[Senate Hearing 111-699]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 111-699
 
                          CURRENT ENERGY BILLS

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

                                HEARING

                               before the

                         SUBCOMMITTEE ON ENERGY

                                 of the

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                                   ON
                                     

                           S. 679                                S. 3251

                           S. 2900                               S. 3396

                           S. 3233                               S. 3460



                                     

                               __________

                             JUNE 15, 2010


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



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               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                  JEFF BINGAMAN, New Mexico, Chairman

BYRON L. DORGAN, North Dakota        LISA MURKOWSKI, Alaska
RON WYDEN, Oregon                    RICHARD BURR, North Carolina
TIM JOHNSON, South Dakota            JOHN BARRASSO, Wyoming
MARY L. LANDRIEU, Louisiana          SAM BROWNBACK, Kansas
MARIA CANTWELL, Washington           JAMES E. RISCH, Idaho
ROBERT MENENDEZ, New Jersey          JOHN McCAIN, Arizona
BLANCHE L. LINCOLN, Arkansas         ROBERT F. BENNETT, Utah
BERNARD SANDERS, Vermont             JIM BUNNING, Kentucky
EVAN BAYH, Indiana                   JEFF SESSIONS, Alabama
DEBBIE STABENOW, Michigan            BOB CORKER, Tennessee
MARK UDALL, Colorado
JEANNE SHAHEEN, New Hampshire

                    Robert M. Simon, Staff Director
                      Sam E. Fowler, Chief Counsel
               McKie Campbell, Republican Staff Director
               Karen K. Billups, Republican Chief Counsel
                                 ------                                

                         Subcommittee on Energy

                  MARIA CANTWELL, Washington, Chairman

BYRON L. DORGAN, North Dakota        JAMES E. RISCH, Idaho
RON WYDEN, Oregon                    RICHARD BURR, North Carolina
MARY L. LANDRIEU, Louisiana          JOHN BARRASSO, Wyoming
ROBERT MENENDEZ, New Jersey          SAM BROWNBACK, Kansas
BERNARD SANDERS, Vermont             JROBERT F. BENNETT, Utah
EVAN BAYH, Indiana                   JIM BUNNING, Kentucky
DEBBIE STABENOW, Michigan            JEFF SESSIONS, Alabama
MARK UDALL, Colorado                 BOB CORKER, Tennesse
JEANNE SHAHEEN, New Hampshire

    Jeff Bingaman  and Lisa Murkowski are Ex Officio Members of the 
                              Subcommittee

                            C O N T E N T S

                              ----------                              

                               STATEMENTS

                                                                   Page

Barrasso, Hon. John, U.S. Senator From Wyoming...................     8
Cantwell, Hon. Maria, U.S. Senator From Washington...............     1
Carper, Hon. Thomas R., U.S. Senate From Delaware................     3
Chalk, Steven G., Chief Operating Officer, Acting Deputy 
  Assistant Secretary for Renewable Energy, Office of Energy 
  Efficiency and Renewable Energy, Department of Energy..........     9
Collins, Hon. Susan M., U.S. Senate From Maine...................     2
Johnson, R. Shane, Chief Operating Officer for Nuclear Energy, 
  Department of Energy...........................................    13
Sanders, Hon. Bernard, U.S. Senator From Vermont.................     6

                               APPENDIXES
                               Appendix I

Responses to additional questions................................    27

                              Appendix II

Additional material submitted for the record.....................    43


                          CURRENT ENERGY BILLS

                              ----------                              


                         TUESDAY, JUNE 15, 2010

                               U.S. Senate,
                            Subcommittee on Energy,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:30 p.m. in 
room SD-366, Dirksen Senate Office Building, Hon. Maria 
Cantwell presiding.

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

    Senator Cantwell. The hearing will come to order.
    This is a U.S. Senate Committee on Energy and Natural 
Resources Subcommittee on Energy hearing. I appreciate our 
witnesses being here today.
    This is a legislative hearing by the subcommittee to 
consider 6 bills that are on the committee's legislative 
calendar, and these bills cover a range of energy-related 
topics under the purview of the Department of Energy that 
include S. 3460, the 10 Million Solar Roofs Act, introduced by 
Senator Sanders. The bill would require the Secretary of Energy 
to provide the funds to States for rebates, loans, and other 
incentives to eligible individuals and entities for the 
purchase of installation of solar energy systems.
    S. 3396, the Supply Star Act, introduced by Senators 
Bingaman and Lincoln. The bill would establish a program within 
the Department of Energy to identify and promote practices, 
companies, and products that use energy efficiently--highly 
efficient supply chains to conserve energy, water, and other 
resources.
    S. 3251, introduced by Senator Carper, who is with us 
today. This bill would improve energy efficiency and the use of 
renewable energy by Federal agencies.
    S. 679, introduced by Senator Collins, who is also with us 
today. This bill would establish a research and development, 
demonstration, and commercial application program to promote 
research of appropriate technologies for heavy duty plug-in 
hybrid vehicles.
    S. 2900, the Gas Turbine Efficiency Act, introduced by 
Senator Gillibrand. This bill would establish a research and 
development technology demonstration program to improve the 
energy efficiency of gas turbines.
    Finally, S. 3233, the Surplus Uranium Disposition Act, 
introduced by Senator Barrasso. The bill would amend the Atomic 
Energy Act of 1954 to authorize the Secretary of Energy to 
barter, transfer, or sell surplus uranium from the inventory of 
the Department of Energy.
    The purpose of this hearing is obviously to collect 
testimony from the Department of Energy and others, but we are 
fortunate to have 2 of our colleagues here, Senator Collins and 
Senator Carper. They are here today to talk about the bills 
they have introduced and are sponsoring. So, we welcome them to 
the committee.
    I will turn to my colleague, the ranking member Senator 
Risch, when he shows up, for an opening statement. But now I 
would like to turn to 2 of our colleagues and start with you, 
Senator Collins. Thank you for being here and to give testimony 
on your bill.

       STATEMENT OF HON. SUSAN M. COLLINS, U.S. SENATOR 
                           FROM MAINE

    Senator Collins. Thank you very much, Madam Chairman.
    Madam Chairman, members of the committee--particularly my 
neighbor from New Hampshire, Senator Shaheen--I want to thank 
you very much for holding this hearing today to consider a 
number of bills that have been introduced, including one that I 
have introduced with my colleagues Senator Feinstein and Kohl. 
It is called the Heavy Duty Hybrid Vehicle Research, 
Development, and Demonstration Act.
    Our bill would accelerate the research for plug-in hybrid 
technologies for heavy duty trucks. In 2008, truck operators in 
Maine and around the country were hit hard by increases in the 
price of diesel fuel. While, fortunately, there has been some 
relief, it is likely that as our Nation recovers from the 
recession, the demand for and prices of diesel fuel will once 
again increase.
    Given that our Nation relies so heavily upon the trucking 
industry to keep our economy running by providing timely 
delivery of everything from food, manufactured goods, raw 
materials, and other products, we must develop alternatives 
that make the industry less susceptible to dramatic changes in 
oil prices. That is also obviously important for the overall 
well-being of our economy, and of course, since the 
transportation sector uses up so much imported oil, it is 
important that we explore technology to reduce our dependence 
on foreign oil.
    Hybrid power technologies offer the tremendous promise of 
reducing this critical industry's dependence on oil. Trucks 
consume large amounts of our imported fuels. Successfully 
transitioning trucks to hybrid power technology would reduce 
our Nation's oil consumption and thereby improve our energy 
security.
    The bill that I have introduced directs the Department of 
Energy to expand its research and advance the energy storage 
technologies to include hybrid trucks, as well as passenger 
vehicles. Current hybrid technology works well for cars that 
can be made with lightweight materials and travel for short 
distances.
    But trucks need to be constructed with heavy materials 
commensurate with the heavy loads that they carry. If they are 
going to be successful as hybrid plug-in vehicles, then they 
must be able to travel relatively long distances between 
charges. Thus, advances in battery technology are needed to 
make plug-in trucks commercially viable, and that requires more 
advanced technology than is required for passenger cars.
    Under our bill, grant recipients would be required to 
complete 2 phases. In phase one, the recipients of Federal 
funds must build a plug-in hybrid truck, collect the data, and 
then make performance comparisons with traditional trucks. 
Recipients who show promise in phase one would be invited to 
enter into a phase 2 competition, where they must produce 50 
plug-in hybrid trucks and report on the technological and 
market obstacles to widespread production.
    The bill would also establish 2 smaller programs to deal 
with drive-train issues and the impact of the wider use of 
plug-in hybrid technology on the electrical grid. In total, the 
bill would authorize the expenditure of $16 million for each of 
the next 3 fiscal years.
    Madam Chairman, as you well realize, we need a 
comprehensive approach to modernize commercial transportation 
in the 21st century. To date, a lot of that effort has focused 
on smaller cars, on passenger vehicles, and not on heavy 
trucks. The purpose of my bill is to advance the research and 
the technology to focus on that sector of transportation, heavy 
trucks.
    I believe that the bill that we have introduced, our 
bipartisan approach, is one vital piece of the puzzle as we 
move forward to secure our Nation and to reduce our dependence 
on imported oil. So, again, I thank you for your tremendous 
leadership in this area and for holding today's hearing to look 
at a variety of bills, including the one that I have introduced 
with my 2 colleagues.
    I urge the committee to proceed and get the advice from the 
Department of Energy, and I hope you will report the bill soon.
    Thank you.
    Senator Cantwell. Thank you, Senator Collins. Thank you for 
being here. This is a very important issue. We have had 
testimony before the full committee before that our dependence 
on Middle East oil could be reduced in half if we just did 2 
things--focus on renewables and on lightweight materials.
    So, I really appreciate that, and I think our national 
laboratory in the Northwest, the Pacific Northwest Lab, has 
done a lot of work on this lightweight material for heavy duty 
trucks. So we will look forward to the outcome of this 
demonstration.
    Senator Collins. Thank you.
    Senator Cantwell. Thank you for being here.
    I am going to call on my colleague Senator Carper next, but 
we have been joined by 2 of our other colleagues who also have 
bills before the committee today. So once we are done with 
that, I will turn to you if you want to make a statement about 
your legislation.
    So, Senator Carper, welcome. Thank you for being here.

 STATEMENT OF HON. THOMAS R. CARPER, U.S. SENATOR FROM DELAWARE

    Senator Carper. Thank you, Madam Chair.
    Senator Barrasso, Senator Shaheen, Senator Sanders, thank 
you for this opportunity you provided for us and for the good 
work that you are doing on these issues and related issues 
across the board.
    Today, I want to chat for just a few minutes with you, if I 
could, about some important opportunities to help our Federal 
Government to cut our energy bill, save taxpayers some money, 
and benefit the environment at the same time.
    Over the past several months, the Homeland Security and 
Government Affairs Subcommittee, which I am privileged to 
chair, held hearings to examine how the Federal Government can 
lead by example in being more energy efficient.
    Now we learned, among other things, that the Federal 
Government is the single largest user of energy in our Nation. 
For example, in fiscal year 2008, the total energy consumption 
of Federal Government buildings and operations was roughly 1.5 
percent of all energy consumed in the U.S., 1.5 percent.
    The energy bill for the U.S. Government that year was 
almost $25 billion. With a price tag that large, our 
subcommittee believes there has got to be some significant 
opportunities for savings.
    That is why I introduced legislation. We call it the 
Improving Energy Efficiency and Renewable Energy Use by Federal 
Agencies Act of 2010.
    Senator Sanders. How do you abbreviate that?
    Senator Carper. The acronym is--we have no acronym, but we 
are looking for one, I am sure.
    [Laughter.]
    Senator Carper. My legislation, our legislation consists of 
really a series of proposals that I believe will allow the 
Federal Government to take greater advantage of clean energy 
and energy efficiency opportunities that exist today.
    Already, many Federal agencies are pursuing some of these 
ideas and technologies to reduce the amount of energy that they 
consume and reduce their air pollution footprint. Many of the 
provisions in the bill adopt those good, common-sense ideas.
    For example, some agencies are entering into what we call 
``power purchasing agreements'' with private sector energy 
production companies. As you may know, these agreements allow a 
company to build and to operate and produce privately funded 
renewable energy on Government land, like an unused portion of 
a military base, in exchange for cheaper electricity for their 
Federal agency.
    This means an agency can reduce the cost of its energy use 
and help clean up our air by promoting renewable energy, all 
without spending a single taxpayer dollar. As far as I am 
concerned, that is not a bad way to do business.
    Currently, only the Department of Defense can enter into 
long-term power purchase agreements. Civilian agencies are 
restricted to only 10-year agreements. Long agreements usually 
mean cheaper energy costs for the agency. That is why our bill 
allows longer-term agreements not just for DoD, but for all 
Federal agencies.
    The bill also requires Federal agencies to consider and to 
adopt new computer and software operations that use less 
energy. Recently, we learned that the Department of Veteran 
Affairs did this, and the agency plans to save about $32 
million over the next 5 years as a result.
    Our bill also establishes a $500 million revolving fund to 
provide financial support for Federal agency energy efficiency 
and renewable projects. This fund would increase the number of 
agency energy efficiency projects, such as new heating and 
cooling systems, which save on operations costs. Money from 
energy savings from the projects would be paid back into the 
fund over time and eventually fund additional projects.
    I am also interested in adopting some common-sense ideas 
from the private sector. There is an old saying you may have 
heard. ``You can't manage what you can't measure.'' It can 
easily be applied to energy use. During our subcommittee 
hearings, we learned that with digital technology, we can save 
energy and money by monitoring the energy used in buildings--
even machinery in the buildings--in real-time.
    For example, Walmart already uses this technology because 
of the financial savings that it brings. So from their 
headquarters in Bentonville, Arkansas, Walmart knows--literally 
knows--if a freezer door has been left open at their store in 
Middletown, Delaware.
    The Federal Government, I think, can and should do the same 
kind of thing. The best part about deploying advanced metering 
is the fact that those investments can pay for themselves 
literally in less than a year.
    These are, I think, some excellent ideas. They are not 
really original ideas. In some cases, they are being practiced 
by one agency or another, and frankly, we just think that not 
just the Department of Defense should have the opportunity to 
do these longer-term agreements for the power purchases. Not 
just the VA should be finding ways in saving $30 million some a 
year and changing the way they power down their computers when 
they are not being used.
    We would like to see a lot of agencies do this sort of 
things. We think these are good ideas and can reduce our 
Government's energy consumption and reduce, at the same time, 
our Federal budget deficit.
    I look forward to working with this subcommittee and this 
committee as you examines our legislation. I believe that it 
will help the Federal Government, our Federal Government to 
lead by example and demonstrate to the American people that 
energy efficiency efforts can pay real dividends, both in 
saving money and in preserving our environment.
    Thank you.
    [The prepared statement of Senator Carper follows:]

Prepared Statement of Hon. Thomas R. Carper, U.S. Senator From Delaware

    Let me begin this morning, Mr. Chairman, by thanking you and 
Senator Burr for holding this hearing on S, 1801, the First State 
National Historical Park Act. I particularly want to thank you, Mr. 
Chairman, for cosponsoring this legislation and for allowing me to 
appear before you today to discuss it with you.
    As you know, this legislation, if adopted, would establish the 
first national park in the State of Delaware, the only state in the 
Union which is home to neither a national park or even to a unit of the 
national park system.
    Some of you may recall, the story of ``America's Best Idea''--the 
National Park System--that was told last year to a national television 
audience by the renowned documentary film maker Ken Burns, who 
coincidentally grew up in Delaware as a youth.
    Along with Ken Burns and many of the millions of people who viewed 
that documentary, I share the belief that national parks are, indeed, 
one of our nation's very best ideas.
    National parks are an invaluable resource for understanding our 
nation's historic and cultural heritage, as well as its natural 
environment. Every year, millions of Americans plan their vacations 
around our nation's national park system.
    I remember fondly my own family's trip several summers ago to 
Denali National Park in Alaska. And, our two sons will never forget 
their cross-country road trip along the northern route from Boston to 
San Francisco last summer, an adventure that took them to places like 
Mt. Rushmore, Yellowstone and Yosemite.
    In planning our family's summer vacation several years ago, we 
logged onto the National Park Service web site and searched state by 
state for ideas. When we came to our own state--Delaware--our search 
turned up empty.
    That's right. The first state to ratify the Constitution, the first 
state in the Union, the first state in which Swedes and Finns came 
ashore in what was to become America, and the place where the Dutch 
built an ill-fated settlement over 400 years ago--Delaware--remains the 
only state to have no national park.
    For almost a decade, hundreds of Delawareans have joined me in 
working to change that.
    After four years of research and planning that involved Delaware 
state officials, community leaders and citizen activists, we unveiled a 
proposal for a Delaware National Park in 2004.
    In 2006, thanks in part to the work of this Committee, Congress 
authorized the National Park Service to study the need for a park in 
Delaware. The National Park Service used our 2004 proposal as the 
starting point for their study.
    In January 2009, the National Park Service finalized its study and 
agreed that--at long last--a park should be created in Delaware.
    In its study, the National Park Service recommended a national park 
that celebrated Delaware's early Dutch, Swedish and English Settlements 
and the events leading up to the state's role in the founding of our 
nation.
    This brings us to today's hearing and to the First State National 
Historical Park Act which I'm pleased to report has been cosponsored by 
each member of our state's tiny congressional delegation.
    The First State National Historical Park Act uses a majority of 
suggestions from the 2009 National Park Study to authorize a national 
park to be created within Delaware.
    If approved, our state's national park will be comprised of sites 
associated with early settlement and with the people and events leading 
up to Delaware's role as the first state to ratify the U.S. 
Constitution on December 7, 1787.
    The Park will tell the story of the birth of our nation in a unique 
way not found in any other National Park.
    The park's central headquarters will be located along the Delaware 
River in the historic Town of New Castle, just a stone's throw from a 
statue of William Penn who deeded the land to the inhabitants of the 
town of New Castle in 1701.''
    Once a national park unit is established in Delaware, families from 
throughout America--and all over the world--will have the opportunity 
to learn from the National Park Service's website of the rich, 
historical heritage of the First State.
    And, who knows? They just might decide to pay us a visit; much like 
my own family did when we chose to spend an unforgettable week or two 
visiting Denali and other parts of Alaska.
    In closing, I would note that the word ``Denali'' translates 
loosely to mean ``the Great One.'' That enormous park is several times 
the size of my state.
    While visitors to Delaware are not likely to remember us as ``the 
Great One,'' they may well end up returning to their own homes with 
lasting memories--fond memories--of the ``Small Wonder'' along the 
Eastern Seaboard of our nation that helped to launch the most enduring 
experiment in democracy that the world has ever known--the United 
States of America.

    Senator Cantwell. Thank you, Senator Carper.
    We have had much discussion about Federal agencies leading 
the way and a specific goal to be met. So we appreciate your 
legislation today and your leadership on it.
    Thank you for being here.
    Senator Carper. Yes. Thank you so much.
    Senator Cantwell. Senator Sanders, would you like to make a 
statement about S. 3460?

  STATEMENT OF HON. BERNARD SANDERS, U.S. SENATOR FROM VERMONT

    Senator Sanders. I would, and thank you very much, Madam 
Chair. Thank you for allowing me to bring forth our amendment 
and say a few words on it.
    The amendment is called the 10 Million Solar Roofs Act, S. 
3460. It is being cosponsored by Senators Specter, Whitehouse, 
Cardin, Gillibrand, Boxer, Leahy, Lautenberg, Stabenow, Casey, 
Merkley, Harkin, Menendez, Kaufman, and Kerry. The bill is 
supported by the Solar Energy Industries Association, the 
National Association of State Energy Officials, the Sierra 
Club, Environment America, and other groups.
    Madam Chair, Thomas Edison said in 1931, ``I put my money 
on the sun and solar energy, what a source of power. I hope we 
don't have to wait until oil and coal run out before we tackle 
that.'' 1931, no wonder that guy invented so many things. He 
was a pretty smart guy.
    Later, the solar cell was invented in the United States. 
Since then, however, Germany, Japan, and Spain have installed 
more solar than we have. India and China have each announced 
plans to develop 20,000 megawatts of new solar by 2020. In 
other words, solar is exploding all over the world.
    Every megawatt of solar means at least 24 jobs and passing 
the 10 Million Solar Roofs legislation would send a clear 
signal that the United States is serious about winning the race 
for solar jobs by creating the largest market for solar energy 
right here in the United States of America.
    The bill would create 30,000 megawatts of new solar energy 
and hundreds of thousands of new jobs while reducing greenhouse 
gas emissions by the equivalent of taking 6 million automobiles 
off the road. The legislation sets a goal of 10 million solar 
properties in the United States in 10 years. If you think this 
is ambitious, consider that in 1952, 1952, a commission formed 
by President Harry Truman predicted that we could have 13 
million solar roofs by the 1970s. That was way back then. But 
today, we just have about 250,000.
    This bill achieves the 10 million solar goal in part by 
providing funds through States to help consumers, businesses, 
schools, and other entities with the purchase and installation 
of solar. This flexible approach allows States to decide the 
best strategy for deploying more solar by utilizing Federal 
funds along with their own State and local incentives and loan 
programs.
    This builds on California's Million Solar Roofs program, 
which set a goal of 3,000 megawatts of solar over 10 years and 
offers rebates for solar purchases and installations. 
California is on track to meet its goals. In fact, there is a 
whole lot of demand for assistance from the State to achieve 
these goals.
    For example, as part of that program, investor-owned 
utilities had a target of 1,750 megawatts of new solar by 2016, 
and to date, they have more than 700 megawatts installed or 
pending. It is clear that we have huge potential for solar in 
this country, and 92 percent of the American people want our 
country to develop more solar. I think every day that we look 
at TV and we see what is going on in the Gulf Coast, that 
number goes up and up.
    A report by the New Rules Project found that every single 
State in this country could produce at least 11 percent of 
their electricity from rooftop solar panels using existing roof 
space. The National Renewable Energy Lab has found the cost, 
discounting any incentives, of photovoltaic panels decreased 30 
percent, went down 30 percent between 1998 and 2008, but also 
found the costs to install solar are even lower in other 
countries like Germany and Japan that have more megawatts of 
solar.
    We need to do more, as Secretary Steven Chu has said, to 
drive down the upfront cost so consumers can purchase 
affordable solar energy and lower their energy bills. The 10 
Million Solar Roofs bill helps to do exactly that by providing 
incentives to ramp up solar production and installation, 
further driving down costs as we achieve a greater scale.
    I look forward to working with my colleagues on the 
committee to add this bill to a comprehensive energy 
legislation.
    Thank you very much, Madam Chair.
    Senator Cantwell. Thank you, Senator Sanders.
    As I was preparing for the hearing today, I found out more 
about your legislation. So I would like to add my voice to it 
and ask that you add me as a sponsor to the legislation.
    Senator Sanders. Thank you very much.
    Senator Cantwell. Thank you.
    Senator Barrasso, would you like to give a statement about 
S. 3233?

