[Senate Hearing 116-289]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 116-289

                        THE ELECTRICITY SECTOR 
                         IN A CHANGING CLIMATE

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

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                     ONE HUNDRED SIXTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 5, 2019

                               __________
                               
                               
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               Committee on Energy and Natural Resources

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                    U.S. GOVERNMENT PUBLISHING OFFICE                    
35-558                       WASHINGTON : 2020                     
          
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               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                    LISA MURKOWSKI, Alaska, Chairman
JOHN BARRASSO, Wyoming               JOE MANCHIN III, West Virginia
JAMES E. RISCH, Idaho                RON WYDEN, Oregon
MIKE LEE, Utah                       MARIA CANTWELL, Washington
STEVE DAINES, Montana                BERNARD SANDERS, Vermont
BILL CASSIDY, Louisiana              DEBBIE STABENOW, Michigan
CORY GARDNER, Colorado               MARTIN HEINRICH, New Mexico
CINDY HYDE-SMITH, Mississippi        MAZIE K. HIRONO, Hawaii
MARTHA McSALLY, Arizona              ANGUS S. KING, JR., Maine
LAMAR ALEXANDER, Tennessee           CATHERINE CORTEZ MASTO, Nevada
JOHN HOEVEN, North Dakota

                      Brian Hughes, Staff Director
                     Kellie Donnelly, Chief Counsel
  Brianne Miller, Senior Professional Staff Member and Energy Policy 
                                Advisor
            Chester Carson, Senior Professional Staff Member
                Sarah Venuto, Democratic Staff Director
                Sam E. Fowler, Democratic Chief Counsel
                Renae Black, Democratic General Counsel
           Luke Bassett, 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
Manchin III, Hon. Joe, Ranking Member and a U.S. Senator from 
  West Virginia..................................................     7

                               WITNESSES

Kelliher, Hon. Joseph T., Executive Vice President, NextEra 
  Energy, Inc....................................................     9
Schutt, Ethan, Chief of Staff, Alaska Native Tribal Health 
  Consortium.....................................................    18
Tierney, Dr. Susan F., Senior Advisor, Analysis Group, Inc.......    23
Medlock III, Dr. Kenneth B., James A. Baker, III, and Susan G. 
  Baker Fellow in Energy and Resource Economics, and Senior 
  Director, Center for Energy Studies, James A. Baker III 
  Institute for Public Policy, Rice University...................    35
Jacobson, Lisa, President, Business Council for Sustainable 
  Energy.........................................................    48

          ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED

CoilPod LLC:
    Letter for the Record........................................   131
Jacobson, Lisa:
    Opening Statement............................................    48
    Written Testimony............................................    50
    Responses to Questions for the Record........................   125
Kelliher, Hon. Joseph T.:
    Opening Statement............................................     9
    Written Testimony............................................    12
    Responses to Questions for the Record........................    86
Manchin III, Hon. Joe:
    Opening Statement............................................     7
Medlock III, Dr. Kenneth B.:
    Opening Statement............................................    35
    Written Testimony............................................    37
    Responses to Questions for the Record........................   113
Murkowski, Hon. Lisa:
    Opening Statement............................................     1
    Charts titled ``Daily Sea Ice Concentration Analysis, NWS 
      Alaska Sea Ice Program'' -- January 25, 2019 and March 02, 
      2019.......................................................     3
    Chart titled ``March 01, 2019 Sea Ice Concentration AMSR2'' 
      by @AlaskaWx...............................................     5
Schutt, Ethan:
    Opening Statement............................................    18
    Written Testimony............................................    20
    Responses to Questions for the Record........................    94
Tierney, Dr. Susan F.:
    Opening Statement............................................    23
    Written Testimony............................................    25
    Responses to Questions for the Record........................    99

 
                        THE ELECTRICITY SECTOR 
                         IN A CHANGING CLIMATE

                              ----------                              


                         TUESDAY, MARCH 5, 2019

                                       U.S. Senate,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:05 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.
    Over the past couple weeks here, we have had hearings that 
looked at the energy markets of today, what could be the 
breakthrough energy technologies of tomorrow, and then 
worldwide forecasts from the International Energy Agency, IEA. 
In each of these hearings we have heard about the effect that 
climate change is having on decisions within the electricity 
sector. Today, we are here to consider those trends in greater 
detail.
    Our nation's energy mix has changed significantly over the 
past decade, largely driven by the shale revolution and the low 
cost of natural gas, but also federal and state policies that 
have boosted low or zero emission energy technologies.
    Now we all know that the electricity sector is just one 
piece of the puzzle when it comes to climate change, but also, 
quite possibly, the most visible and all encompassing. Reliable 
electric power is central to our very way of life. It powers 
our homes and our businesses, charges our cell phones, 
sometimes our vehicles, allows us to run our air conditioners 
and plug in our electric blankets, which I needed last night 
because I had no heat in my house here, so I felt like I was 
back home.
    Senator Manchin. Back in Alaska.
    The Chairman. It was good; I slept well.
    [Laughter.]
    But as more renewables come online and the mix of baseload 
power changes, our Committee will focus on maintaining grid 
reliability and resiliency. We will prioritize keeping energy 
affordable, and we will be working to advance cleaner energy 
technologies that can help reduce greenhouse gas emissions.
    So a focus on what we can do with these technologies, how 
we can push out the R&D, how we can work to encourage the 
developments in the CCUS, what we can be doing more of when it 
comes to efficiencies, particularly for our buildings. And this 
has to be a priority, I think, for all of us.
    Certainly, in Alaska we view that there is no choice here. 
In the Arctic, we are seeing warming at twice, over twice, the 
average of the rest of the Lower 48. It is directly impacting 
our way of life. Diminishing sea ice and melting permafrost are 
real world challenges that we are contending with today.
    We are seeing wildlife migration patterns that are changing 
as the bowheads move further north. We are seeing changes 
within our fisheries as we are seeing different species in more 
northern waters than we have before. It is impacting 
subsistence, it is impacting food security, and it is certainly 
impacting our economy with our fisheries.
    There was a story, just very prominent, in yesterday's 
clips, and it detailed the drought extent across Southeastern 
Alaska. Southeast is where I grew up. It is the Tongass 
National Forest. It is a rainforest. And within Southeast are 
the communities of Wrangell and Ketchikan, where I lived, and 
Petersburg. These are hydro communities that are now relying on 
diesel-powered generation. People are actually having to talk 
about water conservation, literally, in a rainforest. It is 
having an impact. The headline of this particular story was 
``Hatcheries are the Canary in the Coal Mine as Drought Extends 
across Southeast Waters.''
    Because what happens is they have the little fry in the 
hatcheries and they are seeing warmer waters coming down from 
out of the rivers, and they need to keep these fry cool. So 
they put them out into the ocean. Well, they are putting them 
out a full month earlier. So what does that mean then to their 
ability to survive out there? So it is a very, very real 
condition and situation.
    Yesterday, on the front page of our largest newspaper, the 
Anchorage Daily News, there was a story about the extent of the 
sea ice, and how for the first time in many memories we are 
seeing open waters in and around the area here around St. 
Lawrence Island and Diomede Island up here.
    [The information referred to follows:]
    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
    
    The Chairman. This chart shows the sea ice about a month 
and a half ago, January 25th. And then just a couple days ago, 
March 2nd, you have had this much ice that has broken up, 
pushed off and gone further to the North.
    So it is dramatic. It is not just climate change. It is not 
that it warmed up that quickly but you have a series of 
conditions that you see with the wind and the warming and the 
water.
    The other map is one that shows, again from the same 
article, the same graphic by AlaskaWx.
    [The information referred to follows:]
    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
    
    The Chairman. This is the sea ice concentration in the 
Chukchi and Beaufort, in terms of the depth and the 
concentration of the ice. But it speaks to the reality that we 
are facing up North.
    I was home this weekend for one of my favorite events, 
which is the Iditarod race, which is a 1,000-mile, actually 
1,100-mile, race really all about tough Alaskans and grit and 
how humans and animals interact together. It is an iconic race, 
and the route has changed a little bit as we have seen the 
conditions on the ground changing.
    In the Norton Sound area, where usually the teams will 
cross the frozen ocean, it makes for a very exciting but really 
a grueling trek because of the winds that are out there. Well 
now that is open water and so they have had to reroute the race 
to hug the shoreline.
    So as we deal, again, with these very real realities, it is 
not just things like a sled dog race. We have a number of 
communities that need to relocate in order to survive the 
encroaching seas as we are seeing greater sea ice move out in 
more open water.
    But our reality is that we don't, at this point in time, 
have a clear or effective federal plan to ensure that can 
happen on a timely basis. And that is something I hear from my 
constituents a great deal about.
    Another challenge is that many of our remote communities in 
Alaska are heavily reliant on expensive diesel fuel for heating 
and power. Integrating cleaner energy technologies, often with 
a microgrid, can decrease reliance on diesel and provide for 
greater reliability. It can also reduce costs, which is 
critical for unlocking local economic opportunities. And of 
course, it is certainly much better for the environment.
    So I am very pleased that as part of today's panel we have 
Ethan Schutt, a friend, a leader. He is with the Alaska Native 
Tribal Health Consortium to provide his perspective about many 
of these challenges and to provide some details about what work 
is being conducted in Alaska today.
    In addition to Ethan, we have Mr. Joe Kelliher, a former 
Chairman of the Federal Energy Regulatory Commission (FERC) and 
currently the Executive Vice President of Federal Affairs for 
NextEra Energy. Mr. Kelliher has been before the Committee many 
times, but it is good to have you back.
    We also have Dr. Susan Tierney. She is with the Analysis 
Group. We welcome you.
    Dr. Kenneth Medlock is the Senior Director for the Center 
of Energy Studies at Rice University. It is good to have you as 
part of the panel.
    And Ms. Lisa Jacobson, who is the President of the Business 
Council for Sustainable Energy (BCSE).
    I thank each of you for being here.
    Now I think it is important to point out, we know here on 
the Committee that we have jurisdiction in certain areas. We do 
not have complete jurisdiction over climate change, we 
recognize that, but we do have a considerable role to play in 
developing reasonable policies that can draw bipartisan support 
that I think will be a pragmatic contribution to the overall 
discussion. What we can add to that conversation about 
research, about innovation, and efficiency, I think you will 
likely see these as subjects of further discussion within this 
Committee.
    This morning, we will begin that conversation. I am very 
pleased and encouraged that in working with Senator Manchin we 
have been able to have good conversations, the two of us and 
our staffs, about where we want to lead the Committee in this 
very, very important area. I appreciate his leadership on this 
as well.
    Senator Manchin.

