, a Representative in Congress from the State 
  of Michigan, opening statement.................................     7
Hon. Joe Barton, a Representative in Congress from the State of 
  Texas, opening statement.......................................     8
Hon. Ed Whitfield, a Representative in Congress from the 
  Commonwealth of Kentucky, opening statement....................    10
Hon. Joseph R. Pitts, a Representative in Congress from the 
  Commonwealth of Pennsylvania, opening statement................    11
Hon. Steve Scalise, a Representative in Congress from the State 
  of Louisiana, opening statement................................    13
Hon. Frank Pallone, Jr., a Representative in Congress from the 
  State of New Jersey, opening statement.........................    13
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, opening statement...............................    14
    Prepared statement...........................................    16
Hon. G.K. Butterfield, a Representative in Congress from the 
  State of North Carolina, prepared statement....................   119
Hon. Gene Green, a Representative in Congress from the State of 
  Texas, prepared statement......................................   122
Hon. Mike Ross, a Representative in Congress from the State of 
  Arkansas, prepared statement...................................   124

                               Witnesses

Howard K. Gruenspecht, Acting Administrator, Energy Information 
  Administration, Department of Energy...........................    21
    Prepared statement...........................................    24
    Answers to submitted questions...............................   127
Ronald Binz, Chairman, Colorado Public Utilities Commission......    42
    Prepared statement...........................................    44
Stan Wise, Commissioner, Georgia Public Utilities Commission.....    60
    Prepared statement...........................................    62
    Answers to submitted questions...............................   136
Ralph Izzo, President, Chairman and CEO, Public Service 
  Enterprise Group...............................................    70
    Prepared statement...........................................    72
    Answers to submitted questions...............................   146
Edward Lowe, General Manager, Renewables Market Division, General 
  Electric.......................................................    79
    Prepared statement...........................................    81


    RENEWABLE ENERGY: COMPLEMENTARY POLICIES FOR CLIMATE LEGISLATION

                              ----------                              


                      THURSDAY, FEBRUARY 26, 2009

                  House of Representatives,
            Subcommittee on Energy and Environment,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 9:40 a.m., in 
Room 2322 of the Rayburn House Office Building, Hon. Edward 
Markey (chairman) presiding.
    Members present: Representatives Markey, Doyle, Inslee, 
Butterfield, Melancon, Matsui, McNerney, Welch, Dingell, 
Pallone, Engel, Green, Gonzalez, Baldwin, Matheson, Barrow, 
Waxman (ex officio), Upton, Hall, Stearns, Whitfield, Shimkus, 
Blunt, Pitts, Sullivan, Scalise and Barton (ex officio).
    Staff present: Matt Weiner, Clerk; Melissa Bez, 
Professional Staff; John Jimison, Senior Energy Counsel; Jeff 
Baran, Counsel; Joel Beauvais, Counsel; Lindsay Vidal, Press 
Assistant; Andrea Spring, Minority Professional Staff; Amanda 
Mertens Campbell, Minority Counsel; and Garrett Golding, 
Minority Legislative Analyst.

           OPENING STATEMENT OF HON. EDWARD J. MARKEY

    Mr. Markey. Welcome. Today the Subcommittee on Energy and 
Environment is going to have a very important hearing because 
the American people are calling for a clean energy revolution.
    According to a December 2008 poll conducted by the 
Washington Post and ABC News, 84 percent of Americans support 
requiring utilities to increase their use of wind, solar and 
other renewable sources of power. In his address to Congress 
earlier this week, President Obama outlined his vision for a 
clean energy future that will not only help turn around our 
ailing economy but also drive new investment and job growth for 
decades to come. The President called upon Congress to enact 
cap and invest legislation to slash global warming pollution 
and spur renewable energy growth, and that is what this 
committee intends to do.
    President Obama has called for 25 percent of our 
electricity to come from renewable resources by the year 2025. 
The American Renewable Energy Act, the renewable electricity 
standard bill that Congressman Platts and I introduced earlier 
this year, would achieve that goal. Such a standard would 
create hundreds of thousands of new jobs and can provide an 
essential pillar of strong energy and climate legislation.
    Renewables are already growing fast. In 2008, we installed 
in the United States over 8,000 megawatts of new wind-
generating capacity in the United States, over 40 percent of 
all new electricity-generating capacity additions in our 
country. The Department of Energy recently issued a report 
charting a course to generation of 20 percent of the county's 
electricity from wind alone by 2030. Study after study has 
demonstrated the massive potential for solar, biomass, 
geothermal and incremental hydropower as well. One of the key 
drivers of the recent surge in renewables has been the growth 
in State renewable electricity standards. Twenty-eight States 
and the District of Columbia now have mandatory standards. 
Those standards cover over half of the country's electrical 
load and will require the addition of more than 60,000 
megawatts of new renewable power by 2025.
    Renewables are an engine of job creation. With a single 
wind turbine containing between 200 and 400 tons of steel, a 
clean energy economy will reinvigorate our manufacturing 
sector. Those jobs are going to be done by the same blue-collar 
workers doing the same kind of work just with new technologies 
already in communities like Newton, Iowa, where wind blades are 
now produced by the same blue-collar workers left unemployed 
when Maytag left town. The manufacturers of renewable energy 
technologies are located all across the country from LM 
Glassfiber's wind turbine blade factories in Arkansas, Michigan 
and North Dakota to First Solar's thin film solar plant in 
Toledo, Ohio. People are living the renewable energy 
revolution.
    Just as the United States is blessed with great business 
and technology innovators, it has also been blessed with an 
abundance of renewable resources. A federal renewable 
electricity standard will allow us to harness potential from 
every region of the country from wind across middle America to 
biomass in the Southeast to solar in the Southwest. Every part 
of the country can benefit and contribute. A renewable 
electricity standard and a carbon cap are complementary 
policies. As a zero-carbon electricity source, renewables will 
of course contribute to our climate goals but a renewable 
standard will also spur technology development and job creation 
immediately, driving renewable energy costs down and domestic 
green jobs up. If we build a strong domestic renewable energy 
industry, that will drive economic growth over the coming 
decades and make it easier for America and the rest of the 
world to meet declining carbon caps over the long term. At the 
same time, by lowering demand for natural gas, a renewable 
standard will deliver major energy savings for consumers while 
enhancing our energy security and global competitiveness.
    This is an important subject for our country. I look 
forward to our distinguished panel.
    I now turn and recognize the ranking member of the 
committee, the gentleman from Michigan, Mr. Upton.
    Mr. Upton. Well, thank you, Mr. Chairman, and before I 
begin my statement, I would like to submit for the record an 
article by Professor Jay Apt, executive director of the 
Carnegie Mellon Electricity Industry Center. Sadly, Professor 
Apt was not permitted to testify today to make a couple of 
important points and observations on the topic. I would like to 
read two lines from his article that are very important for us 
to hear. ``Legislation that mandates specified electricity 
production from renewable sources paves the way to costly 
mistakes because it excludes other sources that can lead the 
country's goals. Rather than specifying a winning technology, 
Congress should specify the goals and provide incentives to 
reach them.'' I would ask that the hearing record be left open 
for the submission of additional statements including my 
friend, Mr. Burgess, who had to go to another hearing on the 
Senate side in terms of his opening statement.
    Mr. Markey. Without objection.
    [The statement of Mr. Burgess follows:]

    [GRAPHIC] [TIFF OMITTED] T7094A.001
    
    [GRAPHIC] [TIFF OMITTED] T7094A.002
    
              OPENING STATEMENT OF HON. FRED UPTON

    Mr. Upton. Today's hearing, ``Renewable Energy: 
Complementary Policies for Climate Legislation'', is indeed an 
important one. I am supportive of renewable energy for many 
reasons. Primarily it is domestically produced, it helps us 
achieve energy independence and it is clean, which helps 
obviously our environment. As policymakers, our goal should be 
to promote energy independence, keep energy affordable and 
foster a cleaner environment. It is not appropriate for us to 
be picking winners or losers. We should support all sources of 
energy that meet those goals and everything must be on the 
table, all of the above, as we seek to expand the use of 
renewable energy.
    This month my chairman, Mr. Markey, introduced a renewable 
electricity mandate. I do support using more renewable 
electricity but the bill, I think, provides too narrow an 
approach, only allowing for a few select renewable sources 
rather than all renewables, and most notably, this bill does 
not include other forms of emission-free power. Emission-free 
sources of energy should be at the forefront of any discussion 
of climate change. It is a glaring omission to not include all 
forms of emission-free electricity. A renewable-only 
electricity mandate would effectively be an added tax on 
electricity and this government mandate would increase prices 
and hurt consumers by adding increased costs at a time of very 
dire economic times in our country.
    U.S. residential electricity prices already are projected 
to increase in the coming years and this bill would undoubtedly 
increase those prices even more at a time when American working 
families and businesses can least afford it. The federal 
mandates ignores the standards already crafted by States to 
meet their specific regional needs. My State, Michigan, has 
already tailored a renewable plan to mesh with the renewable 
resources available in our region, and this bill ignores those 
different regional needs. A one-size-fits-all approach would 
not be the most effective means to harness the power of 
renewable sources of energy.
     I thought we were trying to focus on reducing carbon 
dioxide emissions. If we add all clean electricity sources in 
the Markey bill, the impact on greenhouse gas emissions and 
energy security would be significant and our air quality and 
planet as a whole would be much better off. I would in fact 
support creating a national electricity standard and I would be 
happy to work with you in crafting a bill that creates a 
nationwide electricity standard that promotes any form of zero-
emission power. That is what we ought to be focusing on, not a 
narrow renewable mandate that has somewhat minimal 
environmental impacts and does in fact increase energy prices.
    Energy legislation should be inclusive. Let us decide where 
we want to go and allow the market and all available 
technologies to get us there. If we are serious about reducing 
emissions, being energy independent and creating jobs, keeping 
nuclear off the table is a mistake. In addition to be a zero-
emission-based low power source, each nuclear plant employs 
between 600 and 1,500 folks with an equivalent number of 
indirect jobs. There are thousands of jobs involved in the 
construction at these sites and obviously I think it improves 
our economy as each new plant adds more than $500 million a 
year to the economy. A renewed commitment to nuclear power and 
the construction of dozens of new plants on American soil will 
foster the rebirth of the manufacturing industry and the 
creation of tens of thousands of new high-paying jobs while at 
the same time reducing emissions.
    In conclusion, I am supportive of finding policy options to 
address climate change but in today's economic and national 
security environment, we have to be mindful of the impact on 
our country. Thank you.
    Mr. Markey. The gentleman's time has expired. The chair 
recognizes the chairman emeritus of the Commerce Committee, the 
gentleman from Michigan, Mr. Dingell.

           OPENING STATEMENT OF HON. JOHN D. DINGELL

    Mr. Dingell. Mr. Chairman, I thank you for your courtesy 
and I thank you for holding this important hearing. You are to 
be commended for building a strong record on this matter and 
for making a strong case for swift and well-thought-out action 
on climate change. The title of the hearing speaks for itself. 
Renewable energy can and should be a complementary policy for 
climate change, but as I have said for years, it must be well 
thought out and it must be a real renewable energy standard.
    We in Michigan are saddled, as you know, with an extremely 
depressed economy, and I have to tell you, Mr. Chairman and my 
colleagues, that we have exactly the kind of workers who can 
benefit from the jobs created by a strong renewable energy 
sector. We have some of the best metal workers in the world, 
who would be delighted to have the opportunity to be in the 
forefront of these new technologies. I would also point out in 
Michigan, like in many other States, our State, we have our own 
renewable standard. Ours is 10 percent by 2015. As we move 
forward with a national standard, it is important that we take 
what the States have already done into consideration and that 
we have a framework then within which they can work. It is also 
important, as my friend from Michigan has just said, that it is 
important that we should consider the differences and the 
peculiarities in the situation of each of the States.
    Now, as always, Mr. Chairman, the devil is in the details. 
For example, it makes a great deal of sense to understand that 
we should not be putting waste in landfills if when we do so we 
are taking up space and in the long run we are spewing methane 
into the atmosphere. This is, as we all know, one of the very 
greenhouse gases which we need to rein in to effectively 
address the problem of climate change. So why add to the 
problem of landfill space and methane gas when we can utilize 
that waste for energy while still maintaining strong air 
quality standards.
    Finally, I want to stress the importance of an inclusive 
approach as we move forward with climate change legislation. 
While we are talking specifically about renewables today, it is 
my strong belief that any comprehensive climate change 
legislation needs to include all renewables and indeed other 
non-greenhouse-gas-emitting technologies.
    Mr. Chairman, I thank you for your courtesy. I look forward 
to hearing from our witnesses today and I yield back the 
balance of my time.
    Mr. Markey. The gentleman's time has expired. The chair 
recognizes the gentleman from Texas, Mr. Barton, the ranking 
member of the full committee.

