tv [untitled] CSPAN June 13, 2009 1:30am-2:00am EDT
>> you are absolutely right mr. chairman and we are assuming it 150-megawatt wind farm and is to mention we can do that 20 miles out and still be in 140 feet of water. let's not underestimate the challenge of the construction and maintenance costs but we expect to fully pentecost of the short-haul transmission and would be opposed to having a nationwide support for a long-haul transmission. >> what could happen if we take mr. miller's church. i guess they are not mr. miller's church. there maps that have been put together, is that right mr. miller? >> the transmission map biz ap. we overlaid it on wind and cold sores maps. >> if that transmission plan was implemented it would bring transmission line in from the midwest very close to the east coast. what impact might that have on
your planning for renewable electricity off the coastline or other parts of new jersey? >> we would stop. >> why would you stop? >> we would not be able to be competitive with the cost of the wind if it is not burdened by the cost of transmission, said the wind from the midwest, if it does not face the transmission charge would be cheaper in that case. >> you are up in the great lakes, mr. joos. could you talk about that in potential with the great lakes and what impact that could have for michigan and what could happen if instead power is brought in from other parts of the country, through that grow preemption, federal eminent domain takings? >> it is a bit similar but maybe two aspects to what mr. izzo has said. first of all it is clearly windier in the dakotas for example bennett is in michigan.
michigan has wind resource even on land but it is thought is wendy in the dakotas so instead of 42% roughly capacity factors you might 3-maxie in the range of 30% capacity factor however once the cost of transmission to get the power to the dakotas is taken into account it is cheaper to develop in michigan. michigan does have a very strong offshore wind resourced birkland fortunately offshored is still about twice as expensive to develop than entre resources though why not calculus is taken into account when need to make more sense to develop the onshore resources first. >> you were there earlier testimony about the problem getting renewable energy resources from the dakotas over to minnesota and the bling being laid it defeated the federal government? inner regioned do you believe that is one of the main problems that otherwise the region has been able to harmonize their electricity transmission
policies and a way that is viewed as fair to all states? >> i am not familiar with specific federal government problems that may have come up in minnesota. my observation is to regional planning process has been effective and is a good solution to the problem. i think as many of us are pointing out, you warp the economics when you start putting effectively free transmission or postage stamp transmission alondra regents and change the economics dramatically rather than having them compete on a stand-alone basis. >> for our audience when we say postage stamp, what are you referring to? why is the phrase postage stamp use? >> effectively and wheat are a postage stamp raised used and an analogy to the postal system where you put its stamp on a letter and send it anywhere for the same price. >> you could send it from the dakotas to new jersey for the same price?
>> the reality is the cost about the same enemy look at the cost of transmission to move power from west to east there is significant cost involved however if that coast is ignored in everybody pays the same price regardless of how offered myths the changes the economics and yes decota wind would then be more economic on that basis once the cost of transmission is ignored, then michigan or the east coast. we don't think that is the right way to look at it. >> one of the things that we are trying to accomplish obviously in the waxman-markey bill is to generate renewable electricity and renewable energy jobs generally in all 50 states. so mr. izzo had the plan. along with many other people in new jersey, to generate new renewable energy jobs that help with the employment in his company but in the state of new jersey as well.