         STATEMENT OF HON. JOHN BARRASSO, U.S. SENATOR 
                          FROM WYOMING

    Senator Barrasso. Thank you very much, Madam Chairman. I 
would.
    Madam Chairman, the Department of Energy controls roughly 
150 million pounds of uranium. The uranium is a valuable 
resource, and it is owned by the American people.
    In 2008, the department approved a plan to manage its 
excess uranium. The plan provided a roadmap for the efficient 
management and responsible disposition of excess uranium. The 
plan was intended to maximize the return on this valuable 
asset. It was also intended to ensure that Department of Energy 
sales do not undercut the domestic nuclear fuel industry.
    Last year, the department announced a proposal to transfer 
between $150 million and $200 million worth of excess uranium 
in fiscal year 2010. Additional transfers valued at $450 
million were planned over the next 3 years. The proposal 
ignored the department's own management plan.
    Forcing too much uranium onto the market puts jobs in the 
entire uranium industry in jeopardy. It also undercuts the 
department's ability to get fair market value for the uranium 
that they are trying to sell. Members of Congress and Congress 
as an institution recognized the problem.
    The 2010 energy appropriations bill directed the Government 
Accountability Office ``to undertake a review of the 
department's oversight and implementation strategy of the 
proposal, including an evaluation of the department's overall 
uranium management plan.'' Fortunately, the department has now 
backed off its plan.
    In testimony earlier this year before this committee, 
Secretary Chu acknowledged that the proposed uranium transfers 
did create significant problems for domestic uranium producers. 
This admission is evidence that the department continues to 
struggle with responsible management of its uranium stockpile.
    Now this is not the first time that the Department of 
Energy has struggled with managing its uranium stockpile. In 
2006, the Government Accountability Office concluded that the 
Department of Energy had actually broken the law, bartering 
Government-owned uranium for services.
    This is why I have introduced this bipartisan bill with 
Senator Ben Nelson. Companion bipartisan legislation has been 
introduced by a number of members of the House of 
Representatives. The goal of this bipartisan bill is simple--to 
codify the uranium management plan that was issued in 2008.
    We need to improve the Government's management of its 
uranium stockpile. This bill is important for jobs, jobs in 
Wyoming and jobs across the country. It will also improve 
certainty and transparency for the department's uranium 
stockpile. Finally, it will ensure the American taxpayer gets 
fair market value for this important asset.
    So I look forward to hearing the department's testimony. I 
look forward to moving this bipartisan bill through Congress.
    Thank you, Madam Chairman.
    Senator Cantwell. Thank you, Senator Barrasso. Thank you 
for being here to discuss this legislation.
    Now we are going to proceed to the members of the 
administration who are here to give testimony.
    I would like to welcome Mr. Steve Chalk, who is the chief 
operating officer and Acting Deputy Assistant Secretary for 
Renewable Energy at the Office of Energy Efficiency and 
Renewable Energy at the Department of Energy, and Mr. Shane 
Johnson, who is the chief operating officer of the Office of 
Nuclear Energy at DOE.
    So if you would both like to come up to the witness stand, 
and I think you are both going to give us some remarks about 
the department's views on these various pieces of legislation.

 STATEMENT OF STEVEN G. CHALK, CHIEF OPERATING OFFICER, ACTING 
  DEPUTY ASSISTANT SECRETARY FOR RENEWABLE ENERGY, OFFICE OF 
  ENERGY EFFICIENCY AND RENEWABLE ENERGY, DEPARTMENT OF ENERGY

    Mr. Chalk. Thank you, Madam Chairman and other members of 
the subcommittee.
    Thank you for the opportunity to appear before you today to 
discuss the proposed clean energy legislation. We at the 
Department of Energy share the subcommittee's goals of 
strengthening our economy, enhancing our energy security, and 
protecting our environment.
    The department and the subcommittee have had a long, 
productive relationship. In addition to my appearance here 
today to discuss these pieces of legislation, I also commit to 
working with the subcommittee further as you continue to 
consider clean energy legislation on the way to the floor.
    The 5 bills related to energy efficiency and renewable 
energy on the agenda cover a range of topics and technologies, 
and it is clear that even where there are some particular 
differences, the department shares the intentions and the 
spirit of virtually all of them.
    While there are detailed remarks on each bill in my written 
testimony, I would like to comment briefly on a few key points. 
First of all, the department shares the goal of 10 Million 
Solar Roofs Act. Like the bill's sponsor, we are committed to 
the widespread deployment of solar energy systems on homes and 
businesses. The DOE would like to work with this subcommittee 
to ensure that, if passed, this legislation provides us with 
the flexibility to achieve this goal.
    In particular, we suggest that the DOE be given the 
flexibility to adjust the cost share requirements in order to 
leverage Federal funding. We also are open to innovative 
programs to promote photovoltaic installations throughout the 
country.
    Second, the DOE welcomes the Supply Star Act of 2010 as a 
next step to our existing supply chain initiatives. While we do 
have concerns regarding the term ``Star,'' as we want to 
maintain a clear distinction between the Energy Star brand, we 
commend Chairman Bingaman for introducing this bill to maximize 
supply chain energy reductions.
    Supply chain energy reductions can make an important 
contribution to the overall industrial efficiency and 
competitive position of domestic suppliers. Analysis suggests 
that a large part of the carbon footprint for many consumer 
products can be attributed to the supply chain, from raw 
material extraction to processing, transport, packaging, all 
the way to the consumer, including recycling of the product.
    Presently, DOE encourages manufacturing companies to engage 
their supply chains in energy and carbon management. We look 
forward to providing companies with further tools to make 
production as efficient and clean as possible.
    So, in the interest of time, I will conclude my oral 
statement with these remarks, but I am happy to answer 
questions on any of the 5 bills related to energy efficiency 
and renewable energy.
    I especially want to recognize Senator Collins's testimony 
on the heavy duty RD&D bill and Senator Carper for trying to 
help us expand the toolkit that we have available in the 
Federal Government to expand renewable energy and to reduce our 
energy use.
    Once again, we support the intent of all of these bills, 
and we look forward to working with the subcommittee on these 
and other issues. I thank you for your time and look forward to 
your questions.
    [The prepared statement of Mr. Chalk follows:]

Prepared Statement of Steven G. Chalk, Chief Operating Officer, Acting 
   Deputy Assistant Secretary for Renewable Energy, Office of Energy 
         Efficiency and Renewable Energy, Department of Energy

    Madam Chairman, Ranking Member Risch, and Members of the 
Subcommittee, thank you for the opportunity to appear before you today 
to discuss proposed clean energy legislation.
    The Department and the Subcommittee share common goals of 
strengthening our economy, enhancing our national security, and 
protecting our environment. As part of the Recovery Act, the Office of 
Energy Efficiency and Renewable Energy (EERE), oversees a total of 
$16.8 billion in investments. To date, EERE has obligated 96 percent, 
or $16.07 billion, of its Recovery Act funds. The funds are putting 
America to work laying the foundation for our clean energy future. The 
Department also appreciates the authorities you have provided in recent 
years in the Energy Policy Act of 2005 (EPAct) (P.L. 109-58) and the 
Energy Independence and Security Act of 2007 (EISA) (P.L. 110-140). 
This year, the Committee has proposed further investment and we thank 
you for all your hard work in reporting the American Clean Energy 
Leadership Act (S. 1462).
    Today, I am pleased to offer the Department's perspective on five 
pending pieces of legislation related to energy efficiency and 
renewable energy. Note that many of the authorities outlined in the 
bills would simply reinforce existing authorities, and may not be 
necessary for the Department to carry out the activities in question. I 
will discuss them in the order listed in the hearing invitation letter 
I received from the Subcommittee. These include the 10 Million Solar 
Roofs Act of 2010 (S. 3460), the Supply Star Act of 2010 (S. 3396), the 
Improving Energy Efficiency and Renewable Energy Use By Federal 
Agencies Act of 2010 (S. 3251), the Heavy Duty Hybrid Vehicle Research, 
Development, and Demonstration Act (S. 679), the Gas Turbine Efficiency 
Act of 2009 (S. 2900).

              S. 3460: 10 MILLION SOLAR ROOFS ACT OF 2010

    We thank the subcommittee and the sponsor of this legislation for 
your strong leadership on solar technologies over the years. The 
Department's goals for solar electric technologies are to be cost 
competitive in their respective markets by 2015 and to reach a high 
penetration of solar installations. The Department is investing $232 
million in 2010 to support solar research across the development 
pipeline, from basic photovoltaic (PV) cell technologies to 
manufacturing scaleup to total system development. Within the $232 
million, DOE is investing up to $50 million in concentrated solar power 
technology development and deployment related activities and $23 
million to understand how solar technologies can be better integrated 
within existing electricity generation and transmission systems. In 
solar hot water heating, DOE is investing approximately an additional 
$6.5 million in 2010.
    The proposed legislation incorporates several significant features. 
We believe that rebates, loan programs, and performance based 
incentives are all effective means of stimulating demand. Allowing 
states to choose between these incentives will enable the Act to expand 
existing state programs that have been effective in promoting solar 
installations. In addition, the states' matching funds requirements 
will leverage available federal appropriations and increase the 
resulting deployment of solar technologies, both of which are high 
priorities for the Department.
    To maximize the effectiveness of the proposed legislation, we would 
recommend two changes. First, while we support the state match 
requirement, we propose that the cost share be set at 50 percent to 
increase the potential leverage of federal funds. Second, the Secretary 
should be given the ability to reduce this as necessary to increase the 
overall effectiveness of the program. We also believe the program could 
be designed in a creative way such as working with municipalities to 
promote photovoltaic installations through innovative local programs.
    We note that by our estimates, the $250 million authorized for FY 
2012 would yield roughly 100,000 rooftop solar systems, and may not be 
sufficient to put us on a trajectory to meet the goal of 10 million 
solar roofs. With these changes, the legislation could be an effective 
tool in increasing deployment of solar electricity technologies 
Nationwide. We note that existing authorities, such as the competitive 
portion of the state energy program, would allow DOE to undertake such 
a program already.

                    S. 3396: SUPPLY STAR ACT OF 2010

    Supply chain energy efforts can make an important contribution to 
overall industrial efficiency and the competitive position of domestic 
suppliers. Analysis suggests that a large part of the carbon footprint 
for many consumer products can be attributed to the supply chain--from 
raw materials, transport, and packaging to the energy consumed in 
manufacturing processes--on the order of 40 to 60 percent\1\.
---------------------------------------------------------------------------
    \1\ Source: Climate Change and Supply Chain Management, McKinsey 
Quarterly, McKinsey & Company, July 2008.
---------------------------------------------------------------------------
    The Supply Star legislation seeks to build upon existing best 
practices in the industrial community by establishing a voluntary 
recognition program that supports and promotes products and companies 
with highly energy-and resource-efficient supply chains.
    DOE and the Environmental Protection Agency (EPA) both have 
existing initiatives that address supply chain efficiency, such as Save 
Energy Now at DOE and the Smart Way TransportTM program at 
EPA. The legislation should coordinate with and leverage these programs 
as a structure through which Supply Star activities could be conducted. 
For example, through its national Save Energy Now initiative, DOE 
encourages manufacturing companies to engage their supply chains in 
energy and carbon management. Specifically, DOE develops processes and 
resources to assist companies in promoting energy management to their 
industrial suppliers and customers. Save Energy Now LEADER Companies 
make a voluntary commitment to reduce their energy intensity by 25 
percent in 10 years. Many of these companies are interested in 
improving the efficiency of their supply chains as well.
    The Supply Star bill also builds upon Superior Energy Performance 
(SEP), a voluntary certification program working to provide industrial 
facilities with a roadmap for achieving continual improvement in energy 
efficiency while maintaining competitiveness. A central element of SEP 
is implementation of the forthcoming International Organization for 
Standardization (ISO) 50001 energy management standard, with additional 
requirements to achieve and document energy intensity improvements. DOE 
is working through SEP to bring ISO 50001 to the U.S. Upon its expected 
publication in 2011 this American National Standards Institute-
accredited program will provide companies with a framework for 
fostering energyefficiency at the plant level and a consistent 
methodology for measuring and validating energy efficiency and 
intensity improvements. This new framework will be an important tool to 
integrate into supply chain efforts.

   S. 3251: IMPROVING ENERGY EFFICIENCY AND RENEWABLE ENERGY USE BY 
                      FEDERAL AGENCIES ACT OF 2010

    On October 5th, President Obama signed Executive Order 13514 
requiring Federal agencies to set GHG emission reduction targets, 
increase energy efficiency, reduce fleet petroleum use, conserve water, 
reduce waste and promote environmentally-responsible produce purchases 
by federal agencies. With this action, the President directed agencies 
to demonstrate the Federal government's commitment, over and above what 
is already being done, to reducing emissions and saving money.
    As a whole, the Federal government has made significant progress in 
meeting the energy requirements of EISA 2007 and EPAct 2005. Further 
progress on these efforts would be bolstered by S. 3251. The Department 
is particularly supportive of provisions clarifying the definition of 
allowable ``renewable'' energy sources, and authorizing the creation of 
a revolving fund for Federal facility energy efficiency and renewable 
energy projects.
    The Department looks forward to working with the Subcommittee on 
legislation that would provide agencies with the flexibility to 
purchase renewable energy for appropriate time periods, that do not 
exceed asset life, create appropriate risk sharing between project 
developers and taxpayers, and that recognize the importance of fiscal 
responsibility and Congressional Budget Office scoring of contracts. 
This authority would provide opportunities for more on-site renewable 
power at Federal agencies and would provide strong support for growing 
our domestic clean energy economy.
    The Department's recommended definition of renewable energy follows 
the definition in section 203 of EPAct 2005, with an additional 
recommendation to allow for both electric energy and thermal energy 
from renewable sources. It is very important to allow thermal energy to 
count as renewable energy, particularly because renewable thermal 
energy sources such as ground source heat pumps are often the lowest-
cost option for displacing purchased energy and are already widely 
deployed. This approach contrasts with the current definition which is 
limited only to ``renewable electricity,'' a definition that reduces 
incentives for this valuable and cost-effective form of renewable 
power.
    The Department fully supports the creation of a revolving loan fund 
based on best practices and subject to appropriate interest rates for 
Federal facility energy efficiency and renewable energy projects. There 
is considerable experience and success at the state and local level 
with using revolving loan funds to assist innovative projects to 
improve energy efficiency. In addition, there is Federal experience 
with a similar concept within the General Services Administration (GSA) 
that funds agency relocations, and agencies reimburse the fund at 
slightly above costs to gradually increase the amount of funds 
available for lending.
    Federal agencies are already responding to the requirements of EISA 
Section 432 to survey their facilities for potential energy efficiency 
and renewable energy upgrades, as well as to complete energy audits and 
to report on measures taken. The Department recommends that the 
renewable energy facility surveys called for in S. 3251 Section 5 
should be included as a modification of EISA Section 432.
    DOE's Federal Energy Management Program is already at work 
implementing provisions similar to the Federal energy management and 
data collection standard called for in S. 3251 Section 7. As required 
under EISA Section 432, DOE will publish overarching guidance for 
implementation of all Section 432 requirements in 2010. The Department 
is also developing a web-based tracking system for facility-level 
energy data and identified or implemented energy conservation measures 
per EISA. Tasking the GSA to deploy a similar publicly-available 
resource with facility-level energy data would create redundancy as the 
Department's compliance tracking system will be deployed for use by all 
agencies in July 2010.

     S. 679: HEAVY DUTY HYBRID VEHICLE RESEARCH, DEVELOPMENT, AND 
                           DEMONSTRATION ACT

    The program authorized by S. 679 would complement several of the 
Department's current activities focused on increasing vehicle energy 
efficiency. One of those programs is the SuperTruck Program, in which 
DOE is seeking to improve the freight hauling efficiency of Class 8 
trucks by 50 percent. Other complementary efforts underway include: (1) 
the development of hybrid school bus technology; (2) research, 
development, and demonstration of medium-duty utility bucket trucks and 
passenger shuttles using a plug-in hybrid electric system; and (3) 
other medium and heavy duty truck deployment activities supported by 
our Clean Cities program. S. 679 has the potential to increase the fuel 
economy attainable by vehicles in this sector.
    There are several technical definitions and reporting requirements 
about which we would like to seek clarification, and the Department 
looks forward to working with the subcommittee on those provisions.

              S. 2900: GAS TURBINE EFFICIENCY ACT OF 2009

    The Gas Turbine Efficiency Act would establish a research, 
development, and technology demonstration program to improve the 
efficiency of gas turbines used in combined cycle and simple cycle 
power generation systems.
    The Department believes that industry has economic incentives to 
invest in research, development and demonstration to increase the 
efficiency of gas turbines. To the extent that the private sector 
underinvests in basic research, DOE has sufficient authority and 
existing programs to improve high temperature materials applicable to a 
range of energy technologies.
    The bill is similar to an existing successful program within DOE. 
The Advanced Turbine Systems Program, a research, development and 
demonstration collaborative between the Department's Offices of Energy 
Efficiency and Renewable Energy and Fossil Energy, successfully 
developed and deployed advanced turbine material and coating leading to 
today's turbine efficiencies.
    The legislation outlines activities DOE already performs. For 
example, through its Industries of the Future (crosscutting) 
investments, DOE's Industrial Technology Program (ITP) aids the 
development of advanced manufacturing processes for the expanded use of 
lightweight materials such as titanium. Those breakthroughs help to 
drive production cost down and market impact up. In other efforts, ITP 
promoted advanced alloys of steel to support many of the new clean 
energy products being developed today. Nanocoating technologies are 
still another group of innovations developed with the assistance of ITP 
that now extend the life of tooling systems and provide wear resistance 
to reduce the cost of manufacture and extend the useful life of 
products. All of these efforts support the overarching objective of 
reducing the energy intensity of Industry to help advance the 
Administration's energy security and environmental performance goals.
    The Department is committed to continuing research of high 
temperature materials which will help industry develop more efficient 
energy technologies. Meanwhile, the private sector has economic 
incentive to invest in the development and demonstration of efficient 
gas turbines. Therefore, private sector work on later stages of 
efficient natural gas turbine development and demonstration will likely 
be conducted without the need for additional funding authorizations 
beyond that already in place.
    In conclusion, the Department of Energy thanks the Subcommittee for 
the opportunity to comment on these proposed initiatives. We look 
forward to working with Congress to develop strong, effective clean 
energy policy to ensure U.S. leadership on these global issues and in 
the clean energy economy.

    Senator Cantwell. Thank you, Mr. Chalk.
    Mr. Johnson.

STATEMENT OF R. SHANE JOHNSON, CHIEF OPERATING OFFICER, OFFICE 
            OF NUCLEAR ENERGY, DEPARTMENT OF ENERGY

    Mr. Johnson. Thank you.
    Madam Chairman, members of the subcommittee, I appreciate 
the opportunity to appear before you and comment on legislation 
under consideration by the committee and to provide the 
information on the Department of Energy's management and 
disposition of its excess uranium inventory.
    The administration views nuclear power as an important 
element in its strategy to increase energy security and combat 
climate change. A strong domestic nuclear industry supports the 
expansion of clean, carbon-free nuclear energy in the United 
States.
    To date, the Department of Energy has awarded conditional 
commitments for loan guarantees for the construction of both a 
new nuclear power plant and a new uranium enrichment facility, 
and the department is considering additional loan guarantee 
applications in both of these areas.
    In my written testimony, I have provided details on the 
department's excess uranium inventory and how the department 
manages that inventory. The department is committed to managing 
its excess uranium inventory in a manner that complies with all 
applicable legal requirements, maintains sufficient uranium 
inventory to meet current and reasonably foreseeable mission 
needs, undertakes transactions with nongovernment entities in a 
transparent and competitive manner unless the Secretary of 
Energy determines in writing that an overriding DOE mission 
need dictates otherwise, and supports pursuit of our climate 
and energy goals while at the same time supporting departmental 
missions and objectives.
    With my remaining time, I would like to offer a few 
comments on the Surplus Uranium Disposition Act of 2010. The 
department understands that S. 3233 seeks to facilitate an 
orderly management and disposition of the department's excess 
uranium in support of a strong domestic nuclear industry. We 
believe certain provisions of the bill, while well-intentioned, 
may work against meeting that objective and would complicate 
the department's ability to meet its own missions.
    We are especially concerned that the technical amendment at 
the end of the bill would revise the definition of 
``commission'' in Section 11(f) of the Atomic Energy Act to 
mean Nuclear Regulatory Commission rather than Atomic Energy 
Commission. This provision would result in a major change, 
which we believe was unintended, in how the Government deals 
with nuclear energy matters.
    This provision would effectively strip the department of 
its authorities under the Atomic Energy Act and transfer them 
to the Nuclear Regulatory Commission. This change would, in 
effect, undo the Energy Reorganization Act of 1974 and go back 
to the situation that existed when the Atomic Energy Commission 
was responsible for implementing all of the authority under the 
Atomic Energy Act.
    Other provisions of the bill are inconsistent with the 
concept of competition in sales or transfers, and some 
provisions potentially conflict with existing contractual 
commitments currently held by the department's National Nuclear 
Security Administration and the Office of Environmental 
Management. In considering the management and disposition of 
the department's excess uranium inventory, a variety of factors 
need to be assessed, including the mission needs of the 
department, energy security, and the flexibility to be 
responsive to a changing uranium market.
    The department is committed to managing its excess uranium 
inventory in a manner that is consistent with and supportive of 
a strong domestic nuclear industry, while at the same time 
supporting departmental missions and objectives.
    Thank you again for the opportunity to testify today. I 
look forward to answering your questions.
    [The prepared statement of Mr. Johnson follows:]

Prepared Statement of R. Shane Johnson, Chief Operating Officer, Office 
                of Nuclear Energy, Department of Energy

                              INTRODUCTION

    Thank you, Madam Chairman, Ranking Member Risch, and Members of the 
Subcommittee. I appreciate this opportunity to appear before you and 
comment on legislation under consideration by the Committee, as well as 
to provide information on the Department of Energy's management and 
disposition of its excess uranium.
    The Administration continues to view nuclear power as an important 
element in its strategy to increase energy security and combat climate 
change. A strong domestic nuclear industry supports the expansion of 
clean, carbon-free nuclear energy in the United States. To date, the 
Department of Energy has awarded conditional commitments for loan 
guarantees for the construction of both a new nuclear power plant and a 
new uranium enrichment facility, and the Department is considering 
additional loan guarantee applications in both of these areas. The 
Department also sees the necessity of managing its excess uranium 
inventory in a manner that is consistent with and supportive of the 
maintenance of a strong domestic nuclear industry achieving our climate 
and energy goals while at the same time supporting Departmental 
missions and objectives.

