    [Senate Hearing 115-490]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 115-490

                     NEW EFFICIENCY OPPORTUNITIES PROVIDED
                        BY ADVANCED BUILDING MANAGEMENT
                              AND CONTROL SYSTEMS

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

                                    HEARING

                                   BEFORE THE

                                  COMMITTEE ON
                          ENERGY AND NATURAL RESOURCES
                              UNITED STATES SENATE

                         ONE HUNDRED FIFTEENTH CONGRESS

                                 FIRST SESSION
                                   __________

                                OCTOBER 31, 2017
                                   __________

                    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

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

            Available via the World Wide Web: http://www.govinfo.gov

                                  ___________

                        U.S. GOVERNMENT PUBLISHING OFFICE

    27-435                    WASHINGTON : 2019

                   COMMITTEE ON ENERGY AND NATURAL RESOURCES

                        LISA MURKOWSKI, Alaska, Chairman
    JOHN BARRASSO, Wyoming               MARIA CANTWELL, Washington
    JAMES E. RISCH, Idaho                RON WYDEN, Oregon
    MIKE LEE, Utah                       BERNARD SANDERS, Vermont
    JEFF FLAKE, Arizona                  DEBBIE STABENOW, Michigan
    STEVE DAINES, Montana                AL FRANKEN, Minnesota
    CORY GARDNER, Colorado               JOE MANCHIN III, West Virginia
    LAMAR ALEXANDER, Tennessee           MARTIN HEINRICH, New Mexico
    JOHN HOEVEN, North Dakota            MAZIE K. HIRONO, Hawaii
    BILL CASSIDY, Louisiana              ANGUS S. KING, JR., Maine
    ROB PORTMAN, Ohio                    TAMMY DUCKWORTH, Illinois
    LUTHER STRANGE, Alabama              CATHERINE CORTEZ MASTO, Nevada

                          Brian Hughes, Staff Director
                    Patrick J. McCormick III, Chief Counsel
                   Chester Carson, Professional Staff Member
               Angela Becker-Dippmann, Democratic Staff Director
                    Sam E. Fowler, Democratic Chief Counsel
              Brie Van Cleve, Democratic Professional Staff Member

                                C O N T E N T S

                                  ----------

                               OPENING STATEMENTS

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

                                   WITNESSES

    Simmons, Daniel R., Acting Assistant Secretary, Office of Energy
      Efficiency and Renewable Energy, U.S. Department of Energy.....     4
    Virden, Dr. Jud, Associate Laboratory Director, Energy and
      Environment, Pacific Northwest National Laboratory.............    12
    Grunau, Bruno C., Chief Programs Officer, Cold Climate Housing
      Research Center................................................    20
    West, Tracy, Director, End Use, Power Delivery and Fleet R&D,
      Southern Company...............................................    29
    Wallace, John, Director Innovation, Emerson Commercial and
      Residential Solutions..........................................    36

              ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED

    Cantwell, Hon. Maria:
        Opening Statement............................................     2
    Grunau, Bruno C.:
        Opening Statement............................................    20
        Written Testimony............................................    22
        Responses to Questions for the Record........................    70
    Mernick, Tessie:
        Letter for the Record........................................    73
    Murkowski, Hon. Lisa:
        Opening Statement............................................     1
    Simmons, Daniel R.:
        Opening Statement............................................     4
        Written Testimony............................................     7
        Responses to Questions for the Record........................    60
    Virden, Dr. Jud:
        Opening Statement............................................    12
        Written Testimony............................................    14
        Responses to Questions for the Record........................    68
    Wallace, John:
        Opening Statement............................................    36
        Written Testimony............................................    38
    West, Tracy:
        Opening Statement............................................    29
        Written Testimony............................................    31
        R&D Flyer regarding Alabama Power Smart Neighborhood.........    81
        R&D Flyer regarding Georgia Power Smart Neighborhood.........    82

                     NEW EFFICIENCY OPPORTUNITIES PROVIDED
                        BY ADVANCED BUILDING MANAGEMENT
                             AND CONTROL SYSTEMS

                                  ----------

                           TUESDAY, OCTOBER 31, 2017

                                           U.S. Senate,
                     Committee on Energy and Natural Resources,
                                                        Washington, DC.
        The Committee met, pursuant to notice, at 10:03 a.m. in
    Room SD-366, Dirksen Senate Office Building, Hon. Lisa
    Murkowski, Chairman of the Committee, presiding.

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

        The Chairman. Good morning, everyone. The Committee will
    come to order.
        Happy Halloween to you all. I am perhaps in a little more
    of a Halloween spirit. I like Halloween.
        Senator Manchin. You scare people.
        The Chairman. I do scare people, sometimes.
        [Laughter.]
        Boo.
        [Laughter.]
        Alright, now we are going to get serious. This is a serious
    subject here this morning.
        Last week we had an opportunity to look at a really scary
    subject, and that was cyber and cybersecurity and the
    vulnerabilities of our nation's electric grid system. That is
    clearly going to come up a little bit this morning and a
    challenge with which we have to contend.
        But our primary focus this morning is on what is coming
    down the pike with building technologies and advanced building
    management and control systems.
        One hears terms like ``smart'' when it comes to appliances
    and buildings and cars all the time, but we really have to ask
    the question as to whether or not we understand the scope of
    what is possible when we are looking at a whole building.
        Smart thermostats and other smart sensing, metering, and
    control technologies have already had a big impact. No doubt
    those products are a major reason why new homes here in the
    country, according to DOE's Building Technology Office, use
    about 20 percent less energy for space heating than our older
    homes and why, by DOE's estimate, today's American households
    are paying roughly $216 less per year than if we did not have
    energy efficient equipment and appliance standards.
        These numbers are dramatically different in my home State
    of Alaska, where energy costs are exorbitantly high and some of
    our rural communities live dangerously close to, or are already
    in, energy insecurity. Some Alaskan families pay thousands of
    dollars a month, up to half of their household budgets, on
    energy alone.
        The challenges in rural Alaska are unique and that is
    certainly true when it comes to optimizing the way a building
    uses energy. That is partly because the puzzle pieces up north
    are more than just simple math. They are more than just looking
    at the bottom line on energy bills. Much of the housing in
    rural Alaska is effectively western-style design, a design that
    may work in Albuquerque or in Ohio, but just does not work in
    an Arctic environment.
        Mr. Grunau is my expert this morning and I think members of
    the Committee here will enjoy, or certainly learn a lot from
    what he has to impart with building energy use from a rural
    Alaska perspective. I thank you for being here this morning,
    Bruno.
        On the whole, though, the efficiency opportunities our
    buildings offer are enormous. With around 125 million
    residential buildings and more than 5 million commercial
    buildings consuming nearly 75 percent of all the electricity
    used in the U.S. every year, the volume is obvious. I expect we
    will hear much more about the sleeping giant those buildings
    represent as an untapped energy efficiency resource, because
    most of them do not have any kind of energy management or
    control system and most of them are nowhere near being
    optimized when it comes to energy use.
        Another thing that we hear, another phrase we use around
    here a lot is ``low-hanging fruit.'' We may be in the position
    where we think we have plucked all of that low-hanging fruit,
    in terms of energy-efficient water heaters and A/C units, but I
    think we will hear this morning, as we listen to today's
    witnesses, that there may very well be some pretty ripe, low-
    hanging fruit that we have yet to go after, and that it is in
    and with our buildings. So we will look forward to that this
    morning.
        I thank each of the witnesses for being here and, before I
    introduce each of you, I will ask Senator Cantwell for her
    comments this morning.