              STATEMENT OF HON. JOE MANCHIN III, 
                U.S. SENATOR FROM WEST VIRGINIA

    Senator Manchin. Thank you, Chair Murkowski, and thank all 
of you for coming today to be with us at this very, very 
important meeting.
    I might add, this is the first hearing on climate since 
2012 in the ENR Committee, almost seven years. We all talk 
about it every day. We know it is impacting our lives. First 
hearing. So I want to thank you, Chairwoman Murkowski, because 
this is excellent timing for this.
    Our shared focus on identifying pragmatic solutions to the 
urgent problem of climate change makes the work of this 
Committee vital to our nation. I believe it sets a model for 
working together to come to an agreement on a bipartisan path 
forward, in spite of partisan rhetoric.
    I also want to thank our distinguished panel for joining 
our Committee to share your insights with us today.
    For years I have argued we need to be working from an 
agreed upon set of facts about the climate crisis in order to 
move forward quickly with real world solutions that protect our 
communities and workers from unnecessary economic harm. You 
really cannot play a game of darts if you can't agree on where 
the bullseye is. And that is what we are dealing with here.
    People--I have never seen in any one town such as this--
people will basically set their opinions and try to justify 
their opinions based on what they want the facts to be, not 
based on what the facts are and try to work toward an agreed 
position. To that end, we are seeking to use this hearing to 
identify what emission reductions the power sector has achieved 
and what the power sector must do to contribute in near-term 
and long-term emission targets. I believe the focus must be on 
the path toward innovative power generation technologies that 
will keep the lights on, our economies humming and achieve the 
emission reductions we so desperately need.
    First, man-made climate change is real and it is a serious 
threat to our citizens, to our economy, to our environment and 
to our national security. In 2016, a devastating flood took the 
lives of 23 West Virginians, unparalleled in any other time in 
history in West Virginia. Over the last four years I have asked 
the White House for emergency funding six times as a result of 
severe flooding. My office deploys an emergency response page 
during severe weather, and we have posted it dozens of times 
over the past few years.
    In Alaska, my dear friend and colleague here, Chairwoman 
Murkowski, there have been 4 communities that needed to 
immediately pick up and move and 12 more actively planning for 
a partial or total community relocation due to climate change, 
as Mr. Schutt will tell you about in his testimony.
    Climate impacts have also forced people to leave their 
communities permanently in the wake of storms like Hurricane 
Maria after which nearly 130,000 people left Puerto Rico 
according to the Census Bureau. And if you just look on the 
news today what happened in the last couple days as far as 
horrific tornadoes down in the south and southwest.
    According to the Fourth National Climate Assessment, the 
U.S. has experienced 44 weather and climate disasters since 
2015. The cost has neared $400 billion with a B, $400 billion.
    Second, all communities, including those in energy 
producing states like West Virginia and Alaska, are 
experiencing the harmful impacts of the climate crisis. These 
impacts are often felt disproportionately in West Virginia 
communities which are already suffering from the downturn in 
the coal production, resulting unemployment and negative 
effects of coal company bankruptcies on retirement and health 
care benefits. Therefore, the path to a climate solution must 
offer states like West Virginia opportunities, not additional 
economic burdens. The Chairwoman and I share a deep concern for 
our rural communities and seek to use this Committee as a means 
of identifying and legislating pathways to ensure our 
constituents have a role in the clean energy future.
    And third, the solutions must be grounded in reality which 
requires a recognition that fossil fuels are not going anywhere 
anytime soon. The IEA predicts that up to 51 percent of China's 
power could come from fossil fuels in 2040 depending on energy 
policies that are adopted. That number could be as high as 57 
percent for India. This is the real world we are living in.
    The role of fossil fuels in the global economy is growing, 
and the U.S. must lead the world in pursuing the solutions that 
will allow us to burn fossil fuels in a cleaner, more cost-
effective and more efficient manner.
    What we were told by Dr. Birol is that the age of the 
plants in Asia is about 11 years old for all the fossil fuel, 
about 11 years is the average. They are going to amortize those 
plants out. They are going to run them until they are 40 to 50 
years of age. That is just the economic facts.
    In America, we have plants that are much older. It is much 
easier for us to convert than it is for Asia, and that is just 
what we are dealing with today. It does not mean that we should 
set aside work increasing efficiency or advancing nuclear 
storage or renewables such as solar, wind and hydropower. But 
it does mean that we have to double down on innovative 
solutions for the clean use of fossil energy in the electric, 
industrial and transportation sectors, and we must do it today.
    Just last week, Dr. Birol, the leader of the International 
Energy Agency, told this Committee that the rest of the world 
and particularly countries in Asia will continue to use fossil 
fuels for decades to come. He stated, and I quote, ``Last year 
global CO2 emissions, once again, increased and the 
main driver for that increase came from Asia.''
    As I have said before, just as West Virginians don't want 
to drink dirty water or breathe dirty air, neither do citizens 
of other countries. As India continues to build new coal power 
plants to provide electricity to more and more of its people, 
the U.S. should find ways to ensure that they have the 
technologies and policies needed to eliminate any resulting 
pollution and that technology is developed and manufactured 
here in America. That is where we can truly be the game 
changer.
    Similarly, as China becomes the world's largest natural gas 
importer and continues consuming large amounts of coal and oil, 
the U.S. should respond to these developments by leading on 
carbon capture utilization and sequestration technologies.
    It is a fact that our country has the greatest energy 
resource of all. Our brilliant researchers and developers can 
do and must do the job. That is something nearly every witness 
we have heard from this year has highlighted.
    As Secretary Ernie Moniz has said best, ``Clean energy 
innovation supports malleable national goals, economic 
competitiveness, environmental responsibility, energy security 
and national security and it is at the heart of American 
economic success and optimism.''
    I am optimistic about our country's ability to innovate and 
implement climate change solutions, because we fundamentally 
share these goals and have the know-how to tackle them 
together.
    I look forward to the Committee taking up this discussion 
about energy innovation and expanding it across all 
technologies needed to address the climate problem, and we 
cannot wait another seven years to continue these meetings.
    With these facts in mind, I look forward to today's 
discussion of the trends in the U.S. electric sector, how they 
affect and are affected by climate change and how this 
Committee can continue this important dialogue and take action 
on the technology and policies needed to address it.
    With that, Chairman Murkowski, I look forward to our 
hearing and thank you so much for calling it.
    The Chairman. Senator Manchin, thank you.
    We will now turn to our panel. I think I have introduced 
each of you.
    I would ask that you try to limit your comments this 
morning to about five minutes. Your full statements will be 
included as part of the record, but this will allow us an 
opportunity for dialogue afterwards.
    With that, we will turn to you, Mr. Kelliher. Welcome.

STATEMENT OF HON. JOSEPH T. KELLIHER, EXECUTIVE VICE PRESIDENT, 
                      NEXTERA ENERGY, INC.

    Mr. Kelliher. Thank you.
    Chairman Murkowski, Senator Manchin, members of the 
Committee, I appreciate the opportunity to testify today on the 
dramatic changes that are occurring in the electricity sector. 
I appear today on behalf of NextEra Energy, one of the largest 
electric generators in the U.S., generator with the most 
diverse electricity supply in the country and the world's 
leading generator of renewable energy.
    The electricity sector is undergoing an unprecedented 
degree of change. That change has resulted in significant 
customer benefits, in the form of lower prices, lower price 
volatility, and improved operational performance. Our 
electricity supply mix has become younger, cleaner, more 
diverse, and more flexible.
    A collateral benefit of the transition in our electricity 
supply mix is that emissions from the sector have declined 
sharply.
    The electricity sector transition is being driven by market 
fundamentals, including a dramatic increase in U.S. natural gas 
production, a sharp and sustained fall in natural gas and 
wholesale power prices, displacement and retirement of 
inefficient fossil generation, lower than expected demand, the 
addition of modern, efficient gas generation, and accelerated 
entry of renewables. Contributing to these market forces are 
federal and state policies encouraging renewables, as well as 
stricter environmental requirements on generation facilities. 
As a result of these factors, the U.S. electricity supply mix 
has changed significantly over a very short period and there is 
now more diversity in the U.S. electricity supply than at any 
point in the past.
    The coal share of our electricity supply mix has declined 
from 47 percent in 2005 to 27.5 percent last year. The natural 
gas share rose from 22 percent to 35 percent, and the wind and 
solar share quadrupled, now accounting for roughly 11 percent 
of our supply.
    FERC wholesale competition policy played a critical role in 
this transition, and in my view, competition policy, wholesale 
competition policy, has been a major success.
    The same cannot be said about retail competition, however. 
Retail competition has largely been limited to states that 
historically had very high retail rates. And in many of these 
states, retail competition has been a failure, at least for 
residential customers, resulting in higher rates from 
competitive suppliers than those rates charged by regulated 
utilities.
    One of the primary drivers of the transition in the 
electricity sector is the surge of new technologies. The 
electricity industry is now experiencing a greater degree of 
technology entry than at any point in the last 100 years.
    While federal and state policy did encourage renewable 
energy, renewable entry is the result of technological 
improvements and lower cost. Since 2009, the cost of wind 
generation has declined 69 percent and solar PV costs are down 
88 percent. The low cost of solar is encouraging even faster 
entry.
    For example, recently Florida Power and Light, one of our 
principle subsidiaries, announced a ``30 by 30'' plan to 
install more than 30 million solar panels by 2030, making 
Florida a world leader in solar energy.
    Battery storage is a breakthrough technology that promises 
many benefits. Storage can provide power during grid failures 
and weather-related outages, it can relieve transmission 
congestion, and it can integrate renewables. It really is the 
most flexible product that we see in the electricity industry. 
Storage economics have also improved dramatically with battery 
costs falling 80 percent since 2010.
    Now increasingly, electricity companies are looking for a 
way to combine these new technologies in order to better serve 
customers. Recently, our competitive power company, our other 
principle subsidiary, NextEra Energy Resources, announced a 
partnership with Portland General Electric in Oregon to develop 
the nation's first project that integrates wind and solar 
generation with storage, at the same site, the Wheatridge 
Renewable Energy Facility.
    The changes that are sweeping across the industry have not 
just lowered prices, they've lowered emissions. Electricity 
sector emissions of carbon in 2017 were 28 percent below 2005 
baseline and that compares very favorably to the goals of the 
Clean Power Plan which were a 32 percent reduction by 2030.
    Importantly, the primary cause in the decline of 
electricity sector emissions are generation retirements and 
lower output from higher-emitting resources attributable to 
market fundamentals. New environmental regulations were only a 
secondary factor in these emissions reductions along with lower 
electricity demand.
    Market fundamentals have resulted in the retirement of a 
host of inefficient fossil plants since an inefficient plant 
not only uses more fuel to produce the same electric output, it 
produces greater emissions. These retirements have had an 
outsized impact on emissions reductions.
    In conclusion, U.S. electricity markets are undergoing a 
fundamental transition driven by market fundamentals. The 
transition is likely to continue, producing an increasingly 
diverse and more reliable electricity supply and this 
transition has resulted in environmental benefits, from sharply 
lower emissions from a generation fleet that is younger, 
cleaner, more efficient, more diverse, and more flexible in 
performance.
    Thank you very much. And I look forward to answering your 
questions.
    [The prepared statement of Mr. Kelliher follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    The Chairman. Thank you, Mr. Kelliher.
    Mr. Schutt, welcome. Thank you for traveling all this way.

          STATEMENT OF ETHAN SCHUTT, CHIEF OF STAFF, 
             ALASKA NATIVE TRIBAL HEALTH CONSORTIUM

    Mr. Schutt. You're welcome. I'm happy to be here. Thank you 
for inviting me to provide perspective from Alaska.
    My name is Ethan Schutt. I'm the Chief of Staff for the 
Alaska Native Tribal Health Consortium. We serve in Anchorage 
in operating the Alaska Native Medical Center which is a large 
hospital in Anchorage, and then we also support a statewide 
health system serving Alaska Native American Indian IHS 
beneficiaries.
    In that role we also have a Department of Environmental 
Health and Engineering that assists in environmental health 
matters which is primarily clean water and sewer projects in 
rural Alaska. Most, the vast majority of the communities we 
serve in that capacity are not road connected, meaning that 
they have seasonal barge access and then everything else comes 
and goes by airplane.
    In that environment you have extremely high costs for 
energy, and it also happens to be the place where climate 
change impacts are most dramatically felt. Many of those 
communities, again, almost all of them, are coastal or on 
rivers. And with the dramatic changes in seasonal patterns and 
ice conditions that Senator Murkowski showed at the beginning 
of the hearing here on the map, those dramatic changes in ice 
conditions have very profound impacts on communities and their 
infrastructure. It's causing dramatic changes to coastlines.
    I mentioned in my written testimony that there has been 
coined a new word in the federal emergency management lexicon 
to describe the condition where permafrost is melting so 
rapidly that it creates dramatic effects at the surface. 
Largely, this again happens at the coastal area at this point, 
but it is a dynamic situation.
    Senator Murkowski also mentioned something in my written 
testimony about the number of communities that are affected 
that require immediate action. There are officially four 
communities that need complete community relocation at this 
point because of the threat of storm surge or coastal erosion 
and the dramatic, life-threatening conditions that come along 
with that condition. There's also, officially, a dozen, 12, 
that are just behind that.
    I think the condition on the ground is so dramatic that 
those numbers are not numbers that I'm confident in. I think 
those numbers change day to day with the dramatic retreat of 
the seasonal sea ice still well within the winter storm system 
in Western Alaska, and I think we will see additional dramatic 
coastal erosion and storm-caused problems in our coastal 
communities.
    We address these issues through a number of adaptation 
measures, specifically permafrost protection through the 
insulation of these active/passive systems that help preserve 
the permafrost underneath community infrastructures so that the 
ground underneath the community does not melt or at least the 
ground underneath the community infrastructure does not melt. 
We also work with coastal protection and river bank protection, 
trying to protect the banks of these communities.
    In addition, we are involved at some level in mitigation. I 
don't proclaim us to be the leader in mitigation activities in 
Alaska, but we do assist our rural communities in installing 
renewables and addressing conservation and efficiency matters, 
particularly with the water and sewer utilities.
    These communities spend an inordinate amount of their 
disposable income and community income on energy, and a large 
portion of that goes into actually keeping the water in the 
water and sewer system thawed and not frozen. It turns out that 
often there's inefficiencies in how those systems are installed 
or operated and basic repairs and maintenance can save 
communities 50 percent of their annual budget on their water 
and sewer system for things like running too much heat tape and 
having it on 24/7/365 when you really only need it during 
certain cold periods. So our engineers help these communities 
by assessing those conditions and rectifying those small 
operational inefficiencies or installing new equipment and 
repair.
    I think that that nexus between water and energy is 
important as a policy matter as this Committee considers energy 
and emissions--there's an extraordinary nexus between water and 
energy. And one of the facts I learned a couple of years ago 
was that as California went through its extreme drought period 
here a couple of years ago, it turns out that the water 
conservation measures saved more energy than all of the other 
state investment in energy conservation directly. And so that 
single fact highlights the need to address multiple sectors and 
to pay close attention to energy and water.
    Thank you for my time.
    [The prepared statement of Mr. Schutt follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    The Chairman. Thank you, Mr. Schutt.
    Dr. Tierney, welcome.

  STATEMENT OF DR. SUSAN F. TIERNEY, SENIOR ADVISOR, ANALYSIS 
                          GROUP, INC.