                        EXCESS URANIUM INVENTORY

    To start, I would like to provide the Subcommittee with an overview 
of the Department's excess uranium inventory. The Department of Energy 
holds a significant inventory of uranium that exceeds government needs. 
This inventory contains uranium in various forms and includes highly 
enriched uranium (``HEU''), low enriched uranium (``LEU''), natural 
uranium, and depleted uranium hexafluoride, all of which must be 
actively managed. The natural uranium equivalent contained in this 
inventory corresponds to about three years of supply for current U.S. 
nuclear power plants. The uranium held in this inventory is a valuable 
asset both in terms of its monetary value and in the role it could play 
in achieving vital Departmental missions and maintaining a healthy 
domestic nuclear fuel infrastructure. However, a significant amount of 
this inventory requires further processing before it is considered 
marketable. The long lead times anticipated for processing some of our 
uranium materials would reduce the annual amount of uranium that could 
enter the market.
    For non-proliferation reasons, the Department already has an active 
program for downblending much of its excess HEU into LEU. The 
Department will continue to downblend HEU to promote non-proliferation 
objectives.
    The Department's current excess uranium inventory also contains a 
considerable amount of natural uranium in the form of uranium 
hexafluoride. This uranium meets commercial-grade specifications and 
does not require further processing to be marketable. Some of this is 
domestic natural uranium that was declared excess to U.S. defense needs 
while other quantities were purchased from Russia to support the U.S.-
Russia HEU Purchase Agreement.
    The excess uranium in the Department's inventory also includes 
depleted uranium hexafluoride that was generated from the government's 
prior uranium enrichment activities. Making this depleted uranium 
hexafluoride useable could require considerable processing, depending 
on the uranium's form, assay level, and degree of contamination. Some 
of this material--especially that with higher assay levels or about 10 
percent of DOE's total inventory of depleted uranium hexafluoride--is 
potentially marketable subject to the market price of uranium.

                      MANAGEMENT OF EXCESS URANIUM

    Next, I will describe how the Department manages its excess uranium 
inventory. DOE's Office of Nuclear Energy (NE), Office of Environmental 
Management (EM), and the National Nuclear Security Administration 
(NNSA) are the organizations within DOE responsible for the 
Department's excess uranium inventories. These offices coordinate the 
identification of transactions that are planned or under consideration, 
or that may be considered by DOE in the future, for disposition of 
DOE's excess uranium consistent with the following principles.
    First, the Department has broad authority under the Atomic Energy 
Act (AEA), as amended, to loan, sell, transfer or otherwise utilize its 
inventories of depleted, natural and enriched uranium. In exercising 
this authority, the Department must act consistently with other 
relevant statutory provisions, including the National Environmental 
Policy Act and section 3112 of the USEC Privatization Act. Section 3112 
imposes limitations on certain specified transactions, including the 
sale and transfer of natural or enriched uranium to certain domestic 
end users of material from the Department's inventory. Under this 
section, the Secretary must determine that a proposed sale or transfer 
of natural or LEU, with the exception of certain sales to select non-
commercial entities or for national security purposes, ``will not have 
an adverse material impact on the domestic uranium mining, conversion, 
or enrichment industry.'' We often refer to this procedure as a 
``Secretarial Determination.''
    Second, the Department should maintain sufficient uranium 
inventories at all times to meet the current and reasonably foreseeable 
needs of Departmental missions.
    Third, the Department undertakes transactions involving non-U.S. 
Government entities in a transparent and competitive manner, unless the 
Secretary of Energy determines in writing that overriding Departmental 
needs dictate otherwise.
    Fourth, the Department believes, as a general guideline, that the 
introduction into the domestic market of uranium from Departmental 
inventories in amounts that do not exceed 10 percent of average annual 
domestic demand (approximately 2,000 metric tons of uranium or 5 
million pounds of U3O8) in any one year period should not have an 
adverse material impact on the domestic uranium industry. In fact, the 
10 percent guideline was one of industry's recommendations regarding 
the Department's management of its excess uranium.
    The disposition of excess uranium is anticipated to take at least 
25 years, consistent with the time envisioned for completing the 
decommissioning and decontamination of the gaseous diffusion plant 
sites where much of the excess uranium inventory is stored and for 
dismantlement of nuclear weapons removed from the national security 
stockpile. The Department anticipates that in any given year it may 
introduce less than that amount into the domestic market and that in 
some years it may introduce more, particularly for national needs.
    While the 10 percent guideline appears to be a reasonable rule of 
thumb, the Department is not exempted from conducting analyses of the 
impacts of specific sales or transfers on the market prior to entering 
into these sales or transfers. It is important to note that the 
Department will assess each and every proposed uranium transaction in 
the context of all current and other planned DOE transactions.
    In July of 2009, the Department announced that it would transfer 
uranium to USEC Inc. in exchange for accelerated cleanup services to be 
performed at the Portsmouth Gaseous Diffusion Plant. The subsequent 
Secretarial Determination placed a limit on this transfer of no more 
than 300 metric tons of uranium per quarter for a total of 1,125 metric 
tons of uranium over the combined calendar years 2009 and 2010. In 
light of this transfer, the Department decided not to conduct 
additional sales or transfers of uranium it had planned to carry out 
during calendar years 2009 and 2010 and limited its transactions to the 
1,125 metric tons for the accelerated cleanup at Portsmouth and the 
amount of NNSA's committed transfers related to the blend down of HEU. 
As a result of coordination among EM, NNSA, and NE, the Department's 
total actual transfers for 2009 were 3.1 percent of average U.S. 
reactor demand in 2009 ramping up to 6.6 percent in 2010, significantly 
less than the 10 percent guideline.
    The Administration is seeking an increase of $184 million in 
Congressional appropriations for FY 2011 in lieu of bartering uranium 
for environmental cleanup at the Portsmouth site. Secretary Chu, in 
testimony at the Senate Energy and Natural Resources Committee's 
hearing on DOE's FY 2011 budget in February, stated that the Department 
favors a budgetary approach over bartering uranium to fund 
environmental cleanup at the Portsmouth site.

                          COMMENTS ON S. 3233

    It should be clear from the preceding comments that the Department 
is committed to managing its excess uranium inventories in a manner 
that: (1) complies with all applicable legal requirements; (2) 
maintains sufficient uranium inventories at all times to meet the 
current and reasonably foreseeable needs of DOE missions; (3) 
undertakes transactions involving non-U.S. Government entities in a 
transparent and competitive manner, unless the Secretary of Energy 
determines in writing that overriding DOE mission needs dictate 
otherwise; and (4) supports achieving our climate and energy goals 
while at the same time supporting Departmental missions and objectives.
    The Department understands that the Surplus Uranium Disposition Act 
of 2010, S.3233, also seeks to facilitate an orderly management and 
disposition of DOE's excess uranium to support a strong domestic 
nuclear industry. We believe certain provisions of the bill, while well 
intentioned, may work against meeting that objective and would 
complicate the Department's ability to meet its own missions. We are 
especially concerned that the ``technical amendment'' at the end of the 
bill would revise the definition of ``Commission'' in section 11f of 
the AEA to mean ``Nuclear Regulatory Commission'' rather than ``Atomic 
Energy Commission.'' This provision would result in a major change, 
which we believe was unintended, in how the government deals with 
nuclear matters and effectively strip DOE of its authorities under the 
AEA and transfer them to the Nuclear Regulatory Commission. This change 
would, in effect, undo the Energy Reorganization Act of 1974 and go 
back to the situation that existed when the Atomic Energy Commission 
was responsible for implementing all of the authority under the AEA.
    Other provisions of the bill are inconsistent with the concept of 
competition in sales or transfers, and potentially conflict with NNSA 
and EM commitments.

                               CONCLUSION

    In considering the management and disposition of the Department's 
excess uranium inventory, a variety of factors need to be assessed, 
including DOE's mission needs, energy security, and the flexibility to 
be responsive to a changing uranium market.
    Thank you for this opportunity to testify before you. I look 
forward to answering your questions and working with the Committee to 
achieve the Administration's goals of utilizing our valuable uranium 
assets in a manner that meets energy security needs, reduces the 
nation's carbon emissions, and supports skilled jobs for American 
workers.

    Senator Cantwell. Thank you, Mr. Johnson. Again, thank you, 
Mr. Chalk, for being here.
    I wanted to start with S. 3460. Mr. Chalk, the 10 Million 
Solar Roofs Act proposes to distribute funds to States to 
incent solar energy systems using the State Energy Program 
allocation formula. I know that the DOE inspector general 
released a report finding that the SEP program and ARRA funds 
were meant to go toward additional solar in Florida and were 
used instead.
    So is it your view that this report raises questions about 
whether that is the most appropriate mechanism for this?
    Mr. Chalk. First of all, let me explain what happened in 
Florida. Florida had approved State energy programs in place 
for the solar rebate program back to 2008 and 2007. It was so 
successful that it was oversubscribed, and the State did not 
have enough money to pay the rest of the rebates.
    When it was offered as an activity in the Recovery Act 
funding, Florida first chose to complete the rebates to the 
people that had already subscribed. The DOE did approve that, 
and measures have been put in place so that does not happen 
again, so we do not use Recovery Act dollars for something that 
has been done in the past and essentially does not create jobs.
    Hopefully, when those people got their rebate, that they 
put that money back into the economy and created jobs somewhere 
along the way. But it was a very successful program, 
oversubscribed.
    I think the State Energy Program is one route. There are 
some issues possibly with the formula, where it is partly based 
on previous funding. We may want to look at that. There are 
other opportunities to use the Energy Efficiency Conservation 
Block Grant formula (EECBG), which is much more based on 
population, overall population and daytime population, I think 
the intent of the overall legislation is to scale this as much 
as possible, get it out into many communities as possible.
    So I would prefer the EECBG mechanism. I would definitely 
prefer SEP or EECBG over competitive solicitation. Competitive 
solicitation is good, but I think it provides unfair advantage 
to the States that are already ahead in solar energy. I think, 
again, the intent of the legislation is to scale this as much 
as possible and to have deployment nationwide, not just in some 
of the leading States.
    Senator Cantwell. One of the barriers, obviously, to the 
deployment of great distributed generation is our process of 
interconnecting to the utility grid. Would you consider 
something where States would be required to streamline their 
interconnection procedures for small distributed solar before 
they could access the funds?
    Mr. Chalk. Yes. In fact, I think we ought to have standards 
so there are ways of doing solar right in terms of working with 
utilities--for instance, net metering. You mentioned 
interconnection standards, but net metering is something else 
that should be a condition of the funding, any other best 
practices that come into play. Obviously, we want folks to 
leverage this money as much as possible.
    Senator Cantwell. OK. Changing to S. 3396, on the Supply 
Star program, I am aware that the Department of Energy made 
some good progress in tracking some of the supply chain 
efficiency issues. Can you give us an idea how that we might 
grow this for the future, how this bill might complement those 
efforts that DOE has already been undertaking?
    Mr. Chalk. Right now, we have Save Energy Now program, 
where we have folks volunteer to sign up for 2.5 percent 
improvement or reduction, if you will, in energy intensity per 
year. So over 10 years, that could be as much as 25 percent and 
really help industry on their bottom line. We help them do 
energy audits. We help them baseline their energy use.
    As Senator Carper said, if you can't measure it, then you 
really don't know how much you are using. So we spend a lot of 
time working with the American standards associations and, in 
fact, international standards associations so we know we are 
measuring the energy for various processes in the right 
fashion.
    So I think we would use our existing programs to complement 
this effort, which I think is more expansive. Again, it is more 
cradle to grave, if you will, looking at the whole process, 
beginning with extraction all the way to recycling, where our 
current efforts are mainly dependent, we are looking at process 
efficiencies in the plant itself, not looking at where the 
materials are coming from or the packaging thereafter or how 
consumers use the product.
    So this legislation we support because it is more expansive 
of our current programs, but we could use a lot of the tools 
developed in our current program to help industry decrease 
their energy use.
    Senator Cantwell. Thank you.
    Senator Sanders, did you have questions?
    Senator Sanders. Thank you, Madam Chair.
    Mr. Chalk, my impression is if we look at California, if 
you look at New Jersey, if you look at Florida, I could tell 
you even beginning to look at Vermont, there is a lot of pent-
up demand for solar, that given the opportunity, people and 
building owners want to move in that direction. Would you agree 
with that?
    Mr. Chalk. Absolutely. I think those demand-side programs--
and this is a demand-side program--have definitely worked. We 
have the excess supply capacity to produce these solar cells 
and modules so these types of programs will really help 
multiply the number of installations throughout the U.S.
    Senator Sanders. Right. As I understand it, Secretary Chu 
has said that he wants to see the cost of solar come down 
significantly within the next 10 years. Would I be right in 
assuming that if we create all kinds of demand all over this 
country that you are going to see efficiencies of scale and 
installation in terms of driving down prices for solar? Is that 
a fair statement, do you think?
    Mr. Chalk. It is. I think with these subsidies, if you 
will, rebates, we can be competitive in a lot of markets, at 
least on the retail side. If you also have a robust R&D 
program, which we do--we have an investment of over $200 
million in solar--we will continue to do the R&D to bring the 
cost curve so that hopefully in the near future we do not need 
these subsidies.
    Senator Sanders. Right. As you know, because we have worked 
with DOE on technical feedback for this legislation, our bill 
authorizes $250 million for the first year as a down payment of 
sorts toward fully funding this program over 10 years. In our 
text, we provide this funding to the States to complement 
existing State and center programs.
    In your judgment, are there other approaches we can 
consider in terms of getting maximum leverage for the $250 
million while maintaining a flexible approach that works with 
States and localities to deploy more solar power?
    Mr. Chalk. Yes, there are. As I mentioned, one route is the 
State Energy Program. There is another formula program, the 
block grants. But the real key is leveraging this can be 
combined with revolving funds and other types of financial 
instruments where we can bring in private sector money and make 
the Government money go even further.
    Senator Sanders. OK. Give us some case histories, if you 
would, about what approaches have been most successful up to 
now at the State level or in other Nations to help consumers 
purchase and install solar.
    Mr. Chalk. The actual cash rebates has probably been the 
most successful. When you look at renewable energy under the 
Recovery Act programs known as 1603, you see that even 
developers who are putting in wind turbines or wind farms, 
solar farms are preferring the cash in lieu of the tax credit 
in that program. So I think the cash rebate has been the most 
effective.
    The key, though, and I think we will get into this when we 
talk about the Federal energy use, is renewable energy in 
general, higher first cost, but of course, the fuel is free. So 
you can amortize that first cost over many years through 
different financial mechanisms, and you can do that on solar 
through purchase power agreements--a lot of Government 
installations have done that, a lot of businesses have done 
that--then it can be very affordable.
    Senator Sanders. The price of photovoltaics are going way 
down. I think there is an argument right now that in terms of 
concentrated solar, large utility-size solar projects, in terms 
of producing energy, they are competitive or cheaper, I should 
say, than nuclear right now. In terms of photovoltaics, when do 
you see them becoming competitive with other, more mature forms 
of energy?
    Mr. Chalk. I believe that we still need about a factor of 2 
for photovoltaics in order to start being competitive with more 
conventional means. Right now, with subsidy programs, we can 
compete with retail rates, but not generation of power at the 
source. It is still going to take another factor of 2, possibly 
3, to come down.
    Senator Sanders. But we are making some progress in that 
area?
    Mr. Chalk. We are making tremendous progress. In the last 
decade, I would say that we cut the cost essentially in half.
    Senator Sanders. OK.
    OK, Madam Chair, thank you very much.
    Thank you, Mr. Chalk.
    Senator Cantwell. Thank you, Senator Sanders.
    Senator Barrasso.
    Senator Barrasso. Thank you, Madam Chairman.
    Mr. Johnson, if I could, I want to talk a little bit about 
the proposed uranium transfers. You know, in February, the 
Secretary testified during the Fiscal Year 2011 budget hearing 
that the department is not going to move forward with the 
proposed uranium transfers in 1911 and 1912 and 1913, and that 
was good news.
    Then I got a letter from the Secretary that raised some 
questions. That was in April 2010. I can get you the letter. He 
said a separate secretarial determination would be required 
later regarding possible transfers of uranium to fund 
decontamination and decommissioning activities at the 
Portsmouth plant after Calendar Year 2010, and I know you are 
familiar with the situation there.
    That statement to me appeared to leave the door open a 
little bit to moving forward with the previous plans. Are you 
still considering the proposed uranium transfers in 1911 and 
1912 and 1913 relating to that, do you know?
    Mr. Johnson. No, sir. I do not believe we are. I believe, 
as Secretary Chu testified on the department's appropriations 
request, that the department is seeking about $180 million in 
appropriation for funding the cleanup at the Portsmouth plant. 
He would prefer the direct appropriation as opposed to any type 
of material barter.
    Senator Barrasso. I think I would agree completely with 
preferring that approach. If that appropriation doesn't come 
through, though, would you fall back on additional uranium 
sales?
    Mr. Johnson. I believe we will just have to look at it when 
that time arises. I cannot speak to it one way or the other.
    Senator Barrasso. They wanted to go with the ramp-up, the 
original plan for the ramp-up, the Department of Energy's 
excess uranium management plan included that for future sales 
and transfers gradually increasing the amount of uranium put 
into the market. Made sense to me and 2013 reaches I think 5 
million pounds, which is 10 percent of the market.
    The gradual ramp-up was included to ensure that the 
department's sales didn't really have a negative impact then on 
the American uranium industry or on the cost, the value of that 
Government-owned uranium. But looking at that 4-year Portsmouth 
plan, I just have concerns that that initially was going to 
ignore the ramp-up as well, now that we have drawn back from 
those 3 years.
    So I just want to make sure that the department recognizes 
that that ramp-up idea shouldn't be discarded with this sort of 
an increase.
    Mr. Johnson. Yes, sir. The department is very aware of the 
sensitivity of the impact that we could have in the commercial 
marketplace. The guideline limit of 10 percent that the 
department has been using as its benchmark was actually a 
recommendation from the industry themselves that the department 
has embraced and is using.
    I believe in 2009, the transfers, including the barter for 
the Portsmouth material, worked out--that, NNSA worked out to 
be about 3.1 percent, and I believe those transfers here in 
calendar year 2010 amount to about 6.6 percent. So we are 
working to maintain our impact at below that 10 percent 
guideline.
    Senator Barrasso. Good. Right now, the United States 
currently imports about 90 percent of the uranium that we use 
in American nuclear power plants. So we do have vast American 
uranium reserves. We continue to be somewhat dependent on 
foreign countries for the feedstock for our nuclear energy.
    So my question is does the department consider domestic 
uranium production important for America's energy security?
    Mr. Johnson. Yes, sir. We do.
    Senator Barrasso. So it would make sense then that the 
department wouldn't want to force too much uranium on the 
market, which would perhaps push the envelope to the point that 
it impacts American jobs and American energy?
    Mr. Johnson. Yes, sir.
    Senator Barrasso. OK. Thank you.
    Thank you, Madam Chairman.
    Senator Cantwell. Thank you, Senator Barrasso.
    Can I go back to S. 3251, which is Senator Carper's bill, 
and I understand that power purchase agreements are used, the 
Department of Defense is allowed to enter into long-term 
contracts, up to 30 years, while other agencies are just 10. 
So, Mr. Chalk, do you know how many power purchase agreements 
are in place within the Federal Government, and does the 
administration support extending the length of time beyond 10 
years?
    Mr. Chalk. Yes. Right now, for renewable energy, there are 
about eight purchase power agreements in place, four of those 
eight are out at the National Renewable Energy Laboratory. A 
few others are in the Defense Department, like the Nellis Air 
Force Base.
    We do support the bill, and again, I want to make sure the 
subcommittee understands this is a good tool. Again, the first 
cost is really what we are trying to overcome with renewable 
energy. Since the fuel is free, it becomes very predictable to 
say with relatively low risk what the cost of electricity is 
going to be over a 20- or a 30-year period.
    Now, having said that, on mature technologies, wind 
turbines, for instance, we feel very comfortable. While on 
other technologies, where we are still bringing down the cost 
curve, we would not want the Federal Government to enter into a 
long-term agreement and then have the solar R&D be successful 
and pay higher prices over time, paying higher electricity 
rates than what the market might bear. That would be one 
concern we would like to address with the subcommittee, as well 
as between DOE and the subcommittee and the Office of 
Management and Budget.
    The other issue with the PPAs, of course, is how they are 
scored by the Congressional Budget Office. Even though it may 
be over a 20- or 30-year period, it is all scored in year one. 
Of course, that can be a lot--in the billions of dollars. So 
another issue that we would like to work with the subcommittee 
on is how the PPAs are actually scored.
    We do think it is a better tool than current energy saving 
performance contracts, which you can enter in for renewable 
energy. We believe that there is much lower finance costs 
associated with PPA's. So, essentially, it is a much lower risk 
instrument than some of the tools that are available to us now 
for renewable energy.
    Senator Cantwell. I wonder what BPA says about purchasing 
contracts? I mean, being an entity, I would be curious to see. 
So you are basically saying there are some issues here with the 
length of time. You would generally like to increase it beyond 
10 years, but there are issues here? Is that a fair 
characterization?
    Mr. Chalk. Beyond 10 years, but there are a few issues that 
we would like to work with the subcommittee on so that the 
deals we enter into, we establish pretty hard, rigorous 
criteria so that we are purchasing electricity at the market 
rate or lower through these long-term instruments.
    Senator Cantwell. OK. If I could go to the heavy duty 
vehicle research legislation? Now I know we have a couple of 
different programs, or Senator Stabenow has introduced 2843, 
which would provide a new structure for medium and heavy duty 
trucks. The department, as I mentioned before, I know conducts 
research with regards to heavy duty truck fuel and efficiency.
    So can you give us a sense of how the current authority and 
this bill and other proposals would fit together?
    Mr. Chalk. We start with Senator Collins's bill, which is 
more narrowly focused than Senator Stabenow's. But Senator 
Collins's bill is focused on an area of our portfolio that is a 
little underwhelming. We do not have a lot of investment in 
Class 4 through 7 trucks. In fact, the R&D investment is only 
about $1 million a year.
    Of course, a lot of the investments we make on hybrid 
technology, whether they be on light duty or for the Class 8 
trucks, is still going to apply in these middle classes, if you 
will. But we support that bill. We support the program that is 
in that bill.
    One adjustment that could be made is the first phase, the 
R&D phase be 2 years instead of 1 year, and that will allow 
more designs to be looked at. The ultimate deliverable of that 
first phase is a heavy duty hybrid truck that will allow for a 
little better shakeout of the design and operations and the 
integration of all the hybrid components. You could almost 
flip-flop the timeframe for one and 2, or just make phase one 2 
years. So we support that very much.
    In fact, this class of trucks is probably going to benefit 
from hybridization more than any other class of trucks, 
especially the heavy class, because of the drive cycle, a lot 
of start and stopping through the urban drive cycles. You can 
picture delivery vans or box-type trucks, things like that.
    It is also a little easier on the infrastructure. These 
trucks basically go back to the same place every night, and 
they can refuel through electric charging stations and things 
like that. So we support this bill very much. It could improve 
fuel economy by a factor of 2.
    We also support the broader bill, Senator Stabenow, because 
that would authorize essentially our whole vehicles program. 
So, actually, the first bill is almost a subset of the broader 
bill, and we support both of those bills very much.
    Senator Cantwell. Do you think that there is enough 
potential applications for the minimum number of grants here?
    Mr. Chalk. We think there are enough companies that would 
be interested to meet the minimum requirements, and there are 
enough different types of applications. There are buses, 
delivery vans, box trucks, and refuse trucks. So we would have 
enough platforms that we could really come up with some optimal 
designs for each situation under this program.
    Senator Cantwell. OK. I know we didn't hear a statement 
from Senator Gillibrand. But if we could talk about S. 2900, 
does the Office of Energy Efficiency and Renewable Energy 
conduct research on these turbines, or is it primarily within 
the Office of Fossil Energy?
    Mr. Chalk. Over the last 20 years, both offices have 
conducted R&D. In the Energy Efficiency and Renewable Energy, 
our gas turbine investments have decreased. It is on the order 
of $5 million today, but mostly in support of combined heat and 
power applications. We actually made a lot of awards under the 
Recovery Act in combined heat and power with gas turbines.
    The Office of Fossil Energy is mainly focused on utility-
scale, hundreds of megawatt type of turbines. So that has been 
their role. They have been doing the larger turbines. We have 
been doing the smaller turbines. We do support this bill. Gas 
turbines are a very mature technology. So what is in the bill 
is almost a step increase in efficiency.
    So while there are lots of investment in gas turbine R&D by 
industry, we think there is a Government role here to improve 
the efficiency from about 50 percent combined cycle to 65 
percent. We would like to work with the subcommittee on this 
balance of what is funded by the Government, the higher risk 
enabling R&D, versus what industry can do by itself because 
this is a mature technology. Roughly, 7 gigawatts of gas 
turbines went in last year. If you look at capacity, gas 
turbine capacity is even greater than coal. It is not for 
generation, but there is lots of capacity.
    Gas turbines are very, very cost effective by themselves. 
If you look at a single combustion regime, you are talking on 
the order of $700 per kilowatt. The combined cycle is only 
$1,000 per kilowatt. So these are the most cost-effective power 
generation units that essentially you can buy, and they are 
very, very modular.
    While we support the intent of the bill, we want to 
carefully look at what the Government investment should be, 
which is the higher risk R&D.
    Senator Cantwell. This uses, I believe, the Energy Policy 
Act of 2005, that 999(e) section. So it limits the 
participation to U.S. companies. Is that--does that cause any 
potential----
    Mr. Chalk. We would concur with that. We could also work 
with the committee offline on if it is not a U.S.-owned 
company, as long as they have operations and research in the 
United States, we would concur with that because taxpayer 
dollars would stay within the United States. But I can get back 
to the committee on a formal position on that issue.
    [The information referred to follows:]

    While DOE has no issue with this language as written, the 
Department would like to respond to a question raised by Sen. Maria 
Cantwell (D-WA) related to this sub-section. The question concerned 
whether inclusion of the limitation on participation to the U.S. 
companies found in section 999E of the EPAct of 2005 would cause any 
problem for the Department.
    In response, the Department wishes to first make a clarification. 
According to our understanding, the language of 999E allows certain 
companies that are organized under U.S. law, but that have a foreign 
parent company, to be eligible as long as the laws of the country where 
the parent company is based meet certain criteria. This domestic situs 
criteria is intended to ensure compliance with certain World Trade 
Organization (WTO) obligations.
    The Department has no problem with keeping EPAct 999E in the bill, 
nor does it see a problem with application of the domestic situs 
criteria to S. 2900. The companies most actively engaged in the 
research and development called for in the bill should fall safely 
within the eligibility criteria as set forth here.

