[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]



 
   BENEFITS OF AND CHALLENGES TO ENERGY ACCESS IN THE 21ST CENTURY: 
                              ELECTRICITY

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

                                HEARING

                               BEFORE THE

                    SUBCOMMITTEE ON ENERGY AND POWER

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                           FEBRUARY 27, 2014

                               __________

                           Serial No. 113-121


      Printed for the use of the Committee on Energy and Commerce

                        energycommerce.house.gov


                                 ______

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                    COMMITTEE ON ENERGY AND COMMERCE

                          FRED UPTON, Michigan
                                 Chairman

RALPH M. HALL, Texas                 HENRY A. WAXMAN, California
JOE BARTON, Texas                      Ranking Member
  Chairman Emeritus                  JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky               FRANK PALLONE, Jr., New Jersey
JOHN SHIMKUS, Illinois               BOBBY L. RUSH, Illinois
JOSEPH R. PITTS, Pennsylvania        ANNA G. ESHOO, California
GREG WALDEN, Oregon                  ELIOT L. ENGEL, New York
LEE TERRY, Nebraska                  GENE GREEN, Texas
MIKE ROGERS, Michigan                DIANA DeGETTE, Colorado
TIM MURPHY, Pennsylvania             LOIS CAPPS, California
MICHAEL C. BURGESS, Texas            MICHAEL F. DOYLE, Pennsylvania
MARSHA BLACKBURN, Tennessee          JANICE D. SCHAKOWSKY, Illinois
  Vice Chairman                      JIM MATHESON, Utah
PHIL GINGREY, Georgia                G.K. BUTTERFIELD, North Carolina
STEVE SCALISE, Louisiana             JOHN BARROW, Georgia
ROBERT E. LATTA, Ohio                DORIS O. MATSUI, California
CATHY McMORRIS RODGERS, Washington   DONNA M. CHRISTENSEN, Virgin 
GREGG HARPER, Mississippi            Islands
LEONARD LANCE, New Jersey            KATHY CASTOR, Florida
BILL CASSIDY, Louisiana              JOHN P. SARBANES, Maryland
BRETT GUTHRIE, Kentucky              JERRY McNERNEY, California
PETE OLSON, Texas                    BRUCE L. BRALEY, Iowa
DAVID B. McKINLEY, West Virginia     PETER WELCH, Vermont
CORY GARDNER, Colorado               BEN RAY LUJAN, New Mexico
MIKE POMPEO, Kansas                  PAUL TONKO, New York
ADAM KINZINGER, Illinois             JOHN A. YARMUTH, Kentucky
H. MORGAN GRIFFITH, Virginia
GUS M. BILIRAKIS, Florida
BILL JOHNSON, Ohio
BILLY LONG, Missouri
RENEE L. ELLMERS, North Carolina

                                 _____

                    Subcommittee on Energy and Power

                         ED WHITFIELD, Kentucky
                                 Chairman
STEVE SCALISE, Louisiana             BOBBY L. RUSH, Illinois
  Vice Chairman                        Ranking Member
RALPH M. HALL, Texas                 JERRY McNERNEY, California
JOHN SHIMKUS, Illinois               PAUL TONKO, New York
JOSEPH R. PITTS, Pennsylvania        JOHN A. YARMUTH, Kentucky
LEE TERRY, Nebraska                  ELIOT L. ENGEL, New York
MICHAEL C. BURGESS, Texas            GENE GREEN, Texas
ROBERT E. LATTA, Ohio                LOIS CAPPS, California
BILL CASSIDY, Louisiana              MICHAEL F. DOYLE, Pennsylvania
PETE OLSON, Texas                    JOHN BARROW, Georgia
DAVID B. McKINLEY, West Virginia     DORIS O. MATSUI, California
CORY GARDNER, Colorado               DONNA M. CHRISTENSEN, Virgin 
MIKE POMPEO, Kansas                      Islands
ADAM KINZINGER, Illinois             KATHY CASTOR, Florida
H. MORGAN GRIFFITH, Virginia         JOHN D. DINGELL, Michigan (ex 
JOE BARTON, Texas                        officio)
FRED UPTON, Michigan (ex officio)    HENRY A. WAXMAN, California (ex 
                                         officio)

                                  (ii)


                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Ed Whitfield, a Representative in Congress from the 
  Commonwealth of Kentucky, opening statement....................     1
    Prepared statement...........................................     3
Hon. Jerry McNerney, a Representative in Congress from the State 
  of California, opening statement...............................     4
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, opening statement...............................     5

                               Witnesses

Edward S. Finley, Jr., Chairman, North Carolina Utilities 
  Commission.....................................................     7
    Prepared statement...........................................     9
Bruce E. Biewald, Chief Executive Officer, Synapse Energy 
  Economics......................................................    66
    Prepared statement...........................................    69
    Supplement to prepared statement \1\
Mel Coleman, Chief Executive Officer, Northern Arkanses Electric 
  Cooperative....................................................    77
    Prepared statement...........................................    79
Paul O'Brien, Vice President for Policy and Campaigns, Oxfam 
  America........................................................    86
    Prepared statement...........................................    89
Todd J. Moss, Chief Operating Officer and Senior Fellow, Center 
  for Global Development.........................................    98
    Prepared statement...........................................   101

                           Submitted Material

Report, undated, ``Climate Change Evidence & Causes: An overview 
  from the Royal Society and the U.S. National Academy of 
  Sciences,'' submitted by Mr. Waxman \2\
Statement of February 24, 2014, ``What the Cold Snap Tells Us 
  About EPA Carbon Rules,'' Electric Reliability Coordinating 
  Council, submitted by Mr. Whitfield............................   140
Letter of January 24, 2014, from Christopher M. Crane, President 
  and Chief Executive Officer, Exelon Corp., et al., to Regina A. 
  McCarthy, Administrator, Environmental Protection Agency, 
  submitted by Mr. Whitfield.....................................   143
Article, posted February 20, 2014, ``Energy Access and the True 
  Cost of Fossil Fuel Projects in Africa,'' The Huffington Post, 
  submitted by Mr. Whitfield.....................................   149

----------
\1\ Internet link to the report ``2013 Carbon Dioxide Price 
  Forecast'' is on page 77.
\2\ Internet link to the report is on page 124.


   BENEFITS OF AND CHALLENGES TO ENERGY ACCESS IN THE 21ST CENTURY: 
                              ELECTRICITY

                              ----------                              


                      THURSDAY, FEBRUARY 27, 2014

                  House of Representatives,
                  Subcommittee on Energy and Power,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:16 a.m., in 
room 2123 of the Rayburn House Office Building, Hon. Ed 
Whitfield (chairman of the subcommittee) presiding.
    Members present: Representatives Whitfield, Shimkus, Terry, 
Latta, Olson, McKinley, Pompeo, Kinzinger, Griffith, Barton, 
McNerney, Tonko, Green, Barrow, Matsui, Christensen, Castor, 
and Waxman (ex officio).
    Staff present: Nick Abraham, Legislative Clerk; Charlotte 
Baker, Press Secretary; Sean Bonyun, Communications Director; 
Allison Busbee, Policy Coordinator, Energy and Power; Tom 
Hassenboehler, Chief Counsel, Energy and Power; Brandon Mooney, 
Professional Staff Member; Mary Neumayr, Senior Energy Counsel; 
Peter Spencer, Professional Staff Member, Oversight; Caitlin 
Haberman, Democratic Policy Analyst; Bruce Ho, Democratic 
Counsel; Alexandra Teitz, Democratic Senior Counsel, 
Environment and Energy; and Kate Istoll, Democratic Fellow.

  OPENING STATEMENT OF HON. ED WHITFIELD, A REPRESENTATIVE IN 
           CONGRESS FROM THE COMMONWEALTH OF KENTUCKY

    Mr. Whitfield. I would like to call the hearing to order 
this morning and certainly want to thank the witnesses for 
being with us today.
    This morning, we do begin a new hearing series entitled 
``Benefits of and Challenges to Energy Access in the 21st 
Century.'' And today's hearing will focus on electricity 
access, and the next hearing will deal with fuel supply and 
infrastructure issues.
    Now, when we talk about access to electricity, in America 
we are fortunate that we have a well-developed system, but many 
of us are genuinely concerned that the Obama administration is 
pushing us so quickly, so fast into a renewable mode, and the 
President says that he supports an all-of-the-above energy 
policy, which all of us do support. But his actions indicate 
that certainly on coal he does not see that coal really has a 
future in America, despite what he might say.
    And most people recognize, I think, that Europe at least 
has the reputation of being the green sector of the world, and 
22 percent of their electricity comes from renewables. But we 
also know that they are having great difficulty. They have an 
unemployment rate of 12 percent, gas prices are so high that 
they mothballed 30 gigawatts of natural gas-powered plants to 
produce electricity, and last year, they imported into their 
area about 50 percent of our coal export market. And they are 
using more coal because natural gas prices are too high.
    And I think realistically in America we don't think anyone 
is going to build a new coal-powered power plant with natural 
gas prices as low as they are, but most of us genuinely believe 
that we should have the option to build a coal-powered plant in 
the future. And with the greenhouse gas regulations that will 
become final supposedly this summer, it will be impossible to 
build a new coal-powered plants because the technology is not 
available to meet the emissions standards set by EPA. And we 
feel very strongly and have written letters to EPA asking for 
an explanation, that their emissions standard was set illegally 
because the plants that they rely on is an explicit violation 
of the 2005 Energy Policy Act.
    And I think that this recent cold spell should also cause 
concern for all of us. The CEO of AEP announced that 89 percent 
of their plants in operation to meet this cold spell demand are 
scheduled to be retired in 2015. Southern Company, 75 percent 
of their coal plants, operating at capacity for this recent 
cold spell, plan to be retired. Luminant brought two coal-fired 
plants back into operation in Texas for this cold spell. TVA 
set an electricity demand record during this cold spell and 
they are planning to close 20 coal-fired plants. The nuclear 
companies have written us letters saying that the pending 
cooling tower regulation coming out of EPA threatens the 
premature shutdown of a significant number of nuclear power 
plants.
    So, on the one hand, you talk to people and they say, well, 
climate change is the number one issue and that has got to be 
addressed. On the other hand, if people's reliability is 
threatened and if we can't compete in a global marketplace 
because we are eliminating one source of fuel that we might be 
able to use in the future, then we are threatening jobs and the 
economy.
    But one of the most disturbing things from my perspective 
is that the Obama administration is being so aggressive in 
making sure that the World Bank and even they attempted--the 
Ex-Im Bank and the Asian Development Bank and other financial 
institutions will not provide funding for a coal plant to be 
built anywhere in the world. We have people from Bangladesh 
coming to talk to us, people from Africa. I was reading in 
Nigeria half the people there don't even have electricity.
    So this administration, not only are their regulations 
affecting us domestically, but they are affirmatively, 
aggressively trying to prevent the building of a new coal-
powered plant even with the best technology anywhere in the 
world even though in those areas what they are burning now is 
fuel oil using generators that is much dirtier than emissions 
from a supercritical coal plant, for example.
    So these are issues that we are struggling with and they 
have got to be answered. We can't just run off, as John Kerry 
said recently in Indonesia, that climate change is the mass 
destruction weapon facing mankind. I think that kind of extreme 
view is not good or healthy.
    My time is expired, and I was just getting started.
    [The prepared statement of Mr. Whitfield follows:]

                Prepared statement of Hon. Ed Whitfield

    Today's hearing will focus on electricity access, and the 
next hearing will deal with fuel supply and infrastructure 
issues. The unusually cold weather we have recently experienced 
across the Nation underscores the importance of affordable and 
reliable electricity.
    Nonetheless, under the Obama administration electricity 
access is being jeopardized by a number of already finalized or 
pending measures raising its cost. This includes pending global 
warming-related regulations from the Environmental Protection 
Agency.
    Regardless of intention, I believe any policy that 
increases the price of energy runs a serious risk of doing more 
harm than good. And the first victims of misguided measures are 
the least fortunate in society, both here in the U.S. and 
around the world.
    EPA's rules threaten electric reliability as well as 
affordability. EPA's rules are contributing to an unprecedented 
number of coal plant shutdowns that will occur in the next few 
years as environmental regulations take effect. Taking coal out 
of the equation means that America's most abundant source of 
baseload electricity will have a diminishing role. The North 
American Electric Reliability Corporation's most recent Long-
Term Reliability Assessment and other studies have raised 
serious concerns about electric reliability in the near future. 
Among the EPA rules contributing to reliability problems are 
the Mercury and Air Toxics, or ``Utility MACT,'' rule, that is 
accelerating the pace of coal-fired power plant retirements, 
and the proposed greenhouse gas New Source Performance 
Standards for power plants that would effectively ban any new 
coal from coming online. To address the latter, we need to 
enact H.R. 3826, the Electricity Security and Affordability 
Act, in order to keep new coal in our energy future.
    America's growing natural gas abundance is clearly a 
blessing, but the recent cold spells demonstrate that there are 
limits to the ability of natural gas to replace coal. In fact, 
it was necessary to increase the use of coal-fired generation 
to get us through the periods of high demand brought on by the 
very cold temperatures. This included many coal facilities 
scheduled to shut down in the next 2 years. We should look at 
this winter as an early warning that reliability is at risk.
    Now I might add that it is not even necessary to be a 
global warming skeptic to be a skeptic of these policies. Even 
EPA administrator Gina McCarthy admitted to this committee that 
none of her agency's costly global warming rules would make a 
measurable difference. In other words, the Obama energy agenda 
is all economic pain for no environmental gain.
    And the pain will fall disproportionately on the poor, who 
are least able to handle higher electric bills. The unemployed 
are also hurt, as higher electricity costs slow the pace of job 
creation, and the war on coal is eliminating job opportunities 
in many communities.
    The damage around the world from the administration's 
climate policies could be even worse. 1.2 billion people still 
don't have access to electricity. The last thing they need 
imposed on them is a costly climate agenda that puts the dream 
of electrification even further out of reach.
    For this reason, I am particularly disappointed by the 
administration's opposition to financing for new state-of-the-
art new coal-fired power plants in developing countries, and 
I'm perplexed by the President's insistence that he supports 
the goal of increased electricity access while also pursuing an 
uncompromising global warming agenda that effectively deprives 
people of such access.
    Unfortunately, those seeking to advance a global warming 
agenda lose sight of the things that really matter. Today, we 
will refocus on what really matters--ensuring affordable and 
reliable energy for as many people as possible.