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

        Senator Cantwell. Thank you, Madam Chair. Thanks for
    holding this important hearing.
        Why is this topic so important? Well, across the United
    States 2.2 million people work in energy efficiency jobs,
    including 62,000 in the State of Washington.
        This year energy efficiency jobs are expected to grow by
    nine percent. Buildings in the United States consume 40 percent
    of our country's energy and only a small fraction of our 130
    million buildings we can say are actually smart.
        I was glad that the Chair and I were able to tour some of
    these buildings in the Pacific Northwest and then went to
    Alaska to hear about how smarter grid technology can help in
    very rural parts of Alaska.
        Advanced controls and inexpensive sensors are the next
    revolution in how we manage our buildings resulting in energy
    savings and improved performance for buildings and their
    occupants.
        We made big gains in energy efficiency over the last 40
    years, due in large part to DOE's program that focused on
    research, setting standards for appliances and developing
    energy codes for buildings. The appliance standard alone will
    save consumers $2 trillion by 2030 on their energy bills.
        So smart buildings are the new frontier. Smart buildings
    using those building management systems of sensors and advanced
    controls can save 30 percent more than can be achieved by
    improving energy efficiency of individual building components.
        Lower costs and more competitiveness will help grow our
    businesses and give them important opportunities, especially in
    the data-sensitive industries that we host in the State of
    Washington.
        Smart buildings have a potential to make all of our
    nation's commercial buildings more energy efficient to save
    owners and tenants money that they can then plug back into
    their businesses. In fact, we did an analysis that energy
    efficiency is its own feedback loop--that the savings to
    businesses go back into helping them create their own
    technological advances and keep them competitive with other
    businesses around the globe.
        So this is a huge opportunity. The smart building market is
    expected to be worth $30 billion in five years. And as we hear
    more about this today, we know that it is part of a modern
    electricity grid. Buildings provide flexibility for energy
    storage. They act like distributed mini power plants. Utilities
    and their consumers get a more resilient grid and avoid having
    to build costly new power plants and building owners tap into
    new revenue sources.
        So, how do we get there? Well, the bipartisan Senate energy
    bill was a good start. It included provisions that Senator
    Murkowski and I introduced as a stand-alone measure, the Smart
    Building Acceleration Act. This provision of the energy bill
    would accelerate the use of technologies by evaluating smart
    building performance and focusing on research and identifying
    key barriers to adoption. These trends toward smart, integrated
    systems really are game changers.
        Unfortunately R&D challenges persist. At the heart of the
    smart building revolution is the decreasing size and cost of
    monitoring controls and computer technology. That is why I am
    so glad that PNNL is here again, because with the funding from
    DOE it is leading in the development of cutting-edge controls
    technologies that can cut a building's energy use by 30
    percent.
        These are real savings. We must continue to make these
    investments. We must embrace a future with more smart
    technologies to improve our economic competitiveness and create
    jobs. Cutting the DOE's critical research programs in this area
    by 66 percent as the Trump Administration proposes is not the
    way to embrace the future.
        Last Wednesday, Secretary Perry released DOE's review of
    so-called regulatory burdens to the American people, calling
    out reforms to the successful appliance standard program that
    would, ``alleviate or eliminate agency's actions that burden
    domestic energy development, production and use.''
        I can't emphasize enough how wrong I think the Secretary
    got this. In reality, these standards are alleviating the
    challenges that our businesses face by putting more money into
    their pockets so that they can be competitive. So I hope they
    will stop beating up on the energy efficiency programs that we
    have at DOE and move forward on them.
        I so look forward to hearing the testimony and know that
    there is a lot at stake to make sure that we continue to move
    forward on energy efficiency.
        Thank you, Madam Chair.
        The Chairman. Thank you, Senator Cantwell.
        Welcome to each of you. We have a good panel here this
    morning.
        I will ask each of you to try to limit your comments to
    about five minutes. Your full statements will be included as
    part of the record. We will hear from each of you, and then the
    Committee members will have an opportunity to ask questions.
        We are joined this morning by Mr. Daniel Simmons, who is
    the Acting Assistant Secretary of the Office of Energy
    Efficiency and Renewable Energy, or EERE, over at the U.S.
    Department of Energy (DOE).
        Dr. Jud Virden, as Senator Cantwell mentioned, is with
    Pacific Northwest National Laboratory (PNNL). He is the
    Assistant Laboratory Director for Energy and Environment.
        I mentioned Mr. Grunau. Bruno Grunau is the Chief Programs
    Officer for the Cold Climate Housing Research Center. I am
    going to brag a little bit on this amazing, amazing research
    and, kind of, living laboratory in Fairbanks, Alaska, just off
    the campus there at University of Alaska Fairbanks. It is the
    furthest north, LEED platinum certified building in the world.
    At first I thought it was just North America, but it is the
    whole world. So we are very proud of it. We are very proud of
    the innovation that goes on there and, recognizing that some of
    the challenges that you have in providing for efficiency in a
    colder, an Arctic environment, what is being demonstrated there
    on a daily basis is really quite phenomenal. So I am very
    pleased that Bruno is with us this morning.
        Ms. Tracy West is the Director of End-Use, Power Delivery
    and Fleet R&D at Southern Company. We welcome you to the
    Committee.
        Mr. John Wallace is with us this morning. He is the
    Director of Innovation at Emerson Commercial and Residential
    Solutions. Some neat things coming out of Emerson, so we are
    pleased that you are with us here this morning.
        Mr. Simmons, if you would like to kick the panel off, and
    we welcome all of you.

      STATEMENT OF DANIEL R. SIMMONS, ACTING ASSISTANT SECRETARY,
        OFFICE OF ENERGY EFFICIENCY AND RENEWABLE ENERGY, U.S.
                          DEPARTMENT OF ENERGY

        Mr. Simmons. Thank you very much.
        Chairman Murkowski, Ranking Member Cantwell and members of
    the Committee, thank you for inviting the U.S. Department of
    Energy to testify. My name is Daniel Simmons, and I am the
    Acting Assistant Secretary for Energy Efficiency and Renewable
    Energy at the Department of Energy. Efficiency and building
    management and controls is an important aspect of building
    efficiency in grid performance, and I am pleased to speak with
    the Committee today about this important and exciting issue.
        As has been mentioned by Senator Murkowski, the U.S. has
    approximately 125 million buildings consuming about three-
    quarters of all electricity, taking power from the grid for
    cooling, for heating, for consumer goods and countless other
    uses. And as we all know there's been an explosion in the
    number of internet-connected devices over the past few years.
    In fact, approximately 200,000 of these devices are connected
    to the internet every single hour, and the largest market for
    that is in the United States where it's projected that these
    devices are--well, it's projected that the world demand for
    these devices will grow about fourfold in the next few years.
        These new and exciting smart and connected technologies are
    transforming homes, workspaces and other buildings that
    Americans occupy every day. Quite simply, smart building
    technology can redirect the way energy is used by buildings,
    their owners and occupants.
        At DOE, we are focusing on the energy opportunities these
    technologies represent, consistent with our commitment to early
    stage research and development as well as promoting affordable
    and reliable energy to enhance economic growth and energy
    security. To that end we are interested in how these devices
    can enable families and businesses to save both money and
    energy and provide valuable grid services.
        Just as importantly, we recognize the challenges that a
    smart and internet-connected building sector brings which is
    why we are working to promote the interoperability of energy-
    related technologies so that one, they can work efficiently and
    more effectively with each other and two, that they can work
    with the grid.
        Furthermore, as part of our smart building efforts, we are
    working to ensure that these systems are cybersecure from the
    beginning so that they enhance the grid's reliability and
    resilience.
        The promise of smart buildings represents more than just
    saving energy and money inside buildings. Increased
    connectivity for building equipment can also enable buildings
    to be more responsive to electric grid conditions. This
    flexibility can help avert system stress and enhance the
    reliability of the entire electrical grid. Having buildings
    become more responsive and dispatchable in response to grid
    needs is a key aspect of our research.
        In the rapidly-approaching Grid-interactive Efficient
    Buildings future, buildings will not only demand power from the
    grid, but can also adjust their demand up or down, earlier or
    later, in response to fluctuations on the grid. Our goal is to
    ensure that families and businesses have the tools to make
    informed purchasing decisions that meet their individual needs.
        EERE's R&D in this area is led by our Building Technology
    Office who are working very closely with several DOE national
    labs that you know well, including Oak Ridge National Lab, the
    National Renewable Energy Lab, Lawrence Berkeley National Lab
    and, of course, Pacific Northwest National Lab.
        Last week, I and others from DOE had the opportunity to
    spend a couple days at PNNL and much of the conversation was in
    this space. We had a great time at PNNL.
        Our Building Technology Office and other parts of DOE,
    including the Office of Electricity Delivery and Energy
    Reliability as well as the Grid Modernization Lab Consortium,
    are working closely with private and university researchers.
        One such example is our work on cybersecure, transaction-
    based energy systems. We're developing transaction-based
    controls that inherently value the consumer and utility
    engagement as a method to help facilitate energy decisions and
    transactions in grid-interactive efficient buildings.
        For example, one such DOE effort done with PNNL and Oak
    Ridge has been to develop a cybersecure and highly
    interoperable platform for distributed control and sensing
    called VOLTTRON, designed to support modern control strategies
    including the use of agent-based controls. Jud Virden, sitting
    next to me, obviously knows this work very well. EERE will
    continue our early stage R&D and other efforts on these key
    opportunities, challenge and research priorities for grid-
    interactive, efficient buildings.
        Chairman Murkowski, Ranking Member Cantwell, I respectfully
    request that my full written statement be submitted for the
    record and thank you very much for the opportunity to testify.
    I look forward to answering your questions.
        [The prepared statement of Mr. Simmons follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        The Chairman. Thank you, Mr. Simmons.
        Dr. Virden, welcome.

      STATEMENT OF DR. JUD VIRDEN, ASSOCIATE LABORATORY DIRECTOR,
     ENERGY AND ENVIRONMENT, PACIFIC NORTHWEST NATIONAL LABORATORY