    Senator Cantwell. I think most of my colleagues want to see 
the investment here. So it is a question of just understanding 
how that 2005 act section would apply.
    On the uranium legislation that my colleague Senator 
Barrasso has recommended, does the department perform an 
economic analysis before selling and bartering, transforming 
uranium from stockpiles? Do they do that now?
    Mr. Johnson. Yes, ma'am, we do. We actually contract with 
an industry organization that conducts these analyses on behalf 
of the department, and then those analyses are then reviewed by 
the department, concurred and used as the basis for making the 
decision.
    Senator Cantwell. So is that information, is that analysis 
made public?
    Mr. Johnson. Yes, it is.
    Senator Cantwell. So, does the department have existing 
authority to sell and barter and transfer? Do you have that 
now?
    Mr. Johnson. Yes, ma'am. The department does.
    Senator Cantwell. OK. But this appears to fix it in 
statute. Is that----
    Mr. Johnson. Madam Chairman, I am an engineer, not a 
lawyer. But I have it from our counsel who says that----
    Senator Cantwell. We need more engineers at DOE, not more 
lawyers. So that is----
    [Laughter.]
    Senator Cantwell. That is the good news.
    Mr. Johnson [continuing]. That the department has the 
authority and that one of the department's concerns on this 
legislation is the implication that it--by the language in the 
bill that we don't have that authority, and that authority 
already exists in existing legislation.
    Senator Cantwell. So you don't see anything here that 
provides more flexibility?
    Mr. Johnson. No, ma'am.
    Senator Cantwell. OK. But why, if you have that authority, 
would you be worried about specifying it?
    Mr. Johnson. Again----
    Senator Cantwell. You are not the lawyer, OK. All right, 
well, maybe we will get an answer from somebody over there on 
that point.
    Mr. Johnson. I can get an answer back for you.
    [The information referred to follows:]

    The legislation, in a section entitled ``Authority of Secretary,'' 
states that ``as soon as practicable after the date of enactment of 
this section, the Secretary may barter. . .uranium in accordance with 
this section.'' The Department has existing authority to barter 
pursuant to the Atomic Energy Act. The Department would not be in favor 
of any language that implies that this authority does not currently 
exist. Likewise, the Department, as discussed at the hearing, does not 
believe that the constraints that this legislation puts on the 
Department's barter authority are necessary or advisable.

    Senator Cantwell. OK. I think that is all the questions 
that I have, and I know I am sure we will keep the record open 
on these various pieces of legislation, or people who want to 
ask questions to the department.
    We appreciate you being here and being so forthcoming on 
the details of where the agency supports these various bills 
and how they coordinate with various projects already underway 
by DOE. I think that is very important.
    There is so much work for us to continue to do. So we are 
glad to have our colleagues working with DOE on these programs 
and looking at getting these bills passed.
    So the hearing is adjourned.
    Mr. Chalk. Thank you, Madam Chairman.
    [Whereupon, at 3:28 p.m., the hearing was adjourned.]


                               APPENDIXES

                              ----------                              


                               Appendix I

                   Responses to Additional Questions

                              ----------                              

    Responses of Steven G. Chalk to Questions From Senator Bingaman

                                S. 3251

    Question 1. Mr. Chalk, Section 3 of 5.3251 authorizes a $500 
million revolving fund to finance energy efficiency or renewable energy 
projects at federal facilities. Will the federal government continue to 
use Energy Savings Performance Contracts if the revolving loan program 
is established?
    Answer. Yes, Energy Savings Performance Contracts (ESPCs) and other 
financing tools such as Utility Energy Services contracts, would still 
be used because federal agencies need to invest significantly more than 
$500 million dollars annually to meet their various energy efficiency, 
renewable energy, and related sustainability goals. The revolving fund 
will provide an important additional tool to finance projects that do 
not fit well under current mechanisms, such as medium size projects or 
those which include major renewable power generation capacities.
    Question 2. Who will administer the revolving loan program and how 
will the administrator choose the energy efficiency and renewable 
energy projects to receive loans?
    Answer. The revolving loan fund would likely be created within an 
existing government agency in cooperation with the Department of the 
Treasury. Projects would be selected on a competitive basis based on 
return on investment, contribution to sustainability goals, and social 
benefit.
    Responses of Steven G. Chalk to Questions From Senator Murkowski
    Question 1. It appears that S.3251 is largely duplicative of 
ongoing requirements to improve energy efficiency and the use of 
renewable energy by federal agencies that are set forth in the Energy 
Policy Act of 2005, the Energy Independence Act of 2007, various 
Executive Orders, and S. 1462, the American Clean Energy Leadership Act 
of 2009, as reported by this Committee. Please describe the 
Administration's current energy efficiency/renewable energy efforts for 
Federal agencies. Does the Administration require additional authority 
in those areas?
    Answer. The Administration supports the intent of S. 3251 and will 
work to ensure that it does not lead to duplications or redundancies of 
any ongoing efforts.
    Currently DOE's Office of Energy Efficiency and Renewable Energy, 
with the support of its Federal Energy Management Program, undertakes a 
wide range of activities on behalf of the Federal Government including 
technical assistance to support energy efficiency and renewable energy 
projects; assistance in executing alternative funding through Energy 
Saving Performance Contracts or Utility Energy Service Contracts 
projects; training, testing and deployment of new and emerging 
technologies; guidance and assistance in meeting statutory facility 
energy management, auditing, benchmarking, and reporting requirements; 
coordination of knowledge exchange; chairmanship of interagency working 
groups; assistance in fleet management activities; and technical 
support for greenhouse gas accounting.
    Question 2. Currently, energy efficiency and renewable energy 
projects in federal buildings are funded through such methods as 
federal appropriations, Energy Savings Performance Contracts, and 
Utility Savings Contracts. Does the Administration require additional 
funding sources for these activities? What is the Department's position 
on establishing a revolving fund to finance these energy efficiency/
renewable energy activities, as S. 3251 seeks to do?
    Answer. The Department supports the creation of a revolving fund to 
support sustainability projects, since funds in addition to ESPCs and 
UESCs will be required to meet Federal sustainability goals, 
particularly in areas not well addressed by ESPCs. Currently, ESPCs and 
most UESCs are financed through third party private financiers obtained 
by the energy service contractors of each project.
    Question 3. Please describe the process for creating a revolving 
loan fund based on best practices and subject to appropriate interest 
rates for Federal facility energy efficiency/renewable energy projects. 
How would OMB address this type of loan fund, if authorized?
    Answer. The revolving loan fund would likely be created within an 
existing government agency and funded by the Treasury up front, 
incrementally, or periodically as projects are selected. The fund would 
charge an interest rate on projects that accurately reflects the true 
borrowing cost to the government plus the cost associated with 
administering the fund. This would likely result in agencies being able 
to finance projects for 25 to 50 basis points above Treasury rates 
compared to the current private sector rates which average 270 basis 
points above Treasury for similar projects. Assuming $500 million of 
projects were financed at current private sector interest rates 
(270bps), the government would pay roughly $1.03 billion over the life 
of the projects. If financed using the revolving loan fund at 37.5bps 
above Treasury rates, the government would pay $742 million, for a 
total savings of $287 million. These estimated savings are only for the 
initial allocation of the revolving loan funds, additional savings will 
occur with each subsequent reallocation from the loan fund.
    Several states have successfully created revolving loan funds, and 
would serve as guides for the creation of this Federal fund. The Office 
of Management and Budget would address this type of loan fund according 
to existing procedures for revolving loan funds.
    Question 4. Please describe how DOE has monitored, and tracked 
energy use within the Government. What other agencies are involved in 
developing standards, or data regarding energy use in the Federal 
Government?
    Answer. The Department of Energy has collected from Federal 
agencies energy use, costs, and facility square footage data going back 
to 1975. Currently, these data are reported under three end-use 
sectors:

          1) Goal-Subject Buildings
          2) Excluded Facilities and Processes
          3) Vehicles and Equipment (including covered fleet 
        consumption and tactical mobility fuels.)

    The Annual Reports compiling this data and describing agency 
progress toward energy goals can be accessed through: http://
wwwl.eere.energy.goy/temp/regulations/ facility_reports.html.
    The database of Federal energy consumption maintained by the 
Federal Energy Management Program (FEMP) within DOE's Office of Energy 
Efficiency and Renewable Energy contains annual data back to Fiscal 
Year 1975. Annual aggregated data is maintained for approximately 25 
major Federal agencies. This database is currently being migrated from 
its legacy system to a Web-based platform and is being enhanced to 
address additional reporting requirements and functionality to support 
calculation'of greenhouse gas emissions reporting required under 
Executive Order 13514.

                       FACILITY ENERGY REPORTING

    Federal agencies that own or control buildings are required to 
report the energy consumption in these buildings to FEMP by January 1 
after the end of each Fiscal Year. The General Services Administration 
(GSA) reports the energy consumption of buildings it owns and operates, 
including usage by other Federal agency occupants. Agencies which have 
been delegated authority by GSA to enter into contracts for energy and 
utility services are responsible for reporting their energy consumption 
and square footage. Not included in this data set is energy used in 
leased buildings where the energy costs are a part of the rent and the 
Federal agency has no control over the building's energy management. 
The latest reporting guidance and data template for agencies to use in 
reporting energy use to FEMP can be accessed through: http://
wwwl.eere.energy.gov/femp/regulations/ facility_requirements.html.
    These reporting requirements are coordinated with the major 
agencies through the Interagency Energy Management Task Force. The 
agency members of the Task Force are listed at: http://
wwwl.eere.energy.gov/femp/about/ iatf_members.html

                         VEHICLES AND EQUIPMENT

    Federal agencies operating motor vehicle fleets are required to 
report the fuel consumption of their fleet vehicles as one portion of 
their annual submission through the Federal Automotive Statistical Tool 
(FAST) managed by DOE and GSA. These agency fleet submissions are 
required to be complete on or before December 15 for the prior fiscal 
year. Reporting guidance to agencies specific to fleet vehicles and 
FAST can be accessed through: https://fastweb.inel.gov/.
    Fleet vehicle Annual Reports can be accessed through: http://
wwwl.eere.energy.gov/ femp/regulations/fleet_reporting.html#ar.
    Question 5. Please describe all your interagency agreements with 
other federal agencies as it relates to energy use.
    Answer. The Department of Energy (DOE), Golden Field Office (GFO), 
in support of the Federal Energy Management Program (FEMP), processes 
several Interagency Agreements (IAAs) each year with multiple federal 
agencies. GFO processes both ``funds-in'' IAAs, where DOE receives 
funds from other agencies and ``funds-out'' IAAs, where DOE sends funds 
to other agencies.
    Funds-in IAAs (approximately $1.5 million for project facilitation 
support and between $400,000-$1.5 million annually for SAVEnergy and 
Technical Assistance):

   Authorized by the Economy Act or the Skaggs amendment to the 
        Omnibus Consolidated Appropriations Act of 1998: IAAs 
        authorized by the Skaggs amendment are for Project Facilitation 
        (PF) support for Energy Savings Performance Contracts (ESPCs) 
        which are designed to assist agencies in achieving greater 
        energy efficiency, water conservation or use of renewable 
        energy by means of privately financed mechanisms.
   IAAs authorized by the Economy Act are for SAVEnergy and 
        FEMP Technical Assistance. DOE receives these IAAs to pay for 
        the use of DOE's existing contract vehicles and/or readily 
        available expertise that some other agencies do not posses. 
        Examples include energy audits of federal facilities to 
        identify energy conservation measures, feasibility studies on 
        efficient building design, or use of wind or photovoltaic 
        technology at Federal sites.

    Funds-Out IAAs ($0 for the last two years and up to $500,000 in 
prior years)

   Authorized by the Economy Act
   DOE entered into a 5-year Funds-Out Interagency Agreement 
        with the National Institute of Standards and Technology (NIST) 
        on March 14, 2007 (DEAI01-07EE11247). As called for by 
        legislation (Energy Policy and Conservation Act, P.L.94-163, 
        195, 92 Stat 3206, 42 USC 8252 et seq), NIST provides technical 
        assistance to DOE in the development and implementation of 
        life-cycle costing methods and procedures for evaluating 
        potential energy and water conservation and renewable energy 
        investments in existing and new federally owned and leased 
        buildings. DOE does not possess life-cycle costing expertise 
        and it is readily available at NIST in its Building and Fire 
        Research Laboratory's Office of Applied Economics. Under the 
        IAA, $830,000 has been obligated by DOE to date as follows:

     FY 07: $55,000
     FY08: $200,000
     FY09: $75,000
     FY10: $500,000

   IAAs sending funds to other agencies to utilize existing 
        contract vehicles and/or expertise readily available that DOE 
        does not possess. Examples include assisting agencies with the 
        costs of installing energy efficient lighting by a contractor 
        already selected by the other agency.

    The Department of Energy has interagency agreements with Architect 
of the Capital, Bureau of Land Management, Central Intelligence Agency, 
Department of Homeland Security, Department of Homeland Security / U.S. 
Coast Guard, Department of Defense, DOD Army National Guard, DOD Navy, 
DOD U.S. Air Force, DOD U.S. Army, Department of the Interior U.S 
Geological Survey, Department of Justice Bureau of Prisons, Department 
of State, Environmental Protection Agency, National Institutes of 
Health, Federal Aviation Administration, Federal Bureau of 
Investigation, Food and Drug Administration, General Services 
Administration, Department of Housing and Development, National 
Archives and Records Administration, National Aeronautics and Space 
Administration, National Institute of Standards and Technology, 
National Park Services, Smithsonian Institute, U.S. Department of 
Agriculture Beltsville Agricultural Research Center, United States 
Forest Service, and Veterans Affairs.
    Question 6. Within ARRA, how much money has been spent on 
developing data to better understand how buildings use energy? Has the 
Department developed any models to better understand energy use with 
the building sector? If so, please describe the funding, and the types 
of data being developed?
    Answer. To better understand how residential buildings use energy, 
$8 million in Recovery Act funding was directed to the Energy 
Information Administration's Residential Energy Consumption Survey 
(RECS), which is designed to collect energy characteristics, usage, and 
expenditures in U.S. households. The Recovery Act funding will allow 
for a more detailed geographic representation of the RECS data, 
including detailed energy use data for up to 15 States (currently only 
4 States are represented). The funding will also increase the level of 
precision of all data for all geographic regions of the U.S.

                                S. 2900

    Question 1. In your written testimony, the Department seemed to 
oppose this legislation. However, there seems to be a disconnect 
between your written and oral testimony because the Department appeared 
to support the bill at the subcommittee hearing. Please clarify the 
Administration's position on this legislative proposal?
    Answer. The Department believes that industry has sufficient 
economic incentive to invest in research, development and demonstration 
to increase the efficiency of gas turbines. To the extent that the 
private sector under invests in basic research, DOE has sufficient 
authority and existing programs to improve high temperature materials 
applicable to a range of energy technologies.
    Question 2. General Electric estimates that just a one percentage 
point improvement in efficiency for its gas turbines would result in 
greenhouse gas emissions reductions of 4.4 million tons per year while 
providing savings of more than $1 billion in fuel costs. Does the 
Administration agree with GE's assessment?
    Answer. Without seeing GE's methodology, it is difficult to comment 
on their specific estimates. As illustrated by GE's estimate, gas 
turbine manufacturers should have a strong incentive to improve the 
efficiency of their gas turbine products. The Department is committed 
to continuing basic research of high temperature materials which will 
help industry develop more efficient energy technologies. The private 
sector has sufficient economic incentive to invest in the development 
and demonstration of efficient gas turbines. Therefore, government 
funding for the later stages of efficient natural gas turbine 
development and demonstration would inefficiently subsidize activities 
likely to be conducted by the private sector absent any government 
funding.
    Question 3. Does the Administration agree with the targets set 
forth in S.2900--a Phase I portion to achieve at least 62 percent 
combined cycle efficiency or 47 percent simple cycle efficiency; with 
Phase II designed to achieve at least 65 percent combined cycle 
efficiency or 50 percent simple cycle efficiency?
    Answer. These goals are aggressive but achievable. The Department 
is committed to continuing basic research of high temperature materials 
which will help industry develop more efficient energy technologies. 
The private sector has sufficient economic incentive to invest in the 
development and demonstration of efficient gas turbines. Therefore, 
government funding for the later stages of efficient natural gas 
turbine development and demonstration of specific efficiency targets as 
set forth in S.2900 would inefficiently subsidize activities likely to 
be conducted by the private sector absent any government funding.
    Question 4. Does the Administration have existing authority to 
undertake this type of research and development? Is the private sector 
already undertaking this type of research?
    Answer. To the extent that the private sector under invests in 
basic research, DOE has sufficient authority and existing programs to 
improve high temperature materials applicable to a range of energy 
technologies.
    The bill is similar to an existing successful program within DOE. 
The Advanced Turbine Systems Program, a research, development and 
demonstration collaborative between the Department's Offices of Energy 
Efficiency and Renewable Energy and Fossil Energy, successfully 
developed and deployed advanced turbine material and coating leading to 
today's turbine efficiencies.
    The legislation outlines activities ITP already performs. For 
example, through its Industries of the Future (crosscutting) 
investments, ITP aids the development of advanced manufacturing 
processes for the expanded use of lightweight materials such as 
titanium. Those breakthroughs help to drive production cost down and 
market impact up. In other efforts, ITP promoted advanced alloys of 
steel to support many of the new clean energy products being developed 
today. Nanocoating technologies are still other innovations developed 
with the assistance of ITP that now extend the life of tooling systems 
and provide wear resistance to reduce the cost of manufacture and 
extend the useful life of products. All of these efforts support the 
overarching objective of reducing the energy intensity of Industry to 
help advance the Administration's energy security and environmental 
performance goals.
    The Department is committed to continuing basic research of high 
temperature materials which will help industry develop more efficient 
energy technologies. The private sector has sufficient economic 
incentive to invest in the development and demonstration of efficient 
gas turbines. Therefore, government funding for the later stages of 
efficient natural gas turbine development and demonstration would 
inefficiently subsidize activities likely to be conducted by the 
private sector absent any government funding.
    Question 5. What economic incentives exist for the industry to 
increase R&D for gas turbine efficiency to reach the levels proposed in 
this bill?
    Answer. In a previous question, reference was made to an estimate 
by General Electric that ``just a one percentage point improvement in 
efficiency for its gas turbines would result in greenhouse gas 
emissions reductions of 4.4 million tons per year while providing 
savings of more than $1 billion in fuel costs.'' As illustrated by that 
estimate, gas turbine manufacturers should have a strong incentive to 
improve the efficiency of their gas turbine products. The major 
manufacturers sell a broad range of gas turbine systems to meet the 
needs of different customers, duty cycles and service requirements. One 
of the most important gas turbine markets is for power generation, 
which includes baseloaded generators, cycling units that operate 10% to 
50% of the time and peaking units that may operate only 100 hours per 
year.
    Fuel costs dominate the total cost of operations for the baseloaded 
generators and manufacturers promote the efficiency of their most 
efficient combined cycle units. Even simple cycle turbines are marketed 
for their high efficiency; GE's LMS 100 can achieve 45% efficiency 
(lower heating value).
    The market for simple cycle gas turbines that operate as peaking 
units may not be directly affected by the proposed legislation. Low 
capital cost and rapid startup are more important than fuel costs 
(efficiency) for this market segment, although it should be noted that 
these units account for only a small portion of generation.
    Question 6. In your testimony, you make the point that S.2900 
outlines activities that the Department already performs. We are 
unaware that the Department is funding R&D on gas turbine efficiency. 
Titanium is not used in heavy duty gas turbines and nanocoating has 
little to do with turbine efficiency. Please explain.
    Answer. Work in the areas of titanium and nanocoating were intended 
as examples of the Department's cutting-edge research activities that 
parallel those described in Section 2(b)(1)(A) of the bill (i.e., 
``high temperature materials, including superalloys, coatings, and 
ceramics;), and that support the goal of reducing the energy intensity 
of industry similar to, and consistent with, the objectives stated in 
the legislation. The National Energy Technology Laboratory (NETL) 
recently won an award for its work on a coating that can extend the 
lifetime of metal components, thus enabling greater efficiency for gas 
turbines. Other work related to titanium and nanocoating being 
conducted by the Department could have applicability to gas turbine 
efficiency down the road.

