tv [untitled] CSPAN June 13, 2009 1:00am-1:30am EDT
consumer and environmental interests groups. this will remain a state, not a federal process. citing authority would rest with ferc with the states collectively would have more power, not less, than they do now because their plans would govern the exercise of the federal authority. only of the planning process breaks down would ferc have the ability to resolve disputes and get transmission belt to bring renewable energy to market. .. committee onning for thor legislative language if you think that would be helpful. mr. chairman, you and your
colleagues have taken an enormous step forward of transforming our nation's energy system to deal with the threat of global climate change. expanding and modernizing our transmission grid is essential to that transformation. by addressing transmission directly and comprehensively, you can address the and not be left stranded by regulatory impediments. our economy, and bramlett in national security deserve no less. thank you very much. >> thank you so much for your testimony for gore next witness is joseph welch, chief executive of officer of itc holdings ago that is the nation's first independent transmission company. we welcome you, sir. please begin. >> thank you and good afternoon. >> could you move that microphone and a little bit closer and turn it on? >> thank you and good afternoon chairman markey and members of the subcommittee. my name is joseph welch.
i am chairman and ceo and president of itc holdings the nation's first and only independent transmission company in the united states. being independent means we are not affiliated with any market participants. we have no ownership or have any dealings in energy transactions. our job is to facilitate the market, to facilitate the interconnection of any sources of generation that are put before us and to make sure we connect the lows inver libelee dues. we own and operate about 15,000 miles of high-voltage lines in iowa, minnesota, illinois, missouri michigan and developing transmission projects in kansas and oklahoma. as we have worked through these various states each time we come to a point where we need to build transmission for whatever reason, we have come up against a set of popsicles each one different in every state. probably that is as it should be but we may get to the outcome of
where we want to go in this country this is going to become a major impediment for us to move forward as a country hit dearly and necessarily need to seek energy independence. i brought with me today report from the council on competitiveness and energy sustainability which i believe is a good framework and i will leave it with you for all of you to read. it offers a lot of information which is very consistent with the very principles and items you are considering here. going to the fundamental principles that we need and at the top of the list, and i want to go right to the top of the list, we need a policy for energy in this country. we have talked about all the things underneath and debate about whether it is writer run but the fundamental issue is we need a policy and something to plan to. with that policy in place the rest of the items become a lot clearer and a lot more sustained and a lot of the debates we hear from all of us who are closer
than further apart really start to come together. for instance with a policy, then the planners and when i say the planners and we have talked about this in the item i support and my company supports is that the need independent planning authority. we need to take the policy and get the policy implemented in a very clear and distinct way. secondly, if you have a policy, then the cost allocation can be dictated by the policy itself meaning that from that policy we now know where we want to go. we know who were the benefactors and with this benefactor issues are. so that policy said that the top and we need that. last but not least for me get down to the very bones, i also tell people being in the transmission business, it is a great business and sell it to one of two things in the first item is build new transmission lines. the minute we start to build them it becomes a nightmare in the process is hard and it is
long. what we need is true federal backstop citing authority. that is not meant to cut the state's out of the process. the state should be involved because they are the most knowledgeable about local issues but it in the the day we have to get a regional transmission grid bill. at you have heard here there are literally thousands upon thousands of megawatts of renewable energy that this country needs to deploy and we need to deploy it now. if we start now we are years and years away from our goal line so please, let's have this conclusion and bring it to oni thank you for an opportunity to speak here today. our next witness is christopher miller. he is president of the piedmont in our mental council, focused on conservation issues in the piedmont region of virginia. we thank you for being here sir. >> thank you congressmen markey. thank you for the opportunity to testify on behalf of piedmont in
parliament the council and also for lynn trustingly and conservation organizations throughout the country. we are happy to be a member of the land trust alliance in we have been working hard on this issue with them. they asbestos to express some of their concerns. i have a couple of maps, which i hope the staff can put up because i think it will help construct this conversation. we appreciate the time and attention this committee is taking to consider the complex issues associated with transmission. we appreciate the willingness of the committee to deal with transmission is part of a broader policy and not is an end in itself. from our perspective transmission is only a tool for moving electricity, but much more important are the policies that will reduce demand for electricity, modify peak demand so that the need for a generation and transmission infrastructure is minimized and encourage clean generation close to load centers which were reduced the losses of energy
caused by long distance transmission. in the end of high-voltage transmission lines with towers that can exceed 180 feet in height and wide rights of where protivin is-- part of the system with the largest footprint and often the most dramatic impacts on communities. the transmission system has the potential for substantial land use in pac's including impacts that directly conflict with federal, state and local policies to protect and enhance importantly natural and culture resources. in the brief amount of time i have a want to focus on issues that have not been raised yet. the first is the assumption, the assertion that the only way we can meet goals to reduce greenhouse gas emissions and increase the role of renewable energy is to build a national transmission grid. one example of this grid is up here. this is the grid proposed by ap for the 765 kv system that would