and, we don't want to invoke the law of unintended consequences and have the standard imposed upon the jersey and not have the jobs created in new jersey especially if they have the richest renewable energy resources to write off their shore. mr. anguish. >> mr. chairman, i think you make a good point but i would also suggest one other things, that it might make more sense in light of the objective of the legislation and it led to the fact we are entering into a little different world than we have in the past that really what we are trying to do here is maximize the amount of renewable energy that we get reduced all over the country. in fact, whether it is produced in one state for is is another state, as long as it is the most cost-effective way in which we can produce it and in fact make use of it across the nation i think would be the ultimate objective. i can understand why some folks may want to look at this very
localized and may be a very parochial thing but this is a national piece of legislation and we are trying to achieve a national objective and the thing that is limiting us to being efficient is this transmission system. >> absolutely and by the way we couldn't agree more on this. >> so if you are looking at this map and the fact that we are talking it out along the coast and they may have more wind there, then obviously we ought to be looking, that is where we ought to produce it and we shouldn't use it most cost-effective way and that is what should be the driver. if we can do that we have to do it out in the dakotas then fine, do it in the dakotas but it shouldn't matter whether it is off the coast of massachusetts or in the dakotas as long as we are meeting the nation's needs and we are going to have the huge amount of power that is going to be necessary to come from renewable energies that we are going to meet these
objectives. one quick point, i have got a home in south carolina. it is up on amounts up. we have got a huge amount of wind up there but i can assure you if you tried to build a wind generator up on that mountain you are going to have a lot of people that will be objecting to it, unlike-- >> absolutely so i think the point that mr. isdell is making and mr. joos as well is using this postage stamp analogy, it doesn't cost 47 cents to really move a letter from new jersey to new york city. it probably cost less but the average is 47 cents so if someone from south dakota can mail the letter to new york city and we have this communications across the whole country, than that is great. we accept that. it is the way should be. with mr. izzo is saying, if he did the same thing for
electricity, and you may get the same price to transmit electricity can from the middle of america to new jersey, as it would be to bring in off the coast line of new jersey, than that it's going to undermine the economics of all the projects along the east coast, because it hasn't factored in how much it costs to transmit that electricity 1500 miles of the way into the east coast market. and so the question then becomes how many new jobs have we created along the east coast of the united states if there is no incentive in the clunker for mr. izzo because he is almost bound by his obligation to the shareholders to take all of this very inexpensive but subsidize electricity coming in from the midwest? so how do we square the circle so that mr. izzo and mr. joos
and others aren't disincentivize to produce renewable electricity within their own service areas? >> the people that are receiving the power, they are using the power are paying the costs. that is what it really comes down to. if you are not talking about mailing that letter from the decota is to some other region of the country and you are talking instead what it cost to actually mail the letter to that location, that is the issue your coming down to. >> how would you respond to that? >> i would say that if i looked it just this last year alone, the price difference associated with transmitting power from the plains states to new jersey, depending on how busy the transmission waters were range from $20 to $80 a kilowatt hour. typically it was 30 to $40. that means it would be cheaper
for a customer in new jersey to use a wind farm operating 25% of the time then to use a wind farm operating in the plane's 40% of the time. because it is the total cost that matters. if you eliminate transmission, then suddenly the 40% time of the dakota farm looks cheaper but you have put a burden on the american taxpayer and you have ended our economic development in our region. >> but we want to be fair here, right? that is our goal of the bill. we want to incentivize renewable, this green energy revolution should be everywhere and not just in certain parts of the countries that we need to find a way to make sure that we don't invoke this kind of consequence. that undermined the economic development in states that have economic resources indigenous to them and that is the real problem here and something we have to work through.
i apologize to everyone. i really could spend a whole afternoon with you and next week i might spend an afternoon with each one of you and working out this issue because we have to be fair. we have to be fair. we have the big fission but every state can play a role here. there is actually role for everyone and we have to make sure that we render to the east coast the things that are theirs, the things to themselves that their theirs and the midwest that are theirs and the west that are theirs. and even as the worst thing you represent 75% of all land mass of the united states. garrison ocean mass too that is also out there and we have to factor that-- excuse me? [inaudible] >> that is what i am saying to you. i want to make sure those close the co-ops are able to go into the ocean than have the incentive.