    Dr. Tierney. Good morning, Chairman Murkowski--and I 
mispronounced, I dropped a syllable, I apologize--Murkowski, 
Ranking Member Manchin--I think I got the right number of 
syllables on that one--members of the Committee, it's such a 
pleasure to be here. Thank you for inviting me to join the 
panel. I personally, as a citizen of the United States, 
appreciate that you are holding this hearing on climate change. 
So thank you very much.
    I would like to talk a little bit about the electric 
sector, but Mr. Kelliher has said almost everything that I was 
going to say. My written statement includes a number of charts 
and figures which amplify those points, so I'll try not to 
repeat.
    But I will say that I would agree with him that there is 
very good news in terms of what we're seeing happening in the 
electric sector. As he said, the system is much more diverse 
than it was in the past. We have retained incredible, reliable 
service, including in Hawaii where you are on the edge of 
renewable energy and other things. So it's great.
    Consumers are seeing electricity bill savings associated 
with the changes we've seen in the past and for every dollar we 
spend on electricity, we are getting much more gross domestic 
product output. This is a great piece of news for the American 
economy.
    And of course, all of that is happening at the same time 
that emissions have declined in the electric sector by 28 
percent since 2005. That is great news.
    The power sector emissions are coming from almost every 
state in the United States which is also great news. This gain 
in efficiency, productivity of our electricity dollars are 
spreading across the United States and that's great.
    There are many developments that are underway that are 
contributing to these. You have heard about those. States have 
adopted renewable energy standards. States have adopted goals 
for greenhouse gas emissions. They have also innovated. You 
have supported technology research at the Department of Energy. 
All of that is great.
    And we also see corporations, cities, counties, doing a 
tremendous amount of work to meet their own commitments and 
people like me have rooftop solar coming up all over the 
country which is great. And that's, in part, because the costs 
of those technologies are going down. And again, I think that 
that is a product of the innovation that we have spawned in 
this country.
    Another point I want to mention is that every indication in 
surveys of the American public is that people believe climate 
change is occurring and that increasingly Americans at the 
level of 75 percent think that it is a problem. So it's a 
strong word of encouragement for the actions of this Committee 
and others to think about what to do.
    But even with the successes that we've seen, there is not 
all good news. And the troubling news is that not everyone has 
benefited from these changes as Ranking Member Manchin has just 
said. There have been parts of the country which have seen 
dislocations and there is much, much more to do.
    So first, the electric sector is both a contributor to the 
problem and a helper to the problem, but it is also affected 
tremendously by climate change itself. And so, there is a lot 
of infrastructure that is at risk associated with flooding, sea 
level rise; a lot of electric infrastructure is on the coasts, 
in low level waterways. And so, the thing that we're depending 
upon to help us actually is exposed to climate change at the 
same time.
    Additionally, climate change, greenhouse gas emissions 
reductions are not occurring as fast as they need to. In fact, 
in the last year, emissions in the electric sector went up for 
the first time in a decade. And so, that's a little bit 
troubling news. And so, we need, looking ahead, to see more 
significant action. And that's why I'm very glad that you're 
holding this hearing and your others to look at solutions 
coming up.
    So the current progress we've made, I think, is so helpful 
because it tells us what is doable and it helps us be ambitious 
in terms of what we can do next.
    One of the things that I want to underscore is a point that 
Ranking Member Manchin said about the importance of looking 
across the board at a variety of portfolios. One of the things 
that I would encourage the Committee to do is not to 
prematurely limit options that are needed in order to address 
this issue. Everything that I have read from the literature on 
decarbonizing the electric sector which is a cheaper way to 
address the emissions of greenhouse gases, that's needed in 
order to electrify other sectors such as the vehicle sector. 
And all of those contribute to an approach. But if we do that, 
the literature says, we need to keep all options on the table 
at the moment.
    So, thank you very much.
    [The prepared statement of Dr. Tierney follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    The Chairman. Thank you, Dr. Tierney.
    Dr. Medlock, welcome.

 STATEMENT OF DR. KENNETH B. MEDLOCK III, JAMES A. BAKER, III, 
AND SUSAN G. BAKER FELLOW IN ENERGY AND RESOURCE ECONOMICS, AND 
SENIOR DIRECTOR, CENTER FOR ENERGY STUDIES, JAMES A. BAKER III 
          INSTITUTE FOR PUBLIC POLICY, RICE UNIVERSITY

    Dr. Medlock. Thank you. It's a pleasure to be here to talk 
about this. I agree with Susan, this is a very important topic, 
and I'm glad that the Committee is actually undertaking a 
broader discussion of these issues.
    When I was approached about testifying, the title of the 
hearing, sort of, caught me by surprise. It was, sort of, like 
a big wow moment, right? Because, you know, in the discussion 
it was mentioned that cost, technology, emissions, to the 
extent that they could be addressed, via the jurisdiction in 
this Committee, were all raised. And one of the things that I 
commented about was that is a massive undertaking. But it's an 
incredibly important one because it runs the gamut in the 
electric power sector from capacity investment options to 
operations to grid design. It ends up getting into discussions 
about the future of the utility. And when you start having 
those kinds of conversations, it's often important to look back 
and think about where we've been and why we are where we are 
today.
    Nationally, as has been indicated already, there's been 
significant progress made, but it's important to understand 
why. And I think this is a really, really important point 
because it highlights why some regions are different than 
others.
    Legacy is an incredibly important word when we start 
talking about transitions in any energy space, much less the 
electric sector alone. Coal-fired generation capacity in this 
country is aging. And we are actually at a point now, given the 
last time there was a major expansion of coal-fired generation 
capacity which was in the late '70s, early '80s where we're 
nearing the 40th birthday of a big chunk of capacity in this 
country.
    And that presents a very serendipitous situation, namely in 
particular with low cost natural gas but declining costs of 
renewables, it means that generators and utilities have a 
choice, they can retire and replace or they can upgrade and 
retrofit. And economically, that's a real easy decision to make 
right now.
    So it's important to understand what's driving the change. 
It's certainly got elements of policy in it at a national 
level, but it also has a tremendous amount to do with economic 
realities on the ground.
    An interesting point about all this is that what we see at 
the national level, some of the trends that have already been 
highlighted, has really been driven by what's occurring at a 
local level. State renewable portfolio standards have certainly 
played a role in accelerating the adoption of renewables but it 
goes beyond just states. You also have in certain states, 
municipal renewable portfolio standards.
    So, you know, there's an old saying, ``Politics are 
local.'' And I think you're seeing that play out with regard to 
power generation, choices that are being made across the 
country in different municipalities. The power of revealed 
consumer preferences also playing a role in states where you do 
have things like retail competition. For example, you're seeing 
individuals prefer to contract for long-term supplies of green 
energy, and what that actually does is it transmits a signal 
all the way through to the wholesale level that actually drives 
contracting and ultimately construction for things like wind 
power which you've seen a tremendous amount of investment in 
the State of Texas, where I'm from.
    So, all of these things are really important to recognize, 
but it's also important to recognize that it goes beyond just 
investments in generation capacity. Grid design is also 
incredibly important. Infrastructure related to the ability to 
move power from one state to the next is incredibly important 
because, for example, and this is highlighted in my written 
testimony. The State of New York is actually seeing a 
precipitous decline in the use of coal for power generation but 
most of that has actually been facilitated by an increase in 
imports into the state. And so, that's where you have to, sort 
of, look farther, sort of, back upstream and figure out where 
that's coming from to understand what the ultimate impact is. 
But the more grid-connected different regions are, the more 
options they're presented with when they start to address the 
issues that we're all confronted with.
    Various incentives have been incredibly important. And 
that's not just true in the United States because you look 
around the world, actually look at Europe. You look at, you 
mentioned the address of Dr. Birol last week, thinking about 
the different policy options that are confronted, are 
confronting countries like China, India, other countries, in--
where there are massive populations, 3.3 billion people, 
collectively, trying to grow and achieve the levels of economic 
prowess that we enjoy in the West. Those options, those policy 
options are going to be incredibly important in shaping their 
future, but they also need to see some direction. And this is 
actually where some of the things that can come out of this 
Committee can be very beneficial because leading by example is 
often the best way to lead. But one of the things that we 
really need to think seriously about is basic R&D because 
research and development really does pave the way of the 
future.
    I like to say that the next great innovation is in the mind 
of a four-year-old somewhere playing with Legos. We don't know 
what it's going to be, but we need to actually create pathways 
so that those innovations can make their way to the future and 
pave the way to a brighter future for us all.
    Thank you.
    [The prepared statement of Dr. Medlock follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    The Chairman. Thank you, Dr. Medlock.
    Ms. Jacobson, welcome.