    Mr. Whitfield. At this time, I recognize the gentleman from 
California, Mr. McNerney, for an opening statement.

 OPENING STATEMENT OF HON. JERRY MCNERNEY, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. McNerney. Well, I thank the chairman. I want to thank 
the witnesses for coming out here today despite the weather and 
whatever other obstacles you may have had. I just want to say a 
little rebuttal to the chairman, who I have a great respect 
for.
    Coal does have a future in this country but we need to 
implement carbon capture and sequestration technology and 
develop that technology, which would be a benefit to the coal 
industry. That being said, electricity and energy production 
and our environment are interconnected and it is essential that 
we continue efforts to produce energy in a responsible way. We 
know, as has been confirmed by the world's leading scientists, 
that climate change is happening and that human activities, 
including burning fossil fuels, are driving this change.
    We have also seen that climate change threatens our 
electricity system itself and our economy through impacts like 
droughts like the one we are now having in California, where 
water accounts for about 15 percent of our total power supply. 
This drought has disrupted hydroelectric dams and forced 
utility companies to purchase electricity from other sources 
that is up to three times more expensive than hydro.
    Severe weather events, disasters, polar vortices, and large 
wildfires also pose additional strains to our electricity 
system. As a result, when considering electricity access in the 
coming years, we must consider climate change. Energy 
efficiency demand response, grid resiliency, reliability 
measures and modernization could all help to mitigate and 
prepare for the climate impacts that scientists tell us are 
coming. Addressing electric enhancements and vulnerabilities 
that providers are more capable of preparing for and responding 
to our energy needs during extreme weather events and also 
boost our economy by creating manufacturing jobs and 
encouraging innovation.
    Our Nation generates electricity from a variety of sources; 
39 percent comes from coal, 29 percent from natural gas, 19 
percent from nuclear, and 13 percent from renewable sources. 
Renewable energy capacity alone has surpassed 90 gigawatts and 
is becoming more competitive with fossil fuels every year. In 
this committee, we have talked about American efforts to curb 
carbon pollution and greenhouse gas emissions and how that 
parallels the energy policies of other nations.
    The U.S. should lead by example. We can show other 
countries that we are more environmentally responsible to meet 
our energy needs. Coal will remain a component of our Nation's 
energy infrastructure but we can show that there are ways to 
make it cleaner. For example, there will be plants online this 
year both in the United States and Canada where CCS technology 
will significantly reduce coal's carbon pollution. We are also 
seeing the potential benefits of microgrids where consumers may 
be better able to handle energy needs. When wildfires take down 
a power line, the microgrid system can provide additional power 
back to the utility.
    The International Energy Agency estimates that by 2020, 
developing countries will double their electricity power 
output. There will be regions where new centralized power 
plants make sense economically and that it is appropriate for 
existing infrastructure. However, microgrids could and should 
be essential to bringing power to many developing regions. That 
is because connecting a remote community to a conventional 
power grid with its large, centralized power plants is 
expensive and could take more than a decade.
    Building and combining power from multiple local sources 
can be cheaper, more secure, and faster than extending the grid 
to remote areas. This type of distributed generation also 
typically relies less on carbon-intensive energy sources.
    With that, I look forward to hearing the witnesses' 
testimony and I yield back.
    Mr. Whitfield. Thank you very much, Mr. McNerney.
    And at this time, Mr. Upton was going to make a 5-minute 
opening statement and we will submit it for the record, but he 
is not here today.
    So is there anyone on our side of the aisle that would like 
to make a statement?
    I know that Members of Congress always like to speak. I saw 
Mr. Waxman coming in so I was trying to stress that someone 
talk on our side, but at this time I recognize Mr. Waxman for 5 
minutes.

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Waxman. Thank you very much, Mr. Chairman, on behalf of 
the opening statement-makers.
    I want to say we are having a hearing on electricity 
access. Access to affordable, reliable electricity is 
fundamental to our economy. It is a subject we should be 
working together to address, especially since much of our 
current electricity infrastructure is decades old and will need 
to be replaced or upgraded in the coming years.
    According to the Edison Foundation, these investments will 
cost over $1 trillion over the next two decades. But we can't 
have an honest discussion about the future of the electricity 
system unless we talk about climate change. Until we have an 
energy policy that acknowledges the reality of climate change, 
the utility industry will operate in a perpetual state of 
uncertainty.
    Outside of Congress, there is a broad agreement that 
climate change is the most significant issue facing our energy 
system and infrastructure needs. On Monday, the CEO of the 
Nation's largest railroad, Matthew Rose, called for an energy 
policy that recognizes the reality of climate change. On 
Tuesday, David Crane, the CEO of the Nation's second-largest 
power generator, said that climate change is the most serious 
threat to the future of the world.
    These CEOs operate in the real world, so unlike this 
committee, they know the value of listening to scientists. And 
scientists know that climate change is occurring in that human 
activities such as burning fossil fuels are largely 
responsible. The most recent report from the Intergovernmental 
Panel on Climate Change, which assessed nearly 10,000 peer-
reviewed studies, concludes that ``warming in the climate 
system is unequivocal,'' and ``human influence on the climate 
system is clear.''
    And yes, yesterday, the Royal Society in the United Kingdom 
and our own National Academy of Sciences jointly briefed this 
committee to reiterate that it is now more certain than ever 
that humans are changing Earth's climate and that these changes 
will have serious impacts on humans, society, and the natural 
world.
    Energy, economic disparity, and the climate are 
intertwined. The rest of the world knows this. UN Secretary 
General Ban Ki-Moon calls climate change an existential threat. 
And World Bank President Jim Yong Kim said that unless we 
address the climate change, ``we could witness the rolling back 
of decades of development gains and force tens of millions more 
to live in poverty.'' And President Kim said point-blankly, 
``if we don't confront climate change, we won't end poverty.'' 
We need to face this reality if we are going to design an 
energy policy that protects our environment, grows our economy, 
and gives companies the certainty they need.
    Electricity system investments cost hundreds of millions 
and often billions of dollars and are expected to last for 
decades. It makes no sense to build this infrastructure without 
considering its effects on the climate and the effect of 
climate change on our energy systems. Much of American industry 
knows this. Even ExxonMobil screens investments using a price 
on carbon of $60 per ton. Most other major oil companies assume 
carbon prices as well. Wal-Mart, Wells Fargo, Delta, GE, 
Google, DuPont all are using a price on carbon to guide their 
decisions.
    As we will hear from one of our witnesses today, Synapse, 
even utility companies are assuming carbon prices in their 
planning. According to a recent survey, ``carbon pricing has 
been standard operating practice in business planning.'' But it 
is still an anathema even to discuss the idea in this 
committee. We need to stop denying science and start listening 
to the scientists and enlightened business leaders if we are 
going to succeed in crafting a sustainable energy policy for 
the future.
    For the information of our witnesses and our guests at this 
hearing today, despite repeated requests to have a hearing with 
scientists, we haven't even gotten a response to that request, 
let alone a hearing, so we have a woeful ignorance in this 
committee of the reality of what is happening in the world 
today as we look at energy policy.
    Thank you, Mr. Chairman. I yield back my time.
    Mr. Whitfield. Thank you, Mr. Waxman.
    And that concludes our opening statements, and so once 
again, I want to welcome the witnesses and thank you for being 
with us today. We have a distinguished group of panelists that 
will provide great insights into this issue that we are talking 
about, energy access and the benefits and challenges of that.
    Our first witness this morning--and I will introduce all of 
you and then we will go back--but we are delighted to have Mr. 
Edward Finley, who is the chairman of the North Carolina 
Utilities Commission. Mr. Finley, thank you for being with us. 
We have Mr. Bruce Biewald, who is the Chief Executive Officer 
of Synapse Energy Economics. We have Mr. Mel Coleman, who is 
the chief executive officer of the Northern Arkansas Electric 
Cooperative. We have Mr. Paul O'Brien, who is the Vice 
President for Policy and Campaigns at Oxfam America. And then 
we have Dr. Todd Moss, who is the chief operating officer and 
senior fellow at the Center for Global Development.
    So thank all of you for being with us, and each of you will 
be given 5 minutes for an opening statement and then we will 
open it up for questions.
    So, Mr. Finley, you are recognized for 5 minutes.

 STATEMENTS OF EDWARD S. FINLEY, JR., CHAIRMAN, NORTH CAROLINA 
    UTILITIES COMMISSION; BRUCE E. BIEWALD, CHIEF EXECUTIVE 
OFFICER, SYNAPSE ENERGY ECONOMICS; MEL COLEMAN, CHIEF EXECUTIVE 
OFFICER, NORTHERN ARKANSAS ELECTRIC COOPERATIVE; PAUL O'BRIEN, 
  VICE PRESIDENT FOR POLICY AND CAMPAIGNS, OXFAM AMERICA; AND 
TODD J. MOSS, CHIEF OPERATING OFFICER AND SENIOR FELLOW, CENTER 
                     FOR GLOBAL DEVELOPMENT

               STATEMENT OF EDWARD S. FINLEY, JR.

    Mr. Finley. Thank you, Chairman. Chairman Whitfield and 
Ranking Member McNerney and members of the subcommittee, thank 
you for the opportunity to share with you my thoughts on the 
important of affordable and reliable electricity in North 
Carolina.
    By far the most difficult aspect of my job is to conduct 
public hearings at which consumers appear and implore us 
commissioners to reject utility requests to raise rates. The 
testimony is often poignant and heartrending. If you approve 
this request, I will be unable to pay both the power bill and 
to pay for medicine that I need. We listen to testimony for 
hours at a time in hearings from one end of our State to the 
other. In the end, we nevertheless grant at least a percentage 
of the requested increases because the utilities must maintain 
their financial health to provide reasonably priced electricity 
over the long-term and maintain reliable and safe service.
    Electric utility rate increases in recent years have been 
driven primarily by plant construction expenses, a new 
supercritical coal plant to replace older, less efficient ones, 
new gas plants constructed for the same reason. More stringent 
environmental regulations have been a major catalyst.
    Our State, its legislature, the electric and gas utilities, 
and its regulators have acted responsibly in efforts to improve 
the environment while minimizing financial hardship on the 
State's citizens that have been hit hard by the recession. 
Since 2002, we have spent billions on environmental control 
facilities, coal-to-gas conversion, incentives for renewables, 
demand response, and energy efficiency measures.
    By 2015, our electric utilities will have retired all of 
their uncontrolled coal plants. However, rules requiring 
removal of carbon from the remaining smokestacks will prove a 
challenge for us. We have no place for the repositories.
    In 2007, the legislature enacted the first renewable energy 
portfolio standard in the southeast. It calls for 12.5 percent 
of electric sales to be from renewables and energy efficiency 
by 2021. For Duke Energy, demand-side management and energy 
efficiency is projected to meet one-third of the projected 
demand growth over the next 15 years, and for Progress Energy, 
20 percent.
    We have followed an all-of-the-above policy thinking that 
is best. We have been able to balance the requirements to keep 
energy prices affordable while anticipating assisting to 
formulate and to comply with the rules to protect and improve 
the environment. We believe this approach is best. It is 
usually done in an adversarial context where we hear strong 
arguments from both sides. That seems to be how our energy 
policy is addressed these days.
    Thank you very much.
    [The prepared statement of Mr. Finley follows:]

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    Mr. Whitfield. Thank you, Mr. Finley.
    And, Mr. Biewald, you are recognized for 5 minutes.

