[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
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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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