            STATEMENT OF LISA JACOBSON, PRESIDENT, 
            BUSINESS COUNCIL FOR SUSTAINABLE ENERGY

    Ms. Jacobson. Yes, thank you very much.
    Chairman Murkowski, Ranking Member Manchin and members of 
the Committee, again, I want to commend you on putting forward 
this very important hearing.
    I'm here representing the Business Council for Sustainable 
Energy (Council). The Council is a coalition of companies and 
trade associations in the U.S. energy sector with a specific 
focus on energy efficiency, natural gas and renewable energy. 
The BCSE also has a small business arm, the Clean Energy 
Business Network and together the Business Council and the 
Clean Energy Business Network represent a broad range of the 
clean energy economy from Fortune 100 companies to small 
businesses working in all 50 states.
    On behalf of the Council, I'd like to express our 
appreciation for the longstanding, bipartisan support and 
approach and the accomplishments of this Committee. Looking 
back, the 2005 and 2007 energy bills and the strong, sustained 
and bipartisan support for research, development and deployment 
initiatives at the Department of Energy, have helped shape the 
current energy landscape.
    My testimony will refer to the findings of the 2019 
Sustainable Energy in America Fact Book which was released last 
month by the Council and Bloomberg New Energy Finance.
    In its seventh year, the 2019 Fact Book provides up-to-date 
facts on the U.S. energy landscape. It is not a forecast and it 
does not advocate for policies.
    Based on Fact Book data, I would like to highlight four 
main points: the U.S. electricity sector is transforming and is 
utilizing a diverse portfolio of resources; the U.S. 
electricity sector is decarbonizing due to increased investment 
in energy efficiency, natural gas and renewable energy; the 
U.S. electricity sector has low cost and is enhancing our U.S. 
competitiveness. In 2018 while greenhouse gas emissions rose in 
all sectors of the economy, the power sector's carbon intensity 
continued to decline due to the low and zero carbon resources 
being used to generate power and investments in energy 
efficiency. It was a 2.5 percent decline in carbon intensity. 
The electricity sector is changing in other ways as well both 
in terms of technology integration, digitization, 
decentralization and its inner connection with buildings and 
transportation. Further, grid-connected buildings and vehicles 
are responding to electricity system needs providing new 
sources of system flexibility. Finally, the sector is also 
being impacted by natural disasters and it is facing the threat 
of cyberattacks.
    Though I am, you know, kind of, closing the panel here, I 
will reiterate some important facts about the changing 
electricity sector that some of my panelists have said before.
    First, natural gas accounts for 35 percent of electricity 
generation in the country. That is up 25 percent over a five-
year period.
    Renewable energy at the end of 2018 accounts for 18 percent 
of U.S. generation. This is nearly on par with the nation's 
nuclear fleet.
    U.S. spending on energy efficiency from utilities, energy 
savings performance contracts, and property assessed clean 
energy programs climbed to a record level of $15 billion at the 
end of 2017. That's the most recent data we have.
    On the consumer side, they devoted a record low share of 
their household spending in 2018 toward electricity. And these 
records started about 1960.
    And the energy efficiency, natural gas and renewable energy 
sectors support over three million jobs across the country. New 
data on energy sector jobs will be available tomorrow. So, I 
encourage everybody to look at that, looking for changes in 
that dataset.
    Further, corporations are driving change in the energy 
sector. Companies in many segments of the economy contracted 
record volumes of renewable power through direct contracts 
amounting to 8.6 gigawatts of capacity in 2018 alone, and this 
is being driven increasingly by economic factors including low 
renewable power prices and the ability to lock in predictable 
electricity prices over a period of time.
    An important area of focus for this Committee is research, 
development and deployment (RD&D) programs at the Department of 
Energy. A range of clean energy and energy efficiency 
technologies have benefited from the full spectrum of federal 
RD&D support in many cases in partnership with the private 
sector. This includes early stage programs like ARPA-E as well 
as applied RD&D programs. Specific examples include initiatives 
to lower solar soft cost, the longstanding public-private 
partnership that led to shale gas production and energy 
efficiency technologies such as LED lighting.
    In addition, the BCSE appreciates the Committee's support 
for modernizing the U.S. electricity system. This includes grid 
infrastructure as well as policies that seek to streamline and 
increase the efficiency of permitting and siting procedures.
    The Council looks forward to continuing to work with this 
Committee as it moves forward on policy solutions. And again, 
thank you for holding this hearing today.
    [The prepared statement of Ms. Jacobson follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    The Chairman. Thank you, Ms. Jacobson.
    I appreciate all that you all have contributed this morning 
in reminding us what the role of this Committee is in this 
broader debate. And the fact that you all speak to the R&D 
piece of it, how important it is to be building out these 
technologies that will allow us to reduce our emissions, just 
be more responsible environmental stewards as a general 
practice.
    I like to say that we should have a ``no regrets'' policy. 
Regardless of the direction that things go, you know, we are 
doing the right thing for the right reasons. So you have 
reminded us of that.
    My colleague, Senator Cassidy, has to relieve another 
colleague on the Floor of the Senate here in just a few 
minutes, so I am going to yield my time to him.
    Senator Cassidy.
    Senator Cassidy. Thank you.
    I have been floating in and out, but I have really enjoyed 
your testimony. By the way, my staff gave me some other 
interesting stuff.
    Mr. Medlock, first let me just say that four-year-old who 
will find the next innovation is currently playing with Legos 
is clearly my grandson. Okay? I will just tell you that.
    [Laughter.]
    So, Sam, if you are listening out there on TV to Papa, we 
are relying on you, buddy.
    The other thing I will point out. You mentioned and I am 
struck how New York will not allow pipelines to be built 
through New York to bring natural gas to New England, and you 
point out though that New York has benefited by transitioning 
off of coal, among other ways, by using natural gas. My staff 
pulled together for me the average monthly industrial bill, the 
cost per kilowatt. In New York it is 5.92 cents. In New England 
it is 12.54 cents. And so, the inability to get cheap natural 
gas to New England has given New York a competitive advantage 
in attracting industry. This is economic warfare by other 
means. Now I see why Governor Cuomo is so stringent upon that.
    And I will share this with you, Senator King, because it is 
remarkable. The average price of kilowatts, industrial in New 
England is 12.54 cents and in New York it is 5.92 cents. Why 
would an energy intensive enterprise move to New England? In 
Maine, in particular, it is 9.20 cents, and you were the 
cheapest. Consider poor Rhode Island at 14.57 cents. So anyway, 
that said, Governor Cuomo has a good thing going.
    Ms. Jacobson, you mentioned this and so--no, I am sorry, 
let me stay with you, I think it is Mr. Medlock--let me go back 
to the testimony.
    Taking the different pathways of California and Texas and I 
think I see here the industrial cost in California is 20 cents 
per kilowatt-hour. No, 12.73 cents per kilowatt-hour, and in 
Texas it is 5.45 or something such as that. Clearly that would 
have an impact upon the industrial base.
    Ms. Jacobson, I think you were speaking to that. To what 
degree do the costs per kilowatt-hour influence whether 
industry will establish itself in one state versus another or, 
indeed, one country versus another?
    Ms. Jacobson. Well, thank you very much for the question 
and I would just note, looking at the nation across the board 
to start, the Fact Book has really good data on how we compare 
with our retail electricity prices versus other competing 
nations.
    Senator Cassidy. But hang on, but stay with the industrial.
    Ms. Jacobson. Yeah, sure.
    We're number two to Canada amongst our major global 
competitors, because we have low electricity prices as a 
country.
    In terms of state-to-state decisions, I mean, of course, 
there's a lot that goes into what would determine whether one, 
you know, facility would go into one location versus another. 
But certainly having low, predictable electricity costs is key.
    And I think----
    Senator Cassidy. So let me stop you for a second.
    If you exclude hydro, it does seem as if the cost basis for 
states more relied upon renewable tends to be higher than the 
cost basis for those who are reliant upon natural gas.
    I have been struck, say, the Green New Deal which is 
obviously a hot topic of conversation. I have read a report by 
academics that it would cost, if we were to decarbonize between 
now and 2060, it would cost, what was it? Thirty trillion 
dollars or something? Trillions of dollars and that is over 50 
years as opposed, or 40 years, as opposed to over 10 years.
    If we were to say that decarbonizing would dramatically 
increase the cost of transmission and of production and 
therefore, of use, what would that do to the United States 
industrial base?
    Ms. Jacobson. Well, when I look at the data, I see a very 
different story. We have a diverse electricity sector now and 
costs for business and consumers are near record lows.
    Senator Cassidy. Well, I accept that.
    Ms. Jacobson. So----
    Senator Cassidy. But that is with, I think I mentioned both 
you and Dr. Medlock spoke about natural gas, kind of, allowing 
that transition to a lower carbon footprint but at the same 
time keeping those prices a little bit lower. Did I 
misunderstand you?
    Ms. Jacobson. No, I agree the portfolio is essential. And I 
think if Congress is going to make forward looking policies, it 
should do it recognizing we need all the resources available to 
us and not to pick a technology over another. We really need to 
have the ability to evolve and, you know, we can't anticipate 
the future.
    Senator Cassidy. Got it.
    Dr. Medlock, any comments on that? To what degree do, I 
mean, we just have to provide jobs for working Americans and 
obviously lower cost electricity is part of that. To what 
degree could we completely transition away from fossil fuel and 
still have a low enough rate structure as to facilitate the 
creation of those jobs?
    Dr. Medlock. Well, this is exactly why I highlighted the 
role of innovation, the role of R&D, because if we're going to 
talk seriously about long-term economic health of this country, 
it's got to be a combination of, to use a trite phrase, ``all-
of-the-above.'' But the only way to do that and address a lower 
carbon footprint is through basic R&D in things like carbon 
capture, energy efficiency. All of these things matter.
    In fact, when you start talking about energy transitions in 
addressing local community needs, it's not just about clean 
energy. It's also about urban planning. It's also about how you 
actually think about things like infrastructure resilience.
    Senator Cassidy. And so, to play off of what Senator 
Manchin was saying in his opening statement, knowing that Asia 
will continue to use coal, part of that innovation will be, as 
you say, what do we do about the carbon footprint of a resource 
that is going to be used, period, end of story.
    Dr. Medlock. That's precisely the point, yes.
    Senator Cassidy. Yes.
    I am out of time, and I yield back. Thank you for----
    The Chairman. Thank you, Senator Cassidy.
    Senator Manchin.
    Senator Manchin. Thank you very much, Madam Chairman.
    And also, I have one of my dear friends and colleagues who 
has to run to another meeting because she chairs also. I want 
to relinquish my time right now to Senator Stabenow.
    Senator Stabenow. Thank you very much, Senator Manchin.
    I first want to thank both our Chair and Ranking Member for 
an excellent hearing on an incredibly important topic that we 
are all facing and having to work together on in order to be 
able to get action on carbon pollution. I am very impressed 
with the hearing and appreciate the leadership of both of you.
    I also do want to debate, unfortunately Senator Cassidy 
just left, but it is actually my six-year-old grandson who is 
going to provide----
    [Laughter.]
    He is unbelievable. He is putting together robots with 
Legos and making them talk. I am not sure how he is doing that, 
but I am looking forward to his leadership as well as all of 
our young people.
    First, let me just say welcome to all of you.
    And Mr. Schutt, when you talk in your testimony, written 
testimony, about describing new words that are now needed to 
explain what is happening on climate change, boy is that real 
in Michigan right now.
    We have been the epicenter, whether it is the polar vortex 
and what is happening because things are heating up, the cold 
air is floating down. We are getting hit with it. I know those 
are not scientific terms, but that's how I view it.
    Secondly, last weekend we had something, a new term called 
a ``bomb cyclone'' which was 60-mile-an-hour-plus winds, and I 
had never heard of that term before. It is extraordinary what 
is happening.
    And so, we have a lot of work to do, and there is a real 
sense of urgency about it. And even though there are those, 
including the Administration, that continue to deny climate 
change--we all know--and the business community is moving 
forward, others are moving forward as we need to, aggressively 
on this.
    So I am really glad NextEra, and I am glad that in Michigan 
our two utilities, DTE and Consumers, are aggressively moving 
forward on wind and solar. I think they are real leaders. They 
have a plan to reduce carbon emissions by 80 percent and at 
least 50 percent clean energy by 2030. And we are a state that 
until recently was 70 percent coal production. So, in terms 
of--I don't mean production--reliance on coal, so Michigan is 
now the leader in the Midwest.
    I would just say to my Ranking Member that we are creating 
jobs, those clean energy jobs that we have all been talking 
about. And I want them all in Michigan, but we would be happy 
to let a few go to West Virginia but there are 8,000 parts in a 
big wind turbine and we can make every one of them in Michigan. 
And when I last was in Alaska, I saw some, actually wind 
turbines made in Michigan which I was very proud to see.
    So, Dr. Tierney, and I think also Dr. Medlock, you 
mentioned this as well, but when we look at what is driving the 
reduction in coal generation at this point, rather than it 
being federal regulations, would you comment again on the fact 
that low natural gas prices, sharp drop in costs of renewable 
energy, is that, in fact, what is driving it? And secondly, if 
the answer is the latter, what are the environmental benefits 
of deploying electric vehicles, near and dear to my heart in 
Michigan in terms of our leadership, with a generation mix that 
is rapidly becoming cleaner which I know is essential to that 
in terms of carbon pollution reduction?
    Dr. Tierney. Thanks for that question.
    And with all due respect, Mr. Owen Cory Tierney is going to 
be the one playing with Legos.
    Senator Stabenow. Oh, well.
    Dr. Tierney. He's only one.
    Senator Stabenow. Competition.
    [Laughter.]
    Dr. Tierney. But they're all going to be there. It's great.
    Senator Stabenow. They are. They really are.
    Dr. Tierney. Your question tees up a central issue for the 
jurisdiction of this Committee. It's about technology and 
innovation and markets.
    When I think about the Committee's jurisdiction over both 
FERC and encouraging competitive markets on the electric side 
and on the gas side, and when I think about the innovations 
that have come through funding, through authorizing activities 
at the Department of Energy, it goes to your question 
perfectly.
    First, we've had flat electricity demand in huge part as a 
result of the energy efficiency technologies as well as 
standards that have been set by the Department of Energy. 
Second, when you think about the cost reductions that have 
taken place on the renewable energy side, again, that has been 
driven in large part by investments to increase the 
productivity and performance of renewables.
    And in fact, when Senator Cassidy asked about the 
competition between electricity, excuse me, natural gas and 
renewables, I'm thinking of Senator Gardner because in 
Colorado, Xcel Energy procured renewables at lower cost than a 
supply from a natural gas facility.
    But all of those activities, including the production of 
natural gas, have been accomplished through investments in 
applications of advanced technologies. So, that's cool. Those 
are all contributing to the story on the electric side and now 