                 STATEMENT OF BRUCE E. BIEWALD

    Mr. Biewald. Thank you very much. Good morning, Chairman 
Whitfield, members of the U.S. Subcommittee on Energy and 
Power.
    My name is Bruce Biewald. I am President and CEO of Synapse 
Energy Economics. We are a research and consulting firm 
specializing in electricity, energy, economic, environmental 
topics. We do work largely in the States before commissions 
such as North Carolina related to utility planning.
    So I believe that climate change and carbon emissions from 
the electric sector can be addressed in the U.S. without 
threatening reliability, without large electricity price bill 
increases to customers, and in a way that creates net jobs in 
our economy.
    I am here today to focus in particular on the planning 
practices in the States. Many utilities are placing dollar 
values on CO2. Carbon dioxide emissions are priced 
in utility planning processes in the States. It has become 
increasingly commonplace. So that is what I am focused on.
    I did a report in November 2013, which is online. I think 
it is actually attached to my comments here. And it reviews 
Federal and State policies related to CO2 and then 
summarizes utility forecast of CO2 prices. So 
electric utilities, they are making very important resource 
decisions, very capital-intensive, long-lived resource 
decisions, and as part of that, they present the basis for 
those decisions before regulatory commissions in the States. 
They forecast CO2 prices, they forecast fossil fuel 
prices, they forecast capital costs for their resource 
alternatives.
    So I have a slide here today. Unfortunately, it is 
difficult to see at this scale, but it summarizes 30-some 
forecasts of CO2 prices by utilities.
    [The information follows:]

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    Mr. Biewald. So we have got, for example, Duke Energy in 
the Carolinas as a forecast I think in the middle of the pack. 
There we have got Entergy in Arkansas. In their planning they 
use four CO2 price forecasts--well, they use zero 
for certain cases. They also look at a price of $25 per ton in 
2017 in one of the sets of scenarios that they look at. So 
Entergy has a carbon price in their forecasts. In Arkansas, the 
Electric Cooperative Corporation has a CO2 price. 
They look at $0, $10, and $20 for purposes of the latest plan.
    So, you know, utilities around the country, including what 
are represented here through their regulators or executives, 
are forecasting CO2 prices and planning on that 
basis. They are able to do this and the average of the prices 
shown there for 2025 is $16 per short ton of CO2. So 
that is kind of a summary of a lot of complicated information.
    The links to all the IRPs are provided in the appendix to 
my written submission here.
    So I want to say that there are carbon prices I think 
coming in the future in the United States that affect power 
plants. Utilities are recognizing that. They are able to 
recognize that and plan to serve their customers reliably at 
reasonable cost and, you know, to the benefit of the local and 
U.S. total economies.
    Energy efficiency is available. Utilities that are 
investing in energy efficiency are seeing prices of 2 to 4 
cents per kilowatt hour. It is extremely attractive. In much of 
the country, particularly the middle from the Dakotas down to 
Texas, wind energy last year was coming in at prices of 2 to 4 
cents per kilowatt hour.
    In contrast, natural gas generation, you know, all in is, 
you know, 6 to 8 cents per kilowatt hour and the coal-fired 
power plants that we have been discussing, whether they are new 
coal-fired--well, existing coal-fired power plants with the 
upgrades that are required are at prices significantly above 
that typically. It varies by region; it varies by plant. It is 
important for utilities and regulators and others to roll up 
their sleeves, look at the details, and make sound long-term 
planning decisions.
    Thank you very much.
    [The prepared statement of Mr. Biewald follows:]

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    The report ``2013 Carbon Dioxide Price Forecast'' is 
available at http://www.synadpse-energy.com/Downloads/
SynapseReport.2013-11.0.2013-Carbon-Forecast.13-098.pf.
    Mr. Whitfield. Thank you very much.
    Mr. Coleman, you are recognized for 5 minutes.

                    STATEMENT OF MEL COLEMAN

    Mr. Coleman. Thank you, Mr. Chairman.
    Members of the Energy and Power Subcommittee, thank you for 
inviting me to testify today on the benefits and challenges to 
electric energy access in the 21st century. I am Mel Coleman. I 
am here only as CEO of North Arkansas Electric Cooperative and 
my main concern are my 35,000 accounts that I have.
    We strive each and every day to improve the quality of 
life. That is the business we are in. We have 28,000 members, 
35,000 connects. We purchase our power from Arkansas Electric 
Cooperative Corporation, which is our cooperatively owned 
wholesale power supplier.
    We have an obligation, Mr. Chairman, to provide a reliable 
supply of electricity, plain and simply, providing that to our 
member consumers at the lowest possible price. This job is not 
easy today based on the new and ongoing challenges that we 
face. One such challenge is the heavy infrastructure investment 
that is associated with serving rural service territories. Co-
ops serve very diverse communities with sharp economic and 
geographical differences with service territories that are 
sparsely populated. I have a density, sir, of 7.4 meters per 
mile where the average across the United States is 33.3. So our 
costs are a lot more than most co-ops and most utilities will 
see. The legacy of rural electrification and the obligation to 
serve the last mile results in higher maintenance costs as 
compared to our industry counterparts.
    On top of our infrastructure challenge, we serve some of 
the neediest Arkansans. As with most rural areas, North 
Arkansas is economically depressed with limited economic 
opportunities for our members. All six counties that my co-op 
serves has an average poverty rate of 19.15 percent, well above 
the national average, and a median household income of $32,000, 
well below the national average. Rural consumers are more 
dependent upon electricity to meet their household energy needs 
than those living in urban and suburban households. 
Contributing factors are higher electric usage in rural areas 
and the prevalence of single-family detached unit homes, as 
well as energy inefficient manufactured housing. So it stands 
to reason that increased electricity costs have a 
disproportionate impact on rural consumers.
    Recently, consumers have been hit with the double whammy of 
increased costs and higher rates due to the recent cold snap. 
Not even a southern State like Arkansas was immune. Our 
electric co-ops set new peaks for winter power consumption with 
this being the coldest winter the State has experienced in 20 
years. High demand for electricity and natural gas, along with 
localized gas supply disruptions, force the grid to rely 
heavily on coal generation to meet the power needs this winter.
    I hope we can all take a lesson from these events and 
appreciate the stability of coal pricing as a hedge against 
natural gas-priced volatility. Our coal-based generation 
resources protected Arkansas' electric cooperative member 
consumers from the full effect of the recent spike in natural 
gas prices. This winter proves that such a move to shut down 
coal plants and EPA's goal of shutting down coal plants would 
jeopardize reliable and affordable electricity for my members.
    Unfortunately, EPA's proposed standard to limit carbon 
dioxide emissions from new coal units will require carbon 
dioxide capture technology that is costly and is not viable on 
a commercial scale, effectively removing new coal generation as 
a hedge against future natural gas price spikes. EPA's climate 
regulations may well be the greatest threat facing our 
industry. We are extremely concerned that EPA will propose a 
standard to existing coal plants this summer that will threaten 
the viability of our existing coal fleet, resulting in 
increased cost to our members and undermine the reliability of 
the Nation's power grid.
    My cooperative, members of the committee, is not in the 
electric business. We are in the life improvement business. Our 
partnership with NRECA's international program has only 
confirmed my sentiments about our commitment to quality of 
life. To see what rural America was like before rural 
electrification, all you need to do is visit a Third World 
country.
    I hear old-timers talk about the day the lights came on but 
I didn't experience that day. I was fortunate to be part of an 
electrification project in the remote areas of northwest 
Guatemala. Last year, I saw the lights come on for the first 
time for people. As the electrons flowed for the first time, so 
did the tears of all who witnessed. That was the beginning of 
the quality of life for those villagers, and in their face, I 
saw our grandparents and felt what they experienced in our 
country 75 years ago. That is what we have to protect. 
Electricity is the foundation of our quality of life, and we 
must never forget that. Thank you.
    [The prepared statement of Mr. Coleman follows:]

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    Mr. Whitfield. Thanks, Mr. Coleman.
    And, Mr. O'Brien, you are recognized for 5 minutes.

                   STATEMENT OF PAUL O'BRIEN

    Mr. O'Brien. Thank you, Mr. Chairman, and thanks, Ranking 
Member McNerney, for your comments and for inviting us here.
    Oxfam America is part of a collaboration of 17 affiliates, 
and we work in 90 countries around the world, kind of in the 
same business as Mr. Coleman, trying to improve lives. And 
those were touching reflections and we have experienced those 
ourselves. We see energy poverty and what it means to people on 
the ground all over the world where we work. I lived in 
Afghanistan for 5 years and I saw the same thing. I saw micro 
hydro dams turn on electricity for girls who were able to do 
schoolwork for the first time. In Sudan, I saw pumps that 
electricity was allowing water to come out. Women no longer had 
to walk through insecure areas. It literally changed their 
lives, may have saved them. East Africa in more remote areas I 
saw what refrigerated electricity can do for the medicines that 
rural communities and remote places can have and health clinics 
work all day long.
    But we have seen something else happening in the last few 
years that we are also trying to work on on the ground, and 
that is the devastating impacts of climate change for poor 
communities. We feel that they are the ones who face it first 
and worst. They are 20 times more likely to face a climate 
disaster in their lifetimes than the non-poor.
    So what has that meant for us? Well, it means two big 
things. One, it means that we as Oxfam have to spend a lot more 
time trying to help people to be food secure in an increasingly 
insecure environment. We work in places like Mali, Ethiopia, 
Nigeria, Senegal to help farmers develop resilience practices 
so that they can cope with unpredictable weather. We have 
watched in the last few years food price spikes. And of course 
these are far worse for poor people because they are spending 
70 percent of their income on food. So corn may not be at all-
time high now but it was just a couple of years ago, and our 
estimates and our research tells us that corn is going to 
double in cost in real terms over the next 20 years due to 
climate change.
    The other big thing we see besides food insecurity is 
climate-related disasters. We have worked with victims of 
flooding in places like Pakistan and Bangladesh. We have helped 
communities recover from coastal incursions by extreme weather 
in the Gulf Coast of the United States, in Haiti, and very 
recently, in the Philippines.
    In the next 40 years, we estimate that somewhere between 
150 million and 1 billion people are going to be displaced by 
climate change. The U.S. is already one of the most generous 
and effective responders to disasters around the world, but are 
we going to be able to cope? Already, today, we are dealing 
with south Sudan, Syria, the Philippines, the Central African 
Republic. What are we going to do when climate exacerbates the 
breadth and depth of the disasters that we face? And this isn't 
just about the people on the ground that Oxfam America and 
others like us care about. It is also about all of the security 
and political unrest that comes when you face those kinds of 
disasters. What are we going to do?
    Something different must be done to deal with these two 
challenges of energy poverty which is real on the one hand, as 
we have spoken about, but also of climate-related poverty. And 
just to be clear, Oxfam America does not oppose fossil fuel 
extraction. We worked for 10 years to make sure that the monies 
from oil, minerals, and gas that developing countries are 
getting, and they are getting it--goes towards poverty 
reduction.
    I just want to put this in numerical context. Globally, 
there is about $130 billion spent every year on AIDS to help 
people living in poverty mostly in developing countries. At the 
same time, there is $2 trillion of private investment going 
into developing countries. And there is $6 trillion of 
government investment being spent in developing countries. The 
question that is before us is not whether we should decide the 
fate of fossil fuel industries in Africa and other places. That 
is going to happen anyway. The question is whether we should be 
taking precious U.S. payer tax dollars and using it to invest 
in fossil fuels. And we believe that that is not the way 
forward if the interests of the poor in those countries is the 
center of the equation.
    So today, the Electrify Africa Act is being marked up by 
the House Foreign Affairs Committee and we, Oxfam, and many 
organizations like us are advocating that the Act adhere to 
three core principles around access. First, it should be 
prioritizing access and not just production. Secondly, let's 
remember that at the end of the day whether communities and 
countries have viable access to electricity is going to be the 
responsibility of their governments, and everything we do 
should weaken, not undermine, those governments. Whether we 
like it or not, they are going to be responsible for 
maintenance and for ensuring that revenues are connected to 
sustain their energy economies.
    And finally, we believe that the Act should be prioritizing 
renewable energy development. And just a couple quick comments 
on why. First, we believe that fossil fuels do not internalize 
the actual cost of their production, their cost to communities, 
their cost to countries, their cost to the planet. If they did, 
we believe that they are actually far more expensive than 
renewable energies. Secondly, we know where the poor are 
living, and although some will say that the numbers around 
urban poor are high, maybe as high as 200 million, we don't 
think it is that high. Even in a place like Africa, most 
people, 400 million, are living in rural areas where you cannot 
access them with centralized grid planning. You need mini-
grids. You need off-grid plans.
    I watched in Afghanistan in the early----
    Mr. Whitfield. Mr. O'Brien, excuse me a minute. I have let 
you go over a minute and 15 seconds----
    Mr. O'Brien. OK.
    Mr. Whitfield [continuing]. So if you could just summarize.
    Mr. O'Brien. I will close with one sentence. Renewable 
energy costs, we believe they are going down and we would like 
more creativity and innovation by the United States.
    But thank you, Mr. Chairman----
    Mr. Whitfield. Thank you.
    Mr. O'Brien [continuing]. For allowing me the time, and I 
look forward to your questions.
    [The prepared statement of Mr. O'Brien follows:]

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    Mr. Whitfield. Thank you.
    Dr. Moss, you are recognized for 5 minutes.

