The importance of energy security for America – including how to make the U.S. electric system more resilient – is one of the topics that cropped up often at a Feb. 12 Senate hearing on the Department of Energy’s budget request for fiscal year 2016. The hearing was held by the Committee on Energy and Natural Resources, headed by Sen. Lisa Murkowksi of Alaska, and was the first of three hearings that committee will hold on the DOE budget. Secretary of Energy Ernest Moniz, the sole witness at the hearing, was grilled about details about the budget, and also was complimented several times by members of the committee, who said they appreciated his depth of knowledge about the broad array of programs overseen by DOE.
The Energy Department’s budget request is for $29.9 billion, an amount that Committee Chairman Murkowski (R) said would raise taxes by $2 trillion over the next decade. Murkowski said the budget claims to, and should, embrace an “all of the above” energy policy. But even though the amount of money is large, “I worry that it is ‘all of the above’ in words, and not necessarily in practice,” she said, noting that “almost all of the budget for fossil fuel is for carbon capture.”
“I do want to address the ‘all of the above’ strategy,” Moniz said. “We are very committed to that.” He agreed that the fossil fuel portion of the budget has a strong focus on carbon capture and sequestration, but added that DOE, and other parts of the federal government, are supporting R&D on fossil fuels. Moniz pointed out that DOE has an $8 billion loan guarantee program for advanced fossil fuel projects, and noted that the Obama administration has proposed a new, $2 billion program to be run by the Treasury Department that would provide tax credits for carbon capture and storage projects.
Murkowski said she is very interested in “greater energy security, and North American energy independence.” Those things are very important, she said, yet the Obama administration is saying no to the Keystone XL oil sands pipeline, “and we’re shutting off Alaska,” by restricting energy development there.
“I’m happy to engage in the whole energy security discussion,” Moniz responded.
The budget proposal that President Obama sent to Congress early this month would increase DOE funding for fiscal year 2016 by $2.5 billion (9.2 percent). The increase would be split roughly evenly between defense and non-defense energy programs, with the lion’s share of non-defense funding increases proposed for DOE’s Office of Energy Efficiency and Renewable Energy (EERE) and its Office of Electricity Delivery and Energy Reliability (OE). Programs included in the president’s proposed budget of potential direct impact to public power utilities include an increase in funding for OE from $146 million to $270 million, an increase of 84 percent.
Sen. Joe Manchin, D-West Virginia, pointed out that, according to projections made by the Energy Information Administration – a branch of DOE – the U.S. will continue to rely on fossil fuels for about 60 percent of its electricity. Generating plants that provide baseload electricity are important, Manchin said, noting that parts of the country, including the PJM Interconnection, had problems last winter because of the unusually cold weather caused by the polar vortex.
“I think it’s unbalanced,” Manchin said of the disparity between the budget’s funding for R&D on renewable technologies, compared to fossil fuel.
‘This device likely powered by coal’
Coal “remains the single largest source of electricity supply in America,” said Sen. Steve Daines, R-Montana, who added that his state “has more recoverable coal than any state in union.”
Saying that coal – a plentiful domestic fuel — is underappreciated, Daines suggested that smart phones should have a sticker on the back saying, “This device likely powered by coal.”
Electric vehicles, too, could have a label on them saying, “This electric automobile likely powered by coal,” he said.
“Overall I’m pleased that the budget shows about a 9 percent increase over last year,” said Sen. Maria Cantwell, D-Washington, the ranking minority member of the committee. Among its many tasks, the Energy Department “is responsible for transitioning to a low-carbon future,” she told Moniz. “I commend you for your commitment to the advanced technologies in this budget.”
Cantwell noted that the budget proposal includes a 94 percent increase for smart grid projects, a sizeable increase for research on energy storage, and what she called a “strong commitment” to research on cyber security, as well as significant funding for energy efficiency efforts.
There is an energy transformation going on in this country, “and it is having a profound effect on the economy,” she said. Energy consumption has been falling, and “the recent decrease in demand for energy represents savings to households and businesses,” she said.
“De-linking economic growth to one of the most expensive components – energy – will help the economy,” she said.
“I look forward to the budget proposal modernizing and strengthening our electricity grid,” Cantwell added. “We need to make sure it is resilient.”
“A huge part of our energy structure is the electric grid,” said Sen. Elizabeth Warren, D-Massachusetts. It’s been so reliable for so long, that “for the most part, no one even thinks about it,” she said, but much of the grid is old. She cited an estimate that utilities will have to spend between $1.5 trillion and 2 trillion by 2030 just to maintain reliable service.
“This will be a major focus of the Quadrennial Energy Review,” Moniz said, referring to an in-depth, inter-agency effort launched by President Obama in January 2014 to look at energy infrastructure and identify threats, risks, and opportunities for the U.S. energy sector.
Warren said one threat to the grid “is extreme weather,” with heat waves creating the potential for brownouts and blackouts. She cited a report by the Government Accountability Office that said one way to reduce the impact of severe storms would be to invest in projects to harden the grid and make it more resilient.