on electric vehicles. They are very cool.
    If one wants to reduce greenhouse gases and one wants to do 
it affordably, then cleaning up the electric sector is key and 
then using electricity to fuel other things like vehicles.
    So if that's the only goal, that's a terrific one for 
Americans. But the goal of economic development is also really 
key, of course, you want those jobs. And for the U.S. to remain 
positioned in an international market where foreign companies 
from Europe, from Asia, on the Asia side not only Japan and 
Korea, but also China, they are going with electric vehicles. 
So for the U.S. to remain competitive in an international as 
well as domestic market, this is a great opportunity.
    Senator Stabenow. Thank you very much.
    Thank you for allowing me to jump ahead. Thanks.
    The Chairman. Thank you, Senator Stabenow.
    Let me just very quickly turn to you, Mr. Schutt.
    I often use the State of Alaska as a case in point for why 
the innovation and technology, R&D, particularly microgrids, 
can make a difference in real time in a place like Alaska.
    Senator Cassidy mentioned some of the prices that some are 
paying in the Northeast and in New York. As we know, we have 
some communities in our state that pay in excess of $1.00 a 
kilowatt-hour. These are obviously not sustainable and so that 
drives a level of innovation that, I think, most people don't 
recognize and don't appreciate.
    In your written testimony you describe the Rural Energy 
Initiative. You have indicated how we are utilizing some 
systems to deal with permafrost to keep the permafrost cold 
through these passive systems.
    You have innovation that is happening within the sewer and 
water systems, recognizing that in far too many of our 
communities, we still lack basic sanitation. We don't have 
running water. We don't have a place where you can flush a 
toilet, and you have a washateria that the community uses to 
bathe and wash their clothes in. So we deal with some pretty 
tough conditions.
    Can you just quickly speak to what we are seeing from the 
Rural Energy Initiative and how, again, through the innovation 
and the pioneering that we are seeing in some far away spaces, 
oftentimes working with our national labs, how we are working 
to not only reduce the cost of energy but improve the lives of 
people because when you have safe drinking water, when you have 
the ability to just stay warm in your house that isn't filled 
with mold and contributing to respiratory issues, what it means 
for a family?
    Mr. Schutt. Sure. Thank you for your question.
    I think Alaska is something of a national lab for these 
innovative technologies around energy.
    The pipe penetration of renewables into microgrids which 
doesn't seem like it's a close relation but as the deployment 
of renewables on, particularly, solar PV on rooftops of 
businesses or homes gets more and more pervasive within the 
system, the physics behind the substation at a distribution 
level look a lot like an isolated microgrid in a rural 
community in Alaska.
    And so, we have, as a state and as energy leaders in the 
state and researchers have done a lot of research around the 
integration and high penetration of a variety of renewables, 
not just wind, not just solar, but heat pumps, hydrokinetics, 
micro wind, which is, I think, a little bit different, 
geothermal and also storage. And I think within that space we 
have two communities that stand out at a larger scale for doing 
things that are, sort of, unheard of and not thought of at some 
level.
    One is--Kodiak is effectively a 100 percent renewable 
electric utility, Kodiak Electric Association. Now that, I 
recognize, requires a unique set of circumstances and driven in 
part by the economics of being otherwise a diesel-reliant 
community. And so, they have a large hydro resource, but they 
also have nine megawatts of wind and they have also had to 
bring on two different forms of electric storage in order to 
make this whole system work.
    The other is Cordova which is a little bit smaller, but 
they have 100 percent buried distribution of the transmission 
grid which is, sort of, unheard of also. And I think that as 
you have these more dramatic climate change weather events, the 
resilience of a completely buried distribution system is quite 
different and quite a bit more resilient and reliable for the 
community.
    So we are doing a lot of interesting things, and we do have 
a lab in Fairbanks at the Alaska Center for Energy and Power at 
the University of Alaska Fairbanks that does a lot of research, 
primary research with these, kind of, balance of plant and 
other technologies that are around the energy technology 
itself.
    I think we have an applied lab in Alaska in both a formal 
lab sense as well as in rural communities where, kind of, the 
desperation of the local economic reality drives innovation and 
innovation drives the reality of practical applied engineering.
    The Chairman. That was well said.
    We invite everybody to come up.
    Senator Manchin.
    Senator Manchin. Thank you, Madam Chairman.
    I am so glad that we are having this hearing, and Senator 
Murkowski and I have talked about it. And a lot of people, you 
all probably have evolved over the years of how you believe or 
where you get your information. You might have changed your 
position on climate. Is climate change real? Is it biblical 
proportion time or--the last, I think the last century there is 
no doubt that humans have made a tremendous impact on what we 
are dealing with.
    Very quickly, can you tell me where you get, basically, 
where you get your facts that support your position? If I just 
know where you are coming from, because we are trying to get to 
where we are all on the same sort of facts and where we are 
getting our information. And you all, being the experts you 
are, might have a better insight. So if you could quickly go 
down the line and just tell me where your facts come from.
    Mr. Kelliher?
    Mr. Kelliher. Mine come from the U.S. Energy Information 
Administration, part of DOE. Some of the cost decline 
projections come from Lazard analysis that looks at the 
levelized cost of energy. The one I cited was from November of 
last year. And then there's also the analysis on battery 
storage that came from BNEF.
    Senator Manchin. Mr. Schutt?
    Mr. Schutt. I get my facts from a variety of the government 
sources, U.S. EIA, private industry, BP's Annual Energy Outlook 
and then, what my wife would call, an inordinate amount of time 
on the Internet trying to figure out what's real and what's not 
and----
    Senator Manchin. I mean, here is the only thing, as you all 
go down here. People basically that differ with you or disagree 
with you are getting their facts or saying they are getting 
facts from different sources. Have you looked into those 
sources saying, that's not real news? That is just not real 
facts. That might be the distorted facts.
    So, yes sir, Joe.
    Mr. Kelliher. Can I respond to that?
    Senator Manchin. Yes.
    Mr. Kelliher. One fact that is frequently misstated, I have 
to think knowingly or maybe it's a matter of faith----
    Senator Manchin. Okay.
    Mr. Kelliher. ----that our electricity supply is losing 
diversity. The exact opposite is true, and you can prove that 
mathematically----
    Senator Manchin. Okay.
    Mr. Kelliher. ----by taking, summing the squares of the 
different components of our electricity supply in different 
points, different years.
    Senator Manchin. Yes.
    Mr. Kelliher. And I did that recently and it's, we are 50 
percent more diverse.
    Senator Manchin. You were able to diffuse that, right?
    Mr. Kelliher. We're 50 percent more diverse----
    Senator Manchin. Diverse than we were.
    Mr. Kelliher. ----mathematically, objectively using GI 
data, than we were in 2005. So, that----
    Senator Manchin. You debunked that one, okay.
    Dr. Tierney? Where do you get your facts?
    Dr. Tierney. I spend all my time looking at facts. So, on 
the energy side----
    Senator Manchin. Which ones do you believe?
    [Laughter.]
    Dr. Tierney. I follow data collected by the U.S. Government 
through the Energy Information Administration.
    Senator Manchin. EIA.
    Dr. Tierney. It provides a tremendous range of facts that 
are provided by industry----
    Senator Manchin. And you have cross-checked that to make 
sure that it was accurate? You feel the accuracy of what you 
are getting is by cross-checking?
    Dr. Tierney. I am quite familiar with it. I was the 
Assistant Secretary for Policy at the Department of Energy. I'm 
very familiar with the EIA and its work. They do great work.
    Senator Manchin. Okay.
    Dr. Tierney. I have followed the IEA, the International 
Energy Agency.
    Senator Manchin. Yes, there is a little discrepancy between 
the two in some of the information we have received.
    Dr. Tierney. In forecasts, yes.
    Senator Manchin. Okay.
    Dr. Tierney. I think there's a lot of historical 
information that is quite----
    Senator Manchin. The IEA was more accurate than our EIA 
when they forecasted in 2012 or 2015 that the United States 
would be the leading producer of natural gas. No one thought 
that would ever happen.
    Dr. Tierney. That's true.
    Senator Manchin. How did they hit it right and we missed 
it?
    Dr. Tierney. The EIA, when it forecasts which is different 
than facts for historical records.
    Senator Manchin. Okay.
    Dr. Tierney. Which is what I was talking about originally, 
when they forecast, they forecast based on known policy as it 
exists today----
    Senator Manchin. Yes.
    Dr. Tierney. ----in the United States.
    Senator Manchin. Gotcha.
    Dr. Tierney. And so, there's some differences.
    But may I just also say----?
    Senator Manchin. Very quickly.
    Dr. Tierney. I get my facts on what's happening with the 
climate change from the International Panel on Climate Change, 
IPCC.
    Senator Manchin. Okay.
    Dr. Tierney. As well as the National Climate Assessment. I 
was a co-author of the Energy Chapter of that. They do great 
work.
    Senator Manchin. Dr. Medlock?
    Dr. Medlock. A variety of sources. I use government 
sources. I use IEA. I use research networks. I actually 
participate in conferences with people who are involved in 
climate research. So----
    Senator Manchin. Have your opinions changed since more 
facts have come out? Have you changed your opinion on climate 
change?
    Dr. Medlock. I don't think I've ever had an opinion on it.
    Senator Manchin. Okay. Or your support of it, or your 
belief.
    Dr. Medlock. It's really, it's a data-informed exercise. 
And you know, scientifically, we've known, you know, that 
CO2 is a forcing agent for a century. This is not 
new information. It's always been about, you know, what's the 
degree to which it's actually impacting things? And that's 
where research is opening doors, opening things.
    Senator Manchin. Great.
    Ms. Jacobson?
    Ms. Jacobson. Thank you.
    Business Council and its members get a lot of the same 
information from the same datasets and we decided about seven 
years ago to put it together in a free basis for the public and 
for policymakers.
    It also, I think it's important to check in with industry, 
the historical data is very strong. We're really blessed by the 
investments that our government has made.
    And you know, just a plug for one other opportunity, you 
know, this jobs data that we're seeing is very significant and 
the U.S. Government has supported that type of endeavor before 
to track U.S. jobs across the board. I hope that the U.S. 
Government will continue to look for areas to capture that 
data. It's now being done by outside sources. But again, this 
Fact Book and we brought copies for everybody, the Committee 
and their staff, is again available for free online and it uses 
government sources, industry, other independent analysts.
    [The Fact Book referred to is available at: https://
bcse.org/wp
-content/uploads/2019-Sustainable-Energy-in-America-
Factbook.pdf]
    Senator Manchin. It is a website.
    Ms. Jacobson. Off of the Business Council's website. It's 
done independently by Bloomberg New Energy Finance. We 
commission it each year, but it's BCSE.org.
    Thank you.
    Senator Manchin. BCSE.org.
    Ms. Jacobson. But again, we have copies for anybody who 
would like one.
    Senator Manchin. Thank you all so much. We have more 
questions coming.
    The Chairman. Thank you, Senator Manchin.
    Senator Gardner.
    Senator Gardner. Thank you, Madam Chair.
    Ms. Jacobson, if you could just talk a little bit more, in 
your testimony you talked about energy savings performance 
contracts. This Committee, myself along with a number of my 
colleagues, have tried to pursue additional energy savings 
performance contracts (ESPC). Could you talk about a few steps 
the government could take to encourage even more ESPC success?
    Ms. Jacobson. Well again, this is an area where I want to 
commend the Committee for its attention. I mean, as you know 
well, I mean, one of the benefits of energy savings performance 
contracts is because of the efficiency opportunities we have in 
the economy.
    The private sector can partner with building owners and 
others that are looking to enhance their energy infrastructure 
and buildings and without any outlays by those property or 
facility owners, they can partner with companies that will go 
in, just based on the energy savings alone, and provide those 
retrofits and a guaranteed performance of those facilities.
    So that what the Federal Government can do is, you know, 
they've already permanently authorized that ability for federal 
facilities to utilize that mechanism. And there's also a 
utility counterpart mechanism.
    But leadership, I mean, that was a huge driver in the last 
five to seven years for uptake in ESPCs. If the Federal 
Government would once again take on an ESPC challenge, I think 
it would regalvanize the energy around using that mechanism in 
federal facilities again.
    Senator Gardner. Should we take an approach that may be 
like requiring different agencies to meet certain targets 
either through a dollar amount, a percentage amount of ESPCs?
    Ms. Jacobson. Well, I wouldn't want to dictate what the 
appropriate discreet mechanism is, but we need a pathway to 
invest on and something that will drive the market to looking 
at ESPCs. So I would say anything that you can do to provide 
that direction.
    And then, the reporting and accountability is critical. We 
can set a goal, but if there isn't a mechanism to check and 
make sure that we're achieving those goals and learning from 
where we are doing well and where we're falling short, then we 
won't really capture the benefit of that type of mechanism.
    Senator Gardner. Because we are talking billions of dollars 
in energy savings, correct, and thousands of private sector 
jobs that can be created if we do this in an expanse that we 
could?
    Ms. Jacobson. Yes.
    And again, and not on the taxpayer burden.
    Senator Gardner. Right.
    Ms. Jacobson. I mean, this is things that taxpayers don't 
have to put the outlays for but I would just say also, it's 
just thinking about the roles of government either serving our 
veterans or helping with basic services. You know, we are just 
improving the quality and performance that the Federal 
Government investments are providing to U.S. citizens by using 
mechanisms like this.
    And I would also say it can enhance our resilience as a 
country.
    So making these kinds of investments in buildings and in 
government facilities as well as in our schools and hospitals 
and other critical infrastructure is extremely important.
    Senator Gardner. Thank you, Ms. Jacobson.
    Mr. Kelliher, you talked about the shale revolution, how 
it, in your testimony, the dominant driver of recent changes in 
electricity markets and the reduction as well that we have seen 
in solar and wind costs both being contributing factors to, 
sort of, this electricity matrix that you are talking about.
    Do you suppose that the last 30 years, can you comment on 
how the last 30 years' worth of DOE R&D investment, research 
and development investments in both new extraction technologies 
as well as investments in solar and wind, might have helped set 
the stage for those technologies? I mean, when I grew up ``damn 
wind'' was one word. And now it is nice to see that we are 
actually utilizing what was such a common resource in Eastern 
Colorado.
    Mr. Kelliher. Sure. Thank you.
    I would actually love to know the answer to that question. 
I've always wanted to know what was the contribution from DOE's 
R&D program and what was from the private sector's R&D. I don't 
know the answer to that. But I think--I don't think it all came 
out of DOE, the DOE labs, but I think they played an important 
role.
    Senator Gardner. No doubt they played an important role.
    Mr. Kelliher. Yeah, I think they did. I just, I've always 
wanted to know what was the relative contribution.
    Senator Gardner. Right.
    Mr. Kelliher. I don't know the answer to that.
    Senator Gardner. Would sort of the same focus that we took 
on research and development through DOE and perhaps other 
agencies, if we made that sort of investment in carbon capture 
or advanced nuclear technologies to help make and add more 
carbon free choices, would that be a boost to our efforts?
