[Congressional Record (Bound Edition), Volume 151 (2005), Part 5]
[Senate]
[Pages 7039-7040]
[From the U.S. Government Publishing Office, www.gpo.gov]




                              ENERGY PLAN

  Mr. BURR. Madam President, I rise to talk about the overdue need for 
a long-term domestic energy plan, one that reflects the needs of a 21st 
century economy that will depend on a reliable, modernized electric 
grid.
  As a Member of the House of Representatives, I introduced bipartisan, 
comprehensive energy legislation in each of the three previous 
Congresses and, as a member of that body's Energy and Commerce 
Committee, examined and investigated the energy crisis in California 
and the massive blackouts in the Northeast two summers ago.
  Out of these two fiascoes emerged a common theme: Without an 
aggressive rehabilitation and modernization of this Nation's 
transmission grid, we are bound for more brownouts, blackouts, and 
forced outages, and an inability to deal with the capacity needs of an 
economy that grows in the future.
  Earlier this year, I introduced, along with Senators Landrieu and 
Lott, S. 498, the Interstate Transmission Act, which addresses the 
fundamental elements necessary for a successful electricity policy. The 
bill sets out to achieve three goals:
  No. 1, to ensure reliability;
  No. 2, to modernize the transmission grid;
  No. 3, to reaffirm the role of State and Federal regulators.
  In this year's State of the Union Address, President Bush challenged 
the Congress to pass an energy bill that modernizes the electricity 
grid. S. 498 achieves exactly that goal. How do we do it?
  No. 1, mandatory reliability standards. The Interstate Transmission 
Act makes a mandatory set of reliability standards for the electric 
grid. Currently, the North American Electric Reliability Council, or, 
as we call it, NERC, has standards and guidelines and criteria for 
assuring the transmission of electricity through the system is secure 
and reliable. However, compliance with the standards of NERC is 
voluntary. It is not subject to any Government oversight.
  The standards in our bill are the product of consensus and 
cooperation, and the language is identical to the reliability language 
from the energy conference report that received 58 votes in the Senate.
  In its 2004 report on the U.S.-Canadian blackout of 2003, the 
bilateral committee tasked with investigating the blackout made as its 
No. 1 recommendation that Congress enact mandatory reliability 
standards.
  Without mandatory rules on the books for reliability standards, we 
will continue to leave our grid and our country vulnerable to another 
massive blackout like the one the Northeast experienced.
  No. 2, we need to attract new investment in transmission. While 
investment in the generation sector of electricity has resulted in the 
construction of new powerplants, these gains in supply are negated by a 
substandard electric transmission grid. It is estimated that the 
transmission investment over the past 25 years has declined at a rate 
of $115 million per year.
  Additional research further indicates that there needs to be an 
investment of at least $56 billion in the transmission sector to 
upgrade existing lines and add additional capacity in order to meet 
existing peak electricity demands over the course of the next decade. 
It is currently projected, however, that the industry will only spend 
an average of $3 billion each year during the decade on upgrades and 
new transmission lines.

[[Page 7040]]

  Wall Street is not promoting the transmission sector as a worthy 
investment. Why? Because it is not particularly profitable to invest in 
transmission today because it takes over 30 years to realize gains on 
transmission investments. Even with the good news we continue to hear 
about the economy, people can invest in other places and realize 
greater profits and quicker returns on their investment. Thus 
regulators must implement policies that ensure quicker, more attractive 
returns on investment in transmission.
  The legislation I have introduced allows FERC to adopt transmission 
rules to promote capital investment in the system, improve operation of 
the system, and allow for returns to investors reflecting financial, 
operational, and other risks inherent in transmission investments.
  Let me give you a great example of how innovative capital investments 
can spur the upgrade of the grid. It is estimated that electricity 
consumption in the West has grown 60 percent in the last 20 years. Yet 
transmission capacity has only grown 20 percent.
  Last week, the Governors of California, Nevada, Utah, and Wyoming 
unveiled the ``Frontier Line Project,'' a series of new transmission 
lines spanning 1,300 miles from Wyoming to California. Knowing of how 
fast southern California and Nevada are growing, it would seem that as 
an investor, one would naturally be drawn to providing capital to build 
out this project. Yet these Governors are relying on State money and 
matching funds from DOE to make up the $2 billion it will cost to have 
the lines up and running by 2011. Granted the utility customers 
receiving the power will pay back the States for the project, but is 
the rate of return on what looks like such a needed project so low that 
we have to ask cash-strapped States to put money upfront to pay for 
these lines?
  Mr. President, I sense the need to conclude. I believe my colleagues 
understand just how severe the challenge and the threat is to this 
country. We have to address these three things. We have to have a 
vibrant transmission grid. The Interstate Transmission Act will 
accomplish all these goals.
  In the State of the Union Address, the President made it clear that 4 
years of debate is enough; Congress needs to pass legislation that 
makes America more secure and less dependent upon foreign energy. I 
agree with the President that 4 years is enough. A fundamental, sound 
economy is only as stable as a fundamental, sound energy policy. I urge 
my colleagues to support S. 498. Let's get back on track and be 
prepared for the future.

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