“A new study from the World Bank says that when there is more diversity from energy sources, this will improve our resiliency,” she added.
Moniz responded that DOE is working with utilities to use synchrophasors to improve the performance of high-voltage transmission lines. “Distributed generation and microgrids are themselves a resiliency tool,” he added.
Rooftop solar units are causing problems in Arizona, says Sen. Flake
Sen. Jeff Flake, R-Arizona, asked Secretary Moniz whether he had heard about problems that homeowners in his state have been having recently with rooftop solar units.
“People are in for a surprise when they go to sell their house,” Flake said. “Some already have had a surprise.” Many homeowners who have signed leases with solar companies have discovered that they must pay off their loan, or have a lien put on their house, he explained.
“Thank you for telling me about this,” said Moniz. “I don’t know what authorities we would have [to address this], but I think we should look into this and see if there is a role for us to play.”
“It’s a growing issue for Arizona,” and is due in part to the federal incentives that go along with these units, said Flake.
“At a minimum, we’ll try to understand the issue, and get back to you,” said Moniz.
Sen. Angus King, I-Maine, cited the work DOE is doing on advanced batteries and on carbon capture and storage technology, saying, “I don’t think your budget is big enough.”
“Put me down as saying, ‘Let’s keep going with the R&D,’” he said.
King made a pitch for moving high-level radioactive waste away from nuclear power plants.
“We have 100-plus high-level storage sites all around the country, one of which is in Maine,” he said, and asked Moniz, “Is waste storage a high priority?”
“Absolutely,” replied the secretary, saying that this topic is a priority both for commercial nuclear plants and for the defense programs that DOE oversees.
“To move fuel away from the reactors would be a very good first step,” Moniz said.
Sen. Bernie Sanders, I-Vermont, said he believes DOE should spend more on weatherization and other energy efficiency efforts.
“I represent a state that has a lot of older homes and older buildings,” where energy conservation efforts have cut energy consumption by 30 percent or more, and also reduced bills by 30 percent, Sanders explained. “I think it’s important to make sure that those who cannot afford it, are able to do these kinds of things,” he said. Efficiency and conservation efforts help people, cut energy use and reduce carbon dioxide emissions, Sanders observed, calling them “win-win.”
Portman, Shaheen to introduce their energy efficiency bill
Sen. Rob Portman, R-Ohio, told the hearing that he and Sen. Jeanne Shaheen, D-New Hampshire, plan to introduce their broad energy efficiency bill “in the next few weeks.” The Portman-Shaheen effort has received broad backing by many organizations, including the American Public Power Association. In January, portions of their bill were added to legislation on the Keystone XL pipeline.
“We will support your energy efficiency bill,” promised Moniz.
As she brought the two-and-a-half-hour hearing to a close, Murkowski applauded the energy secretary for being well prepared.
“This clearly is not something where you studied up on quickly,” she said. “You know the details of this budget.”
Murkowski said she agreed with Sen. Daines’s idea about putting labels on cell phones and electric vehicles saying that they run on coal power.
The Alaska senator mentioned that she is looking forward to the release of the Quadrennial Energy Review, and said her committee will hold a hearing on it, once the report has been released.
“As we move forward in putting together an energy bill, where we may need technical assistance, I hope we would have your assistance with that,” she told Moniz.
“Absolutely,” he replied.
House hearing on DOE budget focuses on EPA Clean Power Plan
The day before the Senate hearing on the DOE budget, the House Energy and Commerce Subcommittee on Energy and Power held its own hearing on the Energy Department’s budget.
Questions from the subcommittee’s Republican members centered largely on aspects of the Environmental Protection Agency’s Clean Power Plan. The lawmakers asked whether the EPA had consulted with DOE and the Federal Energy Regulatory Commission regarding the proposed rule; asked about the reliability impacts of coal plant shutdowns directly resulting from the rule; and pointed out that six out of seven carbon capture and sequestration (CCS) projects funded by DOE have either been cancelled or significantly delayed.
Rep. John Shimkus, R-Illinois, also blasted Secretary Moniz over the DOE’s failure to conduct a supplemental environmental study of the nuclear waste repository at Yucca Mountain.
Democratic members of the House subcommittee offered praise for DOE’s efforts to spur investment in “smart grid” technologies, work toward more integration of renewable energy resources, and increase energy efficiency.
Responding to Republicans, Moniz said that EPA had consulted with DOE on technical matters in the Clean Power Plan rule, but would not go as far to say that there was a “formal” consultative process outside the standard inter-agency review for new costly regulations such as the Clean Power Plan.
Moniz said DOE has funded “cutting-edge” CCS projects that would sequester far more than the amount of carbon required to be sequestered under the proposed EPA rule.
In response to a question from Rep. Jerry McNerney, D-California, about barriers to the deployment of smart grid technology, Moniz said that “a lot of the action will be on the distribution side” and that grants included in the budget proposal were intended to foster federal-state partnerships to create incentives for grid modernization, among other things. – See more at: http://www.publicpower.org/Media/daily/ArticleDetail.cfm?ItemNumber=43180#sthash.B4Cv1JfP.dpuf