    Mr. Kelliher. I think it would be. I think that the same 
sort of line of thought that the future technological 
developments won't all come out of the DOE labs but some of it 
will and a lot will come from the private sector.
    I will try to find the answer to your question though. I'll 
try to follow up and find out is there analysis that shows what 
was the contribution of the labs to the improvements in wind 
and solar technology.
    Senator Gardner. Senator Heinrich and I have been working 
ITC investment tax credit language for adoption of new 
technology in storage. Would something like that help as well 
as we develop new renewable clean energy technologies?
    Mr. Kelliher. Yes, and that's, sort of, there's a little 
hurdle for storage to qualify for some of the current tax 
incentives. And that's something that could be addressed 
because I think Congress--storage really is a fundamental 
change. Electricity is the one commodity that cannot be easily 
stored. But battery storage can change all that.
    Senator Gardner. Very good. Thank you, Mr. Kelliher.
    Mr. Kelliher. And tax incentive might help.
    Senator Gardner. Thank you.
    Thank you, Madam Chair.
    The Chairman. Thank you, Senator Gardner.
    Senator Wyden.
    Senator Wyden. Thank you, Madam Chair. And Madam Chair, to 
you and Senator Manchin, thank you for putting together this 
very important hearing.
    Mr. Kelliher, first of all, thank you for your kind words 
about what Oregon is up to in terms of wind, solar and storage. 
We took special note of that.
    I am going to ask a question of you, if I could, Ms. 
Jacobson, because you have essentially been making the argument 
and making it for some time that a smart tax policy would 
really generate growth in innovation in clean energy in the 
years ahead.
    As the Ranking Democrat on the Senate Finance Committee, I 
have essentially proposed taking the 40 energy tax provisions 
that are on the books now which, in my view, basically 
subsidize the dirty energy relics of yesteryear. I propose 
throwing them in the trash can and substituting one for clean 
energy, one for clean transportation fuel and one for energy 
efficiency because I think this would make a real difference in 
promoting innovation, cleaner energy, helping us to shake the 
carbon habit.
    So the question I wanted to ask of you, because I don't 
want to get you in the how do you feel about this bill or that 
bill and endorsing pieces of legislation because I know that 
with your organization that is problematic. So let's just talk 
conceptually. From a conceptional, concept standpoint, don't 
you think that there would be even more innovation and more 
opportunities to grow clean energy if Congress basically junked 
the energy provisions in the tax code and replaced them with 
what I think you and I would call a ``technology neutral 
approach?'' What is your take on that?
    Ms. Jacobson. Well, thank you very much for the question 
and as you know well and you know, federal tax policy has been 
a major energy policy of the last several decades. And when you 
look at what's happened through the production tax credit or 
the investment tax credit when they're active, when they're not 
active, when they've been extended for a short period of time 
versus a long period of time, the market responds very quickly 
and affirmatively.
    So, I think, I'm looking, you know, at the legislation that 
you introduced last year but has been contemplated for a good 
number of years, the Clean Energy for America Act as an 
example. As you've described, you've tried to articulate a 
policy that's not looking at one technology versus another but 
how can we set a goal for the electricity sector and for energy 
efficiency and enable a long-term investment pathway 
incentivized by the tax code to support the types of 
investments that Congress is seeking.
    And by putting it on a longer timeframe and setting a 
common metric, we're moving away from the uneven policies that 
we've had before that hit different industries and different 
businesses in very different ways.
    And even though things like the production tax credit or 
the investment tax credit have sought to deploy a grouping of 
technologies, because of those businesses and investment 
cycles, not all have benefited. I mean, hydropower is a good 
example, but we could look at biomass. We could look at waste 
to energy. Now this conversation on storage.
    New technologies are coming into the marketplace. And these 
policies, you know, need to adapt to the marketplace of today. 
So I really commend your leadership on thinking about a 
revised, refreshed and current framework for energy tax policy.
    And I very much look forward to having our members further 
comment on your proposal and seeing it move through the 
Committee process.
    Senator Wyden. Well, thank you and we are going to want to 
work closely with you and, obviously, the Chair and the Ranking 
Member.
    To me, and I see one of our colleagues, our Senator from 
Nevada, who just joined the Committee, I think that if you are 
running a company and you make a change on your factory floor, 
you are always going to buy something that is more innovative, 
more energy efficient and cleaner because you are not going to 
be able to explain to your investors if you are doing 
otherwise. And so, it seems to me this would be a benefit 
across the board and my sense is, and I am exploring this, if 
you are running a public company, I am not sure you even meet 
your fiduciary obligations in a public company if you were to 
buy something less energy efficient and dirtier than what was 
already on the factory floor.
    So thank you for your straightforward and supportive take 
of a technology neutral tax policy in the energy space. We are 
going to be calling on you often and, of course, working 
closely with the Chair and the Ranking Member and my new 
colleague on the Finance Committee from Nevada who has had a 
great interest in clean energy as well.
    I appreciate the Chair, again, and Senator Manchin, for 
holding this important hearing.
    The Chairman. Thank you, Senator Wyden.
    Senator Cortez Masto.
    Senator Cortez Masto. Thank you, and thank you, Madam Chair 
and Ranking Member. This has been incredible, this discussion 
so far.
    Actually I was going to lead with that question. Let me 
just clarify because when you, Ms. Jacobson, in your written 
testimony, say to address climate, global climate change, 
alignment is needed between the private sector and policies at 
local, state, regional and national levels, is that what you 
were referring to in your conversation with Senator Wyden, that 
type of alignment or is there more that we can do to align, to 
address climate change?
    Ms. Jacobson. I think at the broadest level, it's to be 
mindful of what's going on at all these different levels of 
investment decision-making. So in part, it's what's going on 
with private companies when we're seeing increasingly, they're 
taking advantage of low renewable power prices and procuring 
record levels of renewable power.
    We are seeing states and cities and regional bodies take 
action across the board as it relates to energy and 
electricity, and some of those are environmental policies and 
some of them may be a range of other policy objectives.
    But from a tax perspective at the federal level, you're 
sending a very strong signal of what you're trying to encourage 
through tax policy. And as we've seen over the last several 
decades, energy tax policy has been very powerful and 
effective.
    Senator Cortez Masto. Right, right.
    Ms. Jacobson. So if we're looking at that as one of the 
options to drive either greenhouse gas emissions or other 
energy sector investments, I think the benefit of having a 
forward-looking policy that hopefully is long-term enough so 
that all technologies can participate and that allows all 
technologies to participate is key.
    So it has to be in line with the investment cycle. So 
that's the alignment with the private sector. It needs to be 
mindful of the trends in the country which we've been talking 
about which are, you know, looking to decarbonize the 
electricity sector.
    And it has to be factoring in, you know, how the Federal 
Government's role can be and the tax code, you know, is 
probably, I wouldn't say the most important, but certainly one 
of the most important drivers the Federal Government has to 
direct investment.
    Senator Cortez Masto. Okay.
    Are there any other drivers or anything else we should be 
looking at other than utilizing the tax code?
    Ms. Jacobson. Definitely.
    Senator Cortez Masto. What else?
    Ms. Jacobson. I mean, I think research, development and 
deployment which we've talked about.
    Senator Cortez Masto. We have talked about, yes.
    Ms. Jacobson. I think, you know, other opportunities to 
streamline investment in the electricity sector is key. You 
know, we talked about the oversight this Committee has with 
FERC. There's a tremendous amount of activity going on there. 
Things like building codes and standards for the energy 
efficiency industry are really critical to enable cost benefits 
for consumers, as well as environmental savings.
    So there's complementary energy policies that might go 
along with things in the tax code or maybe very specific 
policies. We haven't really talked about it much here, but you 
know, market-based mechanisms to address carbon emissions.
    Senator Cortez Masto. Right.
    Ms. Jacobson. So, you know, there are tax policies being 
contemplated. There are, you know, cap and trade type policies 
being contemplated.
    So there might be some very discreet policies that might be 
looked at, you know, not alone in this Committee, obviously. 
This Committee's jurisdiction is not on emissions but EPW and 
other committees may be looking at discreet policies that will, 
again, send that market signal throughout the economy to lower 
our greenhouse gas emissions.
    Senator Cortez Masto. Thank you.
    Mr. Schutt, thank you for being here.
    Let me just say, I was looking at your website. I so 
appreciate you being invited today, because I think there is 
this nexus between what is happening in our climate and health 
care, health care to individuals, health care to individuals 
and we don't talk enough about it. So I appreciate you being 
here.
    I noticed under your website you have a Center for Climate 
and Health. Can you talk a little bit about what that center 
does? Does it address the health care needs of members in your 
community or, if you don't mind, kind of, just expanding on it 
a little bit?
    Mr. Schutt. Sure.
    So that center is addressing a number of the health care 
impacts in rural Alaska. A lot of it does relate to the water 
and sewer issues and in support of the development of new water 
and sewer projects or the rehabilitation of existing projects, 
the energy efficiency that I mentioned earlier in the 
operations of the existing projects. But there are also other 
initiatives around indoor air quality and other factors, 
environmental health factors that impact human health.
    So one of the ironies around energy conservation and 
efficiency is that the more you insulate a house, particularly 
in a retrofit type of a situation, the more you contend to 
create indoor air problems. So there are other initiatives 
around air circulation and getting fresh air into the homes. So 
that particular group is fairly small and they deal with a 
whole host of practical and applied issues, but you are correct 
around the basic thrust of what they do.
    Senator Cortez Masto. Thank you.
    I notice my time is up. Thank you.
    The Chairman. Thank you, Senator.
    Senator King.
    Senator King. Thank you, Madam Chair.
    First, I want to thank you and the Ranking Member for this 
hearing. It has been absolutely fascinating and important, very 
important and thank you for inviting me to Alaska so I could 
see some of these issues.
    I still tell people about arriving at a remote village by 
driving on a frozen river. That I had never experienced before. 
And a lot of these issues are right on the front lines of the 
people of Alaska.
    Ms. Tierney, I loved your testimony and some of the graphs 
that you present are just really fascinating. One that really 
struck me was Figure 5 where it basically has a line that says 
this is where we would have been if nothing had happened in 
terms of utilization of electricity and sources. And what it 
shows is that 50 percent of the reduction in carbon output was 
because of efficiency which we don't think of. We talk about 
solar and wind and natural gas and all these other things, but 
just using electricity, the cheapest, cleanest kilowatt-hour is 
the one that is never used.
    I think we need to remind ourselves of that and your chart 
was one of the most powerful. Half of the reduction was from 
more efficient use of power, one-fourth is from switching to 
natural gas and one-fourth is to the growth of renewables. So I 
think that is an important point. I want to thank you for that.
    With regard to natural gas, the concern I have, and I have 
always been an advocate of natural gas, particularly as a 
transition fuel because it is so much cleaner. But it is 
growing so significantly. In New England now, it is 50 to 60 
percent of our electricity source. I worry about 
overdependence.
    I think diversity is very important and we are talking 
about a commodity that is at a very low price, but it is a 
price that can change. And that dependence, it seems to me, 
could create a serious problem if the price changed because of 
world commodity markets. Do you share that concern?
    Dr. Tierney. Yes. It may not be obvious but I spent 35 
years in New England. I lived in Boston for many years and am 
very familiar with the circumstances associated with increasing 
reliance on natural gas.
    Senator King. Like me, as a New Englander then, you are 
probably happy that when the Patriots won the World 
Championship it ended a terrible three-month drought between 
world championships for Boston and New England.
    Dr. Tierney. Woo-hoo.
    [Laughter.]
    Senator King. No, go ahead, sorry.
    Dr. Tierney. So yes, they're, I think, becoming too 
dependent on any fuel is not a great idea. And the story that 
you're describing of New England's rising concerns about the 
extent to which competition for a limited amount of natural 
gas, especially during winter, is a problem. You're either 
going to have to put it in homes, industries and/or power 
plants.
    So New England has been trying to diversify by looking at 
alternatives, as you know. And I think that's one of the 
messages I hear from everybody on the panel which is don't 
choose some horses and then ride only those horses.
    Senator King. Diversity of supply is a key.
    Dr. Tierney. Absolutely.
    Senator King. Mr. Medlock, I want to ask you a question. 
Does the grid itself need substantial modification to support 
greater electrification?
    Now it seems to me, for example, in transportation most 
people are going to charge their cars at night. And as you 
know, there is significant additional capacity available on the 
existing grid at night and on off-peak hours.
    Talk to me about what we are going to need, if anything, in 
terms of modification to the grid itself. I am not talking 
about energy sources, I am talking about transmission and 
distribution, in order to accommodate greater electrification.
    Dr. Medlock. There is a significant amount needed with 
regard to grid infrastructure upgrades, new investment and the 
like.
    I think if you talk to anybody who has, you know, spent 
their career in the electric power sector, you never plan to 
the optimum, you plan to the suboptimum.
    And so, you made a statement, everybody is going to charge 
their cars at night. Well, that is what we hope would be the 
case but that might not be----
    Senator King. Mine is charging right now----
    Dr. Medlock. Well, there you go, so but the point is, is 
you actually have to have a grid that's flexible enough to 
accommodate, you know, the whims of the consumer which are very 
difficult to predict.
    Senator King. So there will be infrastructure needs.
    I would appreciate it for the record if you could supply 
some thoughts on that, what might be needed. Not for now, not 
now because my time is running out.
    Dr. Medlock. Sure.
    Senator King. But if you could give us some thoughts.
    Mr. Kelliher, it seems to me, I mean, one of the things 
that has come out of this, storage is the big deal. It will 
unlock vast amounts of potential renewable power.
    You mentioned battery prices have come down. Where do 
battery prices have to go in order to make, to be totally 
competitive with say, a wind and solar plus battery storage 
system, as you describe in Oregon?
    Mr. Kelliher. Yeah, I think they're at a good price now 
where they make sense now. We're the biggest renewable company, 
wind company, solar company, in the world.
    When we respond to an RFP for wind, we've started to say 
well, we'll give you wind plus solar, or if we're responding to 
an RFP for solar, we're saying here's solar plus storage. And 
they look at it. So we're giving them, offering them, a product 
different than what they asked for and we also offer them the 
pure wind or solar product. And they'll look at the 