                   STATEMENT OF TODD J. MOSS

    Mr. Moss. Thank you, Chairman Whitfield, and other members 
of the subcommittee.
    Energy access is increasingly relevant to American business 
and U.S. foreign policy interests, especially in the fast-
growing emerging markets. As a development policy scholar at 
the nonpartisan Center for Global Development and a former 
State Department official, I am going to focus this morning on 
the international dimensions and what the U.S. really can and 
should be doing about it.
    I have three points this morning. One, the energy gaps are 
huge and very harmful; second, the U.S. can and should be a 
leader in expanding energy access abroad; and three, to 
succeed, we have to be honest about how our policy choices may 
have the practical effect of denying power to the world's 
poorest.
    First, more than 1 billion people today live without 
electricity. Turning on a light, heating our homes, using a 
computer or a fridge are things that we in the United States 
view as simple conveniences of modern life. In Africa, as we 
have heard, some 600 million people, almost twice the 
population of the United States, live with no electricity at 
all. Even those with access to power use an absolute fraction 
of the power that we do.
    I was recently shopping for a new refrigerator with my son, 
who is here with me today, and I was reading those little 
yellow ENERGY STAR tags, and my new fridge uses five times 
power per year than the average person in Tanzania or Liberia.
    This lack of electricity is devastating to both lives and 
livelihoods. Without electricity, people are forced to cook 
with wood and charcoal. This creates indoor air pollution, 
which then leads to premature death. The best global estimate 
we have is that there are 3 \1/2\ million premature deaths 
every year from indoor air pollution, so energy poverty kills 
more people than AIDS and malaria combined. The effect on jobs 
and economic growth is stifling. World Bank data show that the 
lack of affordable and reliable electricity is the top 
constraint to business expansion in Africa.
    Second point, the U.S. Government has a very vital role to 
play in closing this energy gap. African governments are 
prioritizing electricity estimates. European countries, China, 
and other nations are increasing their commitment to energy 
access and it is time for the U.S. to play its part, too. In 
our own history, our government has been fundamental in the 
expansion of electricity to underserved areas and ensuring that 
American industry has sufficient and affordable energy to be 
competitive. This policy had both a human face and was pro-
growth.
    Last June, President Obama launched Power Africa. This very 
promising initiative supports a doubling of energy access in 
the continent. Ordinarily, the agency best positioned to lead 
this effort, the Overseas Private Investment Corporation, or 
OPIC, is hamstrung by outdated policies and legislation. This 
little-known but high-performing agency supports the American 
private sector through insurance and project finance, not aid. 
This is commercial finance. And what OPIC needs is not more 
money but they need more authorities and flexibility to fulfill 
their mission.
    Fortunately, the Electrify Africa Act introduced last year 
by House Committee on Foreign Affairs Chairman Royce and 
Ranking Member Engel is being marked up today. Congressional 
action is important because it will power OPIC and provide a 
foundation so these efforts outlive the current administration.
    Momentum in Congress is encouraging, yet just as the U.S. 
is pushing expanded access, other policies are adding 
restrictions on financing for natural gas and even hydropower. 
This comes unfortunately at just the moment when many African 
countries are discovering natural gas and understandably they 
want to use some of those resources to produce electricity at 
home. Indeed, all six of the Power Africa focus countries are 
either producing or exploring for oil and gas today.
    Ghana, a close U.S. ally, is a good example. Ghana wants to 
use its newly discovered natural gas to expand access and grow 
its industry. If the U.S. is limited in our ability to assist, 
and many advocacy groups concerned about greenhouse gas 
emissions are pushing to prevent any gas-fired power plants in 
Ghana, as we consider our position, it is worth noting in the 
United States we have over 3,400 fossil fuel plants. Ghana has 
two.
    My final point is that we cannot wish away these tradeoffs 
of our energy policy choices. An emphasis on clean technology 
is a very good idea where it is feasible and it deserves active 
U.S. support, but the scale of the problem is so great that 
those approaches will simply not be enough. People living 
without power are not all in isolated villages. As we have 
heard from Mr. O'Brien, some 200 million Africans living 
without electricity are in cities and towns. Connecting these 
fast-growing urban areas will require more large-scale 
generation and expanding the grid.
    Even in rural areas in Africa, people are not as spread out 
as some people imagine. In Kenya, only 20 percent of the 
population has access to power, but a careful study by the 
University of California Berkeley shows that 75 percent of the 
population lives within a mile of an existing transmission 
line.
    Solar lamps, also very popular, it is a fine invention, but 
consumer demand is going to be much greater than having a 
single light bulb and a cell phone charger. No country would 
rationally accept solar lamps in lieu of a modern energy system 
that can generate jobs and growth.
    A final common mistake is assuming that universal energy 
access can be achieved entirely through renewables. Instead, 
there is a clear tradeoff between strictly focusing on 
renewables and expanding access. My colleague Ben Leo and I 
estimate that allowing OPIC to invest in natural gas power 
projects could provide, for the exact same money, access for 60 
million more people over a renewables-only strategy. At the 
very least, we should make an exception to any public financing 
restrictions for the poorest countries with the least 
emissions.
    To conclude, no one would openly argue that we should fight 
climate change on the back of the world's poor, but we must be 
very careful not to burden the poorest nations with romantic 
notions of an energy future that does not yet exist. If an all-
of-the-above approach is good enough for the United States, how 
can we in good conscience stand in the way of the world's 
poorest countries using locally available energy sources to 
provide electricity for their own people?
    Thank you.
    [The prepared statement of Mr. Moss follows:]