                                S. 3396

    Question 1. What is being done already to comply with provisions in 
the Energy Independence and Security Act of 2007 and the Energy Policy 
Act of 2005 regarding energy savings in government and federal 
programs?
    Answer. Extensive efforts are underway across all Federal agencies 
to comply with the provisions of EPAct and EISA. DOE's Office of Energy 
Efficiency and Renewable Energy, with the support of its Federal Energy 
Management Program (FEMP), which serves as the Federal Government's 
lead coordinator of energy management and provides technical assistance 
to agencies as they work to meet these provisions.
    A summary of agency performance in key indicators based on 
preliminary data from the Fiscal Year 2009 Annual Report on Federal 
Government Energy Management and Conservation Programs are as follows:

          Energy Intensity.--Federal agencies reported that buildings 
        subject to energy reduction goals collectively decreased energy 
        use per gross square foot by 13.1 percent in FY 2009 relative 
        to FY 2003.
          Renewable Power.--Federal agencies reported purchasing or 
        producing 2,330.6 Gigawatt-hours of renewable electric energy 
        in FY 2009, equivalent to 4.2 percent of the Federal 
        Government's FY 2008 electricity use.
          Petroleum Reduction.--Federal agencies reduced petroleum-
        based fuels in buildings by 76.8 percent in FY 2009 compared to 
        FY 1985, from 118.8 trillion Btu to 27.6 trillion Btu. Compared 
        to FY 2003, use of these fuels fell by 36.1 percent.
          Metering.--Overall, agencies identified 107,250 buildings for 
        which separate electricity meters are appropriate. Of these 
        buildings, 95,821 had standard electricity meters installed and 
        10,723 had advanced meters installed. Although there may be a 
        few instances of counting both the advanced and standard meters 
        in a single building, overall compliance with the metering goal 
        exceeds 99 percent.
          Performance Standards for New Buildings.--Four agencies did 
        not achieve full compliance with the requirement that all new 
        buildings designed since FY 2007 must be 30 percent more 
        efficient than relevant code, if life-cycle cost effective. 
        These four agencies, the Departments of Defense, Homeland 
        Security, Health and Human Services, and the Social Security 
        Administration, have an opportunity to revisit designs to bring 
        them into compliance. However, SSA does not own or operate any 
        Federal Buildings for which designs were started since the 
        beginning of FY 2007. Some agencies are also assessing 
        performance of designs underway to determine compliance and 
        will report these findings in their future annual reports. Of 
        the 1,132 new building designs since FY 2007, 1,071 or almost 
        95 percent are in compliance.

    Question 2. Are additional measures such as the Supply Star bill 
necessary, or are they duplicative? Is further Congressional authority 
really needed to promote highly efficient supply chains? Or does the 
authority already exist?
    Answer. The Administration looks forward to working with Congress 
to consider the efficacy and efficiency of these and other measures in 
the context of comprehensive energy and climate legislation to protect 
our nation from the serious economic and strategic risks associated 
with our reliance on oil, to create jobs, and to cut down on the carbon 
pollution that contributes to the destabilizing effects of climate 
change.
    While the Supply Star bill would provide a new lens through which 
one can consider energy efficiency, the potential exists for this new 
initiative to overlap with or duplicate existing Federal Government 
efforts to address supply chain efficiencies. For example, the ENERGY 
STAR program already has developed tools and resources that provide an 
industry sector benchmarking approach for energy performance, promote 
the procurement of energy efficient products and services, and engage 
industrial partners in mapping value chain energy use. Also, the Green 
Suppliers Network, led by the Department of Commerce and EPA works with 
large manufacturers to engage their small and medium-sized suppliers in 
low-cost technical reviews that employ Lean and Clean methodologies 
(e.g., eliminating energy and water waste and toxic emissions) to 
increase productivity, reduce waste, and boost profitability.
    While the Department of Energy (DOE) and other federal agencies 
already have authorities and programs in place to address supply chain 
energy efficiency, the authority proposed in the Supply Star Act of 
2010 could provide a means for expanding those efforts to address 
efficiency in the use of water and other resources as well. Under 
existing authorities, the Department's Industrial Technologies Program 
promotes energy efficiency in industrial production/operations by 
working with a broad spectrum of industries from mining and material 
processing to manufacturers of finished products for consumers. The 
Supply Star Act of 2010 would expand DOE's supply chain efficiency 
initiatives by providing specific authority to implement strategies to 
improve the efficiency of energy, water, and other resources throughout 
the entire lifecycle of a product, including production, transport, 
packaging, use, and disposal. However, this expansion could lead to 
potential overlap with or duplication of efforts underway at the EPA 
and other federal agencies. The focus on resources beyond energy and 
the stages of a product's lifecycle beyond manufacturing constitute 
important additional elements in the effort to address overall supply 
chain efficiency.
    Question 3. Please describe how the Department of Energy could 
incorporate the intent of Supply Star within their Save Energy Now 
Program. Furthermore, please provide a listing of programs, or 
authorities that you have to address supply chain efficiencies--from 
raw materials, transport, and packaging to the energy consumed in 
manufacturing processes.
    Answer. The Save Energy Now initiative in DOE's Industrial 
Technologies Program (ITP) currently works in partnership with industry 
to develop and disseminate tools, training, assessments, and other 
resources to target energy savings in industrial production/operations 
throughout the supply chain. ITP is currently developing resources to 
help Save Energy Now LEADER Companies who volunteer to launch an 
outreach program with their suppliers and customers focused on energy 
and carbon management.
    The Save Energy Now program could, in coordination and consultation 
with other government agencies and programs, expand its focus beyond 
energy to include water and other resource use efficiency across the 
entire lifecycle of manufactured products. New resources targeting 
supply chain efficiency could be developed in partnership with industry 
and other stakeholders both domestically and internationally. These 
activities would build on DOE's successful partnership leveraging 
strategies. The resulting guidelines, benchmarking and analysis tools, 
databases, training, and other resources could be distributed using 
ITP's existing infrastructure and outreach mechanisms. Achievements in 
supply chain efficiency could be recognized as part of the Save Energy 
Now recognition program. The program would coordinate with other 
federal initiatives such as Smart Way and Green Suppliers Network as 
appropriate.
    DOE programs that address supply chain energy efficiency include:

   ITP's R&D program partners with U.S. industry to develop new 
        technologies that improve the energy efficiency and 
        environmental performance of the most energy intensive 
        industrial processes. ITP R&D activities target industry-
        specific efficiency improvements in the processing of raw 
        materials as well as the development of crosscutting 
        technologies and materials that benefit multiple processes 
        across the industrial sector and throughout the supply chain.
   ITP's Save Energy Now initiative aims to drive a reduction 
        of 25% or more in industrial energy intensity in 10 years. The 
        program distributes resources, tools, and training to help 
        companies in diverse industries increase their awareness of 
        energy savings opportunities and their implementation of energy 
        efficiency projects.
   Superior Energy Performance is a market-based, ANSI-
        accredited manufacturing plant certification program that will 
        provide companies with a framework for implementing the 
        forthcoming ISO 50001 energy management system (standard) and 
        validating energy intensity reductions. ITP is participating in 
        the development of the standard and is a member of U.S. Council 
        for Energy-Efficient Manufacturing (U.S. CEEM) which is guiding 
        the development of the certification program.

    Public Law Authorizations:

          P.L. 94-163, ``Energy Policy and Conservation Act'' (EPCA) 
        (1975)
          P.L. 94-385, ``Energy Supply and Production Act'' (ECP A) 
        (1976)
          P.L. 95-91, ``Department of Energy Organization Act'' (1977)
          P.L. 95-619, ``National Energy Supply Policy Act'' (NECPA) 
        (1978)
          P.L. 95-620, ``Powerplants and Industrial Fuel Use Act'' 
        (1978)
          P.L. 96-294, ``Energy Security Act'' (1980)
          P.L. 101-218, ``Renewable Energy and Energy Efficiency 
        Technology Competitiveness Act'' (1989)
          P.L. 102-486, ``Energy Policy Act of 1992''
          P.L. 109-58, ``Energy Policy Act of 2005''
          P.L. 110-140, ``Energy Independence and Security Act of 
        2007''

    Question 4. Please describe how the Superior Energy Performance 
certification program works. How do you intend to incorporate and 
integrate supply chain efforts into validating energy efficiency and 
intensity improvements?
    Answer. Superior Energy Performance is a voluntary certification 
program that provides industrial facilities with a road map for 
achieving continual improvement in energy efficiency while maintaining 
competitiveness. A central element of Superior Energy Performance is 
implementation of the forthcoming global ISO 50001 energy management 
standard along with additional requirements to achieve and document 
energy intensity improvements. A non-governmental organization will 
manage and administer the Superior Energy Performance program and will 
be self-sustained through the collection of certification fees. 
Industrial facilities pursing certification will implement the ISO 
50001 energy management standard and take steps to reduce energy use. 
The certification of the plant is retrospective; plants must 
demonstrate that requirements have been met upon applying for 
certification. Third-party verification by an ANSI-accredited 
organization is required to receive certification.
    Companies can use Superior Energy Performance as a framework to 
demand a high level of quality in how their suppliers manage energy and 
achieve energy cost reductions. It can provide a way for large 
companies to assist their suppliers and thereby reduce their overall 
costs. ITP's Save Energy Now program has a portfolio of energy 
management tools and resources which will help facilities, including 
suppliers, prepare for certification. In addition, ITP is developing a 
series of complementary professional certification programs on 
industrial energy management, efficiency, and auditing expertise that 
will assist plants to become certified by the Superior Energy 
Performance program.

                                 S. 679

    Question 1. Please summarize the Department's current authorities 
and activities, if any, related to the development and deployment of 
heavy-duty plug-in hybrid vehicles.
    Answer. The Department of Energy (DOE) supports a number of 
projects related to the development, demonstration, and deployment of 
heavy-duty plug-in hybrid vehicles, with funds from the American 
Recovery and Reinvestment Act (ARRA) as well as annual appropriations.
    DOE awarded ARRA funds for Transportation Electrification projects 
that will result in the deployment of more than 1,800 electric and 
plug-in hybrid electric medium-and heavy-duty vehicles and charging 
infrastructure. These vehicles will include 378 plug-in hybrid electric 
bucket trucks and shuttle buses deployed nationwide in partnership with 
50 electric utilities and partner fleets. DOE will conduct data 
collection and analysis activities as part of these projects to 
evaluate vehicle performance and fuel economy benefits in a variety of 
user environments and vocations.
    DOE has also partnered with several major vehicle manufacturers to 
develop and deploy advanced plug-in hybrid electric vehicles through 
the five-year Plug-in Hybrid Electric Vehicle Technology Acceleration 
and Demonstration Activity (PHEV TADA). One project within this program 
targets medium- and heavy-duty vehicles, focusing on the development of 
a plug-in hybrid school bus that will provide 30 miles of all-electric 
propulsion. This project is intended to accelerate the 
commercialization of PHEV school buses that meet the requirements of 
the majority of customers with regards to performance, affordability, 
reliability, and fuel economy.
    In addition, DOE supports in-use evaluations of medium-and heavy-
duty electric-drive trucks, as well as modeling and simulation studies 
to predict the effectiveness of various powertrain configurations--
including plug-in hybrid architectures--and evaluation of idle-
reduction technologies enabled through heavy-duty truck 
electrification. This work is conducted primarily at national 
laboratories using annual appropriations.
    With ARRA funds, DOE also awarded 14 geographically-dispersed, 
cost-shared projects to deploy a total of 910 medium/heavy-duty hybrid 
trucks and buses. These projects are being implemented by local 
community partnerships that comprise DOE's Clean Cities Program and 
will help inform DOE's work on plug-in hybrids.
    Department authorizations related to the development and deployment 
of heavy-duty plug-in hybrid vehicles include EPAct 2005, Sections 706, 
712, and 721, and EISA 2007, Section 131.
    Question 2. Please discuss the potential value of developing hybrid 
technologies for heavy-duty vehicles, in terms of cost-effectiveness 
and emission reductions, as compared to other technologies and other 
fuels (such as natural gas) that are also capable of improving 
efficiency.
    Answer. Hybrid technologies achieve significant fuel economy 
benefits when applied to heavy duty vehicles that experience duty 
cycles involving frequent starts and stops, because much of the energy 
typically lost during braking can be recaptured through regenerative 
braking systems and subsequently reused during acceleration. Because of 
their ability to capture and reuse otherwise wasted energy, 
regenerative braking and other hybrid technologies provide fuel economy 
benefits that cannot be obtained through efficiency improvements in the 
engine or fueling system alone. Refuse haulers, delivery trucks, and 
school buses, for example, could increase their fuel economy by 18 to 
40% using hybrid technologies. The benefits of vehicle hybridization 
are not fuel dependent and they help improve fuel economy no matter 
what fuel is chosen.
    Question 3. According to various news reports, there are already a 
number of companies who supply heavy-duty hybrid systems and a number 
of companies who demand those systems. For example, Coca-Cola 
Enterprises reportedly ordered 130 hybrid trucks from Eaton Corporation 
in February 2008. Given the small but growing market for heavy-duty 
hybrid systems, does the Department believe that the type of grants 
program created by S.679 is most appropriate to encourage their 
continued deployment?
    Answer. The Administration looks forward to working with Congress 
to consider the efficacy and efficiency of these and other measures in 
the context of comprehensive energy and climate legislation to protect 
our nation from the serious economic and strategic risks associated 
with our reliance on oil, to create jobs, and to cut down on the carbon 
pollution that contributes to the destabilizing effects of climate 
change.
    The Department of Energy believes that the reported acquisitions of 
hybrid trucks indicate early adopter interest in this advanced 
technology, but may not necessarily mark the beginning of a broad 
introduction to the nation's medium-and heavy-duty fleet. While some 
companies have initiated procurement of medium-and heavy-duty hybrid 
vehicles, most of these purchases are for demonstration purposes to 
assess the business case and familiarize company personnel with hybrid 
technology.
    The grant program proposed by S.679 is consistent with activities 
currently authorized and being undertaken by the Department as part of 
its vehicle technologies research, development, demonstration, and 
deployment efforts. The program would provide a demonstration and 
deployment opportunity for companies that would not otherwise be able 
to invest in advanced hybrid vehicles and enable the collection of 
useful data and accumulation of field experience that can lead to broad 
acceptance of hybrids in the commercial vehicle market.
    S.679 also includes an important mandatory research effort in Phase 
I of each project. Such work is expected to improve heavy-duty hybrid 
performance and efficiency while lowering costs and removing other 
barriers to broad market acceptance.

    Responses of Steven G. Chalk to Questions From Senator Bingaman

                                S. 3460

    Question 1. Mr. Chalk, the 10 Million Solar Roofs Act allows states 
to use Federal funds to provide rebates, loans, and other incentives to 
consumers to purchase solar energy systems.
    Between federal and state tax incentives, ``PACE'' financing 
programs, state and local rebates, net-metering, and other incentives, 
there are a variety of mechanisms available to support the deployment 
of solar PV. Does the Department have any insight into the comparative 
effectiveness of these different deployment incentives?
    Answer. The Administration looks forward to working with Congress 
to consider the efficacy and efficiency of these and other measures in 
the context of comprehensive energy and climate legislation to protect 
our nation from the serious economic and strategic risks associated 
with our reliance on oil, to create jobs, and to cut down on the carbon 
pollution that contributes to the destabilizing effects of climate 
change. The incentive programs listed in the 10 Million Solar Roofs 
Act, rebates, loans, and performance-based incentives, have been 
implemented at various levels of government in the U.S. and in 
international markets such as Germany to stimulate solar demand. Each 
of these incentives has particular advantages. For instance, rebates 
reduce the upfront costs of solar systems, loan programs increase the 
availability and reduce the cost of financing of solar systems, and 
performance-based incentives are directly tied to generation of solar 
energy.
    Generally, a cash incentive, whether in the form of a rebate or 
performance-based incentive, is a simpler and more efficient incentive 
than a tax credit incentive of the same amount, whose benefits, in some 
instances, may only be realized by the taxpayer with the use of tax 
equity financing.
    Other state and local financing programs have limited operating 
history and the ultimate effectiveness of such incentives can depend on 
specific local considerations.
    Question 2. The 10 Million Solar Roofs Program would rely on state-
level programs to disburse its funds to consumers. Should the program 
take into account the varying degrees of effectiveness and cost-
efficiency of these different incentive mechanisms?
    Answer. The Administration looks forward to working with Congress 
to consider the efficacy and efficiency of these and other measures in 
the context of comprehensive energy and climate legislation to protect 
our nation from the serious economic and strategic risks associated 
with our reliance on oil, to create jobs, and to cut down on the carbon 
pollution that contributes to the destabilizing effects of climate 
change. In that context, DOE would consider taking into account the 
varying degrees of efficiency and cost-effectiveness of different 
mechanisms as well as 1) a State's ability to execute a given program, 
2) its existing solar incentive infrastructure, 3) solar activities of 
utilities in the State, as well as other physical, economic, policy and 
regulatory considerations, and 4) ability of states to leverage the 
Federal money of state and private capital. Additionally, the 
Department would welcome the flexibility to work with cities and 
counties as well should they be well-positioned to administer these 
funds.
    Responses of Steven G. Chalk to Questions From Senator Murkowski
    Question 1. A recent Inspector General's report found that there 
have been some problems with the distribution of funds to state energy 
programs. For example, the American Recovery and Reinvestment Act 
authorized $3.1 billion in grants to state energy programs, and the 
Energy Department allocated $126 million for Florida--a state that 
previously had received about $1.4 million. The Inspector General found 
that Florida had used the federal stimulus money to pay for its own 
state solar rebate program, so no new jobs were created. Apparently, 
Florida's rebate program ran out of money in 2008 and it had a backlog 
of people waiting to collect so the stimulus funds were used to address 
the existing state backlog.
    S. 3460 allows this new federal program to be used to expand 
existing state solar programs, including rebate programs. Is it correct 
then, that this legislation could be used to fund the backlog of state 
solar rebates, as the ARRA was in Florida? Does the Department believe 
this is a wise use of limited federal resources?
    Answer. Utilizing an existing state rebate program would allow 
federal resources to leverage existing program infrastructure for 
rebate marketing and fulfillment, as well as saving on program 
development startup costs. State funding should be supplemented, not 
supplanted. We have taken steps to work with the state of Florida, and 
they are now using their regular budget to cover the pre-existing solar 
rebate program and are steering their SEP funds to other energy 
activities.
    Question 2. In response to that Inspector General's report, the 
Energy Department noted that many of the problems with the ARRA funding 
resulted because no state energy program had ever encountered the 
``scale of funding'' provided under the Recovery Act. If that is the 
case, is this new federal program to subsidize residential solar energy 
necessary?
    Answer. Electricity from solar energy sources is still two to three 
times more expensive than electricity from other generating sources in 
wholesale markets, in the absence of subsidies. Deployment of solar may 
be accelerated by incentives such as those contemplated in this bill. 
DOE is emphasizing robust R&D programs to lower the cost of solar 
energy, therefore allowing it to compete in the long term unsubsidized. 
The Administration looks forward to working with Congress to consider 
the efficacy and efficiency of these and other measures in the context 
of comprehensive energy and climate legislation to protect our nation 
from the serious economic and strategic risks associated with our 
reliance on oil, to create jobs, and to cut down on the carbon 
pollution that contributes to the destabilizing effects of climate 
change.
    Question 3. What is the Administration's position on other 
financial models for residential solar energy like the third-party 
ownership model adopted by Solar City? These types of residential 
third-party ownership models allow a tax equity investor to benefit 
from the tax incentives of ownership and provide the host site with a 
renewable energy system with little or no upfront cash required--
payment s are made through either Power Purchase Agreements in which 
payments vary based on a customer's electricity usage or via leases 
that incorporate a fixed rate payment schedule independent of 
electricity usage. In this way, customers get the benefit, without 
having to pay up-front costs or even maintain the system.
    Answer. Innovative financing methods for residential solar energy 
can accelerate solar installations. For the reasons stated above, third 
party Power Purchase Agreements or leases can overcome upfront cost 
issues or other obstacles related to affordability of residential 
solar.
    Essential to the success of the third-party ownership model is the 
overall economic viability of solar for a given state. This viability 
is primarily determined by examining the amount of solar radiation a 
state receives, current utility and retail electric rates, and 
available incentives. To date, the presence of an adequate state 
incentive program has been an essential prerequisite for SolarCity and 
other third-party ownership providers to expand their operations into a 
given state.
    Additionally, the Power Purchase Agreement model for solar has 
faced some legal challenges at the state level that has hindered its 
proliferation into some states or market sectors. In some cases, new 
regulatory proceedings or state legislation may be required to ensure 
that a potential provider has legal authorization to proceed.
    Question 4. You testified that by the Department's estimates, ``the 
$250 million authorized for FY 2012 would yield roughly 100,000 rooftop 
solar systems, and may not be sufficient to put us on a trajectory to 
meet the goal of 10 million solar roofs.'' Under the Department's 
estimates then, it appears that $2.5 billion in federal funding would 
be needed to reach the 10 million solar roofs goal--correct?
    Answer. No, PV panel and system prices have declined by over 50% 
and 20%, respectively, over the past two years. With the continuing 
price declines that the Department expects from technological 
improvements and market development, lower incentive levels will be 
possible in the coming years to make solar-generated electricity 
competitive with electricity from the grid. The amount of federal 
funding needed to deploy a certain number of rooftop installations is 
thus expected to decline over time.
    For reference, the estimate cited in your question is based on a 
20% state cost share and a potential rebate of $0.75/Watt to make 
rooftop PV systems competitive at present along with other federal 
incentives, $250 million in federal funding for one year would result 
in the deployment of 400 MW of solar. If all of the funding went 
towards residential PV systems, which average roughly 4,000W in size, 
approximately 100,000 solar systems would be installed in the first 
year. With the expected cost declines, it is possible that lower 
subsidies per installation could enable larger deployments in future 
years with the same funding level, but a detailed analysis of a 
specific program would need to be undertaken to determine the level of 
subsidy required to achieve 10 million installations over 10 years.
    In a simple scenario with an average potential incentive of $0.50/W 
over 10 years and a state cost share of 20%, $16 billion in cumulative 
federal funding would support deployment of 40 GW of solar over 10 
years. If all of the funding went towards residential PV systems, which 
average roughly 4,000W in size, 10 million solar systems would be 
installed.
    Question 5. S. 3460 proposed to allocate funds based on the State 
Energy Program formula. How are funds now distributed under the State 
Energy Program and how does the recovery mechanism work?
    Answer. For annually appropriated SEP funding, the initial $25.5M 
is allocated to States according to the base allocation table listed in 
10 CFR 420.11. Any appropriations above the $25.5M base are allocated 
according to the following formula:

   1/3 equally among all states and territories
   1/3 according to population of the participating States as 
        contained in the most recent reliable census data available 
        from the Bureau of the Census, Department of Commerce, for all 
        participating States at the time DOE needs to compute State 
        formula shares
   1/3 according to energy consumption of the participating 
        States as contained in the most recent State Energy Data Report 
        available from DOE's Energy Information Administration.