              OPENING STATEMENT OF HON. JOE BARTON

    Mr. Barton. Thank you, Mr. Chairman. I think it is 
important to have a good hearing schedule if we are going to 
begin to move on this issue of climate change. I commend you 
and the full committee chairman, Mr. Waxman, for scheduling and 
notifying that we are going to have a number of these hearings.
    The question that I would have today before getting into 
the substance of the renewable debate is whether you want to 
have a series of hearings where you only hear one point of 
view. We have five witnesses today. There is one that has been 
offered by the Minority, the public utility commissioner from 
the State of Georgia. We had another witness, a professor from 
Carnegie Mellon that we did everything except smuggle him in 
under cover of darkness last night and disguise him as a chair 
or something in the hearing room to try to get him to testify. 
He wasn't allowed to because apparently you and/or your staff 
doesn't think that it is fair to have a broad range of views or 
more comprehensive range of views on this particular issue. We 
have had the same problem in every hearing that we have had so 
far in this subcommittee on this issue, not renewable but just 
climate change. It is not fair to say you are going to have 
hearings and then not allow the Minority to have a full 
complement of alternative views so that we get a fair and 
balanced hearing record in which to determine what legislative 
approach, if any, needs to be taken. I know time is of the 
essence but I don't think one or two additional Minority 
witnesses is going to slow the process down that much and I am 
hopeful that in the near future we will come to some agreement 
so that we can have a full and balanced hearing.
    Mr. Markey. Would the gentleman yield?
    Mr. Barton. I will be happy to yield.
    Mr. Markey. The standard which I am using is the standard 
honestly which was applied to me as the ranking member on the 
telecommunications committee. I was afforded one witness for 
each hearing for all those years, and that was deemed to be 
fair by the Majority at that time, and all I am doing is 
extending the same courtesy that the Majority, now in the 
Minority, that was extended to me because that was the 
precedent that was set and that was the determination that was 
made with regard to the number of witnesses--
    Mr. Barton. Reclaiming my time.
    Mr. Markey. --the Minority would have.
    Mr. Barton. Reclaiming my opening statement time, Mr. 
Chairman. We will go back and get the witness lists from my 
chairmanship. I am not going to disparage such a distinguished 
gentleman as yourself and a friend of mine as you are, but that 
is not my recollection at all. We had hearings in which there 
were more Minority witnesses than Majority witnesses, and it is 
just not acceptable to have a witness situation where the 
preponderance of the witnesses is so overwhelmingly at a 
philosophical and ideological point of view that it is just 
not--at a minimum, it is not balanced. Time will tell about 
where some of these issues stand up, so I am not going to 
belabor it but this issue isn't going to go away. I have talked 
to you about it privately. I have talked to Chairman Waxman 
about it. We will continue to discuss it as professionals. It 
is something that can be resolved and that should be resolved, 
and knowing your personal fairness as a human being, I think it 
will be resolved.
    Mr. Markey. I appreciate that. But I think when you go back 
and you look at the history, you will see that my recollection 
of--
    Mr. Barton. Well, we will see. The facts are the facts and 
we ought to be able to recreate the facts from the past. I 
mean, you can't predict the future but you can at least with 
some degree of accuracy recreate the past.
    With the 1 minute I have left here in my opening statement, 
if Professor Apt had been allowed to testify, he would have 
told us than an RES is impractical, requires a lot of 
transmission construction and is not the most cost-effective 
way to reduce CO2. He would have also explained that 
the grid can't handle more than 20 percent of its power coming 
from an intermittent source such as wind and that the highly 
interconnected electricity grid is subject to cascading 
blackouts when there are disturbances, even in remote areas. 
Professor Apt is the executive directive of the Carnegie Mellon 
Electricity Industry Center, and he has conducted important 
work on the inefficiencies of RES. At some point in time I hope 
that his report will be included and I haven't given up hope 
that he may at some point in time yet be allowed to testify.
    Let me also say that if we are going to have a renewable 
energy standard, I would change the terminology and make it a 
clean energy standard. I would include nuclear, I would include 
clean coal and then I would put some sort of a cap on cost 
increases so that as we go into this new world, we don't end up 
with cascading electricity retail and industrial price 
increases on our consumers and our industrial manufacturers 
that force many of them, in the case of industry, to go out of 
business and move their plants overseas, and in the case of our 
retail constituency, force them into lifestyles that are less 
than they are today.
    With that, Mr. Chairman, I yield back.
    Mr. Markey. The gentleman's time has expired. The chair 
recognizes the gentleman from Pittsburgh, Mr. Doyle.
    Mr. Doyle. Thank you, Mr. Chairman. Mr. Chairman, as we 
work on this committee to build a comprehensive national policy 
to address the very real threat of climate change, I think it 
is critical that we remember that different States and 
different regions of our Nation will face unique challenges as 
we all do our part to lower the emission of greenhouse gases 
into the air. A solution in one part of our country may not be 
workable in another due to the different resources each of our 
States possesses.
    There is no doubt that our Nation's renewable energy 
portfolio must be expanded to meet the ever-growing energy 
needs of our citizens. Like most of you on this dais, I fully 
support increased investment and deployment of renewable 
sources such as wind, solar, hydro and geothermal power. We 
need to advance the efficiency of these technologies. We need 
to create incentives for investment in these sources of power 
and we need to ensure that the energy we generate can be 
transmitted to where the real need is. However, we also need to 
ensure that we don't shut off the lights or dramatically 
increase the cost of electricity in the parts of our Nation 
where these renewable resources aren't as abundant. Many of our 
States have moved forward with their own renewable standards 
based on the resources available to them. In fact, in my State 
of Pennsylvania, we already have an 18 percent renewable 
standard and I would like to submit a summary of this policy 
for the record.
    Mr. Markey. Without objection, it will be included.
    [The information was unavailable at the time of printing.]
    Mr. Doyle. This standard sets up a two-tiered system that 
not only includes the aforementioned technologies like wind and 
solar but also includes distributed generation, large-scale 
hydropower, energy efficiency and even waste coal clean-ups. It 
recognizes the resources available in our State and has brought 
significant environmental benefits to our citizens. I think it 
is critical that any standard we pass in this committee take a 
similar approach and allow States the necessary flexibility to 
meet the compliance requirements. Simply stated, there is no 
silver bullet to solve the climate crisis and there is no 
silver bullet standard that can be achieved everywhere in our 
Nation.
    Mr. Chairman, I look forward to working with you and the 
members of this committee to establish a workable and flexible 
renewable standard that will drive investment in new technology 
while recognizing the real-world cost and compliance issues we 
face.
    Mr. Markey. The gentleman's time has expired. The chair 
recognizes the gentleman from Kentucky, Mr. Whitfield.

             OPENING STATEMENT OF HON. ED WHITFIELD

    Mr. Whitfield. Mr. Chairman, thank you very much and we 
certainly look forward to this hearing on a particularly 
important subject matter, renewable electricity standard.
    I might say that over 90 percent of the electricity 
generated in Kentucky and about eight other States comes from 
coal and 50 percent of the electricity generated in the entire 
country comes from coal. Coal is a reliable, available and 
affordable resource. Shifting even a small amount of our 
electricity generation from coal to renewable sources of 
electricity such as solar and wind would cause problems dealing 
with availability, affordability and reliability. Kentucky, for 
example, cannot meet a larger percentage of its growing needs 
for electricity. That means either drastically reducing demand 
or importing large quantities of expensive renewable power from 
the West and Southwest over an interstate power grid that is 
simply not up to the task today. Importing large quantities of 
power will require significant, lengthy and costly upgrades to 
the cross-country transmission system when we have the ability 
to do that at home today.
    So the question is, we all understand we need renewable 
power but how much will it cost, and I know that in one of the 
pieces of legislation that I have seen, there is an additional 
5 cents per kilowatt-hour if States do not need their renewable 
mandatory sources. I had a local electricity company compute an 
electric bill on one industrial plant in my hometown with an 
additional 5 cents per additional kilowatt-hour, and it 
increased their rates by $18,750 per month. At a time when our 
economy is weak, we do not want to take an opportunity of 
forcing industries out of business, losing jobs and 
transporting those jobs to countries like China who are 
bringing on one new power plant with electricity every 2 weeks 
to produce electricity.
    So as we move forward, I think we have to look at the total 
ramifications, the additional cost involved, and to make sure 
that we still have the opportunity to use our most abundant 
resource, and that is coal.
    Mr. Markey. The gentleman's time has expired. The chair 
recognizes the gentlelady from California, Ms. Matsui.
    Ms. Matsui. Thank you, Mr. Chairman. I am very pleased to 
be here today and I also would like to thank all the witnesses 
for being here today too.
    My State of California has a long history of support for 
renewable energy. While our initial renewable portfolio 
standard set a 20 percent goal by 2017, we have strengthened 
our commitment to 20 percent by 2010 and 33 percent by 2020. 
This commitment will lead to a cleaner plant and good-paying 
green job growth. The Sacramento region has been a laboratory 
on this issue and we have seen upwards of 100 clean energy 
companies emerging in our area from biofuels to solar to 
hydrogen fuel cells. These companies have brought good-paying 
jobs to a region in need. That is not to say that this has 
always been easy. While California has been a leader in this 
field, there are challenges to overcome. We will need to 
address a host of issues from transmission capacity to emerging 
technologies. I look forward to getting more insight on the 
challenges we must tackle and opportunities we will have from 
the witnesses we have here today.
    Again, Mr. Chairman, thank you for highlighting this 
important issue and I yield back the balance of my time.
    Mr. Markey. The gentlelady's time has expired. The chair 
recognizes the gentleman from Pennsylvania, Mr. Pitts.

           OPENING STATEMENT OF HON. JOSEPH R. PITTS

    Mr. Pitts. Thank you, Mr. Chairman. I would like to thank 
you for convening this hearing today on such an important 
issue.
    Like all of us, I believe that renewable and alternative 
sources of energy are important parts of the process in curbing 
greenhouse gas emissions and increasing energy independence. 
However, as Congress considers legislation dealing with the 
RES, the renewable electricity standard, it is imperative that 
we include all forms of viable alternatives in this standard. I 
would like to highlight one of those today mentioned by the 
former chairman.
    In my district, the Lancaster County Solid Waste Management 
Authority operates a waste-to-energy facility that is literally 
turning trash into clean energy. During a visit last year I had 
the opportunity to see this incredible technology firsthand 
right there on the banks of the Susquehanna River. Trash that 
would have otherwise filled the local landfill is instead 
producing 198 million kilowatts of electricity a year. The 
plant is operated using just 10 percent of the electricity with 
the other 90 percent being sold to the local electric provider. 
There are six waste-to-energy facilities in Pennsylvania, and 
the State depends on them to manage more than 8,700 tons per 
day of municipal solid waste. A baseload generation capacity of 
268 megawatts powers many homes and businesses in the State.
    The old-line opposition to waste-to-energy facilities 
claims that they pollute the air. However, with significant 
advances in technology in the last couple of decades and the 
sorting and removal of much of the waste before it is burned, 
the emissions from waste-to-energy facilities have become 
increasingly clean. In fact, the Environmental Protection 
Agency says that electricity from waste-to-energy facilities is 
some of the cleanest energy out there.
    The Europeans and Japanese have been utilizing this process 
at far greater levels for decades. China plans to build 300 
plants like the one in Lancaster. They can see the great 
potential that is present in this technology. Therefore, I 
believe that as this committee considers RES legislation, it is 
imperative to include waste-to-energy as a key part of this. To 
not include waste-to-energy sends a signal that we are not 
serious about the value of all alternative and clean energy 
sources, and I might add that this applies to nuclear power as 
well. It does send the signal though that we truly do not care 
about energy independency and viable options for decreasing 
greenhouse gases. It makes no sense to haphazardly pick and 
choose what renewables and alternatives should be included and 
which should not.
    So I hope this committee will recognize this value and 
efficiency of waste-to-energy as we move forward, and I yield 
back.
    Mr. Markey. The gentleman's time has expired. The chair 
recognizes the gentleman from California, Mr. McNerney.
    Mr. McNerney. Thank you, Mr. Chairman, for holding this 
important hearing.
    My perspective comes from two experiences. First, I spent 
20 years as an engineer in the wind industry business and saw 
the technology transform from a fringe industry to a highly 
successful, competitive business. Second, I have been running 
around meeting entrepreneurs and looking at some incredible 
technology that is available from around the country, so from 
these two experiences, I am certain that the technology is out 
there. We can meet whatever standards we put up, especially if 
it is on such a good purpose for reducing greenhouse gases, 
improving our national security, creating jobs. We can do this. 
The real limiting factor, in my humble opinion, will be what 
the federal and State legislatures do in this issue.
    Renewable energy standards is one strong tool we have to 
move forward and has been highly successful in application. As 
my colleague, Ms. Matsui, said, in California we have had a 
very good experience. The utility companies have not only met 
the standards but they have met them ahead of schedule and are 
very enthusiastic about proceeding with this issue, and so when 
we get the utility companies to embrace the program, they turn 
on the local entrepreneurs, things start happening. So I think 
we need to move ahead and we need to be aggressive and we need 
to accept what we have to do and use this tool of renewable 
energy standards to make this happen.
    With that, I yield back.
    Mr. Markey. The gentleman's time has expired. The chair 
recognizes the gentleman from Louisiana, Mr. Scalise.

            OPENING STATEMENT OF HON. STEVE SCALISE

    Mr. Scalise. I would like to thank the chairman for calling 
the hearing and look forward to hearing from the panel as we 
talk about renewable energy.
    These are all important issues in the broader context of 
developing a comprehensive energy policy which our country 
sorely lacks. When we talk about a comprehensive policy, 
clearly we are talking about renewable sources of energy but we 
are also talking about the importance of conservation, 
efficiency, as we had the hearing earlier just a few days ago 
on that issue, but also you have to talk about the importance 
of the role that domestic production of oil and gas plays in 
that comprehensive energy policy strategy and ultimately our 
goal is not only to reduce emissions but also reduce our 
dependence on Middle Eastern oil, which not only is an economic 
threat but is a threat to our country's security.
    So when we talk about the broader comprehensive policy and 
then specifically talking about renewable sources of energy, I 
think it is very important to talk about the role that wind 
plays, the role that solar plays in that, but I think it is 
also important to talk about the role that other renewable 
sources play as well, and one renewable source of energy that 
sometimes unfortunately gets left out of the discussion is the 
role that nuclear power plays and should play in this 
discussion, and I think right now it is not a part of that 
discussion and should be because it is a proven form of 
renewable energy, a form that many other countries have already 
figured out. Unfortunately, our country is behind in that and 
is going to continue to stay behind until we include nuclear 
power as a source of renewable energy, which it is, and 
unfortunately if it not going to be included in the 
legislation, we need to include it or otherwise we will have, I 
think, a failed renewable policy. So we are going to continue 
to show how the role nuclear plays in renewable energy is very 
important and very proven and is in fact adopted by many other 
countries.
    With that, I will yield the balance of my time.
    Mr. Markey. The gentleman's time has expired. The chair 
recognizes the gentleman from New Jersey, Mr. Pallone.

          OPENING STATEMENT OF HON. FRANK PALLONE, JR.

    Mr. Pallone. Thank you, Mr. Chairman. I want to thank all 
the panel for being here but I particularly want to point to my 
friend, Ralph Izzo, who is chairman and CEO of the Public 
Service Enterprise Group, which is a New Jersey-based energy 
company. Under Ralph's leadership, PSEG has been a leader in 
renewable investments. In February, PSEG's subsidiary announced 
their Solar for All program that will invest $800 million to 
bring solar energy to communities by placing solar panels at 
Brownfield sites, government buildings, low-income housing 
areas and on utility poles, and PSEG has also announced the 
development of an offshore wind project off the coast of 
Atlantic City.
    I mention these because they are great examples of how a 
renewable electricity standard can spur private investment into 
renewable energy. New Jersey has one of the most aggressive 
renewable electricity standards in the country requiring that 
20 percent of our electricity needs come from renewable energy 
by 2020. New Jersey is one of the 28 States that require a 
renewable electricity standard, and thanks to these laws, all 
of these 28 States are experiencing faster growth in renewable 
energy, and I can just imagine what we would accomplish with a 
national RES.
    I have long been a supporter of a renewable electricity 
standard. Last year I worked to help pass an amendment to the 
Energy Independence National Security and Consumer Protection 
Act that would have created an RES of 15 percent by 2020 
nationally, and I am also a cosponsor of the chairman's bill 
that requires that 25 percent of our energy come from renewable 
energy by 2025.
    Congress should be doing more to encourage investment in 
renewable energies. This should include tax incentives, low-
interest loans and a renewable energy standard. By establishing 
a strong RES, we will be challenging energy companies and 
utilities to innovate and invest in renewable energy, and this 
will help us not only reduce greenhouse gases in this country 
but it also will create green jobs. PSEG's Solar for All 
program will create 400 to 500 direct annual jobs in my State, 
and I am happy that my State is on the frontline of renewable 
energy production and I am hopeful that Congress will pass 
legislation to establish a strong renewable electricity 
standard nationally.
    Thank you, Mr. Chairman.
    Mr. Markey. The gentleman's time has expired. The chair 
recognizes the gentleman from Missouri, Mr. Blunt.
    Mr. Blunt. Thank you, Mr. Chairman. This is a topic that 
almost all of us agree on, on the goal of renewable energy and 
a lot of our discussion of course is how we get there.
    In November of 2008, Missouri voters approved the Missouri 
Clean Energy Initiative at the ballot, which creates a 
renewable portfolio standard for investor-owned utilities to 
utilize 15 percent renewable energy sources in their total 
output by 2021 and so the States are moving forward sometimes 
with initiative efforts in the States. I have a statement for 
the record, and the only thing I would like to emphasize, Mr. 
Chairman, from that statement is just my belief that for 
renewable portfolio standards to make sense and work, we need 
to be sure that we are categorizing and counting the things 
that are renewable, that do matter. That has to include, in my 
view, hydro, it has to include clean coal, it has to include 
nuclear and certainly the other things like the good example 
that Mr. Pitts just gave of waste-to-energy from Pennsylvania.
    Thank you for holding the hearing, Mr. Chairman.
    Mr. Markey. The gentleman's time has expired. The chair 
recognizes the chairman of the full committee, the gentleman 
from California, Mr. Waxman.