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    Mr. Whitfield. Well, thank you very much, Dr. Moss, and 
thank all of you for your testimony.
    You know, your testimony raised some great issues because 
while we do have many problems in America as we make this 
transition--and I still maintain we are transitioning too 
quickly to renewables--but basically, you have America and 
Europeans and wealthy nations dictating to developing nations 
on exactly what kind of energy they are going to have.
    And, of course, Mr. O'Brien, in your testimony, I mean 
Oxfam has a great reputation. In your testimony you talked a 
lot about climate change, and obviously, whenever you talk 
about this issue, you have got to talk about climate change. 
And I want to read an article that I read just recently about 
the most recent AR5 assessment report of the Intergovernmental 
Panel on Climate Change, which says it acknowledged that the 
lack of warming since 1998--there has been a lack of warming 
since 1998--and there are growing discrepancies between 
observations in reality and the climate model projections. 
There is evidence of decreased climate sensitivity to increases 
in atmospheric CO2 concentration, evidence that the 
sea level rise during 1920 to 1950 was the same as 1998 to 
2012, and that the Antarctic ice mass is increasing, also, that 
types of weather extremes were worse in the '30s and even in 
the '50s than they are today.
    And there are a large group of scientists who are saying 
because so much of CO2 emissions are natural, that 
is having a much greater impact certainly than manmade. So none 
of us question the concern about greenhouse gas-enhanced 
climate change, but we should not be such alarmists, and the 
international news media I think is contributing to this 
because we need to start acknowledging that there are some real 
discrepancies in these model projections and the reality, as is 
pointed out in this AR5 assessment report that was issued in 
the fall by the IPCC.
    So here we are talking about we have got these financial 
institutions under pressure from the Obama administration 
dictating on what the electricity is going to be produced from 
in these developing countries. And I mean that is a concern 
that you expressed also, Dr. Moss.
    But anyway, one of the questions I wanted to ask you, Mr. 
Coleman, I mentioned in my opening statement about how, with 
this cold spell that we had, and we had Southern Company, we 
had AEP, we had Luminant, we had even the nuclear plants 
talking about the impact of these regulations, and 89 percent 
of the AEP coal fleet is going to go down, Southern Company, 75 
percent that was operating at capacity is going to go down, all 
because of these regulations.
    And many of us are concerned about when you have spells 
like this, the renewables, I mean how can you just meet your 
requirements with reliability without these plants? Would you 
just comment on that for me?
    Mr. Coleman. Well, Mr. Chairman, I think the short answer 
is we can't. Baseload generation are our fossil fuel plants. 
And I will give you a disclaimer; I am in the distribution 
business. I am not a generation and transmission expert. But 
the power that we purchase, you know, we have to have the 
baseload generation there.
    Renewables are great. We are all for renewables. We have 
got renewables in our portfolio. And as you said, in Arkansas 
we have got a campaign called The Mix Matters, and it says you 
have got to have a mix of all-of-the-above energy strategy, not 
all-but-one energy strategy.
    So renewables play a part, certainly, the wind renewables 
that we have, but it is not baseload generation. Fortunately in 
Arkansas we are part owners of the newest coal plant in the 
country, an ultra-supercritical coal plant, the Turk plant, and 
we could not build another one today under today's EPA rules. 
So, yes, we have got to have the basic generation or my people 
are out of power.
    Mr. Whitfield. You know, these are such real issues with 
such dramatic impacts on people, and I really think the Obama 
administration is not being truthful with the American people 
when they set the emission standards on these new plants based 
on plants that will not be built without a lot of government 
support. And none of these plants are in full operation yet. 
That is the thing that is so disturbing to me and many other 
people.
    My time is expired so I would like to recognize the 
gentleman from California for 5 minutes.
    Mr. McNerney. Well, thank you, Mr. Chairman.
    What I am hearing this morning is a conflict between the 
legitimate desire to provide electric power to people in the 
world to make their lives better so that they can live in a 
modern world on the one hand, and on the other hand, providing 
electric power requires fossil fuels to be burned, which 
increases the problems associated with climate change. So the 
risk in my opinion of the climate change is the bigger risk. 
But we can't overlook the need to provide power. So that is the 
fine line that we need to develop and to walk. And to say that 
one side or the other is totally right or wrong is missing the 
point in my opinion.
    Mr. Biewald, you had an interesting comment I believe in 
your opening statement that you thought that it was possible to 
provide responsible power and create jobs without increasing 
the price of electricity. Would you expand a little bit on 
that, please, in a minute or so?
    Mr. Biewald. Absolutely. In the States that we have looked 
at, it is perfectly plausible with a little bit of planning to 
retire some plants and replace them with alternatives that 
really don't cost any more, in fact, in many cases cost less. 
And so it helps the consumers.
    In Kentucky, for example, we did a study where adding 
efficiency and renewables, displacing some fossil fuels, added 
20,000 net jobs by the year 2020. So it is helping the economy, 
it is keeping the reserves at a level that is required for 
liability and at reasonable cost to the customers.
    Mr. McNerney. Would that increase their price of 
electricity for the customers?
    Mr. Biewald. It need not. What happens is the efficiency 
opportunities are so inexpensive and such low-hanging fruit and 
so attractive that those are available and decrease the prices 
a lot. The renewable prices are a mix. Some renewables are less 
than the conventional supply and some renewables are more. In 
terms of intermittent renewables coming on the grid, say wind, 
as Mr. Coleman points out, we need to sort of baseload demand 
for electricity, but that baseload can be served by some mix of 
resources, including, say wind, with natural gas backing it up. 
So that provides in combination baseload power that serves that 
baseload demand reliably.
    Mr. McNerney. Thank you. Mr. O'Brien, I would like you to 
sort of expand that discussion to the international situation.
    Mr. O'Brien. Well----
    Mr. McNerney. How could we provide power to international 
customers that don't have power now----
    Mr. O'Brien. Right.
    Mr. McNerney [continuing]. Using responsible low-carbon 
emission methods?
    Mr. O'Brien. What has changed radically for us as a 
development organization is where wealth that is driving 
economic growth is coming from. Let's take countries we have 
been in in the last several decades, Kenya, Tanzania, Uganda, 
Mozambique. In the last 3 years, those four countries have 
discovered 130 trillion cubic feet of gas. They have discovered 
2 billion barrels of oil. They don't need our help to burn more 
fossil fuels. In the same environment, they have populations 
facing extreme weather events all the time. They have got 
coastal regions where fishing communities are being wiped out; 
they have got farmers who are losing their livestock and their 
crops.
    What we are asking is that the United States plays a 
leadership role in helping the global economy move off an 
overreliance. We want to be the ones associated with the 
hospital in Haiti that is able to run through solar power an 
entire hospital to cater for 6,000 patients. We want to be 
associated with that.
    Mr. McNerney. So another thing that scares me about climate 
change is the potential to drive political and military 
conflicts. Would you expand on that a little bit, please?
    Mr. O'Brien. Today, there are 2 billion people under water 
stress. Many of them live in insecure regions where their 
governments don't have confident control of their territories 
and they are not frankly anything close to the kind of strong 
democracies that we would like to see. Climate is only going to 
exacerbate local tensions based on lack of access to important 
resources like water and so on. If we don't tackle the 
consequences of climate change, we are going to be dealing with 
the stresses on governance and on security in much of the 
Sahel, in much of central Asia where I spent a lot of time, and 
in many other areas which are really facing water stress is 
perhaps the easiest way to understand it.
    Mr. McNerney. Well, thank you, Mr. Chairman.
    Mr. Whitfield. At this time I recognize the gentleman from 
Texas, Mr. Barton, for 5 minutes.
    Mr. Barton. Thank you, Mr. Chairman. You may have done this 
before I arrived but we have former Congresswoman Jo Ann 
Emerson in the audience, and if she wasn't introduced, we 
welcome you back to the committee and we are glad to have you 
in your new position today.
    Mr. Whitfield. Yes, thank you for doing that. We hugged and 
kissed before but we didn't do it publicly.
    Mr. Barton. Well, I missed out on that unfortunately, 
dadgummit.
    We have been throwing around a lot of terms here today, Mr. 
Chairman, and just for the record I want to try to clarify some 
of these before I ask some policy questions.
    My first question--and I don't know who to ask this to, I 
guess the utilities commissioner from North Carolina, Mr. 
Finley--is the cost of CO2 the same as the cost of 
carbon?
    Mr. Finley. Well, there is a lot of ways to measure the 
cost of carbon. Of course, carbon involves more than 
CO2. It involves methane and other types of--I am no 
expert on the cost of carbon so that is about the best answer I 
can give you.
    Mr. Barton. OK. Well, let me try it another way. When we 
talk about the cost of CO2, are we talking about the 
actual cost of obtaining CO2 for a productive 
purpose such as oilfield injection or something of that sort or 
are we talking about the cost of complying with various 
CO2 remediation and reduction regulation?
    Mr. Finley. In my opinion, it is the latter as opposed to 
the former. There is a lot of cost involved in taking the 
CO2 out of the smokestack and making the plants 
compliant with whatever regulations that we do come up with and 
retrofitting plants to be able to accomplish that.
    Mr. Barton. So we are really talking about the cost of 
regulatory compliance?
    Mr. Finley. I think that is a large cost, yes.
    Mr. Barton. Does anybody disagree with that, anybody on the 
panel? I don't see----
    Mr. Biewald. Well, some people do talk about the cost of 
buying CO2 as an industrial product. No one here 
today----
    Mr. Barton. But that is not what your chart was?
    Mr. Biewald. No, no, and my chart has to do with the price 
of carbon or carbon dioxide for purposes of planning. So we are 
certainly talking about that. Some of us are also talking about 
the societal cost of the carbon emissions, so the cost of the 
damages associated with the carbon emissions. So there is both 
sides to it.
    Mr. Barton. Which is a very subjective thing, very 
speculative. This pencil lead is carbon. I know what that 
costs. I know what this pencil cost. Your chart and all this, 
it is in the eye of the beholder what you want to apply to 
that. At least in my opinion it is.
    Do these compliance costs result in any increased 
efficiency in the generation of electricity or any lowering of 
electricity cost? And I will ask the gentleman from the 
electric co-op in northern Arkansas that question.
    Mr. Coleman. Again, Congressman, I am a distribution guy; I 
am not a generation guy. Would you restate the question for me 
one more time?
    Mr. Barton. Well, I was trying to get you to say no----
    Mr. Coleman. No.
    Mr. Barton [continuing]. It just raises the cost.
    Mr. Coleman. That is what I heard, no.
    Mr. Barton. OK. That is the answer I wanted. I only have a 
minute left. The vice president of Oxfam, I was really 
impressed by your testimony. I mean you seem to be in the real 
world and not some starry-eyed idealist, which I am an 
industrial engineer by training so I really did appreciate what 
you said. So my question to you, and I don't think this is a 
loaded question and I think the answer is going to be yes, but 
does your organization believe that democratically elected 
governments that use free market capitalism principles provide 
the greatest opportunity for their people to have a better life 
in their country?
    Mr. O'Brien. Yes.
    Mr. Barton. OK. Good. Good.
    Mr. O'Brien. We have a way to go to get there, but yes.
    Mr. Barton. OK. Now, I wish I had another 10 minutes or 5 
minutes because I would really like to get into--I actually 
support a lot of what you said about in these developing 
nations a baseline power grid system like we have in the United 
States is not the most efficient means of providing power in 
these developing countries where they are so spread out and 
they don't have the infrastructure, and I do believe that 
alternative energy sources like wind power and in some cases 
small hydro is the way to go.
    But I also believe that there are cases where a baseload 
coal-fired power plant, if there is coal locally in the region, 
can provide an economy of scale and an efficiency that these 
alternative energy sources can't provide so that in my view, if 
you are using free market capitalism, you would have a mix in 
these developing countries. Would you agree? That is a pretty 
complicated statement.
    Mr. O'Brien. I will tell you what I saw.
    Mr. Barton. And then I will yield back to the----
    Mr. O'Brien. And very briefly, in my 5 years in Afghanistan 
I saw major infrastructure projects around energy start and 
flounder because the government was weak, like you say, or 
didn't have the capacity to get things going or it got stolen 
or there wasn't security on the grounds to actually move the 
thing forward fast enough.
    But at the same time, I went to some of the most remote 
bases and saw small micro hydros literally change the options 
for women and children.
    Mr. Barton. Right.
    Mr. O'Brien. And I see what is going on in Pakistan today, 
and even if we get those lines across Afghanistan to provide 
power, I don't believe that government has what it takes to 
collect the revenues needed to sustain a big energy economy. 
That is why I think in many respects if we want to meet real 
needs, we have got to go smaller and meet people where they are 
at.
    Mr. Barton. I agree with that. Mr. Chairman, I yield back.
    Mr. Whitfield. The gentleman's time expired a long time 
ago, but at this time I would like to recognize the gentleman 
from California, Mr. Waxman, for 5 minutes.
    Mr. Waxman. Thank you, Mr. Chairman. I will try to do my 
questions within the 5 minutes, but I see that you are being 
liberal and allowing people to go over, but I will try to stay 
within the 5 minutes.
    Coal-fired power plants are responsible for one-third of 
the Nation's carbon dioxide pollution. A new coal-fired power 
plant can cost billions of dollars and might be expected to 
operate for 40 years or even longer. Given what we know about 
climate change, it doesn't make sense to invest in a new coal 
plant without considering the long-term liability of its 
pollution.
    Mr. Biewald testified that many electric utilities are 
looking for ways to minimize their carbon pollution such as by 
including costs of carbon in their integrated resource plans or 
IRPs. In 2013, the Arkansas Electric Cooperative, which 
supplies Mr. Coleman's co-op with its power, filed an IRP with 
the Arkansas Public Service Commission that included carbon 
price scenarios starting at $10 per ton in 2022 and escalating 
to as high as $78 per ton by 2050. Last year, Duke Energy 
Carolinas also included a carbon price in the IRP it filed with 
Chairman Finley's commission. Duke looked at a carbon price of 
$17 per ton beginning in 2020 and escalating over time.
    Mr. Coleman and Chairman Finley, are there laws that impose 
these carbon prices in Arkansas or in North Carolina?
    Mr. Coleman. No.
    Mr. Waxman. Mr. Finley?
    Mr. Finley. Not in North Carolina.
    Mr. Waxman. OK. Jim Rogers, Duke Energy's former CEO, 
recently said, ``every decision we make today we make with the 
knowledge that there will someday be carbon regulation in this 
country. There will be a price on carbon, and since we make 
decisions for 30 to 40 to 60 years, we need to take that into 
account.'' Mr. Biewald, do you agree with Mr. Rogers that 
rational utilities should include a price on carbon in planning 
and investment decisions even if there are no current laws that 
impose such a price?
    Mr. Biewald. Absolutely, yes, because such prices are 
likely to be in place, policies and prices, during the life of 
these assets. So prudent, responsible planning really requires 
the companies making these decisions----
    Mr. Waxman. Um-hum.
    Mr. Biewald [continuing]. To anticipate that.
    Mr. Waxman. Utilities around the country are prudently 
considering the cost of carbon in their business decisions. 