        Dr. Virden. Chairman Murkowski, Ranking Member Cantwell and
    members of the Committee, thank you for the opportunity to
    testify at today's hearing.
        My name is Jud Virden, and I'm the Associate Lab Director
    for the Energy and Environmental Research at Pacific Northwest
    National Laboratory. It's PNNL--it's even hard for me to say
    that sometimes----
        [Laughter.]
        ----in Washington State.
        Over the last two decades, PNNL has been at the forefront
    of research focused on building efficiency, grid operation and
    buildings-to-grid integration. PNNL research has been supported
    by DOE's Building Technology Office, the Office of Electricity
    Delivery and Energy Reliability and the Office of Science. As
    part of these programs, PNNL collaborates with other national
    labs, universities and private industry.
        As was mentioned, in the U.S. nearly 75 percent of all
    electricity is consumed in buildings. Eighty-five percent of
    these commercial buildings do not have automated control
    systems, and studies estimate that the energy efficiency of
    commercial buildings could be increased 30 percent with the
    implementation of automatic control systems. This is the
    equivalent of the energy use of 15 to 20 million Americans
    annually. It's a huge opportunity. Managing loads could reduce
    peak electricity demands 10 to 20 percent which is billions of
    dollars of energy saved, ultimately.
        We believe that we can increase the energy efficiency of
    buildings and, ultimately, grid reliability and resiliency
    through the integration of low-cost sensing, measurement
    devices, computing and advanced control theories.
        I'd like to show you one example where PNNL research is
    being used to optimize buildings' performance. This device, the
    one I'm holding in my hand, represents about a $10 piece of
    commercially-available hardware. What makes it unique is we've
    developed an open-sourced, flexible software platform for
    distributed control and sensing.
        In a building--if we put it in this building, it would
    integrate data from devices like temperature sensors,
    thermostats, HVAC systems, perform data analysis and make
    decisions on building operations to optimize energy use.
        You could think of this hardware, kind of, like your
    smartphone and the software on this device, kind of, like apps
    on your phone. If an incentive signal was sent to this device
    from the grid, it could act like an Uber app, where the
    building could decide if it is willing to offer grid services
    based on the cost and value of those services, kind of like
    when we decide if we're willing to pay surge prices with Uber--
    it can be transactive.
        And let me share a couple examples of our research. The
    first example is a collaboration led by PNNL where we tested 66
    rooftop units out in the field. Rooftop units provide heating,
    cooling, ventilation to buildings. With a device like this and
    with advanced control algorithms to optimize the performance of
    the rooftop units and based on measurement temperatures in the
    buildings, the studies show that on average you could have a 57
    percent energy reduction in the rooftop units in a payback
    period of two to six years, if we can optimize the building and
    the rooftop units.
        In the Olympic Peninsula of Washington State, we led a
    collaboration to demonstrate that incentive signals sent from
    the grid could reduce peak loads on a winter-constrained
    transmission line. An incentive signal was sent to 112 homes
    with smart technologies, two diesel generators and five
    municipal water pumps. Over the course of a year, the project
    resulted in an average 15 percent reduction in peak load and
    approximately 10 percent energy savings for consumers.
        At our own PNNL campus in Richland, Washington, we have
    installed 9,000 sensors across 12 buildings, and this device
    helps collect and integrate over 11 million data points per
    day. Over the course of the experiment we've been running on
    our campus, that's 34 billion data records over the last 18
    months. We installed and are testing advanced algorithms and
    have shown that we can reduce peak energy consumption by 10 to
    20 percent. And now we're teaming with universities across the
    country using the same approach to optimize energy use on their
    campus.
        We are learning from our research, and what we are learning
    is that we're pushing the boundaries of big data collection and
    analysis, data analytics of complex and dynamic systems, and
    current control theories just don't always work the way we
    expect them to work.
        From a research perspective, we see three important areas
    of investigation to realize new efficiency opportunities from
    advanced buildings' management and control systems. And these
    are: the first one, novel and low-cost approaches for
    integrating large amounts of data with new advances in
    analytics, such as machine learning combined with high-
    performance computing; advanced control theories for complex
    and dynamic systems; and, finally, stakeholder engagement to
    establish best practices for interoperability and cybersecurity
    of smart buildings technologies and systems.
        Thank you again for the opportunity to testify on this
    important subject and I'd be happy to answer any questions you
    may have.
        [The prepared statement of Dr. Virden follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        The Chairman. Thank you, Dr. Virden.
        Sometimes the numbers you are talking about is like it is
    make believe--it is just that amazing.
        So, thank you, I appreciate that.
        Mr. Grunau.

      STATEMENT OF BRUNO C. GRUNAU, CHIEF PROGRAMS OFFICER, COLD
                    CLIMATE HOUSING RESEARCH CENTER

        Mr. Grunau. Well, thank you, Chairman Murkowski and thank
    you, Ranking Member Cantwell and other members of this
    Committee for the opportunity to talk. Thank you for your
    searing endorsement too.
        It may not be obvious why a small, not-for-profit, research
    center from Fairbanks may be at the table. Our mission is for
    resilient, healthy, durable, sustainable homes in the North. We
    have a reputation for being reputable and relevant, and we're
    really connected to people. That's really our strength. We also
    have an extreme environment. We have some of the highest energy
    costs in the country. It's not evident that we're an oil and
    gas state, but we fly all of our oil out to these villages or
    barge them. So it's a great proving ground for energy
    efficiency and proving all this technology.
        We have some of the best housing and some of the worst
    housing in Alaska, and energy efficiency impacts all of that.
    In some of the worst housing we have some of the highest upper
    respiratory rates in the nation, and it all has to do with how
    people are reacting to high energy costs.
        So our focus at the research center is applied research.
    How quickly can we get this research to the ground, to
    demonstrate it? Kind of, our philosophy is, if you half--if you
    cut the demand in half then you're effectively doubling the
    supply, right?
        Cutting the demand doesn't just save money for our families
    and our businesses, but it reduces the stress on our natural
    resources. It eases pressure on the grid. It makes us more
    resilient. It makes our communities more resilient to natural
    disasters, economic uncertainty. I mean, think about Puerto
    Rico, right? So building automation absolutely has a piece in
    this in concert with things like good building envelopes, this
    is the low-hanging fruit we like to talk about. Good building
    envelopes, good, efficient heating ventilation and cooling
    systems.
        So how do we get this technology to the market? That's what
    I want to talk about. In fact, I'd like to give a give a quick
    example.
        Alaska had a home energy rebate program. Great example. It
    is one of the most cost-effective programs, energy-saving
    programs in the state's history. It applies to new housing,
    existing housing, and it created an entire industry and a new
    economy.
        So here's how it works: If you have a home, you're a
    homeowner, you pay out of your pocket for an energy rater to
    come in and they grade the energy efficiency of your house.
    They look at the windows and the insulation, the air tightness
    and the building automation-type systems and you get a grade on
    a scale of one to six--one being the worst and six being the
    best. Then the energy rater gives you a list of things--whether
    it's add insulation, air tight, increase air tightness,
    whatever it is. They give the user, the homeowner, the ability
    to pick and choose and this does a couple of things. They have
    to pay for it out of their pocket, up front, but it gives the
    ability of the homeowner to educate themselves on what's the
    most cost-effective way to go. And then when the rater comes
    back, you've got a five-star-plus or better, and the state
    reimburses us up to $10,000 on these costs.
        So what's the effect of that? Our retrofit buildings, on
    average, saved 33 percent on energy use. So they use 33 percent
    less energy than their next-door neighbor. New housing is even
    better. New housing is anywhere from 40 to 80 percent less
    energy.
        When the money stopped--of course, you guys know Alaska is
    in trouble financially--that energy, that program stopped, but
    the savings continue for the life of the house. Not only that,
    but it created a demand.
        So now our builders--we raised the bar on our builders. And
    our builders didn't stop making good houses. So we actually
    have some of the best builders in the country because of this
    program.
        My family and I, personally, took advantage of this when we
    decided to build our house. And we said, let's build a six-star
    house. And so, we took it an extra step and said, let's build
    it without fossil fuels, which is an accomplishment in the
    subarctic, and we had our paybacks, we had good insulation,
    good building automation controls and things of that nature.
        But I'll tell you, the thing where it really hit most was
    when we lost power for an entire week a couple years ago. I
    didn't have to worry about my pipes freezing, my kids getting
    cold. I mean, there's no amount of money that can account for
    that level of stress that was alleviated. And that's where the
    passive systems really were the lowest-hanging fruit.
        Quite frankly, if you can do this in Fairbanks, you can do
    this anywhere. That's pretty much why we did it. And also, we
    wanted to set an example.
        It's not pie in the sky. It's achievable, attainable. The
    technology is here. It's getting better. And so, our question
    is how you adopt this in a larger fashion? I see this as the
    path to energy independence, to self-reliance, to resilient
    communities and healthy homes. Quite frankly, bottom line--this
    is preaching to the choir--is investing in energy efficiency
    has a permanent return on investment.
        So I'd like to make the case today that we support research
    that advances energy efficiency through universities, National
    Science Foundation, et cetera. Support programs that get the
    technology adopted into these buildings, like the home energy
    rebate type of program, like programs that EERE are doing.
    Great work. And support education. And I don't mean just
    education, students going to school. I mean, building managers
    and homeowners. It's really important. Builders support the
    industry. We need to not just educate how this stuff works, but
    why is it important--because then you get that buy-in.
        I look forward to the discussion, and I hope that our
    contribution is meaningful and impactful. Thank you.
        [The prepared statement of Mr. Grunau follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        The Chairman. Thank you, Mr. Grunau.
        Ms. West, welcome.