link resources. it was originally overlaid over wind resources but in fact the correspondence with coal resources is actually hizer. when you actually go, and see where the lines are laid up. that is one of the causes of concern that in fact what you would be doing by doing a transmission loaded set of incentives is and that's encouraging greater transmission of coal-fired generation then in fact a renewables. the reason for that is that nowhere in the legislation do we recommend a change in economic dispatch rules that govern which generation has brought on line first. the renewable goals notwithstanding, we dispatch energy by price. the options are by price and we have heard lots of calls for competitive pricing but the potential that that will in fact increase the amount of transmission that is carrying coal-fired emissions and in fact from the dirtiest and oldest
plants is very real. unless this committee can also insured that before the transmission is made available we are in fact putting in the carpan cuts through the carbon cap-and-trade, and otherwise governing the emissions of grandfathered coal plants that have never reduce their emissions, there is a very real possibility in the eastern interconnect that the gains had been made by the 45 million tons or so of carbon emissions reductions could be offset. a second issue that has not been addressed so far is the issue of peak versus averaged demand. peak, the transmission and generation system is being designed to meet peak loads and the more we can do to reduce peak clothing, the less we have to build across our landscape and so, it is very important as committee address the fact that transmission planning that has
been done to this point really hasn't addressed the full cooperation of some of the policies that are in the cases let's illation. it did not take into account the amount of demands that is recommended and in fact assume a lever-- level of use that steadily increases over time rather than as reduce. the final thought is this. to the extent that transmission is necessary and obviously connecting summer nobles will require transmission, it is very important to respect the of the public policy values that are out there and particularly related to the lancet have to be caused by transmission. it should be seeking to avoid wherever possible the natural resources, the historic resources, the cultural resources and as the landscapes that american values so much. current legislation draws a distinction between publicly owned lands and privately owned lands and that is something that think this committee to-- needs
to look at hard. each of the mississippi most natural resources lands are privately owned by protective to public-private partnerships whether it is the designation of historic districts for the donation of conservation and historic easements. those easements are often approved by state government. in the case of massachusetts hundreds of thousands of acres are approve each time by the attorney general. the same is true in the state of virginia and they are to all of the respect that a national park or wildlife refuge and state park would be do so as you think forward on those transmission lines that have to be built make sure that we are avoiding the resources, the private resources as well as the public resources and make sure we medicate and compensate for the impacts of those resources. >> thank you mr. miller very much and our final witness is david joos, the chief executive officer of cms energy and chief
executive officer of its principal subsidiary consumer energy. we welcome you sir. >> thank you mr. chairman, and thank you all azar pronouncing my name properly. i appreciate that. >> it took me one minute up here to get it right but i wanted to make sure. >> i appreciate the opportunity to address the subcommittee this afternoon. consumers energy our principal subsidiaries serves 1.8 million electric customers, 1.7 natural gas customers in the lower peninsula of michigan. at whitson just we have a unique opportunity having developed own and operate transmission assets along with distribution and generation assets for a century. consumers energy now no longer owns transmission assets. we solar system in 2002 and it is now independently operated. we therefore appreciate the
difficulty in deciding the transmission and support federal backstop authority for a new interstate lines as a last resort. we also see a need for new transmission emissions to interconnect new wenge resources that are being developed in the thumb in particular along the lake michigan shoreline as part of the renewable portfolio standard compliance effort in the state of michigan. we believe transmission development should meet three common-sense principles. number one bennett is the proposed project should exceed the costs by reasonable margin. number two proposed project should be similar or should be superior to other alternatives, which would include other transmissive solutions, tester beeson solutions, perhaps lower voltage in transmission and generation solutions and beilin casa to be fairly allocated to the beneficiaries of the project as determined through the planning process. i would concede that these principles are complex to apply
and therefore need independent planning authority of some sort to apply them. a regional transmission organization or group of rto's for example to conduct the evaluation. they cannot be objectively performed by market participants including independent transmission owners that have a vested interest in new transmission. in their view overly generous policies have created a rush to invest in transmission often not justified in a cost-benefit basis. i provide specific examples with in my written testimony and will go for those that. fortunately for intrastate projects in michigan we have a certificate livni process that this these projects before allowing condemnation. i suggest that might be a model appropriator at the federal level as a federal backstop. now their proposals to build massive new high-voltage infrastructure over the entire
eastern interconnect, the so-called overlays. part of that, it's free $.2765 billion kv project has been evaluated by the middle is independent system operator in determined not to meet a cost that the test for the state of michigan. a number of independent system operators and planning authorities in the eastern interconnect recently studied a joint coordinated system plan that was referred to earlier involving a 56 billion-dollar high-voltage overlay. some have referred to it as the equivalent of constructing an interstate highway system. the study concluded that michigan would receive virtually no benefit at fairly large costs. looking just to consumers customers of cossler spread on a postage stamp basis to all of our customers we would pay 100 $9 million in increased costs or roughly 80 million-dollar annual benefit. i did submit michigan simply can't afford that. another ten to 12 billion-dollar project that it's been proposed