Unfortunately, there is only so much they can do on their own. 
In 2009, American Electric Power proposed to build a 
commercial-scale coal-fired power plant with carbon capture and 
sequestration in West Virginia, but AEP had to cancel that 
project when State regulators wouldn't approve the cost because 
no existing laws required AEP to reduce its carbon pollution. 
Mr. Biewald, are other utilities likely to be able to finance 
technologies such as carbon capture and sequestration if there 
are no legal requirements to control carbon?
    Mr. Biewald. I would say in general, no. It would be 
difficult for commissions to approve those kind of expenditures 
and put them on the backs of the customers. Even a new coal 
plant without carbon capture and sequestration is sort of 
economically unviable, so in that regard, it is not about the 
carbon policy or the price of carbon. It is just the market 
economics of producing kilowatt hours.
    Mr. Waxman. Well, EPA's forthcoming power plant rules would 
provide the regulatory certainty utilities need to build 
cleaner coal plants in this country, yet House Republicans 
recently passed the Whitfield bill out of this committee which 
would block EPA's rules. House Republicans might not believe 
climate change is real, but virtually no one in the scientific 
community holds this position and responsible businesses don't 
either. This committee needs to stop ignoring reality and start 
finding solutions to climate change.
    In his questions a minute or so ago, Chairman Whitfield 
read some out-of-context quotes to suggest that climate change 
has paused and that there is less reason for concern. He could 
not be more wrong. Yesterday, the Royal Society of Great 
Britain and our own National Academy of Sciences published a 
new paper entitled, ``Climate Change Evidence and Causes'' that 
specifically addresses these and similar denialist arguments. 
And let me read you a key section. ``Does the recent slowdown 
of warming mean that climate change is no longer happening? No. 
... Despite the slower rate of warming, the 2000s were warmer 
than the 1990s. A short-term slowdown in the warming of Earth's 
surface does not invalidate our understanding of long-term 
changes in global temperature arising from human-induced 
changes in greenhouse gases.''
    So since there is still such misunderstanding about such 
basic facts on this committee, I would ask unanimous consent to 
introduce this report for the record.
    Mr. Whitfield. Without objection.
    [The information is available at http://dels.nas.edu/
resources/static-assets/exec-office-other/climate-change-
full.pdf.]
    Mr. Waxman. Thank you, Mr. Chairman. I see that my time has 
expired.
    Mr. Whitfield. Thank you.
    And at this time, I would like to recognize the gentleman 
from Ohio, Mr. Latta, for 5 minutes.
    Mr. Latta. Well, thank you, Mr. Chairman, and thank you 
very much for the hearing today and thanks to our witnesses for 
being with us today. I really appreciate your testimony. You 
know, we have been experiencing a really cold winter in the 
United States. Across my district, tonight it is going to be 10 
below again, so it has been cold.
    But if I could get right to it, just a little bit about my 
district. I probably represent the largest number of co-ops in 
the State of Ohio. I probably represent the largest number of 
farmers in the State of Ohio. I also represent about 60,000 
manufacturing jobs in the State of Ohio. And as I believe Mr. 
Coleman had said a little bit earlier that you need baseload 
capacity to turn these machines on and what you need to do to 
power up, and that is what we have to have in my area to make 
sure that people are back at their jobs in the morning working.
    And if I could, Mr. Finley, I noticed with interest on page 
4 of your testimony, you are describing, you know, some of the 
declines in your furniture businesses and things like that and 
then on page 5 that, you know, you are all competing for 
business across the country and businesses are also looking at 
price and reliability. How important is it to you to have that 
power out there to make sure that you can even bring these 
businesses into your State?
    Mr. Finley. It is fundamentally important. It is one of the 
most important aspects of our jobs and the power companies' 
jobs that we regulate.
    Mr. Latta. And, Mr. Coleman, as you talk about Arkansas co-
op and, you know, I also saw that in your testimony, you know, 
you talked about that if you are going to raise the standard of 
living and tackle poverty, you have got to have that power. And 
to be able to do that, especially tackling poverty and to have 
that power, doesn't that equate to jobs that you have to have 
to make sure that you have it?
    Mr. Coleman. Absolutely.
    Mr. Latta. And again in looking at your testimony, I also 
found it interesting, I think it was on page 2 of your 
testimony where you went into one of your plants is required to 
do $614 million in total upgrades to a plant that cost $1.17 
billion. So you are almost at half the cost of your plant for 
upgrades. Who is paying for those costs?
    Mr. Coleman. Congressman, my members are and all of the 
480,000 members of the State of Arkansas are paying for those 
in the electric bills every day.
    Mr. Latta. OK. And when you look at that, what are your 
folks out there that are using the power in your companies 
saying when they are getting these increases in their costs? 
Are they saying that they can stay in Arkansas or do they have 
to sometimes look somewhere else?
    Mr. Coleman. Well, I can give you an example. We have got a 
10 megawatt load on our lines, and we meet with them on a 
quarterly basis. They are based out of Chicago, and they are 
the largest user of power that we have. Power is also the 
largest expense that they have as a business. And, you know, I 
meet with them across the table once a year and I hear from 
them that, you know, when is this going to end? And if you 
listen to some of the testimony today, it is not when is it 
going to end; it is almost like it is just beginning. So when 
we talk to, whether it is the industrial customer or whether I 
talk across the table to a residential member, and I have got 
some stories about how they can't pay their bills, that is the 
problem, the affordability of the bill and the fact that the 
power has got to be there when they need it.
    Mr. Latta. Thank you. Mr. Finley, if I could ask a question 
to you now. You also testified that the electricity rate 
increases are up in North Carolina are being driven largely by 
recent construction of power plants required in large number by 
need to comply with more stringent environmental regulations. 
When you refer to more stringent environmental regulations, 
what are you referring to?
    Mr. Finley. Those have to do with the atmospheric 
regulations both within our State and from the national 
government. There are any number of them that have been driving 
the cost of plants in North Carolina since approximately 2002.
    Mr. Latta. Thank you. And, Mr. Moss, also when you are 
looking at the developing countries out there and to really get 
their economies moving and get the standard of living up there, 
you have to have jobs. And to have those jobs, you have to have 
that energy and especially electricity. When you are looking at 
that crystal ball into the future, what kind of power do these 
countries have to have to be able to have that baseload 
capacity to create those jobs to increase that standard of 
living?
    Mr. Moss. Many multiples of what they have now, many, many 
multiples.
    Mr. Latta. OK. And when you say multiples, how would you 
describe the multiples?
    Mr. Moss. The average person in Nigeria uses about 130 
kilowatt hours per year. In the United States, the average 
person uses about 13,000, so we have got 100-fold. You know, 
for a Nigerian that wants to live an American-style lifestyle, 
they need a 100-fold increase in power. There is an aluminum 
smelter previously owned by an American company in Ghana. That 
has been running at only 20 percent capacity for the sole 
reason that they do not have enough power.
    Mr. Latta. Thank you.
    Mr. Chairman, I see my time is expired and I yield back.
    Mr. Whitfield. The gentleman's time is expired.
    At this time, I recognize the gentleman from New York, Mr. 
Tonko, for 5 minutes.
    Mr. Tonko. Thank you, Mr. Chair, and thank you to our 
panelists for some interesting discussion.
    Mr. O'Brien, in your testimony you refer to the 
International Energy Agency's scenario for universal energy 
access, which has 65 percent of the energy coming from 
renewable sources. The model for the electricity sector in the 
developed world, large-scale central generation with power 
delivered to customers over a network of transmission and 
electrical lines, is about a century old. OPIC and the Ex-Im 
Bank have been operating for years without any energy cap, and 
these countries have had access to the technologies that make 
up this traditional generation and delivery system for years. 
This model hasn't delivered for these people, so this doesn't 
seem to be a realistic model for energy access by the poor, 
especially in rural areas. Would you agree with that statement?
    Mr. O'Brien. Yes.
    Mr. Tonko. And the finance model for our electricity sector 
where central generation and delivery costs are paid by the 
ratepayers also doesn't seem realistic for people who operate 
in a cash or barter economy and spend about 75 percent of their 
incomes on food. Would you agree with that?
    Mr. O'Brien. Yes.
    Mr. Tonko. It seems to me this is analogous to the 
situation with landline-based telecommunications versus 
cellular communications, that the improvements in renewable 
energy technologies and the drop in the price to acquire them 
seems to have been done far more to improve energy access for 
poor people in developing countries than our decades-long 
attempt to help them duplicate our model of energy access. Is 
that----
    Mr. O'Brien. Yes. I had the privilege of being in both 
Africa and Afghanistan to watch the technology leap in the 
telecom sector, and it was transformative and it wasn't done by 
starting from all technologies. I couldn't agree with you more.
    Mr. Tonko. Thank you. And your testimony provides examples 
of climate impacts that poor communities in the developing 
nations are experiencing now. Are these communities or their 
national governments able to respond to natural disasters, 
increased water scarcity, or other climate-related problems 
that they are experiencing?
    Mr. O'Brien. The short answer is they have to be because 
there is no other viable way to meet the long-term solutions. 
If we want those free market economies with proper oversight, 
you have got to have effective governments doing that.
    When we went to Haiti to help them after the earthquake, 
only 1 percent of all the money we provided to Haiti went 
through public institutions and basically left them just as 
weak afterwards as they were beforehand. You know that Haiti is 
going to see another climate-related disaster in the next few 
years, and their government is no more ready today than it was 
before the last crisis. We have got to find a way both to meet 
the needs of people on the ground and to do it in a way that 
makes local institutions stronger at being responsible 
themselves.
    Mr. Tonko. Thank you. And what do these continued or 
accelerated climate impacts mean for the people affected?
    Mr. O'Brien. Well, it means everything. It means jobs, too, 
for fishermen, for farmers, for healthcare workers. We are 
witnessing threats to livelihood in that all of these contexts 
because of extreme weather events, and not is why we are so 
seized with the fact that we have to address both the climate 
challenges economically and the energy challenges.
    Mr. Tonko. Thank you, Mr. O'Brien. Mr. Chair, I yield back.
    Mr. Whitfield. Thank you.
    At this time I recognize the gentleman from West Virginia, 
Mr. McKinley, for 5 minutes.
    Mr. McKinley. Thank you, Mr. Chairman.
    Mr. O'Brien, in your testimony you use quite a few 
statistics and some facts there but you didn't provide the 
sources of those so that we could verify that. I think it is on 
page 3 you talk about--you use a 20 time multiplier. You talked 
about the 3 percent with the poorest people--could you----
    Mr. O'Brien. Yes.
    Mr. McKinley [continuing]. Go back through your testimony 
and provide us the references of those if you would, please?
    Mr. O'Brien. We will be happy to do that.
    Mr. McKinley. But that leads me to another because what I 
heard in your comments, you raise, quite frankly, a moral 
question. I think everyone on the panel and others would agree 
that the African nation needs affordable and dependable energy 
for them to emerge from poverty. And there is a consensus among 
economists that the best way to do that is using their fossil 
fuels that either they have or they can develop with that. But 
by virtue of some of your testimony, it came across that these 
Africans and other people in Third World nations--it comes 
across as they shouldn't be entitled to use them. Now, America 
can, but they can't.
    And so there was a quote that was given. It was, you know, 
forcing a Third World person to stay behind by forcing him to 
use more expensive electricity just so some First World person 
will feel better about themselves. This comes across as immoral 
and I am troubled with that, and I hope that we can work 
together somehow to get across to maybe change the minds of 
some individuals with that.
    But the time that I have remaining I would like to hear a 
little bit of Mr. Moss because you were also providing some 
very interesting testimony. I started talking about Africa a 
year ago, the problems that they have with a lack of power and 
how we can be exporting coal into Africa to develop so that 
they can emerge from poverty. Then I used the model of a 60 
watt light bulb and I said that is the total power that they 
have there is a 60 watt light bulb for 3 hours a day per 
person. That is it.
    So I want you to amplify a little bit more on that and also 
to reflect back on some of Mr. O'Brien's testimony if you 
would, please.
    Mr. Moss. Sure. I mean I think that it is absolutely right 
that the poorest people in the world are going to be hit the 
hardest by climate change, but it is perverse to actually make 
the world's poor pay twice by compounding their poverty by 
taking measures that effectively deny them access to power.
    There is no plausible scenario that I have ever seen where 
African carbon emissions are going to affect global emissions, 
so if it is a global problem, the problem is in the current 
emitting countries; it is not--you know, us denying Ghana two 
or three natural gas power plants is going to have absolutely 
zero affect globally. So it doesn't make sense to try to 
connect Ghanaian farmers who are having trouble with climate 
change and saying, well, let's not let Ghanaian farmers get 
electricity from Ghana's natural gas. That is just a logical 
leap that I think is quite frankly quite immoral.
    Just one other point I want to make, the IEA figures, the 
International Energy Agency, when they define energy access, it 
is for an urban household of five people, 500 kilowatt hours 
per year. That is 100 kilowatt hours per person. That is what 
an American will use in 3 days.
    So when you see these scenarios that we can provide 
universal energy access through, you know, nice solar panels, 
yes, some clinics will run on solar panels, yes, micro-hydro 
and other technologies are changing every day, but if your 
target is 3 days' worth of electricity per year for somebody, 
of course you can do it through these other technologies. And 
you are not going to be able to build industry, you are not 
going to be able to have households that run refrigerators and 
washing machines and all of the things that all consumers want 
without being able to provide a modern energy system which, 
given current economics, frankly is going to have to be a mix, 
including a lot of fossil fuels in many places.
    And it is true that the price of renewable technology is 
coming down. If it turns out that renewables are cheaper in 
Ghana or Kenya or Mozambique, then the regulations on something 
like OPIC are totally irrelevant because OPIC is going to 
decide project by project on what is commercially viable. That 
is how they do it.
    Mr. McKinley. Thank you. I yield back.
    Mr. Whitfield. The gentleman's time is expired.
    At this time I recognize the gentlelady from Florida, Ms. 
Castor.
    Ms. Castor. Well, thank you, Mr. Chairman, and thank you 
very much to the panel. I think this is a very interesting 
topic and we have many challenges ahead.
    Affordable, reliable electricity is very important to our 
neighbors back home and to the overall economy, and one way 
that States and utilities help ensure that electricity costs 
are affordable is by a going through planning processes 
routinely where they look at the economics of generation and 
conservation over the long-term and then compare different 
options. And I know you all agree that if utilities do not 
adequately prepare for the future, this can impose substantial 
cost on the electricity system and its customers.
    But it seems now that these planning processes now do not 
meet the challenges that we face due to the changing climate. 
They seem divorced from the context of rising costs, from 