           OPENING STATEMENT OF HON. HENRY A. WAXMAN

    Mr. Waxman. Thank you very much, Mr. Chairman, especially 
for calling this important hearing today.
    Renewable energy is going to be one of the key pillars of a 
clean energy economy. We are not going to be able to avoid 
catastrophic climate change without a dramatic increase in the 
amount of energy generated from renewable sources. Today only 
2\1/2\ percent of our electricity comes from all non-hydro 
renewables, but fortunately the United States has tremendous 
renewable energy resources that we have only just begun to tap.
    In addition to the so-called Wind Belt that extends from 
the Dakotas down to Texas, there is substantial biomass 
potential in the Southeast as well as significant solar 
resources in the Southwest and throughout the United States. 
The Department of Energy recently issued a report showing that 
we could get 20 percent of our needed electricity from wind 
alone by 2030. Every region of the country has renewable 
resources that could be tapped to achieve our national goal of 
expanding renewable energy generation and reducing global 
warming pollution. More renewable energy also means more good 
jobs right here in the United States. Over the last few years 
the wind industry has been an engine of job growth. Last year 
wind companies created 35,000 new jobs. Some climate solutions 
require big technological breakthroughs but renewable energy is 
something we can deploy today. We can ramp up wind, solar, 
biomass and geothermal electricity production now. As the 
deployment of clean energy increases, the cost for this 
technology will continue to decline.
    A big driver for renewable energy development has been the 
willingness of States to forge ahead despite the absence of 
federal leadership. Twenty-eight States and the District of 
Columbia now have mandatory renewable electricity standards 
which require utilities to generate an increasing percentage of 
their electricity from renewable sources. These policies are 
working. More renewable energy is being generated with little 
or no effect on the electricity prices of American consumers.
    One potential effect of a cap-and-trade system is a so-
called dash to gas. Because burning natural gas for electricity 
produces less global warming pollution than burning coal, 
utilities may switch from coal to natural gas to reduce their 
emissions, and that could drive up the price of natural gas, 
increasing costs to consumers and companies that use it. When 
paired with a cap-and-trade system, a renewable electricity 
standard could help stabilize natural gas prices and prevent 
the dash to gas. By providing long-term incentives for 
renewables, a federal renewable electricity standard would also 
give a big boost to those clean technologies while reducing the 
chances that utilities would have stranded investments in 
dirtier technologies. I don't believe that a federal renewable 
electricity standard and a federal cap-and-trade system are 
duplicative or mutually exclusive. On the contrary, they may 
complement each other in important ways.
    I look forward to working these synergies with our 
witnesses today and with members of the committee. I yield back 
my time.
    [The prepared statement of Mr. Waxman follows:]

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    Mr. Markey. The gentleman's time has expired. The chair 
recognizes the gentleman from Pennsylvania, Mr. Shimkus.
    Mr. Shimkus. Pennsylvania has a lot of coal there too, Mr. 
Chairman.
    Mr. Markey. The gentleman from Illinois.
    Mr. Shimkus. I am honored to be considered from 
Pennsylvania, a fossil fuel state, which we are trying to 
protect their jobs too.
    I have shown these posters before. A lot of the senior 
members of this committee were here during the Clean Air Act, 
and this is Peabody Mine #10, Kincaid, Illinois. When the Clean 
Air Act was passed, 1,000 mine jobs left. That mine is still 
closed. And we are moving hell bent to a cap-and-trade regime 
that for the fossil fuel industry will do the same thing, and 
whether that is coal and whether that is crude oil, whether 
that is oil shale, the day of reckoning is coming, and I just 
want to pose this as far as the last hearing on efficiency and 
the current hearing now on renewables, let us consider this: If 
we were to improve the efficiency of the existing coal power 
generation fleet by only one percentage point, that is to 
increase from 33 to 34 percent efficiency, which is doable with 
technology today, we would save more energy than we would gain 
by expanding existing wind generation capacity 12 fold. This 
increase in efficiency would also result in 3 percent reduction 
of carbon dioxide release from coal power generation for the 
same amount of power delivered. Going further, if we 
aggressively improve efficiency by four or five percentage 
points, then emissions could fall by 250 metric tons, about 13 
percent of last year's carbon dioxide emissions from coal 
power.
    So Mr. Chairman, I think as we have talked before here in 
the committee and also on the Floor that I hope you will save 
fossil fuel use, low-cost power and coal in any movement on 
climate change, and I yield back my time.
    Mr. Markey. The gentleman's time has expired. The chair 
recognizes the gentleman from Georgia, Mr. Barrow.

             OPENING STATEMENT OF HON. JOHN BARROW

    Mr. Barrow. I thank the chair, and I want to welcome Mr. 
Stan Wise today also, one of the members of the Georgia Public 
Service Commission, because he has an insight to share in this.
    I just want to add to all the concerns that have been 
raised about such proposals that don't include making room for 
nuclear as a part of the portfolio and not including efficiency 
and not crediting those things. The unintended consequences 
that we will get from this, a lot of folks are making proposals 
and telling us in Georgia that we have enough biomass to cover 
our end of the deal but I don't think folks realize that folks 
are writing checks in Georgia that Georgia biomass cannot cash. 
I would hope we would have learned from the unintended results 
of our first tentative efforts to stimulate the growth in 
alternative fuels, that a small mandate that can only be met 
with existing technology without really forcing folks to really 
create new technologies had the unintended consequence of 
driving up the cost of other things as you take things that are 
spoken for in other marketplaces and try and direct them toward 
your new area of interest. We learned that with the price of 
food, through corn and corn starch ethanol. I don't want us to 
learn that lesson again at the price of Georgia consumers for 
Georgia biomass. We simply don't have the biomass in Georgia to 
meet the projections some folks are calling for without 
deranging the market for pulp for paper, lumber for 
construction. You name it, we could pick the State clean and 
not be able to generate enough to meet the mandates that are 
being proposed by some.
    What I also want to raise is the idea that if we don't have 
a mandate that is going to be met, we are going to have 
essentially an income transfer from one part of the country to 
the other, and the unintended consequence of this will be that 
some ratepayers in other parts of the country will benefit from 
an income transfer without generating any new net renewables in 
that part of the country to show for it. I am willing to vote 
for some pain but not if there is no gain. If we can't get the 
gain in our part of the country because the only thing we can 
do is buy our compliance and we don't get any gain in net 
renewables anyplace else because they have a surfeit because 
the mandate is set so low they already got renewables to burn, 
we are not going to get any new renewables anyplace else to 
show for the sacrifice being asked of some parts of the 
country. I can't support that, and I want to challenge those 
who are going to propose these mandates that we make sure we 
get some net renewables someplace else to show for this. 
Otherwise we will have the irony of not supporting nuclear as 
an alternative in Georgia but providing money for other folks 
to support nuclear in other parts of the country as they get 
money to spend any way they want and they expand nuclear, even 
though is not supported by the proposed. So let us don't have 
that. Let us try and make sure that we got some new net 
renewables and we are all fed out of the same spoon.
    Thank you, Mr. Chairman.
    Mr. Markey. The gentleman's time has expired. The chair 
recognizes the gentleman from Texas, Mr. Gonzalez.
    Mr. Gonzalez. Waive opening, Mr. Chairman.
    Mr. Markey. The chair recognizes the gentlelady from 
Wisconsin, Ms. Baldwin.

            OPENING STATEMENT OF HON. TAMMY BALDWIN

    Ms. Baldwin. Thank you, Mr. Chairman.
    As President Obama so clearly said on Tuesday night, to 
truly transform our economy, to protect our security and to 
save our planet from the ravages of climate change, we must 
ultimately make clean renewable energy the profitable kind of 
energy, and this not only means making investments in the 
development of new renewable energy technologies, but also 
taking policy steps to drive the production of more renewable 
energy in America. A federal renewable energy standard is one 
of the measures we need in place if we are to harness the power 
of clean renewable energy and be a leader in the 21st century 
global economy.
    I am proud that my home State of Wisconsin has required 
electric providers to increase their use of renewables to 
generate electricity. Wisconsin's current RES requires 
utilities to produce 10 percent of their electricity from 
renewable energy sources by 2015, and last year the Governor's 
Task Force on Global Warming, comprised of members of a cross-
section of Wisconsin's economy, recommended in its final report 
that the RES be increased to meet the 10 percent requirement 2 
years earlier and reach 25 percent by 2025.
    I do have some concerns and questions relating to the 
crafting of a federal RES that I hope we will discuss during 
this hearing today. Among them, what renewable energies should 
be allowed to qualify. For instance, Wisconsin has an abundance 
of woody biomass. Should that be included? What about energy 
derived from solar light pipe technology such as those made by 
a company in my home State? And what about some of the energy-
efficient technologies that we discussed in our hearing just a 
couple of days ago including combined heat and power 
technologies and waste heat energy. I also have some questions 
about the constraints that we face in transmission as we 
generate more renewable energy.
    But despite some of the challenges in defining and 
implementing a national RES, I believe it to be a key 
component, a key complementary measure to ending our dependence 
on foreign oil, tackling environmental degradation and 
addressing our economic recovery.
    I look forward to our witness panel today, and I yield back 
the balance of my time.
    Mr. Markey. The gentlelady's time has expired. The chair 
recognizes the gentleman from Louisiana, Mr. Melancon.

           OPENING STATEMENT OF HON. CHARLIE MELANCON

    Mr. Melancon. Thank you, Mr. Chairman. I appreciate the 
attention that you have shown to this issue and I would like to 
thank the witnesses for taking time to be here this morning.
    As I have said before in hearings, meetings and anywhere 
else people will listen, I believe that we must take climate 
change seriously because I have a grandson that I want to be 
able to enjoy the same planet that I did, whether it is hunting 
or fishing or any other reason. I want Louisiana's coast to 
still exist for his and the other generations to come.
    That being said, I encourage all my fellow committee 
members to be reasonable and responsible in how we approach 
climate change policies. There can be large costs associated 
with some strategies and it is important more now than ever to 
ensure that those costs do not simply get passed down to the 
consumers, who are our constituents.
    We are here today to discuss complementary policies to 
climate change legislation and the crux of such legislation 
would be to reduce emissions of carbon dioxide and other 
greenhouse gases, an important and time-sensitive task. 
Reducing emissions of carbon dioxide and other greenhouse gases 
is the right move to make but we should focus on that goal and 
not lose perspective. Wayne Leonard, who is the chief executive 
officer of Entergy, wrote an op-ed, which I would like to 
submit for the record, for the New York Times. In it he 
explains the realities of how a policy like RES would impact 
his company. He points out that having to invest in either 
development of renewable technology or the purchase of credits 
would drastically change their business model. It would create 
a drive towards cheaper and cheaper fuel sources to compensate 
for new costs, meaning that more expensive natural gas would be 
squeezed out of production to make room for more cheaper coal. 
This dynamic would have the precise opposite effect that we 
should be aiming for by countering some of the emission 
reductions achieved by development of renewable electricity.
    I would like to conclude by reiterating my support for 
efforts to reduce harmful greenhouse gas emissions but also to 
emphasize the importance of taking a balanced approach that 
keeps in mind the impact this will have on our increasingly 
burdened constituents.
    Thank you, Mr. Chairman. I appreciate the time.
    Mr. Markey. The gentleman's time has expired, and all time 
for opening statements has been completed for the members. I 
will now turn to our very distinguished panel. Our first 
witness this morning is Dr. Howard Gruenspecht. He is the 
acting administrator for the Energy Information Agency. Dr. 
Gruenspecht worked with the Department of Energy's Office of 
Policy as director of economics, electricity and natural gas 
analysis. Thank you for joining us, Mr. Gruenspecht. Whenever 
you are ready, please begin.

  STATEMENTS OF HOWARD K. GRUENSPECHT, ACTING ADMINISTRATOR, 
ENERGY INFORMATION ADMINISTRATION, DEPARTMENT OF ENERGY; RONALD 
  BINZ, CHAIRMAN, COLORADO PUBLIC UTILITIES COMMISSION; STAN 
WISE, COMMISSIONER, GEORGIA PUBLIC UTILITIES COMMISSION; RALPH 
 IZZO, PRESIDENT, CHAIRMAN AND CEO, PUBLIC SERVICE ENTERPRISE 
  GROUP; AND EDWARD LOWE, GENERAL MANAGER, RENEWABLES MARKET 
                   DIVISION, GENERAL ELECTRIC

               STATEMENT OF HOWARD K. GRUENSPECHT

    Mr. Gruenspecht. Thank you, Mr. Chairman and members of the 
committee. I appreciate the opportunity to appear before you 
today. The Energy Information Administration is the independent 
statistical and analytical agency within the Department of 
Energy that produces data projections and analyses to assist 
policymakers, help markets function efficiently and inform the 
public. We do not promote, formulate or take positions on 
policy issues, and our views should not be construed as 
representing those of the Department of Energy or the 
Administration. My testimony reviews the role of renewable 
electricity generation and recent EIA projections, provides an 
overview of the renewable resource base and discusses some key 
findings from some of our earlier analyses of renewable 
electricity standards.
    As discussed in many of the opening statements, spurred by 
State renewable incentives and mandates as well as federal tax 
incentives for renewables and projected prices for natural gas 
and other fuels, our Annual Energy Outlook 2009 reference case 
projects that renewable energy sources will play a growing role 
in electricity generation as shown in figures 1 and 2 of my 
written testimony. Overall, the projected growth in non-
hydropower renewable generation in our reference case 
constitutes 52 percent of the overall projected growth in 
electricity sales through 2020 and 38 percent of the growth in 
electricity sales through 2030. These estimates do not include 
the very recent American Reinvestment and Recovery Act, which 
provides some additional incentives for renewable energy.
    Let me now turn to some insights from recent EIA analyses 
of past proposals for a federal renewable electricity standard. 
First, because the levelized cost of renewable generation 
resources tends to be higher than that of equivalent 
conventional resources, there is a tendency for an RES to 
increase electricity prices and consumer expenditures on 
electricity though by relatively small amounts. For example, in 
our June 2007 study of a 15 percent RES, EIA found that 
residential consumers spent about four-tenths of a percent more 
on electricity than in the reference case. However, these 
electricity price impacts can be partially offset if fuel 
consumption for electricity generation such as natural gas and 
coal is reduced enough to reduce the price of these fuels. It 
is important to note that impacts on individual consumers and 
electricity sellers can vary considerably in part for some of 
the reasons that were brought up in the opening statements.
    The impact on carbon dioxide emissions, which are not 
currently regulated at the federal level, depends on the fuels 
being placed. Carbon dioxide benefits are significantly larger 
when coal is displaced than when natural gas is displaced. 
Certain renewables such as biomass cofiring at existing plants 
directly displace coal use. Other increases in renewable 
generation generally displace the most costly generation source 
that would otherwise be used to meet demand. Due to the effect 
of increasing concerns related to greenhouse gas emissions on 
investor behavior, our new projections include fewer additions 
of new coal-fired power plants than earlier projections and 
that tends to reduce the displacement of coal from levels 
projected in our previous RES analyses.
    Regarding regional impacts of an RES also raised in many of 
the opening statements, different parts of the country have 
access to different types of renewable energy with different 
cost and performance characteristics. Some parts of the country 
such as the Southeast would rely on a significant increase in 
the cofiring of biomass resources such as forestry residues in 
existing coal plants to move toward compliance with an RES. 
Other parts of the country such as the Great Plains or the 
Pacific Northwest are likely to focus on their abundant wind 
resources. The designs of all the federal RES proposals EIA has 
examined allow for renewable energy credit trading so 
electricity sellers in regions are not limited to locally 
available resources. However, in our June 2007 analysis of a 15 
percent RES, EIA found that while some interregional trading 
credits occurred, most RES compliance occurred through growth 
in eligible generation within each region.
    Looking at transmission issues, the need for expansion of 
the transmission system will depend on the stringency of an RES 
proposal and the desire to exploit some of the best renewable 
resources which are often located far from major population 
centers. The more stringent the RES proposal, the greater the 
likelihood that markets near the best renewable resources will 
not be able to absorb the potential increase in generation and 
additional transmission capacity would therefore be needed to 
move it to other markets.
    Electricity demand and supply must balance continuously in 
the absence of cost-effective electricity storage technologies. 
As reliance on intermittent resources increase, the traditional 
electricity system paradigm of generation follows load becomes 
harder to sustain. Greater reliance on intermittent generation 
could be more easily accommodated with energy storage or if 
some portion of the load could be made to follow changes in 
generation, such as through smart grid technologies that allow 
for automatic or economically driven time shifting of non-
critical loads.
    In conclusion, as is the case with many energy issues, the 
devils or angels associated with the design of an RES or other 
types of energy policies are in the details. EIA is prepared to 
provide the committee with whatever assistance we can as you 
develop and design possible legislation.
    Mr. Chairman and member of the committee, this concludes my 
testimony. I would be happy to answer any questions you may 
have.
    [The prepared statement of Mr. Gruenspecht follows:]

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    Mr. Markey. Thank you, Mr. Gruenspecht, very much.
    Our second witness this morning is Mr. Ron Binz. He is the 
chairman of the Colorado Public Utilities Commission since 2007 
where he has carried out Colorado's 20 percent state renewable 
electricity standard. Previously Mr. Binz was president of 
Public Policy Consulting specializing in energy and 
telecommunications policy. Welcome, Mr. Binz.