capabilities and it will invite a discussion about well, what 
do we get with this combined product? And there's actually a 
lot of interest. It really comes down to with storage is what's 
the discharge period you're looking for?
    Senator King. Right.
    Mr. Kelliher. And how----
    Senator King. In New England we need some batteries that 
would last two weeks in January. That is different than an 
afternoon peak.
    Mr. Kelliher. Exactly. Yeah.
    And we are actually building a storage project in Maine.
    Senator King. I know. And you are building a major solar 
project in Maine.
    Mr. Kelliher. Yes, sir. Yes, sir.
    So I think----
    Senator King. So battery cost per kilowatt-hour of output 
is getting to the place where it is competitive?
    Mr. Kelliher. It's competitive for certain uses.
    Now, there's not a two-week, you know, battery storage 
project.
    Senator King. Right.
    Mr. Kelliher. It's, you know, that's what's changing is it 
used to be, kind of, a two-hour product, then a four-hour 
product and so people are looking at well, when will it be 
eight hours? When might it be longer? What will the costs of 
that be?
    But the costs are still declining. I mean, if you look at 
solar PV cost declines, they've been----
    Senator King. $70 to $.50.
    Mr. Kelliher. But--and storage is experiencing a similar 
cost decline and it's still going, it's still declining.
    Senator King. And just to tie a bow on it, research money 
is critical. Tax policy is critical to encourage this 
development?
    Mr. Kelliher. Yes.
    Senator King. Yes. Thank you.
    Dr. Tierney. Not just on batteries but other kinds of 
storage.
    Senator King. Other kinds of storage, sure. Pump storage, 
thank you.
    Thank you, Madam Chairman.
    The Chairman. Thank you, Senator King.
    So a good conversation about the need for diversity of 
supply and technology neutral and how we build out a grid that 
works.
    You asked the question about is our grid sufficient as we 
work to integrate these new sources of supply. I think 
everybody has spoken to that, that you have a combination of 
policy mechanisms here, market forces, consumer demand, and 
that has pushed us in the direction where we are seeing the 
level of natural gas rising and the wind and the solar 
generation and then the decline in the more traditional 
baseload resources.
    Can we just have a conversation about what that may mean to 
reliability of the grid? We use the term resilience around here 
a lot of times. As much as we all want to ensure that we are 
moving toward reduced emissions, we are lowering the cost. We 
all want to make sure that when we need it, it is there because 
when it is not, it is cold and it is dark or it is too hot. Do 
any of you share the concern that with this, because I think 
the transformation has been pretty rapid in this past decade 
here. Does the speed with which we are moving to change up this 
fuel mix, does it pose greater grid reliability challenges that 
we are not prepared for?
    You mentioned the transmission aspect of it, Mr. Medlock, 
but anybody jump in here.
    Mr. Kelliher. I don't think there's a threat to resilience 
from the developments that have been occurring, particularly 
the changes in the electricity supply mix. And part because the 
newer technologies, they're much more flexible on performance. 
They don't have long startup times. They don't have long, 
minimum run periods. So they're just much more flexible in 
performance. And I think there's a relationship between 
diversity and resilience.
    And it's also important to remember that resilience really 
isn't driven by the generation fleet so much as by the wire 
system, the distribution system and the transmission system.
    There's a really excellent analysis that showed that the 
outage hours resulting from fuel supply emergencies were, this 
is from the Rhodium Group--Senator Manchin has asked, was 
curious about sources, it's not my number--is 0.0007 percent. I 
think that's seven ten-thousandths of a percent of our outages 
were a result of a fuel supply shortage onsite. Everything else 
is caused by failures of the wire systems.
    So I think the wire system, the delivery system, is the 
real resilience issue and we need continued investment, because 
today's grid was designed in the past for yesterday's 
electricity supply. We need a different grid as the supply mix 
changes.
    Dr. Tierney. Could I add?
    I have just left a committee meeting over at the National 
Academy of Sciences where there is a new committee, of which 
I'm honored to be a member, on grid modernization. This 
committee's membership exemplifies the terrific work that's 
being done at lots of different windows into the resilience and 
reliability issue. There are aspects of it that are associated 
with what's your mixture of generation because each type of 
power plant has really different functionalities. So you need a 
mix, and I'm going to keep coming back to a mix and the 
diversity issue.
    On the transmission system there's tremendous work being 
done by the national labs, the Department of Energy's Grid 
Consortium, Grid Modernization Consortium, is doing great work. 
They are keeping up ahead of the curve.
    There are a lot of people looking at cyber issues, and they 
are a huge portion of the resilience question. And of course, 
extreme weather events are critical to all of this.
    So we think about integrating more flexible, variable 
resources and that is a new challenge, and we are finding that 
the grid operators are handling those issues and keeping ahead 
of the curve. But, and the industry is so mission-oriented to 
addressing these other ones. So there's a lot of work being 
done. And the big challenge is trying to have a grid that can 
handle a perturbation from any of those kinds of things.
    The Chairman. Dr. Medlock?
    Dr. Medlock. Yes.
    So one thing I want to highlight is handling the 
introduction of variable sources of supply, non-dispatchable 
sources of supply, is not just about the grid. It's also not 
just about having other flexible forms of generation on the 
grid. It's also about other market responses such as voluntary 
load reduction programs.
    So large industrial consumers that are connected to the 
grid actually have the ability to ramp down, and they typically 
get preferential rate treatment when they do something like 
this when there's a resource adequacy issue on the grid.
    So grid operators are doing a really good job of handling 
the challenges that are presented, but as we go forward it's 
going to be important that we increase interconnectivity 
because that, ultimately, allows for areas that are short 
resources to draw on areas that are long resources. And that's 
going to be a very, very important point as we go forward.
    The Chairman. Good, thank you.
    Senator Manchin.
    Senator Manchin. The National Climate Assessment says 
within the next ten years if we don't make drastic changes as a 
globe, as the world, as seven billion of us living on Planet 
Earth, if we do not do something within ten years it could be 
irreversible of the damage that's done to the climate. Are you 
all in agreement with that statement, the ten years?
    And next of all, if that is the case, you have China over 
60 percent reliant on fossil, coal, you have India almost 70 
percent reliant. They are not changing any time soon. What do 
we do?
    Just jump right in.
    Dr. Medlock. I'm happy to jump on that one.
    I will preface my remarks with the following statement. At 
the Baker Institute we have had the opportunity to host over 
the last six years, on average, 23 different international, 
administrative level delegations for conversations about energy 
and environment. And the one thing that is just remarkably true 
about every one of those conversations is that they're all 
different.
    And that's eye opening because we all view the world from 
where we sit. And the reality on the ground in China is very 
different than the reality on the ground in India, is very 
different than the reality on the ground in London and in New 
York, then in Washington, DC.
    And the challenges that those governments, local and 
national, are faced with are in many ways very different. What 
one group considers the next big crisis may not be considered--
--
    Senator Manchin. I mean, is a ten-year cycle, is that a 
fair statement?
    Dr. Medlock. Well that's what I'm getting to. The ten-year, 
the point about ten years, I don't believe that the world is 
going to end in ten years, no.
    But I think it's important that sitting in the United 
States in a developed part of the world, we actually lead by 
example which is why I've highlighted the role of R&D because 
you look at countries like China, for example. There's 254 
gigawatts of coal-fired generation capacity under construction 
right now. That is larger than the entire U.S. coal fleet at 
the moment.
    Senator Manchin. Correct.
    Dr. Medlock. So when we think about that, we think about 
CO2 as being a problem of the global commons, it 
really means that we need to lead by example.
    Senator Manchin. But Doctor, if we are leading by example, 
we have done scrubbers, low NOX boilers and 
baghouses.
    Dr. Medlock. Absolutely.
    Senator Manchin. They are not implementing any of those.
    Dr. Medlock. I agree with you 100 percent.
    Senator Manchin. Well then, how do we lead by example?
    Dr. Medlock. The scrubber issue though, is not a 
CO2 issue. That's a local air pollution issue.
    So I agree with you 100 percent, and that's where it 
actually comes, it comes down to cost.
    Senator Manchin. So, basically----
    Dr. Medlock. You've got to address things. And this is 
where innovation has actually been vital. You know, what's the 
parasitic load of these technologies as we attach them to 
existing power plants? And that's one of the reasons why 
they're not actually operated in some places in China, because 
that lets the costs up.
    Senator Manchin. It is all cost. I know that.
    Dr. Medlock. It's about economics.
    Senator Manchin. Same thing with carbon capture and 
sequestration, because it is not basically economically 
feasible to----
    Dr. Medlock. It's not economically feasible now, but 
neither was shale in 1985.
    Senator Manchin. Correct.
    Dr. Medlock. Right?
    And that's my point.
    Senator Manchin. But I am just saying you said we lead by 
example. For the last 20 years we have removed particulates 
from the air in America.
    Dr. Medlock. Yes, we have.
    Senator Manchin. We have closed the old coal-fired plants. 
They still have not followed our example because either we have 
to use our trading policies and our, basically, the tariffs 
that we charge to get into our market to give them an incentive 
to do what they don't want to do because of cost factors.
    Dr. Tierney. Could I add to this?
    Just one sec, I spent a lot of time on China's energy 
outlook.
    China is actually an unsung story on a lot of innovations 
and I think that the part, the main point of what I'm about to 
say is that the U.S. needs to continue to advance technology 
leadership so that we don't get our----
    Senator Manchin. I think Dr. Birol said basically if we 
don't do something, basically----
    Dr. Tierney. They will.
    Senator Manchin. We sat on our hands for the last decade 
and did not do anything----
    Dr. Medlock. Well, I will say this, if you look at federal 
in real dollars. I have a colleague that's actually written 
about this. He was a former science advisor to the Clinton 
Administration.
    In real dollars, federal R&D spending has been declining 
for the last 30 years, and that doesn't make any sense.
    Dr. Tierney. And they are building advanced reactors. They 
have huge wind construction. They are dealing with the air 
pollution, tragic air pollution issues associated with their 
choices.
    They are doing a lot, and we need to step it up so that we 
don't lose to them on these competitive technologies. So, 
that's a reason----
    Senator Manchin. They are not using them though.
    Dr. Tierney. What?
    Senator Manchin. They are not using them. They are turning 
off their scrubbers. It is not CO2 killing people in 
China.
    Dr. Tierney. Oh, I know that.
    Senator Manchin. It is basically particulates.
    Dr. Tierney. Oh, of course, of course.
    Senator Manchin. And they are not. So, you know, in that 
type of a country.
    Dr. Medlock. These are bigger issues than just China.
    I was just in Seoul, and I had a really interesting meeting 
at the Ministry of Foreign Affairs with the Director of their 
Climate and Energy Program. And he said on the worst days, 80 
percent of the PM in the atmosphere in Seoul is from Beijing. 
That's remarkable. So transboundary issues are incredibly 
important, and that's where governments around the world have 
to come to----
    Senator Manchin. The final question I wanted to ask, very 
quickly because my time is running out, is that basically, 
regulated versus deregulated states on the PSC, Public Service 
Commissions, and all that.
    We have a regulated state. So basically, energy that we 
need, we produce, we regulate that. We do not have the market 
in a rural area. Deregulation has not worked in rural America, 
I can assure you. We have gotten screwed every time.
    I don't know how you all look. And Joe, I know you were in 
on that. How do you look about regulated versus deregulated? 
How it is working in the marketplaces? I think you just all 
said it has not driven down prices. It has not brought more 
competition in.
    Mr. Kelliher. Retail competition has largely been limited 
to states that had very high retail rates to begin with. It 
also was states that typically had large industrial customers 
and those industrial customers felt like cost properly 
attributed to residential customers, real people, were being 
assigned to them. They wanted to flee those costs.
    So industrials typically have been the driving force behind 
retail competition, not surprisingly, they've also been the 
primary beneficiary. And in many of these states, residential 
rates are higher from a competitive supplier, the offerings 
from a competitive supplier, than they are from the regulated 
utilities. There have also been marketing and fraud 
investigations of some competitive suppliers in a number of 
states--New York, Connecticut, Massachusetts, Rhode Island, I 
think. So there are some questions about the competitive 
suppliers.
    Dr. Medlock. I'll just add one thing to that, real quick.
    We recently did a study looking at the Texas situation. And 
I think it's dangerous to paint with a broad brush, because the 
introduction of liberalized markets looks different in every 
single application.
    Texas is a case, actually, where retail rates have declined 
relative to regulated rates. And you actually see side-by-side 
regulated utilities and competitive enterprise and you've seen 
successes there, so.
    The Chairman. Thank you, Senator Manchin.
    Senator Cortez Masto.
    Senator Cortez Masto. Thank you.
    Let me follow up with a question that I also asked. Being 
from a western state, water is very important to us. I am 
curious, how is the energy sector at large compensating for 
changes in water availability and the potential declining 
supply of water? I am curious. I would just open it up to the 
panel, if this has been a consideration.
    And just to put it in perspective, most of the western 
states, as you may or may not know, we are in drought mode 
right now. Obviously the utilization of water for everything we 
do within our communities is scarce but most important for how 
we move forward with the innovation and this technology.
    Nevada is an innovation state. We are moving forward with 
technology. We have solar, geothermal, some wind, but I am 
curious if you would touch on that a little bit and whether 
that has been incorporated into your analysis?
    Dr. Tierney. The portions of the state where there is 
either high reliance on hydroelectric power, where snowpacks 
and their decline and drought conditions are really affecting 
it, you know, that is your part of the world, that's my part of 
the world. And those utilities are quite mindful of that.
    Some of the implications are that they have to add other, 
thinking about adding other supplies to make up for reserves 
and contingencies.
    But additionally, water is also used for cooling 
technologies for power plants and as a result of that we have a 
situation in Texas where the water in the rivers was so hot 
they couldn't take the outflow from a power plant and they 
couldn't operate the power plants.
    So there are a variety of different kinds of effects on 
this, and that is affecting the need to add for a robust mixed 
supply of resources. It keeps being the theme.
    Senator Cortez Masto. Okay. Thank you.
    The Chairman. Senator King.
    [Senator King shook his head no.]
    The Chairman. I wanted to ask a question of you, Mr. 
Kelliher, because I think it is notable what we have seen with 
a number of utilities that have voluntarily pledged to reduce 
their emissions. Xcel Energy committed to reducing 100 percent 
of carbon dioxide emissions by 2050. Your company, NextEra's 
Florida Power and Light, has committed to reducing over 65 
percent. And notably, these have been done in the absence of 