extreme event. I know one of my colleagues said that those 
costs are often subjective, but they are real and local 
governments have to adapt, have to address rising sea level 
rise, but in our local property tax dollars to repair, replace 
infrastructure systems at home. And look at what the Congress 
has to do when it comes to disaster funding, responding to 
natural disasters. It has been a very high price tag that is 
very well documented.
    It seems that part of this is because the whole business 
model of electricity sales is outdated. There need to be new 
incentives for the utilities to promote conservation and energy 
efficiency. And some States are doing that and some are way 
behind. My State of Florida is kind of a problem child and 
needs to do more when it comes to efficiency and conservation.
    Mr. Biewald, you know, your group has done a lot of the 
analysis on these planning processes. Most State electric 
utility planning processes really don't take into account the 
wider range of cost. One Florida utility Commissioner recently 
said to me in a conversation, gosh, our hands are tied. The 
State law was written some time ago. We can't consider any of 
these cost factors outside of just that narrow ratepayer or 
rate increase decision. What needs to happen today in the 
planning processes at the State level for States to begin to 
build in consideration of the huge costs that we are going to 
face in the future due to the changing climate?
    Mr. Biewald. So I would start out by pointing out Florida 
is one of the more vulnerable States in terms of those damages, 
right, the storms and the impacts of climate change. We tallied 
up the damages for scenarios with sea level rise in Florida, 
and they are, I will say, astronomical in terms of the 
regulation of utilities in Florida.
    I think that the regulators in many States--you have to 
look State by State--but in many States they have more leeway 
they may take advantage of. In other words, regulators should 
certainly be requiring test practices in integrated resource 
planning, and those practices include carbon price or carbon 
constraint on the planning of the utilities as they are picking 
their resources and looking at a full range of resource 
options, really looking at energy efficiency, really looking at 
renewables.
    Some States now have laws that require the procurement of 
all cost-effective energy efficiency, and that is a terrific 
thing. It is basically in the interest of the customers and the 
businesses in that State. It has environmental benefits but 
also economic benefits locally. So where we see things like 
that happening, it helps the commissions and the utilities.
    Ms. Castor. Do you agree this whole business model on the 
amount of energy you sell really is not going to service well 
in the future? Think about the cost that ratepayers and 
consumers could realize if utilities are aggressive about 
conservation and energy efficiency. And there is one huge 
example out of Florida--I know you all are aware of it--where 
we have put in an advanced recovery fee that kind of encourages 
the building of large power plants. Unfortunately, the plants 
did not come online but ratepayers were still on the hook to 
the tune of $3 billion without realizing one kilowatt hour of 
energy. Certainly, if a more enlightened business decision had 
been made, that $3 billion could go to more energy-efficient 
initiatives. What do you think?
    Mr. Biewald. Absolutely. I think there is a lot of 
improvement that could be made within the current legal and 
regulatory structures and then also the utility business model 
and the regulated monopoly. The regulation, the way it is done, 
is very stressed and needs to be changed. And I think that will 
be changed going forward on a kind of State-by-State basis as 
States experiment and learn----
    Ms. Castor. What can we do at the Federal level to 
encourage it?
    Mr. Biewald. Well, at the Federal level I think the main 
thing is clarity of the coming regulations. So, in other words, 
utilities in these planning processes in the States, some of 
them do a good job at anticipating the future fossil fuel 
prices, future environmental regulations of various types. 
Other utilities take a very myopic view. They look at the next 
regulation and ignore the further regulations that are going to 
come 4 years----
    Ms. Castor. Yes.
    Mr. Biewald [continuing]. Six years from now. So as 
regulations are firmed up so there is some certainty of what is 
actually coming in terms of carbon and cooling water and air 
regulations, that helps the utilities and the regulators be 
able to plan in a rational way and actually pick the lower-cost 
alternatives. What no one wants is this piecemealing of 
complying with just the next regulation, then the next 
regulation, then the next regulation one at a time, which leads 
to horrendous resource decisions, very expensive investments as 
you pointed out, that hurt the residential customers, hurts the 
industrial customers, hurts the local economy.
    Mr. Whitfield. The gentlelady's time is expired.
    At this time I recognize the gentleman from Kansas, Mr. 
Pompeo, for 5 minutes.
    Mr. Pompeo. Great. Thank you, Mr. Chairman.
    You know, we heard from some folks on the other side today 
the Republicans aren't interested in solutions. You know, what 
we are really interested in is the EPA has proposed solutions 
that simply don't work. I asked Ms. McCarthy a few weeks back 
now about the 26 indicators she has got on the EPA Web site 
about climate change, and I asked what the greenhouse gas 
regulations would do to each of those 26 indicators. And she 
said, well, you are thinking about it wrong. This is about 
global leadership. This isn't about actually impacting climate 
change. This is about feeling good about ourselves.
    You know, Republicans don't care about science? Science is 
about testable propositions, right? You satisfy the regulations 
and this is the impact we would expect this would have on 
climate change, and then you test against that. And yet the 
very test that is being proposed by the EPA, the administrator 
herself admits doesn't work.
    And so I think this is all about science. I think it is 
about finding real good solutions, solutions that work. And, 
Mr. Coleman, that is why I wanted to ask you a question. So you 
talked about we have got a greenhouse gas set of rules that are 
proposed for future coal power plants to be built and you 
expressed some concern that they may begin to regulate current 
coal-fired power plant generation as well. How long before the 
impact of just the rules on new power plants will begin to be 
felt in the cost structure?
    Mr. Coleman. Well, I think you are feeling them right now. 
I was fortunate enough to be able to speak to the EPA back in 
the summer about this. You know, we are seeing and we are 
projecting rates that are going to be again somewhere around 40 
percent, 20 to 40 percent range for our members when we see 
some of these come into effect now. You know, that is up to 
$480 a year, and that is not a lot to us, but to the ladies, 
the grandmothers that I have got on fixed incomes, when you 
talk about these coal-fired plants, whether it is the existing 
fleet or whether it is the new fleet, it is going to have a 
tremendous negative impact on my members.
    And, you know, I can give you one example. I had a 
grandmother call me a few years back when we had--we have a 
fuel cost line adder on our bill and this fuel cost rise that 
is passed along to the member because that is the only person 
that can pay these fuel costs. But I had a grandmother from 
Horseshoe Bend, Arkansas, called me. Typically, this would be a 
phone call where she was not happy and I might get chewed on 
just a little bit, but she told me, she said I what you to know 
that I have figured out--I got this phone call, by the way, 
this is not someone handing me a note. She said I want you to 
know that I have figured out how to pay my electric bill; I am 
going to take my medication every other day. This was several 
years back. That was when that lady's electric bill was lower 
than it is today, and what really scares me is all this stuff 
we are talking about, how is she going to afford it?
    I got a text last night from a member who cannot pay her 
electric bill, and she is a young person and she is worried 
about not being able to afford air-conditioning in the summer 
because of what her winter bills have been because of the 
extreme winter. This is what I face every day.
    Mr. Pompeo. Yes, I appreciate that, real health effects of 
these regulations impacting folks adversely as opposed to what 
the proponents of these rules would say they are going to 
improve the health of citizens in Arkansas and places like 
south-central Kansas.
    Mr. Coleman. Exactly. Exactly.
    Mr. Pompeo. Thank you.
    Mr. Biewald, you said in your testimony that in a strip 
South Dakota and south--that would be Kansas, straight south of 
South Dakota if I got my geography right--you said wind is 
cheaper than other forms of energy today. Is that your 
testimony?
    Mr. Biewald. In many parts of the country, yes.
    Mr. Pompeo. So if it is cheaper today, no need for the wind 
production tax credit any longer? That is a vestige of days 
gone by, an anachronism because we now have affordable wind 
energy at least in this strip? We will have it in other places 
but the production tax credit for producers in those places, we 
should just eliminate immediately? That would make sense, 
right? Just let the market sort it out because they are cheaper 
today?
    Mr. Biewald. I think we should look at energy subsidies 
kind of comprehensively.
    Mr. Pompeo. I agree with you but I am just asking the 
question. One of the justifications for the wind production tax 
credit you have to subsidize it while the technology improves 
so the costs could come down, and I just heard you say we are 
there.
    Mr. Biewald. I think there are parts of the country where 
that is the case for wind. There are other----
    Mr. Pompeo. And I thank you for supporting me in that 
effort to get rid of all of those energy tax credits, for the 
oil and gas guys, too. I think we should get rid of them all. 
But it sounds like wind is at the competitive point from your 
perspective in at least certain places.
    I was also interested--I have just got 20 seconds left--you 
talked about companies pricing carbon today in anticipation of 
regulations down the road.
    Mr. Biewald. I did.
    Mr. Pompeo. So just the mere threat of regulation is 
driving up costs for consumers today, is that right?
    Mr. Biewald. Not at all. It is providing a signal where the 
smart utilities that are looking forward doing long-term 
planning are able to make better resource decisions. I would 
say it is lowering costs again in many parts of the country.
    Mr. Pompeo. Wow. So it is lowering costs for them to 
anticipate some future cost increase on their business? Having 
been a small businessman for a long time, that is fascinating 
economic estimation.
    Mr. Biewald. I also am a small businessman.
    Mr. Pompeo. Yes.
    Mr. Biewald. We try to do good planning.
    Mr. Pompeo. Fascinating. I will yield back.
    Mr. Whitfield. At this time I recognize the gentleman from 
Texas, Mr. Green, for 5 minutes.
    Mr. Green. Thank you, Mr. Chairman, and thank you for 
holding the hearing.
    Today's hearing we are discussing the topic of electricity 
production and climate change. We have heard from our witnesses 
that discussed domestic international opportunities and 
challenges associated with energy access, but underlying all 
these opportunities and challenge is the economic cost.
    You know, the cost associated with natural resources, 
regulation, production, carbon has created vast amounts of 
uncertainty for consumers, investors, industry, and the 
environment, and it is this uncertainty that Congress should 
address. We must create a workable structure that deals with 
uncertainty and the framework must remove these unknown 
variables and address environmental concerns and promote 
economic development.
    Saying all that, I have some questions. Mr. Biewald, your 
organization produced a document, 2013 carbon dioxide price 
forecast, that discusses a number of different ways to price 
carbon. Under the social cost of carbon, the price of carbon is 
$23-$37, industry internally priced carbon at $6-$60, which is 
a great spread, and regional cap-and-trade prices range from 
$2-$11. First, what accounts for these wide disparities? Are 
they all using different formulas?
    Mr. Biewald. Well, they are to some extent different 
things. And one of the questions I answered earlier had to do 
with the price of carbon in terms of compliance versus the 
social cost of carbon.
    Mr. Green. Um-hum.
    Mr. Biewald. So the social cost, those higher numbers are 
associated with the damages imposed on people outside of the 
system from the emissions. The median numbers I believe that 
you referred to have to do typically with the cost of 
compliance. So the marginal price if you had a cap-and-trade 
system comprehensive for the country, this is where the price 
might be, the kind of prices that I showed where utilities are 
anticipating the cost. And in the lower numbers are for some of 
the cap-and-trade systems in place today.
    Mr. Green. OK. I represent a very industrial district in 
Houston--refineries, chemical plants--and I know the issue with 
EPA now is looking at new power generation plants. We know that 
carbon emitted from a coal plant--in Texas we use everything, 
coal, natural gas. I don't think we use fuel oil but in a lot 
of our rural areas we use propane.
    But on the cost of fuel switching is a good example, and I 
want to ask from our co-op in Arkansas, because your base fuel 
is coal, and I know Arkansas traditionally has produced natural 
gas and we are seeing some very low prices except for the last 
month when we have had such--although my producers obviously 
like the $5 or $6 but we don't think it will stay there. What 
would be the carbon cost, for example, if you used your 
baseload in Arkansas, you used natural gas instead of coal? 
What would it cost? Is coal that much cheaper than a pipeline 
from, say, South Texas to be able to fuel switch to natural 
gas?
    Mr. Coleman. Yes, sir. Coal is our least-cost resource. The 
existing coal fleet that we have, when you exclude the Turk 
plant that you are well aware of, is about 2.3, 2.4 cents. You 
get up in the gas range, you are going to be up in that 4 cents 
a kilowatt hour on a wholesale basis. Now, again, my disclaimer 
here is I am a distribution guy, but obviously I keep up with 
our generation resources.
    Mr. Green. Um-hum.
    Mr. Coleman. But, yes, natural gas is more expensive. And 
what worries me is what happens when the next debate moves on 
to natural gas because of its carbon emissions?
    Mr. Green. Well, and that is the issue, but unless 
scientists are changing their opinions, we know carbon would be 
about half----
    Mr. Coleman. Right.
    Mr. Green [continuing]. What it would be for coal.
    But that is where I get back to the cost. You know, the 
ratepayers are going to end up paying for that cost.
    Mr. Coleman. Yes, sir.
    Mr. Green. If we see, you know, people really do want to 
deal with carbon, then we need to make sure that the ratepayers 
understand there is a cost of doing that. And although I have 
to admit that in Texas we also produce more wind power than 
everywhere else in the country. And it is cheap.
    And, in fact, ERCOT in our recent problem with reliability 
said if we hadn't had that 10,000 megawatts of wind power, we 
would have probably had rolling blackouts through Texas. And if 
in Texas we are lacking energy electricity production, no 
telling what the rest of the country is because we use, like I 
said, everything except for hydropower. We just don't have 
enough rivers that have any fall to be able to deal with 
hydropower.
    Mr. Chairman, I know I am out of my time but I appreciate 
our--because that is the issue, the cost and how much both our 
customers, your grandmother but also your industry in Arkansas, 
can afford to be there. And with natural gas we are seeing 
expansion of a lot of plant capacities as it is cheaper. Thank 
you.
    Mr. Whitfield. Thank you. And at this time I recognize the 
gentleman from Illinois, Mr. Kinzinger, for 5 minutes.
    Mr. Kinzinger. Thank you, Mr. Chairman. I was in microphone 
no man's land, so I will move here.
    I appreciate you bringing this hearing together in order to 
focus on the benefits of having access to affordable and 
reliable electricity. Not only do individual households reap 
the benefit of our country's vast energy resources on a daily 
basis but so does our economy. The industrial sector in the 
United States accounts for about one-third of all in-use energy 
consumption while filling about 14 percent of our GDP. What 
this means is that access to our country's affordable and 
reliable energy puts domestic production and employment in the 
manufacturing industry at a competitive advantage as compared 
to others around the world.
    In fact, I had an interesting meeting recently in Germany 
in which many of the German CEOs informed me of that very fact 
and the much better competitive environment here in the United 
States than even in Europe. Low-input prices tend to lead to 
higher output that can in turn lower prices for consumers. 
Lower prices lead to less demand for imported products and help 