    All ARRA SEP funds were allocated based on the above formula.
    Question 6. In your written testimony, you propose that the 
Secretary should have the authority to reduce the cost share percentage 
in order to increase the overall effectiveness of the program. Please 
explain. How do you envision this to work?
    Answer. The Energy Policy Act of 2005 grants the Secretary the 
authority to reduce or waive cost share. The Secretary utilized this 
authority for awards made under the American Recovery and Reinvestment 
Act of 2009. In areas where the target organizations are already 
challenged by economic conditions, this can be critical in enabling the 
department to extend its reach to identify a larger pool of worthy 
ideas for support.
    Question 7. In your written testimony, you state that the ``program 
could be designed in a creative way such as working with municipalities 
to promote photovoltaic installations through innovate local 
programs.'' How does the Department envision this coordinated effort to 
work?
    Answer. The Administration looks forward to working with Congress 
to consider the efficacy and efficiency of these and other measures in 
the context of comprehensive energy and climate legislation to protect 
our nation from the serious economic and strategic risks associated 
with our reliance on oil, to create jobs, and to cut down on the carbon 
pollution that contributes to the destabilizing effects of climate 
change. In that context, Similar to the Energy Efficiency and 
Conservation Block Grant program, DOE would work with local governments 
towards the creation or expansion of innovative solar financing models 
and to leverage private sector capital. Examples that can be drawn from 
the Solar America Cities Program, include Community Solar models, such 
as the Solar Shares program administered by the Sacramento Municipal 
Utility District; volume purchasing programs, such as Solarize Portland 
created by the City of Portland, OR; or public-private partnerships 
such as the SolarCity-City of Phoenix partnership under which SolarCity 
offers Phoenix residents a solar lease with no down payment. In 
addition, DOE would work with local governments on best practices for 
solar installation. These include net metering, standardized grid 
interconnection protocols, and best practices for developing utility 
rate structures. However, the current S. 3460 does not provide DOE the 
authority to provide funds directly to local governments.
    Question 8. In your written testimony, you suggest that the funding 
available in this act would not be sufficient to meet the goal of 10 
million solar roofs. What percentage increase would be necessary to 
meet this projected target?
    Answer. The federal funding for the Act to reach the goal of 10 
million solar roofs is hard to predict because it will depend on 1) the 
continued cost declines of solar systems, 2) the mix of smaller 
residential and larger commercial systems funded by the Act, 3) a 
supportive policy and regulatory framework, including such areas as 
interconnection standards, net metering and utility rate structures, 
and 4) the existence of other federal and state solar incentives, 
notably the investment tax credit (ITC) and 1603 grants in lieu of tax 
credits.
    In a simple scenario with an average potential incentive of $0.50/W 
over 10 years and a state cost share of 20%, $16 billion in cumulative 
federal funding would support deployment of 40 GW of solar over 10 
years. If all of the funding went towards residential PV systems, which 
average roughly 4,000W in size, 10 million solar systems would be 
installed. DOE emphasizes the importance of a robust R&D program to 
continue to lower PV costs so that it can be compete with alternatives 
on an unsubsidized basis.
    Question 9. What is the current amount of installed solar rooftop 
capacity? If the U.S. reached the 10 million solar roof goal set forth 
in this legislation, how much of a percentage increase would that 
represent?
    Answer. At the end of 2009, there was a total of nearly 95,000 
residential PV systems installed in the U.S., so the 10 Million Solar 
Roofs Act, presently funded with $250 million in FY 2012, could double 
the current number of installations. The full goal of 10 million 
cumulative solar installations by 2020 would equal 100 times the 
current number of residential systems.
    While this increase is very large, it is consistent with the rapid 
growth of the U.S. PV market. Over the past four years, the number of 
annual residential installations has grown at a compound annual growth 
rate of 57%. Maintaining this growth rate through 2020 would result in 
over 13 million cumulative solar installations. Historically, PV costs 
have decreased by 20% every time cumulative production doubles. 
Therefore, subsidies can decrease over time.
    Question 10. Please describe the durability and longevity of these 
types of solar rooftop panels. What is the impact of the installation 
on the roofs? Will roofs need to be retrofitted (both shingles and 
framing) to accommodate these panels?
    Answer. Solar panels have proven to be both reliable and durable 
products. There are panels installed in the U.S. that have been in 
operation for over 25 years that continue to achieve their expected 
performance. Solar panel manufacturers typically warranty their product 
to produce at least 80% of the rated output for 25 years. Solar panels 
are designed to pass a number of industry standard tests including 
tests that mimic the ability to withstand golf ball size hail, snow 
loads, high humidity, and high wind events. Properly designed and 
maintained rooftop solar photovoltaic systems can last as long as the 
underlying roof itself.
    The total weight of solar panels, racking, and mounting hardware is 
between 4 to 6 pounds per square foot. Residential and commercial 
rooftops that are built and maintained in conformance with the 
published building codes can accommodate the additional weight of a 
rooftop solar system--no retrofitting of the framing is generally 
required. The roof surface (whether it be asphalt shingle, tile, tar 
and gravel, metal, or wood shake) generally does not need to be 
retrofitted to accommodate the panels. There are a wide range of 
commercially available products that allow the solar installer to 
complete a fully weatherproofed installation without the building owner 
needing to make any modifications to the roof surface.
                                 ______
                                 
   Responses of R. Shane Johnson to Questions From Senator Murkowski

    Question 1. When the DOE transfers uranium to its contractors does 
the DOE have control over when (immediately or with some delay) or how 
(through the spot market or long-term contracts) the uranium enters 
into the commercial market?
    Answer. No, the Department does not control a contractor's use of 
the material once it has been transferred to the contractor in 
compliance with applicable law.
    Question 2. What are the issues with establishing a strategic 
reserve of 20 million pounds of U308 equivalent? 
Would the DOE need authority to promulgate rules for the management and 
release of materials from the strategic reserve? Could the unallocated 
U.S. highly-enriched uranium, which is equivalent to approximately 32 
million pounds of natural U308, be utilized as 
strategic reserve? If so, should it be down blended to low-enriched 
uranium?
    Answer. DOE already has sufficient authority and capability to 
manage its excess uranium inventories effectively without establishment 
of a formal strategic reserve. DOE believes it is in the best interest 
of both DOE and the uranium industry to retain this flexibility 
regarding access to its excess uranium inventory. While it is possible 
that the Department could use the unallocated highly enriched uranium 
(HEU) among other inventories to create a strategic reserve, the HEU 
would need to be down blended. The National Nuclear Security 
Administration is already creating a reliable fuel supply of low 
enriched uranium (LEU) by down-blending from HEU. This supply would be 
available to both domestic and international recipients in the event of 
a market disruption.
    Question 3. The DOE's actions to increase the rate at which it 
releases excess uranium into the market along with the actions of the 
Department of the Interior to withdraw Federal lands from exploration 
and mining taken together may have significant impact on domestic 
uranium mining in the U.S. Is it the Administration's intent to bring a 
halt to domestic uranium production?
    Answer. No, the Administration certainly does not intend to halt 
domestic uranium production, and the Department does not believe its 
release of limited amounts of excess uranium into the market has 
resulted in a material adverse impact on the domestic uranium mining 
industry. As a result of close coordination among the offices within 
DOE responsible for the disposition of excess uranium inventories, the 
Department's total actual transfers for 2009, including transfers for 
accelerated cleanup services and for NNSA's pre-existing commitments, 
were 3.1 percent of average U.S. reactor demand in 2009, with an 
anticipated ramp up to 6.7 percent in 2010. This is significantly less 
material actually transferred than the 10 percent guideline articulated 
in the Department's 2008 Excess Uranium Inventory Management Plan (the 
Plan), and less material actually transferred than the amounts 
anticipated to be transferred for these years under the Plan.
    Question 4. About 90 percent of the uranium that is used in U.S. 
reactors is from foreign sources. Given this large dependence on 
foreign sources for clean nuclear energy, is it advisable for the DOE 
to be taking steps that could create a greater dependence on foreign 
sources in the future?
    Answer. DOE does not believe its releases of uranium relative to 
the total uranium market have resulted in a greater dependence on 
foreign sources of uranium. However, to increase domestic uranium 
enrichment capacity, a critical element of the fuel cycle for nuclear 
power reactors, the Department has made available $4 billion in loan 
guarantees for the deployment of advanced enrichment technology in the 
United States.
    Question 5. In 2008, DOE's total excess uranium inventory was the 
equivalent of 150 million pounds of U308. What is 
the amount of excess uranium inventory held by the department today?
    Answer. The amount of DOE's excess uranium inventory at the 
conclusion of calendar year 2010 will be the equivalent of around 128 
million pounds of U308, or the equivalent of 
49,300 metric tons uranium (MTU). The decline of DOE's excess uranium 
inventory from about 153 million pounds of U308 
(the equivalent of 58,900 MTU) presented in the December 2008 DOE 
Excess Uranium Inventory Management Plan results largely from the 
National Nuclear Security Administration's (NNSA) shift of previously 
unallocated U.S. HEU into allocated programs, including a program to 
provide replacement LEU fuel for research reactors which had previously 
used HEU (which does not impact the commercial industry) and from the 
Office of Environmental Management's choice of a non-market disposition 
path for the off-spec non-UF6 inventory. A small part of the 
overall decline does result from DOE's excess uranium entering the 
commercial market in calendar years 2009 and 2010 as actual and 
anticipated transfers to USEC for accelerated cleanup services and 
NNSA's pre-existing commitments. These various reductions in DOE's 
inventory total 1,954 MTU, equivalent to 5.1 million pounds 
U308.
    Question 5a. How much of this material is U.S.-origin natural 
uranium in the form of UF6?
    Answer. The DOE's current inventory of U.S.-origin natural uranium 
in the form of UF6 amounts to about 5,156 MTU.
    Question 5b. How much of this material is Russian-origin natural 
uranium in the form of UF6?
    Answer. At the conclusion of transfers related to the accelerated 
cleanup at the Portsmouth Gaseous Diffusion Plant, DOE's inventory of 
Russian-origin natural uranium in the form of UF6 at the end 
of calendar year 2010 will be about 11,315 MTU.
    Question 5c. How much of this material is off-spec non-
UF6 uranium?
    Answer. As of the end of calendar year 2008, DOE identified 4,462 
metric tons of uranium as off-spec non-UF6. DOE has made 
several attempts to sell or reuse this material to avoid or mitigate 
disposal costs and responsibilities. Of the 4,462 metric tons, 
approximately 1,515 metric tons have been disposed of as of June 30, 
2010, and approximately 1,076 metric tons remain to be disposed in 
fiscal year 2010 with funding provided by the American Recovery and 
Reinvestment Act of 2009. Additionally, 1,278 metric tons of the off-
spec non-UF6 are scheduled for sale to a private entity 
which will extract only the fluorine content. The remaining 
approximately 578 metric tons are budgeted for disposal in fiscal year 
2011.
    Question 5d. How much of this material is depleted uranium in the 
form of UF6?
    Answer. Approximately 75,300 MT of depleted uranium as 
UF6 (equivalent to 25,950 MTU) is identified as higher assay 
235U.
    Question 5e. How much of this material is unallocated U.S. highly 
enriched uranium?
    Answer. Of a total of 209 metric tons of U.S. HEU designated to be 
down-blended, 34.3 metric tons of HEU are not allocated to any project 
at this time. The 34.3 metric tons of HEU contain the equivalent of 
approximately 18 million pounds of U308, or 
approximately 6,900 MTU.
    Question 6. More than 40 percent of DOE's excess uranium is in the 
form of depleted uranium. While it is possible that this material could 
be enriched at a gaseous diffusion plant, what would the uranium price 
need to be to make this a viable option? Would this price be lower if 
it were enriched using the laser enrichment process being developed by 
General Electric? What is the long range plan for the use of this 
depleted uranium?
    Answer. DOE is evaluating its options for potential future use of 
the highest-assay depleted uranium in its inventory. Any future policy 
decision, however, will depend upon current and forecast prices for 
both uranium and enrichment services. Because depleted uranium must be 
re-enriched (for example from a tails assay of 0.35% 235U to 
an assay of 0.7% 235U, the same assay as in natural uranium) 
before it is usable in commercial nuclear fuel, the cost of the 
enrichment process, whether by older gaseous diffusion technology or by 
modem laser technology, will be a critical factor.
    Question 7a. Much of DOE's excess uranium is in the form of uranium 
hexafluoride (UF6) which does not have to be converted prior 
to being enriched into reactor fuel. Is this material more attractive 
to a buyer since the buyer would not have to pay for the cost of 
conversion?
    Answer. The price a buyer pays for UF6 includes the cost 
for both U308 and conversion services. Some 
consumers may prefer purchasing UF6 rather than 
U308 and conversion services but utilities 
generally meet most of their fuel requirements by contracting for both 
U308 and conversion services.
    Question 7b. Would this have a negative impact on the conversion 
services in the U.S. especially in regard to the fact that the U.S. 
only has one conversion facility?
    Answer. In its transfers of excess UF6 into the market 
thus far, DOE has determined there to be no adverse material impact on 
the conversion industry. Pursuant to Section 3112 of the USEC 
Privatization Act, the Secretary of Energy must determine that certain 
sales or transfers of excess natural or enriched uranium ``will not 
have an adverse material impact on the domestic uranium mining, 
conversion, or enrichment industry.'' Any future transfers by DOE of 
UF6 will also comply with this requirement as applicable.
    Question 8. When analyzing the potential impact of uranium auctions 
or transfers did the DOE examine the historical trends in the uranium 
spot market price with employment in the domestic mining industry? 
(Note: historically, employment tracks well the average spot market 
price for a given year. As the price increases so does employment.)
    Answer. DOE examined recent historical trends for spot market price 
both in advance of and after transferring excess uranium to USEC for 
accelerated cleanup at the Portsmouth Gaseous Plant. DOE contracted 
Energy Resources International (ERI), a nuclear fuel consulting 
company, to conduct a market impact analysis to form the basis for its 
section 3112(d) Secretarial Determination authorizing the transfer of 
excess uranium to USEC in exchange for services. ERI observed that the 
short-term volatility in spot market price over the last several years 
corresponded to a variety of market events, including the flooding of 
mines and temporary closures of production facilities due to regulatory 
compliance issues. DOE believes that short-term fluctuations in price 
do not form a sound basis for making long-term investment decisions in 
uranium mining projects. DOE has carried out its announced quarterly 
transfers of uranium to USEC, and the current spot market price for 
U308 falls within the range of prices prior to 
the DOE's July 2009 announcement of the anticipated transfers to USEC.

    Responses of R. Shane Johnson to Questions From Senator Barrasso

    Question 1. Do all funds generated by the Department of Energy 
sales, barters, or transfers of excess uranium go to the U.S. Treasury?
    Answer. For transactions in which uranium or other nuclear 
materials would be sold for cash, those proceeds would go to the United 
States Treasury. For transactions in which the Department has received 
goods or services in exchange for transfers of excess uranium, no funds 
were generated to go to the U.S. Treasury.
    Question 2. Did the proposed transfers generate revenue for the 
U.S. Treasury? What processes did the Department use to evaluate the 
value of the transferred uranium scheduled for 2009 and 2010?
    Answer. The revenue from the transactions with USEC was in the form 
of services provided to cleanup the Portsmouth Gaseous Diffusion Plant 
under the Cold Shutdown Contract with USEC. DOE required the contractor 
to provide a quotation for the value of services to be provided in 
exchange for the proposed quantity of uranium to be transferred in that 
quarterly transaction. The Department then evaluates the contractor's 
proposed value to determine that the value represents ``fair market 
value.'' Once that determination is made, DOE's contracting officer 
modifies the contract to include the additional services at that value.
    Question 3a. Does the Department play a role in the disposition of 
excess uranium once it transferred to USEC Inc.?
    Answer. No, the Department does not control a contractor's use of 
the material once it has been transferred to the contractor in 
compliance with applicable law.
    Question 3b. How does the Department ensure that the uranium 
transferred for cleanup services does not impact the market?
    Answer. In the case of the recent USEC transfers, the Department 
contracted with Energy Resources International, a nuclear fuel 
consulting company, to conduct a market impact analysis which included 
a number of sensitivity analysis cases to determine, based upon the 
government's specifications, how much uranium could be transferred, and 
on what schedule, so as not to have an adverse material impact on the 
market. Ultimately, based upon internal analysis and consideration of 
industry interests, the Secretary of Energy determined that a maximum 
of 300 MTU per quarter and no more than 1,125 MTU for the entire period 
could be transferred to the contractor without creating an adverse 
material impact on the market. In 2009 and 2010, DOE's total uranium 
sales and transfers (including those sales and transfers to which DOE 
was already committed) remained within the guideline of DOE transfers 
not exceeding 10 percent of the annual domestic reactor demand.
    Question 4. The Environmental Assessment for disposition of federal 
uranium inventories and the analysis done for the Department concerning 
the recent Secretarial Determination both recognized that long term 
uranium sales would have much less impact than spot market sales of 
this material. Does the Department have plans to enter into long-term 
contracts in order to dispose of its excess uranium?
    Answer. The Department intends to include long term uranium 
contract sales or transfers among its preferred options when its excess 
inventories permit such a decision.
    Question 5. Is the Department committed to pursuing long-term 
contracts for disposition of a portion of its uranium, given the 
greater certainty long-term contracts provide for uranium markets?
    Answer. The Department intends to include long term uranium 
contract sales or transfers among its preferred options when its excess 
inventories permit such disposition.
    Question 6. Increasing transparency for the disposition of 
Department of Energy uranium will help ensure Department actions do not 
negatively impact domestic uranium mining and conversion industries. S. 
3233 includes a requirement that the Secretary publish the Secretarial 
Determination in the Federal Register 14 day before the Secretary 
barters, transfers, or sells any of the Department's excess uranium. 
Does the Department agree that notifying the public in advance will 
improve transparency?
    Answer. The Department believes that the process laid out in the 
December 2008 DOE Excess Uranium Inventory Management Plan (Plan) is 
already transparent. Since the Plan was released, the Department has 
transferred uranium to support accelerated cleanup of the Portsmouth 
Gaseous Diffusion Plant. The Department intends to publicly release an 
update of the Plan to reflect this activity and other changing program 
objectives. In the past, DOE has made Secretarial Determinations under 
section 3112(d) of the USEC Privatization Act publicly available and 
has also released the underlying market impact analyses that supported 
these Determinations. The Department notes that imposing a 14-day delay 
on a transfer or sale supported by a Secretarial Determination hinders 
the Department's discretion and may adversely affect the Department's 
ability to enter into transactions that are more advantageous to the 
government.
    Question 7. Does the Department believe there is currently a market 
for initial cores for new reactors and if so what steps has the 
Department taken to make sales of initial cores for new reactors?
    Answer. A market does exist for initial cores in new reactors but 
DOE would be competing with other suppliers worldwide to supply a 
relatively small number of anticipated new U.S. reactors. DOE is 
evaluating various options, including sales for initial cores, but has 
not made a decision as to the disposition of its excess uranium in this 
market.

    Responses of R. Shane Johnson to Questions From Senator Bunning

    Question 1. Would an eligible entity under 2 (e) of S. 3233 include 
a foreign entity?
    Answer. Under proposed section 2(a), new Sec. 170J subpart (e) 
permits DOE to barter, transfer, or sell to eligible entities certain 
amounts of uranium in addition to transfers for initial cores. New Sec. 
170J subpart (c) defines eligible entities for non-initial core 
transfers as possessing a license from the Nuclear Regulatory 
Commission (NRC), without specifying what type of license would be 
needed to qualify. If a foreign entity were able to acquire the 
requisite NRC license, it does not appear that the pending legislation 
would preclude that entity from being an ``eligible entity.''
    Question 2. If 2 (e) does not include the sale to foreign entities 
under the 10 percent limitation, is there any limitation on the sale of 
DOE uranium inventory to foreign entities?
    Answer. As noted in response to question 1, foreign entities may be 
eligible entities under new Sec. 170J subpart (e). Aside from new Sec. 
170J subpart (e), the Department conducts its sales of excess uranium 
in compliance with existing law, including applicable provisions of the 
USEC Privatization Act, and with entities appropriately licensed or 
approved to engage in the transaction.
    Question 3. Would you agree that the market for uranium is global 
in nature, and thus that sale of DOE uranium inventory should not be 
limited by a 10 percent cap on only the domestic demand, but rather on 
a 10 percent cap on worldwide demand?
    Answer. DOE does not agree that the general 10 percent guideline 
for limiting the sale of excess DOE uranium inventory should be based 
on worldwide demand instead of the current approach of domestic demand. 
While DOE recognizes the global nature of the uranium market, a 10 
percent limit based on world uranium demand could roughly triple the 
amount of DOE excess uranium entering the market in a given year. This 
additional quantity of uranium could cause an adverse material impact 
on the domestic industry.
    Question 4. Under the provisions of S. 3233, would DOE be able to 
apply the proceeds from the sale of uranium derived from the re-
enrichment of the tails at Paducah and Portsmouth to the DOE D&D 
program so long as the sales were consistent with the limitations 
proposed under 2 (e)?
    Answer. As we understand the bill, unless Congress specifically 
provided that the sale proceeds were to be deposited in the Uranium 
Enrichment Decontamination and Decommissioning Fund, DOE must return 
the proceeds to the United States Treasury.
                              Appendix II

              Additional Material Submitted for the Record

                              ----------                              

                                                     June 29, 2010.