                    STATEMENT OF RONALD BINZ

    Mr. Binz. Good morning, Chairman Markey. It is nice to see 
you again after all these years.
    My name is Ron Binz and I am the chairman of the Colorado 
Public Utilities Commission. It is my privilege and great honor 
to speak here today about the role that renewable energy will 
play in the Nation's attempt to address global climate change. 
I congratulate the chairman on calling this hearing and I look 
forward to the opportunity to talk about a real success story, 
what we call the New Energy Economy in Colorado.
    Colorado is moving forward aggressively to adopt renewable 
energy as a major portion of our generation resources in the 
State. The collection of all those efforts of new jobs, of 
companies relocating to Colorado, of rural economic 
development, we call the New Energy Economy, and it is easy to 
date the beginning of that. It was Election Day in 2004 when 
the State's voters passed the renewable energy standard. It had 
failed three times in the legislature. Citizens took it to the 
ballot. It passed in 2004. After initial opposition to it, the 
utilities have come back to support the process. In fact, the 
legislature 2 years later doubled the standard in the State to 
20 percent by 2020.
    The New Energy Economy means more than just clean 
electrons. Colorado's Office of Economic Development traces 
22,000 jobs, new jobs in Colorado, what we are calling green 
collar jobs. Now, to give you a sense of that scaled up to 
national numbers, that would be 1.25 million jobs nationally in 
this energy sector. Our investments in renewable energy are 
also helping the State make progress toward the Governor's 
Climate Action Plan. Significant wind and solar resources are 
reducing carbon emissions in the state. For that reason, Mr. 
Chairman, I would take slight exception to your notion of this 
being a complementary policy. We think of it as a foundational 
policy. Our belief is the reduction of CO2 and 
greenhouse gas emissions is going to require the development of 
renewable energies is not just an add-on to a carbon policy, it 
is going to be a foundation of it.
    I dwelt in my testimony about solar energy. I put a map in 
there that was developed by the National Renewable Energy 
Laboratory in Colorado showing solar resources around the 
country. Everyone knows that solar costs more than electricity 
produced by coal or natural gas today. Everyone also knows that 
the cost of PV is falling and many predict that it will achieve 
grid parity some time in the future but the cost of solar and 
other renewable technologies doesn't fall simply over time, it 
falls with the volume and deployment as that increases. Ramping 
up solar supply, just to again focus on solar, will thicken the 
supply chains and large manufacturing base, grow the commitment 
to R&D and generally increase competition in the design and 
installation of solar.
    Much has been said about parts of the country who have 
relatively less wind power and I understand that Georgia, home 
of my soon to be former best friend, Stan Wise here, Georgia 
may not have the wind capacity that Colorado does but just to 
underscore, Mr. Pallone talked earlier about the efforts in New 
Jersey. New Jersey, maybe to your surprise, is the second 
largest State for solar deployment in the country, second only 
to California. The resources, the solar insulation levels in 
New Jersey are far poorer than they are in the southeastern 
part of the United States. I think the draft legislation wisely 
gives a three times credit for distributed solar generation. I 
think that is a very important step to boost the efficiency and 
economy of those kinds of resources.
    I just want to conclude with two things. First, this 
salutary social effect of pushing renewable energy through an 
RES kind of standard is one of the main reasons that I as a 
regulator in Colorado hope that other States adopt RES 
policies. That will begin to bring these break-even points on 
cost closer in time to today. Bringing down the level of carbon 
emissions and the cost of renewable technologies is in my view 
a shared responsibility shared by all citizens of this country, 
and as far as I am concerned, that is where the nexus for 
federal interest in this matter derives.
    As chairman of the Public Utilities Commission of Colorado, 
I can unreservedly endorse the benefits of a renewable energy 
standard. Because of the action of 28 States with RES policies, 
the costs are falling today. RES will provide a needed boost to 
that continued development. In my experience, it enjoys strong 
consumer support and can be implemented with reasonable impacts 
on rates. Thank you.
    [The prepared statement of Mr. Binz follows:]

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    Mr. Markey. Thank you, Mr. Binz, very much.
    Our next witness is Mr. Stan Wise, a commissioner on the 
Georgia Public Service Commission. He has previously served as 
Cobb County commissioner in Georgia and is a former president 
of the National Association of Regulatory Utility 
Commissioners. We welcome you, sir. Whenever you are ready, 
please begin.

                     STATEMENT OF STAN WISE

    Mr. Wise. Thank you, Mr. Chairman. Thank you to the 
committee for this opportunity to speak before you today as you 
wrestle with this very difficult issue.
    I am a publicly elected commissioner on the Public Service 
Commission and as a regulator I am responsible for ensuring 
that retail electricity customers receive safe, reasonably 
priced, reliable electric service. I am concerned that a one-
size-fits-all RPS mandate fails to recognize that there are 
significant differences between the States and regions in terms 
of available and cost-effective renewable energy resources and 
that having such a standard in energy legislation will 
ultimately increase consumers' electricity bills.
    We should be discussing ways to promote clean energy of all 
types. We need to develop and deploy all energy sources that 
can ensure an adequate supply of energy in the future, that can 
power our economy and that moves us forward to improving our 
environment, especially in ways that reduce greenhouse gases. 
Major energy sources that can meet these needs include nuclear, 
coal, coal with carbon capture and sequestration, natural gas, 
energy efficiency as well as wind, solar, biomass and 
geothermal. The distribution of these energy sources is 
different across the country. Some regions have more nuclear 
power than others, some coal, and others have wind and solar 
opportunities. We should be encouraging States and regions to 
take advantage of these sources that can best advance our 
energy and environmental goals with the understanding that the 
exact use of sources will be different in each State or region.
    Establishing a uniform national RPS focused exclusively on 
a limited number of sources like wind, solar, biomass or 
geothermal without regard to crucial regional differences will 
unnecessarily drive up electricity costs, jeopardize 
reliability and divert capital that will be needed to achieve 
other objectives like meeting aggressive carbon targets. My 
State, for example, does not possess an abundance of what is 
described as renewable in many of the legislative proposals. 
The DOE data shows that Georgia does not have abundant solar 
energy that is available in other parts of the country, wind 
turbine generation available to States located in the Great 
Plains nor do we have abundant geothermal. My State and our 
region must seek to encourage the growth of research and 
development in the use of energy resources that are available 
and economically viable to provide our future needs. This will 
include the development of coal with carbon capture and 
sequestration, nuclear power, natural gas and energy 
efficiency. There is renewable development occurring in our 
State and currently we are considering a biomass plant that 
would replace a small coal-fired plant, and even though it is 
one of the largest in the country, it will only equal 100 
megawatts. Some regions of the country have access to wind 
resources. Wind can be a ready resource but has its 
limitations. Its availability is severely limited and cannot be 
dispatched by utility operators when the load demand peaks. A 
study by the Joint Coordinated System shows that several 
regional transmission planning organizations and the TVA in the 
Southeast does not and cannot meet anything greater than 30 
percent all of the time. This gap demand would have to be 
recovered by building additional natural gas-fired generation. 
The report also shows that if the eastern United States were to 
meet the 20 percent of its energy requirements with wind, that 
229,000 megawatts of wind capacity would have to be built. Some 
are discussing building transmission lines from areas with wind 
resources primarily in the West, to the eastern United States. 
These proposals raise concerns about cost, reliability and 
additionally transmission that doesn't solve the intermittent 
nature of wind resources.
    Solar power has a capacity even lower than wind. Humidity 
and cloud cover in the Southeast makes it very difficult to 
maintain a capacity of lower than 20 to 25 percent. That would 
also have to be backed up with fossil fuels, most likely 
natural gas.
    Mr. Chairman, I would like to go ahead and skip ahead to my 
summary to make sure that I have the opportunity to get this 
in. Even with the challenges it is still the desire of the 
Congress to impose these federal mandates, then certain 
conditions should be taken into account, that States should be 
allowed to develop renewable or clean energy standards that 
take into account the resources available in the State or 
region. This will ensure State-to-State equity while maximizing 
the benefits of expanding clean energy. Targets and timetables 
should be practical and allow State or regional variations 
depending on the resources available. The definition of 
qualifying resources that would count toward compliance with a 
federal standard should be expanded from the list in the 
current proposals including existing hydro that should count 
towards compliance the same as existing wind and solar. Nuclear 
generation should be included due to the fact that it emits no 
carbon. The definition of biomass should be expanded to include 
all recoverable wood material. This would include whole trees 
which are currently excluded from credit towards compliance. 
Energy efficiency should be included as a resource that would 
count towards compliance. This is a resource that is being 
expanded in Georgia and the Southeast and its use should not be 
limited in any federal standard. Utilizing municipal solid 
waste for energy production should be included toward 
compliance. This is a renewable resource that is available 
across the country and will reduce the use of other 
environmental impacts.
    I thank the chairman for this opportunity.
    [The prepared statement of Mr. Wise follows:]

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    Mr. Markey. Thank you, Mr. Wise, very, very much.
    Our next witness, Dr. Ralph Izzo, is the president, 
chairman and CEO of the Public Service Enterprise Group 
Incorporated. Mr. Pallone has already listed the distinguished 
history of Dr. Izzo. We welcome you, sir. Whenever you are 
ready, please begin.

                    STATEMENT OF RALPH IZZO

    Mr. Izzo. Thank you, Mr. Chairman, Congressman Upton and 
members of the committee. Our family of companies distributes 
electricity and natural gas to more than 2 million utility 
customers in New Jersey and we own and operate approximately 
17,000 megawatts of electric generation in the Northeast, Mid-
Atlantic and Texas. I appear before you this morning to express 
my strong desire to see this Congress adopt a national 
renewable electricity standard. I would like to recognize your 
leadership, Chairman Markey, on this issue as well as that of 
Congressman Pallone, who has championed renewable energy for as 
long as I have known is, which is probably a lot longer than 
either of us care to think about right now.
    Global warming is the most important environmental 
challenge of our time, and to avoid catastrophic impacts from 
climate change, most scientists agree that we must achieve 
carbon emission reductions of 80 percent by 2050. To reach this 
target, we urgently need decisive federal action, not a 
patchwork of state and regional fixes but a strong, progressive 
national energy policy. A carbon cap-and-trade program will be 
a central part of such a policy but we need a portfolio of 
solutions. To achieve necessary carbon reductions, we must do 
nothing less than electrify our transportation sector and 
decarbonize our electric sector. We need policies aimed 
directly at driving these transformations, and an RES will 
create demand for technologies that will transform the way we 
generate electricity. With this policy we will create jobs and 
we will develop new technologies that we can export all over 
the world. In other words, investment in renewable energy is a 
strategy for long-term sustainable growth.
    As an investor and a businessman, I believe the adoption of 
a federal RES would create tremendous opportunities. PSEG, our 
company, our company, is already beginning to invest heavily in 
alternative energy. Two weeks ago, our utility filed a proposal 
with New Jersey regulators to invest almost $800 million in 
solar generation over the next 5 years. This will include 
putting solar panels on Brownfields, low-income housing, 
government buildings and on roughly 200,000 utility poles. We 
are also planning a 350-megawatt offshore wind farm off the 
coast of southern New Jersey and we recently created a joint 
venture to develop compressed air storage facilities that can 
store energy and help make renewable generation more 
competitive.
    A federal RES will send clear market signals to companies 
like ours to increase their investment in renewable electric 
generation. In the long term, these investments will be a net 
benefit to customers. In the short term, however, renewable 
energy is more expensive than fossil fuel generation. We must 
be upfront with consumers about these costs, but the most 
effective way to minimize cost is through a national approach. 
A strong national program will create economies of scale and 
drive down production costs, and once developers can rely on a 
stable national market for renewable energy credits, it will 
reduce their cost of capital.
    It is also worth nothing that certain emerging renewable 
technologies such as offshore wind and solar will need 
additional federal incentives, particularly through the tax 
code. Fostering these industries is important to our long-term 
climate change strategy.
    In closing, Mr. Chairman, as you know, our country faces 
daunting challenges. We must dramatically reduce carbon 
emissions and transform our energy economy and we must do this 
while we face rising unemployment and an economic crisis. 
Implementing an RES will send a clear signal to investors that 
a true shift has occurred in our approach to a national energy 
policy. Let us encourage sustainable investments to power our 
way out of this downturn. We need to get started now. Thank 
you.
    [The prepared statement of Mr. Izzo follows:]

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    Mr. Markey. Thank you, Mr. Izzo, very much.
    Our final witness, Mr. Edward Lowe, is General Electric's 
energy general manager of renewable energy and market 
development. GE is one of the country's largest renewable 
technology producers and actually supplies half of all wind 
turbines in the United States. We welcome you, Mr. Lowe. 
Whenever you are ready, please begin.