    STATEMENT OF TRACY WEST, DIRECTOR, END USE, POWER DELIVERY AND
                      FLEET R&D, SOUTHERN COMPANY

        Ms. West. Thank you.
        Thank you, Chairman Murkowski, Ranking Member Cantwell and
    members of the Committee. My name is Tracy West, and I'm a
    Director in Research and Development at Southern Company. I'm
    going to take you to the other side of the country, the hot,
    humid Southeast and talk about our projects today. We're just
    as enthusiastic, in a different way. So thank you for the
    opportunity to speak today.
        Southern Company has operations in 19 states, serving over
    nine million gas and electric customers. Our assets include
    44,000 megawatts of generating capacity, 200,000 miles of power
    lines, 80,000 miles of natural gas pipeline and 190 BCF of
    natural gas storage. Our mission is to provide clean, safe,
    reliable and affordable energy.
        The R&D program at Southern Company includes developing the
    next generation of energy resources, modernizing our grid for
    resiliency and security, and creating new products, both in
    front of and behind the meter to benefit our customers. It is
    our job in R&D to paint a vision of what the future could hold
    10, 20, 30 years out from a technology standpoint. We also take
    a shorter view by hardening these technologies in our research
    centers and our test beds, like the projects I'm going to talk
    about this morning.
        We believe that buildings-to-grid integration can bolster
    the relationship between and the interaction between the
    customers and the utility. It allows us to meet our load with
    fewer peaking resources and cycling our online assets while
    increasing resiliency and flexibility of our grid.
        Our Smart Neighborhood projects are an important part of
    our buildings-to-grid research portfolio. In 2014, we were
    discussing what a utility might look like in the future and
    what the customer of the future would expect from their
    utility. Some envision rapidly-advancing technology and
    changing economics driving the industry toward microgrids and
    distributed energy resources (DER), and from this distribution-
    driven model, the Smart Neighborhood concept was born. These
    Smart Neighborhoods simulate two scenarios for residential
    customers in a world where DERs and microgrids become key to
    powering the country. These projects consist of three main
    pillars: high performance homes; distributed energy resources;
    and buildings-to-grid integration.
        The Smart Neighborhood project in Birmingham is the first
    large-scale project of its kind integrating connected
    technologies with DER assets to explore how these independently
    tested technologies can benefit both the customers and the
    grid. This neighborhood consists of 62 single-family homes with
    a community-scale microgrid owned and operated by Alabama
    Power. Next generation, high-efficiency heat pumps for HVAC are
    used. Heat pump water heaters will be used. There will be smart
    appliances connected to the home's energy management system.
    Home construction upgrades include items like triple-paned
    windows, smart outlets, LED lighting, high insulation. These
    homes will also include smart security features and
    connectivity.
        This project aims to understand these high-performance
    homes and how to build them, determine programs and services
    for new energy solutions for our customers, evaluate community-
    scale microgrids, explore buildings-to-grid opportunities for
    load shaping and build relationships with the homeowners for
    real-world feedback.
        The community microgrid is located nearby, and is comprised
    of solar panels, gas generators and battery backup. We will be
    able to island the community for a few hours or supply the
    grid. There's a lot of excitement around this project. Nearly
    all of the homes are sold and the first homeowner will move in
    before Thanksgiving of this year. The homeowners have signed a
    two-year agreement with Alabama Power for us to perform
    research on behalf of our stakeholders.
        The second project is in Atlanta, and it's comprised of 46
    townhomes that make up the first phase of a larger community
    build out. Each townhome will be equipped with rooftop solar,
    battery energy storage, connected heat pump water heaters and
    thermostats. This project is also customer-owned, behind-the-
    meter DERs and will be managed on behalf of the homeowner to
    reduce energy costs, improve comfort and supply energy to the
    grid as a resource. The goals are similar but also include
    understanding the impacts of rooftop solar battery storage,
    understanding the impacts of customer supplying energy back
    onto the grid, developing new methods to integrate rooftop
    solar battery storage and controllable devices. And this
    project should be fully developed in 2018; groundbreaking has
    just occurred.
        I want to stress that these projects would not be possible
    without our partnerships with key stakeholders like Oak Ridge
    National Lab. The value of the Alabama project has been
    strengthened by working across the unit lines at DOE with both
    the Buildings Technology Office and the Office of Electricity.
    Smart Neighborhood also includes important collaborations with
    vendors, builders, EPRI and our customers--our homeowners.
        Successes and obstacles from these projects will be
    applicable across the entire country as the Southeast sets the
    stage for future Smart Neighborhoods. As these programs develop
    and energy landscapes shift, Southern Company intends to lead
    the change to serve our customers and build the future of
    energy. We have the ability to study the integration and
    interaction all the way from the control center down to the
    water heater with these projects, and we are anxious to see
    what we learn.
        Thank you for the opportunity to testify today. I'm looking
    forward to your questions.
        [The prepared statement of Ms. West follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        The Chairman. Thank you.
        Mr. Wallace, welcome.