we have to work at a fair formula so i thank each of you and we are going to have to stick very close together over the next couple of weeks so we can have this conversation and reflect what our national goals are but with each state, each region and the history of each state in region. states that are not even states, there, and wells, weathered the va or massachusetts have their own traditions in terms of what lands are sacred that might not follow the traditional federal lands act that have the same impact in terms with their relationship with the mr. red states. i'm going to turn over the remainder of the hearing to congresswoman who will bring it to a conclusion gut thank you very much. >> i don't get to sit in this chair very often but i won't make you stay long, just because i am enjoying it. [laughter] first, a quick comment and ibm--
i am considering or interpreting from the testimony that there's a frustration with some of the planning that is occurring at the state process and one of the things i would just point out insert may be heard testimony on the first panel about their successful state level planning, but if you look at order 890 in this process is relatively new and i think i would argue hasn't been yet given a chance to play out. if you look at the area i am most familiar with, the first time my soul ordered planning processes were approved by farc and then subject to additional compliance requirements was on may 15th, 2008 and thereafter they had to do a filing in august of 2008 where it was just approved on may 20th, 2009, so if you could make an argument
that really just three weeks ago this is getting underway and it is a process that is to be given 12 to 24 months to occur. so, it's certainly concerns me to have a characterization of this state in a reasonable planning process as being broken or not working wind really much of the focus is subject to order 890 is just underway. i have one, one question for the panel with regard to-- it goes without saying that construction of a transmission superhighway will be a moneymaker for certain partisan bald and we heard the chairman of burke testified that the economics of transmission siting and construction as well as the guaranteed rate of return, so i guess i would like to ask you all what role if any
should these entities, with private interests, play in the transmission, citing in decision-making process? how should we appropriately limits or not the role that they play. why don't we go from left to right this time to start with mr. miller. >> i appreciate that question. that has been one of the most troubling aspects of the planning process in the pj am regent. the pgm is essentially from our perspective a trade association of utilities proposing projects and ratifying the proposals amounts themselves. they do not have, until very recently have a process that complies with the farc order 890. they were looking only at transmission solutions and not alternatives. they do not do the kind of balancing of impacts, other issues of the public interest that state with utility
commissions clearly have authority to do, so the current way we to regional transmission planning is very disturbing. the owners of the transmission lines proposed projects. there is there reactive approval process then there's no balancing of other considerations even within the alternative energy solutions like energy efficiency, dsm. they are starting to incorporate those things but the process is very conservative and very oriented toward producing transmission solutions. >> to go to your question, first the frustration with the planning process, i would agree with you that order 890 when a long way but the one thing we don't have, we don't have full participation from all of the affected people. as a result when you are trying to do regional planning, dui not going to get to the solution set
the unique. number one. number two, when we had problems in 2003 with the largest black out that affected this country we finally came to the conclusion that merk was funded improperly and was an independent in their decision-making for setting reliability standage. as a result of that we change the way it was funded. it is funded through an assessment through all of the utility's and rather, that assessment is paid to ferc who pays nairra in we have taken the incentives of the market participants on the hands of the rto or in this case the reliability council so when we talk about independent planning is not about some kind of closed-door deal here. it is about getting the financial impacts of the back of the rto's so they can do the job they are there to do nothing amici to that point of the question that says who should participate and which of the
rates of returns these company should earn? a fair thing we should say here is when you build regional projects they should be participating in it as financial investors-- those people should be part of that investment proposition because they are all there to make the grid work and work in a concert way. when you build a regional grid, you have to have yourself in a position where you can also maintain it. no one company could ever go across thousands of miles, have lineman, line crews, warehouse facilities and everything we need so it is going to take the participation of all of this people but with that everyone being there at the table this gets very tough to do. when you get to that point, would that there ferc says is reasonable, that is what it will be. >> thank you for the question. let me suggest a way to think
about cost allocation and rate of return together. and did the current system private companies to enter into agreements to provide transmission and they raise the capitol on the markets to do that, so as regulators consider that they have to provide the cost of that, at the high cost of raising the capitol and then a rate of return on top of it. if the costs are more broadly shared first of all you have the guaranteed revenue flow which were reduced the cost of capital to raise the money in the first place and therefore a reduced rate of return to the companies would be justified, so there would be two ways, by sharing the cost, that you would reduce the cost of building at this transmission, sharing it across a broader range of customers. >> mr. english. >> we have had many complaints about the fact that it is difficult for electric
cooperatives to participate in this process both because of this size, the complexity and type of expertise required to participate independently but also think a lot of it does come down to the situation that the big entities in the region quite frankly are the ones that seem to have the control and the influence, or at least who feel that they should and many of those, said that basically does not have an all-inclusive broad participation locally in defining many of the systems that come forward, so i think there is much work that needs to be done and hopefully we will see that in the future but we need a broad based planning system in place. >> mr. nipper? >> yes maam we would agree with the comments that had been made, that it requires participation by everyone involved, all of the stakeholders. that is varied in members' dues but among regions, some a bit
better than others but it is really necessary eveyln be at the table and be participating with their and pledged, be accounted. i will say that falling on the comment of the rto and i assume regence and dave gary as well among them but the opportunities to participate in the, equally participate in the stakeholder process leaves a lot to be desired. i will say that. and then i would lastly mention the benefits that the mentioned in my testimony about the joint ownership and if there are opportunities, equal opportunities for folks in american transmission company is a good example of this, where an opportunity for fraud in joint ownership by a a multiple entity provides planning and other benefits as well. >> mr. joos. >> i might just pick up on something mr. miller said.