                    STATEMENT OF EDWARD LOWE

    Mr. Lowe. Thank you, Mr. Chairman and members of the 
committee. I appreciate the opportunity to testify on the 
potential impacts of a federal renewable electricity standard.
    GE believes that a federal RES is the single most important 
step the Congress can take to lay the long-term foundation for 
a green collar workforce and a domestic renewable energy 
manufacturing base. Today GE's renewables business has an 
installed base of over 25 gigawatts in more than 65 countries, 
employs 4,700 people globally and we have created over 10,000 
supplier jobs. Since entering the renewables business in 2002, 
GE has invested over $850 million in renewable energy 
technology and production. We have increased wind turbine 
reliability and efficiency 12 and 19 percent points, 
respectively. We have developed leading-edge integration 
technology and we continue to invest in wind and solar 
technology advancements. During the time period we have tripled 
our U.S. wind assembly facilities and increased wind turbine 
production six fold. GE is the leading wind turbine supplier, 
as the chairman indicated, with nearly one of every two wind 
turbines in the United States being a GE wind turbine. This 
growth has created well-paying U.S. jobs. Nationwide, we employ 
2,000 people in our wind and solar businesses in five States 
while supporting over 4,000 supplier jobs in 15 additional 
States.
    An example of the economic benefits that we generate is a 
wind blade manufacturing facility that opened last year in 
Newton, Iowa, and was referenced earlier. This is owned by TPI 
Composites and employs 500 people in a facility that was 
previously closed by Maytag. In the past 2 years, wind turbine 
and turbine component manufacturers announced or added or 
expanded 70 facilities, 55 alone last year. This growth was 
driven by successive extensions of the wind production tax 
credit in 2005 and 2006 and the growth of State renewable 
portfolio standards. If Congress were to approve a federal RES 
this year, GE would expect to see considerable growth and 
demand for its renewable products. Responding to this growth 
would in turn prompt us to explore the expansion of our 
existing wind turbine facilities and construction of new 
facilities, increase commitments to component suppliers and add 
new suppliers. These investments could result in the creation 
of approximately 3,000 to 5,000 jobs to support our wind 
business. We are aware of 10 to 12 foreign suppliers who have 
expressed a strong interest in opening facilities in the United 
States but are awaiting a long-term policy signal to support 
the required investment.
    Recent studies point to the job creation potential of a 
federal RES. The Department of Energy estimates that achieving 
20 percent wind by 2030 would create 500,000 jobs. With 
accelerated policy support, the solar PV industry predicts 
230,000 jobs by 2016. Based on our experience, State RPS 
programs should have certain key elements, among which is an 
aggressive long-term goal out to 2020 or 2025, achievable 
interim goals, meaningful non-compliance teeth, tradable 
renewable energy credits and support for distributed 
generation. In addition, legislation to expedite transmission 
expansion is essential. Finally, a federal RES will be a 
critical down payment on future climate change legislation by 
accelerating the near-term deployment of wind, solar and other 
low- or zero-emission technologies.
    In summary, a federal RES is essential to creating a 
sustained green collar workforce and a domestic renewable 
energy manufacturing base and a federal RES will also serve as 
a critical complement to climate legislation.
    Thank you for holding this important hearing and the 
opportunity to present this testimony.
    [The prepared statement of Mr. Lowe follows:]