        STATEMENT OF JOHN WALLACE, DIRECTOR INNOVATION, EMERSON
                  COMMERCIAL AND RESIDENTIAL SOLUTIONS

        Mr. Wallace. Good morning, Chair Murkowski, Ranking Member
    Cantwell and distinguished members of the Committee. Thank you
    for the opportunity to appear before you and provide testimony
    related to smart building technologies.
        My name is John Wallace, and I'm the Director of Innovation
    for Emerson Commercial and Residential Solutions located in
    Kennesaw, Georgia. Emerson is a $14.5 billion, global
    manufacturing and technology company founded in the United
    States 127 years ago. Emerson has over 80,000 employees and
    operations in more than 150 countries. Emerson's commercial and
    residential solutions business provides products and services
    for commercial and residential buildings including automation
    systems which manage HVAC, refrigeration and lighting, as well
    as other infrastructure within the buildings. Emerson's
    customers use our products and services to manage and optimize
    their operations including over $7 billion in energy cost and
    over $2 billion in food inventory, monitored and safeguarded
    every year.
        HVAC, refrigeration and lighting systems account for most
    of the energy consumption in a typical retail building.
    Providing effective optimization and management of these
    systems is critical to the success of building operators,
    particularly for our retail operators facing thin margins and
    increasing competition.
        Our multi-site retail customers face many challenges,
    including providing a safe, comfortable environment for
    shoppers, ensuring the safety of perishable food and minimizing
    their energy and maintenance costs across a broad portfolio of
    buildings. While more efficient equipment can be incorporated
    into new buildings, providing an easy way to lower energy cost,
    newer buildings are typically a very small part of a multi-site
    operator's overall portfolio.
        To have the most impact, technologies must be developed
    that can easily be applied into existing buildings and provide
    an acceptable payback based upon energy, maintenance or other
    savings. Through the development of smart buildings, Emerson is
    working with our customers to lower operating cost while
    improving sustainability. The following strategies are being
    implemented to improve the viability of smart buildings:
    incorporating CO2 and other natural, environmentally friendly
    refrigerants in refrigeration systems; constructing, or
    planning to construct, buildings that leave clients with a net-
    zero, or near net-zero, energy bill as a test or learning
    prototype; installing onsite electric generation as well as
    energy storage methods to provide the ability to shift electric
    demand to non-peak hours; incorporating remote monitoring
    strategies using data analytics and diagnostics to identify
    issues; and utilizing internet, cloud-based services to ensure
    that perishable food is being kept at the proper temperatures
    throughout the supply chain.
        Increasingly, various building equipment is being
    integrated into building automation systems that can optimize
    energy use as well as operational characteristics across the
    equipment within the building. The building automation system
    serves as the gateway that can coordinate various equipment
    within the building as well as provide a pathway to access
    remote services for the equipment from outside the building.
    For example, Emerson's building automation system, trade named
    Site Supervisor, integrates the equipment control, provides
    sensors to monitor key metrics within the building and uses IoT
    technologies to connect buildings to cloud-based services.
        With the introduction of new technologies such as IoT,
    remote services and machine learning, new possibilities are
    emerging that enable smart buildings to not only optimize the
    operations of the equipment within the building, but also to
    react to and coordinate with other services outside of the
    buildings. Examples of these types of services include the
    Demand Response programs which provide some type of incentive
    to a building operator in exchange for the ability to lower
    instantaneous or peak demand for electricity.
        Some of the challenges to the broader adoption of these
    types of programs include the mismatch between the load a
    typical building can shed versus the minimum shed amount
    typically established by utilities as a threshold to
    participate. Additionally, building operators typically must
    maintain normal operations during a shed event, thus choosing
    which equipment to turn off can be a difficult task. Newer
    technologies that provide building operators the ability to
    autonomously aggregate peak demand reductions across a
    portfolio of buildings, as well as shifting demand peaks, can
    provide smarter buildings and facilitate broader adoption of
    these types of programs.
        The availability of newer technologies will increasingly
    enable our buildings to be managed in a smarter and more
    sustainable manner. Providing the ability for smart buildings
    to be connected with outside services offers new ways to
    optimize buildings and respond not just to the conditions
    within the building, but also to outside conditions and other
    conditions as well. As an industry, we look to incorporate
    these new technologies and we need to ensure that we maintain
    the appropriate balance between the local control of a building
    equipment and the external services that can optimize
    operations, not only of an individual building, but of a
    portfolio of buildings.
        Emerson has shown a commitment to industry stewardship and
    will continue to work with our customers, national labs,
    universities and others to successfully develop and maintain
    smart buildings.
        Thank you for providing me this opportunity to testify
    before you today. I will be happy to answer any questions you
    may have.
        [The prepared statement of Mr. Wallace follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        The Chairman. Thank you, Mr. Wallace.
        And thank you, each of you, for your contributions this
    morning.
        I want to thank you, Mr. Grunau, for the discussion about
    the energy audits and the rebates that have allowed for, I
    think, some significant differences not only in people's homes
    but when we think about the audits for some of our public
    buildings.
        I had an opportunity at AFN this year to focus on some of
    the ways that we are pioneering with some of the efficiencies,
    and I mentioned little things like an energy audit that Hoonah
    underwent. They realized that by changing out the lights on the
    docks at their little public swimming pool, they could save
    tens of thousands of dollars. At Craig, they did a simple walk-
    through of the little hotel there and the savings that they
    then realized. When you think about communities like that that
    are really operating on the margin, $10,000 means a lot to them
    and particularly a small little hotel that may be somewhat
    seasonal. So I think about the advantages that gives.
        You mentioned healthy homes, and I think that this is
    something that--well, we are focused on cost savings that
    efficiency brings. We have been talking a lot in this building
    this year about health care and health care costs and some of
    the drivers. There was a study that came out not too many
    months back about health statistics with Alaska children, and
    you mentioned respiratory disease amongst young children,
    particularly in our villages. We have the highest rate of
    infant pneumonia, and so much of this is attributable back to
    the home and the fact that you have homes that are not
    adequately ventilated that in an effort to stop the leakage of
    the heat escaping, you plug every exit and thus you trap in
    just the bad stuff.
        If you are living in a small house where you have a couple
    bedrooms and eight people living in the home, ten people living
    in the home, it is also the garage. So you might have somebody
    working on the outboard engine in the living room and you have
    fumes that are coming off. It is a reality that we face that we
    do not think about.
        So I want you to just speak, just a moment here, to this
    aspect of healthy homes because, again, I think we do not
    understand how efficiency can actually allow the homes to be
    healthier for our families.
        Mr. Grunau. Well, thank you for the question.
        I'd like to add to your example. It's not just energy
    efficiency. It's energy efficiency based on sound building
    science.
        So after the pipeline boom, a lot of the folks who came up
    here from the pipeline came from the Midwest and they built
    houses like they knew in the Midwest, right? Two-by-four type
    construction. When the price of energy was inexpensive it
    wasn't a big deal, but when the price of energy went up, then
    people started really feeling the crunch. And so, people kind
    of took matters into their own hands and would take maybe one
    or two inches of foam and put it on the outside of the house.
    Now what happens is that any moisture that's generated in the
    house no longer has an escape path--now it's trapped in the
    walls. So now you're generating mold, allowing mold to grow. It
    creates rot, and mold also inhibits our health, so there's that
    part.
        Ventilation and overcrowding is just a key issue that, I
    think, can be addressed when people understand the importance
    of ventilation, importance of these systems, importance of
    building properly, making these energy retrofits properly. So
    the example you gave with regard to the plugging up the holes--
    I mean, if you're paying $8.00 a gallon for heating oil, you're
    going to save money any way you can. When people feel cold air
    coming in they're just going to plug it in. They think that's
    what's helping them.
        With things that can happen, of course, is if someone turns
    on the dryer, now you're depressurizing the house. You can pull
    in exhaust gases from your boiler, now you've got carbon
    monoxide issues. Now you end up with some headline about this
    family that ends up in the hospital or worse.
        How do we address it? The first thing we do is we try to go
    and inform the public, but we go to each of these projects, and
    just have this conversation with them. The resources are here
    and they're available, and for us it's a matter of outreach and
    having these communications.
        The Chairman. A lot of education.
        Let me go to, I think Senator Manchin was up first. I
    think, who is after Manchin? Senator Hirono is gone. Senator
    Franken? Oh wait, Senator Cortez Masto, you were first. Sorry
    about that. Please.
        Senator Cortez Masto. Thank you, I appreciate that.
        Thank you for this conversation. I am very excited. I think
    this is our future--smart communities, smart buildings. The
    technology is going to be there for the future.
        I support the Chairwoman and Ranking Member's Smart
    Building Acceleration Act. Senator Burr and I introduced in
    Commerce the Moving First Act, which is similarly focused on
    technological innovation, mobility and transportation for our
    communities and smart cities.
        I am curious though, and I am going to open it up to all of
    you--what are our barriers? I appreciate, Mr. Grunau, the
    conversation about how do we get new technology to market,
    because I think that is going to be key to all of this and the
    affordability. What are our barriers? What do we need to be
    looking at to address this, to make sure we are moving in that
    direction?
        Ms. West. I would say for Southern Company, the barrier is
    cost-effectiveness. Our rates are fairly competitive, at or
    below national average, and the paybacks are just not what
    you're going to get when you're in Alaska or California or the
    Northeast.
        Senator Cortez Masto. Anyone else? Same barrier?
        Mr. Grunau. I'd like to just add to that.
        It's often not just the payback, it's just the upfront
    cost. I mean, someone has got to pull it out of their pocket to
    do that. And if you're struggling to make rent, the last thing
    you're going to do is think about how to put in a smart
    thermostat.
        Senator Cortez Masto. So what can we do? Incentives? Grant
    programs? Programs for innovation to help supplement some of
    that cost? Is that what we should be looking at here in
    Congress?
        Mr. Grunau. I think that's incentives, and the other thing
    is that when people start to see it and they start to embrace
    it and if your neighbor has it, then you have it. So, I think,
    just getting it out there and demonstrating it is a key
    solution.
        Senator Cortez Masto. Dr. Virden, did you have a comment?
        Dr. Virden. Yeah, Senator, I would add cost for sure, but
    it was 85 percent of the buildings that don't have automated
    control systems, you know, they really need it and they're not
    aggregated so it will take companies like Southern and others
    to aggregate those buildings so they can get the cost down so
    they can get the return on investment and consumers can see
    that return on investment.
        So we have a disaggregated market and you really need
    turnkey solutions for this vision of a smart building where
    it's automated, as was said earlier. So it's turnkey, it's put
    in, it can do all the things that you want and it keeps the
    environment, the built environment, healthy and eventually both
    the utilities or others can see the value added and the
    consumer can see the value added.
        Senator Cortez Masto. Okay, thank you.
        Dr. Virden. And it gets more complicated the more you put
    more buildings together responding to a dynamic grid.
        Senator Cortez Masto. Well, no, and I appreciate the
    conversation that there needs to be this collaboration and it
    is not just government, it is private sector, it is builders,
    it is everybody coming together to really create these
    communities. And it is going to be a different type of
    collaboration, correct?
        Dr. Virden. Correct.
        Senator Cortez Masto. Yes.
        Ms. West. Can I elaborate on that?
        Because we are in the process of building and we are having
    to work extremely closely with these builders who don't
    understand how to build such a tight envelope. And so, we are