Hon. Jeff Bingaman,
Chairman, Senate Energy and Natural Resources Committee, SD-304, 
        Washington, DC.
Hon. Lisa Murkowski,
Ranking Member, Senate Energy and Natural Resources Committee, SD-304, 
        Washington, DC.
    Dear Senator Bingaman and Senator Murkowski: We, the undersigned 
organizations, urge you to support S.2900, the Gas Turbine Efficiency 
Act of 2009, introduced by Senator Kirsten Gillibrand (D-NY) and 
cosponsored by Senators Susan Collins (R-ME), Kay Hagan (D-NC), and 
Bill Nelson (D-FL).
    S.2900 would authorize a four-year program at the Department of 
Energy to establish a public-private research, development and 
technology demonstration program to improve the efficiency of turbines 
used in natural gas-fired electric power generation systems. The goals 
established under the bill would result in efficiency improvements in 
turbines used in simple and combined cycle systems to bring them to 
levels of 50 percent and 65 percent respectively.
    We believe the program would produce technologies that would 
dramatically reduce the carbon footprint of existing natural gas-fired 
electric generating units and improve the next generation of power 
plants. To offer one example of the impact of turbine efficiency, if 
technologies developed under the proposed program resulting in a 1 
percentage point efficiency improvement were deployed across the 
existing gas turbine fleet, it would result in CO2 
reductions of approximately 10 million metric tons per year. A 
reduction of 10 million metric tons would be the equivalent of taking 
nearly 2 million passenger cars off the road permanently.
    The significance of this is twofold. First, gas turbines currently 
generate approximately 20 percent of the nation's electricity. 
Secondly, given the preference of electric utilities for the reduced 
carbon footprint of natural gas turbines, as well as the competitive 
cost of America's abundant natural gas supplies, this figure is 
expected to grow in the next decade.
    Finally, S.2900 would have substantial economic and employment 
impacts in the United States, helping to create or maintain thousands 
of jobs across the country in engineering, construction, services and 
suppliers. The bill would help to preserve America's traditional 
leadership role in gas turbine innovation and bolster our exports to 
overseas markets.
    As such, we would urge the Committee's timely and favorable 
consideration of S.2900.
            Sincerely,
                    International District Energy Association; Gas 
                            Turbine Association; National Electrical 
                            Manufacturers Association; Interstate 
                            Natural Gas Association of America; 
                            American Society of Mechanical Engineers 
                            International Gas Turbine Institute; 
                            Natural Gas Supply Association; United 
                            States Clean Heat and Power Association; 
                            National Association of Manufacturers.
                                 ______
                                 
          Statement of the Gas Turbine Association, on S. 2900

    The Gas Turbine Association (GTA) appreciates the opportunity to 
provide written testimony in support of S 2900, ``The Gas Turbine 
Efficiency Act of 2009'', introduced by Senator Kirsten Gillibrand (D-
NY). The GTA commends Senator Gillibrand for introducing the bill, and 
applauds the Committee for holding this Committee hearing. We believe 
these actions highlight the importance of increasing dramatically the 
efficiency of both future natural gas fired gas turbine products and 
the existing gas turbine fleet which is currently generating almost 20% 
of the nation's electricity.
    The GTA member companies include virtually all of the US based 
turbine manufacturers as well as small businesses which provide support 
services and supplies to the industry. These members include United 
Technologies/Pratt and Whitney Power Systems, Alstom Power, GE Energy, 
Siemens Energy, Solar Turbines, Strategic Power Systems, Florida 
Turbine Technologies, Meggitt VibroMeter and Rolls-Royce. Under S 2900 
all turbine manufacturers, both large and small, would be eligible to 
compete for DOE funding. This is a major reason the GTA is in unanimous 
support of the legislation.
    It is clear that dramatic reductions in greenhouse gas emissions 
are in the national interest and it is also clear that the economy will 
need more electric generation capacity in the years ahead. Without the 
more efficient gas turbine technologies envisioned in S 2900, the power 
generation industry will be hard pressed to produce the needed 
additional electric capacity while at the same time meeting the strict 
greenhouse gas emissions set by states and the federal government.
    Gas turbines already play a significant role in reducing greenhouse 
gas emissions because they are already the cleanest form of the fossil-
based generation technologies. Gas turbines can be sited and built 
quickly and can also burn a wide range of fuels. However, without the 
public private partnership proposed in S 2900, the higher efficiencies 
that will be required in the near future are simply not likely to be 
available when needed. In short, higher efficiency gas turbines along 
with the use of lower carbon fuels (e.g. natural gas) will lead to 
lower CO2 emission. But reduced emissions of CO2 
are not the only environmental benefits provided by gas turbines. 
Emissions of nitrogen oxide (NOX), sulfur dioxide (SOX) carbon monoxide 
(CO) and particulate matter (PM) from gas turbines are also at 
fractional levels compared to other combustion-based power generation 
and mechanical drive applications. In addition to these significant 
environmental advantages, the GTA believes that the development of the 
new turbine technologies envisioned under S 2900 is likely to result in 
the creation at several thousand high-paying, high-technology jobs and 
increased volumes of US exports. For the past several years Federal R&D 
funding support for the development of higher efficiency gas turbines 
has lagged significantly behind what the nation requires. The scope and 
authorizing levels of S.2900 match very closely the support levels and 
technology goals that the GTA has been recommending now for several 
years.
    GTA would like to make one additional point. GTA members have heard 
suggestions that the program envisioned in S 2900 should include carbon 
capture and sequestration (CCS) research directed at natural gas fired 
gas turbines (as distinguished from coal based syngas fired gas 
turbines). CCS on natural gas fired gas turbines is a longer term 
question and can't truly be addressed given the timing and funding 
limitations contemplated by this bill. Expanding the scope to natural 
gas fired gas turbines could dilute the substantial benefits that 
otherwise would be achieved through this legislation, divert attention 
from the nearer term and more important work that needs to be done in 
order to promote CCS on coal fired plants (the much lower hanging 
fruit), and send confusing signals into the marketplace. There is 
certainly a time and place for the Senate to address whether adequate 
information exists to assess the need and potential path forward on CCS 
for natural gas fired power plants, but that ought not come at the 
expense of the initial intent of this legislation.
    In closing, the GTA reiterates is strong support for S 2900 and 
commends the Committee for recognizing the national need incorporated 
in the legislation. We encourage the Committee membership to report the 
bill as quickly as possible.
                                 ______
                                 
                            Natural Gas Supply Association,
                                                     June 15, 2010.
Hon. Jeff Bingaman,
Chairman.
Hon. Lisa Murkowski,
Ranking Member, Senate Energy and Natural Resources Committee.
    Dear Chairman Bingaman & Ranking Member Murkowski: The Natural Gas 
Supply Association asks that you support 5.2900, the Gas Turbine 
Efficiency Act of 2009, introduced late last year by Senator Kirsten 
Gillibrand (D-NY).
    As you know, S.2900 would authoize a four year program at the 
Department of Energy to establish a research, development and 
technology demonstration program to improve the efficiency of gas 
turbines used in combined cycle and simple cycle power generation 
systems. The legislation contains a cost-sharing provision which NGSA 
members view as highly important to the potential success of such 
research.
    Gas turbines generate approximately 20 percent of the nation's 
cleaner electricity now and this percentage is expected to grow in 
coming years, in large part because America's domestic natural gas is 
so abundant, reliable and competitively priced.
    NGSA believes that raising the efficiency of gas turbines from the 
present 60 percent efficiency to the 65 percent efficiency required in 
the legislation, will significantly reduce the emissions of 
CO2 and provide an expanded export market for U.S. 
manufactured products.
            Sincerely,
                                           R. Skip Horvath,
                                                  Chairman and CEO.
                                 ______
                                 
Statement of Holly Gordon, VP, Legislative & Regulatory Affairs, SunRun 
                            Inc., on S. 3460

    Senator Sanders and other members of the Committee--
    Thank you for the opportunity to submit written testimony on the 
issue of reaching 10 million new solar rooftop installations by 2020. 
As a growing company in the residential solar industry, we at SunRun 
would first like to applaud the bill's aim to reach 10 million new 
roofs in the next ten years. And second, we would like to express our 
earnest confidence in reaching the goal and beyond--with the 
appropriate allocation of public support, we can eclipse the 10 million 
roof mark and make distributed solar a truly significant contributor to 
creating new American jobs, reducing our dependence on foreign oil, and 
combating climate change.
    From the advent of solar photovoltaic technology up until recently, 
purchasing and installing solar systems on residential roofs has 
required high upfront costs. Even with existing federal and state 
incentive programs, the cost for residential solar systems can range 
from $15,000 to upwards of $60,000. In addition to the prohibitive 
upfront costs, consumers are faced with understanding a complex 
technology, daunting permitting requirements, uncertain maintenance 
costs, and puzzling federal and state incentive programs. To date, this 
marketplace has yielded a total of only 80,000 solar homes. 
Dramatically increasing residential solar installations to one day 
exceed 10 million homes requires addressing these pressure points on 
consumers and offering innovative solutions to address them.
    SunRun was formed in 2007 with a simple mission: to provide every 
homeowner with access to hassle-free, clean, and affordable solar. With 
SunRun's third-party financing model, homeowners get solar on their 
roofs through a Power Purchase Agreement (PPA) or lease, allowing them 
to get solar for as little as $0 down and simply pay monthly for solar 
power. SunRun customers fix their electricity rates for 18-20 years, 
allowing them to save immediately on their bills and even more over 
time as utility rates increase. In addition to the low up-front costs 
and providing monthly savings on customers' bills, SunRun provides 
complete monitoring, maintenance, repairs, insurance and a money-back 
performance guarantee for all customers--eliminating all complexity and 
risk for home solar. With the SunRun model, the homeowner gains all the 
benefits of having solar on their roof and eliminates all the barriers 
of high-up front costs, maintenance, permitting, and navigating complex 
incentive payments.
    Third-party ownership is accelerating solar adoption faster than 
ever. Based on the California Public Utility Commission's California 
Solar Initiative (CSI) database, in Q2 of 2009, the market share\1\ for 
PPAs (Purchase Power Agreements) and leases in the California 
residential solar market was 9%. By Q1 of 2010--just nine months 
later--the market share for PPAs and leases in California residential 
solar skyrocketed to over 25% and continues to rise. Having launched 
only just over two years ago, SunRun--along with a growing small group 
of competitors utilizing third-party financing--is dramatically 
accelerating residential solar adoption by offering homeowners 
affordable and hassle-free solar systems on their roofs.
---------------------------------------------------------------------------
    \1\ CSI includes the territory of the three investor owned 
utilities in California.
---------------------------------------------------------------------------
    The SunRun third-party ownership model works by leveraging the 
purchasing power of a larger developer and offering the cost savings 
directly to homeowners. SunRun purchases all the solar and installation 
equipment and hires local installers to do installations, maintenance 
and monitoring--creating local, well-paying green jobs. SunRun also 
passes on the federal, state and local incentives to the homeowner. For 
example, SunRun currently operates in five states with existing rebate 
programs. Since solar costs are still coming down, SunRun is only able 
to thrive in marketplaces and deliver this value where strong and 
consistent rebate programs exist. As SunRun's success is directly 
attributable to these programs SunRun's near term growth is dependent 
on the expansion of existing and creation of new rebate and incentive 
programs.
    If the ultimate goal of this legislation is to accelerate solar 
rooftop installations in America, we at SunRun strongly recommend that 
the funds allocated through the 10 Million Solar Roofs Act go to 
support all business models capable of deploying solar, rather than 
favoring one business model over another. An earlier version of the 
bill (S. 2993, Feb 7, 2010) provided for traditional rebates that would 
benefit all business models. Under S. 2993, a homeowner could choose to 
get a solar system on their home through either third-party ownership, 
a solar loan (such as through a PACE program), a home equity loan, or a 
straight cash purchase and use the rebates provided for in the bill--
equally for each product offering and allowing for appropriate consumer 
choice and fair competition. However, most ``solar loan program[s]'' 
(sec. 3(d)(1)(B) of the current draft bill) (e.g. PACE loans) exclude 
third-party owned systems. So if a state made a choice to allocate all 
funding toward a solar loan program, it would exclude SunRun's business 
model, even though that business model--using third-party financing--is 
deploying solar on roofs faster than any other model.
    Third-party financing models have already revolutionized the 
residential solar market by dramatically reducing barriers to entry for 
consumers. Giving more states the incentive to ensure strong and 
consistent rebate programs for solar installations will encourage solar 
developers like SunRun to enter new markets and accelerate solar 
adoption across the country.
    Third-party financing works and is proven to be the fastest in 
deploying solar rooftop installations. SunRun's business alone has 
grown over 500% YOY, and we believe this can be attributed to reaching 
a new customer base. Our customers are choosing solar not just because 
of its environmental attributes, they are choosing solar because it 
saves them money. Never before in this industry was this true. If 
reaching 10 million solar roofs is dependent on convincing 10 million 
homeowners to take on prohibitive costs in the name of clean energy, it 
is unlikely that we will reach our goal. Alternatively, if we can offer 
homeowners emission-free, cost-saving solar technology for their roofs, 
we can meet and far exceed the goal of 10 million roofs by 2020. By 
prioritizing the funds allocated through S. 3460 to rebates or other 
such programs that support all business models, including third-party 
ownership, SunRun--along with a growing group of competitors--will 
deliver the up-front cost savings homeowners want, and will create 
local jobs and dramatically accelerate the deployment of affordable, 
hassle and emission free solar installations on roofs across America.
    We would again like to applaud Senator Sander's leadership and 
welcome the opportunity to comment further on this issue.
                                 ______
                                 
  Statement of Jon J. Indall, Counsel, Uranium Producers of America, 
                               on S. 3233

    The Uranium Producers of America (``UPA'') is a group of domestic 
uranium mining and conversion companies whose mission is to promote the 
viability of the front end of the nation's nuclear fuel industry. UPA 
members are conducting uranium exploration, development and mining 
operations in Arizona, Colorado, Nebraska, New Mexico, South Dakota, 
Texas, Utah and Wyoming. The sole domestic conversion company operates 
in lllinois. Several UPA member companies are very close to permitting 
new uranium production facilities and could be contributing to domestic 
fuel security in the near term. UPA members operate valuable, high 
grade uranium deposits that provide good high paying jobs and tax 
revenues and produce clean energy for the citizens of the United 
States. Growth in domestic uranium mining and conversion will be 
required to support the U.S. government's plans to increase use of 
nuclear power and foster new domestic uranium enrichment plants as 
evidenced by multi-billion dollar loan guarantee programs underway. The 
UPA appreciates the opportunity to provide its comments on the proposed 
legislation which its members strongly support.

  I. BACKGROUND OF DEPARTMENT OF ENERGY URANIUM INVENTORY DISPOSITIONS

    The Department of Energy controls approximately 153 million pounds 
of excess uranium inventories in various forms.\1\ The possible 
disposition of these inventories is not certain and this has created a 
significant impediment to the stability of the price of nuclear fuel 
and to the ability to obtain investment to create new domestic uranium 
production in the United States or re-invest in the sole ageing 
conversion plant. Past Department transfers of federal uranium reserves 
have had drastic impacts on the price of uranium and conversion, 
diluting the value of the government's uranium assets and forcing the 
price of uranium below its cost of production. Congress has long 
recognized the importance of carefully managing the Department's 
program for sales and transfer of excess uranium inventories and took a 
positive step by enacting Section 3112 of the Enrichment Privatization 
Act in 1996. The provisions of Section 3112 placed restrictions on 
inventory sales to assure that such sales would not create adverse 
impacts on the front end of the domestic nuclear fuel supply industry:
---------------------------------------------------------------------------
    \1\ See Exhibits 1 and 2 attached.

          Sec.  3112(a)
          ``The Secretary (of Energy) shall not . . . transfer or sell 
        any uranium including natural uranium concentrates, natural 
        uranium hexafluoride, or enriched uranium in any form to any 
        person except as consistent with this section.''

          Sec. 3112(d)
          Sales Must Meet Three Criteria:

                  (A) The President determines that the material is not 
                necessary for national security needs;
                  (B) The Secretary determines that the sale of the 
                material will not have an adverse impact on the 
                domestic uranium mining, conversion or enrichment 
                industry, taking into account the sales of uranium 
                under the Russian HEU Agreement and the Suspension 
                Agreement; and
                  (C) The price paid to the Secretary will not be less 
                than thefair market value of the material.\2\
---------------------------------------------------------------------------
    \2\ See 42 U.S.C. 2297h-10(a) and (d).

    Despite these restrictions, the Department transferred 
approximately 70 million pounds of uranium, with the associated 
conversion component, to USEC in 1998. While the Secretary of Energy 
determined that this transfer would have no adverse impact on the 
domestic producers, this uranium transfer devastated the spot uranium 
price and essentially destroyed domestic uranium production.\3\ For 
example the spot conversion price declined by 50% from $5.10/kgU in Jan 
98 to $2.55/kgU in Dec 99 while the longterm market price dropped 35% 
from $5.00/kgU in Jan 98 to $3.25/kgU in Dec 99. Similarly the uranium 
prices fell from $11.80 per pound in 1998 to $9.60 per pound in 1999, 
and approximately 50% from 1997 to 2002. Clearly, these were material 
adverse impacts.
---------------------------------------------------------------------------
    \3\ 3 The impacts of federal involvement on the frontend of the 
domestic nuclear fuel cycle are well documented. Government programs 
and inventories have historically created a heavy burden on domestic 
fuel suppliers. See generally Jon J. Indall, ``A New Dawn for 
Uranium,'' Rocky Mountain Mineral Law Digest, Vol. 52, p. a-1 (2006).
---------------------------------------------------------------------------
  II. DEVELOPMENT OF THE DEPARTMENT OF ENERGY MANAGEMENT PLAN FOR THE 
           DISPOSITION OF EXCESS F'EDERAL URANIUM INVENTORIES

    With this historic record in mind, as the commercial uranium market 
rallied, uranium producers seeking investment for new projects were 
faced with the outstanding question as to how the Department of Energy 
would dispose of the government's excess uranium inventories. The 
industry met with Department offrcials to discuss the burden imposed by 
the lack of market predictability created by the unknown and 
unpredictable disposition of the government's inventories. In January 
2006, the Department announced its intention to be a good steward of 
federal uranium inventories, recognizing the vast importance that 
responsible management of this material held for the domestic fuel 
cycle industry. The Department also stated that it was aware of the 
importance of managing its uranium assets in a manner that not only 
achieved a higher return on investment to the United States Government, 
but avoided an adverse material impact to the domestic nuclear fuel 
industry. The Department stated it understood the importance of 
limiting the quantity of government uranium entering the market and 
that it recognized the vital importance of new investment in developing 
and expanding new uranium production and processing centers and the 
risks the financial community would evaluate in making necessary 
funding decisions. Finally, the Department stated that there was a need 
to balance national and energy security objectives with the realities 
of the complex mining, conversion and enrichment markets. The 
importance of the Department's treatment of surplus uranium was 
underscored by the fact that, at the time of this announcement, the 
nuclear utilities producing electricity in the nation's 104 nuclear 
power generating plants were importing over 85% of the uranium required 
to fuel these plants. Since that time the U.S. nuclear generators 
dependence on imports has grown to more than 90+% of their uranium 
needs: far more than oil imports.
    In August 2006, the Department unveiled a proposal to sell or 
transfer l0% of U.S. reactor uranium requirements annually over a 3O-
year period. This would produce sales of approximately 5 million pounds 
per year. The UPA responded to the Department's suggested plan with a 
study done by a leading market analyst, Ux Consulting.\4\ The Ux study 
observed that the Department could readily mitigate the impact to 
domestic fuel suppliers from its proposed inventory sales if (1) it 
made longterm sales,\5\ (2) some of the Department's excess material 
were sold for initial cores for new reactors, and (3) the Department's 
sales be gradually ramped up over time to the Department's desired 5 
million pounds per year annual sales. The ramp-up recognized the long 
lead time required to get new uranium production facilities on line and 
the need to reduce the market price impacts of government material on 
an emerging uranium industry and a struggling converter.
---------------------------------------------------------------------------
    \4\ The Summary of the October 2006 Ux Consulting Report is 
attached as Exhibit 3.
    \5\ Long-term sales are defined in the commercial uranium market as 
sales that occur over at least a period of three years.
---------------------------------------------------------------------------
    Industry and the Department continued to debate the merits of 
government uranium sales and in July 2007, the Department urged the 
domestic fuel cycle companies and nuclear utilities to achieve a 
consensus agreement whose parameters, if adhered to, would allow 
govemment sales without adversely impacting the nuclear fuel suppliers. 
The industry achieved a Consensus Agreement in December 2008.\6\ The 
Agreement included (1) a gradual ramp-up of sales, (2) established a 
strategic reserve for emergency reactor fuel needs, and (3) provided 
for initial core sales of up to 20 million pounds. The consensus met 
industry and Department needs and provided much needed predictability 
to the commercial uranium and conversion markets.
---------------------------------------------------------------------------
    \6\ A copy of the Industry Position on Disposition of DOE's Nuclear 
Fuel Inventory is attached as Exhibit 4.
---------------------------------------------------------------------------
    In December 2008, the Department unveiled its Excess Uranium 
Inventory Management Plan. The Management Plan adopted many of the 
aspects of the Industry consensus and was welcomed by the nuclear 
utilities and suppliers. DOE met with industry to describe its Plan in 
early 2009 and stated that ``[u]ranium market fundamentals dictate a 
gradual ramp-up of material entering the market.\7\
---------------------------------------------------------------------------
    \7\ See Department of Energy PowerPoint slide from Excess Uranium 
Inventory Plan, Summary and Status, Presented by William Szymanski at 
the Nuclear Regulatory Commission Fuel Cycle Information Exchange, June 
24,2009, attached as Exhibit 5. This slide clearly demonstrates the 
fact that DOE sales into a limited spot (near term) market would have 
much greater impact on the uranium market than longer term contract 
sales that would provide for future deliveries into a market with 
unfilled orders and the ability to absorb government sales.
---------------------------------------------------------------------------
    In conjunction with its Management Plan, the Department prepared a 
draft Environmental Assessment ('EA'') in December 2008. The EA defined 
the term ``sale'' as including direct sales, transfers or other 
transactions the Department of Energy may undertake in the disposition 
of its excess uranium inventory. This definition would include barter 
transactions favored by the Department in order to direct receipts from 
the asset transfers to Departmental Programs. The EA contained a 
section describing the uranium market. According to the EA, over the 
last few years, about 15 percent of the western world's uranium 
requirements have been procured in the spot market, that is, for 
delivery within 12 months of contract award. A report dated April 
11,2008 by Energy Resources International, Inc. (``ERI'') on behalf of 
the Department of Energy was produced in conjunction with the EA's 
assessment of the impacts on the domestic uranium industry from the 
Department's surplus uranium sales. ERI attempted to quantify the 
potential impact on commercial fuel markets by the sale of government 
surplus uranium. ERI found that impacts would be greatly reduced by the 
sales of excess uranium inventories through long-term contracts. The 
report also stated that there was very limited spot market capacity for 
excess uranium sales by the Department. ERI concluded that potential 
price effect of additional uranium introduced by disposition of the 
Department of Energy's excess uranium inventory on the spot or short-
term uranium market is very difficult, if not impossible, to forecast 
due to the spot market's volatility. ERI also concluded that the 
relative effect of disposition of the Department of Energy's excess 
uranium inventory by sales or transfers appears to be highly dependant 
on the underlying direction in which the market price may be moving at 
the time of the sale or transfer.