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    Mr. Markey. Thank you, Mr. Lowe, very much, and that 
completes opening statements from our witnesses. The chair will 
recognize himself for a round of questions.
    Mr. Gruenspecht, there has been some opposition to a 
national renewable electricity standard from parts of 
southeastern United States based on the argument that the 
Southeast lacks renewable resources. Your analysis last year 
showed that the Southeast was actually a net exporter of 
tradable electricity credits because of the huge biomass 
resource there. In other words, the standard allowed 
southeastern states to actually export renewable credits 
instead of just importing coal. A lot of biomass use was mill 
and other waste that would have rotted on the ground if not 
used to satisfy the standard. Can you expand upon what your 
analysis found?
    Mr. Gruenspecht. Yes, Mr. Chairman. Again, we looked at 
analysis at 15 percent RPS. I guess we got a letter from you 
yesterday and we are going to do further analysis on your 
standard. But we did on a region-by-region basis look at what 
would happen, I think it was a proposal by Senator Bingaman, 
and we did find that at least initially up until about 2020, 
the SERC region, the Southeast Electric Reliability Council 
region, was able to generate more renewable credits, if you 
will, than it used internally. Beyond 2020, they did import 
some of their renewable energy credits but they still produced 
about 80 percent of what they needed within the region. It did 
not break down to State-by-State levels.
    Mr. Markey. Thank you, Mr. Gruenspecht.
    Mr. Izzo, do you believe that a 25 percent renewable 
electricity standard by 2025 is feasible in New Jersey and 
nationwide?
    Mr. Izzo. Yes, I do. In New Jersey our primary focus will 
be offshore wind, onshore wind through PJM and local solar, and 
as you have already been told, the NREL map suggests that New 
Jersey has less of an abundance of those resources than other 
parts of the country.
    Mr. Markey. Mr. Binz, what about Colorado? Do you think you 
could meet 25 percent by 2025?
    Mr. Binz. Our current standard is 20 percent by 2020. I 
think 25 percent by 2025 will be a stretch but I think we will 
make it.
    Mr. Markey. Mr. Lowe, if we delay in adopting a national 
policy such as a renewable electricity standard to encourage 
growth in renewables, is there a risk that other countries will 
end up dominating this growing global market in terms of 
control of this international market that is clearly going to 
be there by 2020 or 2025?
    Mr. Lowe. Absolutely. We see national renewable standards 
being adopted around the world. A highlight, too, number one, 
is the 20 percent renewable energy in Europe by 2020. That is 
expected to drive almost 200 gigawatts of wind installation 
there. The second one that I highlight is China. China used to 
have a goal of 10 gigawatts by 2020. They expanded that to 30 
gigawatts by 2020. Last year they expanded this to 100 
gigawatts by 2020.
    Mr. Markey. That is 100,000 megawatts?
    Mr. Lowe. That is 100,000 megawatts.
    Mr. Markey. That is how much nuclear energy we produce on a 
daily basis in the United States.
    Mr. Lowe. So as is said here, we have the potential for 60 
gigawatts of wind in the United States based on the current 
state RPSs but that is dwarfed by these two other regions.
    Mr. Markey. So based upon that, the Chinese industrialists 
hope we don't adopt a renewable electricity standard?
    Mr. Lowe. I think you can look at a quote that came out of 
Germany by the German Wind Energy Association. Just so 
everybody knows, Germany ends up supplying about 37 percent of 
all wind turbines or components around the world, and that is 
because according to the state, they have a very strong 
domestic policy standard that ends up driving that industry and 
therefore they can export. As an example, Wind Products is the 
second greatest exporter out of Germany, about 60 billion euros 
a year, only to cars.
    Mr. Markey. I think that the Germans and the Chinese are 
hoping we don't have a renewable electricity standard, to be 
honest with you, because we would be importing their products 
by 2020 and 2025 and the work would be in their countries, not 
in ours.
    Mr. Izzo, you have testified that a national renewable 
electricity standard would complement and strengthen climate 
legislation and be workable in concert. Could you elaborate 
upon that?
    Mr. Izzo. Sure. Under a cap-and-trade system, what you 
would have is a cost for carbon which would then encourage all 
other forms of carbon reduction, in particular things like 
energy efficiency, greater improvements in current fossil fuel-
fired-powered plants to increase their energy output per amount 
of CO2 emitted. However, such a climate change bill 
would not bridge the gap that is needed to bring about the 
longer term solutions that renewables are. So that would 
require a special portfolio selection that says in order to 
build the full portfolio of solutions, not just energy 
efficiency, not just more efficient fossil fuel plants but 
carbon-free power. One simply needs to look at the fact that 76 
percent of all renewables produced in 2007 were in RPS States.
    Mr. Markey. Thank you, Mr. Izzo, very much. That is very 
helpful.
    My time has expired. The chair recognizes the gentleman 
from Michigan.
    Mr. Upton. Thank you, Mr. Chairman. Again, I want the 
record to show that I do support an RPS. We have it in 
Michigan, and we will see how it works. It was just approved by 
our State legislature. We didn't have to go to the voters. Our 
legislature did it. We are anxious to see how it works, and I 
must say that last week I spent a considerable amount of my 
time at two of our universities, who are really working on wind 
technology to make it better, and an interesting point, you 
know, in Michigan we have got a lot of storms, as you know, 
that come across the lake, and when I went out to one of these 
giant wind turbines, it wasn't turning, not at all because the 
wind was not blowing last week, and so my question is, as much 
as we want renewable sources of power--and it was a cloudy day 
too so solar wouldn't have worked either. What do you have to 
do in terms of building for the non-peak times or when the wind 
doesn't blow and the sun doesn't shine, which in Michigan is a 
good part of the time. Mr. Izzo?
    Mr. Izzo. Sure, Congressman. We advocate three forms of 
energy policy to achieve carbon reduction. One is energy 
efficiency, two is renewables and third is large baseload clean 
carbon-free technology, which could either be fossil fuel with 
carbon capture and storage or nuclear. We are also investing in 
compressed air energy storage systems, which allow us to store 
electricity from renewable supplies when it is produced and 
then use it when it is needed. One has to take an entire 
portfolio approach to this. No one slice of that will achieve 
our 80 percent reduction by 2050.
    Mr. Upton. Mr. Binz, what has Colorado done for the non-
peak times?
    Mr. Binz. Congressman Upton, we are grappling with that 
very issue. The wind penetration in Colorado is pushing 20 
percent on a capacity factor. If you are an Excel energy 
customer, one kilowatt-hour out of 10 in 2008 was wind 
generated. That presents some challenges but they are obviously 
able to solve those challenges to regulating and balancing the 
system. We use a number of resources such as pumped 
hydrostorage, natural gas peaking units to firm up the wind, 
but still in all, that is a lower cost total application than 
would be using to burn natural gas alone, so we come out ahead 
in that. The other thing I would mention is that regional 
diversification is very helpful. We are looking right now at 
the advantages of bringing in wind from other states that 
happen to have patterns which tend to complement the Colorado 
wind resources. That is another approach you can take.
    Finally, I want to endorse the storage notion. CAES, or 
compressed air energy storage, is going to be very important to 
the future of wind and a comparable but different technology 
for solar will make those dispatchable units in the off-peak 
and shoulder periods.
    Mr. Upton. Mr. Lowe, I am told, I would like you to confirm 
this, that it takes about 60 acres, is that right, in terms of 
space for wind to produce one megawatt of power? Is that about 
right?
    Mr. Lowe. I would say it is a little bit less than that.
    Mr. Upton. A little bit less?
    Mr. Lowe. Approximately.
    Mr. Upton. Fifty acres?
    Mr. Lowe. Forty, I believe.
    Mr. Upton. Forty? Okay. So to provide 5 percent of our 
Nation's power using wind, and again I support wind, I support 
wind in Lake Michigan. I know we have a problem with Nantucket 
in Massachusetts when they didn't want it. My district is along 
Lake Michigan. How many acres would it then take?
    Mr. Lowe. I am sorry. I don't have that statistic with me.
    Mr. Upton. We figured it was 12 billion acres, I think, is 
the figure that we came up with so we might have to encroach 
into Nantucket after all. I don't know if the gentleman is 
willing to acknowledge that or not. That is a lot of acreage to 
reach 5 percent. You know, we don't have the great ski 
mountains of Colorado in Georgia or other places that we are 
going to be able to use a lot of that acreage, but that is a 
heck of a lot, right?
    Mr. Lowe. I would have to go back and check that number but 
certainly if you take a look at the areas of the country where 
wind is predominant, and one of advantages of it is in large 
swaths of the Midwest where you are still using that land for 
very vibrant agricultural use and yet you are also being able 
to produce renewable energy. One of the byproducts this really 
has is, the support from farmers. We know that a number of 
farms right now are in desperate financial condition and the 
leasing payments that they get by being able to put those wind 
farms on their property while also enjoying--
    Mr. Upton. I understand. I want to ask one last question 
before my time runs on.
    Mr. Binz, again, knowing Colorado a little bit, does 
Colorado include hydro as part of your portfolio?
    Mr. Binz. RES includes new hydro.
    Mr. Upton. New hydro. So existing hydro, it doesn't impact 
that at all then, right?
    Mr. Binz. Actually our hydro opportunities are relatively 
modest in Colorado. This is where the rivers start, not where 
they end up, and so--but we do allow in our renewable energy 
standard new hydro.
    Mr. Markey. The gentleman's time has expired. The chair 
recognizes the gentlelady from California, Ms. Matsui.
    Ms. Matsui. Thank you, and you know, we all know that 
preventing climate change will require many strategies. We need 
climate legislation that caps carbon emissions. We need a 
federal renewable electricity standard that drives the 
deployment of renewable energy and stimulates further 
innovation and we need to focus on the easiest and least 
expensive emissions reductions, and that means major energy 
efficiency standards. In 2007, the House passed a renewable 
electricity standard and it required utilities to generate 15 
percent of their electricity from renewable sources. I voted 
for this bill because I think it was the best we could have 
passed at the time. But this bill included provisions allowing 
4 percent of the 15 percent of the standard to come from energy 
efficiency improvements. I am a strong supporter of 
dramatically improving energy efficiency. The question I have 
is, how to address renewable energy with energy efficiency 
policies.
    Mr. Izzo, do you think energy efficiency investment should 
be counted under a federal renewable electricity standard?
    Mr. Izzo. No, I see them as separate issues, equally 
important.
    Ms. Matsui. So you are concerned that including efficiency 
in RES standards would just allow efficiency to displace--
    Mr. Izzo. Correct. You would diminish the necessary 
deployment we need for renewables.
    Ms. Matsui. Mr. Binz, how about you?
    Mr. Binz. I feel the same way. I would rather not reduce 
the effectiveness and I would add to that list. We are strong 
supporters, Governor Ritter in Colorado, strong supporters of 
research and technology having to do with clean coal. We would 
not want to see that defined as a renewable energy resource 
because it would work against the purposes of that bill but we 
think on a separate track those are very important policies as 
well.
    Ms. Matsui. Mr. Lowe, how about you? Does GE support 
separate standard for renewable and efficiency or a combined 
standard?
    Mr. Lowe. I think it can be done either way but the one 
thing I would caution is, if you end up setting a standard and 
then you do not have a clear, articulated basis for what can 
renewables end up providing, then you are not going to see the 
investment and the job creation there. So there has to be a 
certainty of that and the larger portion you allow to be 
satisfied by other technologies, the fewer jobs you are going 
to create, the fewer renewable penetration you are going to 
have.
    Ms. Matsui. Thank you, because your answers give us 
something to think about, because whether or not to separate 
energy efficiency from renewable electricity standard is an 
issue that we really definitely have to consider.
    I want to ask you also about rates. We have talked a little 
bit about that. I want to step back and get a sense of what the 
panel feels on integration. Twenty-eight States plus the 
District of Columbia now have mandatory RPSs, and California, 
as I said, has led the way, and we have heard also about 
Colorado and the good work. But I would like to hear some of 
your thoughts about how to integrate all this into various 
State plans moving forward.
    Chairman Binz, your State has done really excellent work. 
How has your State coordinated with other States on best 
practices and renewable goals?
    Mr. Binz. Well, I have several answers to that. We have 
been talking with regulators and air offices, environmental 
regulators in a number of States around the West. We are 
interested in unifying our transmission grid. We are right now 
improving transmission between Wyoming and Colorado. We have 
plans for improving transmission to the Southwest as well to 
New Mexico and Arizona for the purpose of making that an 
integrated market for these resources. So that is very 
important that we work with our neighbors on this.
    You asked about rates. That is something very important, I 
think. Before I was named Public Utilities Commission chairman, 
I did a study predicting what the Colorado renewable energy 
standard would meet to costs in their State. It turns out I was 
pretty close to right. We have met the standard. Actually our 
utilities are ahead of the standard and the cost differential 
is less than 2 percent. It is about 1.6 percent at the moment, 
between what could have been built using traditional resources 
compared to what was built using renewable resources.
    Ms. Matsui. Thank you, and I think I have used up my time.
    Mr. Markey. The gentlelady's time has expired. The chair 
recognizes the gentleman from Texas, Mr. Barton.
    Mr. Barton. Thank you, Mr. Chairman. Before I ask my 
questions, I am going to read a paragraph from Dr. Apt's 
statement or paper that he wrote because we are here debating a 
renewable energy standard because we think that there is a 
theory that manmade emissions, primarily from fossil fuels like 
coal, which reduce amounts of CO2, are causing 
climate change, i.e., the temperature to rise, and one of the 
solutions being proposed is an RES that is going to rely fairly 
heavily on wind power, which obviously doesn't create 
CO2. I am going to read a paragraph which is if true 
very ironic, and this is from Dr. Apt's paper and I quote: 
``Wind energy is a finite resource. At large scale, slowing 
down the wind by using its energy to turn turbines has 
environmental consequences. A group of researchers at Princeton 
University,'' which is in New Jersey, parenthetically ``found 
that wind farms may change the mixing of air near the surface, 
drying the soil near the site. At planetary scales, David 
Keith, who was then at Carnegie Mellon, and coworkers found 
that if wind supplied 10 percent of expected global electricity 
demand in 2100, which is a number of years off, the resulting 
change in the earth's atmospheric energy might cause some 
regions of the world to experience temperature change of 
approximately 1 degree Centigrade,'' which I think is about 1-
1/2 degrees or 1.6 degrees Fahrenheit. Now, wind is God's way 
of balancing heat. Wind is the way you shift heat from areas 
where it is hotter to areas where it is cooler. That is what 
wind is. Wouldn't it be ironic if in the interest of global 
warming we mandated massive switches to energy, which is a 
finite resource, which slows the winds down, which causes the 
temperature to go up? Now, I am not saying that is going to 
happen, Mr. Chairman, but that is definitely something on the 
massive scale--I mean, it does make some sense. You stop 
something. You can't transfer that heat and the heat goes up. 
It is just something to think about.
    Mr. Izzo, you are our utility representative but you are 
not officially representing the views of EEI, are you?
    Mr. Izzo. No, that is correct. I am not here representing 
EEI.
    Mr. Barton. Okay. Now, I have been told to paraphrase your 
company's position is to say we have to, because of these 
renewable mandates in our service territory, we think the rest 
of the country ought to have to do it too. Is that a fair 
assessment or is that an unfair characterization?
    Mr. Izzo. That is an unfair characterization. We are not 
here advocating New Jersey national security or New Jersey 
climate change. We are here recognizing the importance of 
national energy security and global climate change.
    Mr. Barton. And doing it very well, I might add.
    Mr. Binz, you at the very end of your answer to Ms. Matsui 
indicated that Colorado has been able to implement its RES with 
almost no cost increase. That is very commendable and somewhat 
amazing based on the testimony and the material that I have 
from other sources that show going to a massive RES is going to 
require cost increase of anywhere from 20 percent to 50 
percent. Could you supply the committee in writing with how 
Colorado has been able to--I don't doubt what you said is true 
because you seem like a pretty credible guy to me--
    Mr. Binz. In fact, Mr. Barton, it is the law in Colorado. 
There is a 2 percent ceiling on the cost differential that can 
be achieved as we meet our renewable energy standard.
    Mr. Barton. Would you support such a component of a federal 
law, that there be a cost cap factor in it?
    Mr. Binz. I haven't really thought about that. I think that 
is something you may want to look at.
    Mr. Barton. Well, think about it, because if we are going 
to do this and the Majority is big on caps, I think a cost cap 
might be a component of it.
    Mr. Binz. I will be happy to supply the report I showed 
doing a modeling of that but also I will supply what the 
Commission has found in its borders.
    Mr. Barton. In my last 1 second, Mr. Wise, could you 
comment on the cost of transmission to move wind energy from 
the Midwest to your region of the Southeast?
    Mr. Wise. If the State of Georgia, if the ratepayers that I 
am elected to protect have to pay for the transmission of wind 
from the Midwest to Georgia, we think it would be just 
astronomical. It is just not an affordable project that we 
could sustain.
    Mr. Barton. Let the record show, Mr. Chairman, astronomical 
in Texas means a big increase. Thank you.
    Mr. Markey. The chair recognizes the gentleman from Texas, 
Mr. Gonzalez.
    Mr. Gonzalez. Thank you very much, Mr. Chairman. Something 
that really stood out in Mr. Binz's testimony on page 6, 
``Renewable Energy Systems of America relocated from Texas to 
Colorado in March 2008. The company designs, builds and 
operates wind farms.'' Next bullet: ``Texas-based Dragon Wind 
will open a plant in Lamar, Colorado, to build wind towers.'' 
The question, Mr. Binz, are you finally going to like Texans?
    Mr. Binz. We have always liked Texans, sir. They are 
probably our best ski immigrants.
    Mr. Gonzalez. I am from San Antonio. We have a municipally 
owned utility obviously, CPS Energy, and in discussing with 
them renewables, this is what they reported to me, and I have 
known for some time and I commend them but we are in a very 
special situation in San Antonio. ``CPS Energy's goal is to 
achieve renewable energy capacity equal to 20 percent of our 
customers' peak electrical demand by 2020,'' so when we are 
talking about 15 in 2020, Tom Udall last year, it was doable. 
Twenty in 2020 is going to be doable probably. Twenty-five in 
2025, like you said, it is not the easiest thing but probably 
doable for San Antonio. Among municipally owned utilities, CPS 
Energy ranks number one nationally in wind capacity. I don't 
think I have to tell you where Texas ranks as a State. CPS 
Energy is currently evaluating proposals from a number of 
companies interested in bringing up to 100 megawatts of solar 
power to San Antonio, enough to power about 23,000 homes. The 
plant could begin providing solar-generated electricity to 
customers in greater San Antonio by late 2010 or early 2011. So 
when I think in terms of standards in renewables, my district 
probably will fare all right. My concern is those that have 
been expressed by my colleagues from other States, whether it 
is Michigan, Illinois, Pennsylvania, Georgia. Now, Mr. Wise has 
indicated that there may be problems that San Antonio would not 
experience, but by the same token, I do want to point out that 
San Antonio has invested at this point about $240 million just 
in the license application for a new nuclear plant that we just 
built, a state-of-the-art coal-fired plant, so we all over the 
place but nevertheless on the renewables we know exactly what 
the future holds. But we still have a vested interest in clean 
coal technology, tremendous interest in the development of new 
nuclear power plants, but what I am asking is, what about Mr. 
Wise? How do you respond to his testimony? I know you may have 
touched on it and I apologize because I had to absent myself 
from the hearing for a few minutes. This is what he states on 
page 2: ``On the other hand, establishing a uniform RPS focused 
exclusively on a limited number of sources like wind, solar, 
biomass or get without regard to crucial regional differences 
will unnecessarily drive up electricity costs, jeopardize 
reliability and divert capital that will be needed to achieve 
other objectives like meeting aggressive carbon targets. As a 
result, my State and our region must seek to encourage the 
growth of research and development in the use of energy 
resources that are available and economically viable to provide 
for our future needs.'' And I would ask all the witnesses, if 
you were in Mr. Wise's shoes today, how would you respond to 
your testimony as well as his observations and his description 
of his predicament? I can start with Mr. Binz, who is getting 
all the Texas commercial business.
    Mr. Binz. Congressman Gonzalez, Texas was an early leader 