to bring wind power from the dakotas to the stories that chicago, of course does not reach michigan but further when the cost of that transmission is included in the equation michigan base generation is less expensive to develop. on that score we agree with the northeast and mid-atlantic governors with regard to the potential implications on developing renewable resources locally. let me be clear, we don't object to such projects at the benefits exceed the cost by a reasonable margin, reasonable alternatives have been considered and the costs are spread appropriately to beneficiaries. that might be for example dakota when developers or purchasers of that power who need to meet their own standards. fee in the michigan transmission rates are four times what they were in 2002 when we sold the system. even without these overly projects were forecasting that will increase by another 50%
from today's rates over the next six years. transmission investment is occurring in the state of michigan. we don't feel that ferc oversight is consist-- sufficient and therefore not subject to regulatory oversight. the situation along with overly rich incentives are causing in our few transmission development that is sometimes not infant the best interest of our customers. in summary we think target transmission investment is needed both in michigan and nationally. we believe that planning and evaluation by rto's or groups of rto's that are independent from market participants is an appropriately to pursue that and we think three key principles need to be followed. reasonable alternative said the considered and the costs are appropriately allocated to the beneficiaries. thank you again. >> thank you and we thank our entire panel. allen going to turn and
recognize the gentleman from washington state, mr. inslee. >> thank you. first i would like to put in the record a white paper which is quite instructive called title green powers super highways provided by the american wind energy association and the solar energy industries association. mr. chair, if i may? >> without objection. >> thank you mr. chair, i appreciate that. this white paper does confirm what some of the witness talked about which is that we have got three and a thousand megawatts of wind projects waiting in line is essentially to connect to the grid and they point out that the lack of transmission capacity is also hindering state's ability to meet multiple renewable energy goals and it just confirms what several of the witnesses have testified today. i want to ask mr. detchon about
the greenhouse gas interconnection standard that your proposal has inc. and basically what essentially allow federal backstop authority in relationship to those sources that are low, zero greenhouse gas amending generators. could you tell us how you envision that working and by the way, would it help and it leaves some sense some of the concern of the northeast states who don't want to see they are offshore wind projects intruded upon by saying if we can call it dirty sources from far away in trading on their corridor? >> thank you for the question. i think there's a lot of confusion about how the greenhouse gas interconnection standard would work. in the first place it is an interconnection standard. it does not govern what electrons are on the line because if everybody is pointed at the cannot distinguish between green and brown
electrons but if we are going to provide some additional authority to cite and pay for special new transmission lines to benefit renewable energy, let's make sure that the generation that is hooked up to it is not conventional call. so, what we have suggested is that since you are going to need probably guess to balance renewable energy on these lines, that up to a single site gas turbine, emission level would be acceptable to connect to these lines but above that would not. that seems like a fairly straightforward way to approach that. with regard to the question of competition with local resources, i think what should be important, and i think inevitably what happened if the
states are driving this planning process, even on an interconnection wide basis, is that they have taken into consideration state policies, considering local resources and use delivered prices as was mentioned on the last panel as the basis for comparing different resources. i think that is a very straightforward way to make sure the competition is there. >> i will ask you what i hope it's a rhetorical question but in the bill i entered this week will try to preserve the bottom-up planning so the states and regions to the planning rather than the cram down from the federal government. to you think that is a fair characterization of the proposals that we have made? >> absolutely and i think there has been a lot of talk about top-down or federal intervention here, but i think the legislation that you have proposed congressmen, establishes a mechanism for states to work collaboratively, addressing these regional issues
and those decisions will be executed with the assistance of ferc, but ferc would only be able to step then if the states are unable to reach a plan. >> could you suggest any other solutions to the concern that the gentleman from massachusetts expressed about the offshore wind being crowded out, if you will? i perceived that this greenhouse gas interconnection standards would help solve that problem because it would essentially allow the use of the federal backstop authority for clean sources, green sources of energy and i think that would help solve the problem. do you agree with that and is there anything else he could suggest that would help that-- sold that concern? >> i think a stronger step which mr. miller suggested would be to have federal intervention on loading orders for the use of
different kinds of resources. i doubt that would be politically salable right now so i think within the context of what is doable, i think that the approach you have outlined is about as strong as it can be. i might add that i think that the greenhouse gas standard to a certain extent overtime gets overtaken by the requirements of the cap-and-trade legislation, assuming that is enacted, but i think your legislation reflects that as well. >> thank you mr. chair for your cooperation. >> the chair will recognize himself nell for a round of questions. let's go down the line and it featured you could answer yes or no. do you support giving ferc the authority to modify any transmission plants that are established to bottom-up reachable-- regional planning processes? >> i would not.