  III. THE DEPARTMENT OF ENERGY ABANDONS THE DECEMBER 2OO8 MANAGEMENT 
                                  PLAN

    In July 2009 the Department of Energy abandoned the December 2008 
Management Plan, particularly the ramp-up schedule that the Department 
had previously described as a necessary component ``dictated by uranium 
market fundamentals''. Specifically, on July 28, 2009, the Department 
rejected USEC's application for a government loan guarantee to assist 
USEC's research and development of USEC's American Centrifuge Project 
in Piketon, Ohio. In response to the Department's decision to deny its 
loan guarantee application, USEC announced it would begin laying off 
employees and contractors. In response to this announcement, the 
Department announced a four year commitment of an annual $150 million 
to $200 million investment in accelerated environmental clean up at the 
Portsmouth site in Piketown, Ohio funded by providing excess uranium 
from the Department's existing stockpiles in exchange for services.\8\ 
According to the Department's announcement, new jobs to be created at 
the Portsmouth site would offset any job losses at USEC's American 
Centrifuge Project.
---------------------------------------------------------------------------
    \8\ See the DOE announcement dated July 28,2009, attached as 
Exhibit 6.
---------------------------------------------------------------------------
    The receipts from any direct sales of government surplus uranium 
inventories by the Department of Energy must be deposited in the United 
States Treasury unless Congress specifically authorizes the use of such 
receipts for a particular Department program. The Department has been 
avoiding the payment of the receipts of excess uranium inventory sales 
or transfers by bartering such excess uranium with third parties in 
return for the Department's programmatic needs. Thus, the Department of 
Energy's plan was designed to circumvent the need to ask Congress to 
appropriate funds needed for additional cleanup activities at 
Portsmouth by transferring uranium to environmental cleanup contractors 
in a barter transaction.
    Furthermore, the Department of Energy's announcement to sell or 
transfer excess uranium inventories in exchange for services to 
accelerate the Portsmouth cleanup was made before any Secretarial 
Determination of the potential impacts of such sales or transfers on 
the domestic uranium producing and conversion industries was made. On 
August 13, 2009, the Department of Energy announced its intent to enter 
into a noncompetitive contract with USEC for the first year of the work 
and to fund the noncompetitive contract by the transfer of uranium to 
USEC with a value at $150 million to $200 million.\9\ On August 
28,2009, the Department of Energy issued a Request for Proposal 
(``RFP'') stating that the Department would transfer in a barter 
arrangement the uranium equivalent necessary to fund the accelerated 
Portsmouth cleanup between 2011 and 2014. The Department of Energy did 
not state the exact amount of uranium equivalent to be sold or 
transferred in the RFP because the amount of uranium equivalent would 
be determined by the price bid. Because the successful contractor would 
``have to'' sell the transferred uranium immediately, this material 
would become a ``distress sale'' in a weak market and therefore have a 
dramatic impact on uranium and conversion prices.
---------------------------------------------------------------------------
    \9\ See August l3,2OO9 letter from Secretary Steven Chu to Vice 
President Joseph Biden dated August 13, 2009, attached as Exhibit 7.
---------------------------------------------------------------------------
    On September 17,2009, USEC sent a letter to the Department of 
Energy expressing concern about the Department's announced plan. USEC 
stated that the proposed amount of uranium material to be introduced 
under the plan and the proposed rate of introduction of that material 
would significantly depress cunent and future uranium market prices, 
which would discourage investment in existing and new uranium 
production and conversion. The USEC letter fi!rther stated that the 
volume, sequence and timeframe of the Department of Energy's planned 
introduction of surplus uranium of this quantity would overwhelm the 
normal market dynamics in coming years, with long adverse consequences 
for the U.S. nuclear industry.\10\
---------------------------------------------------------------------------
    \10\ See the USEC September 17, 2009 letter to the Department of 
Energy attached as Exhibit 8.
---------------------------------------------------------------------------
    The Nuclear Energy Institute (``NEI''), a trade association 
representing the front end of the nuclear fuel cycle and the domestic 
nuclear utilities also sent a letter to the Assistant Secretary of 
Energy, Department of Energy expressing concern regarding the announced 
Department plan to release uranium into the commercial market. NEI 
stated that the Department's announcement alone already had contributed 
to a depression of uranium prices, and would ultimately be self-
defeating as ongoing releases into a saturated market trigger a 
continued downward price spiral impacting new uranium projects and jobs 
in the U.S as well as the continued viability of U.S conversion. The 
NEI letter stated the announced Department's plan created a difficult 
scenario to justify the viability criteria that requires the Secretary 
to certify that surplus uranium transfers or sales will not have an 
adverse impact on the mining and conversion sector.\11\
---------------------------------------------------------------------------
    \11\ See the NEI September 22, 2009 letter attached as Exhibit 9.
---------------------------------------------------------------------------
    In response to the Department's proposed uranium transfers, the 
House and Senate Energy and Water Development Committees of the 
Appropriations Committee entered into a conference agreement that 
provided $232,404,000 for funding the Portsmouth enrichment facility. 
This was an increase in funding from the President's budget request by 
the Committee in response to the Department of Energy's decision to 
expand ongoing cleanup activities at Portsmouth. The Energy and Water 
Development Committees also noted in their report language that the 
Department of Energy had limited experience with off-budget excess 
federal uranium barter strategies and that the Congressional Budget 
Office estimated the Department would achieve only 55 percent of its 
defrcit reduction targets from excess uranium sales in fiscal year 
2010. The conferees expressed serious concerns regarding the 
Department's ability to successfully implement its excess uranium 
transfer proposal. The conferees directed the Government Accountability 
Office to undertake a review of the Department of Energy's oversight 
and implementation strategy to ensure that the Department executed the 
excess federal uranium sales or transfers program consistent with the 
statutory requirements of 42 U.S.C. 2297h-10.\12\
---------------------------------------------------------------------------
    \12\ See Energy and Water Committee Report FY 2010, p.194,September 
30, 2009, attached as Exhibit 10.
---------------------------------------------------------------------------
  IV. THE DEPARTMENT OF ENERGY WITHDRAWS ITS PLAN TO FUND ACCELERATED 
    PORTSMOUTH CLEANUP WITH TRANSFERS OF EXCESS URANIUM INVENTORIES

    In response to congressional and industry concerns and declining 
market conditions brought about by the Department's proposal to barter 
uranium inventories for accelerated remediation at Portsmouth, 
Secretary Chu re-examined the impacts of the proposed 2011-2014 
transfers. He told this Committee in February 2010 that the Department 
could not continue to propose uranium transfers to pay for departmental 
programs such as the accelerated remediation at the Portsmouth facility 
due to the adverse impacts on the domestic uranium and conversion 
industries. UPA applauded the Secretary's decision because, unlike the 
Department's initial determination of no impact from these transfers, 
the industry's study of the Department's proposal determined the 
likelihood of much greater price declines for uranium and conversion 
than forecasted by the Department's determination analysis. Industry 
consultants found that the proposed Department transfers could 
represent 20 to 25 percent of annually traded spot market volume, and 
when considering only end-users' volume (as opposed to material traded 
for financial gain), Department transfers would represent an even 
greater percentage of traded volumes.
    In a study done by Trade Tech, an industry consultant, it was 
pointed out that the Department's analysis failed to recognize that 
near-term price movements can affect long-range price forecasts and 
investment decisions. Trade Tech conservatively identifred over 100 
million pounds of annual uranium production that could be negatively 
impacted from a weakening market resulting from the proposed Department 
of Energy transfers.
    While Secretary Chu has rescinded the Department's decision to use 
bartered surplus uranium to fund the 2011-2014 accelerated reclamation 
at Portsmouth, serious impacts occurred to the spot uranium and 
conversion price in response to the Department's initial inventory 
transfer announcement. The substantial market impacts occasioned by the 
decision to barter uranium and then the rescission of this decision 
demonstrates the vital need to codify the Department's Management Plan 
in order to bring predictability to the commercial uranium market. New 
and expanded uranium / conversion operations must have significant 
investment to develop. The uncertainty associated with the Department's 
ability to abandon its stated policy is crippling industry's ability to 
achieve the market stability necessary for investment to expand or 
bring new domestic production and the jobs associated therewith on 
line. Further, the Department's misadventures with these federal 
uranium assets reduces the value of uranium contrary to the 
requirements of Sec.  3112(d). Putting the Department's Surplus Uranium 
Disposition Management Plan into law will prevent market disruption and 
provide predictability greatly needed by the commercial market. It will 
allow both producers and nuclear fuel consumers to have some certainty 
of how the surplus inventories will impact the market.

    V. THE SURPLUS URANIUM DISPOSITION ACT OF 2O1O SHOULD BE ENACTED

    Enactment of the proposed language set out in the Surplus Uranium 
Disposition Act of 2010 would bring predictability to the commercial 
uranium market. It would allow domestic uranium fuel producers to 
obtain the investment required to renew current facilities and promote 
new domestic production to assure security of fuel supply to our 
nation's reactor fleet. It would promote the creation of numerous high 
paying jobs associated with this vital industry. A strong domestic 
uranium mining and conversion sector will provide substantial direct 
and indirect economic benefits and tax revenues to promote economic 
recovery in addition to enhancing national energy security.
    The proposed legislation provides the ramp up of government sales 
that will allow new and expanded domestic production operations to get 
established so that they can coexist with government uranium 
inventories. The provision for new reactor initial core sales will 
provide the Department with the ability in the ramp-up years to meet 
its stated goal of selling 5 million pounds on an annual basis. The 
proposed legislation creates an incentive for the Department to sell a 
portion of the federal inventories by long-term contracts, which all 
analysts acknowledge would have less adverse impacts on private 
industry. The curent Department practice of disposing of its uranium 
inventories through spot barter transaction cannot be accomplished with 
long-term contracts. Also, the Department's practice of using receipts 
from prior sales to fund its programs without the benefit of the 
appropriations process will stop. While the UPA recognizes that the 
Department's programs have merit, the proposed legislation would place 
all receipts into the Treasury so that Congress could direct how these 
federal asset receipts should be allocated. This would create an 
incentive for the Department to sell into the long-term market, make 
initial core sales and greatly mitigate adverse commercial impacts. UPA 
believes long-term sales would enhance the value of the surplus federal 
uranium inventory and passage of the proposed legislation would cause 
the commercial market to be more reflective of actual production costs 
for primary producers instead of temporary supply demand imbalances 
created by surplus government inventories.

                             VI. CONCLUSION

    Fast-growing countries competing for global resources of fuel and 
raw materials like China and India, are building up stockpiles of 
uranium and investing heavily in overseas uranium properties while the 
U.S is disposing of its stockpile and creating a very difficult 
environment for investment in new uranium facilities within the U.S.
    The Uranium Producers of America believe that the Surplus Uranium 
Disposition Act of 2010 deserves strong consideration by this 
Committee. This Act will bring stability to the commercial uranium and 
conversion market while providing the basic conditions for growth of 
all facets of the domestic fuel cycle industry. The Act enjoys the 
support of all players in the nuclear industry.

    [Note: All exhibits have been retained in subcommittee files.]
                                 ______
                                 
   Statement of Shirley Brostmeyer, Chief Executive Officer, Florida 
          Turbine Technologies, Inc., Jupiter, FL, On S. 2900

    Florida Turbine Technologies (FTT) thanks the subcommittee for the 
opportunity to submit testimony in support of S. 2900, the ``Gas 
Turbine Efficiency Act''.
    Florida Turbine Technologies has established itself as a leader in 
the development of next generation gas turbine technologies and 
existing gas turbine improvements. FTT continues to be at the forefront 
of gas turbine technology by (1) recognizing the value of an 
experienced American gas turbine workforce, (2) hiring and retaining 
the best graduates that American universities have to offer, and (3) 
developing innovations that help to achieve the Department of Energy's 
long range goals for energy independence.
    FTT employs over 200 engineers, technicians, and support personnel, 
and has an eleven year history of providing innovative and proven 
efficiency and durability improvements to gas turbines for power 
generation. Furthermore, FTT develops advanced turbomachinery for 
aircraft, missile, and rocket applications, and currently ranks among 
the leading turbomachinery companies worldwide in the number and 
quality of patent awards involving clean energy innovations. FTT's 
contribution to our nation's environment is proven every day since 
turbine efficiency improvements designed by FTT are saving millions of 
tons of CO2 per year.
    Gas turbines generate 20% of our nation's electricity and are a 
versatile component of America's clean energy portfolio. They are 
economic to operate as very efficient base load generators or as peak 
power generators. Their ability to quickly and economically come on-
line to provide power makes gas turbine power the natural complement to 
sometimes intermittent renewable energy sources. And above all they are 
fueled by plentiful and clean domestic natural gas. Currently, 
investments by Asian countries in their own gas turbine technologies 
are threatening the US's technological leadership in this important 
industry, which supports tens of thousands of American export-producing 
jobs.
    The efforts authorized under S. 2900 will help the US preserve its 
technical leadership in the Natural Gas Turbine Industry and will 
leverage American small businesses and universities to create lasting 
jobs for generations to come. Americans must continue to perform the 
detailed design, manufacture and test of efficiency innovations in 
order for the US to retain the depth of understanding that is necessary 
to be the innovative leader in this technology-intensive field.
    Florida Turbine Technologies again thanks the Senate Subcommittee 
on Energy for the opportunity to submit this testimony, and we urge you 
to support S. 2900, the ``Gas Turbine Efficiency Act''.
                                 ______
                                 
            National Association of State Energy Officials,
                                     Alexandria, VA, June 14, 2010.

Hon. Bernie Sanders,
U.S. Senate--SD-332, Dirksen Senate Office Building, Washington, DC.
Re: S. 3460--10 Million Solar Roofs Act of 2010

    Dear Senator Sanders: On behalf of the National Association of 
State Energy Officials (NASEO), I wanted to take this opportunity to 
endorse your innovative legislation: The 10 Million Solar Roofs Act of 
2010 (S. 3460). NASEO represents the energy offices from the states, 
territories and the District of Columbia, and we support a balanced 
national energy policy, that includes strong promotion of renewable 
energy.
    This solar legislation would facilitate the use of solar energy for 
homeowners, businesses, schools and other types of facilities utilizing 
solar installations of less than 1 megawatt. Funds are provided under 
your bill through the State Energy Program (SEP), operated by the 56 
State and Territory Energy Offices utilizing the formula for SEP. This 
is a proven vehicle, which is being operated successfully in 
distributing ARRA funds as well. The types of programs which can be 
implemented include rebates, loans, performance-based incentives and 
other financing options. These programs are being operated at the state 
level now, and these funds will greatly expand and focus their use on 
solar economic development opportunities.
    Your continuing efforts leading support for the State Energy 
Program, the Weatherization Assistance Program, the Energy Efficiency 
and Conservation Block Grant and the Low-Income Home Energy Assistance 
Program, are seen by state and local governments as a powerful model 
for how a legislator can impact energy policy and programs for the 
better. These programs help real people every day, and you deserve 
credit for leading the charge in support of these critical activities.
    Thank you again for your support for innovative approaches to 
solving our nation's energy problems.
            Sincerely,
                                            Philip Giudice,
                                                             Chair.
                                 ______
                                 
                                   Alliance to Save Energy,
                                                     June 11, 2010.
Hon. Jeff Bingaman,
Chairman, Senate Energy and Natural Resources Committee, 304 Dirksen 
        Senate Office Building, Washington, DC.
    Dear Chairman Bingaman: We write today to congratulate you for 
introducing the Supply Star Act (S. 3396). Your legislation would 
create within the Department of Energy a program known as ``Supply 
Star,'' whose sole purpose would be improving the efficiency with which 
enterprises related to each other through manufacturing supply chains 
use energy, water and other natural resources. We believe this bill has 
the potential to significantly improve the energy efficiency of almost 
all energy sectors, and the Alliance to Save Energy is pleased to 
endorse S. 3396.
    Improving the energy efficiency with which products are 
manufactured, packaged, transported, stored, sold, used, and recycled 
or disposed of has a great potential for companies to save money and 
resources. For instance, through Wal-Mart's Supplier Energy Efficiency 
Program, industrial facility retrofits saved manufacturers $200,000 in 
energy costs in its first year, and eliminated more than 3,300 metric 
tons of greenhouse gases. By improving its freight logistics planning 
and the methods by which it loads merchandise in trucks, Wal-Mart also 
reduced the number of miles driven by its trucks by over 87 million 
miles, saving 15 million gallons of diesel fuel--all while transporting 
more goods than before.
    But most companies don't have the capacity or the expertise to 
attain these savings. The Supply Star Program would fill that role, 
collecting best practices by which companies can maximize the 
efficiency of their supply chains, and sharing its findings with 
industry--including, importantly, small businesses. It would develop 
and standardize metrics, processes and tools for measuring supply chain 
efficiency, and collect and disseminate data on energy consumption in 
supply chains. It would provide entities with opportunities to 
benchmark their supply chain efficiency, and promote the practices, 
companies and products that conserve energy water and other resources 
through highly efficient supply chains.
    While there are significant opportunities to improve supply chain 
energy efficiency in the private sector, the federal government is in a 
unique position to lead by example in this field. Through its direct 
energy consumption, the federal government is not only the largest 
single energy user in the nation but the largest buyer in the world of 
many types of products and services. The energy use of federal 
government suppliers is equally substantial, particularly in the 
military sector. We recommend that the Supply Star program capitalize 
on this fact by requiring federal government agencies to improve the 
efficiency of their supply chains.
    This would have a host of benefits. Reduced energy consumption of 
federal suppliers will not only strengthen their own bottom line, but 
improve air quality and reduce the emission of greenhouse gases while 
improving American energy security. And as agencies implement 
innovative strategies to reduce the resource consumption of their 
supply chains, they will serve as a proving ground to test the Supply 
Star information and software tools and to demonstrate and document 
best practices in this field.
    Initiatives to involve the federal government in the Supply Star 
program could take a number of forms. Agencies could work with their 
suppliers to encourage the purchase of Energy-Star-qualified 
appliances; improve facility energy management by calling on their 
suppliers to join DOE's Save Energy Now program and to benchmark and 
``commission'' their major facilities; challenge their suppliers to 
join the Environmental Protection Agency's SmartWay program for 
shipping their products; and much more.
    We would also propose that the federal government enlist advice 
from the private sector in designing and implementing a federal supply 
chain initiative.
    The Supply Star Act creates a unique opportunity to tackle energy 
use across a variety of sectors, while reducing costs for industry in 
these difficult economic times. The Alliance is pleased to endorse this 
bill and we look forward to assisting you in moving it forward through 
the legislative process this year.
            Sincerely,
                                           Kateri Callahan,
                                                         President.
                                 ______
                                 
                                               UPS,
                                  Corporate Public Affairs,
                                     Washington, DC, July 14, 2010.
Alicia Jackson, Ph.D.,
Professional Staff Member, Senate Committee on Energy and Natural 
        Resources, SD-304, U.S. Senate, Washington, DC.
    Dear Dr. Jackson, Given the technical changes that you have made to 
the bill S. 3396, the Supply Star Act of 2010, sponsored by Chairman 
Bingaman, UPS is pleased to indicate its support for the bill. I thank 
you for your cooperation.
            Sincerely,
                                            James T. Bruce,
                                                   Special Counsel.
                                 ______
                                 
   Statement of John Reinker, General Manger, Heavy Duty Gas Turbine 
             Combined Cycle Products, GE Energy, on S. 2900
                                overview
    GE Energy (GE) appreciates this opportunity to submit testimony in 
support of S. 2900, the ``Gas Turbine Efficiency Act.''
    GE serves the energy sector by developing and deploying technology 
that helps make efficient use of natural resources. With nearly 85,000 
global employees and 2009 revenues of $37 billion, GE Energy 
(www.ge.com/energy) is one of the world's leading suppliers of power 
generation and energy delivery technologies. The businesses that 
comprise GE Energy--GE Power & Water, GE Energy Services and GE Oil & 
Gas--work together to provide integrated product and service solutions 
in all areas of the energy industry including coal, oil, natural gas 
and nuclear energy; renewable resources such as water, wind, solar and 
biogas; and other alternative fuels.
    S. 2900 authorizes a cost-shared program at the Department of 
Energy to research, develop and demonstrate technologies to improve 
dramatically the efficiency of gas turbines used in simple cycle and 
combined cycle power generation systems. This program would serve 
significant U.S. national interests by promoting environmental 
protection through reductions of CO2 and other emissions, 
strengthening the economy through job creation and retention, and 
preserving U.S. technology leadership. GE commends Senator Gillibrand 
and her cosponsors for introducing this bill, applauds the Committee 
for moving it forward, and encourages the Senate to enact it as quickly 
as possible.

                                BENEFITS

    This program will achieve important objectives in a variety of 
critical areas. These include:

    Environmental benefits.--Natural gas is considered by many to be 
the cleanest burning fossil fuel. Highly efficient gas turbine 
technology offers a reliable, economical, power generation option, 
providing significant savings for consumers while producing substantial 
reductions in emissions of CO2, NOX and 
SO2 compared to other sources of fossil fired generation. 
The technologies developed pursuant to this new program can be an 
essential part of the response to climate change, both in this country 
and around the world.
    For example, a one percentage-point improvement in efficiency 
potentially achieved through technology developed under this program 
and applied to GE's existing F Class fleet in the U.S. would result in 
CO2 emissions reductions of 4.4 million tons per year. Such 
an improvement could also result in savings of more than a billion 
dollars per year in fuel costs for consumers. Assuming adoption of some 
form of climate change legislation, deployment of a 65% efficient 
combined cycle gas turbine throughout the country could result in 
significant reductions in fuel use, leading to savings in electricity 
costs of $180 billion through the year 2040.
    Jobs created and retained through U.S. technology leadership.--The 
program will promote U.S. technology leadership, which could put the 
U.S. in a position to serve a greater share of the world's energy needs 
and create and retain high value domestic jobs in turbine 
manufacturing. If GE were to qualify for an award under this program, 
we estimate that it would lead to the creation or retention of 180 jobs 
per year for the design, manufacturing, and testing of the technology. 
That technology could lead to the subsequent creation or retention of 
more than 3,700 jobs over the following 5 years for potential plant 
retrofits, and the creation of roughly 1 million hours in labor for 
each new plant constructed.
    Takes advantage of abundant U.S. natural gas supplies.--Recent 
developments in drilling technology are allowing the United States to 
tap huge supplies of shale and other non-conventional domestic gas 
resources. Recent estimates suggest the U.S. has 100-years or more of 
natural gas supply. These developments could have an important impact 
on the role that natural gas plays in our nation's energy mix, which 
would be complemented by the introduction of more efficient technology.
    Need for a public-private partnership.--A government-industry 
partnership will greatly assist in addressing the inherent 
technological challenges in moving the efficiency benchmarks to the 
levels contemplated by this legislation, particularly in the areas of 
the development of high temperature materials, and enhancements in 
combustion technology, advanced controls, and high performance 
compressor technology.
    GE again thanks the Committee for the opportunity to share its 
views on S. 2900, and urges the Committee to support its passage by the 
full Senate as quickly as possible.
                                 ______
                                 
                       Solar Energy Industries Association,
                                     Washington, DC, June 15, 2010.
Hon. Bernie Sanders,
U.S. Senate, 332 Dirksen Senate Office Building, Washington, DC.
    Dear Senator Sanders: On behalf of more than 1,000 companies and 
over 30,000 employees that make up the U.S. solar energy industry, the 
Solar Energy Industries Association thanks you for your leadership on 
the 10 Million Solar Roofs Act (S. 3460). This bill would create a 
mechanism to fund comprehensive solar rebate and incentive programs in 
all fifty states and create for the first time a national market for 
solar in the United States.
    The 10 Million Solar Roofs Act would have significant economic, 
energy, and environmental benefits if enacted and implemented. With its 
focus on spurring the growth of small-scale, distributed solar systems, 
this bill would bring the benefits of solar energy to millions of new 
consumers and organizations. State-level solar incentives created 
through the American Recovery and Reinvestment Act of 2009 have proven 
extremely successful, and this bill would provide a way to sustain and 
expand these programs notwithstanding the current shortfall in many 
state budgets.
    We applaud your determination and dedication to expanding the use 
of solar energy in the U.S. Your willingness to take the lead in 
supporting and encouraging the growing solar industry, and the vision 
you have shown in crafting this legislation, serve as models for other 
legislators in Congress. This type of forward-thinking policy is 
critical to ensuring America's technological and environmental 
leadership in the twenty-first century.
    Passing this important legislation will help America begin to 
diversify our energy portfolio and futher expand our already-growing 
clean energy industry. By investing in solar, the U.S. will create 
thousands of new jobs in manufacturing and installation, save Consumers 
money on their electricity bills, and reduce the amount of harmful and 
dangerous pollutants in our atmosphere.
    Once again, we strongly support the 10 Million Solar Roofs Act, and 
we commend you for leading the way to a clean energy future for our 
country. We look forward to working with you to pass and implement this 
important legislation.
            Sincerely,
                                               Rhone Resch,
                                                         President.

                                    

      
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