in wind, and I think also the analysis that was done, the so-
called REZ regions, the renewable energy zones that were 
identified so that transmission could be matched to those 
zones. That is important model that has been carried lots of 
other places and we do appreciate that as an important expert 
from Texas, the idea.
    I would say that many of the arguments are very reminiscent 
of what we heard in Colorado before we got busy and figured out 
how to build a renewable energy industry. I know that there is 
reluctance to do this by utilities who have had a very 
traditional approach for a very long time and we had such 
utility in the State. They opposed the voter initiative. Two 
years later they supported the doubling of the requirement. 
Much has been said about biomass in the Southeast. I have also 
noted in here in my testimony significant solar potential in 
the Southeast. Biomass doesn't have to be new plants burning 
only biomass. Cofiring of coal is an excellent way of using 
biomass, and it is my understanding you can cofire up to about 
15 percent of the input feed to a coal plant without losing any 
significant efficiency of that plant. That is the place to 
start. If a State is unable at the very beginning of this to 
actually put an industry on the ground, they can buy renewable 
energy credits. They can say we actually own wind being 
produced in Kansas or North Dakota and credibly count that 
against their requirement in their State. That is not the 
permanent solution because you do want to grow renewable 
industry in your State. But I just would exhort States who have 
not done this to look at the experience of Colorado, and there 
are lots of other examples of this, of where you are going to 
turn your economy around with respect to this issue, find that 
you have opportunities you never understood you had. Governor 
Ritter's promise of a new energy economy in Colorado has come 
true and has overridden the skeptics, who thought that we 
couldn't do it. I think the same can be done in many other 
places.
    Mr. Gonzalez. There is only about 29 seconds, Mr. Izzo.
    Mr. Izzo. What I would say is, if I begin with the premise 
that we need to reduce 80 percent of our carbon emissions, 
there are going to be a series of solutions that are critical 
and one part of the region achieves competitive advantage by 
reducing its carbon footprint through more efficient coal units 
and therefore attracts to it the revenues from a cap-and-trade 
system, or another region of the country achieves a competitive 
advantage by having an indigent source of renewable, be it wind 
or solar. That is all part and parcel of a vibrant interstate 
commerce system and it is something that we should applaud and 
strive to achieve, every part of the country doing its bit to 
reduce carbon. Remember, 25 percent renewable portfolio 
standard, 35 percent of CO2 from electricity, we are 
talking about 7 percent of the 80 percent coming from this RPS.
    Mr. Butterfield [presiding]. The gentleman's time has 
expired. Thank you very much.
    Well, a logistical problem has developed. We have been 
called to the Floor for two votes. I am going to recess the 
hearing and ask the members to return 10 minutes after the 
second vote. The committee is in recess.
    [Recess.]
    Mr. Butterfield. All right. The committee will be back in 
session. At this time the chair will recognize the gentleman 
from Mr. Florida, Mr. Stearns.
    Mr. Stearns. Thank you, Mr. Chairman. I ask unanimous 
consent that my opening statement be made part of the record.
    Mr. Butterfield. Very well.
    Mr. Stearns. Coming from Florida, some of our utilities are 
concerned about a possible bill from our Chairman Markey, 
particularly in light of that it doesn't include anything about 
clean coal or nuclear or waste-to-energy and there is not even 
a clear understanding whether we are going to have energy 
efficiency as part of it. I think a question I might have for 
Commissioner Wise is, if we assume that many utilities will 
fall short of the RES mandate and end up paying millions of 
dollars in noncompliance fees, won't that cost the customers 
and hurt the economy? Why do RES supporters claim that this is 
good for the economy?
    Mr. Wise. I think it does actually help the economy with 
new jobs and growth and opportunities in the new technology but 
ultimately the ratepayers do pay the difference in our States 
where we are regionally challenged with lack of resources, and 
if you don't give us credit for the new nukes or efficiencies, 
then ultimately it is going to be a substantial wealth transfer 
from the southern states and ultimately cost us jobs, growth 
and industry, and be a significant cost to the ratepayer.
    Mr. Stearns. In January, T. Boone Pickens, I was at a 
symposium where he indicated that the cost per barrel is going 
to go up even higher than it was of $150 a barrel, it might go 
up to $200. So with the possibility the next 2 or 3 years the 
cost of gasoline going up and then you assume that you add all 
these extra costs, it is going to be enormous cost, as you 
pointed out, to the customers. Now, some dismiss the argument 
that the RPS will result in a wealth transfer from areas of 
this country that lack renewable resources to those that are 
blessed with them. As a State regulator, can you explain why 
you believe a federal mandate will result in increased rates 
for those in the Southeast?
    Mr. Wise. Again, you know, we even heard from Commissioner 
Binz just a few moments ago that he was talking about these 
credits that we could buy to go ahead and take credit for wind 
and solar from other parts of the country, but ultimately if 
they are not generated in our State and we are paying credits 
just to acquire them, then once again it just adds cost to our 
system. We take great pride in going ahead in the southern 
states to have reliable, affordable energy and so we have done 
our job with transmission lines. We are not constrained, as 
many other parts of the country that have not paid their way, 
and so at this point we are talking about adding, you know, 
real dollars to our ratepayers if we are required to buy these 
credits to offset what we simply can't meet under the standards 
being discussed by this committee and this Congress.
    Mr. Stearns. Let us assume you and Florida, Georgia and 
Florida, have to do this. A lot of money from our States are 
going to go outside our States too, which would have an impact. 
Georgia has nuclear power?
    Mr. Wise. Yes, sir, we do, and we are currently considering 
two new plants to be sited where we have a reactor today.
    Mr. Stearns. It is puzzling to me that if the folks are 
considering this RES, want clean energy, why they wouldn't 
consider nuclear power. It is produced in the United States. It 
has zero carbon dioxide emissions. It does not put stress on 
the agricultural community, the timber industry. So why in your 
opinion have they not considered nuclear power?
    Mr. Wise. Again, it might be agenda driven. I really 
believe that if somebody is promoting a new technology and they 
can benefit from it with jobs and growth and industry in their 
region, they are not going to want to give credit for 
efficiencies for new nuclear power, and I think it is 
unfortunate. These do take care of the emissions issues for at 
least 2,200 megawatts that we are talking about adding to 
Georgia's load.
    Mr. Stearns. If you meet all the requirements of clean 
energy, you would think you would get some credit for it. Do 
you agree that as it now stands, our country's transmission 
infrastructure is woefully inadequate to achieve a 20 percent 
by 2021 RPS requirement?
    Mr. Wise. Yes, I do.
    Mr. Stearns. How much backup power from conventional power 
plants is needed to meet a 20 percent RPS requirement by 2021, 
and if you know the cost?
    Mr. Wise. The cost would add probably 15 percent, is the 
way we are looking today, just to add the backup cost to the 
shortfall that if we say put in wind and/or solar, we are going 
to see upwards of 75 percent backup probably from natural gas.
    Mr. Stearns. Thank you, Mr. Chairman.
    Mr. Butterfield. Thank you. The gentleman yields back. At 
this time the chair will yield 5 minutes to himself.
    Let me thank all of you for coming out today to be a part 
of this hearing. On behalf of the chairman, we certainly thank 
you very much. I understand that Mr. Wise may have to depart 
for the airport somewhere around 1:00, but let me assure you 
that this hearing will probably be completed by 1:00. We are 
told that our next vote will be at or about that time, but 
thank you so very much.
    Let me join my colleagues on this committee and the full 
committee who support an RES. Some call it the RPS. I am not 
sure which acronym is more preferable to my office, but thank 
you for speaking on the subject today. But I am terribly 
concerned. I join those who have expressed concern and I too am 
terribly concerned about a national standard. I represent North 
Carolina. I am part of the Southeast that you hear so much 
about. North Carolina has developed a State standard, the only 
one in the southeastern part of the country. We have a State 
standard which is 12.5 percent.
    To the gentleman representing the Department of Energy, the 
acting administrator, and I won't call you by name, because 
quite frankly, I can't pronounce it, but let me address this 
question to you. In your testimony earlier you mentioned an 
analysis that the Department of Energy has made. Would you 
elaborate further on that?
    Mr. Gruenspecht. Yes. These were earlier analyses of 
earlier proposals. In June 2007, in response to a request from 
Senator Bingaman, we looked at a 15 percent RPS. Also, later 
that year in response to a request from, I think it was the 
ranking on Resources, the ranking on Ways and Means and the 
ranking on, I think Energy and Commerce as well, we looked at 
provisions that were in the House version of legislation that 
ultimately became the Energy Independence and Security Act. 
Those are all available on our web and we can certainly make 
them available to the committee. Let me make clear, those are 
not analyses of the proposal that Mr. Markey and I believe Mr. 
Platts have put out. We did receive a letter yesterday from Mr. 
Markey requesting that we undertake an analysis of that 
proposal, and we will do that as best as possible.
    Mr. Butterfield. But do you at least concede that the 
Southeast is extremely limited with respect to wind and solar? 
Do you make that concession?
    Mr. Gruenspecht. Sure. We got very little--biomass was the 
key resource in the South for increasing renewable generation 
both through cofiring in existing plants, as discussed by some 
of the other panelists, and in dedicated plants. A little bit 
of solar came in as well. But again, biomass was the main 
thing.
    Mr. Butterfield. And of course, our concern in the South 
is, how on earth are we going to find this biomass in order to 
satisfy the standard? I mean, we certainly want to be good 
Americans and play a valuable part in this process but where on 
earth are we going to find the biomass to meet the standard?
    Mr. Gruenspecht. Well, we have worked with the University 
of Tennessee actually on the regional supplies of the biomass 
and again, this is not with respect to the standard proposed by 
Mr. Markey but with these earlier standards. We did find that 
there is a fair amount of biomass available both from forest 
residues, possibly from energy crops. It is more expensive than 
coal but in the case of the analyses of those standards, it was 
brought into use.
    Mr. Butterfield. It is going to be extremely difficult. 
Would you agree, Mr. Wise?
    Mr. Wise. I would indeed, and clearly a sustainable--if we 
did it all on biomass alone, it would take--we have heard some 
numbers. To make the 20 percent number with biomass alone would 
take pretty much all of Alabama and Mississippi of the 
sustainable forest, and I am not sure they are going to 
volunteer.
    Mr. Butterfield. I have 50 seconds remaining. Does anyone 
else want to respond to this?
    All right. The chair yields back the balance of its time. 
At this time the chair recognizes Mr. Inslee from the State of 
Washington.
    Mr. Inslee. I want to ask Mr. Gruenspecht, when you did 
your assessment, when the agency did the assessment of 
potential in the South, did it consider hydrokinetic power?
    Mr. Gruenspecht. No, we did not look at hydrokinetic power. 
As described in our testimony, we have focused on the main 
sources of renewable energy that are sort of known 
characteristics, known costs so we did not look at hydrokinetic 
power, we didn't look at hot dry rock, geothermal. We focused 
on the wind, solar, biomass, hydro and sort of I guess more 
conventional geothermal that is primarily in the West.
    Mr. Inslee. So I am told that Commission staff estimates 
that the Southeast has the potential to develop about 30,000 
megawatts of installed hydrokinetic capacity. Development of 
potential is estimated to be about 7,000 megawatts for wave 
energy, 10,000 megawatts for ocean current and 13,000 megawatts 
for in-river hydrokinetic projects. Now, except for perhaps the 
in-river hydrokinetic projects, these are pre-commercial 
application, so you just rule them out because they are not 
commercially in the water yet? Is that the reason?
    Mr. Gruenspecht. Well, I don't know that we are ruling them 
out. It is just that it is hard for us to characterize what 
they would cost and, you know, again, there is very little 
basis for us to have it but we are being very clear of what we 
are including and what we are not including, and so in the 
analysis we did of the 15 percent standard and the language in 
the House bill, we found that again the biomass resource in the 
South, which we could characterize, was what was used. 
Certainly under a standard, other things potentially could come 
into play if they were cheaper.
    Mr. Inslee. So you are not taking issue with the report 
then, I take it?
    Mr. Gruenspecht. I am not taking issue with it. You know, 
words like ``potential'' and ``could be developed'' without 
time frames, without, you know, any sense of what it would 
cost--now, it is important to look at it just like some of 
these advanced geothermal technologies, other things, but we 
could not really factor that into our analysis and say, you 
know, you got 6,238 megawatts of that.
    Mr. Inslee. Well, the reason I ask that is that, you know, 
if we were going to ask ourselves, should we have a national 
goal of having 15 percent penetration of the phone market to be 
cellular phones in 1992, you know, I wonder what this 
discussion would have been at this hearing. I think probably 
DOE would come in and say well, commercial phones are not 
commercially available so we are only going to count bio phones 
or something. I mean, that is the point I am trying to make. 
You can respond if you like.
    Mr. Gruenspecht. I will respond. I am not arguing with you. 
I just want to point out that I guess some of my fellow 
panelists have suggested that our analysis is, I don't know 
what the opposite of conservative is, it is too liberal, and I 
guess you are suggesting my analysis is too conservative, and 
we just try to be very clear about what we did and why we did 
it, and really these are very thorny issues about new 
technology and will you catalyze new technology. You know, to 
be fair, I mean, everyone talks about, you know, if we have the 
mandate it will happen. California had a mandate for zero-
emission vehicles in the 1990s that they envisioned as being 
battery powered, and that turned out to be something of a 
tougher nut to crack than people thought it was in the 1990s. 
Now, we are still very interested in battery power, so it is 
not always the case that if you--yes, if you mandate it, there 
could be things that aren't anticipated that could come in. I 
agree.
    Mr. Inslee. But it is an interesting point though. I don't 
think any State has had an electrical standard that has not 
failed to meet it, is there?
    Mr. Gruenspecht. I think on some of them so far--again, 
they are all phasing in. I think so far that would be a fair 
characterization. A lot of them have, if you will, I don't want 
to call them escape clauses but, you know, clauses that if the 
cost is too high or if something happens and a lot of that may 
depend on the availability of federal production tax credits 
and if the federal production tax credits didn't exist then 
maybe some of those provisions would get triggered. So like 
always, it is really--you know, it is pretty complicated, as 
you know.
    Mr. Inslee. I want to make sure I ask Mr. Izzo about the 
New Jersey experience. My understanding is, New Jersey 
considered a feed-in tariff at one time and actually had a 
study about costs and the study came back saying actually a 
feed-in tariff was the most cost-effective mechanism to really 
inspire development. I introduced a feed-in tariff and I just 
wonder if you have any comments about feed-in tariffs, what New 
Jersey is thinking of them or did you consider what the virtues 
or vices were?
    Mr. Izzo. What we did, probably the best example of a 
successful feed-in tariff is the one that has been used in 
Germany. By successful, I define that to mean where lots of 
solar energy was encouraged. The reason why New Jersey elected 
to not use a feed-in tariff is, there is a little bit more art 
than science around selecting what the number needs to be. If 
you pick the, quote, wrong number, you could get more than you 
want, and if you pick it too high and if you pick it too low 
you can get less than you want. So New Jersey instead, despite 
the success of the feed-in tariff in Germany, has adopted for 
something that is really more dependent upon a REC market, 
which is to let the regulatorily created revenue stream float 
to meet the needs of achieving the standard. So rather than 
picking a set number, which is a feed-in tariff, we let the 
number float so as to achieve the RPS. They are comparable 
methods. We believe the REC approach is a little bit more 
market based.
    Mr. Inslee. I have one more question. I want to ask Mr. 
Wise, you have a concern about reaching these targets in a 
renewable electrical standard. A feed-in tariff works in a 
situation where you don't pay or you don't get--you are not 
compelled to buy or obtain any particular percentage but in 
fact you only are compelled to buy that which is offered to you 
by an energy producer. Is that a superior model for you, your 
concerns in the South or an inferior model? What are your 
thoughts on that?
    Mr. Wise. I have no idea. All I know is that if we are 
talking about credits that we have to buy for what to buy if we 
can't make the number, that is going to add cost to the 
ratepayer, and it is clearly not jobs, it is not growth, it is 
just additional cost for goals that we can't attain.
    Mr. Inslee. You may be familiar with this, but the one 
virtue of a feed-in tariff is, you wouldn't be required to buy 
it unless somebody offered to sell it to you. You would be 
required to buy it at a specified price, which is usually going 
to be somewhat overmarket at that moment for alternative 
capacities, limited to a certain amount by statute or 
regulation. Some of us think that is worthy of consideration. 
Thank you.
    Mr. Markey. The gentleman's time is expired. The chair 
recognizes the gentleman from Utah, Mr. Matheson.
    Mr. Matheson. Thank you, Mr. Chairman, and I would just 
also associate with what Mr. Inslee just said, that I do think 
that a feed-in tariff is something we ought to consider in this 
discussion. It merits being part of this debate. I think we 
ought to include it.
    I have some questions, and I am not sure who should 
necessarily answer this on the panel, but you guys can decide, 
about how the issue of an RES fits in with other energy 
legislation that we are considering. If we have a federal RES 
and we have an energy efficiency mandate as well and we put in 
a cap-and-trade law in place with carbon reductions, how do we 
ensure that these programs are not duplicative, or maybe the 
more positive way to say it is, how do we make sure that the 
goals of these different programs are complementary and not in 
conflict with each other?
    Mr. Izzo. I will begin, Congressman. I think the beauty of 
the RES program as envisioned here is that it really achieves 
about a 7 percent reduction in CO2 emissions and 
most scientists believe we need to achieve an 80 percent 
reduction. So we are not saying here today that renewables are 
the only solution. To your point, there are multiple solutions. 
There is energy efficiency, there is carbon capture and 
storage, there is new nuclear, there is renewables. To that 
extent, the importance of a cap-and-trade program to set a 
price for carbon is essential so that different aspects of that 
portfolio will come into play more prominently in different 
regions. So, for example, one may be able to reduce the cost of 
carbon more effectively in the Southeast through nuclear 
energy, perhaps more effectively in the Midwest through wind 
energy, perhaps more effectively in New Jersey through energy 
efficiency. So cap and trade and a price for carbon seeks to 
set the price signals for reducing carbon. Each of these 
components, however, will be essential in bringing about the 
complete decarbonization of electricity and the complete 
electrification of transportation.
    Mr. Matheson. But you don't foresee potential conflicts 
between the different--
    Mr. Izzo. I don't. so for example, if the alternative 
compliance payment is 5 cents a kilowatt-hour, which is $50 per 
megawatt-hour, that is the equivalent of $70 per ton of 
CO2 for a coal plant in the Northeast. So if carbon 
dioxide is trading at $50 per ton, you will see some other 
solutions that will offset the need for the REC payment in the 
RPS.
    Mr. Matheson. Are there other things out there about how to 
accommodate the regional differences in this country and the 
ability for some places to pursue renewables more than others 
beyond the credit idea of paying for credits for renewable 
energy produced in another part of the country? Are there ways 
to look at tailoring this such that you get away from the one-
size-fits-all approach and encourage different regions to do 
what is appropriate for that region? Do any of you have 
thoughts on that?
    Mr. Binz. Congressman Matheson, Ron Binz from Colorado. 
Like Utah, we are a heavily dependent State on coal right now, 
and we are looking to move away from that and we are hoping to 
move to clean coal technologies in our region. But we see 
renewables and I hope every State sees renewables as one 
essential piece of this total solution. We have been talking 
about a ramp-up in Congressman Markey's bill, a ramp-up which I 
think will allow these industries to develop in States. I think 
it will be very transformative to put that requirement in. I 
will be very surprised if Georgia or any other southeastern 
State pays the penalty, if you will, for noncompliance with the 
5-cent credit we have been talking about. I think they will do 
it much more effectively with either resources that they are 
generating themselves or purchasing.
    Now, I want to also speak to an issue which I know a lot of 