any federal mandates. In your testimony you cite--you just say 
driven by market fundamentals.
    I guess the question to ask is, you have some leaders that 
have stepped up and have taken these positions. We are seeing 
more coming on. But we have had a little bit of discussion 
about the benefits of tax credits moving forward, different 
policy initiatives. The whole debate regarding mandates versus 
incentives, I think, is an important part of this discussion.
    And as much as we would like to think that technology is 
going to be driven by all of these brilliant grandkids and when 
I have a grandkid, he or she will also be in this mix, but the 
reality is that we can influence it in different ways here.
    And one of the ways that I certainly hope we don't go is by 
picking the winners and losers, because I think we always pick 
wrong and I don't think that is the way to advance. That is why 
I love using Alaska as this model of innovation because it is 
just, kind of like, go out there and figure it out. You have 
some duct tape and some imagination, and we are making some 
great pioneering things happen.
    But what incentives do work? I think we have heard tax 
credits. Mr. Kelliher, if you can speak to what more we might 
be able to do to see more utilities moving forward voluntarily 
and then this whole discussion of mandate versus incentives.
    I would like to have that as part of our closeout here.
    Mr. Kelliher. Sure.
    First of all, I think utilities really are moving forward, 
and we're helping them because we will develop projects and 
typically sell to the local utility.
    But many utilities are actually buying more than they're 
required to by the state renewable portfolio standard. They're 
doing it because it makes economic sense. The price has 
declined so much that it's not something being forced upon 
them. They're volunteering to buy that additional increment.
    And it's also because their customers want clean energy. 
So, the customers are asking for it.
    And in terms of general approach, assuming there's some 
consensus that develops around carbon policy, what's the 
conceptual way to attack it?
    And one is to embrace a certain technology or fuel, but 
that always makes me think of the Fuel Use Act of 1978, 
probably the most embarrassing federal law ever enacted where 
Congress deemed that we were running out of natural gas and so, 
therefore, we had to outlaw the use of natural gas for 
electricity generation. Today natural gas is the number one 
source of our electricity generation.
    So blessing a technology is assuming perfect, a Cassandra-
like ability to see into the future.
    But also, like laying out a number, I also don't think is 
the right approach. That makes me think of like the Waxman-
Markey bill from a few years ago. You start with a number. 
What's the basis of the number?
    The Bingaman bill from a few years ago, around the same 
time of Waxman-Markey, I thought, was a sounder approach. What 
it was saying there was well, what are the actions that will 
lower carbon emissions, what are the activities that will 
result in lower emissions that we want to incent, we want to 
encourage, we want to lower barriers to? And the Bingaman bill 
didn't have a number, didn't have a percentage target but it 
embraced a suite of policies that would have the effect of 
lowering carbon emissions. I just think conceptually that's a 
better way to go, typically if it's a technology neutral 
approach.
    And I do like the state renewable energy standards. They're 
sometimes criticized as a mandate. But one thing they did that 
was very effective that isn't really recognized is they 
promoted competition between and among renewable technologies 
and between suppliers. So it worked differently than PURPA with 
qualifying facilities. And the end result is the lower cost 
technologies have prevailed over time. Solar collector, for 
example, really isn't being built anymore because solar PV 
proved to be just much more cost-effective.
    So, sort of, encouraging competition among technologies not 
blessing a technology, not laying out a number, I just think 
is, you know, encouraging investment, encouraging activity, 
lowering barriers. That, conceptually, is just--I think it 
would be a more successful approach.
    The Chairman. Mr. Schutt, what would it mean on the ground? 
More incentive? More mandate? I am thinking you are not going 
to say mandate.
    Mr. Schutt. I agree with Mr. Kelliher.
    I think incentives work better than mandates and technology 
agnostic incentives and policies help if the end objective is 
to reduce carbon emissions and other emissions than what does 
it matter what the technology is.
    There are a number of different areas within this complex 
sector where you could theoretically achieve better 
efficiencies or conservation or, you know, primary production 
from new and potentially unknown technologies.
    So looking out into the future 10 or 20 years is very, very 
hard and, you know, durable tax policy with good incentives and 
that is agnostic to technologies is the preferred choice, I 
think.
    The Chairman. Dr. Tierney?
    Dr. Tierney. There's just two things I would add to the 
conversation on your question.
    One of them is I have not heard anyone yet talk about the, 
what I'll call preciousness of existing nuclear technologies 
such that if we lose the existing fleet of nuclear reactors 
quickly, we will be, we are going to raise electricity rates 
and we are going to have terrible problems from a greenhouse 
gas replacement.
    The Chairman. I agree. I am glad you mentioned that.
    Dr. Tierney. The second thing is I'm thinking of the CEO of 
Xcel Energy when he announced his 100 percent aspirations for 
zero carbon supply in 2050. He did say, I don't know how I'm 
going to get there yet and he needs R&D. So I'm not speaking 
for him, but I heard him say that. And for this Committee, I 
think that's an important message.
    The Chairman. Yes, you can talk about it, but you can't get 
there unless you have the R&D and then the commercialization.
    Dr. Medlock?
    Dr. Medlock. So you could talk about incentives which, I 
think, are generally a better approach than mandates but you 
should also, I think, be open to disincentives. And I know tax 
is a three-letter word, but if you're trying to alter the 
economic landscape, typically one of the best ways to do that 
is through pricing mechanisms and tax is actually a viable 
approach.
    Unfortunately, we tend to want to, in various ways, 
subsidize all sorts of things from upstream oil and gas all the 
way through to renewables. And one of the things that I think 
would be a really interesting experiment to run is to remove 
all of those subsidies and see what wins. I know that's sort of 
a----
    The Chairman. That is neutral.
    Dr. Medlock. ----pie in the sky wish, right? But I think it 
would be interesting.
    The Chairman. Ms. Jacobson?
    Ms. Jacobson. Thank you.
    I guess I'll just end, you know, agreeing with a lot of 
what has been said here.
    I think what's key for all of you is building bipartisan, 
durable policies that the market can invest on. And there's 
tremendous leadership and knowledge in this Committee to offer 
the full Congress and the Administration to move forward 
because if these policies are not cost-effective, and that, 
kind of, gets to your question about mandates or incentives, 
and incentive or a mandate that is providing economic harm, you 
know, is going to be rejected over time. And then we're back 
where we are now, to some degree.
    And I actually shouldn't say that because I've been so 
impressed over the past several months seeing the conversation 
on climate change. And this hearing today is just another 
example of bipartisan interest and a refreshed, robust serious 
conversation on what the Federal Government, aligned with other 
policymakers in the private sector can do. And so, again, back 
to this question of, you know, mandates or incentives? Whatever 
is chosen needs to leverage private sector activity.
    We're at this moment where we're seeing tremendous 
leadership by the private sector capturing the benefits of RD&D 
for low cost electricity. And so, now that we've seen this 
progress, even just looking at the past decade, how do we take 
that to the next level?
    And so, back to where we started with research, development 
and deployment in all these areas that we seek. There's so much 
that we can do. And maybe we build out from there. But we 
shouldn't take for granted the fact that we've had strong RD&D 
budgets. It wouldn't happen without your leadership here.
    You know, we were in a very different position, maybe, four 
to six years ago. And now, as we've heard over and over, we 
need to do much more.
    So, I just don't want us to take for granted the current 
political environment and bipartisan support that we've had for 
RD&D and now how do we accelerate it as we move through this 
Congress and the years ahead.
    And then the last thing I would say because it was kind of 
incomplete, I mean there is an opportunity on incentives, on 
tax policy. There's a number of energy efficiency tax credits, 
tax credits for non-wind PTC technologies like hydro, 
geothermal, biomass, waste to energy. There are other tax 
incentives that have, you know, basically moved off the books 
in the last couple of years while other industries have 
benefited from stable tax environments.
    We need to rectify that in the very, very short-term and 
Chairman Grassley and Senator Wyden introduced a bill last week 
that would extend. So, it's not just energy related. It's 
across the economy.
    But there are many energy incentives that need to be 
extended immediately while we look toward policies in the 
future.
    The Chairman. Well, I appreciate the contributions from 
each of you and particularly, Ms. Jacobson, when you remind us 
that this Committee has a role.
    Clearly the effort here is to get a bipartisan conversation 
going. I think that the rhetoric surrounding the issue of 
climate and climate change can be so heated and so animated and 
so oftentimes just a very toxic discussion that you cannot get 
to focusing on the solutions, on where we are going in a 
positive way on what it is that we should be focused on which 
is what are the technologies either or today or that we will be 
coming up with tomorrow and the day following. I think that is 
the role that we clearly play within this Committee is leading 
and leaning in on these technologies.
    Senator Manchin, he just could not tear himself away from 
the Committee.
    Senator Manchin. I have a group of fellow West Virginians 
in the anteroom right here. We are working on and talking about 
energy and the effects of energy.
    Let me just say that the hearing that we had today, and I 
want to thank Chairperson Murkowski because we talked about 
this. No one would have expected her and I coming from the 
largest producing states of fossil, coal, and natural gas in my 
state, the amount of oil that we rely on from Texas--from 
Alaska. I know, Texas, that was a mistake.
    [Laughter.]
    The Chairman. You are talking about that small state.
    Senator Manchin. That little state down south.
    Anyway, so for us to be able to say, listen, we are all in 
this together.
    The thing I always felt was wrong in the tax policies and 
all these incentives and Dr. Medlock, you mentioned, yes, they 
could just wipe the slate clean. Let's find out who survives.
    I understand trying to help a developing or a maturing 
industry. I understand that.
    I heard my father one time and people, my grandfather 
especially, they used to give credit and help people. He had a 
little grocery store. And he told a guy one time, the guy said, 
Papa, can you carry me for a while? And he said, Honey, your 
mother already carried you for nine months. So he was trying to 
say, when is enough, enough? Okay? We cannot wean ourselves off 
in America. We just don't whether it is on food stocks or 
whatever it is. The thing about it is we are shifting a little 
bit right now. We are not weaning away from fossil. We are 
shifting the fossil utilization more to gas now than we have 
been. And I think, Joe, you mentioned that and showed we almost 
doubled.
    With that, the concern I have because we have an ocean of 
gas under us in West Virginia, an ocean of gas and it is coming 
on strong all the time. We have not even tapped into 
Rogersville yet. We are still in Marcellus and Utica, and it is 
going to come on even stronger.
    But I am concerned that they are taking this for granted, 
because there is so much supply of that left that they are not 
looking at how do we protect our drilling? How do we basically 
capture our methane? How do we transport safely? How do we make 
sure that it is not interruptible by sabotage?
    Because it is not, it is not a baseload fuel if you look at 
the interruption that can be caused from the pipelines to the 
storage to, basically, our pump stations which can freeze up in 
adverse inclement weather. All these things have to be 
considered.
    The other thing I want to tell all of my friends who 
believe that we can switch immediately. I said that if you are 
saying that renewables are 18 percent, then tell me what five 
hours of the day you want your electricity or your energy? As 
long as we come to the facts that we have to have an all-in 
energy policy and transition ourselves into a much better 
place.
    The other thing I wanted to say was policy under, there was 
a previous president and he and I had very lively 
conversations. I said, if you are going to change your energy 
policy that it might not be as realistic of what we are dealing 
with in demands we have on the energy sector, can't you at 
least use your credits in states that have lost a tremendous 
amount of energy jobs, traditional energy jobs whether it is 
going to be oil production, whether it is going to be in coal 
production, whatever? Because the tax credits should basically 
leave nobody behind. If we are transitioning to a new fuel or a 
new energy provider, then you should not leave the people 
behind. Because I guarantee you, and I have said this, a coal 
miner will build you the best darn windmill you have ever seen. 
They will build you the best solar panels. They survived 
underground for hundreds of years. They know what to do, and 
they are all experts in their fields. And this is what we have 
not done well in these policies.
    So the only thing I would say, we are going to rely on you 
a good bit in this Committee, I would assume. This is just the 
beginning. It is not the ending, one and done. This is 
something we have to face. What we have to do is make sure 
those people who believe that we can switch immediately. I have 
not heard one testimony from a professional that this ten-year 
cycle can happen. You can be decarbonized in ten years. Well, 
you can decarbonize it, reduce your carbon footprint by the 
technologies through research and development which we have not 
done for the last ten years.
    The only thing I would say is I hope that we are keeping 
our eye on the ball as we move to different sources of energy 
and that we are doing it in the cleanest fashion and using the 
technology that the rest of the world should be following 
because right now, they are not. And unless we use the whole 
carrot and stick mentality, what is in it for them if they do 
this, even though they don't have an incentive to do it, other 
than we want to be in our market. They want to be, basically, 
open to our markets in a much more advantageous way. I think 
they will be more--especially India right now, I worry about 
them because I know how hard they are coming on strong with 
more power plants, I think coal-fired plants, than anyplace in 
the world--I think that could be accurate. And they are doing 
it with less pollution controls than anyplace else in the 
world. And we have the technology to prevent that from 
happening.
    I just want to say, Madam Chairman, thank you again. This 
is so well timed and I think it would lead to the Energy and 
Natural Resources Committee leading the way and showing that we 
can, coming from Alaska and West Virginia, we are very much 
inclined to make the changes that have to be made, but also in 
a realistic way and pragmatic way.
    Thank you.
    The Chairman. Thank you, Senator Manchin.
    I think, as Senator Manchin has just reminded us, that this 
is an issue or these are issue spaces that this Committee will 
occupy within our jurisdiction recognizing that, again, it is 
shared by many of the committees that are here. But I do think 
this is one of the exciting areas where we can truly make a 
difference for our nation's economy, for our nation's 
environment and, really, for our nation's health. And we do it 
through really smart, innovative people creating good jobs. 
There are a lot of wins to have, there are a lot of challenges, 
but we have a good opportunity within this Committee to help 
shine a spotlight on it.
    So thank you all, ladies and gentlemen, for your time this 
morning to appear before us on this panel but also for the work 
that you have done over the decades in these important spaces.
    With that, the Committee stands adjourned.
    [Whereupon, at 12:12 p.m. the hearing was adjourned.]

                      APPENDIX MATERIAL SUBMITTED

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