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


                                                        S. Hrg. 115-490

                 NEW EFFICIENCY OPPORTUNITIES PROVIDED
                    BY ADVANCED BUILDING MANAGEMENT
                          AND CONTROL SYSTEMS

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

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION
                               __________

                            OCTOBER 31, 2017
                               __________


                [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]


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

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

                    U.S. GOVERNMENT PUBLISHING OFFICE
                    
27-435                    WASHINGTON : 2019         
        
        
               
               
               COMMITTEE ON ENERGY AND NATURAL RESOURCES

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

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

                              ----------                              

                           OPENING STATEMENTS

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

                               WITNESSES

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

          ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED

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

 
                 NEW EFFICIENCY OPPORTUNITIES PROVIDED
                    BY ADVANCED BUILDING MANAGEMENT
                         AND CONTROL SYSTEMS

                              ----------                              


                       TUESDAY, OCTOBER 31, 2017

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

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

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

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

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

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

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

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

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

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

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

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

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