members are interested in is, I think we should be looking at 
strengthening the transmission side so we can move some of 
these electrons around. The virtual purchase of renewable 
energy by buying credits from out of region places works up to 
a point. At some point you actually do need to move the power 
when you don't have sinks in these regions with the excess 
capacity. So I guess what I am saying is, I think the gradual 
ramping up of the standard is what is going to answer the 
question you just raised. I think solutions get discovered 
along the way without an immediate problem being presented to 
these States, and purchases of RECs will eventually be phased 
out. That is in fact how Colorado met its renewable energy 
requirement its first year. We bought a lot of solar RECs from 
other States. We then said we don't want to be doing that, we 
want to develop our own industry in the State, and that is what 
is happening.
    Mr. Matheson. Thank you, Mr. Chairman. I will yield back.
    Mr. Markey. I thank the gentleman.
    The chair will recognize himself, and we might have time 
for more questions if the member are interested. Oh, Mr. 
Scalise, have you been recognized yet for a round of questions?
    Mr. Scalise. No.
    Mr. Markey. Then the chair recognizes the gentleman from 
Louisiana.
    Mr. Scalise. I thank the chairman.
    I do have a couple of questions for Mr. Izzo. In New 
Jersey, I am not sure of the percentage but I know New Jersey 
generates a significant amount of power from nuclear, and maybe 
you can share with me what that is.
    Mr. Izzo. Our company alone generates 50 percent of our 
electricity from nuclear. I think statewide is more like 40 
percent.
    Mr. Scalise. Do you believe that nuclear power should be 
included in the renewable definition?
    Mr. Izzo. No, I don't. I think it is an important part of 
global climate change solutions but I don't think it is a 
renewable source of energy. It is a carbon-free source of 
energy.
    Mr. Scalise. Exactly. But why wouldn't you think that 
encouraging our country to do what many other countries, 
especially in Europe and beyond, are going to as a carbon-free 
source that is very reliable, not intermittent?
    Mr. Izzo. I am an advocate of encouraging it by setting a 
price for carbon and a cap-and-trade system. Nuclear is quite 
competitive if one allows for the externalities that are not 
being captured in today's energy market to be captured. That is 
quite different than the nascent technologies that we are 
trying to make sure become an integral part of that solution 
mix through an RES. I mean, at the end of the day uranium 238 
is not renewable. You use it up. It is carbon-free but it is 
not renewable.
    Mr. Scalise. Mr. Wise, I would like to get your take on it 
as well as what some of these compliance fees may ultimately 
yield in consumer prices.
    Mr. Wise. Say again?
    Mr. Scalise. Well, first on Mr. Izzo's comments about 
nuclear as not being considered renewable.
    Mr. Wise. We think including nuclear in this bill would be 
vital. We are currently considering two new reactors and feel 
like that if carbon emissions are one of the issues that we are 
looking for and the goal of renewables, then we think those are 
one of the mainstays of what we are trying to do in Georgia. 
Again, it goes back to the one size fits all. Clearly, we are 
constrained by lack of resources in this marketplace. As the 
model moves, as the technologies develop, as we have heard from 
this panel today, we think that we will be able to ultimately 
benefit from them if it is in solar if we can do more with the 
humidity and the cloudy days that we have, but ultimately it is 
just too fast a pace for somebody in a region that doesn't have 
the opportunities that maybe they do in other States.
    Mr. Scalise. If standards are set up in a way that don't 
encompass some of these other things I guess where we have a 
disagreement but where many have proven an ability to produce 
renewable sources that don't count in the definition, 
ultimately what would that mean in terms of prices for 
consumers?
    Mr. Wise. Well, it would be significant, and every time a 
new proposal comes out we are looking at the impact of what it 
would be on the consumers, the average consumer in our State, 
and we have heard the same numbers that I am sure you have, 
anywhere from 5 to 25 percent is what it could be.
    Mr. Scalise. Rate increases?
    Mr. Wise. Rate increases on top of already a volatile 
marketplace.
    Mr. Scalise. And obviously we can all agree that it is 
important to encourage and expand renewable sources of energy. 
That definition is probably going to be one of the more 
critical debates because it leaves out some things that truly 
are renewable but maybe aren't included in the definition.
    Mr. Wise. Waste-to-energy is a classic example, and we are 
seeing the development--
    Mr. Scalise. And clean coal.
    Mr. Wise. Clean coal, the sequestration. Biomass is going 
to be something that is a part of it. I am not sure that we are 
still sustainable to do--
    Mr. Scalise. And I do want to ask you about that because I 
know it has come up, and before my time runs out, there has 
been some talk that in the southeast part of the country where 
maybe wind and solar isn't as prevalent as a reliable 
renewable, that some have said that biomass could make up that 
difference. Others disagree. What is your take on that?
    Mr. Wise. Again, it is not sustainable to make up the 
difference in our State with just biomass. Biomass would have 
to be a piece of it. It would be a significant piece but we 
couldn't meet the 20 percent. We couldn't make 10 percent with 
biomass in the southern states. We have a lot of trees but we 
don't have that many trees.
    Mr. Scalise. And obviously then we have the concern about 
what that means to consumers in increased rates. Some of these 
things are thrown around without necessarily factoring in the 
consequences. I would be curious to see if there would be 
tracks on what consumers would pay because I think most 
consumers would say yes, I want to support expansion of 
renewable sources of energy, and many people have already 
started to conserve. Of course, they won't get credit for that. 
That is not something they are going to get credit for but on 
the backside they could get penalized if while they are 
conserving, while their State is using renewable sources of 
energy that aren't included in the definition, they are going 
to be paying higher rates and they are going to say wait a 
minute, that is not what I said when I answered that poll 
question about whether I support renewables. It is a whole 
different story when my renewable isn't included and now I am 
paying 25 percent more on my utility bill.
    Mr. Wise. Some of the users, the potential users of pulp 
and paper in our State are already complaining about the move 
toward biomass, about the impact that I will have on their 
customers, on their industry, and have actually been 
interveners in some of the cases before our Commission raising 
the issue of what it will do to prices for them.
    Mr. Scalise. And we have already heard some testimony from 
industry who have talked about--one person earlier this week in 
testimony said they have laid off 100,000 people. Some of those 
have been jobs shipped overseas because of the concerns of some 
of these policies, and there is a big cost on the other side 
and that is why it is important that we encourage this but we 
watch the consequences too, so I will yield back. Thank you.
    Mr. Markey. The gentleman's time is expired. The other 
gentleman from Louisiana, Mr. Melancon, is recognized.
    Mr. Melancon. Thank you, Mr. Chairman. I apologize. 
Actually I had meetings in my office concerning just what we 
are talking about today in between votes.
    One of the questions I guess I have got and to no one 
specifically but whoever feels they are best to answer this, is 
there a feeling--and I am looking at this. I don't see in the 
proposal nuclear anywhere. Would that not be a good 
alternative?
    Mr. Izzo. Congressman, our company is as we speak working 
on an early site for a new nuclear power plant. With luck, it 
will be ready to produce carbon-free electricity in 12 years. 
Our company is working on an offshore wind farm. With luck, it 
will produce 350 megawatts of carbon-free electricity in 4 
years. We are developing compressed air energy storage systems 
to make more economic onshore wind. With luck, it will produce 
carbon-free electricity in 2 years. We are also in the process 
of developing solar energy that will be deployed within the 
next few months, and hopefully in the 30 seconds it took me to 
say this, we have installed yet another compact fluorescent 
light bulb and a few more programmable thermostats to bring 
about energy efficiency this minute. We need to do all of it. 
Nuclear is important but it is not a renewable energy supply 
and it doesn't need to impinge upon the need for solar, wind, 
biomass and the like.
    Mr. Melancon. On the nuclear, it is not renewable in a 
sense but it can be reprocessed. Cannot that material be 
reused?
    Mr. Izzo. You can get more of the energy content out of 
what we today call the waste. I guess you can call that reusing 
but you can be more efficient with the use of the fuel. At the 
end of the day, the fuel is consumed.
    Mr. Melancon. Mr. Wise?
    Mr. Wise. Yes, sir, I do agree that nuclear power should be 
considered in these standards.
    Mr. Melancon. Do you think this is the area on the 
complementary or should it come under some other section of the 
bill?
    Mr. Wise. I believe if you are going to have a renewable 
energy standard, that new nukes should be included.
    Mr. Melancon. I guess the question I have here is, when you 
look at the sources of fuel, if nuclear is not part of the 
equation, if everything available is not part of the equation 
with proper credits and encouragement, do we end up just going 
to the cheapest fuel and we are back to coal? So if nuclear is 
not in here, is there anybody that would suggest that we do 
nuclear in this section to give options and alternatives to the 
power companies?
    Mr. Wise. I would clearly hope so.
    Mr. Binz. Congressman, Ron Binz from Colorado. I would 
oppose the use of nuclear as a fuel that would satisfy the 
renewable energy requirement because that effectively will gut 
the provision. One nuclear plant will probably wipe out a 
State's renewable energy requirement. You won't get the impact 
that this bill is intended to effect, namely to bring some new 
technologies along. I completely agree that nuclear ought to be 
considered as one of the primary ways of fighting global 
warming and climate change but I don't think you do it through 
this bill. Nuclear power does today receive its share of 
research subsidies and insurance subsides and all sorts of 
other things as do most of the rest of the parts of this 
industry but I think that it would be a mistake to essentially 
qualify it as a renewable resource, and that is just semantics. 
Whatever it is, it is, but the point is that you don't want to, 
I think, take away the impact that this legislation is 
attempting to have for the wind, the solar, the biomass, the 
geothermal and all the other resources that this is intended to 
boost.
    Mr. Melancon. Who can tell me what the life span of the 
material used in the generating facilities, the nuclear 
facilities? How long a lifespan is one cylinder, or how do you 
measure it?
    Mr. Izzo. Most power plants are on an 18-month refueling 
cycle where they replace one-third of their fuel core.
    Mr. Melancon. And how much material is that?
    Mr. Izzo. I don't know the answer.
    Mr. Melancon. I am still trying to figure out what the 
megawatts consumed by--but anyway, I am out of time, but I 
appreciate it. Thank you, Mr. Chairman.
    Mr. Markey. I thank the gentleman.
    The chair recognizes himself one more time. There were 
8,000 new megawatts of wind constructed in the United States in 
2008. If we just take Mr. Izzo's projection for the nuclear 
power plant which he is building for his company, he is using a 
12-year timeline. If you just multiply 12 times 8,000 
megawatts, you are near 100,000 megawatts. That is if we stay 
at the same pace. Of course, if we have a national renewable 
electricity standard, wind will wind up at 150,000 or 200,000 
megawatts within 12 years before the first nuclear power plant 
comes on line. So we just have to be realistic here. No one is 
saying nuclear is not going to be part of the mix but because 
of the timeline and the cost of nuclear and the fact that we 
have a history over the last 34 years in terms of its financing 
it, it has great difficulty in receiving financing in the 
private sector, as opposed to France and China and Japan where 
the government pays for it. Here we have to get private 
investors and they have been shying away from it. So just 
realistically in 2020, we might have 1,000 or 2,000 new 
megawatts of nuclear but we will have somewhere between 150,000 
and 200,000 in megawatts of wind by then at the pace at which 
it is going right now. That is just the reality of it. But no 
one is saying nuclear is going to be out but that is just the 
way it will turn out.
    Let me ask Mr. Gruenspecht, Mr. Melancon raised coal. In 
your new Annual Energy Outlook 2009, it shows a fairly 
substantial reduction in projected coal-fired generation. Can 
you explain the magnitude of that decrease in your projections?
    Mr. Gruenspecht. It is not really a reduction in coal-fired 
generation. It is a reduction in new builds of new coal-fired 
plants, and we try to reflect likely behavior under current 
laws and policies so we are not making assumptions about what 
you would do but we do rely on recent behavior as a key 
indicator, and although existing plants continue to be operated 
based on economic dispatch and produce about half the Nation's 
power as people have said, concerns about greenhouse gas 
emissions do appear to be having an impact on investment 
decisions for new plants, and so because that impact is being 
felt, we are reflecting it.
    Mr. Markey. And so can you give me an idea of how many 
fewer--can you quantify what you believe the reduction looks 
like?
    Mr. Gruenspecht. There is certainly, what, about 10 to 15 
gigawatts, I think, under construction now.
    Mr. Markey. Ten to 15,000 megawatts?
    Mr. Gruenspecht. Ten to 15,000 megawatts, excuse me, under 
construction now, and we see after that not much being built 
probably until about 2025 and then more. I can get you the 
specific numbers for the record.
    Mr. Markey. That is pretty telling, that just looking at 
the marketplace today that you see only 10,000 to 15,000 in the 
pipeline whereas as we can see with wind that that is the 
projection for just the next 3 or 4 years at current pace 
absent the extra spur that a national renewable electricity 
standard would create to increase construction.
    Mr. Gruenspecht. I mean, another thing to keep in mind, of 
course, is that difference, that a coal plant or nuclear plant 
runs at a much higher utilization.
    Mr. Markey. No, I understand that.
    Mr. Gruenspecht. I know you do, sir.
    Mr. Markey. But just the scale of construction.
    Mr. Gruenspecht. Absolutely.
    Mr. Markey. And Mr. Lowe, you talked about all the jobs 
that would be created in the near term if we move towards this 
renewable side, and if you could just talk a little bit, Mr. 
Gruenspecht, about the impact that a national renewable 
electricity standard could have in substantially alleviating 
the demand for natural gas in the power sector. How significant 
an impact on natural gas prices could a strong renewable 
standard have?
    Mr. Gruenspecht. Well, we do in our past analyses. We 
haven't yet done the one that you have just sent to us, but in 
the past it is the case that beyond things like biomass 
cofiring, which clearly back out coal, you do tend to back out 
the most expensive things that you would otherwise be using, 
and in many regions of the country that is gas, so you would 
burn less gas and that can have an effect on the price of gas, 
which affects the price of gas used both for electric 
generation and the price of gas used for other purposes like 
home heating. So we got, as I described in the testimony, in 
the previous analysis modest increases in what we looked at in 
expenditures for electricity by consumers for the reasons that 
have been discussed but to some extent offset by some reduction 
in the cost of gas.
    Mr. Markey. I know Mr. Wise has to go. I would like to let 
him have the last word here. Mr. Gruenspecht, if you look at 
2008 where 50 percent of all new electrical generation 
installed was natural gas, 42 percent was wind, 6 percent was 
coal and the remaining 2 percent was low-head hydro, solar, all 
the rest, I am just looking for you to just make a comment 
about that because natural gas is half the CO2 
emitted as coal. That is probably why we are seeing business 
decisions being made that are shying away from coal. But that 
seems like a good partnership natural gas and wind going 
forward with the other renewables playing an increasing role as 
the years go by.
    Mr. Gruenspecht. Again, I don't want to take a policy 
position.
    Mr. Markey. You are an analyst.
    Mr. Gruenspecht. I am an analyst. A lot of gas capacity was 
built in the first 5 years of this decade, tremendous amounts, 
in part because many people had thought that gas prices, you 
know, would stay low for a long period of time. We are still 
working our way in some sense through that capacity but in the 
present environment where there is reluctance to build coal as 
we discussed, what is getting built is mostly the number of 
coal plants that I mentioned plus some combination of a lot of 
wind and some gas where additional capacity is needed. Gas is 
sort of kicking the can down the road in terms of making a 
decision because most of the cost of gas-fired generation is in 
the fuel other than the plant, and if you don't know what is 
going to be happening, you don't want to put big money on your 
plant. You want to just need the need as cheaply as possible, 
be as flexible as possible.
    Mr. Markey. What I would like to do, if the two gentlemen 
from Louisiana wouldn't mind, is give each witness down here 1 
minute to summarize what they want us to know, and to let Mr. 
Wise, because he has to run for a flight, give you kind of an 
extended one because you are a little bit outnumbered here. 
Please give us the 1 minute you want us to remember on this 
committee as we move forward on a renewable electricity 
standard.
    Mr. Wise. That is very fair, Mr. Chairman. I appreciate it 
very much. I think first and foremost that everybody in this 
room, your committee and this panel have all agreed that 
renewables and the future of energy in this country will be and 
have a significant part of renewables. We just ask for an 
ultimate understanding that one size fits all is not beneficial 
to my State, the southern States and that ultimately that all 
aspects of clean emissions need to be considered. That would 
include nuclear, it would include clean coal or sequestration, 
waste-to-energy and enhanced hydro, and I think that would be 
my message.
    Mr. Markey. Thank you, Mr. Wise, very much.
    Mr. Gruenspecht.
    Mr. Gruenspecht. Mine is easy. We are here for you and the 
members. These are thorny issues. The devil and the angels are 
in the details, as I said. There are lots of different ways to 
do things. Those are your decisions, not ours, but we will be 
glad to provide both data and analytical support.
    Mr. Markey. Thank you, Mr. Gruenspecht, very much, and 
thank you for your good work.
    Mr. Lowe.
    Mr. Lowe. What I would like to leave with you is the fact 
that renewable energy has the ability right now to create 
significant green collar jobs in the United States. From a 
perspective of wind, that is about 500,000 jobs by 2030, on one 
projection. By 2016, there could be approximately 230,000 solar 
jobs. And we also have the ability, as you indicated in your 
statement, about 8,000 megawatts of wind going in in each year 
to immediately reduce carbon emissions for generation going in 
today.
    Mr. Markey. Thank you, Mr. Lowe.
    Mr. Binz.
    Mr. Binz. Thank you, Chairman Markey. A couple of points. 
One is, I want to emphasize the transformative nature that a 
renewable energy requirement had in my State and I believe that 
a similar salutary effect would be had if it were adopted in 
other States via national legislation. We have got more jobs 
dedicated to this than we would have had if we had gone down 
the route of traditional fossil generation. I would also like 
to stress that the cost of renewables will come down as their 
proliferation in the market increases, and that is something 
which I think is a very important part of your legislation. 
Finally, I think we do a disservice to customers if we suggest 
that renewables are going to raise their cost as if other 
compliance measures won't. We have got a very substantial 
challenge with global warming to decarbonize the electric 
sector. I look at renewables are a very hopeful component but 
we should not be suggesting that 15 percent if somebody uses 
that number increase that that might drive is on today's base 
because we are looking at expensive new plants of every stripe 
that are going to be necessary.
    Mr. Markey. Thank you, Mr. Binz.
    Mr. Izzo.
    Mr. Izzo. Yes, Mr. Chairman. We face some fairly daunting 
challenges and opportunities, climate change, national energy 
security and sustainable economic development. We can lay the 
foundation for that with a carbon price through a cap-and-trade 
system. We need a portfolio approach to reducing carbon. 
Renewable energy is a critical component of that portfolio. A 
national approach is needed. It is only through a national 
approach that we can make the most economically efficient 
decisions. New Jersey joyfully buys its citrus fruits from the 
Southeast, its grains from the Midwest and we joyfully export 
our pharmaceuticals and telecommunication products to those 
places. The same should be had for energy policy.
    Mr. Markey. We thank each of you and Mr. Wise for your 
testimony. This is a very important issue right at the heart of 
the revolution which is taking place in Germany, in China. If 
we don't move, they are moving. We will be importing their 
technologies. That is the bottom line. It is an engine of job 
creation which General Electric is now taking the lead in our 
country and in the world and I think we just have to keep pace 
and try to exceed the rest of the world in this subject. We 
should try to be number one looking over our shoulders are 
number two and three and four in the world because this is a 
job creation engine, and if we don't, we for sure will be 
importing 20 and 30 years from now having lost an opportunity 
to create a real manufacturing base in our country. So this is 
going to be a central part of the debate of climate change over 
the next several months, and we thank you for your 
participation. It has been very helpful to the committee. This 
hearing is adjourned.
    [Whereupon, at 1:10 p.m., the subcommittee was adjourned.]
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