create jobs domestically, which are all good things.
    In Illinois, over 90 percent of our electricity generation 
comes from nuclear and coal-powered plants, which seem to both 
be under constant regulatory threats to their existence. In my 
district alone, I have four nuclear power plants providing grid 
and price stability to consumers throughout our region. I 
believe I have the most of any Congressman out there. Without 
the availability of this baseload power, there is no doubt that 
energy prices would skyrocket and the stability of the energy 
grid would plummet. Not only would this be bad for households, 
but it also creates an environment in which manufacturers will 
have to deal with yet another hurdle in order to compete in a 
global market.
    Unfortunately, as is often the case, government regulations 
have set up roadblocks to this sector of the energy industry. 
In just the past 5 years, five nuclear power plants have either 
retired or announced their plans to retire in the near future. 
And that is baseload power that is critical to the reliability 
of the system that, unlike some other forms of power 
generation, we can't just flip a switch to turn back on.
    In addition to this, a large portion of nuclear industry is 
getting to the end of their current licensing lifespans. As it 
currently stands, existing operating licenses for over 7,500 
megawatts of capacity are scheduled to expire before 2023. Two 
of those reactors are in my district in Illinois. This threat 
of closure due to relicensing requirements is real and is 
something that I believe we should all take very seriously.
    The Foreign Affairs Committee, which I also sit on, just 
held a markup on the Electrify Africa Act, and I believe Dr. 
Moss mentioned that in his opening statement. It is bipartisan 
legislation that states it is U.S. policy to encourage access 
to electricity through the development of a multi-year strategy 
to assist countries throughout that region.
    I actually recently visited Liberia and I saw the stark 
contrast between those in Liberia and how they live and those 
in the United States. And because it was a country that chewed 
itself up with civil war, you have basically a lost generation, 
a lost decade. And in many cases, though, I think there is hope 
for Liberia in the future. It is sometimes hard to find because 
of what happens.
    So, Dr. Moss, my first question is for you. What is a level 
of electricity that we would consider meaningful access for the 
poor in Africa and other nations, and is it enough to power a 
few light bulbs for each person through the year or to provide 
such necessary for people to have refrigeration, sanitation, 
efficient water delivery, things like that?
    Mr. Moss. Yes. I think, you know, the international 
standard of 100 kilowatt hours per year or, in rural areas, 50 
kilowatt hours per year is way too low. It is kind of the 
equivalent of the international standard for poverty of $1 a 
day. If you got everybody up to $1.50 a day, you wouldn't call 
them rich and they certainly wouldn't be satisfied with that 
income.
    The exact level, probably something closer to 4,000, 5,000 
kilowatt hours per year would be a better international 
standard that would, you know, provide a dignified life that 
people could use the appliances that in Europe, the United 
States, and other developed parts of the world that we take for 
granted.
    Mr. Kinzinger. Well, thanks. And I think it is interesting, 
too, if you actually look at the advances that Africa has made, 
I mean, you know, back in the '80s and '90s we were constantly 
seeing videos of people on the edge of starvation. And that 
number of people on the edge of starvation has reduced but we 
still have a huge poverty problem obviously in Africa. And when 
you deny people energy, you deny them opportunity to be 
entrepreneurs, to build businesses, and to grow themselves out 
of that situation.
    How far do we have to go to get to a point where the 
poorest of Africa have access on the order of, say, Great 
Britain or China? Obviously very far.
    Mr. Moss. I don't want to look into a crystal ball on that. 
I would say that, you know, there is decades of investment have 
to come and it is both at the consumer level for individuals.
    And I should add that the analogy to cell phones and being 
able to leapfrog cell phones, until we can project electricity 
through the air, the actual lesson from cell phones is that the 
commerce can be based on mobile phone payment systems. I was 
not that long ago in Namibia and they have a pay-as-you-go 
scratch card for electricity, and being able to do that allows 
for people to pay for their electricity, which is necessary for 
commercial sustainability. And we have seen from cell phones 
that even poor people are willing to pay for services if they 
work. So I think there is a lot potential there.
    Mr. Kinzinger. Thank you. And as I wrap up, I will just 
say, you know, I think developing an electrical grid in Africa 
is important to help them withstand weather disasters, to 
reduce the need for U.S. and foreign aid, and obviously help us 
to live in a much better, peaceful world.
    Mr. Chairman, thank you.
    Mr. Whitfield. At this time I recognize the gentleman from 
Texas, Mr. Olson, for 5 minutes.
    Mr. Olson. I thank the chair, and welcome to our witnesses.
    On January 10, 1901, the Spindletop well near Beaumont, 
Texas, started gushing oil. My home State, Texas, rightfully 
became the face of oil in America. About a century later, that 
face has changed. We are still the face of oil, we are the face 
of coal, the face of natural gas, the face of nuclear power, 
the face of solar power, the face of wind power. As my 
colleague Gene Green mentioned, we are the number one wind 
producer in America right now. We have a true diversified 
energy portfolio which has allowed my State to become the 
fastest-growing State in the country. Three million people 
moved to Texas between 2000 and 2010.
    But that growth is being threatened. The administration is 
conducting a war on coal. Nuclear power here in America is on 
hold, and tax credits for wind have put our baseload power 
under pressure. Our grid's reliability is uncertain in the 
future in many ways.
    My first question is for you, Mr. Coleman. And I know that 
Arkansas is different from Texas, but can you please go into 
more detail on why wind is an important source but not one that 
we can build a grid around?
    Mr. Coleman. And you said wind, sir?
    Mr. Olson. Wind, sir, yes, sir. Again, we are number one 
but we can't build a grid around that.
    Mr. Coleman. Well, we can't build a grid around anything in 
my opinion except baseload generation. You know, we do have 
wind assets, and when the wind blows, we have those assets, the 
peaking power that they provide. But I am unable to meet the 
obligation that I have to serve my members if Arkansas Electric 
Cooperative has to base their portfolio around wind. We have to 
have the baseload generation. If I have learned anything in the 
last few months, Lord hope I have learned something because we 
have had a tough winter in Arkansas. I don't know how Texas has 
been but Arkansas has had a tough winter. We have got more to 
come. But our baseload coal generation is our hedge against the 
volatilities that we see of natural gas, of the ineffectiveness 
of wind and solar.
    But we cannot, as you said, base our portfolio around wind 
technology. We will utilize it. It will be part of the mix. The 
mix does matter and it is an all-of-the-above strategy, just as 
you mentioned Texas has.
    Mr. Olson. Yes, sir. Thank you.
    The next question is to you, Dr. Moss. And first of all, 
having a 13-year-old son who will be 14 in April, your boy is 
amazing, but I know he is getting very hungry right now so my 
questions will be very brief.
    I want to talk about India. As you know, over 1 billion 
people call India home. Over 400 million live in poverty, no 
electricity. That is more than the entire population of 
America. And I saw this firsthand. I went on a trip before 
Christmas. Wealth and poverty, opulence next to staggering 
poverty, right side by side.
    You said that allowing OPIC to invest in gas plants would 
bring electricity to 60 million more people focusing on 
renewables alone. I want to get this straight. You said that 
allowing OPIC to invest in gas plants would bring electricity 
to 60 million more people than focusing on renewables alone.
    And while Chairman Emeritus Dingell is leaving us, his 
examples persist. I will ask you some yes-or-no questions and 
get your son to have his lunch here. Are those 60 million 
people more likely to face illness and see higher child 
mortality, more deaths, those 60 million people, without 
getting that power? Yes or no?
    Mr. Moss. Without getting power, yes.
    Mr. Olson. Yes, OK. Yes or no, are they more likely to 
remain on crude sources of heat and power than dirtier 
inefficient sources?
    Mr. Moss. Yes.
    Mr. Olson. Yes. Are they more likely to stay in severe 
poverty?
    Mr. Moss. Yes.
    Mr. Olson. Regarding India, is there any downside to 
exporting LNG, liquified natural gas, to India in your opinion?
    Mr. Moss. Downside for the United States?
    Mr. Olson. Downside for the United States, India, anybody 
in the world, big picture.
    Mr. Moss. I don't think.
    Mr. Olson. No downside. One final question: Do you believe 
that current American policies on power in the developing world 
would leave people in the dark who would otherwise see 
electrification? And you can elaborate on that one.
    Mr. Moss. Yes, it will. I mean, it depends a lot on what 
happens with a lot of the regulations or changing the fiscal 
year 2014 Appropriations Bill. So it will depend a lot on what 
happens next year.
    Mr. Olson. OK. That is all my questions. It is time for 
lunch.
    Mr. Whitfield. Enjoy your lunch, Mr. Olson.
    At this time, I would like to recognize the gentleman from 
Virginia, Mr. Griffith, for 5 minutes.
    Mr. Griffith. He thought he was last. He forgot about me.
    Thank you all for being here. This is important. I will 
tell you that several years ago, then-Administrator of the EPA 
Lisa Jackson was in. We were debating the authority to regulate 
greenhouse gases. Obviously, the case of Massachusetts v. EPA 
set up the principle that they could. It didn't say that they 
had to. It just said they could if they found that it was 
harmful from a health standpoint. I asked her at that point, I 
said, ``OK''--I was last then, also--``Your testimony here 
today has all been about global warming and how hotter 
temperatures cause people to have more heart attacks and 
strokes, but what happens when somebody like people in my 
district cannot afford to pay their bill, cannot afford to buy 
their fuel? The cost has gone up too high for their 
electricity, and they cannot heat their home in the wintertime. 
Did you all study that?'' I asked her that question. Her 
response to me at that time was--and I may be paraphrasing but 
pretty darn close--was, ``We have programs to take care of 
those people.''
    Mr. Coleman and Chairman Finley, I ask you, when you hear 
these stories of people who are not taking their medications or 
you hear stories of people who can't pay their bill, are there 
always programs to take care of those people or does the money 
run out like it sometimes does in my district in a hard winter 
by the time you get to the end of February?
    Mr. Coleman. The money runs out.
    Mr. Griffith. Chairman Finley?
    Mr. Finley. We do the best we can to have support for 
people who can't pay, but for many there is not enough money 
there.
    Mr. Griffith. And so, you know, I have to question the 
underlying finding by the EPA that they have the authority to 
regulate these greenhouse gases because they studied half of 
the problem, the rising temperature, but they never looked at 
what happens when you make those costs go up for the poor 
people in our country, for the working folks, for the middle 
class.
    I think your testimony--and I apologize I wasn't here; I 
was at another hearing--but one of you, I think, testified that 
your constituents or the people that you serve--I guess it was 
you, Mr. Coleman, have an average household income of about 
$32,000. My district might be a couple thousand dollars 
different than yours, but I am in the same boat with the people 
that I represent, and they can't always afford to pay these 
things. We didn't look at that. We didn't look at, apparently, 
what happens when people can't afford to pay for their 
medication and to heat their homes. And so as a result of that, 
I think that the policies the EPA is putting forward are 
actually harming the health of a lot of American citizens, and 
it is unfortunate they didn't take the whole picture into 
account.
    And the testimony today here, hearing you all testify and 
knowing that your testimony is heart-wrenching, I understand 
that because my constituents tell me the same thing.
    Let's talk about, Mr. Coleman, you said the volatility of 
natural gas, this winter there have been a lot of places. Did 
you all have any difficulty getting a hold of the natural gas 
necessary to power whatever plants you have using natural gas?
    Mr. Coleman. We didn't have any difficulty but at one time 
some of the prices that we saw--you know, we were in the $3-$4 
range. We saw prices $17, $18 that spiked. Prices on average 
were $4 or $5.
    Mr. Griffith. Yes. And I saw reports in the Northeast where 
they were having trouble getting supply that prices actually 
crested over $100----
    Mr. Coleman. Yes.
    Mr. Griffith [continuing]. During that really bad cold 
snap. That doesn't happen obviously with coal. You have got it 
piled up out back. You can just pull it in there.
    We do have some infrastructure issues with turning it all 
over to natural gas. Now, in my area, I heard one of the other 
witnesses or one of the other Congressmen say that they didn't 
use a lot of fuel oil in their area, but in my area a lot of 
people use fuel oil and we do at my house. And one of the 
reasons we use fuel oil is because we would kind of like to 
switch to natural gas but there is no pipe that comes to our 
house. I live just on the other side of the interstate, and it 
is just too costly to bring that pipe across the Interstate 81 
to my neighborhood so I don't have the ability to get natural 
gas. I might be able to get propane. Do you find that to be a 
problem for some of the folks in North Carolina, Chairman 
Finley?
    Mr. Finley. Yes, sir, it is a problem. We have done a good 
job, I think, in expanding the pipeline facility. Twelve years 
ago I was in your situation in the middle of Raleigh. My old 
40-year-old oil furnace went out on the coldest day of the 
winter and the pipeline was about 20 yards up the street, and 
they couldn't get it there for 3 weeks and I couldn't wait for 
3 weeks so I had to put an oil furnace back in.
    Mr. Griffith. Yes. And so this is a problem that real 
people, not ivory tower folks at the EPA or even in the halls 
of Congress, are facing. It is that, you know, natural gas may 
be the wave of the future, but if you can't get it there, if 
you don't have the supplies to provide the electricity, to 
provide the heat for people, they are going to need it. And 
also the fact that we are raising the costs by creating 
regulations that are closing down plants and raising the cost 
of electricity for the average American citizen is harmful to 
the health of the working people in this country.
    Mr. Chairman, I appreciate the opportunity to have this 
hearing and I yield back.
    Mr. Finley. I would say, if I might, that from my friends 
at PSNC that they have run the line down to my house and I do 
have natural gas now.
    Mr. Whitfield. You are the chairman, so you have got 
influence, right?
    Well, Mr. Griffith, thank you. And I want to thank you all 
for coming this morning to testify. We appreciate the insights 
that all of you provided on a rather vexing issue.
    And that will conclude the hearing. I would like to ask 
unanimous consent to enter into the record the Electric 
Reliability Coordinating Council's document entitled ``What the 
Cold Snap Tells Us about EPA Carbon Rules,'' as well as a 
letter to the EPA we received from the CEOs of five nuclear 
power plants relating to EPA's pending cooling tower rules and 
the fact that may cause the premature retirement of a 
significant portion of the nuclear fleet.
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    Mr. Whitfield. And I want to clarify the fact, when I was 
talking about Southern Company, I want to make sure that I said 
75 percent of Southern Company's coal-fired generating plants 
scheduled to be retired were operated during the cold spell. 
And that is like 3,300 megawatts. So those that were scheduled 
to be retired were operating, and certainly when they are 
retired, that will be the end of it.
    And also ask unanimous consent that we enter into the 
record ``Energy Access and the True Cost of Fossil Fuel 
Projects in Africa.''
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    Mr. Whitfield. So with that, the record will remain open 
for 10 days.
    And we look forward to working with all of you as we move 
forward, and thank you again for your time. And that will 
conclude today's hearing.
    [Whereupon, at 12:13 p.m., the subcommittee was adjourned.]

                                 
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