    there every day explaining and helping them, and then the
    vendors are also there, as well as the building company. All
    the subs have had to be brought up to speed, all of the
    vendors, I mean, this is a learning process for everybody.
        Senator Cortez Masto. Right.
        Then can you talk about how you incorporate the
    cybersecurity piece in this because I imagine you are thinking
    about that as the interconnectivity of things----
        Ms. West. Yes.
        Senator Cortez Masto. ----and how that can address, or the
    concerns with respect to it?
        Ms. West. Yes, Senator Cortez Masto.
        We are working through Oak Ridge, who is actually using
    VOLTTRON as the platform, and developing some software called
    CSEISMIC and that software will incorporate cybersecurity
    constraints because it is talking back to Southern Company's
    distribution grid. So we are trying to pull all of these
    components back together and the houses will have, well, they
    won't necessarily have cybersecurity, but they will have
    security components built on them as well.
        Dr. Virden. Yeah, I would add, VOLTTRON is the open-sourced
    software that's put on this device and it's the kind of name
    you get when you let a bunch of engineers choose a name.
        [Laughter.]
        This one has volts and Tron and there's actually a suit
    people wear.
        But the point is, from a cybersecurity perspective, it's--
    we've got to raise the entire community and its best practices
    around cyber, its best practices in the vendor communities that
    supply all the, you know, the technologies. It's the
    cybersecurity of the systems, not just the technology, so
    there's a hardware, there's an IT portion and there's a
    controls portion. We're going to have to work through consumer
    groups and professional societies in partnerships to raise that
    cybersecurity best practices.
        Senator Cortez Masto. I appreciate that. Thank you.
        Mr. Wallace. Could I add too?
        From the cyber perspective on a commercial side it is
    obviously top of the line for us as well as our partners.
        I serve on a number of industry committees--AHRI, ASHRAE
    and others--and those committees are all looking at cyber and
    how we should be at the forefront of incorporating that into
    our products. I would echo it's really the whole ecosystem from
    the products themselves to how they're configured in the
    buildings and then how they're ultimately used. You have to
    take a very broad view of that.
        Senator Cortez Masto. Thank you.
        Thank you, Madam Chair.
        The Chairman. Thank you.
        Senator Gardner.
        Senator Gardner. Thank you, Madam Chair. And thanks to the
    witnesses today for your testimony and time with us today.
        Senator Warner and I have introduced legislation relating
    to the purchase of IoT devices when it comes to the Federal
    Government, the federal procurement process when it comes to
    any device. Our legislation would require that the device: one,
    disclose any known vulnerabilities, so if you are buying an IoT
    device we ought to know what those vulnerabilities are; two,
    there can be no hard-coated credentials like a pre-set,
    unchangeable password like the camera on your laptop being
    password 0-0-0-0; three, must use industry standard protocols,
    things like segmentation firewalls; and four, devices must be
    updatable, they must be patchable. It is pretty commonsense
    things. I don't think anything there really exceeds beyond,
    sort of, current cyber hygiene practices.
        Does such a standard exist in the private sector, Dr.
    Virden? Ms. West?
        Ms. West. I am unaware of a standard in the private sector
    right now, but we are putting in devices that are all up to
    whatever code that they're appropriate for, so----
        Senator Gardner. Dr. Virden?
        Dr. Virden. I'm not aware either. I think it's best
    practices at this point and, you know, we led through many of
    the smart grid demos, evaluating all the cybersecurity of
    federal proposals. So I really applaud you on that approach
    because I think that's what we need to do is keep raising the
    bar with our industry partners to get that, kind of, best
    practices.
        Senator Gardner. Dr. Virden, I just wanted to ask you,
    along those same lines, are we putting IoT devices that are, as
    you said, I think, automated control systems that are not
    patchable? Are we using IoT devices within our IoT devices, or
    automated control systems, excuse me, that are not patchable?
    Would you say that we are?
        Dr. Virden. Boy, I don't know of every automated system
    that's out there whether they're patchable, maybe some of my
    colleagues know that. And that's another area though where you
    need best practices so everybody understands the
    vulnerabilities and how to deal with them.
        Senator Gardner. Perhaps we can get to that question later.
    I just think those are some standard things that are very
    important that, again, they don't reinvent or dramatically
    refine or redefine what we are doing, pretty commonsense stuff.
        Mr. Simmons, thank you. Welcome to the Committee. I have
    been active in promoting Energy Savings Performance Contracts
    (ESPCs). President Bush was very active in ESPCs, and President
    Obama had set a $2 billion goal of savings achieved through
    performance contracting. I believe they later expanded it to $4
    or $5 billion.
        I just want to talk to you about the role that DOE plays
    for performance contracting. What can be done to expand such
    energy efficiency measures and what kind of goals the
    Administration may be pursuing?
        Mr. Simmons. Sure.
        The very first thing I did, actually, when I became the
    Acting Assistant Secretary was to participate in the
    announcement of the new indefinite delivery, indefinite
    quantity, ESPC contract that authorizes up to $55 billion in
    ESPC contracts. There is not an Administration position on a
    goal going forward currently that I know of for ESPCs. There's
    obviously a lot of work that could be done.
        In the past five years, I believe, there was $4 billion of
    work on ESPCs and that is fantastic. There was an LBNL report
    that said there was between, I think, $10 to $15 billion of
    possible federal work. So there are definitely opportunities
    going forward for ESPCs, and we will definitely continue to
    work with those in the future.
        Senator Gardner. I think when we talk about $55 billion
    worth of contracts, that is $55 billion of private sector
    dollars. That is not an expense to the Federal Government.
        Mr. Simmons. Correct. Correct.
        Senator Gardner. That is actually taken up by the private
    sector creating private sector jobs and then the energy
    efficiency, in terms of gains to the taxpayers, that's $55
    billion value-add to the U.S. taxpayers.
        It is a pretty incredible opportunity for us, and I would
    encourage the Administration to continue your partnership in
    performance contracting.
        Dr. Virden, just quickly. Puerto Rico, where the network
    has--if you had a Puerto Rico where the network had been built
    with smart meters, building efficiency, advanced building
    controls, control centers of operational viability . . . if we
    had a modern system based on what we have now, how different
    would the recovery process look going forward as to what it
    looks like today?
        Dr. Virden. Boy, I'm not close to the ground. If the
    infrastructure had survived, if you had all of those things, it
    would be faster. You'd have better situational awareness. You
    would understand where you were down and you'd be able to
    recover quicker from it. But it has to survive.
        Senator Gardner. Thank you.
        One of the things I think is important in automated control
    systems, in the top we have energy efficiency.
        We had a situation in Colorado where a company was
    designing efficient lighting but they were not replacing the
    whole light fixture. They could go in and actually retrofit
    existing fixtures and put an LED light or other type of light
    system within it. However, we had to work for some time getting
    that defined or getting that approach to fit within the Energy
    Star guidelines and guidances.
        How much of the efficiency work that we carry out faces
    obstacles like that? We eventually did get that Energy Star
    certification, or qualification, but it was some time before
    that happened. How much of a challenge can, sort of, the
    regulatory obstacles be when it comes to getting a new energy
    efficiency product to fit within a program like Energy Star or
    perhaps other efficiency programs?
        Ms. West. We have multiple mechanisms for assessing energy
    efficiency and then bringing them in front of our public
    service commissions. So it's a pretty rigorous process to get
    things approved. Could it be faster? Probably. Is it robust and
    well vetted? Yes.
        I think as we have more and more options, we're going to
    have to find ways to streamline the process and remove some
    hurdles to accelerate this.
        Senator Gardner. Great. I would love to continue, but my
    time is expired.
        Thanks, Madam Chair.
        The Chairman. Thank you, Senator Gardner.
        Senator Franken.
        Senator Franken. Thank you, Madam Chair, for holding this
    hearing.
        You know, this is all win-win. It helps the homeowner or
    the building owner. Buildings use 40 percent of our energy, I
    think 75 percent of our electricity.
        And there are a couple things here that I have been
    interested in for quite a long time. I am glad that Senator
    Gardner brought up Energy Savings Performance Contracts because
    there is, part of their financing----
        [Laughter.]
        Okay, a little physical humor from the Senator from
    Colorado.
        But, you know, sometimes the financing of that is done by
    the energy service provider paying the new bill and you don't--
    there is no money up front, I mean, this is creative financing,
    but it works.
        It seems like part of what is holding us back is the
    willingness to do this. One, we see a cut by this
    Administration for the Office of Energy Efficiency and
    Renewable Energy by 70 percent. That includes cutting the
    Building Technologies Office by 66 percent.
        Mr. Simmons, your testimony focused on the important role
    of your office for the research and development of smart
    building technologies and the significant impact they have on
    healthcare--on energy savings. But the proposed budget would
    severely limit technological innovation and threaten the
    incredible research being done at the national labs. How can
    you reconcile these cuts?
        Mr. Simmons. The budget is really focused on--the
    President's proposed budget is really focused on redirecting as
    much effort as possible on early-stage research and development
    where, you know, the Administration believes that that is the
    most appropriate federal role, that there is a lot of research
    to be done on that most basic research. But one important thing
    about the budget is that we really want to work with these
    people on the panel, for example, to take up the later-stage
    research and development, even if it's things that we're not
    funding, for things like demonstrations. So that is the, you
    know, that's what the theory of the budget is, is to focus our
    efforts on the early stage.
        Senator Franken. Yes, well, it seems harder to spend more
    money on the early stages if you are cutting the budget by 70
    percent and then leaving nothing for this, which I started off
    by saying this is a win-win, and it seems like we need your
    office to be part of that. By cutting the budget for something
    that is so beneficial and so, sort of, common sense by 70
    percent, that seems very counterintuitive to me.
        I tried to push an energy efficiency resource standard, a
    national one. We do that in Minnesota, about half the states in
    the Union do it--every one of them has exceeded their goals. In
    Minnesota, utilities have to make sure their customers are
    using their electricity--what is it, 0.75 percent a year
    improvement? It is 1.5 percent in Minnesota. But I wanted to do
    this.
        Anybody here, how do you think that would be helpful?
    Because what we have done is, in Minnesota, we have met those
    goals and it has increased retrofitting. It means the utility
    helps the target retrofits and does exactly the kind of work
    you all have been talking about. Anybody have an opinion?
        Mr. Grunau. I'd support that, I mean, I like the concept of
    it.
        There's--that talk happens in Alaska and there's always
    push back from people who say well, we're, you know, builders,
    for instance, having to live up to the standard. And there's
    also the enforcing it. We're just such a dispersed state. There
    were arguments against that, just from the government side, of
    paying for the cost of enforcing that out in the bush.
        To me, personally, I think it makes sense to have a
    standard. I mean, in a way, the Home Energy Rebate Program I
    talked----
        Senator Franken. Let me just--I've got--I'm over.
        Mr. Grunau. Sure.
        Senator Franken. Can I ask about weatherization?
        The Chairman. Yes.
        Senator Franken. Why would we be cutting weatherization?
    The Weatherization Assistance Program helps low-income families
    make their homes more efficient and reduce energy costs, but
    the Trump Administration is proposing eliminating the
    Weatherization Assistance Program which is, Mr. Simmons, part
    of the office that you lead. How do you justify eliminating
    this when it helps low-income families save money on their
    energy bills and supports thousands of jobs?
        Mr. Simmons. Sure. With that program, the theory is that
    that is money that is best for the states to take that role. It
    is state decisions in how that money gets allocated. It's money
    that comes from the Federal Government, goes through the
    states. Now, obviously, Congress has a different perspective on
    that program and that program has been funded and we will carry
    out, you know, obviously we will fund the program as we are
    appropriated money. The budget, the proposed budget is a
    proposal, but we are going to carry out Congress'--you know,
    how you appropriate money, we're going to carry that out.
        Senator Franken. Okay, thank you.