i think ferc's incented policies have created a situation where not only independent transmission companies but also integrated utilities that holds distribution transmission and generation favor investment for solutions to the problems even if they are not the most optimum solution because frankly the rates of return are high here and the level of risk are significantly lower than other kinds of investments that might be under state regulatory policy for example, vis-a-vis with the effort has put in place so our concern is you see a rush to investment transmission. i want to clarify there are transmission project that makes sense that they could-- make good economic sense that to be supported. we have to be careful not to set investment because of the low-- and therefore do think broad public planning of some nature
is necessary but broad participation. >> mr. izzo. >> we it operated distribution business and underregulated business and of regulated transmission business provides liability 99.999% of the times their regional planning process. it works and works well and that is regulated and rates are based upon cost of service. unregulated business always have to is considered the costs of connecting to the grid as part of its investment strategy and phillippe beers that cost. we need to dispel the notion that renewables are not being built because of the transmission system. renewables are not being built because we are not sending clear price signals. this committee deserves-- and now the risk of being a little flip the next thing i expect to hear from people is that if only we had refrigerated freight trains running free of charge from the north pole are local server market would get its ice
cubes four nehr priveleges does not make sense to ignore the transportation charges. >> i want to thank all of the gentleman again for your time and expertise and your patience. before i have geren, i need to ask unanimous consent that the two letters from burke to chairman markey are put in the record. without objection, so ordered and with that our hearing is adjourned. [inaudible conversations]
>> how is c-span funded? >> i have no clue. maybe government grants? >> i would say donations. >> advertising for products? >> public money i am sure. >> my texas? >> how is c-span funded? 30 years ago america's cable companies created c-span as the public service, a private business initiative, no government mandate, no government money. >> earlier today in new york the u.n. security council unanimously passed a resolution imposing economic and military sanctions against north korea. this follows the recent the underground nuclear tests in subsequent missile tests in violation of a previous security council resolution. you will hear remarks from representatives of the 15 countries on the council. this lasts about an hour.
>> the 6,141st meeting of the security council is called to order. the provisional agenda of this meeting is before the council and document s, agenda 6141 which reads "non-proliferation, the democratic people's republic of korea" unless i hear any objection i shall consider the agenda adopted. the agenda is adopted. i should like to inform the council that i have received a letter from the representative of the korea and which he requested be invited to participate in the consideration of the item on the council agenda. andy coal accordance with the usual practice i propose with the consent of the council to him by the representative to speak in consideration without
the right to vote in accordance with the relevant provisions of the charter on rule 37 and the rules of procedure. there being no objection, it is so decided. i am by the representative of the republic of korea to take a seat at the table. the security council will now begin its consideration of item 2 of the agenda. the security council's meeting in response to a letter dated the 25th of may, 2009 from the representative of japan to the united nations addressed to the president of the security council contained in documents as mac/2009/271 for the members of the council have before them
document s2009/301 which contains a draft resolution by france, japan, republic of korea, united kingdom of great britain and northern ireland and the united states of america. was to draw the attention of the members to the came in esmat 2009/274 containing a letter dated 26 may, 2009 from a representative of on korea of the security council. it is my understanding that the council is ready to proceed towards the draft resolution before it unless i hear any objection. i shall put the draft letter resolution to the vote. there is no objection. it is so decided. will those in favor of the draft resolution contained in document
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