>> nor would i. >> mr. nipper? >> no, sir. >> i think that the plans were developed by a broad array of states in the way we are describing, i would agree, no. >> bottom supped is each state brings it up or how you envision that? beef regional planning process that is agreed to by the state. should frugal be able to modify a regionally agreed upon plan? >> at the planning process is not independent, yes. >> not independent manning? >> it is influenced by market participants, and other political entities. the planning process to me-- >> even if the state governor, the state governments agree to it? >> i believe all the transmission within the state, it is not regional in nature, should-- the state should have as much authority as the one.
when we develop regional transmission which is for the good of the region or the good of the country-- >> should the first people to override the agreed upon plan? >> if it is done by an independent planning authority, yes. i mean, i'm sorry no, and if that is, yes. >> why i think one of the current-- concerns we would have if frugal were involved the right of appeal ought to be not only limited to the transmission proposals but also those with other perspectives. right now-- >> under those circumstances you would gifford the authority to modify transmission plants? >> i think there are legitimate issues with anything involved in transmission but if you are going to create that it got the bee equally available to both the proponents and those that have concerns. >> let me go down the line again. how many of you would support a greenhouse gas interconnection
standard of the type proposed by mr. hendsley? can we go down and ask how many of you would support that? >> i would not for the sump or reason that the interconnection standard does not speak to existing carbon intensive generation being able to piggyback. >> thank you. mr. joos? >> to qualify my answer, i am not 100% sure the specifics of the sandra. i have not read them. we have standards for interconnecting all kinds of renewable capacity already. i would not be supported that something that limited the transmission line to certain types of technologies simply because they agree with what has been said earlier that you cannot labeled the electrons. >> mr. nipper? >> we would not support it. >> mr. english? >> i believe the bill in itself, since this will be part of the legislation the bill itself takes part of that so no.
>> mr. welch, i know you do support. >> with my company and independent transmission company you make the policy, we are going to support the policy. >> mr. miller. >> i think it is an interesting concept that apply to lines that feed into the grid but unfortunately the authorities being discussed would apply to transmission that is not simply for bringing new generation on to the grid, but for expansion of the grid as a whole. i would have to say no. >> i will let you answer. >> just to touch on these two points we are talking about specially authorized renewable energy transmission lines that would be feeding into the larger grid, not to the larger grid. and with glenn that if this is the attached to h.r. 2454 and inactive, then some of the reason for it goes away but there is always the possibility
that this will become disconnected from that bill and freestanding measure on transmission, we think a greenhouse gas standard would be important. >> how many of you would limit federal authority to only lines that affect renewable electricity? how many of you would limit federal authority just to that? >> i would do quite the opposite mr. chairman. i would limit fackrell citing authority to lines that affect reliability. >> mr. joos? >> i would limit federal authority has only a backstop provision, and rely on local and regional planning as the primary mechanism. >> mr. nipper? >> assuming the backs of authority, no we would not limit that. >> mr. english? >> again, backstop. >> would you limited just to renewables? >> if we are going to create
special new authorities they ought to be targeted at the problem which is renewables. >> mr. welch? >> i without limit the federal backstop. >> mr. miller? >> i think we would support limiting it and also respecting the opinion were involved in. >> thank you. mr. izzo, the support fackrell back up siding authority for lines for any reason other than reliability? >> no, i would not. >> could you talk a little bit about that first map, which mr. miller put up that showed a very rich wind resources along the east coast of the united states, with the exception of some portions of the great lakes and out on the west coast. it looks like it is, has the greatest potential for renewable electricity generation in our country.
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