        The Chairman. I think you will get the message loud and
    clear from this appropriator that we think weatherization funds
    are absolutely necessary, not just from the cold states, but
    from the warm states as well.
        Senator Heinrich.
        Senator Heinrich. Thank you, Madam Chair, I could not agree
    more. I want to thank Senator Franken for bringing up
    efficiency standards and raise a related issue.
        Mr. Simmons, as you know, last week Secretary Perry
    released the results of the President's required review of
    hurdles to domestic energy development. Now, as someone who
    comes from a state that produces a great deal of energy--oil
    and gas, wind, solar, you name it--I understand that we can
    argue about permitting and regulation and we argue about those
    things regularly on this Committee. But I find it somewhat
    incredible that this Department of Energy concluded that
    efficient appliance standards are somehow a burden on energy
    producers. Can you explain the logic behind this DOE conclusion
    that using less energy and saving consumers money in their
    appliances through these standards is somehow a burden on
    domestic energy production?
        Mr. Simmons. Sure.
        First of all, that statement, I believe, has to be read in
    the context of our statutory requirements, as in, in the
    context of the EPCA, the Energy Policy and Conservation Act.
    Under that, that is the Act that creates the Appliance
    Standards Program. Under that Act we are not, you know, we set
    appliance standards. As in we, the Department of Energy, sets
    appliance standards for----
        Senator Heinrich. Correct.
        Mr. Simmons. ----refrigerators, microwaves, you know, many
    other things. And we, once those standards are set, we cannot
    backslide. We cannot reduce those standards.
        So there is nothing in that memo that should be, like,
    implicating or suggesting that we are reducing, you know,
    reducing what those public standards are.
        Senator Heinrich. How is that a burden on producers?
        We produce a lot of energy in New Mexico. Some of it goes
    into the transportation sector, but much of it goes into
    generation through natural gas generators, through putting
    clean, solar electrons onto the grid through wind generation.
    For any of those businesses, I do not understand how that is a
    burden.
        Mr. Simmons. It isn't necessarily a burden for domestic
    energy production. It is, would, you know, there are some
    possible burdens on, you know, for--there are possible burdens
    on the American public that are looking to buy certain types of
    appliances. That's where the burdens would be, not necessarily
    on production.
        Senator Heinrich. Well, I think before we change statute,
    we should probably find actual burdens as opposed to possible
    burdens.
        Shifting gears a little bit to those of you in the private
    sector. Mr. Grunau, Ms. West, as a general rule from your
    professional experience, is it cheaper today to achieve in the
    market a megawatt of reduced demand through energy efficiency
    or is it cheaper to bring on another megawatt or any other
    increment of additional generation?
        Mr. Grunau. I mean it's, from the numbers we've done,
    energy efficiency is the quicker route to energy----
        Senator Heinrich. The cheaper route as well?
        Mr. Grunau. Cheaper route, yes, cheaper route.
        Senator Heinrich. Do you have any numbers you want to share
    on that off the top of your head?
        Mr. Grunau. I don't have any off the top of my head.
        And if I could correct, I misspoke when I was saying--
    Alaska does have an energy standard, we just don't have an
    energy code.
        Senator Heinrich. Okay.
        Mr. Grunau. My fault.
        Senator Heinrich. Ms. West?
        Ms. West. I'm not sure we can agree on that.
        Our power rates are pretty competitive and I think right
    now that we are still struggling from getting comparable cost
    from energy efficiency, but we will be happy to provide numbers
    for you.
        Senator Heinrich. It seems like the biggest issue here, at
    least from my experience in New Mexico and doing quite a bit of
    energy efficiency work when I was on the City Council there,
    where we had financed a number of issues like replacing
    lighting with LED lighting, with more efficient, up-to-date
    appliances and actually saving money as a result.
        A lot of the challenge here, as I think it was alluded to
    by Senator Franken as well, is not that we cannot save money,
    it is finding an innovative, financial model to actually have
    that work for the individual consumer.
        So if you are a utility you can aggregate a lot of things,
    and oftentimes that works to your advantage. But, if you just
    go back 10 years, when I put solar on my house in 2004 I
    happened to be refinancing my house, so I was able to make that
    work. I traded a bill, my monthly electric bill, for a small
    increment, cheaper increment, on my mortgage and was able to
    basically go net-zero in terms of production at my house.
        But for a lot of people if they could trade $100 off their
    energy bill for paying some third party $80 a month or $50 a
    month or $75 a month, that would be a net gain for them. But
    there is not an easy way to do that, at least at the consumer
    level. The solar industry seems to have figured that out, in
    large part. How come we haven't been able to figure out that
    question of just innovative models, when the numbers do pencil
    out in a positive direction?
        Ms. West. Part of it is our regulatory structure precludes
    us from being able to deal with that; however, we offer rooftop
    solar rates and we're just not finding the penetration. People
    just aren't signing up for them, because they're not finding it
    competitive in our service territory.
        Senator Heinrich. I am talking about energy efficiency. So
    if somebody can--a higher SEER number, you know, cooling
    system, more insulation, et cetera. Why isn't it easier to find
    a contractor who will basically trade a benefit on your
    electric bill for their paying for things that clearly reduce
    demand for the consumer?
        It seems like those benefits are easy if you are a big
    company, but if you are an individual consumer nobody has
    cracked that market from a financial point of view.
        Ms. West. Yeah, that's out of my wheelhouse.
        Mr. Grunau. I'd love to find an answer for that for you. I
    have the same question myself. We don't see that up where we
    are either. Good point.
        The Chairman. Thank you, Senator Heinrich.
        Senator Hirono.
        Senator Hirono. Thank you, Madam Chair.
        Mr. Virden, your testimony called for the creation of
    public-
    private partnerships to ensure that cybersecurity is built into
    all new building control systems and adopted by the building
    industry. Can you elaborate briefly on what you hope the
    partnerships would achieve that is not already happening?
        Then in your view, is the Federal Government investing
    enough resources to address the cyber threat and are utilities
    and the smart buildings industry doing enough to address
    continuously evolving cyber threats?
        Dr. Virden. Well, thank you for the question.
        As I mentioned in my written testimony, I think from an
    industry standpoint, when you start talking about smart
    buildings and linking buildings to the grid there's a lot of
    stakeholders who need to be engaged from a cybersecurity
    perspective. And perhaps, the grid is moving faster than the
    smart buildings, is relative to associations and stakeholders
    moving to cyber best practices.
        But what I think needs to be done is we need to raise the
    cyber best practices in public-private partnerships with
    industries, the vendors community--it is a complicated
    ecosystem so you will need some convening power.
        ASHRAE and others, I think, I believe have a subcommittee
    now that is looking at cybersecurity. So it's starting to move
    forward from a technology point of view. It also needs to move
    forward from a systems point of view and how hardware and
    technologies come together.
        And I think DOE can play a fantastic role in helping to
    convene and drive this whole cyber agenda forward both in
    buildings and the grid and between the two.
        Senator Hirono. Is the DOE stepping forward to do that,
    especially in an environment where their budget is being cut?
        Dr. Virden. At least in the programs I am involved in,
    there are cybersecurity best practices being developed and
    there are partnerships being developed.
        Senator Hirono. So do you think that in terms of the best
    practices, though, should there be some government standards
    that would lay the framework for what should be happening or
    should we rely on something developing in the private sector or
    voluntary standards?
        Dr. Virden. Boy, standards are out of my area of expertise,
    but I do really believe that public-private partnership needs
    to elevate and we need to test and validate that our
    cybersecurity best practices are working. I think that's why
    and it's very important that you have that public-private
    partnership.
        Senator Hirono. I noticed some heads nodding. Are there
    other people on the panel who are more focused on the standards
    and the need for standards--especially in an ever-evolving
    scenario--because cyber doesn't stand still?
        Ms. West. Exactly, Senator Hirono. I agree with everything
    Jud is saying.
        I feel like, from an engineering perspective, we like our
    standards and think we know better than folks how to make the
    standards, but with cybersecurity, this is a different animal
    and we feel like we've got to have these private and public
    collaborations together to make it safe for everybody. So in
    this case, everybody needs to be working together to come up
    with these standards.
        Senator Hirono. So at some point we should have standards,
    but how long do you think that is going to take in an ever-
    changing environment?
        Mr. Wallace. Well, as I mentioned a few minutes ago, the
    industry committees that I serve on, the awareness is certainly
    there which is, to me, the first step. And there is a lot of
    activity now with ASHRAE and AHR and others to produce those
    standards and best practices.
        I think the good news is that work is already happening. I
    think our, the customers that we serve are also aware of that
    and demanding that we pay attention to those kinds of issues to
    make sure that we're providing the proper responses and
    standards. But I think the industry committees are working and
    fully aware of the need to do that and are very close to having
    those kind of standards out.
        Senator Hirono. When you talk about the consumers that you
    work with, are you talking about the corporations or--we are
    not really focusing on individual homeowners are we?
        Mr. Wallace. My comments are related to the commercial, big
    companies that you would know and they're obviously aware. They
    have entire departments that are set up to address those
    things. So it's a little bit different than individual
    homeowners, certainly.
        Senator Hirono. So are we mainly focused on those kinds of
    corporate buildings, in terms of what we need to do because it
    is hard to envision, aside from things like energy efficiency
    appliances, that would be helpful to homeowners that in this
    kind of, you know, where you are talking about thousands of
    entities in the private sector.
        Dr. Virden. Well, I think yes, but it goes beyond that in
    that every technology we could put in our home that is smart,
    you have to work through the vendor chain that every IT or OT
    system that we would have in a building, information technology
    or operational, you know, technology, we would need to have
    best practices and industry standards.
        So I think it's broad. And consumer products, you have some
    very smart consumer products, you know, plugging into your
    house as well. So it's got to be a broad group of stakeholders
    and we have to raise all practices so if someone comes into any
    of our houses and plugs in a bunch of new technology and
    software, we have confidence that, collectively, it's
    cybersecure.
        Senator Hirono. It's a daunting task.
        Dr. Virden. We can do it.
        Senator Hirono. Oh, good to know.
        [Laughter.]
        Thank you, Madam Chair.
        The Chairman. Yes, it is good to know.
        Thank you, Senator Hirono.
        You know, when we talk about all of the smart technology, I
    think, we are also reminded that sometimes the weakest link
    here is us, the operators. Mr. Grunau, you mentioned in your
    written testimony that in a survey on many of the public
    buildings in Alaska, a large number of the buildings actually
    had advanced or control systems that were deliberately rendered
    inoperable by facility personnel. Talk to me a little bit about
    the human factor here.
        I think we recognize that oftentimes we do have some pretty
    decent systems that could help us, but because we want to
    override that system because sometimes we do not understand the
    full benefits that that system can provide, that many times in
    Alaska, I think, we have folks coming in from the outside,
    installing something, leaving it without the appropriate
    training to the local people. Share a little bit with the
    Committee here--because it is not just in Alaska, it is all
    over--where we have systems that can allow us to do better, but
    we are just not as smart as our systems. Talk to me a little
    bit about the situation.
        Mr. Grunau. Thank you for the question.
        I think that this applies, not just to about building
    automation systems in schools and big buildings, but also,
    we've walked into plenty of homes where the ventilation systems
    are disabled because people just don't understand it.
        A lot of times the decisions, at least on public buildings,
    the decisions to incorporate and adopt these building
    automation systems come from the top and the message and the
    importance of it doesn't always trickle down to the person who
    is actually having to push the buttons and monitor and maintain
    it. In many cases, those folks are there for a job and
    maintaining the building automation system is just a small part
    of what they have to do. And so, if it's--if they don't really
    understand the importance of it then they're going to
    prioritize it at a lesser level. In some cases we did see where
    they've just completely disabled, in that survey from 2012.
        And again, in homes it's the same thing. Ventilation
    systems are often just unplugged, and it has to do with people
    just not understanding why they're there.
        The Chairman. So how do we do a better job? How do we make
    sure that either as the homeowner you know and understand what
    it is that you have in your home or from a broader systems
    perspective that the training is more than adequate?
        Mr. Grunau. Wow, I mean, that's a big question.
        I mean in the communities our approach is to go to the
    communities first and say, hey, here's this project we're
    doing. We want your buy-in, we want your feedback, we want your
    input.
        And so, for us to, you know, give a chance to incorporate
    traditional wisdom with 21st century technology, that is one of
    the ways we're able to do this in the villages.
        When it comes to just building automation systems on the
    bigger scale and the commercial scale, it's just a matter of, I
    think, really training and having exposure for the people who
    are operating those systems and getting that, maybe it's
    through continuing education, maybe it's through, I mean, I
    don't know what the directions or the answers are for getting
    them that information but it needs to be addressed. It needs to
    be addressed.
        The Chairman. Let me ask you, Ms. West, because you are
    trying to do this in a community or neighborhood there in
    Birmingham. What are the hardships here just in terms of the
    education or the training? What are you encountering?
        Ms. West. I think it's everything that Bruno is saying, but
    I think that with the research we're about to undertake where
    we will have control of the water heaters and can use them as
    energy storage devices with the customers being able to
    override. We're trying to figure out how much interaction the
    utility should play to optimize, and can the utility have a
    role in trying to optimize at least the larger--the HVAC and
    the water heaters in homes and then let the homeowners deal
    with a lot of the other things. So maybe that's a direction----
        The Chairman. Well, how difficult is that because I like to
    be able to control my thermostat----
        Ms. West. And you should be able to.
        The Chairman. ----and I do not want somebody to tell me
    what the temperature of my hot water is going to be
    particularly if I think that somebody is doing it downtown.
        As a societal thing, is this just something that we are
    going to have to get over in order to gain these efficiencies?
    I will ask Mr. Wallace to join the conversation here, too,
    because from a big commercial perspective--one of the things
    that drives me crazy here, it gets so cold in this Committee
    room and we cannot control it.
        Ms. West. So I'll just continue.
        We will always allow the customer to have the last choice--
    --
        The Chairman. Okay, I like that.
        Ms. West. ----if they want to override it. We will offer
    them cost incentives to let us do that and so we might preheat
    your hot water--so you still have hot water, it's just we might
    shift it, shift the peak for everybody and heat it early, so--
    --
        The Chairman. Mr. Emerson or Mr. Wallace?
        Mr. Wallace. I would agree. I think one of the challenges--
    I think you have a very good point about that.
        We've seen and many times people install building
    automation systems and they tune them and get them really
    optimized when they are first installed, but over time as work
    needs to be done or technicians are in adjusting things, they
    don't really, necessarily, understand the impact of the overall
    system. So it can degrade over time.
        We have programs where we've saved one of our clients over
    $7 million in energy savings over three years by remotely
    checking and monitoring and making sure that those erosions are
    not happening on that.
        So I think there's really a couple parts to it. One of them
    is taking advantage of the new technologies, IoT or remote
    monitoring services, as well as really, as a manufacturer,
    making sure that we're designing products that are simple to
    use, they're not really complicated because I think that's a
    large part of it as well. The usability of that system
    shouldn't be complicated and somebody shouldn't need to have to
    worry about a lot of things in order to use the system itself.
        The Chairman. Senator Hirono, did you have any more
    questions that you wanted to field?
        Senator Hirono. I am with you, Mr. Wallace, in terms of if
    the system is too complicated then there will be erosion and
    even in our own homes. I mean, I have an HVAC thing. I don't
    even touch it, it is like something bad might happen or--I
    think you have a lot of customers like that, Mr. Wallace, who
    once the system is turned on--my hot water, I also don't touch
    that thermostat either. It's like, it's there, it's working.
    That is all I care about. If anything goes wrong, I have no
    idea. We are living in an age where the user-friendliness of
    all of these products is very critical, I would say.
        Thank you.
        The Chairman. Just a couple last questions here and this
    one is directed to you, Mr. Wallace.
        I was a little bit surprised when you stated in your
    written testimony that refrigeration accounts for a bigger
    chunk of a typical retail building's energy consumption than
    either HVAC or lighting. That one surprised me.
        Given that, what are the issues that you are dealing with,
    with R&D, energy technology innovation, the building automation
    systems in general as it relates to the refrigeration piece?
        Mr. Wallace. Thank you very much for the question.
        And yes, refrigeration, it is a surprise but depending on
    the type of building, refrigeration can be the largest part of
    it and the other part of it, as well, is refrigeration is a
    baseload. So refrigeration needs to be on to keep your food at
    the proper temperatures regardless of the time of day. We've
    invested a lot of R&D, in terms of how to build more efficient
    refrigeration systems from compression technologies to smarter
    control algorithms that are able to use advanced sensors to
    look at the actual conditions now and adjust the capacity of
    the system as well.
        Those are all from an equipment level standpoint too, but
    we've also noticed and I think it's a fact that in many
    installations there could be some mechanical problem that is
    causing a degradation of the equipment itself. So, in other
    words, it's still keeping, you know, if you go to your local
    grocery store it's still keeping the food cold, but there's
    something that's just not right in that system and it's
    operating inefficiently, but it's being masked because of that.
        So one of the areas that we're focused on is using new
    sensors, new technologies, many things, as Dr. Virden has
    talked about as well, to pull that data out and to run
    analytics and machine learning on top of that data to
    understand, is that system really operating as efficiently as
    it should be? It was installed one way. Is it really operating
    that way?
        And I think those, combining those pieces together are part
    of the key going forward in terms of managing those systems
    more efficiently and understanding when something really has a
    problem and addressing it.
        The Chairman. Mr. Simmons, did you want to jump in there?
        Mr. Simmons. Sure.
        One of, I think, the kind of exciting pieces of research
    that the Department of Energy has been working on, especially
    with Oak Ridge, is on essentially solid-state refrigeration.
    That's, obviously, essentially sci-fi, but then again, LED
    lights could be seen as, kind of, something out there and yet,
    here they are, lighting this room. But that type of next-
    generation technologies for refrigeration is something, is some
    of the research that we're doing and it's particularly
    happening at Oak Ridge. Just wanted to put that in.
        Dr. Virden. If I could add on to that, Senator?
        The Chairman. Dr. Virden.
        Dr. Virden. I think it's so important about the automation
    and the simplicity and the transparency of technologies and the
    system of technologies that would go into buildings and the
    workforce that can install these systems and adequately train
    all of us to be able to operate them.
        And the analogy I think about where I hope we'll get to
    with buildings, is our vehicles. So our vehicles are, you know,
    have a lot of computational horsepower, a lot of sensors on
    them. They're GPS tracked, soon they'll drive themselves, and
    we're all going to be very comfortable with that. I hope
    they're cybersecure. They're going to be the most expensive 20
    square foot, you know, room that you could find. And we can do
    all the temperature control, but when we walk into our car each
    day, it's turnkey and we expect it to work. And when something
    goes wrong it comes up and then we take it to somebody to
    maintain it, if we don't change the oil.
        We need to get our buildings to that point where it's
    automated, it's turnkey--problems, diagnostics are run. They
    either fix themselves or the right maintenance crew comes in
    and they're optimized so a room like this isn't cold.
        The Chairman. Well, you have given me a good segway to my
    last question which was the role that electronic vehicles can
    play connecting with the issue of smart buildings.
        We are going to be at that point where we are going to see
    an increased need for charging at night when everyone is at
    home and as you look to the variable loads, the variable
    supplies, the smart controllers that are going to be aiding our
    buildings to be more efficient.
        How do you see electronic vehicles or electric vehicles
    playing into all this? How long before these vehicles really
    are viewed as our mobile storage devices? It sounds like you
    think there is a very key and a very integrated role here, but
    I am curious to know from the others as well.
        Go ahead, Dr. Virden.
        Dr. Virden. Well, I don't know exactly when they're going
    to be ubiquitous, but their growth is happening. Battery costs
    are coming down. They're becoming more affordable so there's
    going to be more and more electric vehicles that are going to
    come out into the market.
        But what's, for me, is really interesting when you think
    about smart buildings is our buildings may be generating power,
    you know, through PV. They may be storing power through
    vehicles plugged in at night or other energy storage
    technologies. They're going to be responding, you know, to grid
    signals to reduce loads.
        So the entire operation of a building is going to change
    and the electric vehicles--it's going to be really interesting
    when you link it back to the grid. We did a study about 10
    years ago of how many electric vehicles could you put on the
    transmission infrastructure of the grid. In some parts of the
    country you could put 100 percent of the light-duty vehicle
    fleet on the grid. And that's a good thing from an electric
    vehicle point of view.
        Now your grids, running 90, 95 percent all the time as it
    provides, you know, that electricity to the vehicles that are
    charging in the middle. And on the West Coast it's a much
    smaller amount because we have a lot more renewables and
    hydros.
        So the bottom line, it's going to change the dynamics of it
    considerably when electric vehicles start plugging into
    buildings or homes and we start managing that in large numbers.
        The Chairman. Mr. Simmons.
        Mr. Simmons. And there is, obviously, this is a very
    important area of research and we are working with a number of
    the national labs on this, with Idaho National Lab, Oak Ridge,
    PNNL, because not only are you talking about possible two-way
    flows from the, you know, from the residents into the cars and
    back again, but with the research that we're doing on extreme
    fast charging to be able to charge those cars very quickly.
    That uses an incredible amount of electricity in a short period
    of time.
        I think, don't quote me on this, I thought from like, if I
    remembered the numbers correctly for just three vehicles,
    they'd be drawing one megawatt for a short period of time. That
    is a lot of electricity which, you know, this is some of the
    important work that we're doing in trying to figure out how to
    make that work, number one, for the vehicles themselves, for
    the batteries so that we can recharge batteries quickly. But
    then, to look at from an overall perspective, what does this
    mean for the grid and to try to look at what those implications
    are. So there's a lot of research going on, obviously, because
    of the massive changes we're seeing in vehicles and the energy
    space right now.
        The Chairman. Ms. West, are you factoring EVs into your
    Smart Neighborhoods?
        Ms. West. In this phase, we're not. But we fully intend, in
    future phases, we'd love to see EVs. And it's a very important
    part of our research program so, another piece of the equation.
        The Chairman. And as far as Alaska goes, I always say,
    places like Juneau--island, operating off of hydro; Sitka--
    hydro, island; perfect for EVs. We just need to get more of
    them up there.
        Mr. Grunau. Agreed.
        The Chairman. Yes.
        Mr. Wallace, care to comment?
        Mr. Wallace. No, that's really outside my area of expertise
    just a bit, but I do believe that that does play into the
    overall idea of how you manage the grid and how that the
    building loads can be shifted up and down based upon some of
    the changes to the grid from EVs and other areas as well.
        The Chairman. Good. Very interesting.
        Well, thank you all for your testimony this morning, your
    contributions in many different ways. It has been interesting,
    and I think we recognize that when it comes to efficiency
    opportunities we have a great deal within our buildings and our
    homes.
        So thank you for your time this morning.
        With that, we stand adjourned.
        [Whereupon, at 11:33 a.m. the hearing was adjourned.]

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